The Internet of Things. The once ubiquitous tech phrase that was on everyone’s lips back when Amazon launched the Echo is experiencing a renaissance, of sorts: IoT is hot again. But this time, it’s B2B companies that are finally getting their share of the IoT pie. Attendance to IoT conferences is up 25% this year. There is growing discussion about IIoT, or Industrial Internet of Things, and how it’s going to disrupt business as usual for B2B markets.
But, wait: do you even know what the Internet of Things is? If asked by your grandmother this holiday season, would you be able to define it for her? I’ve provided this handy holiday primer, so you can sound smart to all your loved ones over your festive lamb dinner this winter.
The Basics: what is the Internet of Things?
Wikipedia defines IoT as the network of physical devices (i.e. vehicles, home appliances, doorbells, etc.) that are embedded with electronics, software, and sensors which enable these devices (yes, actual things) to connect, collect, and exchange data. We live in an increasingly connected world, and all those interconnected things in your home (such as your phone, which is connected to a Google Home or Amazon Echo, which both control your lights, thermostat, speaker system, and security cameras) are literally the Internet of Things.
It is simply an interconnected network of “smart” devices that can talk to each other and the outside world via the Internet.
But are people really building “networks” of devices in their homes that are all synced up and communicating? I mean, aren’t talking refrigerators just a joke on HBO’s Silicon Valley? Surprisingly, no.
One in five Americans is expected to have a smart speaker device such as an Echo or HomePod by 2021. Currently, that percentage is almost 15%, which is over 50 million people. And of those that own a smart speaker, almost 30% of them use it to control smart home settings and almost 35% use it to make purchases. This percentage is expected to rise dramatically in the next three years. The B2C IoT is BIG business, and growing quickly.
What’s more, global IoT market share is expected to grow from $249 billion in 2018 to $457 billion in 2020, with $6 trillion expected to be invested in IoT solutions in the next five years. A quarter of that will be in industrial solutions. This is going to be massive.
How did IoT take over your home?
The year 2015 was huge for B2C IoT. It all started with Amazon Dash, a small, branded button consumers could affix to cabinets or appliances in their home and quickly reorder products they used frequently. This B2C button needs an Amazon Prime account and WiFi to work, and costs $4.99 (or £4.99 in the UK) per button. Amazon launched the Echo, the first in-home smart speaker to market, three months later.
When Amazon first premiered its Dash button, it came out around April Fools’ Day, and everyone expected it to be a total joke. Nobody is going to pay for a small click button to order trash bags or toilet paper. And yet, they did! Over two million Dash transactions occurred last year alone, a four-fold increase from its debut year.
Brands that were able to get a Dash button sponsored by Amazon effectively created a frictionless sales channel, directly in consumers’ homes, for buyers to purchase their product with one click. The sales journey evolved from hoping consumers bought your product online or in-store because of competitive prices or brand loyalty to now simply clicking a button. The button creates effortless sales experiences, where customers never abandons their online cart and always buys your brand.
The beauty in the Dash button is in its simplicity. In a world where solutions are becoming more complex, a one-click button is a novel way to reach consumers.
After the success of Dash, Amazon launched its second generation button, the AWS IoT button for developers to program themselves. This opened the door for anyone or any company to use this technology in any capacity. Amazon talks about using it to call an Uber or open your garage door, but why stop there?
B2B companies want frictionless sales experiences for their products, too. Why not combine the streamlined buying process of the Dash with the untethered AWS button? And thus, IIoT was born.
How do I use IoT in the B2B realm?
A handful of startups are now developing their own buttons and corresponding proprietary software to help businesses use simple IoT solutions to increase sales, strengthen customer relationships, and collect insightful user data.
The AWS IoT button requires some developer knowledge to program, an AWS account, a WiFi network, and a lot of patience. The cost? They start at $19.95 per button. But startups such as Clicksale – with their HQ here in Reykjavik – are making their own buttons, and designing software to make them super user friendly, at a fraction of the cost.
Clicksale noticed that sales staff visiting distributors in the automotive parts industry were still writing orders by hand, or sending five or six emails back and forth to initiate the sale of a product. Sometimes a sales person would show up; others times the warehouse would run out of stock before a sales person could come. This friction would cause distributors to buy competitors’ products or leave shelves empty. There had to be a more efficient, effective way. Supplier and consumers wanted simple solutions.
Enter an IoT button. Distributor notices she’s low on WD-40. Clicks the button affixed to the shelf. Lubricant is automatically reordered and invoice automatically emailed. It’s that simple.
What are the potential benefits?
- Cost savings with sales teams: Companies are able to focus their sales professionals on generating new leads instead of them repeating the same repetitive sales visits and calls. Orders arrive just in time, and sales teams can save time, money, and effort, getting more orders with less staff expenditure.
- Quicker adoption: Consumers and suppliers, who were both used to doing sales via phone or email, were more likely to adopt the simple button purchasing method, as opposed to complicated, time-consuming online ordering workflows.
- Modify customer behavior: One-click solutions bolster brand loyalty through ease-of-use; this could also hijack competitors sales.
- Supply chain for everyone: Ordering of new goods no longer has to fall on one or two managers within a company, but on anyone who recognizes stock is low; clicking a button also transcends language barriers, allowing diverse teams to flourish.
- Data collection: Buttons provide an easy way to gather data about when consumers are most likely to sell-out of products and order products, and who is ordering more or fewer products.
“How is this helping me?” you might be asking.
So, you’re not an aftermarket auto parts distributor? Fear not. The number of use cases for these buttons is endless, and it’s just the start of a great automation push in the industrial sector. Clicksale is rumored to be piloting with an Icelandic F&B stalwart to help their new sales team, and with a multi-billion dollar international optical and medical device company that needs on-demand supplies for their high-tech labs.
Buttons can be programmed to call repair staff, order site inspections, or initiate welfare checks. One company even advertised they were using a button to automatically send an email to staff to alert them to cake in staff break room. While this probably isn’t directly increasing company ROI, you can now see these buttons will become more pervasive than we all imagined on April Fools’ Day 2015 when Amazon launched the Dash button.
Bottom line: The button is about creating simple, fun purchasing habits for consumers, and frictionless sales funnels. Simple can be the future. Consider whether IoT solutions would streamline sales, augment existing operations, and create customer loyalty for your brand.
A word of thanks: High fives and handshakes are in order for those that helped me, including my editor, Elizabeth Braden, who is available for freelance editorial and writing projects. And Clicksale, for the allowing me to feature them. If you’re interested in trying their proprietary button and software, get in touch via their website. They’re now booking orders for 2019, and would be happy to help. And of course, Bala of Startup Iceland fame, who has allowed me to share some wisdom with this exciting network.