The Art of Engagement

The age of the Internet of Things (IoT) presents great opportunities and challenges for enterprises across industries. Companies are embedding digital sensors in their products, installing cameras and beacons in their stores and tracking customer digital behaviors through mobile devices. For retailers, IoT offers game changing insights into consumer preferences, such as their propensity for selection and price, and how they want to engage in a retail experience.

For example, look at how Burberry has singularly redefined what it means to go shopping.  As an early adopter of IoT and connected digital technologies Burberry has successfully blended both physical and website in its Regent Street flagship store.  The store was built using digital first as the blueprint to provide consumers unique, personalized experiences via interactive mirrors, cultured areas to socialize, and digital based service and displays – all within a brick and mortar environment.  When one walks into 121 Regent Street, they experience what it feels like to be inside the Burberry website.

While Burberry may be an extreme model of digital transformation, every retailer needs to understand how IoT data can help attract and retain customers, determine best product placement, modify pricing according to consumer sentiment and predict what offerings to sell next. 

According to Altimeter, in the last year alone some 4 billion devices have come online, and could reach as high as 200 billion in less than 5 years.  By 2020 they believe there will be roughly 26 smart objects per human.  Imagine each of those personal devices and sensors exchanging information, providing insights into how customers use your products and experience your service.

Target recently launched an Open Home concept store, which is a blend of experiential, social gathering and retail store to demonstrate use of connected technologies in real life scenarios. While understanding that a smart coffee maker connected to the baby monitor can start brewing coffee when the baby cries will be revolutionary to many new parents, Target is also using Open Home as an opportunity to use IoT to learn about the consumer’s willingness to experience new scenarios that provide retail engagement beyond both the physical and online stores.

Except for the few avant-garde, by and large, IoT initiatives are still in pilot mode. Experimenting with new technologies for technology’s sake is hardly a long term goal. The big question on the minds of retailers and consumer-facing brands is how to apply IoT in ways that will resonate with customers so that they actually are committed and feel secure about adopting and investing in them. Implemented properly, IoT initiatives can provide retailers with new sustainable ways to differentiate, engage, and stay relevant.

With the power of connective networks, the affordability of sensors, and empowerment of the customer, the possibilities are truly endless. The key to success for retailers will be knowing how to mine the IoT data, ensure trust of data use among customers and partners, and create apps to deliver a truly engaging experience that will make the lives of their customers happier, easier and safer.