Leveraging the Internet of Things in Marketing

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1 Leveraging the Internet of Things in Marketing

2 Index Introduction The Internet of Things outlook IoT and marketing Wearables: Reaching customers anywhere Location-based marketing RFID tags and the consumer experience Bigger data analytics Conclusion Copernicus // Leveraging the Internet of Things in Marketing // Page 2

3 The Internet of Things outlook Introduction Google Glass, smart thermostats, self-driving cars: The age of digital devices is upon us. The Internet of Things (IoT) is the term commonly used to refer to gadgets that previously had nothing to do with the Internet but now can send and receive data over the Web. Thus, smart watches, smart home technology (such as intelligent lighting systems, connected refrigerators and advanced coffee machines), fitness sensors and other connected devices all present possibilities for real-time, personalized and adaptive interaction between man and machine. The IoT trend is growing, with applications in both personal and business settings, and it is creating opportunities for marketers to interact with consumers in new and exciting ways. As the sensors and computing technology that make the IoT possible continue to advance, these connected machines and gadgets are poised to create a disruptive impact across a variety of industries. In a 2013 report on the technologies most likely to have a deep impact on personal and professional activities, McKinsey Global Institute noted that 9 billion devices around the world were already connected to the Internet, including smartphones and computers. By 2020, this number is expected to reach over 30 billion, according to research firm Gartner. Therefore, the IoT holds great potential for making a significant impact on the economy. McKinsey predicted an annual economic impact of $2.7 trillion to $6.2 trillion by 2025, with IoT devices opening opportunities for companies to enhance their operations, interact with customers in new ways and derive data to optimize their strategies. Copernicus // Leveraging the Internet of Things in Marketing // Page 3

4 IoT and marketing What do all of these connected devices and advanced sensors mean for marketers? First, they represent opportunities to market new products and devices. For example, Forbes Magazine explained how Lowe s created a customer pipeline for years to come by establishing a smart home hub promoting devices that would all work together in a connected platform branded Iris. The plan was to eventually stock the retailer s shelves with items marked works with Iris, encouraging customers to build an integrated IoT system in their homes. But beyond incremental sales, we see exciting new opportunities for marketers to deliver more timely, personalized, and engaging information to customers, in the most relevant channels. For example, this trend will present marketers with more platforms for their messaging and advertising campaigns, tools and applications for different types of engagement, and a wealth of data to deepen customer insights and optimize marketing performance. Here are a few examples of how certain elements of the IoT might empower marketers to optimize and enhance their campaigns. Wearables: Reaching customers anywhere Smart glasses and watches have already garnered some press, but wearables also include gadgets with sensors for purposes like fitness or medical care. For marketers, however, mobile marketing on devices like smart watches or glasses likely offers the most promising opportunities in terms of messaging and advertising. Already, companies have taken advantage of near-omnipresent smartphones to engage customers no matter where they are, and this trend is likely to accelerate. Mobile marketing means that the target audience doesn t have to be sitting at a computer or in front of a television to get the message it goes where consumers go. Copernicus // Leveraging the Internet of Things in Marketing // Page 4

5 Furthermore, smart glasses, such as Google Glass, could eventually create highly personalized marketing possibilities, such as displaying ads when users look at a particular item or take its picture. Consumers may use the devices to price check or research products while shopping, so marketers should consider the unprecedented ability to deliver the right information, at exactly the right time and place. Location-based marketing The benefit of wearables for marketing is enhanced by location-based techniques. With ibeacons and other geo-location technology, companies can target their messaging based on where consumers are. For example, they might send a promotion to shoppers currently visiting the store, or send specific deals to customers based on the weather in their region identified through location-based technology. Retail Info System News reported that Alex and Ani (a Rhode Island-based retailer) rolled-out a beacon program to its entire chain after 75 percent of shoppers engaged with the content delivered to them during its pilot program. With opt-in, Bluetooth-based technology, the company creates a more personalized in-store shopping experience based on shoppers real-time locations. Location-based marketing can also take advantage of emerging technology such as smart lighting that can interact with visitors smartphones. Philips, for instance, created a lighting system that enables retailers to give shoppers directions to particular store items. As detailed in Tech Hive, the intelligent LED system connects with a mobile app and can be used to send targeted information and coupons when customers are at specific locations within the store. RFID tags and the consumer experience Radio frequency identification (RFID) tags, while still too expensive for most companies to use on a broad level, present a number of potential opportunities for marketers. In addition to enabling more precise item and inventory tracking, RFIDs can serve as tools to enhance and customize the customer experience. Copernicus // Leveraging the Internet of Things in Marketing // Page 5

6 For instance, a KPMG report detailed how some retailers are using RFID smart tags to tailor their fitting room music to the clothes shoppers are trying on. They might play tunes that match the style of apparel or songs of celebrities that sponsor the products. The point is to put consumers in the right mindset, helping them imagine themselves wearing the clothes and creating a pleasant overall shopping experience. Bigger data analytics Finally, as Gartner emphasized in a report on the IoT, this trend will generate tens of millions of new devices and sensors, all producing real-time big data. Information gathered from IoT devices could fuel insights such as: How people use particular products and how well the items are performing Health, fitness and lifestyle characteristics of specific customer segments Which paths store visitors most commonly follow, enabling better in-store marketing Consumer preferences and consumption trends, enhancing inventory and assortment decisions Media consumption habits, improving media planning and buying these analytical projects. Furthermore, most companies are not equipped with adequate infrastructure and expertise to fully leverage IoT data and analytics on their own. For this reason and for broader context and guidance in applying data meaningfully, organizations may need to rely on third-party vendors and consultants. Conclusion The IoT is creating a whole new world of platforms, data and engagement opportunities for marketers. Although much of this technology is still in its infancy, the next few years are likely to bring it to the fore. Organizations that leverage this technology in creative, innovative ways will benefit from a stronger brand connection with consumers. They ll also enhance their brand image by creating highly personalized and relevant customer communications and experiences. For all of these approaches, maintaining a balanced approach is critical: Location-based messaging can be incredibly helpful, or it can seem invasive, for example. Knowing the target audience and understanding how these emerging tactics are perceived will help entities navigate the exciting possibilities of the IoT. Of course, as with other big data initiatives, marketers will need to take consumer privacy and data security into consideration for Copernicus // Leveraging the Internet of Things in Marketing // Page 6

7 For more information on the Internet of Things or all things marketing, please contact: Jeffrey Maloy Senior Vice President 230 East Avenue Norwalk, CT Ph. (203) Sources:

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