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What is the Internet of Things?

The Internet of Things, commonly abbreviated as IoT, basically describes an environment where devices or products are connected to the internet to allow seamless sharing of data. Commonly cited examples include a bin that would tell the council when it’s full and needs collecting or, the classic, a fridge being able to detect when the milk is empty and order another pint.

But there’s a lot more to it than that; and with the costs associated with such technology decreasing all the time, more wireless devices and products using sensor technology are being created than ever before. Recent studies suggest that by 2020, there will be more than 50 billion connected devices in the world.

Obviously, the opportunities and ideas that this will open the door to are boundless, but what will the rise of the IoT mean for marketers and business owners? What opportunities does the IoT present to us?

Through researching this topic, one particular opportunity has stood out:

Marketers, and companies in general, can use IoT technology and the data collected to improve the user experience, and ultimately create a more personal, seamless, and targeted experience for customers.

The Internet of Things and Marketing

Case Study: The Disney Experience

On a recent trip to Orlando, my boyfriend and I decided to visit Disneyland. Amid the deluge of characters, rides, food, and merchandise, I noticed that many of my fellow visitors were wearing brightly coloured, hi-tech looking wristbands.

These are called “MagicBands”, and they’re usually used by those staying in one of the Disney resort hotels. We were staying offsite, so we didn’t receive MagicBands of our own, although we did download the Disney app to help us plan our ride times.

When I returned to the UK, I was interested to find out more about these MagicBands – what those who had them were using them for, and how this might have made their experience at Disney even better.

According to the Disney website, MagicBands are “secure all-in-one devices that allow you to effortlessly access the plans and vacation choices that you’ve made with My Disney Experience.” They have a range of functions, including granting you entry to theme parks and water parks, and even charging food and merchandise purchases to your hotel room.

By introducing these MagicBands and the accompanying app My Disney Experience, Disney has created a seamless and “magical” experience for visitors which allows them to address customer issues; namely, not wanting to wait around in queues all day. But they also make other things possible that may serve to make their customers’ experience even better. For example, with a MagicBand, there’s no need to carry keys, tickets, documents, and money. You can have stress-free, unencumbered fun.

Disney has tapped into their customers’ mind set and have created a solution that fundamentally enhances the Disney experience. Most importantly, they have addressed customer concerns and annoyances, using IoT technology in such a way that the results are of immediate and obvious value to the user.

So What IoT Technology Is Actually In Use Here?

The MagicBands are installed with both Bluetooth and RFID technology for long-range and short-range reading that connect the wearer to a vast system of sensors within the park.

Say a family approaches a restaurant within the park. Using the My Disney Experience App, they’ve already made a reservation and chosen their meals back at the hotel. Once they enter the restaurant, a waitress will greet them by name, tell them to sit anywhere they like, and after the appropriate time, their food will appear. It’s an experience that’s so seamless, the customers may be left wondering, “How did they do that?!”

How indeed? Well, MagicBands contain a long-range radio that can transmit 40 feet in every direction. When the family approaches the restaurant, the waitress receives a message on her modified iPhone that contains the details of their reservation. The kitchen staff, too, received a message letting them know exactly which food they need to prepare. And as soon as the family take their seats, a receiver picks up signals from the bands that pinpointed their location in the restaurant using another receiver in the ceiling. The waiter therefore knows precisely which table to take their food.

With MagicBands, visitors are also able to book ride times in advance through their bands. This means fewer and shorter queues, resulting in an overall easier and less stressful experience that’s sure to make many visitors more likely to return.

internet of things and marketing

Although the opportunities opened up by the MagicBand are remarkable, the technology is not nearly as high tech as it seems. In fact, this is just an early example of IoT technology, but it highlights the possibilities that are open to us as marketers, while also giving us an idea of just how limitless those possibilities are.

Before long, restaurant hosts might be able greet us by name and give us “the usual”, even when we’re new in town. Our houses will be able to automatically switch on the lights when we enter a room, and turn them off when we leave. Shops might acknowledge us on entry, and send a list of personalised offers to our phones.

The crunch point is not necessarily the technology and what it is capable of. Perhaps more important is the cultural issues this will raise, and whether or not we’ll be equipped to respond.

Potential Issues: Privacy Concerns

Disney customers are clearly happy to give up a certain amount of privacy so that their experience can be enhanced and made seamless. But how other companies and businesses will fare is a different matter.

In terms of consumer privacy, the industry is still determining best practices. In the UK, Ofcom released a report in January that set out their plan to support the IoT. Among other matters, they plan to address data privacy:

“Data privacy: protection of individuals’ personal information is a key part of the development of the IoT and will be covered under existing legislation, such as the Data Protection Act 1998. However, traditional approaches to data privacy may have limitations in the context of the IoT. Ofcom will work with the Information Commissioner’s Office, government, other regulators and industry to explore solutions to data privacy issues in the IoT.”

Industry and marketing experts seem to agree that whenever the IoT is utilised, in direct marketing efforts in particular, there must be a real and perceptible value to the customer. They must receive something of value in exchange for relinquishing a certain amount of privacy.

Marketers need to ensure that what they offer to customers when using IoT technology is actually going to make their lives easier, improve the overall experience and reward loyalty. If not, the whole thing is not just a waste of time and energy, it may also be an unnecessary breach of privacy.

 

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