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Internet of Things

Is IoT The Next Big Opportunity?

Is IoT The Next Big Opportunity?
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You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

People used to think the clap-on, clap-off light switch was a novelty. This fun gadget seemed high tech, and though it seemed like a gimmick, was an early taste of what consumers loved. Today, few would be impressed by this small trick as many homes are now equipped with voice controlled light switches, remote controlled thermostats, video surveillance that connects to smartphones, and dozens of other more advanced features.

The industry is now called the Internet of Things (IoT) and marketers are trying to capitalize on this global phenomenon. But one unexpected outcome of this trend is a revolution in marketing. With so many new channels to use, the marketing industry is also scrambling to learn how to adapt to all of these new outlets.

To learn more about the potential of IoT for marketers, I spoke with Kit Hughes, an IoT marketing thought leader and Co-Founder of Look Listen, which last year made the list of Inc’s top 500 fastest growing private companies in the United States. Working with brands such as Anheuser-Busch, BP, Coca-Cola, and GE, Hughes has found himself and his company on the front lines of technology-focused marketing, which gives him unique insight into what the future looks like.

Here are some important points about IoT and what they mean to marketers.

1. Rapid Growth

IoT is growing at a rapid pace, and the next few years could see an unprecedented growth in this segment. According to Hughes, “The biggest challenge in marketing is timing. The undeniable tsunami of the IoT products and services market in the next few years removes the barrier to timing the market. Companies need to be ready now to meet the market demand IoT will bring to their business.”

2. In the Home

“The connected home has been long dreamt about and many companies have been playing in this space for years,” says Hughes. And he could be right. Predictions say that by 2019, companies will deliver 1.9 billion connected home devices, which is expected to bring in about $490 billion in revenue.

“Get ready for the laggards to catch up. Companies need to identify how they intersect with the connected home by understanding whether they create one of the ‘things’ that people use or whether they hook into the data that the connected home provides.”

“Brands will need to make sure they are trustworthy and fun, like a member of someone's family. The connected home products need to make sure they have the attributes of someone that you'd want living with you: dependable, trustworthy, fun to be around, contribute to your quality of life, help out with chores, and respectful of privacy,” adds Hughes.

3. On the Body

It’s not just the home, consumers are warming up to the idea of wearables as well. Right now, less than 7 percent of consumers own a wearable tech device. “Wearable tech hasn't hit escape velocity from its most popular niche: fitness tracking,” explains Hughes.

But by the end of next year, that number is expected to reach 28 percent. “With the stigma of Google Glass behind us, it's time to get serious about wearable tech. Fashion brands need to start embracing wearable tech now so that they can get comfortable with the work that goes into hardware and software development.”

Brands like Lunya are incorporating technical fibers into their clothing to regulate body temperature while you sleep or BellaBeat making fashionable jewelry with a technical purpose.

4. In the Body

It may be a bit too sci-fi for some to fathom, but IoT is also going to be inside the body. In 2008, a company called Proteus Digital Health was awarded a U.S. patent for a pill, which you can swallow, that contains a tiny sensor that connects to this global network of devices.

“Pills that can be controlled by your phone? That's exciting to me on so many levels,” says Hughes.

“Think about the possibility of being able to control the delivery of a cancer drug based on vitals, body chemistry, environmental conditions, etc. Companies in this space will need to do exactly what other healthcare device companies do. Establish trust and credibility in their brand. Without this, the cool factor doesn't matter.”

5. For the Body

Wearables won’t be limited to watches and wristbands, Internet-connected clothing is coming as well and by 2020, 14 percent of consumers expect to purchase some IoT connected clothing.

“Connected clothes are going to be fun. I believe digital marketers should figure out a way to reinvent the band t-shirt. How can you create something so cool that people will want to wear it, while being identified with your brand? Since fashion turns so quickly, the chance to play around with it shouldn't be passed up.”

6. On the Road

“Cars have been the most consistently evolving machines we use. Since it is now a connected micro-environment on wheels, there are several opportunities to open the car up,” says Hughes.

Gartner predicts that one in five vehicles on the road will have some form of wireless connection by 2020.

Look at the rideshare service SPLT.io, which considers itself part of IoT. Companies are figuring out how to use a service like this to make their employees commute easier.

“Smart marketers will seize even simple things like this and make it part of the brand message.”

7. Across the Globe

According to a report released by GSMA, 27 percent of all global machine-to-machine (M2M) connections are in China, while all of Europe has 29 percent, and the U.S. has 19 percent.

“Even though some countries monitor Internet traffic and others have restrictive privacy policies, data doesn't have borders. Marketers are going to have to learn what they can't do versus what they can dream up.”

“This can create challenges for marketers because there can be new restrictions in Europe at any time or overnight policy changes in China. Marketers are going to need to be nimble to reset their expectations while playing in the digital space internationally.”

8. Early Stages

This new industry is just beginning to form and it’s been said only 0.06% of things that can be connected to the Internet actually are, which leaves 10 billion things out of the 1.5 trillion that exist across the world.

“Make no doubt about it. This is going to be big,” says Hughes. “It's not the 3D television or QR code flavor of the year. Marketers who get on board now thinking about how to leverage data, and engage their consumers, are going to win.”

Conclusion

Hughes goes on to explain that it's up to marketers to guide the discussion about what the right points of entry are for their business, and the right time to employ specific strategies and tactics.

“Marketers should run ideation workshops in their companies to get inputs, filter down lists of opportunities, and then draft the best roadmap for the IoT intersection with their business. Make decisions based on what the perfect dream state is and work back from there. Don't start by limiting what the marketing play will be with IoT.”

Edition: December 2016

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