While the term the 'Internet of Things' leaves the average person befuddled, it represents the latest frontier in leveraging data and analytics to better fuel business performance, according to Gib Bassett, CPG and retail industry principal, Oracle, writing in that company's blog.
Retailers can look at the IoT from their own viewpoint, encompassing the equipment, devices and processes that are part of their world, but they should also look at it from the consumer's perspective, which is a mobilized consumer along the path-to-purchase, he noted in a recent RetailWire article. IoT will provide network connectivity for everyday objects, enabling them to send and receive data.
The consumer packaged goods manufacturers and distributors see highly compelling use cases for the IoT, including machines that produce goods and generate data that helps predict and head off maintenance or failure issues. There's also the promise of a flow of tagged goods via RFID through the supply chain, and knowing with confidence their quantity and place relative to demand. "Having product on the shelf is critical to serving consumers," Bassett wrote.
"Retailers can pick up where suppliers leave off, knowing precise inventory and shelf positions for all merchandise, both in store and online. With omnichannel, this capability is crucial to simply maintaining competitive parity," he said.
The potential impact on the consumer will involve mobile, which is "becoming the ubiquitous interface between consumers and their environment at any point along the path to purchase. Mobile is not just for texting, e-mailing, browsing and using apps, but serves as the connection point to the consumer Internet of Things—health monitors, thermostats, household appliances, security systems, automobiles, watches, televisions, and even pantry and household products," Bassett said.
Writing for American City Business Journals, author Terry Brock cited Steve Brumer of 151 Advisors as saying retailers are using IoT to monitor and control inventory levels, measure peak times of traffic, connect with RFID and monitor remote alarms, among other things. "This can represent a huge cost savings, and increase sales when timed right," Brock wrote.
IoT also plays a major role in predicting failure, for example, using sensors linked to sensitive equipment to detect early signs of material fatigue, before the systems reach a critical stage. There are many uses for IoT in transportation and logistics, as well as supply chain management, he said
Not everyone is as optimistic about a future of networked "things." For one, Gartner found in a survey that despite IT and business leaders looking forward to the benefit of smart devices within three to five years, very few organizations have a clear strategy as to how they will take advantage of IoT. "The survey confirmed that the IoT is very immature, and many organizations have only just started experimenting with it," said Nick Jones, a Gartner VP.
"IoT is currently the most overhyped technology category going," wrote Ken Lonyai, digital innovation strategist and co-founder of ScreenPlay Interactive, commenting on Bassett's RetailWire article. "It offers some really good benefits, but they are unlikely to be as earth shattering as those driving IoT want everyone to believe."
IoT home automation products are not exactly flying off the shelves, said Chris Peterson, president, Integrated Marketing Solutions, also commenting on RetailWire. "One could argue that it is still early in the adoption cycle. But if you take time to read the consumer reviews, IoT is still complex for the consumer to set up. Unless vendors and retailers make the products come alive on the consumer's phone in-store, it doesn't become 'real' for the consumer," he said.
"The further immersion of the consumer into the IoT will demand true CPG/retailer partnerships to drive collective brand value and enthusiasm/loyalty," said Ralph Jacobson, global consumer products industry marketing executive, IBM, adding to the RetailWire discussion. "As barriers to entry fall and new competitors emerge, increased responsiveness and automation are today's keys to gaining market advantage and creating competitive differentiation."
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