Five things retailers must do to make IoT not about ‘things’
Through a special arrangement, presented here for discussion is a summary of a current article from the IMSResultsCount blog.
The track record of selling IoT devices in stores has been pretty abysmal. It has turned out that IoT is not about selling “things” at all.
One problem is that retailers are stuck in a legacy of merchandising and selling things. Today’s consumers aren’t buying things because they connect to the internet.
The other problem, according to recent surveys, is that four out of five consumers don’t even have an understanding of IoT or the value of owning an IoT device. These findings are remarkable in that most consumers already own devices with IoT capability: smartphones, smart TVs and, most recently, cars.
Here, a few tips for retailers on how to introduce IoT to shoppers:
The power of stories: When consumers can’t “see” the technology or features, they need to see and hear how it is personally relevant. The benefits of IoT should start online and be told in-store.
Focus on “personal” and “use”: Consumers don’t care so much about what makes it work; they’re interested in what the IoT device does for them — how it makes their life better. If consumers can “see” how they can check if their garage door is open after they leave the house, that is a practical value of IoT and gives them piece of mind while saving a trip.
Let consumers see, touch, feel and “test drive”: We need to see how these devices work, connect and, most importantly, the ease of use. One reason Fitbits are popular is that consumers can put one on for a test drive in store.
Focus on personal value over novelty: A refrigerator that can keep track of its contents is certainly a novelty. But show how an IoT smart home device can send them a text alert if there is an intruder or smoke present — safety concerns of real meaning in their personal life.
Show the “How” – Offer services: Best Buy’s Geek Squad has created a profitable enterprise making technology things work for consumers in their homes. Why not offer similar services for IoT devices designed for “smart homes” and security?
Billions of IoT devices could represent a significant opportunity if retailers can stop selling things, and start helping shoppers buy what fits their lifestyle.
Discussion Questions
DISCUSSION QUESTIONS:
Do you see the path to purchasing IoT smart home devices in need of a change? What extra steps may retailers have to add to sell IoT?
Poll
BrainTrust
Nikki Baird
VP of Strategy, Aptos
Keith Anderson
Founder, Decarbonizing Commerce
Retailers definitely need to change how they sell IoT devices to consumers, and the change is not going to be easy. While it’s easy enough to plug a device in a wall, it’s much harder to configure all the devices to work together to deliver the benefits those devices were purchased for. Which is a huge opportunity for services. But, as noted, retailers aren’t so good at selling services.
Consumer-facing IoT devices are a means to an end — a means to controlling the lights in your home or saving energy or not having to worry about how much water your lawn is or isn’t getting. Consumers buy the things because they want services to make their life easier. In a way, the actual purchase of the devices is an outcome, not the driver of the service itself.
Right now, the people buying these devices are the bleeding-edge people who don’t mind the hard work, the glitches, the frustrations. But in order to be mass market and mainstream, retailers and the brands together are going to have to come up with a way to sell the services first — and the devices as an outcome of buying into the services to begin with.
“Today’s consumers aren’t buying things because they connect to the internet.” That’s like saying a woman isn’t buying a black dress because she wants to add to her wardrobe. It’s always about what it does for the buyer — IoT is no different.
I would posit selling IoT as helping a customer to know if the garage door is open is a fairly unconvincing reason to buy anything. Likewise the teakettle you can turn on with your smartphone. With rising fears of breeches of security in such devices, I don’t see the compelling need.
Outside a certain geek culture, which probably shops online anyways, the best selling is friend to friend — you have to get this. I doubt that’s going to happen anytime soon with a washer that can order its own detergent as its main selling feature.
Yes. Connecting to the Internet is not an inherent benefit in and of itself. What can be done when a device is connected to the Internet? If consumers can not immediately answer that question then a self-service sales approach will not be successful. Therefore, sales reps and/or other marketing tools need to be proactive and interactive to make benefits obvious.
The “test drive” point is really key here. I’ve been reading about the IoT as “the next big thing” for at least three years, but until I owned an Echo and started using it heavily, it hadn’t really hit home.
For the IoT to go mainstream, people will have to experience it.
Selling IoT products is no different than selling any other product. The article does a good job of pointing out the basics of introducing a product to consumers. But just because consumers know about certain products does not mean they will buy them. 3-D TV is a great example. Manufacturers and retailers went all out to introduce 3-D TVs, but consumers didn’t want them. Such may be the case with numerous IoT offerings.
Finally, the steady drumbeat of stories about IoT products not being secure has, in many instances, been what consumers remember, not the benefits of the products. IoT manufactures need to address this issue and solve this very real problem.
