Business frameworks that have been predominately product-based are being replaced by relationship-based models with a laser focus on the customer experience. The biggest factor driving this shift is the wealth of customer data that has been made possible, in part, by the Internet of Things (IoT).
IoT by definition connects many devices and endpoints to the Internet, but at its most meaningful level, IoT is an emerging customer intelligence tool. Because it brings in broader levels of connectivity, IoT has become a Big Data enabler that delivers a flood of customer information to publishers and retailers. This improved intelligence allows companies to react more quickly to customer behavior and usage in real time, with new offers and value-adds that drive new revenue opportunities while giving customers precisely what they want, on their terms, where they want it, and how they want it.
Since commerce began, customer intelligence has been gathered through one means or another, either through pencil and paper, manual head counts, or today, via the IoT. The difference is that now, the hyper-connected customer doesn’t remain in a definable sales funnel. The omni-channel purchase journey is highly complex and encompasses numerous touchpoints, including, online, mobile, and physical stores. Customers perform online research on everything before making purchases in brick-and-mortar-store, and they now demand more and more detailed information, convenience, and consumption-based pricing.
The philosophy of always striving to better serve the customer is not new, but technology today – driven by the Internet of Things and the consumer data it collects – has advanced to the point where companies have more information about customers than ever before, and are able to meet their evolving demands with a more customer-centric business model.
Two new concepts have been added to the modern IoT-driven business model – continuous monetization, and predictive analytics. Continuous monetization goes beyond product offers to focus on predicting precisely what the customer will want, and in the process, discovering new revenue streams. The business paradigm that connects IoT with monetization, Big Data, and analytics creates new opportunities for cross-sell, up-sell, and ongoing service, especially in the world of digital products produced by companies offering film, music, audio, and video games – plus print companies delivering newspapers, books, magazines, and comics – and traditional radio-television broadcasters.
These incremental revenue streams may often exceed the initial purchase price, which in some cases has become irrelevant, as seen in the increasingly popular freemium and free-to-play models of product fulfillment that drive in-app, in-game, and recurring subscription purchases.
Inherent with subscription and relationship-based models is a predictable revenue stream, and an opportunity to more thoroughly understand customer preferences, behaviors, usage, and consumption patterns. The right commerce infrastructure makes it possible to leverage this knowledge to deliver a relevant and contextual experience every time there is an interaction, and thus continuously monetize these ongoing relationships.
Traditional retail commerce has always been front-loaded, with value-add coming second. IoT has turned that around, and the result is twofold. First, it gives the customer greater control and the ability to purchase more precisely what they need, when they need it – and second, it facilitates more opportunities for publishers and retailers to offer value at deeper and more granular levels.
This new era of IoT-driven advanced personalization presents exciting opportunities for both consumers and retailers. The wealth of information delivered by IoT, Big Data and personalization means improved customer engagement, with a highly customized, omni-channel shopping experience based on highly targeted content across every channel.
