Altimeter Group report finds possible win-win for brands and consumers in the Internet of things

Like the universe, the looming Internet of things seems incomprehensibly large and mysterious.

But a pioneering new report from the Altimeter Group finds that this explosion of intelligence, connectivity, and sensors in countless objects and machines is so unique because “it can mutually benefit both enterprise and consumer.”

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“Enterprises gain visibility [and] consumers gain empowerment,” noted author Jessica Groopman in the free report, “Customer Experience in the Internet of Things: Five Ways Brands Can Use Sensors to Build Better Customer Relationships.”

“There’s this potential for a mutual value exchange between brand and consumer,” Groopman told me. For instance, she said, simply monitoring something — such as a patient’s daily progress at home or whether a garage door is open — provides value to the consumer, and possibly to the brand. The consumer tracks her health or her home’s security, while the brand can deepen relationships — with the patient’s doctor by suggesting treatment enhancements, or with the homeowner by letting them know of an open door.

But there are questions that brands and consumers will have to answer, she noted, like which of these kinds of monitoring activities people want. If the value isn’t crystal clear for consumers, she said, companies shouldn’t offer it.

“There’s no one rule,” she added.

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The report doesn’t define the Internet of things as, say, a connected fitness tracker on your wrist. It defines it as a wearable fitness tracker on your wrist that transmits data to a doctor in real time and helps guide a patient’s post-surgical recovery.

By extension, it’s not simply a refrigerator with a display screen, but a refrigerator with a display screen that knows what normal food items are out of stock. In other words, a connected thing needs to add value to the consumer because of its connectness, not simply report back its status to the brand.

And it’s already here. As the report notes, Cisco has estimated that about four billion connected things came online in the past year alone, and Intel estimates that will grow to 200 billion within five years.

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Groopman finds one of the changes resulting from these new communications is the rise of what she calls the Product Voice. Originally, she writes, the Brand Voice was a one-way communication to the consumer, replaced by the two-way Consumer Voice as social media took hold.

Now, she says, the Product Voice is enabling communication not only back and forth from brand to consumer, but between product and consumer, and even product to product.

For a brand, this is Datapalooza. It means the possibility of having actual stats on product use, on consumer behavior, and on progress through an increasingly complex customer journey. It also means that the distinction between online behavior and the dark world of offline behavior will become blurred, as offline is increasingly populated by sensing and communicating objects and products.

Because of all of these changes, brands need to radically rethink how they engage a customer. Not only will “customer touchpoints” become an array of daily interactions with the customer, but there is the distinct possibility — even likelihood — of consumer fatigue.

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After all, how many times in a day do you want to interact with, or receive messaging from, the maker of your refrigerator? Best practices for “brand restraint” may well develop.

The “five ways” referenced in the report’s title are five use cases that create value for both parties:

• “REWARD: Rewarding consumers for their time, money, effort, and engagement,” contextualized because sensors can deliver the reward at exactly the right time. Walgreens, for example, has been piloting an augmented mobile app that offers a discount when you’re in a specific store aisle.
• “INFORMATION AND DECISION-MAKING [empowers] consumers with the ability to access and act on intelligence.” A Whirlpool connected washer/dryer integrated with the Nest thermostat can increase energy efficiency by setting longer drying times when the thermostat detects the occupants are away.
• “FACILITATION: Foster easier, more accessible, and convenient brand experiences.” Examples include Disney’s wearable MagicBand that serves as an identity portal throughout the park.
• “SERVICE: Support and retain customers by proactively identifying opportunities.” Tesla has resolved a recall issue via a remotely delivered software update.
• “INNOVATION: Leverage feedback for rapid R&D, customization, and improvement.” Tesla crowdsources ways to innovate, such as implementing a customer’s request for an extremely slow cruise control for stop-and-go traffic.

While the report acknowledges the needs for consumer privacy, brands are going to have to work hard to make consumer confidence part of the value proposition. Notwithstanding the impact of regulation, brands that do the best job may well be the ones most rewarded with consumer interaction.

As extensive as this report is, it only touches the surface of the new interaction. And, despite its title, customer experience in non-standard connected things — usability, usefulness, interaction flow, visual clues, and a holistic experience — is still a subject waiting to be covered.

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