Businesses must move beyond using the Internet of Things for mass marketing to harness it for targeted personalization, an industry panel concluded Wednesday.
But they may have to overcome pricing, privacy, and platform hurdles on the way there, according to the roundtable at Toronto’s Dx3 conference on digital marketing, advertising and retail.
So far, businesses have largely used IoT to push out discounts and marketing content via mobile apps, said panelist Paul Briggs, Canadian analyst at eMarketer.
“The first generation (of IoT) was trying to get consumers to download the app on their phone and then it was getting them to be willing to accept these offers,” Briggs said.
With the next generation of IoT, marketers should view wearables like smart watches as a tool to collect specific data about each user’s behaviour so they can push out more personalized, relevant marketing, he suggested.
“The temptation for a lot of marketers is to send a little offer or promotion (to smart watches)…but marketers need to think about using smart watches as an informational (tool) from an IoT perspective,” Briggs said.
Beacons of the future
Like smart watches, beacons will also become a “key node” in the next wave of IoT adoption as marketers use them in a more sophisticated, data-based way, he said.
“The new utility of beacons is to take data from people’s ad usage and, taking in the data, learning about their behaviour and providing more contextual offers to those people (via beacons) based on that data,” Briggs said. “Virtually every retailer needs to think about how to deploy beacons in the next couple of years”.
Although Briggs pointed to one global survey showing that 29 per cent of retailers have already implemented beacons, he said the adoption rate “is only about half that number in Canada. So Canada has a lot of room to grow in terms of leveraging beacons.”
Stumbling blocks
He said two stumbling blocks will likely have to be addressed before IoT technology is adopted more widely in Canada and around the world: pricing and privacy concerns. He cited a Nov. 2015 poll in which U.S. consumers said cost (named by 33 per cent) and privacy concerns (named by 24 per cent) were the top two barriers to IoT usage.
“A lot of these smart devices are in the early phase of development so they’re priced (higher). I think price is a big part of it,” Briggs said.
“When the experience level and what you get for having these devices connected starts to (show) tangible benefits that hit home – when you don’t need to look inside your fridge to know what you need to refill it – that’s the real trigger for when these things will see bigger adoption,” he added.
Privacy concerns
As for privacy, another panelist suggested companies can use privacy by design principles – which embeds privacy safeguards into technology at the earliest design stage – to foster IoT deployment.
“You can’t screw privacy onto a product after the fact … All of these things need to be thought of up front, whether it’s at a hardware level or a software level,” said Elaine Mah, director of Intel Canada.
The discussion also touched on the idea that marketers need to stop relying so heavily on downloadable apps to engage customers via IoT technology like beacons. Mah said Intel’s MemoryMirror is one example of how it can be done.
The mirror was launched in 2014 and installed in select stores of retailers such as Neiman Marcus. When shoppers try on clothing in a real fitting room, they can also view different colour options with a simple hand gesture, share the session with friends to ask which garment looks better and save their session data on an app if they choose to.
The mirror also shows in-store staff which products each customer tries on the most so they can up-sell them on similar items. Without requiring an app download, the mirror directly interacts with shoppers in a connected way and provides staff with customer data insights.
Platform standards
Aside from questions about cost, privacy, and app-free interface options, there’s the problem that “none of these devices speak to each other,” said panelist Rahul Raj, vice-president of marketing and ecommerce at Toronto-based smart thermostat maker Ecobee.
Intel, Cisco Systems Inc. and Samsung Electronics are all part of the Open Interconnect Consortium, one of various groups working to develop a common standardized platform for IoT technology.
Those efforts are ongoing but “the first platform that can achieve interoperability among all these different platforms will be the one that really solves it,” Briggs predicted.