As a bridge between the physical and digital worlds, it is no surprise that the Internet of Things (IoT) is gaining traction as a foundational technology, the martech space included. In a previous Redpoint Orchard blog post on the merits of including IoT in a Golden Record, one key reason for doing so was the economic value that IoT is expected to produce, which McKinsey recently estimated at up to $12.6 trillion globally by 2030 – including $710 billion in the retail sector alone. In addition:
- Grand View Research estimates the IoT market in healthcare will reach $534.3 billion by 2025
- IoT Business News predicts there will be 27 billion connected IoT devices by 2025
With these statistics anticipating massive growth potential, we thought it worthwhile to revisit the topic to look at potential and existing use cases for incorporating IoT across a few different verticals, particularly with an eye toward leveraging the technology to deliver a personalized customer experience.
A Retail Game-Changer
In retail, there are countless applications for personalizing the customer experience using IoT. Much like an online browsing session of a retail website, an in-store visit provides a wealth of data about how a customer navigates through a store, such as traffic patterns and dwell times. IoT-enabled sensors can provide data about an individual customer’s patterns and behaviors, which as part of a single customer view can then be used to generate personalized offers or messages – either during the visit through a mobile app, or with a next-best action on a different channel.
Amazon Go, for example, uses sensors and cameras to power its “just walk-out” technology at checkout-less stores. Customers on the mobile app scan a code to enter the store, using a credit card linked to an Amazon account. They can then pick up – and put down – any items they want and simply walk out of the store. Just as Amazon has a wealth of first-party data from online and Prime customers, cashier-less stores provide an opportunity to learn behaviors and preferences of in-store customers, which the company uses to personalize future interactions across channels.
The same technology can be used to enhance the overall customer experience for every customer. While not personalization at the individual level, retailers can use IoT from ‘smart’ shopping carts or shelf units to optimize aisle layouts, reduce checkout lines, improve space allotment or otherwise creating a more seamless customer experience.
Other personalization use cases in retail include IoT devices such as Bluetooth beacons sending alerts in real-time to a customer’s device based on real-time location data. A customer near a store might be prompted to visit to take advantage of a personalized offer, as an example.
IoT devices in the home – refrigerators, washer/dryer, TVs, thermostats, doorbells – also provide largely untapped opportunities for retailers to partner with manufacturers to deliver a more personalized customer experience. Analyzing product usage and recommending or automatically fulfilling a product are familiar examples for bridging the physical and digital through a connected device. A smart beverage refrigerator connected to a weather app might learn over time what a household consumes when the outdoor temperate hits 80°, and automatically order a refill for that product based on both weather and consumption patterns. In this and similar examples, a customer or household will have agreed to share data in exchange for a more relevant experience.
IoT & Travel: At Your Service
In Travel & Hospitality, many IoT use cases approximate the smart home conveniences. In many hotels, for example, smart thermostats, lights and blackout curtains regulate room temperature and lighting to a customer’s preferences – and remember a customer’s preferences on return visits. Customers can use a smartphone app to gain room entry, order room service and use as a remote control.
Disney has been a leader in using IoT to improve and personalize the guest experience. The theme park’s “Magic Bands,” which debuted in 2013, enable guests to access rooms, pay for meals and souvenirs through a credit card linked to the device, and enjoy a personalized experience across the entire park. A vast network of sensors and interconnected devices enables personalized touches such as automatically uploading pictures of customers just off a roller-coaster to their mobile apps. In detailing all the IoT-enabled use cases, an article in Forbes writes that “the Magic Bands and the sensors turn each park into a giant data processor or, as it is known in the industry, an Internet of Things.” Says Kelly White, Disney VP of Digital Strategy, “There is a holistic strategy for how we think about the connectivity, not only from digital experiences but also even some of those moments like getting a food delivery or accessing an attraction. … It is partially about making it a fantastic experience for our guests but also about how we can use technology in service of the story.”
Other travel & hospitality IoT use cases for Disney and other tourist attractions are to use sensors to alert customers with tips for optimizing a visit, such as leveraging real-time data to reduce wait times, capitalize on flash sales and upgrades or to send updates on nearby public transportation schedules or optional services.
Many, if not most, IoT use cases in the travel industry approximate a concierge service, providing customers with a personalized, frictionless experience that gives them more control and greater convenience over the complete customer journey.
IoT & Healthcare: Smart Devices, Healthy Patients
Opportunities for IoT in healthcare are familiar to many consumers from established technology such as Fitbits and other wearables that provide users – and connected providers – with a plethora of real-time health data that can be used to tailor exercise programs, monitor sleep patterns, create a nutrition plan, medication adherence, etc.
Smart medication dispensers, glucose monitors, inhalers and thermometers are among home healthcare devices in use today to connect healthcare consumers with providers outside of a clinical setting in the rapidly growing Remote Patient Monitoring (RPM) field that relies on digital technologies and IoT devices.
In a clinical setting, there are countless examples of hospitals using IoT to improve the patient experience, such as reducing wait times, helping with triage and improving diagnostic accuracy. Hospitals today are using smart hospital beds to reduce falls, mitigate bed sores and to automate the process for finding an available bed.
As in retail and travel, many IoT healthcare-related use cases give the healthcare consumer more control over their journey. By bridging the gap between the physical and digital worlds, IoT technology appears here to stay in a connected economy where the line between physical and digital channels and touchpoints is becoming increasingly blurred. Consumers expect convenience, control and frictionless, personalized omnichannel experiences. IoT delivers on these expectations, which is why the medium is expected to produce trillions in economic value by the end of this decade across all industries.
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