Retailers will still sell, but as web-connected products generate a wealth of information about consumers, online merchants will want to rethink their role beyond the transaction, IRCE featured speaker James McQuivey says.
There will come a day, and James McQuivey is not even kidding as he says this, when consumers will welcome cameras in their bathroom mirror and shower stall. They won’t worry about a camera in their closet either, or that their toilet is equipped to analyze their waste for possible health problems, says the Forrester Research vice president and principal analyst.
They’ll welcome that data-gathering because it will make their lives easier, argues McQuivey, the featured IRCE speaker who will present “The Internet of Things Means a Consumer Information Tsunami: Get Ready to Ride the Wave” at 8:45 a.m. Thursday at IRCE. “A washing machine already senses when it’s out of balance, so a next step would be for it to notify you that it needs a service call and it’s still under warranty for three more weeks so you should schedule that appointment now,” he says. “The moment a trusted company gives consumers more of what they want, they share information.”
Smart, web-connected products are less likely to be transactional for purchases than advisory, McQuivey says, yielding unprecedented data on consumers’ needs, preferences and readiness to purchase.The Internet of Things has the potential to let retailers personalize customer outreach and service with laser-like precision and become more of a personal digital assistant to consumers.
“This is not e-commerce in the way a lot of people think about it now,” McQuivey says. “This is not so much about retail but about building a very intelligent relationship with consumers.”
Part of the problem retailers will face, McQuivey says, is that those billions of devices will come from many manufacturers and there is as yet no standard way to communicate with those devices or collect and transmit data to consumers—or retailers. There needs to be an entity between manufacturers and the recipients of the data to make the information usable, and he expects that may well be a company that already has lots of connections and processes lots of data. Three candidates, he says, are Amazon, Google Inc. and Apple Inc.
McQuivey’s guess is that this information will be aggregated by a major company with the resources to connect to a multitude of devices—and that will be able to offer the shopper many options, much as a Google search results page does today. That “middleman,” as McQuivey describes it, will want to fill consumers’ shelves or closet in a way that makes them happy.
"People have claimed we entered an information age when the PC was invented. But the real information age starts now, as hyperadoptive consumers put sensors in their homes, cars and on their bodies, sensors that will generate more data than ever before. If 8% of people already want their next car to be a self-driving car and 26% of people expect to have a smartwatch soon, smart marketers must prepare to know their customers better than their customers know themselves," he says. "But they'll only maintain their permission to access that data if they do something with it that actually helps people get more of what they want. For marketers this will mean building a lifestyle-supportive relationship with customers, something that goes far beyond today's transactional or brand relationships.
"And because every brand or retailer will be supporting the same lifestyle needs of the customer, they will collide with each other in the customer's bathroom, kitchen and car. Get ready for a hyper-aware economy that is littered with brands that crashed into each other on the road to building the right relationship with the sensor-laden customer," McQuivey says.
Meanwhile, Amazon is testing the concept of devices that can automatically place online orders. It took one step in this direction in March when it introduced Dash, an Internet-connected fob that lets members of its Prime free-shipping and loyalty program order a single product of her choosing with a push of the Dash button. Initially, Amazon ordered 254 products, including Bounty paper towels, Tide laundry detergent and products from such brands as Olay, Gillette, Gerber, Kraft, Glad and WellPet.
And the Dash button is just the first public appearance of a much broader Amazon program called Dash Replenishment Service, which combines the Internet of Things with e-commerce in a couple of ways. As Amazon explains on the web page dedicated to the new service, “Device makers can either build a physical button into their hardware to reorder consumables or they can measure consumable usage so that reordering happens automatically. For example, an automatic pet food dispenser made with built-in sensors can measure the amount of pet food remaining in its container and place an order before running out.”
Amazon says several major consumer appliance brands will release products this fall that work with Dash Replenishment Service. They include: Whirlpool building washing machines that can anticipate when laundry supplies are running low and place orders through DRS; Clorox Corp. promises Brita water filters that will measure the amount of water that has passed through the filter and reorder filters when needed; Brother printers will reorder ink and toner when required; and Quirky Inc. says it will release a coffee machine, baby formula maker and pet food dispenser that will measure how much of the consumable ingredients remain and place orders to ensure the consumer does not run out.