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It’s a nightmare for marketing managers. Where there used to be clearly defined spheres of action, today the digital economy throws up more and more new subject areas for the agenda which have to be evaluated and, if applicable, worked into your own plan. The “Internet of Things” (IoT for short) is one of these new fields. However, before we examine the significance of the IoT for marketing, let’s quickly look at how the market is developing. Because like many other digital developments, the IoT impacts a variety of sectors and processes, and it is by no means merely a subject for techies or nerds.
When the fridge suddenly starts surfing the net
The Internet of Things is invading our homes under the umbrella term of “smart home”, supporting us in our everyday office life, helping to optimise production and logistics processes (Industry 4.0), able to alter the mechanisms in the health sector (smart health) and impacting the world of mobility products (smart mobility). In short, there is no area where the IoT is not playing a role. And the developments are coming thick and fast. By way of an example: whereas two years ago, the first internet-enabled fridges were to be seen at the largest electronics fair CES (Consumer Electronics Show) in Las Vegas, at the latest IFA in Berlin, they were a fixture in the product ranges of nearly every appliance manufacturer. And in five years, we will have a hard time buying any appliance without internet access and display.
These developments are being driven by two guiding principles. The first of these runs as follows: “What can be done, will be done”. The Internet of Things is a gigantic experimental field where anything that seems to be more or less feasible, will also be tried out sooner or later. This may appear to be devoid of reason in certain cases but it definitely delivers new insights and empirical values. And even if the idea initially seems far-fetched, it may suddenly become an exciting solution in a different context of use. So you shouldn’t ridicule an initiative too early. Even if you’re talking about connected hairbrushes or fishing drones.
The second principle is that the real aim of IoT developments is to simplify flows, interactions and processes for users. The task here is to analyse process sequences, identify the benefits provided by connected devices and products and exploit them to our own advantage. So when devices automatically analyse parts subject to wear and tear and reorder them at the right time, breakdowns and the potential user frustration ensuing from them are eliminated. A good basis for a long-term customer relationship. And therefore also a great opportunity which you should take advantage of as a brand and not leave to your competitors.
One thing is sure: Both perspectives are driving developments relentlessly. Why and how can those responsible for brands now act to actively shape the development of the market and therefore to position themselves for the future? For this, we will look here predominantly at the areas of smart home and mobility, in other words spaces which are usually highly relevant as touchpoints for our target markets.
“Things” become touchpoints
In our homes, in particular, new smart products are coming onto the market almost daily, and everyday things which have hitherto been analogue, are now becoming smart, networked system modules. The fridge already mentioned will not only be available for direct food orders via a touchscreen in the future, it will also analyse its own contents in order to produce its own shopping lists independently or to support health-conscious nutrition.
Cooktops and ovens will be remotely controlled or easily operated through natural language assistants. Light compositions, burglar protection, optimisation of energy consumption — already feasible today, in future ubiquitous as a result of the rapidly rising range of products. Car manufacturers, too, have long since initiated changes to their product portfolios. As well as vehicle production, they are positioning themselves as service providers, and they increasingly view cars as “smartphones on wheels”. As well as primary vehicle services such as the temporary release of engine performance or entertainment offers, manufacturers will also include external services in their vehicle environment for a charge. Insurance, delivery services — whatever the heart desires and users can benefit from is welcome in the coming app economy in cars.
What unites all touchpoints, by the way, is the increasing control of the environment through voice control systems such as Alexa, Siri or Google Assistant.
Challenges and opportunities
The task in both areas is to master fundamentally different challenges which go beyond simple operation. Consumers clearly expect “machines” to think proactively. Digital control — fine! But real simplifications only succeed if you are also successful in identifying the particular user, knowing and pinpointing their profile and making them proactive offers in return. To do so, we need to generate user IDs and use them as seamlessly as possible throughout the customer journey with the data saved to the cloud. That’s the theory, at least. Because ownership of the interfaces with consumers — which is what the user ID is — and ownership of the data are regarded as critical factors in future success. In short, everyone wants a piece of the action and they are all manoeuvring to face up to platform giants such as Facebook, Google, Apple and Amazon.
As well as the structural challenge — user IDs and cloud services — the task is to develop and implement the right offers for the future. In contrast to the past when this job was usually performed by clearly defined specialist profiles for research and development, this development environment requires far greater capabilities which have to be combined, demanding a new way of working. New digital services will not be the sole responsibility of the R&D department, and the trend towards “advertising as a service” will also extend the variety of topics on the marketing agenda. As it is no longer the idea on its own that is crucial for the success of a new product but above all the way in which it is implemented and to some extent also the speed, collaborative styles of working and greater agility than shown in the past will be important criteria for success. Product specialists will then encounter information architects, designers, programmers, analysts and lateral thinkers. And ideally, consumers will also quickly become part of the team in order to develop sensible services for this new market. The challenges for marketing can therefore only de facto be met by interdisciplinary task forces able to quickly develop IoT offers — hardware as well as digital services — in close collaboration with the aid of design thinking workshops, rapid prototyping and iterative development processes.
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