‘Smart home commerce’ the next frontier
By Benjamin Cher January 12, 2016
- IoT appliances become truly intelligent only when they connect to the ecosystem
- ‘Businesses need to transform not just their digital front-end but their digital core’
E-COMMERCE is oh-so Web 1.0 and mobile-commerce (m-commerce) is the business reality today, but we’re already at the doorstep of the next frontier: Smart home commerce.
This is being driven by the smart connected home appliances that are rolling out every year, as witnessed by the many such announcements at the recently concluded Consumer and Electronics Show (CES) in Las Vegas, Nevada.
While some of the new product announcements and displays were still at the conceptual stage, many others had official release dates.
These connected appliances are not just exciting for consumers, they are also driving more data points for businesses, according to Jamie Anderson, senior vice president of marketing at SAP Hybris.
“I always look at CES and I see amazing innovations – a lot of them are kind of inside-out driven, doing things because technology has made it possible to do things,” Anderson told Digital News Asia (DNA) recently in Singapore.
“[But] all of this is creating more and more data points for businesses to harness,” he added.
One example he cited was Samsung’s smart fridge which made its debut at CES. According to VentureBeat, Samsung’s WiFi-enabled Family Hub Refrigerator allows you to access the Web, look up recipes, check on items in the fridge, note which foods you need to reorder, and even make those orders online straight from the screen.
However, Anderson argued that automatic replenishment and smart home commerce can only be made possible through connectivity to other businesses.
“It truly becomes an intelligent device … only if you have connectivity with other parts of the customer experience and commerce service,” he said.
“To connect with multiple commerce providers requires a standard set of APIs (application programming interfaces) – which is a massive problem with the Internet of Things (IoT) as there is no standardised technology integration layer to support it,” he added.
Understanding through connecting
From being able to restock your fridge from the screen on the door of that fridge, Anderson (pic) argued that it would not be too much of a stretch to start rating products on the same screen.
“Imagine having, at some point, an open standard API for all intelligent connected devices, moving the IoT from ‘nice to have’ to making a real difference in customer experience,” he said.
“Imagine if you took out a carton of orange juice from the fridge and had a drink, and your fridge asked you to rate the product, and the anonymised data goes straight back to the manufacturer,” he added.
The feedback would be live and in real-time, allowing the manufacturer to run a ‘live business’ that can react proactively rather than retrospectively, according to Anderson.
“It is these data sources from the IoT that companies need to be very excited about today,” he declared.
“You don’t want to put it [he data] in an archaic relational database system that cannot work in real time – businesses need to transform not just their digital front-end but their digital core,” he added.
And while drones are often touted as the future of delivery technology, companies still need to get the simple things right before embracing such new technology, Anderson argued.
“Today, most companies are not getting the simple things right – the IoT for me is the amount of real live data that companies can collect about their brands, and it is astonishing,” he said.
“We need to temper that with the reality of today, which is that most companies still do not have a single customer view from the channels they have.
“And when you start adding in connected devices, it’s a challenge in terms of what do we do with the data and what data we collect,” he added.
The device the customer uses to interact has now become part of the customer experience platform, Anderson also argued.
“When you use the phrase ‘intelligent device’ or ‘smart vending,’ you set an expectation in the mind of the consumer,” he said.
“That thing they are interacting with instead of a person, becomes part of the customer experience, and that’s where you have to be careful when you design and make claims of what these devices can do,” he added.
Businesses need to connect their front-end customer service and support to their back-end logistics and operations, in order to fuel a better customer experience, according to Anderson.
“So many people forget that when you are building customer experience, it is about connecting every part of the customer experience – the fulfilment, the delivery, and the back-end of understanding who the customer is,” he said.
“But with these devices now, you have social and local information as well, which can be contextualised,” he added.
Citing the example of marketing automation, Anderson argued that while companies have been adept at old practices, the next frontier lies in contextualisation.
“Most companies have become adept at automating old processes – people have taken what were best practices four to five years ago, and merely automated them.
“What is interesting instead is the next frontier – contextualised marketing, which only works if you have access to real-time information,” he added.
Businesses unable to adapt to the real-time world are in danger of quickly becoming irrelevant.
“If a business is not able to adapt in real-time they will never crack the code, and the code today is all about relevance,” Anderson said.
“There is no point for a system to take a look at a database extract sitting in a data warehouse, without a view of who you are and what you are doing today.
“If you can’t get a combination of these things in real-time, you are immediately irrelevant; whatever you offer is out of date,” he added.
Automated systems fail because they are not based on real-time data, and campaigns fail because they are executed with old data, according to Anderson.
Changing processes, changing outcomes
The biggest challenges companies face in transforming their businesses to align with customer experience are the two Ps: People and processes.
“The No 1 challenge is cultural and people-centric, because people, processes and platforms are all considerations,” Anderson said.
“The platforms exist but it’s not the challenge in transforming the business, it’s the people and the processes,” he added.
Company processes have been built from the inside-out perspective, Anderson argued, but the world has changed.
Customer relationship management (CRM) systems were considered the panacea for companies in managing their customer information.
“You had a system to put customer information into neat little boxes, but things have changed,” he said.
CRM thinking infers that the brand has control of the relationship with the customer, but now it is the customer who is in control of the relationship, via the devices or technologies he or she uses to communicate with the business, according to Anderson.
“CRM is now both a tired acronym and a kind of outdated perspective for managing customers,” he argued.
“How do you connect your business end-to-end around the needs of the digital customer who wants to talk to you through any device they want? You need to be responsive and adaptive in real-time, which CRM does not enable,” he added.
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