#RetailTrends2020: IoT comes of age

It’s been a long day and you’re driving home from work; well, more accurately, your car is driving you home from work. You’re sitting in the driver’s seat and watching a 3D hologram of the latest news headlines. The figures of politicians on your dashboard are real and lifelike, and sound like they are in the car with you. Then, a sound: your phone is ringing. The car pauses the video and a text message appears over the debate; it’s your refrigerator, AGAIN. It’s still trying to remind you that you’re low on milk and it knows that you’re planning to make a cake for your daughter’s birthday tonight. It’s been texting all day but you’ve been ignoring it; now it means business. Normally you’d just have the milk delivered, but you may or may not (but mostly may) have told your spouse you already bought it before you left the office when she called earlier because the fridge started texting her. You sigh and tell the car to stop by the grocery store on the way home.

You don’t have time to use the store’s click and collect app, so you’ll have to go inside. The car silently parks itself in the parking lot and you head into the store. It’s light, bright, and sparsely populated with other customers doing just what you are: making last minute purchases. There’s really no reason to go to the store unless you like it, and you are not one of those people. The video screen by the door, sensing your arrival and instantly receiving all of your data from its mothership, immediately pops up some ads of things you might like, including birthday gifts. You ignore this and head to the milk at the back of the store (why do they still do that?), grab a carton, and walk back out to your car. You toss the milk on the seat, dismiss the message in the car with your receipt, and head home knowing that at least the refrigerator will be happy.

This is the Future; it’s Coming Fast, and There is a Lot of It

Thanks to new 5G connectivity, by the middle of the fast-approach next decade this type of technology will not only be possible, but commonplace. There was a saying in the 1980s that said, “anything with a digital display must also function as a clock”. In the 2020s the saying will be “anything that can be connected to the internet will be connected to the internet.”

1G gave us voice. 2G gave us text. 3G gave us pictures. 4G gave us video. 5G will give us everything we can imagine, and lots more; a true Internet of Things (IoT). Cisco predicts consumers will own 500 billion “smart” connected devices by 2030; that’s more than 50 devices for every human on Earth, and one third of those devices will be wireless and communicate via cellular networks. In the year 2025 those devices will generate more than 75 zettabytes of data in one year (that’s one trillion gigabytes or 1021bytes). To put that amount of data into perspective, the next tier (yottabyte, 1 trillion terabytes) is the highest order of magnitude of data currently agreed upon.

Everything will be able to communicate with everything; at speeds we can’t come close to today even with the fastest home broadband. Thanks to next-generation factory-installed RFID chips, every item in our lives will be able to wirelessly communicate with every other item. Your milk jug will talk to your fridge, and your fridge will call you and nag you about milk. Your self-driving car will communicate with every other car on the road and whisk you to your destinations with only minimal input from you. Your house will communicate with the Amazon robot delivering your latest purchases and then tell you and Amazon the birthday gift for your daughter arrived.

IoT will have massive implications on how every facet of our society is managed from our daily personal lives, to our businesses, and even to our cities, states and countries. For the average person, IoT will take away much of the thinking that is required to purchase essential daily goods and services. That combined with the enormous amount of data generated by these transactions moving to the digital world will create personalized shopping experiences which could only be dreamed about today and allow for a true artificial intelligence to realise its potential.

The impact of the shift to IoT cannot be underestimated. It’s coming, and when it does the change it brings will be beyond anything we’ve seen since the industrial revolution. In raw dollars and cents, the potential economic impact of the IoT by 2025 is estimated to be nearly $4 trillion, and by 2030 $11 trillion; that’s more than 10% of the world’s economy.

Retailers will find this change comes quickly, and that customer expectations as to what is a “normal” shopping experience will ebb and flow as new technologies come on-line, and consumers become accustomed to their offerings. A one to many, or persona-based personalisation scheme will be seen as outdated and clunky as a rotary phone in just a few short years. To prepare, brands and retailers must look at how their organisations are designed and ensure that the customer experience is weighted as heavily as finance and logistics, the days where user and customer experience were just a “nice to have” are gone, and the era where companies compete on their experiences as much as their product offerings are just around the corner.

Companies that embrace this change early will be in the driver’s seat for the next decade, and it’s won’t matter who is driving the car.