When IoT products are shown to improve quality of life without sacrificing security they will be more attractive to consumers. Until then, they are viewed as expensive toys.
Adoption of IoT smart devices will be driven by two forces: generational pressure and critical mass. Let’s look at them in order.
For Millennials the IoT is the technological “wallpaper” of their lives. They assume devices will be “smart” and connected. So the more economic power Millennials exert the faster manufacturers will build IoT capabilities into everything they make. The rest of us will either learn to catch up or have our kids or grandkids explain it to us.
The second element — critical mass — is what will make Boomers and Gen X and Yers jump on the IoT bandwagon. Buy a new furnace lately? Hard not to have a “smart” thermostat thrown in the package. And as smart and connected devices lose their novelty status and become part of our consumer expectation, set acceptance of the IoT will grow exponentially.
All of which is to say is that it isn’t retailers who are going to lead the IoT charge. The “storytellers” of the IoT revolution today are utility companies, home security firms, exercise equipment designers, medical device purveyors and white goods makers. If they are effective in doing their collective jobs, the retailers path to sell will become almost effortless.
Once more Newtonian physics clings for life. Nothing in this universe is a collection of things. It is all one thing, a technical ecosystem in this case. The article is right in saying people want technology to make life better and/or easier but it doesn’t go quite far enough. Right now for retail, IoT is largely a matter of selling gadgets customers can’t get to work properly. The “I” stands for Irritation. We spend so much time and energy on the gadget we’ve long forgotten what it’s supposed to do for us.
The key is to see this as an inventory of possibilities; possibilities we haven’t seen before and that once we see them we conclude we can’t live without them. I’ll push it further — stop solving problems and start selling possibilities.
We also have to recognize that just because something is possible, it may still not make sense. There’s a high-tech refrigerator that comes with a tablet that automatically records what’s in it. Yup, that’s possible. But dumb. Open the damn door and you can see if you need milk or not.
Shoppers don’t buy things, they purchase experiences — hopefully emotionally rewarding experiences. Retailers and brands alike need to convey stories that share those experiences and their benefits. The connected devices and how they connect simply enable those experiences. The connected refrigerator isn’t interesting but its benefits to the consumer may be valued. I’ve talked to several colleagues who purchased the connected thermostat by Nest. They all purchased the device because it was geek-cool but when asked how and if they used the connected feature of the device on a regular basis they all indicated that they had not after the first test run. Not a very compelling story. One person did indicate that they liked that the device learned their temperature setting patterns — perhaps there’s a valued story that could be shared?
Share storytelling, storytelling, storytelling.
There are items which, if IoT enabled, will make it easier for consumers at large to adopt the entire concept. One example already given was the car and another was the garage door. Another can be a refrigerator: the consumer programs the unit to the local supermarket of choice, continuously scans the UPC of the items that are running low and are ready for re-order (the refrigerator “remembers” them), on a given day. The consumer presses the order button and one of a few things can happen: an order is immediately sent to the local supermarket for delivery or for pick up or an electronic list is immediately sent to the consumer’s smartphone (I use an app called Key Ring in which I keep my shopping lists and activate/deactivate the items I need to buy).
In this case, IoT has value. It makes shopping very easy and IoT is of practical use. It’s not just a cool gadget. Over time, as more practical use applications permeate the marketplace, the cool albeit unnecessary uses will come to the market and IoT will be almost ubiquitous.
I believe that it is not so much up to the retailers to entice consumers to purchase IoT products as it is for the product designers to come up with useful, practical applications of IoT technology that will, in turn, interest and entice the consumer to purchase those products and use them. After that, the consumer will “get it.”
I think the first step is for retailers to be service-driven rather than product-driven. Services have far more opportunity to be compelling differentiators than products typically do. Once truly convenient services are in place and are generating brand loyalty, then IoT devices can play a major role. They need to be convenient and value-add. Just buying a single-purpose device is now out of vogue. IoT is all about multiple benefits for the consumer, and the more overall value the retailer can provide the more likely it is that a consumer will investigate the offering.
The end-state here is pretty clear. At some point in the not-too-distant future, many of the devices in the home, at work and in the car will be managed/monitored/organized/coordinated/integrated/etc. by a smartphone or tablet. Retailers helping a customer make the leap from here to there will be rewarded with great share of wallet and better ratings. Retailers that don’t have a plan for helping customers integrate their lives will lose market share and credibility.
In the battle of transactions versus relationships, the latter is the clear winner. We are moving from expertise in selling things to building relationships and the data necessary to execute.
