For players across sectors outside of technology, especially those developing non-traditional products and services, IoT’s impact is nascent and is just starting to shape up. IoT offers these companies the opportunity to explore adjacent technological innovations that can augment their business offerings; it gives them an opportunity to reimagine their orthodox methods of value creation, and allows for more compelling strategies to enhance customer experience.
Establish valued-added offerings
To institute a shift from building a product to building a service that offers greater benefits to its customers, Febreze developed a connected air freshener. The air freshener works in conjunction with the Nest Learning Thermostat to understand the homeowner’s AC setting and disperse scents at optimal times. The associated app lets customers refill orders quickly when the scented oils are running low. Fueled by IoT, this technological advancement enables Febreze to reexamine its business offerings and go beyond simply functionality. By facilitating a perpetual customer experience and leveraging IoT, Febreze is able to offer new value propositions to consumers, and, in turn, anticipate a greater revenue.
Strengthen customer engagement with data
To address one of the most common challenges that marketers in the non-tech sector face—talking to customers after the product is purchased off the shelf—L’Oreal has created a unique IoT initiative that looks into post-purchase customer engagement. A connected handheld device that utilizes micro-currents was developed to demonstrate the effectiveness of their products for treating wrinkles. The device can also monitor user data which allows L’Oreal to recommend relevant skincare products and promotions via its smartphone app. This IoT implementation provides L’Oreal a springboard to create stronger customer relationships. With the product being able to track usage in real time, L’Oreal has turned a conventional beauty product into an interactive portal that leverages the ability to anticipate, influence, and capitalize on customer behavior and purchase habits.
Revitalize R&D efforts
To better anticipate radical innovations, Absolut Vodka brought in customers to test eight new product concepts across its brands. The experiment involved connected bottles that communicate with third party apps to controlled music playlists and lighting effects in the lab to allow Absolut to profoundly explore the most critical elements that go hand-in-hand with its product experience: the mood. Utilizing IoT allows Absolut to expand their conventional R&D framework; with the data collected from this customer interaction, Absolut is able to unearth insights that can inform new product opportunities and even business partnerships to ultimately create new streams of revenue for the brand.
Products today are no longer “one and done,” and value generation for traditional products is becoming less about the physical goods and the number of sales. CPG companies already have an established footprint in consumers’ homes, and now that they are in an exceptional position to enter the IoT space. By integrating more advanced technology into existing product touchpoints, these brands are able to emphasize the relevance of their offerings and minimize challenges that consumers might experience with product adoption. The opportunity for value creation is therefore unlimited; with IoT, companies can go deeper and harness recurring revenue that far exceeds the initial number on the price tag.