Why the Internet of Things is just one part of a much bigger prize

 
Abbie Walsh
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The Internet of Things revolution will require brands to get more intimate with their customers (Source: Getty)
By now you’re most likely familiar with the Internet of Things, the phrase often used to describe the growing network of once-inanimate objects that are becoming smart, Wi-Fi-connected devices.
Some are extremely innovative – a British inventor has just created smart wallpaper, which uses magnetic charges to flip ‘physical pixels’ in fabric, creating potentially huge digital displays.
Others, seem less promising (connected egg cartons, really?).
But the question that should be on everyone’s lips is how these devices will actually benefit business and society as a whole? The problem with the Internet of Things is it’s essentially a limited phrase for describing the digital transition we’re currently experiencing. The truly pioneering businesses are realising that the Internet of Things is, in fact, part of something much bigger.
Big data, smart mobile technology and connected devices will increasingly combine to allow businesses to create a new type of smart digital service, capable of constantly evolving and learning our individual preferences and environments, almost as if it’s alive. These ‘living services’ will be more contextualised and personalised than any we’ve experienced before.
Early examples are already emerging. Smart thermostat Ecobee is able to program itself using its owner’s preferred temperature and schedule, as well as adjust its settings to suit the weather.
Personal finance app Pocketsmith looks at all incoming and outgoing transactions to create a long distance forecast of the user’s predicted bank balance— even to a given date.
This next step in the digitisation of everything will disrupt many businesses from top to bottom and bring about massive change in the relationship with their customers. There are five challenges every business must meet in order to thrive in the era of living services.

A digital business never sleeps

Today, most businesses are still geared towards selling products and services against long-established consumer needs. Most automotive brands, for example, will constantly look to innovate, but ultimately many are still structured to deliver a mass-produced product as efficiently as possible.
But what if your product is constantly being designed? Not just every year, but every day, hour or minute? Electric car manufacturer Tesla is one example of this. The company has developed an in-car app that adapts to the driver’s behaviour for a more personalised driving experience, such as knowing when to heat up the car on a cold morning before a commute.
Living services like these demand businesses keep an open line of communication and interaction with consumers to constantly evolve and meet their changing expectations. For many companies, this will require a significant shift in mindset.

The marriage of IT and marketing

The complex nature of living services means businesses will have to re-think their organisational structure too. Where old business models worked on the premise of isolating marketing and IT, a coming together of the two departments is actually pivotal for living services to work. Some companies like cosmetics retailer Sephora have fused the roles of chief marketing officer and chief digital officer to establish a digital strategy with a single focus: to achieve continual evolution of the consumer experience.

This service will change your life

Living services flow from the question, “how can we improve consumer’s lives?” rather than “how can we sell our clearly defined product more profitably?” The start-ups offering the first breed of living services understand this philosophy well.
Software company Evernote anticipated how the increasing complexity of digital lifestyle makes it hard for consumers to remember things and stay organised across a range of devices. In reinventing personal organisation for the digital age, Evernote is also affecting a small transformation in the lives of its customers.

Trust is the new currency

Living services like Ecobee’s smart thermostats require brands to get intimate with customers, and that requires deep consumer trust. Businesses will need to adopt an approach to services and dialogue that truly puts the customer first and be absolutely transparent about their customer’s personal data and how they use it. The level of consumer trust will be a key measure of success in this new era, rather than profit margins alone.

Embrace service ‘atomisation’

Consumers increasingly expect services that are readily accessible across a growing number of physical and digital touchpoints. Spotify achieved this by super-distributing or ‘atomising’ its service to make it available through various access points and third-party services – from Samsung Smart TVs to Ford’s auto dashboards.
Any business looking to tap into the advantages of living services will need to adopt a similar approach and allow its brand to appear in multiple places or environments, often where they haven’t previously ventured. Mature companies with entrenched marketing processes might find relinquishing control in this way particularly difficult.
But while the challenges of incorporating living services into traditional businesses are by no means negligible, the benefits of facing such complexities outweigh the cons 10-fold. Like the arrival of the internet before it, this next phase in the digitisation of everything will open up a vast range of improved experiences that will reap huge benefits to both businesses and consumers alike.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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