Challenges of the Internet of Things : privacy

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David De Cremer, Bang Nguyen & Lyndon Simkin (2016): The integrity challenge of the Internet-of-Things (IoT): on understanding its dark side, Journal of Marketing Management, Vol. 33 Issue 1/2, p145-158. 14p. DOI: 10.1080/0267257X.2016.1247517

Keywords: consumer behavior, marketing, internet of things, privacy

De Cremer, B. Nguyen and L. Simkin define in this article the Internet of Things as a network that is interconnected between devices, systems and services. They underline that the heart of the Internet of Things is the fact that it enables easier communication between objects and devices, generating a more direct integration between the real world and the computer systems.

  • To begin with, the authors show the positive feeling that consumers have about the development of the Internet of things
  • But in a second part, they describe the main risk of integrity of the system itself and how marketing practices have been ineffective until now

First, in this article, the writers point out that the IoT can be applied to many areas. If we take the example of businesses, the IoT can be used in many different ways and with the incorporation of some logistical processes, it results in a more effective value chain and of course economic benefits. Estimations have been made and suggest that there will be over 50 billion connected objects or devices by 2020 (NCTA, 2015) showing the positive feeling of consumers and business willingness to develop IoT.

Despite all these estimations, nothing is won yet especially for businesses. Even if it is good value for money when it works well, the authors here show that it is not guaranteed. Even though the IoT area keeps growing, there is evidence that some systems have flaws, and especially since reports suggest there are insecure systems in the IoT industry. Privacy may be an issue as companies using IoT obtain access to many personal information about their customers, but not all of them may be aware of this practice.

However, the development of IoT has also encourage customer favoritism and as a matter of fact discrimination. In their article, D. De Cremer, B. Nguyen and L. Simkin point out that it is very easy to get impeccable knowledge and piece of information on customers with IoT in place. This results in very precise segmentation and the possibility to customize services according to the buying behavior characteristics of the customers – which is a huge strength for any company. But further this, it means that two customers will get different offerings, and the one which is considered as high priority for the firm might get a better offer, better price and better services.

In conclusion, this leads to preferential treatment and to unfairness perceptions.

 

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