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IoT applications for consumer-oriented industries, CIOSEA News, ETCIO SEA


IoT applications for consumer-oriented industries

Although the very initial use cases of The Internet of Things (IoT) were based on consumer products including a “Smart” Coca Cola vending machine in 1980, a Toaster in 1990, a pot of Coffee in 1991 and LG’s connected refrigerator in 2000, it was in only the second decade of the 2000s, that there was categorisation of consumer, commercial and industrial IoT. IoT became extremely popular especially due to advancements in the hardware, edge computing and application layers, especially around rising computing power, mobility penetration, networks and connectivity improvements, and rise of cloud for data collection and storage on one hand and reducing sensor costs on the other. In fact, in 2009, the number of worldwide IoT devices reached a figure of nearly double that of the global population: an increase of 23 times from 2003 till 2010.

From the 2010s, there was little doubt that IoT will play a pivotal part in digital optimisation and transformation across a multitude of industries and business functions. This paper by ResearchGate mentions that Gartner highlighted IoT in its 2011 hype cycle of 2011, and IDC in 2013 estimated that the IoT technology and services spending shall generate global revenues of $8.9 trillion by 2020 with an estimated installed base of approximately 212 billion “things” globally by the end of 2020. IoT powered along with artificial intelligence, extended reality, digital twins, cloud, blockchain and data platforms have brought about many exciting use cases across the consumer as well as infrastructure and B2B facing industries to maintain innovation, enhance customer, employee and supply chain productivity, experiences and satisfaction, enhance operational excellence and reduce costs.

What was the effect of the pandemic on IoT, especially for consumer facing industries? What is the market size?

Although there were chip shortages at the start of the pandemic, digital transformation and optimisation accelerated immensely on account of lockdowns, social distancing, and travel curbs along with market uncertainty and a paradigm shift in customer, employee and supply chain loyalty. The period of 2020 onwards saw accelerated adoption of IoT along with other technologies such as cloud, 5G, edge computing, artificial intelligence and machine learning. From the consumer facing industries, rise of remote healthcare and telemedicine systems, connected vehicles, phygital (physical + digital) shopping, OTT and consumer entertainment, and smart homes were the principal factors. As the pandemic curbs wore off, consumer and commercial IoT also contributed to the restart and resurgence of hospitality, retail, entertainment, airlines, offline education and other consumer-oriented industries.

This research by IoT Analytics, predicts that the current number of connected IoT devices globally of over 12 billion will more than double to 27 billion by 2025. Moreover, according to this paper by Allied Market Research, the global IoT market size which was valued at $740.47 billion in 2020, is estimated to reach $4,421.62 billion by 2030, growing at a CAGR of almost 20% during this forecast period from 2021 to 2030. It is further estimated that around two thirds of all IoT use cases are in the industrial, commercial and B2B space and the rest in the personal consumer space.

Why is IoT so important especially in the consumer-oriented industries in the post pandemic world?

Customer and employee loyalties and importance of total experience has undergone a major transformation in this pandemic period. Amidst this blitz of digital transformation, this PWC article in 2020 estimated that more than 30% of customers will switch brands after one negative interaction and a whopping 92% after a few unfavourable experiences. AI/ ML and Internet of Behaviour (IoB), which were nice to have technologies prior to the pandemic, are now critical to provide insights into the customer’s digital footprint, assessing customer buying, adoption, usage and service and thus moving them into the next phase of the cycle.

Initially used in product recommendations, location intelligence-based offers, and health monitoring, IoB is ever so important for innovation, loyalty and competitiveness in consumer facing industries. Gartner defines IoB as a logical extension of IoT concentrated on ingesting, processing and analysing “digital dust” from consumer’s daily lives, comprising online activity, smartphone geolocations, social media, e-commerce and other activities; and included IoB in its top strategic technology trends for 2021 in this research.

As consumer facing industries adopt the Metaverse and Web 3.0, IoT along with wearables, extended reality and digital twins shall be of paramount importance to enhance the digital experience and loyalty.

Customer experiences have now metamorphosed into total experiences covering employees and supply chains as well. Organisations leveraging IoT across all these stakeholders shall have distinct competitive advantages.

What are the top IoT applications for consumer-oriented industries?

