How Top Brands Are Using IoT For Gain

by CXOtoday News Desk    Jul 09, 2015


The constant need to optimize supply chain at Procter and Gamble prompted Kevin Ashton to start the RFID research consortium that eventually gave the world the concept of Internet of Things (IoT). Even though the IoT in relatively new to retailers, some brands are already using it to their advantage. A new report by Altimeter Group reveals that these companies are investing in technologies and resources to help them determine how their products and businesses can be enhanced through IoT.

The report notes that these brands are already using this sci-fi technology in amazing ways to build customer relationships and optimize their products. “In reality, it’s more evolution than revolution, as companies are already tracking smartphone and Internet usage to gather data that provides crucial feedback about consumer behavior. As the report states, the Internet of Things only “brings us closer than ever to the ultimate marketing objective: delivering the right content or experience in the right context,” it says.

Take for example McDonald’s which is using data to their full advantage. According to the report, McDonald’s partnered with US-based Piper, a Bluetooth low-energy beacon solution provider, to greet customers on their phones as they enter the restaurant. Through the app, consumers are offered coupons, surveys, Q&As, and even information about employment opportunities.

The benefit is that when customers enter comments, their feedback is routed to the appropriate manager who can respond to the request before the person leaves the establishment. On the first month of the app’s launch McDonald’s reportedly garnered more than 18,000 offer redemptions, and McChicken sales increased 8 percent.

Another global retailer Home Depot that previously used augmented reality in its mobile app to allow users to see how certain products would look in their homes. Now it is making life even easier for shoppers by piloting a program that connects a customer’s online shopping carts and wish lists with an in-store mobile app.

As explained in the Altimeter report, upon entering a Home Depot, customers who are part of the Pro Rewards program will be able to view the most efficient route through the store based on the products they shopped for online. And anyone who’s been inside a Home Depot knows how massive and overwhelming those places can be without directions.

Toyota has also opted for IoT to dramatically simplify drivers’ fueling experience. Currently, drivers need to deal with multiple systems to find “the right” gas stations. When they arrive, drivers must authorize payment by swiping a card and punching in various identification codes, or paying the gas station attendant with cash. With the prototype, through a SAP partnership, consumers can use a one-touch, one-screen solution to navigate to the closest gas station, authorize automatic payment electronically and receive personalized coupons.

Back home in India, US-based Avaya is in the process of offering solutions to an educational institution in India, which will help isolate students’ tabs, cellphones and laptops from applications such as WhatsApp when they use Wi-Fi on campus. It, however, allows the teacher full access to internet enabling him to shoot and send a video clip to parents about their child’s behaviour.

There are more use cases. Using IoT, a medical company has hired virtual doctors in villages, where specialists are not available. A top official of the company stated. Through telepresence, these doctors can conduct checkups, dispense health advice, or even alert people to possible health problems before they become serious.

Researchers believe tech companies, including Cisco, Google, Apple, SAP and Avaya, are set to disrupt the IoT market globally, which IDC predicts will touch $7-trillion mark by 2020.

The privacy challenge remains…

However, the biggest hazard, according to the report is that be it in India or the US, there are no laws about how business owners should notify consumers of the presence of the trackers. “In order to operate the technologies, consumers must have already downloaded partnering apps, companies involved say they have consumer consent for tracking when those consumers agreed to the terms and conditions of the individual apps,” said the report.

Even when consumers have opted in, 60% surveyed by Altimeter said they are uncomfortable with how their data is sold or shared in public spaces. Around 56% said it is extremely important that they be notified when data is being gathered in a public marketplace to provide real-time services.

“Companies who want long-term relationships with their customers and consumers need to think deeply about whether the way they use data reflects their brand values,” says Susan Etlinger, industry analyst at Altimeter. “In the next decade, the organizations that make ethical data use a priority will stand apart from those who prioritize short-term gain over long-term relationships.”

There are many ways to notify customers about data use including email, pop-ups or other notifications. Companies need to use these methods and test their effectiveness the same way they would for any other customer experience. Data transparency would hence strengthen the bonding between brands and customers - and fuel the growth of IoT, she sums up.