Connecting Consumers to Business in a Digital Economy

the success of STM Merci, but something else has happened that was not expected.

STM Merci users are also spending more money at participating businesses. STM reports that their app is directly responsible for nearly 3000 new business transactions every day, and the number of businesses that want to become STM partners is growing fast. There are now over 1300 participating businesses. What began as an effort to improve the public transit system user experience has turned into a new digital economy built around transit system users themselves. This is an important lesson in the burgeoning digital economy. By using M2M communications to turn better customer service into business opportunity, the IoT has become the foundation of a digital business ecosystem that did not exist before. That is transformational. What does this mean to the way traditional enterprises operate? Let’s look at another example.

How the IoT Connects Customer Engagement to Enterprise Operations

Several years ago a major home improvement retailer launched a mobile app that helps customers find and purchase products, either while they are off-site or in the store. If the customer is in a store, the application tells exactly where in the store a particular product is located and how many items are in stock. It has other features too, including enabling customers to purchase a product for delivery or for pick-up at a designated store location, build custom project and wish lists, submit product reviews, and accept alerts for special offers.

This application offers a new engagement experience for customers. It makes finding products in a store faster and easier with less reliance on in-store staff. It also provides a way for the retailer to bridge the online and in-store experiences they offer their customers. But this app does something more. It provides a deeper connection between the customer and enterprise operations that have traditionally been far removed from customer facing activities. Here are some examples:

• Data generated by the “connected customer” such as individual customer purchasing patterns, time in store, time between search and purchase,combined with other data such astransaction activity, inventory,offers and promotions, and other relevant context specific information (weather conditions for instance), becomes available for analysis in real time. This enables the retailer to customize special offers, more accurately measure the effectiveness of offers and promotions in real time, and to more accurately forecast inventory needs.

• More accurate forecasting means marketing strategies and supply chain management become more tightly linked, and both become more responsive to predictive assessments of customer behaviors.

• With deeper knowledge of customer history and interests, it becomes possible to leverage stronger customer relationships into new business opportunities. This retailer already has partnerships with contractors. That partnership network can be expanded to offer customers complementary and more personalized products and services, and life-cycle services, some of which may be based on connected sensors built into products the customers purchase.

Increasingly the IoT is becoming the connective tissue of the supply chain itself, all the way from distribution networks to manufactures to component sourcing and raw materials. Supply chain management systems rely on IoT data to track, trace, and manage the flow of wholesale goods. In the digital economy, all these activities are more tightly integrated so that they become more directly responsive to the front end customers.

IT Investments Must Be Customer Centric

The IoT, combined with advanced analytics that make sense of large streams of real-time data and business applications that respond to IoT triggers, becomes the basis for more efficient and profitable business operations. But that alone is not enough.

Businesses must recognize that in the digital economy, consumers have tremendous power. If they become frustrated or dissatisfied with an experience, they can switch to a competitor at the touch of a smartphone screen. To be competitive and profitable in the digital economy, a business must have deep visibility into its processes and costs so that when it sells a product to a customer, the business knows that product will appeal to that customer based on price, quality, and functionality. Such insight can only come from a robust, real-time platform capable of supporting the different data types and processing requirements of the digital economy. Ready-made off the shelf solutions will be a prerequisite to helping businesses transform in ways that enable them to more effectively service the new breed of intelligent consumers.