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How the Internet of Things is transforming customer experience

The Internet of Things has reinvented traditional company-consumer relationships over the past year and a half — and it has only just begun to make its mark.

At the Connected Things event Tuesday in Cambridge, Mass., a panel explored how IoT is helping organizations pivot from throwing ads and coupons at consumers to enhancing their overall customer experience.

For example, an innovative campaign printing the latest headlines in real-time on paper towels dispensed in local mall and cinema bathrooms boosted traffic to the free Mexican newspaper Máspormás by 27% in its first two weeks. Another example highlighted a Women’s Aid digital billboard of a bruised and battered woman whose injuries slowly disappeared when viewers eyed the screen, striking a chord with onlookers.

As Charlie Ungaschick, executive vice president of marketing at PTC, put it, “The person connected to the physical thing is a powerful thing.” Years ago, he explained, the only connection between brand and consumer was the often thrown away warranty cards. Nowadays, when an IoT product is powered on, manufacturers are immediately connected to the user.

Rebecca Schuette, director of marketing at Swirl Networks, reiterated the importance of customer experience at the event hosted by the MIT Enterprise Forum of Cambridge.

“For the retailer, it’s about increasing basket size and driving more data to the store,” Schuette said. “But at the end of the day from a consumer’s perspective, I want to get an excellent customer experience every single time I interact with a brand whether it’s online or my device or in-store. I want them to know about me so they can cater to my preferences.”

Thomas Walle, CEO and co-founder of Unacast, called IoT a “data capturing tool” that helps companies better understand customers and fans. Collected data can be leveraged to personalize online content, run retail analytics and transform online advertising.

However, using IoT to enhance the consumer experience isn’t without its pitfalls.

“In the era of personalization, the data is incredibly important,” Schuette said. “Consumers in this opt-out landscape can shut down this layer of personalization really really quickly. You need to make sure from a data perspective that you’re totally transparent, it needs to be opt-in right now; it needs to be delivering value. People are okay with sharing data if they can get whatever they want in their mind to actually happen.”

Walle added that transparency can also eradicate the consumer notion that location-based technology is “creepy” and change it from “Big Brother is watching you” to more of a “Big Sister is making your life better.”

Still, several barriers can prevent companies from truly benefiting or even implementing IoT for marketing in the first place.

Greg Raiz, founder and CEO of Raizlabs, noted cost and user adoption. “In a lot of these scenarios, the user has to opt in or download an app or take some secondary action,” Raiz said. “There are some passive solutions that are possible, but cost continues to be a barrier for mass deployment.”

Walle noted companies are apprehensive when it comes to sharing. “There is so much cool stuff being done with IoT,” Walle said, “But (companies) are very afraid of sharing what they do. There’s tons of good stuff being done out there, if we shared more, it would foster innovation.”

“There is also the fear at the organization and retail level that consumers are moving too fast,” Schuette added. It takes a while for companies — often up to a year — to fully scale an IoT marketing initiative. By that time, Schuette said, there can be “a bit of paralysis” if consumers have moved onto new or different technology.