selling the internet of things: why are retail solutions a challenge?

#bettersales@MarketSourceInc

Selling the Internet of Things: Why are Retail Solutions a Challenge?


What Exactly is the Internet of Things?

British entrepreneur Kevin Ashton first coined the term in 1999

The Internet of Things (IoT) is the network of physical objects or “things” embedded with electronics, software, sensors, and network connectivity, which enables these objects to collect and exchange data. Source: Wikipedia (2015)

https://en.wikipedia.org/wiki/United_Kingdom

https://en.wikipedia.org/wiki/Kevin_Ashton


In 6 months there were 1.4M mentions of IoT.

1,039,064 mentions on Twitter 27,988 mentions on blogs 421,689 mentions in the news

Overall Sentiment is 95% favorable

51% positive 44% neutral 5% negative

Blogs Age groups 21-35 represent 67% of blog mentions

Social Media Mentions - IoT (6m)


Social Media Mentions - IoT (6m)

Top Words Associated w/ IoT*:

• Technology (34%)• Data (31%)• Devices (29%)• Business (28%)

*According to our social media tool; Sysomos


IoT is an Ecosystem

Things - ConsumerHome

SecuritySmart Locks

Home Appliances

SmartBed

Smart Lights

Gardening Watering Trackers Smart

PetFitness Health

Smart Watches

Smart Fashion

Home Automation

Connected Car

• HomeBoy• Canary• Dropcam• Piper

• August• Lockitron• Ring • Kwikset• Goji

• Nest• Tado• Whirlpool• Smart• ThinQ• Aros• Samsung• cinder

• LUNA• Beddit• Select• Comfort• SLEEPIQ

• LIFX• Belkin• GE link• Cree• hue

• EDYN• NIWA• Droplet• Lono• grove

• Tile• TrackR• BeLuvv• Bikn• hereO

• Whstle• CleverPet• FISHBIT• Petnet• CATFi• FitBark

• Withings• Fitbit• Athos• Garman• Misfit

• Apple• Moto 360• Android• Wear• Pebble• LG Watch• Alcatel• Smart-• watch 3

• Ringly• CUFF• Ring• Mota• Swarovski• Tory Burch• for Fitbit

• SmartThings• Alarm.com• Control 4• Vera• Vivint• iControl

• Navdy• Metromile• Dash• Jasper• Android auto• Apple CarPlay• Tesla• Honda Link• Vinli• BMW• Ford

Things - EnterpriseSmart

LogisticsSmart

FactorySmart

AgricultureSmartCities

Smart Grid

Smart Retail

IoT Security

Smart Healthcare

• WEFT• Keep Truckin• Scania• Maruti3PL• Cisco• DHL• Maersk Line• Sala

• Intel• GE• Rockwell• SAP• Siemens• Cisco

• John Deere• PrecisionHawk• Farmobile• AgSmart• Granular• OnFarm• Observant• Medria• Semios

• Enevo• Grid Waste• ParkHelp• WM• IM• Bigbelly• Kiunsys

• OPOWER• TenDril• Itron• Actility• Schneider• Electric• Silver• Spring

• Percolata• Euclid• Scanalytics• Egburt• Kontakt.io

• Bastille• Sansa• Offspark• ARM• CoroNet

• Proteus• OrthoSensor• Soundhawk• AdhereTech• CareTRX• MedMinder• Vitalconnect• Vitality• AliveCor

Things - InfrastructureHardware Platforms

Board/ Chipsets

Software Platforms

Analytics, Data Storage

• Particle• Tessel• Electric imp• ARM mbed• Pinoccio• Helium

• Beaglebone• ODROID• ARM• AMTEL• QualComm• Intel Edison• Broadcom• Marvell

• Resin.io• Xively• TempoIQ• Temboo• PubNub• ThingWorx• Waygum• Jasper• Ayla

• Senseiot• Sas• Tellient• SensorCloud• Platfora• ParStream• Microsoft• splunk

This map is not 100% comprehensive, there may be companies missing.

• There are currently more devices connected to the internet than humans and the trend is that in 2020, 26 billion “things” will be connected.

• The IoT is still in its early stages. On the consumer side it is mainly for hobbyists, and on the enterprise side it’s still for early adopters.

