Part II: Internet of Things is here – are your customers ready?
In my previous blog on Internet of Things is here, I focused on broad selection criteria that will guide your business for adoption of right level of IOT, thereby staying current as well as not indulging in a technology that’s still undergoing maturity process.
In this continuation of blog, I will be diving slightly deeper into most important aspect of entire equation – Customer.
There is a lot of press and academic content on internet arguing about privacy invasion through retail sensor technologies and how it could be a deterent to customer experience. Understandably, these outbreaks have gotten retailers slightly more vigilant and reserved about adoption of newer technologies that could fall under this umbrella of claims.
So for starters, I wanted to frame the question businesses are trying to tackle as following:
Are customers ready for IOT technology in retail? How have customers reacted to similar technologies that arguably invade their privacy?
IOT allows “things” to turn smart – with sensing capabilities, myriad devices are able to capture the environmental details and transmit them over network. With many devices on network sharing variety of data, collective insights could be synthesized. As an initial entrant of this technology, phones became one of the first IOT devices when they turned “smart”. Today, we have widespread adoption of smart phones around the world. Remember the times when smart phones (or even cell phones) were considered as intruding into private lives of users?
Just around the same time, eCommerce and online penetration was increasing. Retail and shopping online for variety of needs started becoming more and more acceptable. Online retailers started utilizing web analytics to gain more insights into purchasers behavior allowing them to optimize webpage content based on visitors and in turn improve customer experience. Remember the first time you had an email promoting a product of similar category that you were searching on google? First reactions were surely of rage and claiming intrusion, however, over time, customers have gotten more educated and accepting; also, businesses have become more responsible in requesting consents from visitors and tailoring analytics based on their preferences.
As we can see below, web analytics market has seen tremendous growth and is expected to continue growing at CAGR (compounded annual growth rate) of 18.3%. It is expected to grow from $1.33 billion in 2014 to $3.1 billion in 2019.
In my opinion, IOT in retail would not be any different. Yes, there is scope for technologies to become more robust and mature in terms of ensuring that key privacy details are not captured and stored. However, more importantly, businesses have to build trust with their customers that they’re not interested in private information, but only utilizing technology to enhance customer experience in their stores.
As for customers, they seem to be more ready to adopt IOT enabled technologies – growth of active wear technologies could be a leading indicator to customer acceptance to beneficial IOT technologies. The active wear market is expected to grow from $2.5 billion in 2013 to $12.6 billion in 2018.
Also, similar indicator could be traced from customer readiness to utilize digital signage at retail outlets. It is estimated that digital signage use (for check outs) would increase from $6 billion in 2013 to $27.5 billion in 2018, a CAGR of 35.7%.
Active Wear & Digital Signage Market Growth Estimates