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While hype around the internet of things has reached stratospheric levels this decade, at some point, a company must decide how to invest actual capital into collecting data. For B2C brands, the costs quickly multiply when implementing systems to collect, track and analyze data for sales, let alone the training and technical education required to use them.
So if you're thinking about piloting an internet of things (IoT) CRM project with an app connected to an existing device or offering proprietary or white-label devices to your customer base, narrowing the universe of devices is one place to start. Looking broadly, the smart home or connected home is one category. It includes everything from remotely controlled thermostats and security systems to garage doors, digital video recorders and even light bulbs. Wearables is the other category -- mainly, personal devices to track location and health statistics.
Both categories have seen considerable growth over the last few years and show promising potential for continuing on those curves. Millennials and savvy Gen Xers are showing much interest in developing these technologies and exploring their full range of possibilities.
Which of these markets are worth considering for an IoT CRM pilot now, and which one might be good for the future?
First, we need to clarify the breadth of the wearables market. Wearables comprises a much broader category than smartwatches, probably the most-covered wearable on consumer news sites.
Wearable technology is still making its way to mainstream adoption. Every day, innovation finds new ways to combine science with ergonomics, but general ambiguity about the value of a particular wearable can be very difficult to navigate in a relatively new market.
Some companies focus on capturing only human data. Companies like BeBop Technology are investing themselves in technology that monitors human touch and applied pressure. These sensors can be integrated into clothing and around complex objects to collect complex data.
Although pioneers in this field discover new possibilities every day, the wrist still holds the primary focus for the wearable market. Technology giants like Motorola, Samsung, Apple and Fitbit are aggressively battling for their share of that multibillion dollar market.
Industry sales for wearables rose 17.9% in the first quarter of 2017, compared with this same period in 2016. This uplift equates to a total of 24.7 million units shipped in Q1 2017, and that growth is forecast to continue, projected to hit $25 billion by 2019.
One company that has capitalized on this particular market is Xiaomi Inc. This Chinese company has seen incredible growth since its inception in 2010, and very recently took Fitbit's place in the top wearables distributor position. Xiaomi's secret? Offering a very similar product at a much lower price.
Step counters and wrist-based health trackers have hit their stride, and until we see a new wave of innovation, streamlining the current product is an excellent way to capture market share here.
This kind of shift suggests an approaching saturation point for this type of wearable. That sort of technology is still in the novelty category and focuses on increasing insight and convenience, the value of which varies wildly depending on the user.
The smart home market seems to be far from a novelty, unlike wearables. Currently, the smart home market share is worth $24 billion, almost beating the projected forecast of wearables by two years.
What sets this market apart is the prediction for growth. Estimates for the future smart home market are between $53 billion and $121 billion by 2022, effectively doubling (or quadrupling) within the next five years.
The reason this IoT category has much more growth potential comes down to the flexibility of innovation, the adoption rates of the average consumer and an excellent value proposition. IoT CRM can help B2C brands target well-to-do homeowners who enjoy spending disposable income on gadgets.
The smart home market naturally integrates with IoT seamlessly, and it is very appealing to homeowners right now. Some of the more fanciful devices include clothes dryers that fold your laundry and smart lawnmowers that manicure your lawn with precision. There is even a concept for a refrigerator that checks for food spoilage and that can automatically reorder the food if you so desire. Another innovative idea is a smart closet that illuminates the hangars of outfits you should wear that day.
Wearables collect data. Smart home devices can actually save a consumer time and, in some cases, money. This is the chief driver for companies developing infrastructure with the smart home market in mind.
Xiaomi is expanding device offerings to this category, as well. Preferring to streamline replication over innovation, one can see the company applying the same strategy it used on Fitbit to this area.
Innovators in this field range from large to small. Amazon, Google and, most recently, Apple have artificial intelligence offerings that enable users to control their devices from a single location, which is incredibly helpful when you have a vast array of companies that specialize in only one area. Examples include companies like Kuna for home security or LIFX for lighting.
Smart home technology promises to reduce the repetition of life, improve efficiency or even pay for itself by reducing cost. This compelling value proposition is something that wearables fail to match right now. Until there is a significant leap in innovation with wearables, it appears the smart home market will continue to expand faster based on its consumer feasibility and strong value proposition, and it might very well be the bigger bang for your IoT CRM investment.
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