Posted by Bethany Frank on 27 Oct 2016
Experts estimate that the Internet of Things will encompass over 20 billion interconnected objects within four years. The expected near-ubiquitous interconnectivity between devices, commonly referred to as “IoT”, already shows exciting potential for commerce and monetization. Below are four areas where the IoT could become an essential part of the modern economy.
Voice Command Assistants
Amazon Echo and Google Home are only the first of what could become a whole industry of AI-driven, do-all personal assistants. In their current forms, the Echo and Google Home can provide information about everything from traffic conditions to recipes. Eventually, these devices could book travel arrangements, act as home security systems, and much more. The possibilities for businesses to develop services built on these new platforms are nearly limitless, and the ecosystem will likely become more robust as industry leaders and others continue to forge partnerships that bring additional value to consumers.
The IoT could enable a new and enriched shopping experience for consumers and simultaneously present lucrative revenue opportunities for merchants. Apps like Shopkick, for example, are actively reshaping in-store consumer behavior. Macy’s, Nordstrom, and other big-name retailers are investing in the installation of beacon technology across thousands of their locations. The beacons alert shoppers entering a store to turn on their Shopkick app; as shoppers make their way through various departments, the app notifies them of potential rewards and promotions. These kinds of enriched shopping experiences can help traditional retailers bridge the gap between online and in-store shopping, and possibly lead to increased sales.
Amazon is also harnessing the power of the IoT to enhance its delivery service. Rather than traditional ground or air shipping, customers will receive their packages via interconnected, unmanned drones in 30 minutes or less. The new service, known as Amazon Prime Air, is already available in 27 cities across the United States and in some parts of the UK.
A 2014 McKinsey & Company report found that over a quarter of respondents prioritize Internet connectivity as a more important feature than engine power or fuel efficiency. Car manufacturers can utilize the IoT to address these new demands and completely redesign the customer experience.
Internet connectivity combined with apps like Spotify and Netflix make in-vehicle entertainment a fully integrated and seamless experience. Manufacturer-provided subscription services such as GM’s OnStar also provide new way for automakers to engage with customers, and could become a major source of recurring revenue. Connectivity could also create new revenue streams for telecommunications providers who can charge drivers for mobile data access. According to a report from SNS Research, revenues from connected car services are expected to top $40 billion in the next five years.
Car insurance companies are also utilizing the IoT to provide enhanced services to its best customers. Driving trackers enable insurance companies to monitor a customer’s habits and offer discounts for safe driving.
The concept of the “smart home” is already beginning to take hold through devices like remotely controllable alarm systems, automatically dimming lights, and smart appliances. WIRED says filling a home with smart devices is “just the start”. At the 2015 Consumer Electronics Show, Samsung CEO B.K. Yoon went as far as boldly claiming that 90% of the company’s products would be connected to the Internet by 2017.
Running errands for common household items could become a thing of the past with devices like Amazon’s “dash buttons” – small Wi-Fi enabled devices that allow customers to automatically place refill orders for their favorite products by simply pressing a button. Continued development of virtual home assistants like the Amazon Echo could help integrate these kinds of disparate smart devices into a central command center.
The Internet of things is a promising new frontier that opens the door to innovation, creativity, and significant potential profits. These examples only begin to highlight the possibilities. The changes brought forth by increased connectivity are likely to impact nearly every industry, making it imperative for businesses to leverage both new and existing technologies to enhance the customer experience.
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