The Consumer Electronics Show (CES) 2015 kicked off this week in Las Vegas, which is always an exciting time for me. I am the foremost gadget freak and have always been an early adopter of new technology.
The one prevailing theme at CES 2015 is the “Internet of Things” (IoT): sensor technologies that allow increasing numbers of everyday appliances and gadgets to be connected and controlled through apps or the Internet. IoT isn’t new. These connected device manufacturers like Nest (now owned by Google), which makes “smart” thermostats, have been in the market for a few years. In addition, there have been fitness wearable devices that allow you to monitor all aspects of your health from how much you walk to your blood pressure.
However, IoT no longer seems to be a novel idea for tech geeks like me. It seems to be getting closer to a tipping point. Laundry machines, refrigerators, coffee makers, locks, and even clothing are all starting to become “smart” and connected. I just saw a bicycle jacket that has built-in motion sensors. When you signal you are going turn, small LEDs in the arm sleeve illuminate. IoT is getting more prevalent, and soon everything we buy will contain some type of sensor technology that will make our lives easier.
However, is this a situation where technology advances are leading to a number of unintended consequences? If you think about it, IoT will give companies the ability to collect an enormous amount of data. Homes in the near future will have the ability to run themselves. My house will know what rooms to illuminate and heat based on my heat signature. My refrigerator will know what I eat and reorder things when I am running low. My laundry machine will alert me prior to starting a cycle that I have put a red shirt in with my whites. My car will be able to automatically drive me to the store. All very cool, right?But, what if my house starts making suggestions based on that information? What if it tells me I need to get out more and make more friends or exercise more? Or, the refrigerator tells me to cut down on the beer consumption, or the car tells me I should lose ten pounds in order to improve fuel efficiency? I know I am taking this to an extreme, but it raises a lot of privacy questions. What happens to all the data that is being collected? Should I be OK with data being collected about me? Will use of this data benefit me or harm me down the road? Do I have the ability to opt out? Overall, is my privacy being protected? Do I actually care about privacy if I find value in having my data collected? Does it enhance or impede my customer experience?
For companies, and especially for marketers, IoT enables a world of new opportunities to develop deeper relationships with customers and potential prospects. However, IoT will also present a ton of new challenges companies will need to immediately address. Analysts estimate that there will more the than 50 billion IoT devices by 2020. Yes, 50 billion! That is an enormous amount of data to collect, manage, and integrate. And, even if companies are able to tackle those challenges, they are just a few of many. For instance, do companies have a scalable and repeatable process to draw actionable insights from this vast and varied data? With the rising number of data breaches, is there a liability of holding on to some of this data? And just because companies can draw insights from the data, should they? Do they have a pulse on their customers’ privacy expectations? Will it positively or negatively impact the overall customer experience?
The bottom line is IoT is close to going mainstream. It will provide unprecedented new opportunities for both consumers and companies alike. That said, it also poses a number of new questions and challenges. Customers need to become informed and companies need to develop a clear strategy on how they are going to navigate both the technical and customer privacy challenges. Those that do will have the strategic competitive advantage and deepen their customer relationships. Those that don’t may find themselves overwhelmed with a mountain of data and angry customers. What does your IoT strategy look like?