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6 Expert Views on the Consumer Internet of Things

On September 30, academics and industry leaders gathered at George Washington University to explore the consumer Internet of Things. Led by digital marketing experts Donna Hoffman and Tom Novak, speakers offered a 360-view of emerging challenges and untapped possibilities.

“A smart home is not something you buy—it’s something you create.”

Donna Hoffman and Tom Novak, George Washington University

“The implications of complex interactions between people and newly smart everyday objects and devices are revolutionary,” said Donna Hoffman. “But there’s a disconnect between what companies are doing and what consumers are adopting. People just don’t see the value.”

She and Tom Novak propose that marketers shift their focus from individual-use cases and single devices to smart-home interactions among people, devices, infrastructure, interior and exterior climate—and even pets.

From these interactions, which they call “micro-assemblages,” novel and valued customer experiences emerge and point the way to effective marketing strategies. “A smart home is not something you buy—it’s something you create,” Novak said. “We are different so our smart homes are different.”

Marketers need to “get these devices into as many homes as possible as quickly as possible so consumers can start interacting with them and experiences can emerge,” Hoffman said. “Take a page from Steve Jobs’ introduction of the ipad in 2010: ‘It’s everything you imagined and more. Take it home and interact with it.’”

It is critical that marketers pay attention as consumers create their own smart-home “recipes” and  establish new “IFTTT” rules for object-person interactions, they concluded. “What patterns bubble up? What customer segments are emerging? This is the forefront of consumers expressing their needs.”

More from Donna Hoffman

VIDEO: "Smart is coming, ready or not." 

2

”Be aware of what's going on in the market: 3000 companies are doing experiments.” 

Larry Downes, Georgetown Center for Business and  Public Policy

“The IoT was entirely predictable,” observed Larry Downes. Thanks to the smaller, faster and cheaper computing principle known as Moore’s Law, “it is now cost-effective to put sensors on to pretty much everything.”

The IoT is in at a period of rapid and chaotic experimentation. “The new curve of market adoption is the shark fin—there are trial users and everyone else,” he noted. Experiments occur rapidly and at low cost on popular platforms, and companies market to all segments of users at once. Most experiments fail, but when a winning combination appears, the market embraces it all at once. An entire product lifecycle may be days or weeks—“it’s life and death in the app store.”

What’s needed to accelerate IoT adoption? He pointed to five "imperatives":

  • Interoperability: As companies compete to be the industry standard, consumers have little incentive to invest in one system. Interoperability of devices and systems is critical.
  • Mobility: In the next 5-10 years, 5G will offer easier device-to-device connectivity. “The faster it comes, the better.”
  • Invisibility: Over time, brands will mainstream the IoT.  As sensors are embedded into products consumers already buy, technology will become invisible.
  • Privacy and security: Marketers need to emphasize IoT benefits—fast. How will smart grids, automated vehicles, and smart homes improve their lives?
  • Experience, not product features. Marketers must go beyond product features to framing customer experiences: “Do It for You,” not “Do It Yourself.”

“The most important thing now is to be aware of what’s going on in the market: 3000 companies are doing experiments,” Downes concluded.

3

Peace of mind leads benefits for consumers.

Nicki Wells, CBS Interactive

What are consumer attitudes toward smart home technology? Nicki Wells presented findings of CNET/Nielsen smart home study. Among these: 

  • Smart home tech use is strongly tied to life stage: the heaviest smart home tech users are young males with families.
  • Smart thermostats, security cameras, and speakers are the most highly adopted smart home products.
  • Peace of mind leads benefits for consumers.
  • Cost and security are also top concerns, but users of the technology are not yet seeing cost savings

Consumers are evaluating technology on a product level right now, Wells noted. “Marketers need to put products in the context of other products. Show consumers how they work together as a part of a bigger solution.”

4

“We are moving from a ‘models’ to a ‘measures’ world—and insurance is getting there first.”

Peter Levin, Intel Corporation

"With cheap sensors, democratized analytics, and new platform tools, we are moving from a 'models' to a 'measures' world—and insurance is getting there first,” said Peter Levin. “From ‘model’, where car insurance is based on demographics, calculated every six months, to ‘measure’, where pricing is based on the last 300 miles you drove, calculated daily.”

“Insurance is to the Internet of Things what advertising was to the internet,” he noted. The shift from models to measures is migrating to home insurance, health insurance, and other forms of risk management. It is transforming practices across other industries as well. Levin pointed to several examples:

  • Restaurant service measured as “time-to-table” via sensors embedded in serving trays;
  • Supply chain “green-ness” documented with verifiable measures;
  • Precision medicine based on personal DNA and daily well-being measures.

