The Internet of Things or IoT has significantly changed the way businesses operate today. It refers to the digitization of the physical world as a key enabler for digital transformation. Connecting people, objects and environment together, IoT enables visibility, enhances decision-making, and empowers innovation. The technology provides organizations with a platform to leverage data to create new business models.
IoT-enabled customer experience
Latest analysis by Frost & Sullivan shows that globally, companies lose more than US$300 billion annually due to poor customer experience, which makes it a top priority for organizations globally. IoT has the potential to enhance an organization's ability to understand the customer journey. This could mean proactively engaging with them, resolving their issues more efficiently, delivering better value and enhancing the customer satisfaction overall.
A key value proposition of IoT is its ability to 'sensorize' an environment leading to digitization of the physical world and quantifying human actions. An example would include getting better understanding of customer behaviors.
Although the omnichannel strategy covers all touchpoints and channels for effective customer experience, many organizations are not able to meet customer expectations due to the siloed approach. IoT enables the convergence of customer journeys across both physical and digital environments, including mobile, web, social, self-service and even video, making it easier for organizations to continually deliver personalized, predictive, and productive experiences to their customers.
"IoT enables organizations to collect vast amount of customer data in real time, and leveraging analytics to drive valuable insights for targeted engagement, proactive services, improving loyalty and trust. This helps them to determine the intention and subconscious state of a customer's mind," noted Sapana Maheira, Analyst, Digital Transformation, Asia Pacific, Frost & Sullivan.
IoT-enabled smart retail
Moving on to retail in the Asia Pacific region, the expectations of today's customers are rising. Conditioned by excellent online experiences - which offers immediate and personalized service - customers can now have similar expectations for their in-store retail experience.
To meet these changing customer needs, physical retailers must do more. Instead of just adding e-commerce storefronts, they need to also focus on incorporating the digital experience into the physical store.
The digitization of the retail store begins with understanding the customer journey (digital awareness) during the visit to generate vital data regarding behavior in-store and product interaction. This data helps retailers better understand their customers, and allows for data-enabled decisions to be made, like improving visual merchandising or optimizing manpower.
Retailers should then progress to digital immersion, which allows the store to provide personalized and contextual advice matched by an interactive experience that will influence customer's buying behavior.
"Developing smart retail is a journey. Retailers can start with designing a roadmap to formulate a strategy from digital awareness to digital immersion as they evolve from understanding their customers to better engagement with them for customer loyalty and advocacy," noted Kenny Yeo, Senior Industry Analyst, Digital Transformation, Asia Pacific, Frost & Sullivan.
Cyber security remains vital
As organizations look into the applications of IoT into their digital transformation strategies, such as customer experience or smart retail, it is imperative that cyber security becomes paramount in ensuring that these initiatives are built on a secure foundation.
Hence, it is essential that organizations recognize and address the two main issues facing cyber security today, namely, the lack of security by design for the Internet of Things (IoT), and the lack of skilled cyber security professionals to meet market demands.
"Without recognizing the need to invest in security and having the right technology, processes and people in place, organizations will not have a secure foundation to thrive in their digital initiatives," noted Charles Lim, Industry Principal of Frost & Sullivan's Cyber Security Practice.