The Internet Of Things As The Future Of Marketing – Examples, And Challenges
The Internet Of Things: Reach in your pocket – what are you holding in it? A mobile phone that can determine your location thanks to Google Maps. Or maybe you have a watch that sends out an uninterrupted stream of web notifications? It is worth asking yourself: are you observing reality, or is the environment watching you?
The Internet of Things (IoT) concept was created in 1999 by the British father of start-ups, Kevin Ashton. It means a system in which objects can communicate with computers without human intervention, using sensors. An entrepreneur got the idea when he was working on launching the Oil for Olay cosmetics line and discovered that one of the shadows was missing from the local store. He wanted to know where precisely the cosmetic was and what happened to it. At the same time, he came across a microchip with a radio function, thanks to which it was possible to track the location. In this way, the idea of connecting an object with a network and providing information about its location was born. Did anyone think then that a decade later, at the turn of 2008 and 2009, the number of such devices connected to the network would exceed the number of inhabitants of our planet?
How can the Internet of Things be used?
Imagine the year 2020. The Internet of Things surrounds you on every side, from the kitchen, bathroom, through the hall, workplace, street, and ending with it seems that its space is endless and, according to experts, it will grow every year – it is estimated that in 2020 the number of devices connected to the network will exceed 25 billion.
However, the Internet of Things is not only about devices that can improve the quality of your life. It is also, or perhaps most of all, a source of information about the client, his behavior, and habits. Each message goes to the web and can be used by marketers. How can specialists use this data? Let’s look at some examples of companies.
When you can’t decide what you want
You are standing in front of the snack machine. You can choose Milka chocolate in five flavors, Lu biscuits, Oreo cookies, Belvita oatmeal cookies in six flavors, Halley, M & M’s, Reese’s candies, Skittles Not sure what to choose? Don’t worry; the machine will help you with that!
In 2016, Mondelēz introduced the latest snack vending machines. They are equipped with interactive displays that allow you to sort items in the order selected by the customer, get to know the ingredients of the products and their nutritional value, and collect information about consumers. The generated statistics allow you to adjust the assortment of each machine based on the collected demographic and purchase data of existing buyers. Every time you make a purchase, the information is immediately sent via the cloud to a central location where you can track real-time sales in a given city or country. This allows the distributor to determine what is needed in a specific location. What’s more, there is a camera at the top of each device that recognizes the age and gender of the customer, allowing you to personalize the ads displayed on the screen.
When you don’t know how to comb your hair
In 2013, more than 300 new hair products appeared in American stores, which pushed the Pantene brand into the background. With no novelty to offer in the face of increasing competition, the brand is at a critical juncture. The solution turned out to be a campaign conducted in cooperation with the Weather App (an application providing information about current weather conditions) and the Walgreens chain of stores.
The premise of the campaign was simple. What does a typical middle-aged, health-conscious woman do after waking up? One of the first things to consider is the hairstyle and clothes that are appropriate for the weather. Therefore, an application was offered that, in addition to providing information about the weather conditions in the selected location, indicated itself which hairstyle was the most appropriate and which Pantene product was best to use. As a result, the company recorded a 24% increase in sales within two months, pushing the competition to the background.
When you don’t feel like going shopping
You’ve probably ordered something online more than once. What if the shopping was done by itself, without having to go to the website and search for the desired item for a long time? Thanks to the Amazon Dash Button device, customers can do this. This is a special button with WiFi access, connected to the user’s account on Amazon and associated with a specific type of goods, e.g., washing powder or animal food. Pressing the button automatically places an order for the selected product, which a courier then delivers. You can cancel your order at any time using the specially designed mobile application. The company currently works with over a hundred brands, incl. Gillette, Coca-Cola, Orbit, or Gerber.
Amazon Dash Button is an ideal tool for the consumer – you don’t have to stand in endless queues in supermarkets or run a computer to place an order. On the other hand, it is also an ideal solution for marketers – it allows you to build customer loyalty and provides a lot of information about them. Collecting data about buyers, behavior, shopping preferences, demographic characteristics, shopping hours, or quantities of purchased goods allows Amazon to personalize the proposed offer. What’s more, the brands it works with also receive invaluable tips on how to adapt their product range to the recipients better.
Let’s go back to the beginning.
The idea of the Internet of Things was undeniably laudable – collecting data on the goods sold undoubtedly enables the adjustment of the offer to the customer’s needs. But where does the line between what is private and what companies can use for marketing purposes begin?
As a warning to marketers, let’s be the Barbie incident in Germany in early 2017. It was then that the doll, capable of making intelligent conversations, was withdrawn from sale, which, thanks to the microphone and constant connection to the network, recorded the child’s voice and sent it to the ToyTalk system. According to the regulatory office, the lack of security measures preventing strangers from accessing the microphone and speakers or the possibility of intercepting recordings by hackers could threaten the privacy of toy users.