Beyond measure-based outcomes, the “durable” value of the IoT is unleashed via circulatory data, as primary data—gathered for a single purpose—is combined, repurposed, and circulated along a highly integrated value chain. This type of IoT synergy is nearly nonexistent today, Levin noted. “Almost no data circulates thoughtfully.”

How do we get beyond an internet of “one-off solutions”? Circulatory data requires stewardship and rigorous collection protocols, Levin said. “A working system must allow people to define boundaries within which circulation is allowed. Without a regime of exchange, we are too often left not knowing what we are giving up, for what we are getting.”

5

U.S. DOT vision: To change transportation as we know it

Egan Smith, U.S. Department of Transportation

“IoT and connected and autonomous vehicles are a natural fit,” said Egan Smith. The DOT’s strategic vision of smart, interoperable, networked wireless communication among vehicles, infrastructure and personal devices “will change transportation as we know it.”

Intelligent transportation systems will improve movement of people and goods, he noted. The greatest benefits accrue when current technologies—such as adaptive cruise control, lane-keeping assistance, and braking assistance—are paired with next-generation technologies like automated cruise control, vehicle platooning, speed harmonization, and cooperative merging. Among pilot programs:

  • Along Wyoming’s I-80 corridor, 400-500 vehicles (including snow plows, highway patrol, maintenance, fleet and commercial vehicles) will use connected vehicle technologies to improve safe and efficient truck movement and reduce the number of secondary incidents.
  •  In New York City, approximately 5,800 cabs, 1,250 MTA  buses, 400 commercial fleet delivery trucks, and 500 city vehicles will be fitted with connected vehicle (CV) technology and intersection communications to improve traffic flow and pedestrian safety in 300+ intersections.
  • In Tampa, Florida, on the Selmon Reversible Express Lanes, a pilot program will deploy vehicle-to-vehicle and vehicle-to-infrastructure applications to relieve congestion, reduce collisions, and prevent wrong way entry at the REL exit. CV technology will also enhance pedestrian safety, speed bus operations, and reduce conflicts between street cars, pedestrians, and passenger cars at locations with high volumes of mixed traffic.
  •  “SmartColumbus” will reshape the city’s transportation systems, using electric autonomous vehicles and data analytics to connect more residents to jobs and improve health care access.

6

“The opportunity for competitive advantage is now—and it may fade.”

Sam Ransbotham, Boston College

“There’s a fever pitch around all the cool stuff the Internet of Things can do, but most people aren’t doing anything. Companies are still kicking the tires,” observed Sam Ransbotham. He discussed findings of a large-scale research study undertaken to understand current IoT activity as well as organizational capabilities required to create business value from the IoT. Among these:

  • Companies with strong analytics capabilities are three times more likely to get value from IoT than are those with weak or no analytics capabilities.
  • As companies develop capabilities in data analytics production, it becomes more important—and more difficult—to be equally capable in data consumption. “Organizations have to be able to use the data from IoT devices to obtain meaningful insights.”
  • Business value depends on data flow across organizations. “Two-thirds of the respondents to our survey who are actively working on IoT projects collect data from and/or send data to their customers, suppliers, or competitors."

“There are no easy answers. Business value depends on multiple capabilities in data management and analytics,” Ransbotham concluded. At the same time, companies not yet active on the IoT would do well to move quickly to develop capabilities. In the study, 39% of organizations agreed that IoT capabilities are now “rare” and only 6% agreed that there are substitutes for the value that IoT can provide. Asked to look ahead three years, only 18% said their IoT capabilities will be “rare” and 28% said that substitutes for IoT will arise. “This suggests that the opportunity for competitive advantage is now—and it may fade.”

"Consumers need assurances that IoT device makers are taking security seriously."

Across presentations, speakers noted that it was critical to resolve security and privacy concerns—a point underscored in October, when a cyberattack disabled a number of major sites, apparently through unsecured IoT devices. 

Donna Hoffman commented: "The recent IoT hack may be just the stimulus needed to motivate firms to work together on industry standards that put security at the forefront. Consumers need assurances that IoT device makers are taking security seriously. Without that commitment, mass market consumer adoption could likely stall."

Related links

Marketing in the Consumer Internet of Things [Conference presentations] (2016)

“I find out what the world needs, then I proceed to invent it”
Sean Burke [Conference presentation] (2015)

How SciFi Is Changing the Future of Retail
Kyle Nell [Conference presentation] (2015)

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