“Big Data” may dominate the headlines, but increasingly there has been a recognition that Micro Data more accurately describes the opportunity for brands in the years ahead. The most valuable information a company can have consists, not of macro-level trends, but rather one-to-one customer data and intelligence that can strengthen relationships and foster longer-term profitability.
Powering the opportunity around data is a rapidly growing network of connected or intelligent devices, also known as the Internet of Things (IoT). Reports from Gartner forecast that the current number of 7 billion connected devices will balloon to 21 billion by 2020. And by turning every product or touchpoint into a real-time sensor, brands can finally achieve a holistic understanding of how their customers shop, buy and interact with their products. Below are a few ways that companies are using IoT-generated insights to inform more consistent, customer-centric decisions across the organization.
Closing the Gap Between User Design And UX
Never before have companies been able to see with such precision how customers actually engage with their products and marketing communications. Usage data can provide invaluable insights around product design, ensuring that form matches function, and helping product teams better prioritize which new features to develop or optimize. “Smart,” or connected, devices like fitness trackers, thermostats, light bulbs, and more are already generating real-time data that informs more impactful product updates and re-designs.
Mapping Out How Consumers Navigate The Marketplace
Many brands are using IoT-related technologies to see how shoppers navigate their retail or online stores, tracking where they linger and how that affects if and what they ultimately buy. These insights can increase revenue by optimizing the in-store layout, or online experience, for higher conversions and lower rates of cart abandonment. Amazon Go, the grocery concept store unveiled in February by the e-commerce giant, is one real-world example of this technology, equipped with hundreds of sensors that facilitate a frictionless, “Just Walk Out” checkout experience for customers.
Developing Stronger Customer Relationships
With advanced feedback loops built into their products, IoT-powered companies no longer have to rely on customer complaints as a way to uncover issues with their product offering or user experience. Instead, the product or service can itself become a source of data, detecting potential problems before they materialize and enabling support teams to focus their time and resources on proactive initiatives. Smart devices and user interfaces — such as a mobile app, or digital check-out experience — can also offer personalized information or discounts at the point-of-sale, nudging customers towards new products or related upsell features based on what they’ve purchased in the past.
In the coming years, McKinsey predicts that IoT will add $4 to $11 trillion annually to the global economy by 2025. The customer intelligence generated from IoT and other customer insight platforms can drive value creation across nearly every department and stage of the supply chain. But it’s also important for companies to continually be transparent with consumers and vendors in how they collect and use customer data (giving users control to opt-out as they wish). Partnering with tech companies that prioritize data visualization can also ensure that brands are unlocking the most value from the new customer intelligence they are gathering.