IoT Influence in Future of Digital Commerce
As per Gartner, digital commerce is defined as “buying and selling of goods and services using the Internet, mobile networks, and commerce infrastructure.
It includes the marketing activities that support these transactions, including people, processes, and technologies to execute the offering of development content, analytics, promotion, pricing, customer acquisition and retention, and customer experience at all touch points throughout the customer buying journey.”
Since the emergence of eCommerce in the US during late 90’s, the growth of eCommerce has been tremendous, generating a huge amount of transactions in retail, hospitality and media industry, which changed the way the business is conducted all over the world.
Internet of Things (IoT)
The Internet of Things (IoT) is a network of dedicated physical objects (things) that contain embedded technology to communicate and sense or interact with their internal states or the external environment. The connecting of assets, processes, and personnel enables the capture of data and events from which a company can learn behavior and usage, react with preventive action, or augment or transform business processes. The IoT is a foundational capability for the creation of digital business.
In simple words, IOT goes beyond the traditional digital commerce devices like desktop, laptop, mobile phones and tablets to a more varied range of devices which the humans use every day with embedded technology that can communicate with the external systems using the Internet.
In order for a company to get into IOT domain, getting the fundamentals right is essential for long-term success, but the IoT is not a “one size fits all” solution. The integration of IoT technologies varies significantly among companies and industries. Be it wired or wireless internet infrastructure, various things that are required to identify an object and communicate with the internet, which forms the basis for IOT infrastructure. These infrastructures include sensors, tags, product, networks, software application and analytics tools. As per Gartner following infrastructures are required for IOT to be a success
- Things: Things can be dumb or smart on their own and store most of their data on board. Things can also be self-sufficient and communicate to the internet for only centralized coordination and analysis.
- Gateways: Gateways may house the application logic, store data and communicate with the internet for the things that are connected to it. Things don’t have to be as smart because the gateway can provide these resources.
- Mobile devices: Smartphones (or any mobile device) may house the application logic, store data and communicate with the internet on behalf of things that are connected to it. Things don’t have to be as smart because the mobile device provides these abilities.
- The cloud: The cloud can act as the central connection hub, power analytics and provides data storage. Things don’t have to be as smart because the cloud will provide these resources.
- The enterprise: This architectural role is focused on keeping connected machines, application logic, and analytics and data
Digital Commerce with IOT
Digital commerce growth is on the increase every year and shows no sign of a slowdown. Still, with this growth, there is a great opportunity available in the developed markets to take this to the next level using IoT. The digital commerce players or retailer or manufactures should stay on top of the IoT trend in order to stay ahead of the competition and not to miss the big IoT bus.
As per Gartner insights, IoT base is expected to grow by 26 billion units in 20203. There are a lot of R&D and implementation happening around us, with Amazon being one of the most visible case studies by implementing Amazon Dash, where each Dash button assigned to a product number and pre-defined quantity. Pressing the button will send the order to Amazon with the predefined address and payment method.
Another example of IoT in digital commerce can be of printer cartridges replenishment based on the cartridge levels. The printer can come with sensors which monitor the cartridges, and when cartridge life/level reaches a certain threshold level, the order is automatically placed using the account associated with the Printer and cartridges delivered to the address associated with the device and account. Similarly, IoT can be used for service, with the same example of Printer, if there are error codes, the sensor can send automatic troubleshooting instructions to the email id associated with the Printer and account, if it cannot be troubleshot by the consumer, schedule a service appointment by initiating schedule process with the customer.
With the application of IoT, Digital Commerce business can get a huge leap ahead in the way business is conducted and reap greater competitive edge. The main areas which the IoT can help the organization to go the next level are
i. Customer Experience
IoT can provide consumers with more holistic shopping experience with personalized and context driven interactions that can lead to high level of customer engagement. Based on the previous shopping behaviors, purchase history, the company can remove certain regular or low-value interactions and make it automatic and concentrate on providing more value to the consumer. Again, with the example of the printer, for the specific customer, take off the service and cartridge replenishment part from the main customer experience in the website and instead channel the customer towards more productive office automation or products of interest which will provide higher value.
ii. Customer Value
IoT technology leverages real-time information that helps companies to deliver unique value to the customers. In the current market scenario which is highly competitive, the customer data becomes a valuable asset to the company. The companies can make use of this date to focus on various customer engagement strategies which may include warranties, periodic maintenance, expiry reminders, etc., as post-sale services. E.g., Based on the purchase date and product data, CVS can send a notification to the customer around 15 days before the expiry date of the product and provide an option to reorder the same product again.
iii. Inventory and Logistics
With IoT technology, companies can monitor the flow of goods/product/SKU from one location to another with the help of sensors and internet. This helps in tracking of product from production to consumption. IoT can help in tracking the items in transit, giving complete information about location, temperature, and more. With IoT-enabled technology, companies can easily manage the route and speed of their shipped products too, which can help in reducing lost or misplaced shipments. Sensors can be used in delivery trucks as well for real-time monitoring of the deliveries and decreasing losses.
Pragiti is Gold Partner with SAP Hybris and providing broad range Digital Commerce and Omni Channel solutions and system integration services across varied industry and business segment. Combining unmatched experience and specialized skills 4 locations, Pragiti works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders.
Ready to learn more on how the Pragiti team can help you use Hybris and IoT to engage your customers more effectively across channels and move to next level in Digital Commerce. Contact us today at firstname.lastname@example.org or visit us online at pragiti.com