• The full IoT ecosystem is huge and very complex; you could have an ecosystem map for every submarket listed above.

Source: Medium.com, “A Map of the Internet of Things” written by Chris McCann, July 28, 2015.


What Are Consumer’s Excited About?

#bettersales@MarketSourceIncIoT: The Smart Home

Home Automation

Home Monitoring

Home Security

Home Control

Connected Devices

Home Entertainment

Examples:• Closing Blinds• Adjusting Lights• Make Coffee

Mechanical Tasks

Examples:• Tablet• PC / Printer• Mobile Phones• Storage Devices• Medical Monitor

Share Everything

Examples:• Theater• TV• Distributed audio

Listen and Watch

Examples:• Thermostat• Irrigation• Lighting

Automate Activity

Examples:• Door locks• Cameras• Alarms/Alerts

Secure Your Home

Examples:• Deliveries• Latch Key Kids• Pets

While I’m Away

Many of These Devices Cross Categories to Create Lifestyle Scenes

Connected Home


Learning from the Past: Evolving Ecosystems

4GLTE

9.6Kbps 144Kbps 384Kbps up to 42Mbps 150Mbps 1Gbps

20162010200620031993Mobility

Data Rates

Low

Medium

High

2G

Digital

1G

Analogue

3G

3G+

4G

LTE+

Wireless Communications


The Challenges were Very

Similar

Learning from the Past: Evolving Ecosystems

Transformation Relied on:• Content Developers• Broadcasters / Providers• Telecom Infrastructure

and Technology

• Manufacturers• Retail Transformation• Consumer Understanding

and Adoption

• Analog to Digital• Tube to Flat Panel to

OLED/Micro-Dot to …• Over Air to Streaming

• Low Resolution to High Resolution to Ultra Res…

• Single Device to Multi-device content sharing

Television Ecosystem:


Complex Environment

• Unaware of Technology• Unaware of benefits• Unfamiliar w/ brands in this category• Confused about where to buy• Waiting for alignment

• Trying to establish

themselves in IoT category

• Products cross categories

• Categorization of products vary from

retailer to retailer• More complex sale

• Requires training across categories

Consumer

• Establishing a new category• Crossing into unfamiliar

categories/retailers• Unsure of Consumer’s

buying pattern• Difficult to maximize

marketing spend

Slow Category Growth

Brand Awareness Brand Loyalty

Consumer LoyaltyBrand Identity

Category Leadership

Market ShareDiversification

How Do You Connect To

Your Customer?


Your Customer?

Manufacturer

Retailer

How Do I Get the Retailer to Bring my Brand and Products to Life on the Floor?


Added Challenge: Consumer Purchase Patterns

Omni channel• “Showrooming”• “Webrooming”• Social Purchasing

Infographic byhttp://www.magnetic.com/

Consumers are now in control of where and how they purchase.

Varies by Segmentation• Baby Boomers = Retail / Showrooming• X Generation = Showrooming/Webrooming• Y Generation = Webrooming• Millennials = Webrooming / Social Purchasing• Connected Generation = ?

http://www.magnetic.com/

http://www.magnetic.com/



Examining the shopping journey of those above the age of 45

Would like more assistance with the setup of their Smart Home device

compared to their younger counterpart

Say they are likely to spend less than $500 to upgrade their home to

Smart Home

Prefer to shop for Smart Home products at a Security Company or a

Cable/Telecommunication company

Examining the shopping journey of those ages 45 and younger

More likely to prefer DIY compared to their older

counterpartSay they are likely to spend between $2,000 -

$3,000 to upgrade their home to a Smart Home

Prefer to shop for Smart Home products at a Security Company, Technology Company or a Home

Repair Store

SMART HOME - Intent to Purchase


1,964

971Total number of establishments (in thousands)

Revenue per establishment (in thousands)

$1,489

$2,148

800

55

$342

$710

Non-web stores Web stores% change

+102%

-52% -31%

+1,354%

Source: US Census; National Retail Federation, Forrester Research estimates

% change

20142002



The

Cha

lleng

e:

Finding Information

Difficulty finding a solution to meet their lifestyle challenge

Scarce Resources in

Store

Consumers are often more informed than associates in the store

Hesitant to Commit

Consumers are waiting for a unified operating language and fear early obsolescence

Consumer

Train and Educate

Train anyone that engages the IoT customer so they can give consumers details they need to make a purchase decision.

