The Internet of Things (IoT) is a concept of adding smart Technology to products and services which organisations bring to their market.
An IoT product has four basic characteristics:
1. Product: A physical product or a physical product linked to a dedicated service
2. Smart Technology: Sensors, a micro-processor and analytics software
3. Connectivity: The ability to send data to the Cloud, via cellular or satellite connections
4. Back-End Processing: Software to manage or monitor the device remotely
Here are some examples of this technology in action:
Manufacturing:
Identifying production bottlenecks
Monitoring engine performance and wear
Healthcare:
Recording a heart pace-maker's activities
Detecting counterfeit drugs
Retail:
Real-time monitoring of stock levels and automatic re-ordering
Smartphone scanning of products by customers
Energy:
Remote monitoring of grid installations
Remote control of home heating thermostats
Urban Development:
Monitoring and managing traffic flows
Water management through smart meters
Agriculture:
Soil sensors for moisture levels
Manage and control smart connected harvesters
IoT Market Growth
The market in IoT devices is expected to grow substantially over the next few years. Estimates suggest as many as 40 billion devices by the year 2020. With an estimated economic value of over US$ 6 trillion by the year 2025.
This proliferation of smart devices is being driven by both technology advances and consumer demand for better services and more useful products.
IoT Business Benefits1
A business can gain several important benefits for this Internet of Things technology.
1. Increased brand equity is one of those often quoted benefits.
Which suggests a longer-term impact of adopting this technology, in terms of ongoing investment and rewards.
2. The ability to create new or enhanced products.
These products often have a premium price, or at the very least they can create an edge over a product's competitors.
3. Offering technology enhanced products also opens the door to offering add-on services.
These additional services can include software to manage the product and support service management contracts.
4. Out-Flanking competitors
Consumers are also getting more and more technology aware when it comes to buying products. Having an IoT capability can be a factor which helps a buyer choose between similar competing products.
5. Products with embedded technology also give greater customer satisfaction.
Why? Well they can simplify a user's life. For example by allowing them to remotely control their home heating. Or it saves them money on expensive breakdowns, by warning when parts need to be replaced.
These consumer benefits lead to increased customer retention and an increase in their long-term value.
All of the above benefits can be factored into the bottom-line PandL. Businesses with IoT capabilities often report higher profits.
IoT Marketing Trends
One of the current trends in marketing is to make the customer the focal point of all marketing activities. A scenario where cost-reduction isn't they only show in town when it comes to driving profits.
IoT products are designed to give greater customer satisfaction and attract premium prices.
Employees also benefit from IoT products. They give them more data to work with and the means to assist customers in more meaningful ways. They can free them up from routine tasks, and empower them to perform more person centred activities.
Summary
Technology enhanced products and services offer both sides of a market many benefits. Businesses gain an edge over their competitors and their customers get more useful products with added value services.
Sources:
1 Genesys / Frost and Sullivan, 2017.
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andcopy; David R. Durham,
Digital Marketing Education.
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