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Impact of Internet of Things on Marketing

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Arch G. Woodside & Suresh Sood (2016): Vignettes in the two-step arrival of the internet of things and its reshaping of marketing management’s service-dominant logic, Journal of Marketing Management, DOI: 10.1080/0267257X.2016.1246748

Keywords : innovation, IoT, marketing management, consumer behavior

In this article, the authors introduce the Internet of Things and their impacts on marketing. It is interesting to consider the fact that even though consumers are willing to be connected, they actually do not participate in the IoT revolution that is happening (we do not take into account smart phones). Benefits in the evolution of these technical advances in smart devices are huge and growing very fast as we expect the IoT revolution to be in our day-to-day lives by 2025.

Perspectives of marketing, sales and advertising are changing and it is becoming a real challenge for marketers which has to focus necessarily on the interactions and consumer experiences of the IoT. New practices came out of this, and marketers must adapt. The integration of design thinking methods (Brown, 2009; Louridas, 1999; Pattinson & Sood, 2010) into marketing activities represents a major step in these new opportunities.

Beyond these new practices that must become obvious for marketers, marketing skills especially for IoT are changing. These new skills needed for marketers are an association of design, psychology and cognitive science.

The responsibilities and as a consequence the role of the product manager highly changes with IoT.  We must take into account the product and experience that emerges from it in order to integrate in with the touch points of key consumers. This is going to be key in IoT, and building automating customer journeys will continue changing the marketers roles and responsibilities.

 

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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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Internet of Things : Assemblage and Interactions

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Novak, T. and Hoffman, D. (2016), Visualizing Emergent Identity of Assemblages in the Consumer Internet of Things: A Topological Data Analysis Approach

Keywords: Internet of things, consumer, assemblage, interactions

Novak and D. Hoffman first define the Internet of things and explain their « Assemblage Theory ». They take the example of the online service IFTTT, to show the consumer experience that emerges from that assemblage.

 

  • First of all, we will define the Internet of Things and the Assemblage Theory that can be applied to marketing concepts.
  • Then, in is interesting to point out how it has changed the consumer experience and in which way it will continue to evolve.

 

The Internet has kept evolving these last years, transforming from the internet of information to the Internet of things today. In this article, the authors explain that the Internet of things is a new step in Internet. They underline the fact that consumers do not only interact with smart devices, but also that smart devices can interact amongst themselves. According to T. Novak and D. Hoffman, what must be pointed out is that interactions is much more than just between consumers and devices, devices can also interact with other devices or even with content on Internet.

As a matter of fact, the authors here suggest that interactions in the Internet of Things “create assemblages of consumers, digital information and physical devices” and from these assemblages comes out capacities, that do not exist with the consumers, digital information of physical devices themselves. The assemblage is made of various components that all together creates a whole.

The writers propose that the identity of an assemblage – “what it is” – is defined as the properties, capacities and tendencies that emerge from the ongoing interactions between the different parts of the assemblage. However, the identity of an assemblage is essential to the Internet of Things as it can influence the consumer experience and since consumer experience emerges from a person’s interactions with an assemblage.

In the example that T. Novak and D. Hoffman take in their article, the online service IFTTT, they view an individual IFTTT recipe as “a singular realization that has been created and used by a consumer”.

To finish with, we can tell that the concept of interactions – that they see as a singular realization by each consumer – is crucial to the understanding of the assemblage theory. The whole that creates emerging capacities is much more than the sum of its parts.

 

 

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