The Internet of Things (or IoT) has caused groundbreaking and dramatic shifts in the global supply chain, manufacturing, engineering, and more. How those developments have changed and altered the world of ecommerce is very much an open question. Given the exciting changes that the IoT is already bringing to our present moment, forecasting what the future will bring is an exciting prospect.
But if you’re not familiar with what the IoT is, here’s a quick overview:
The IoT refers to billions of physical devices, all connected to the internet. With the advent of technologies that have enabled miniaturization of computing power and wireless connectivity, anything can be “smart,” another way of saying “able to do computing tasks.” With the IoT, it’s possible to turn the smallest device into a computer, or, for that matter, the largest.
So, that’s the basics of what makes the IoT the IoT. Now where is it currently?
Where is the IoT now?
The IoT has been making two major inroads: one, there’s a lot happening already on the B2B and industrial side of things; two, while still in its infancy, IoT developments have been making serious inroads with B2C commerce.
The industrial IoT has already dramatically changed the B2B commerce space, streamlining the ordering process for manufacturers and enabling business buyers and contractors to interact with one another in a more sophisticated way. IoT devices have revolutionized the supply chain, keeping stakeholders apprised of the status of inventory, the health of machinery, and the total output of any given operation.
While the IoT has transformed B2B commerce, the direct-to-consumer and B2C space has not seen as much development, and that’s likely where we’re headed in the future. However, technologies like smart shelving and automated data collection points have entered consumer spaces as well.
Let’s go through some of the trends that are currently on the rise in ecommerce and retail IoT.
Read more: How IoT is Changing the Ecommerce Landscape
1. There will be exponential IoT growth
In 2016, there were more than 4.7 billion things connected to the internet. By 2021, the estimates sit around 11.6 billion. According to Statista, 75.44 billion devices will be connected worldwide by 2025. That’s serious growth!
On top of this projected growth, there are new technologies emerging to support the growth of the IoT, including 5G networks. These faster and more connected networks will allow connected devices to perform in unexpected and exciting new ways.
AI and machine learning systems that previously required connection to high speed internet connections will be able to work in remote and distant areas, quickly and accurately making predictions and usable insights (edge computing), which will allow for more sophisticated marketing and branding campaigns. This report from Business Insider takes a deep dive into what those possibilities might come to resemble.
2. A more efficient IoT-powered buying process will emerge
The buying process means different things for different folks in the great chain of commerce. For large-scale retailers and businesses, it means being able to acquire and utilize the materials and supplies needed to create the products that they sell to their customers.
In this sense, the IoT will dramatically reduce the amount of friction inherent in the reordering process. For any business, time is money, and time spent hunting down essential materials to reorder is time wasted. The sales process of many manufacturers is too time intensive, which can actually end up harming small businesses more than larger ones.
If your one sewing machine for your bag-making business breaks, the days you lose getting a replacement park dramatically affects the bottom line. With devices, machinery, and parts that have integrated IoT functions, the health and repair of vital pieces of equipment becomes more efficient, which is a huge boon for small businesses. The fundamental job of the IoT is to reduce the time between purchase decision and purchase action.
The buying process is also dramatically improved by the implementation of the IoT on the consumer side as well. One of the simplest examples that’s going to become more and more important is IoT connected shelving. While it might sound silly, if you are a business with a limited space for displaying inventory, or if you’re an online retailer having to manage a stock, shelves that track when particular items run out and send a notification (or even automatically reorder) will greatly save time, especially if you’re a small business owner harried on all sides.
Shipping and delivery
Additionally, IoT devices could reshape the shipping and delivery experience for many ecommerce businesses. As the IoT evolves and the technology starts to become a part of vehicles (including autonomous vehicles), self-driving and manned vehicles could create more efficient and cheaper methods of delivering parcels, further cementing the supremacy of ecommerce as a staple of all commerce. The French postal service plans on using autonomous vehicles to deliver parcels very soon.
Warehouse robots will increase picking and packing efficiency by huge margins. Amazon’s warehouse robots can move at 4.5mph and load to increase your picking and packing process efficiency. Their actual robots can move at 8 km/h and load parcels up to more than 600lbs, and these technologies, aided by the IoT, only stand to improve.