Ecosystem Focused

Make sure reps understand the entire ecosystem of products and services and how the ecosystem is evolving

Lifestyle Based

Focus product info/display on problems solved and benefits to consumer based on lifestyle scenes

The Solution:The Challenge for the Consumer


85% of consumers prefer to shop at physical stores, and 90% are more likely to buy when helped by a knowledgeable associate.

- State of Retail 2015, TimeTrade

If you could book an appointment with a sales associate before going to the store, would you use it for your next visit?

59%Say “yes”

41% say “no”

Retailer The Challenge for the Retailer

Other

I don't like waiting for items to ship

I like to get advice on what product to buy

I like to 'touch and feel' products before I decide what to buy

7%38%

26%92%

Why do you prefer shopping in the store? (Respondents Ages 35 – 44)


Retailer The Challenge for the Retailer

The Challenge:

Bringing the whole consumer solution to

life in the buyers ecosystem

(online, in-store, mobile)

The Solution:

Make it clearly evident in your store that

you are experts in the IoT spaceUnderstanding how to engage today’s

customer where and when they want to

be engaged

Have dedicated personnel in your stores

that are trained across products,

categories, and system providersStaying in front of the consumer post

sale

Capturing the customer for life

Provide a consistent experience at all

touchpoints along the consumer‘s journey


The

Cha

lleng

e:

Needs Identification

Difficult to identify the needs and wants of a diverse customer base

Focusing Marketing

Spend

Consumer buying patterns are erratic and diluted in this category

Speed to

Market

Barriers to entry are low and new brands and products are entering the category confusing the consumer, slowing growth

Get Focused on Your

Consumer

Identify your current customer (early adopters), but plan for your emerging customer and how to meet them where they buy. (GIS)

Partner for Success

Create “lifestyle scenes” with benefits to the consumer by partnering with other companies in your ecosystem

Gather Information

Capture and respond to the voice of your customer (retailer and consumer) at the point of sale, and post-sale

The Solution:The Challenge for the ManufacturerManufacturer


Solution Nexus

Information shared with me is relevant to my personal taste, style, age group or location

My retail experience is consistent across digital devices no matter where I am - on my desktop, tablet or smartphone

Information shared with me is relevant to what I am currently interested in or looking to buy

My retail experience is consistent across digital and in-store

My online experience is easy: I can find what I am looking for, see product reviews and recommendations, and buy when and how I want

WHAT DO YOU FIND MOST CRITICAL DURING YOUR RETAIL EXERIENCES?

(RESULTS REFLECT CONSUMER RESPONDENTS WHO RANKED THE FOLLOWING “IMPORTANT” AND “CRITICAL”)

TWEET THIS“One of the fastest ways to occupy the part of the consumer’s brain that retailers want to occupy most…

— where brand and emotion become associative and inseparable —

…is to establish human connection.”

- Brian Kilcourse and Steve Rowen, - Commerce Convergence: Closing the Gap Between

Online and In-Store, Retail Systems Research


Solution Nexus

Consumer


Your Customer?


Your Customer?

Manufacturer Retailer

How Do I Get the Retailer to Bring my Brand and Products to Life on the Floor?

Manufacturers Should Consider a Direct to

Consumer (D2C)Strategy, both in

person and on-line

Retail Should Consider Specialized Staff and Aligning to Consumer Shopping

Demands


Key Take-a-Ways :How to drive Category Leadership in IoT

At this stage, most IoT Products are sold, not bought

Enliven the “lifestyle scene” for the consumer throughout the buyers journey

Providing an elevated consumer experience requires elevated capabilities and elevated training

Provide a consistent experience for the consumer at all touch points

Purchase patterns vary by segmentation. Lock on to your highest opportunity demographics and align your marketing strategy accordingly.

Drive your sales by aligning to the retailer’s scorecard and incentives

Choose a field sales & marketing partner that has experience in the IoT category, and works across multiple consumer touchpoints, to maximize your marketing investments

Find out more about Retail in the Internet of Things - subscribe to MarketSource’s blog:

www.marketsource.com/blog

http://www.marketsource.com/blog