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Internet-of-Things

How will brands face the IOT challenge ?

Par : HUB Institute
1 décembre 2014
Temps de lecture : 6 min
Chapo

Thermostats, cars, bracelets, glasses, all these objects that are becoming connected are the main conversation topic lately and are attracting consumers attention. It's the perfect moment for brands and agencies to initiate change and innovate. Still having doubts ? the lines below are for you.

 

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Thermostats, cars, bracelets, glasses, all these objects that are becoming connected are the main conversation topic lately and are attracting consumers attention. It's the perfect moment for brands and agencies to initiate change and innovate. Still having doubts ? the lines below are for you. The internet isn't only billions of data used and shared anymore, but also the internet of objects where many devices interact with each other, with the users and with other services. After the democratization of the web in the 90's and the popularization of mobile apps in 2007, the connected objects are most likely to become the internet's third generation. Second to me it's a dual revolution. First of all, it means that for the first time there will be more beings with artificial intelligence on the face of the earth than human beings. This new IOT era will truly start when we'll count more connected objects than men. For now there is about 5 billion connected objects all over the world, mainly computers, phones and tablets. By 2020 the number should be around ... 80 billions, mostly everyday life objects with a touch of 2.0. The second revolution lies there. The first smart terminals were inventions on their own that needed their own usage time. But now with the IOT, technology  steps aside in the benefit of more natural uses : tactile, movement and voice are revolutionizing design as well as user interaction. This helps enhancing our everyday life items, from the watch to the bicycle, by giving it the opportunity to ease our life. those connected devices can watch over our actions and their environment and learn to know us better than ever. The digital isn't a field on its own anymore, it's an added value that enhances our everyday life. More details in the video : This "datafication" trend will become more intense with the democratization of the IOT. No need to remind you that the interest of it  isn't the amount of data anymore, but the understanding and the benefits you can take off of it. This will help enhance the products and the customer's life cycle management. All this will facilitate customer loyalty.

BRANDS ARE TAKING THE IOT HIGHWAY

You see what i mean... Brands already able today to manage consumption data in an efficient and customized way, will be tomorrow's leaders  in generating the best user experience. Build up a relationship that isn't based on data is dangerous because without it, it's really hard to know how consumers really use the product and services. Technology is a source of innovation for many companies, but it's often only considered as a marketing tool, disconnected from the rest of teh company. At the age of connected objects, marketing can't be considered a discipline on its own anymore, it has become the way brands have to run their business and serve their clients. We may be at the very beginning of this evolution, some forerunners are opening a way that brands should follow.  That can happen only by observing and approaching those innovative players. Start-ups coming from Silicon Valley or elsewhere, have always influenced consumers behavior and upset brands ability to build themselves by attracting and converting those consumers. This will be even more accurate in the years to come. Lets take the example of the house energy management systems made by NEST thermostats. Tony Fadell's start-up uses the personal data of their users so they can manage their own house from afar on their smartphones, as well as optimizing their energy consumption. NEST has put in place high engagement levels around energy consumption, generating a drop in air conditioning consumption during rush hours. That can be explained by the introduction of mechanics like the Rush Hour rewarding system that helps saving money depending on you consumption. Those services are based on client data history, that allows the strat-up to understand the energy consumption of each client, advise them, and then mechanically manage their consumption. That's why this company just got bought by Google for 3,2 billion dollars. Since 2011, the company of Moutainview, is trying in vain to impose its vision of the "Conscious Home". In this case, Google was more interested in the strat-up's staff and vision than in the products (Alarm, Thermostat, etc.). The idea behind this acquisition was to give some sens of innovation to the Android Home entity, struggling to impose itself since its creation. In France, we like to bring out our gold nuggets like Withings, Netatmo ou My Fox, instead of more innovative companies. This ecosystem has to be highlighted, but we can also recognize the work of companies like EDF Energy, who experimented a meter that monitors the electricity consumption minute by minute, to set a rate based on demand. If you use your household electrical outside rush hours, you save money.In the future, those meters will be able to "negotiate" with your dryer, for it to slowdown when there's a rise in demand elsewhere. Simply by learning your usage habits, EDF will be able to optimize its ressources. Other companies, like in textile for instance, are also pioneering in IOT, that's what we call the " Wearable technologists". It's also the case for Nike with it's connected bracelet Fuelband (we could have talked about the SB Apps ecosystem as well). The bracelet monitors your physical efforts to help you enhance your performances. It mirrors the brand's avant-gardist vision, that sees itself as a societal actor. Apart from being useful, this approach impacts on a community of millions of persons. Launched in january 2012 is worn by more than a million sporty people. This approach consolidates the baseline "Just do it" and is an opportunity to accompany the user into reaching his goal by playing a coaching role. Also, Nike launched in october 2013 the Nike+ Fuel Lab, that will manage 10 start-ups working on the FuelBand API. A way to get closer to  the ecosystem where were born the most innovative ideas, that attracts consumers the most. Testings are multiplying, but make sure not to get mixed up between an invention and a prototype made for advertising purpose, as it's the case for Smartdrop by Evian, Smartwatch by Nissan or Fundawear by Durex. Despite all, those that were simple messages at first, become more and more real inventions. Evian for example should be launching its Smartdrop on the market this year. But brands should be careful not to forget what their real job is. Like Rafi Haladjian recently said "If your job is to make hats, you're not going to produce devices for hats but communicating hats."

THE REAL INPUTS OF THIS NEW ERA

IOT inputs for brands can be summed up in four key elements : - When an object can tell exactly how is being used, then the brand is able to adapt its products and services. - When an object can be remotely controlled, it develops long term service relations. The brand isn't limited anymore to a casual transaction, it can also offer all sorts of services and so maintain the attention, which isn't easy currently. - By learning the usage habits of the owners, it is possible to reduce the costs. - Target messages depending on behavior. When you know exactly where your customers are and how they use the product, you can then target the message  corresponding to the situation.

IN CONCLUSION

The era of connected objects is first of all the era of small data. If there is trust and consumers are satisfied by the value of the product versus the price, they will be more willing to share their data, which will eventually become the main innovation lever. Brands have to completely change the way they create and bring value. The internet of objects is offering tremendous inputs, but also brings out a lot of questions regarding private life and security protection. The transparency we've been asking from brands for years on social networks is beyond compare with what will be asked from IOT. Indeed, yesterday, internet pirates were hacking companies websites for their customers data. Tomorrow they'll be hacking their houses, cars... their whole life. Will our insurances ever start considering the problem ?