And that’s just the tip of the iceberg. Smart devices that monitor aspects of customer behavior (whether it’s online or off) give the most valuable resource to a business: data. With more data drawn for more devices, the future of IoT will give businesses more insight and control over marketing and selling to their customers. Let’s dive into that future next.
3. Data will become the most important resource
One of the products of the IoT that is already creating an industry in and of itself is the volume of data generated. This information, AKA “Big Data,” is a new frontier, and understanding and digesting it will become a crucial marker for business success.
For most businesses and ecommerce stakeholders, it is unlikely that they will be able to manage and sift through this data themselves. The Data-as-a-Service (DaaS) industry is growing exponentially as more and more businesses adopt devices and services that generate data. It already takes a significant amount of time and work to interpret results from Google Analytics, and when data starts to come in from smart devices, this will prove to be a bit too much for many small businesses.
The reality of the situation is that many of the companies that produce IoT devices also have monopolies on much of the data that those devices output. Learning to come to terms with and utilize the data management services that these companies offer will become an essential skill as the IoT grows and evolves.
4. Security will be more important than ever
In addition to bringing massive benefits to consumers and businesses, the IoT has also brought a significant haul of security threats and dangers. Multiple Distributed Denial of Service attacks have utilized unsecured IoT devices (for example, a smart refrigerator) to turn these devices into a “botnet” that hackers could use to flood different websites and servers with traffic.
This is just one example of how the security paradigm will need to shift to account for the potential dangers and stresses the IoT represents. In the ecommerce and retail spaces, as smart devices begin to collect and store consumer data, it will become essential to protect and secure that data. For anyone looking to expand or become a first adopter of IoT tech, this is a vital consideration. Consumer data requires protection; once there’s a breach, it’s almost impossible to put everything back in Pandora’s box.
5. Voice search, AI, and machine learning will continue to evolve
For the uninitiated, machine learning is a type of artificial intelligence that will help computers change and adjust their behavior without the need for reprogramming, or in some instances, even have any interaction with a human user. Machine learning algorithms focus on using new data to learn preferences and adjust behavior. An easy example is when you use a website like Amazon or YouTube, these sites recommend products based on the items and search terms you previously used to locate something.
What do these developments have to do with the IoT, and by extension, ecommerce?
One of the most significant developments in recent memory is the addition of voice recognition software to phones and in-home devices (Google Home, Amazon Alexa, etc.). These devices have created a need for many businesses to begin the process of optimizing their websites and ecommerce storefronts to account for voice-driven search engine optimization. As voice recognition technology powered by machine learning advances, it will become increasingly important to account for.
The IoT is also contributing to marketing and promotional opportunities. IoT devices can be a part of collating and collecting customer data at different points in a store, and automatically dispense personalized advertising to a mobile device when a customer enters a store or approaches a different part of a merchandise display.
Online, with data gathered from IoT devices, customers can receive personalized advertisements and promotions designed to meet their specific needs, supercharging sales and keeping them within acceptable margins for the business offering them.
6. IoT-driven shifts in the ecommerce landscape
With massive shifts driven by a global pandemic, consumers that were already spending enormous amounts of time online are now nearly always online. A survey conducted by the Pew Research Center concluded that 77 percent of Americans are online at least once a day. With the sheer volume of information available to consumers, they’re able to start using data themselves to make informed and smarter decisions.
What that means is that consumers are becoming more specific in their desires and also less forgiving of mistakes. Many customers report that they expect a response within hours of posting on a business’s social media channels.
Consumers will start taking products into their homes that will do comparative research for them, and assist them in finding the products that they need. Additionally, there are many products that will have the capability to reorder when their supplies run dry. For example, HP’s Instant Ink service automatically orders new printer cartridges when the old ones run dry, or after a certain amount of printed pages.
An IoT-driven future approaches
The IoT offers untold possibilities for ecommerce and other forms of business, especially as 5G networks continue to grow in prominence. The current landscape is no slouch either–there’s hundreds of IoT platforms available now for business use, and these platforms are only going to evolve. Stay on top of the latest developments to see how you can adapt them for your business.
All in all, it’s an exciting time for the internet of things, and if you’d like to learn more or start adopting IoT measures for your business, talking to some of our ecommerce experts is a great place to start.