Customer experience and the Internet of Things: a reality check

The largest potential of the Internet of Things or IoT from a customer experience – and marketing – perspective is generally seen in next generation smart devices, appliances and applications in the consumer space.

The glue that needs to make it happen: data, put into context and turned into actionable intelligence. However, the consumer IoT is still relatively small, in comparison with the Industrial Internet of Things.

Consumers are wary and cautious, among others regarding security and data privacy. It’s clear that recent cyber-attacks using IoT-enabled devices haven’t exactly helped In this regard. Still, security and privacy concerns were already among the main reasons why consumers aren’t going for the Internet of Things massively yet, as Accenture found, early 2016.


Customer experience in the Industrial Internet of Things

With the Consumer Internet of Things not really picking up yet, what about the role of customer experience in Industrial Internet of Things applications?

If we look at the main types of IoT projects today, it’s clear that they are mainly about optimization, process automation and other internal goals that are not related with customer experience goals. This might sound surprising as often we believe that digital transformation and, within that context internet of Things deployments, are about customer experience, customer-centricity and customer adaptiveness in the so-called age of the customer.

However, even if digital transformation and customer experience are essential in most transformation projects, this is not necessarily the case in enterprise-wide digital transformation and certainly not in projects and initiatives with an Internet of Things component. In fact, as IDC found, the main goals of organizations who are moving from trials to more scalable IoT deployments are about the mentioned internal and operational goals. Customer-facing goals such as customer experience optimization lag behind.

This isn’t really a surprise. With the mentioned slower evolutions in the Consumer Internet of Things and the leading industries in IoT deployments in mind, customer experience and customer-facing goals are only indirectly served.

Not all industries are created equally: customer experience, IoT and retail

However, we need to differ. The Internet of Things is not a thing. There are ample use cases and of course not all industries are the same or have equal use cases. A factory isn’t a fashion shop.

An example of a sector which is a first mover in the Internet of Things and does pay attention to customer-facing goals, is retail. IoT implementations in the retail industry are about internal processes to a large extent as well: optimizing logistics (supply chain), the conditions of shipped goods, managing inventory (for instance smart shelves) and reducing costs are just a few examples.

However, a lot of these by definition have an impact on customer satisfaction, meet increasing customer expectations and, last but not least, are joined by IoT deployments to improve customer experience and customer engagement.

That’s where IoT applications such as smart fitting rooms, self-checkout, smart mirrors and IoT-enabled signage are about, even if personalized marketing is never far away in the latter example.

Prioritize for mutual benefits

Retailers want IoT deployments. Retail Systems Research found that enhancing inventory accuracy, the ability to engage with the digital shopper in a physical context and higher store effectiveness for consumers rank high on the IoT benefits list of retailers.

Nevertheless, there are still several challenges the research says. Our advice to retailers is to start looking at use cases that offer an immediate business benefit and a customer advantage at the same time. There is a link between inventory accuracy and customer satisfaction. It is possible to enrich in-store experiences, while selling more through personalized messaging.

These are just some examples. The important thing is to make the business case, get buy-in and simply start. In the end, it won’t take long before the best IoT-enabled experiences which shoppers enjoy at a retailer, will also be expected from others.

Top picture: purchased on Shutterstock. Copyright: Vasin Lee

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