That technology has changed life in the 21st century is undeniable considering the utility of enhanced communication in personal as well as professional life among other positive changes. The internet of things (IoT), defined by Nowodzinski, Łukasik, and Puto (2016) ‘a cohesive system where physical objects are seamlessly integrated into the information network, and where the physical objects can become active participants in business processes’.
The application of IoT in commerce has indeed changed business into business marketing through a consumer-centric focus where investments are made towards development of innovative marketing tools that can help in identifying, attracting and retaining customers. This focus on the user is affirmed by Weichselbaum (2015) who identifies the world of IoT as one where ‘intelligent, context-aware, learning devices’ interact with each other, ‘while other devices are constantly being added, removed, or modified’. The focus on the customer is informed by trends like aggressive competition where companies with almost-similar capabilities fight for a single fast-learning consumer on whom firm revenues depend on, while affirming the importance of enhancing customer experience and lifetime value.
Through sensors and transmitters, which are part of the essence of the IoT, the impact of the IoT is also experienced on the sales process which is enhanced by allowing the customer to shop in the best possible manner from choosing available products to payment and delivery (Nowodzinski, Łukasik & Puto, 2016). In this case, the IoT compiles relevant customer data and provides the appropriate services in the sale of products and services which goes beyond the traditional physical paradigm of sales service to highly effective technology-mediated personalized services. The IoT even includes aspects of cross-selling and up-selling through aspects like enhanced customer relationship management (CRM) aided by predictive social media. The replacement of workers in sales is affirmed in a report by the McKinsey Global Institute (2015) even though sale associate roles may expand in case of omni-retail channels if consumers desire a physical store experience while new workers competent in data analytics and other IoT-relevant areas will be needed for design and maintenance of associated systems.
Since the IoT uses ‘sensors to collect extra information and then’ channels it to ‘guide better decisions and actions’ as indicated by Hosanagar, a Wharton professor of operations, information and decisions, competitive advantage is achieved by leveraging acquired information to enhance business (Knowledge@Wharton, 2016). Porter and Heppelmann (2014) aver that knowledge on customer product use can allow firms to customize products, segment consumers, set prices to better capture value and extend value-added services in a way that enhances customer value and firm performance in relation to competitor capabilities.
- Knowledge@Wharton. (2016). Leveraging the internet of things for competitive advantage. Pennsylvania: Wharton School of the University of Pennsylvania.
- McKinsey Global Institute (2015). The internet of things: Mapping the value beyond the hype. New York, NY: McKinsey & Company.
- Nowodzinski, P., Łukasik, K., & Puto, A. (2016). Internet of things (IoT) in a retail environment: The new strategy for firm’s development. European Scientific Journal, 332-41. ISSN: 1857 – 7881.
- Porter, M. E., & Heppelmann, J. E. (2014). How smart connected products are transforming competition. Harvard Business Review. Retrieved from https://hbr.org/2014/11/how-smart-connected-products-are-transforming-competition
- Weichselbaum, P. (2015). Internet of things: Changes the company-customer relationship. Harvard Business Review. Retrieved from https://hbr.org/2015/06/the-internet-of-things-changes-the-company-customer-relationship