Search is Dead…Long Live IoT

With the onset of IoT, AI and big data, humans will no longer be making purchasing decisions for many products that we currently do; computers, hardware systems, even fridges will be doing that for us.

Ericsson predicted that there will be 50 billion connected devices by 2020, OK I have no idea if we are there yet but we soon will be if we are not. IoT enables businesses to limit and control customer purchasing choices under the guise of seamless customer experience. IoT serves as the perfect vehicle to create great customer experiences, however, it also drives customers away from the competitive landscape of the web, particularly for commodity purchases such as food, refills, replacements, household day to day, etc.

Back in 2011 Google coined the ZMOT thinking, the zero moment of truth, it talks about the classic (obsolete?) mental model for marketing:

• Stimulus — see a TV ad for something
• Shelf — goes to store to see it
• Experience — take the item home and start using it

Then the new mental model, with the inclusion of the ‘Zero moment of truth’ — i.e. checking reviews, product videos, user feedback, etc- this is where we are today.

So with IoT systems using IoT technology to purchase products on behalf of the consumer and the ongoing commoditization of more and more products, a good question to consider is, where in the world of IoT does this ZMOT sit?

Well maybe around the service provider and not the product. Interestingly, the heart of Google’s power, its search algorithm is at risk, but that’s a whole different story.

From Brand & Product to Commodity & Service

How can businesses remove competitor choice from their customers, I know how this sounds but isn’t this what every business would ultimately love to achieve? to lock customers to their brand and products removing or at least distancing them from any likely competition. IoT helps to serve this ambition.

Let me rewind a little and set the scene, how many of you have signed up to a utility service provider and not reviewed this for many years? or maybe your bank, when was the last time you changed your current account provider? if anything like most people, the effort and pain of changing far out ways any benefit, so unless something pretty spectacular goes array, I stay where I am.

Let’s Compare this to light bulb purchases as an example, have you gone back to the same shop or even brand to buy the replacement bulbs you need year on year? Probably not in fact you're probably asking yourself what the hell is he on about, light bulbs? Which only reinforces the principle.

OK OK, what about the food in your cupboard or fridge? do you go to the same supermarket week on week, well maybe if the convenience factors are right but if you have every supermarket choice nearby, you’d go to the best deal right? who has a sale on, the voucher you've received through the post, the foods you like best, but at any time you could enter another provider shop with relative ease and little thought.

This is the commoditization of products or services, with little in the way of brand allegiance that can be observed, so how can this allegiance be obtained? By means of intelligent customer experience, wrapping the commodity product or brand within a great service all enabled by the IoT advances.

A New Hope

So how do businesses get through or even flourish in this product and brand promiscuity, the answer lies in the utility or banking services models? IoT can be the solution to achieve in many industries, by changing your product, brand, or service into a commodity to the overall value service provision.

Consider the lighting example above, using a manufacturing business as an example. A manufacturing plant houses hundreds of light bulbs used across its production facility, by putting in place IoT systems which monitor lighting states; identifying those which have failed, are due for maintenance or are going to fail and purchasing through a system to system communication with a supplier all delivered the next day ready to be installed. This in its simplicity will save a business money, enabling employees and company resources to be focused on where they add true value to the business.

A businesses ‘True value’ is the product they sell and not in the facilities they are made in. For example, consider a laptop manufacturer, having more engineers focusing on end-product design making the laptop more efficient, lighter, faster or consume less power or maybe the maintenance engineer optimizing the production line efficiency, as opposed to facilities personnel spending time identifying and searching for faulty bulbs and then purchasing the right replacements. This has got to result in a better bottom line right?

Hence a light bulb provider commoditizing its light bulb products and charging a service fee (with free of charge or very little product cost) to remove the lighting maintenance problem is a simplistic example of how IoT corners a market. The customer has far bigger things to be concerned with and is unlikely to switch unless maybe all the light bulbs fail!

IoT will result in a less competitive landscape for those who make a transition from product to service and create an intelligent customer experience around it. Once the user has bought into the customer experience it will be very hard for any competition to break them away (banks and utilities!)

The beauty of IoT is that the more customers that sign up the stronger the service offered; insight is gained, which ensures holding the right stock at the right volumes, new innovative avenues will present themselves and customer savings can be offered, in addition to providing increased purchasing power through consolidation and significant savings through limiting stock obsolescence.