Let us examine the popular IoT use cases across industry verticals and business functions for major consumer-oriented industries.

Healthcare: Healthcare continues to lead the adoption of IoT from the days of the pandemic. The Internet of Medical Things (IoMT) has grown to be a significant market in itself, and this Deloitte research estimates its size to be valued at over $158 billion in 2022. From the initial applications of fitness, track and trace, social distancing norms and smart wearables for Patient Monitoring, IoMT smart sensors also monitor levels of Heart rate, diabetes, mental health, glucose and several other diseases, thus providing proactive alerts and triggering workflows for better care management. Hospitals and pathology laboratories are leveraging IoMT for robotic surgery, Imaging, telemedicine as well as emergency and trauma services such as dispatch and tracking for ambulances and home healthcare stations. For OPD and In Patient Services, IoMT is further providing benefits in enhancing in-building sanitation, Heating Ventilation and Air Conditioning (HVAC) and Smart environment management. IoT/ IoMT is hence providing critical for all players in the healthcare ecosystem including care givers, hospitals, digital apps providers, devices and wearables companies and healthcare technology solution providers to achieve better patient medical and emotional outcomes, proactive and preventive health management, critical disease handling, improve engagement and experience and reduce costs.

Retail: As per this Gartner Research, spend on IoT in retail and wholesale trade will grow by $28 billion from 2020 through 2030. Retailers are leveraging IoT both for in-store fulfilment and customer experience as well as across deliveries and logistics. Right from inventory visibility and turnover through smart tags, smart and dynamic store planograms, express checkouts, minimising customer wait times and store pilferage, enhancing customers’ in-store journey experience through beacon powered personalised messaging and offers, to maintaining social distancing protocols and providing an omni-channel e-commerce experience, IoT has a critical role to play for in-store operations.

Whilst some consumers are on hand continuing to use e-commerce and adopting the Metaverse and Web 3.0, some are returning to physical stores and yet others are going “phygital”. Many consumers are buying online-picking up from store, some others are looking up online and buying from store and their other combinations. IoT is amongst the top 5 technology investment areas by retailers, as this research by EY highlights. This article highlights the main focus of IoT around personalised products and experiences, operational and process efficiencies, infrastructure and energy management and customer feedback and experiences.

Automotive: According to Gartner’s research, by 2025, the enterprise and automotive IoT platform market will represent an $11.3 billion opportunity. The percentage of 5G and connected cars is increasing rapidly and the inbuilt adoption by the Electric Vehicle segment will contribute immensely to its growth. Moving away from a simple transportation experience, owners and users of vehicles are gaining immensely from IoT powered superior driver assistance and Infotainment experiences, safety, charging points, emissions, vehicle health and predictive maintenance. New age car insurance products are incorporating driver patterns, risks and hygiene and data along with those of the vehicles for innovative usage based/ pay as you drive motor insurance policies, thus incentivizing better driving discipline with lower premiums. Additionally, Fleet Management companies leverage telematics for better driver monitoring, identifying risks and improving visibility and control.

Automotive companies have huge potential of additional revenues as well as savings from IoT and connected cars. This McKinsey research predicts that by 2030, 95% of new vehicles sold shall be connected and this connectivity could deliver upto $310 in revenue and $180 in cost savings per vehicle yearly, on an average.

Airlines: With severe travel curbs especially across the passenger travel segment, IoT is a clear driver for the resurgence in the aviation vertical. Airlines are leveraging IoT all throughout the passenger experience right from baggage scanning to smart check-ins, beacons for gate display, upgrades, offers and other information dissemination, inflight climate control and personalised passenger experience, baggage tracking management, smart terminals and many others. There are of course other significant IoT use cases on the Infrastructure, Operations and Maintenance end such as core aircraft flight operations, fuel management, safety, maintenance schedules, runaway optimisations and many more. Senior Management of aviation companies leverage Artificial Intelligence and Smart Analytics on top of this humongous IoT data for better insights, experiences and operational efficiency both from the passengers and operations perspectives. This article by Deloitte highlights the importance of IoT in the aviation industry

Hospitality and Entertainment: Similar to airlines, hospitality players across the hotel, restaurants, entertainment, cinemas, and luxury cruises verticals are turning to IoT to improve consumer experiences, achieve operational excellence and optimise costs in their restart mode. This paper by ResearchGate highlights the myriad of IoT applications in hotels right from in room personalised guest experiences across entertainment, dining, smart lights, climate control to in resort navigation, safety and emergency, express check in and checkout. IoT also facilitates energy management and control for the building as well as enable staff to optimise operations across the facility and provide better response times to guests especially in the areas of maintenance, complaints, room service, and refills.