Forget about selling products and think about delivering consumer experiences. Thriving retailers in the years to come will have a radically different view and execution on retailing. Experiential retailing is more than your customer’s experience in the store, the web or across all points of interactions. It’s about relationships and that means enhancing consumers’ lives and helping to fulfill their aspirations along their many life journeys.
True confession. I had to look up what IoT is. I’m at the tail end of the baby boomers, so older but not THAT old and admittedly not an early adopter of technology, but I don’t have flip phone either… probably not too much different than millions of consumers they are trying to reach.
I think there is a lot of work to be done with educating the consumer about what this is and how it works.
IoT is not about selling things. It is about serving the customer after the sale. I didn’t respond to the Poll questions today because the one I would have picked isn’t there and, IMHO, it is the most important thing retailers and especially retail marketers need to get right.
The correct answer is: Serving the Customer.
It’s all about serving the customer before, during and after the sale.
And that is my 2 cents.
According to Fortune, 87% of consumers don’t know what IoT is. There is definitely an educational hurdle that needs to be addressed to sell the benefits of IoT to consumers. Since everyone is time-starved, I think the biggest selling point for IoT is convenience. If your favorite retailer (based on an opt-in model) can track the status of your product or consumption habits, the retailer can alert you or automatically replenish your product when you are running low.
Retailer need to communicate the customer journey. A good example of this is my home printer. My HP printer has a IoT tracking device inside and when my ink is running low, HP automatically sends me more ink as part of my subscription-based account. I never have to worry about running out of ink or running to the store when I run out. This is the type of convenience that retailers need to sell to their customers to gain mass adoption of more IoT devices.
IoT will be one of the key enablers or enhancements to the move to real-time retail based on customer context.
No doubt, if a retailer is planning on selling smart devices, they will assign a buyer. You can do the buyer and the makers a real favor by assigning folks to actually use the stuff.
When you purchase these devices for real, you’ll begin to uncover the unknown unknowns that you’ll only find through usage.
You will find how device use varies based on how people actually live. Do they live in an apartment or home? Is it in an area with vast changes in temperature? Do others live in the house? What anxieties do they hope to resolve? What are their daily life patterns and how can IoT help? Did they just move into the house or are they planning a renovation? Do they own a drill?
I was recently asked by someone about the Nest thermostat. They saw one, loved the design, loved that they could control it remotely, and felt it was a huge advance over their current programmable device. Based on some quick questions about how they wanted to use the device, it became apparent that they needed a system that could turn on during their commute home based on their location in the commute aka Geofencing. There is a way to do that with Nest, but I only knew about because I had experience with the device.
Retailers actually have an advantage selling IoT because we are in the business of real life. Vendors can really use our help. All kinds of “things” are becoming smart. Pick your buyer, select and test devices that connect with the problems your customers might want to resolve, fine tune your value proposition, identify some killer uses such as helping folks who are concerned about security, or an aging parent at home, or tracking when folks come and go from your house,etc., then figure out which services might be needed to make them work or install and test how to integrate these services into the sale of products and use this coming year to figure out how 2017 will be a year you’ll ramp-up. Oh, and don’t forget what Einstein said about IoT:
“If you can’t explain it to a six year old, you don’t understand it yourself.”
It’s not the Thing of the Internet that matters; it’s the experience or service it enables.
That’s why IoT products demand a whole new take on merchandising. Items in boxes won’t cut it when the actual product is an intangible. Sellers will need interactive demos that prove utility and ease of use. Make ’em interact with customers’ mobile devices right at the shelf. If they opt in, you have a great chance of closing the sale.
IoT and smart home devices will not sell themselves like many other products at big box retailers like Home Depot or Lowe’s. Rather, these items need to be thoroughly explained and sold by store associates. Taking it a step further, the “test drive” concept discussed in this post is probably the most novel means for selling IoT products. If consumers can touch/feel and use certain IoT products in store they will most-likely understand how said product will be a benefit to their own life and home. This seems to be the sales tactic that can help IoT products break down the wall between nice-to-have and necessity.
I’ve always thought the term “Internet of Things” was a strange way to describe something that is a solution that makes life more convenient, easier, etc. Market the result and not the way it works — and give it a better name.
I think this article is well written — it is not about the steak, it is about the sizzle. By that, I mean that consumers are seeking benefits — ways to leverage technology to improve their lives. IoT devices sold on the basis of being “internet connected” are not proving a real benefit to consumers at all. Tell the stories, show the benefits and consumers will purchase (e.g. Fitbit). If not, then the business will struggle to gain traction (e.g. Nest).
If the manufacturers cannot make this leap, then it is incumbent on the retailer to help consumers “cross the chasm” by demonstrating and facilitating clear consumer use cases and benefits.