Considering the onset of IoT, the Internet of Things, the answer is a resounding yes! With its proliferation well and truly progressing, 50 billion devices by 2020 all connected together, IoT enables limiting customers purchasing choice and control under the guise of a seamless user experience. IoT serves as the perfect vehicle to create intelligent customer experiences ensuring customers bypass the competitive landscape of the web, particularly for commodity purchases such as food, refills, replacements, household day to day, etc.
Search is Dead…long live IoT
Back in 2011 Google coined the ZMOT thinking, the zero moment of truth, it talks about the classic (obsolete?) mental model for marketing: Stimulus – see a TV ad for something, Shelf – goes to store to see it, Experience – takes item home and starts using it
Migrating to the new mental model of the day, with the inclusion of the ‘Zero moment of truth’ – checking reviews, product videos, user feedback, etc
So with IoT systems talking to IoT systems to purchase products on behalf of the consumer and the ongoing commoditization of more and more products, a good question to consider is, where in the world of IoT does this ZMOT sit? Well maybe around the service provision and not the product. Interestingly, the heart of Google’s power, its search algorithm becomes at risk, but that’s a whole different story.
From Brand and Product to Commodity and Service
How can a business remove competitor choice from the customers in its industry, I know how this sounds but is nt this what every business would ultimately love to achieve? to lock customers to their brand and to their products removing or at least distancing them from any likely competition. Well IoT will help to serve this ambition.
Let me rewind a little and set the scene, how many of you have signed up to a utility service provider and not reviewed this for many years? or maybe your bank, when was the last time you changed your current account provider? if anything like most people, the effort and pain of changing far out ways any benefit, so unless something pretty spectacular goes array, I stay where I am.
Let’s Compare this to light bulb purchases as an example, have you gone back to the same shop or even brand to buy the replacement bulbs you need year on year? Probably not in fact your probably asking yourself what the hell is he on about, light bulbs? Which only reinforces what the principles here .
OK OK, what about the food in your cupboard or fridge? do you go to the same supermarket week on week, well maybe if the convenience factors are right but if you have every supermarket choice nearby, you’d go to the best deal right? who has a sale on, the voucher you ve received through the post, the foods you like best, but in principle at any time you could enter another providers shop at the drop of a hat.
This is commoditization of products or services, with little in the way of brand allegiance that can be observed, so how can this allegiance be fostered? By means of an intelligent customer experience, wrapping the commodity product or brand within a great service all enabled by the IoT advances.
A New Hope
So how do businesses get through or even flourish in this product and brand promiscuity, the answer lies in the utility or banking services models. IoT can be the solution to achieve in many industries, by changing your product, brand or service into a commodity to the overall value service provision.
Consider the lighting example above, using a manufacturing business as opposed to consumer household as an example due to its economy of scale but the principles apply to both. A manufacturing plant houses hundreds of light bulbs used across its production facility, by putting in place IoT systems which monitor lighting states; identifying those which have failed, due for maintenance or are going to fail and purchasing through system to system communication with a supplier all delivered the next day ready to be installed. This in its simplicity will save a business money, enabling employees and company resources to be focused on where they add true value to the business.
This ‘True value’ is in the product they sell and not in the facilities they are made in. For example, consider a laptop manufacturer, having more engineers focusing on end product design making the laptop more efficient, lighter, faster or consume less power or maybe the maintenance engineer optimizing the production line efficiency, as opposed to facilities personnel spending time identifying and searching for faulty bulbs and then purchasing the right replacements. This has got to result in a better bottom line right?
Hence a light bulb provider commoditizing its light bulb products and charging a service fee (with free of charge or very little product cost) to remove the lighting maintenance problem is a simplistic example of how IoT corners a market. The customer has far bigger things to be concerned with and is unlikely to switch unless maybe all the light bulbs fail!
IoT will result in a less competitive landscape for those who make a transition from product to service and create an intelligent customer experience around it. Once the user has bought into the customer experience it will be very hard for any competition to break them away (banks and utilities!)
The beauty of IoT is that it plays directly into the principles of IntelligentCX, the more customers that sign up the stronger the service offered, insight given ensures holding the right stock at the right volumes, new innovative avenues will present themselves and customer savings can be offered, in addition to providing increased purchasing power through consolidation and significant savings through limiting stock obsolescence.