Restaurants, cinemas, entertainment venues, theme parks and luxury cruises are also leveraging IoT for enhancing booking, preferences and on-premise experiences, better queue management, handling social distancing protocols, children safety, dissemination of messages, personalised and location-based offers, and many others.

Education: As education moves back into the physical or hybrid mode, IoT is being leveraged by academic institutions, students and staff to improve safety and tracking on campus, have more energy efficient buildings and campuses, manage and track transportation, view and monitor assets and resources, and have personalised learning and reinforcement. Smart Classrooms leverage IoT, for secure attendance and tracking, alarms, cameras, and locks. Institutions combine IoT with Extended Reality and other tools for imparting better pedagogy through smart boards, assessment checking, Augmented Reality enabled learning and aids for special children.

Buildings, Real Estate and Facility Management: Moving beyond Smart Homes and connected devices, IoT is bringing about immense benefits to smart Building and Facility Management. This research by Deloitte spells out some of the use cases right from smart energy management to predictive maintenance, fault and repair management of HVAC, elevators, drainage, piping, alarms, fire control, power, parking, waste and a whole host of In-building systems.

Furthermore, owners of residential and commercial buildings are looking at significantly improving tenant experiences of smart homes as well as smart buildings and also leverage the IoT data for better insights, more revenue opportunities, further optimisation of layouts and further improving services.

Media and Entertainment: IoT and Artificial Intelligence have traditionally made significant strides in the Media and Entertainment Industry. Post the pandemic, with the huge shift in consumer patterns and preferences, IoT is a key lever for competitiveness and innovation. Personalised offerings and messaging, targeted advertising, Immersive experiences are some of the common IoT use cases for online/ home entertainment.

With resumption of entertainment parks, cinema halls, live concerts, IoT use cases similar to hospitality are being leveraged such as enhancing booking, preferences and on-premise experiences, better queue management, handling social distancing protocols, children safety, dissemination of messages, personalised and location-based offers, and many others. Owners and Facility managers of these premises also use IoT for their inbuilding solutions such as smart energy management, predictive maintenance, fault and repair management of HVAC, elevators, drainage, piping, alarms, fire control, power, parking, waste and others

Similar to retail, adoption of Metaverse and Web 3.0 will also necessitate smart use of IoT in a phygital way to ensure best customer experiences, operational excellence and optimised costs.

Utilities: Electric, gas and water utilities have turned to IoT especially in the areas of smart metering, fault and repair, predictive and planned maintenance, outage planning and management on the Consumer facing end, besides grid management, supply chain transformation and ensuring worker tracking, safety and efficiency on the Infrastructure and Operations end.

Consumer packaged goods: In this paper, Research and Markets, estimates the Global FMCG Packaging Market to exceed USD 622 Billion by 2027, from a size of USD 514 billion in 2020. This gives CPG manufacturers an immense potential to leverage IoT in packaging viz. Internet of Packaging (IoP) IoP devices such as barcodes and smart tags on packaging are becoming an important tool and platform for manufacturers to communicate key messages, provide content for upsell or cross sell, and disseminate safety and other guidelines to the consumers.

Besides the IoP applications, the IoT Transportation Use Cases are very relevant for the extended CPG enterprise such as Route Management and Optimisation, Real-time Vehicle Tracking, and Monitoring, Adjusting and Controlling the environmental parameters of Products. A combination of IoP and Unmanned Aerial Vehicles are providing faster and cost-effective deliveries to consumers.

At the consumer facing store end, IoT use cases of retail apply right from inventory visibility and turnover through smart tags, to smart and dynamic store planograms, express checkouts, minimising customer wait times and enhancing their in-store journeys amidst social distancing protocols and providing an omni-channel e-commerce experience across online and offline.

