The Internet of Things (IoT) is one of those rare buzzwords that started to substantially impact consumers’ lives before most had even learned what it was.
Basically, the concept of IoT is built upon the idea that every device with an on/off switch can (and should) be connected to the internet, to all the other devices around it, and to you.
As the internet of things evolves, we can imagine a future where cars can communicate with each other to avoid accidents, the snooze button on your phone could text your work to let them know you’ll be a few minutes late, and your electric toothbrush could book you a dentist appointment.
As the IoT becomes increasingly entrenched in the lives of millions, what effect will this emergent reality have on the FMCG industry?
The IOT Reality is already upon us
Forward-thinking brands are already beginning to integrate the IoT into their manufacturing processes and supply chains, but as we move forward, customers will likely see the results in vastly increased personalization in the marketplace. As a recent Emarketer article notes, “Whether it’s monitoring the supply chain, tracking how products are used or gaining more insight into shopper preferences, the IoT is ushering in an era in which “smart” things can seamlessly collect, share and analyze real-time data.”
What will this mean in the real world? It means that both a store and customer can communicate with each other throughout the shopping experience. Sensors, cameras, real and virtual shopping carts, smartphones and apps can allow information to flow in real time between retailers, manufacturers and consumers. This will allow the customer to receive offers on what they’re buying, and products that would complement what they’re buying. It would give retailers and brands information on why and how the consumer made the choices they did, and allow both to interact with each other in real time to optimize the shopping experience.
It puts the salmon in the basket.
A recent study by Scandanavian researchers looking to find what information from the IoT was used and preferred by shoppers focused on consumers shopping for salmon, and analyzed which information impacted their purchasing decision. The authors concluded that “Relative to the static information presented in the choice situation, the real-time information was the most salient. Among the real-time stimuli, quality ratings by other customers were the most salient, followed by an offer based on a product in the shopping cart, real-time expiry date, and real-time price.” Knowing this can help brands and retailers reach interested consumers at the point of purchase with highly personal and targeted information that will generate sales.
Which “things” will drive IoT’s role in FMCG?
Where the internet of things becomes really interesting in the FMCG field is when we begin to consider smart appliances. The Korean tech giant LG released a smart fridge in 2017 that allows consumers to place Amazon orders through a touch screen on the door, and is Alexa integrated. The fridge also “includes a panoramic camera that can send a photo of the contents of your fridge to your smartphone, so you can find out if you need milk and eggs even if you’re already at the grocery store.” Soon we’ll have fridges that will order your milk, bacon and eggs for you, before you’ve even realized you need them.
Similar to Smart Fridges, digital assistants are poised to change the way we shop for FMCGs. We’ve covered this topic here, here, and here. The popularity of digital assistants is exploding, and they are making voice shopping look like the future of retail. Digital assistants will create new challenges for the marketing industry, forcing brands to create and promote voice signatures, and to explore using shoppable marketing rather than the traditional broadcast form.
How can FMCG brands capitalise?
As more and more people begin using their TVs, digital assistants, fridges and phones to buy their groceries, brick and mortar retailers are likely to lose business to their eCommerce rivals. As customers move from grocery stores to other modes of shopping, brands will need to explore creative new ways of marketing their products.
We can safely predict that advertising for FMCG products will migrate from TV and print to our fridges, digital assistants, and phones. Brands will need to find effective and personalized ways of reaching potential customers. If they don’t, it seems likely that Amazon, which is poised to be integrated into all of the smart devices that comprise the IoT, will carve out a dominant market share. Retailers and brands should be thinking very hard about how to become a part of the internet of things, or be left with nothing.