Finance: Customers have been leveraging smart assistants and chatbots in banks and financial services space for a while now. Banks are also leveraging IoT for monitoring, controlling and drawing up preventive maintenance and downtime strategies for ATMs, Vaults and other assets. For consumers who still visit Bank and branch premises, IoT contributes immensely to a superior user experience similar to retail by leveraging smart tags, smart queue management, minimising customer wait times, enhancing customers’ visit through beacons and personalised messaging, and adhering to social distancing. Owners and facility managers of banks and financial institutions premises also use IoT for their in-building solutions such as smart energy management, predictive maintenance, fault and repair management of HVAC, elevators, drainage, piping, alarms, fire control, power, parking, waste and others.

Motor insurance companies are now launching usage/ driving based motor insurance products which take driving insights and patterns from the IoT telemetry systems of connected vehicles. Similarly, property insurers are using IoT insights from buildings to come up with innovative insurance solutions based on the state of inbuilding services and quality.

Smart contactless, wearable driven payments, fraud management, customer risk assessment are amongst some of the other IoT use cases in Financial Institutions.

Agriculture: IoT applications in agriculture are diverse and spread right across the farming lifecycle from planting and preparation of soil, farming, harvesting and distribution. IoT devices and sensors provide farmers and other stakeholders in the Agri economy to take smart decisions based on rainfalls, humidity, pollution and other environmental data from these devices.

Irrigation and soil sensors, drones and sensors on livestock provide great insights around monitoring and tracking product yields and environments, conserving water, optimising use of fertilisers, pesticides and biological agents, enhancing product quality, planning and risk management and cost control.

Additionally, farmers are also using robots and automation for repetitive tasks and further optimising costs.

Use cases across enterprise business functions

Within the enterprise across all consumer facing industries, common functions such as Supply Chain and Human Resources are also using IoT for their internal operations.

IoT value-adds to connected supply chain covering predictive maintenance, employee/ worker safety and utilisation, asset management, smart energy management, real time tracking and environmental monitoring

CHROs are looking beyond employee tracking and safety aspects, and using IoT across the employee lifecycle to monitor health and wellbeing, having better and more immersive skilling, learning, onboarding and on-the-job performance experiences by combining with extended reality. This paper by ResearchGate summarises the impact of IoT on the HR function. Moreover, as per this research by Gartner, one fourth of employees worldwide will spend at least one hour in the Metaverse by 2026, and IoT, wearables and extended reality will have an important part to play in enhancing this experience.

What are the potential pitfalls in unlocking IoT value?

In consumer facing industries, it is sacrosanct to mention the importance of privacy, security and governance in terms of compliance to regulatory norms especially regarding customer and sensitive data. While industries jump on to the IoT bandwagon to unlock value, they must implement the necessary cybersecurity measures to enhance zero trust and cyber resilience, especially considering the large attack surface that these IoT devices bring about. Governments, Institutions and Enterprises will continue to work on governance frameworks of uniform baseline standards for IoT devices across users, supply chains and the extended enterprises incorporating shared security principles, certifications and regulations. It is expected that these guidelines shall encompass hardware encryption, software architecture and design and to also be taken into account during supplier compliance and assessment exercises as well.

Gartner research estimates that 75% of Earth’s population shall have its personal data covered under a modern privacy and compliance regulation. Another article by Gartner predicts that by 2024, organisations will spend over USD 15 billion in data protection and compliance technology on account of privacy compliances. McKinsey states similarly that data protection and privacy and adherence to regulatory compliance enhances organisational reputation, customer trust and builds a solid business advantage.

Consumer facing industries also need robust enterprise and data architectures as well as analytics and insights tools to ensure high quality of data ingestion, correctness, processing, storage, analysis, delivery and visualisation. This is critical to have correct insights and use these for taking short- and long-term business decisions.

Wrapping up

IoT is a key driver in the post COVID-19 digital transformation and optimisation phase. This McKinsey research estimates that IoT would unlock a value between USD $5.5 trillion to $12.6 trillion globally by 2030. Amidst these ever-growing use cases, organisations would need to also make investments in human skill sets, cyber security and data analytics to unlock the IoT value within the extended enterprise.





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