The days of early adopters—consumers who will try new things—are over. “Welcome to ‘hyperadoption.’ We are all early adopters now,” James McQuivey, vice president and principal analyst at Forrester Research Inc., said Thursday during his featured presentation, “The Internet of Things Means a Consumer Information Tsunami: Get Ready to Ride the Wave,” at the Internet Retailer Conference & Exhibition in Chicago.
For example, before the Apple Watch, 26% of consumers surveyed by Forrester said they could see themselves owning such a device, McQuivey said, and that number is not small, he said especially since it was for a product no one had seen. Same for self-driving cars, which will be loaded with sensors and collecting all kinds of data: “8% of people want a self-driving car already, and they don’t even exist yet,” he said.
Consumers are ready and willing to embrace new services and technology that will provide an avalanche of data, so retailers should learn how to manage and best use that information. Not so much for direct transactions but to service consumers and make them happy, McQuivey said. “You need a cloud-based, single view of your customer. It’s eminently important that you do that,” he told the audience. Retailers need to brace for and ride a “fifth wave,” one that follows four others: bricks-and-mortar commerce, telephone-based commerce, e-commerce and social/mobile commerce, McQuivey said, riffing off the keynote presentation that Christopher McCann, president of 1-800-Flowers.com, gave Thursday. Looking back, “each of the waves was successively more compressed than the other,” McQuivey said.
Social media and mobile commerce, is the current wave, and is all about chatter among people; the fifth wave, the Internet of Things, will be “machine-to-machine chatter, and it will occur at a scale and velocity that a few billion people on Facebook can’t imagine,” McQuivey said.
Research and advisory firm Gartner Inc. defines the Internet of Things as “the network of dedicated physical objects (things) that contain embedded technology to sense or interact with their internal state or external environment. The IoT comprises an ecosystem that includes things, communication, applications and data analysis.” Gartner says there will be 4.9 billion connected “things” in use this year and it predicts that number will explode to 25 billion by 2020.
Technological advances make it easier and cheaper to develop such sensors and connected products, as well as store massive amounts of data, but it’s important to note that consumers are “hyperadopting” services and experiences, not devices, McQuivey said. The emphasis for retailers, therefore, should not be on the sensors, connections or devices but on how those tools benefit consumers. By 2020, the amount of data customers produce will be 100 times the cumulative data in data warehouses today, he said. Retailers need to prepare a customer analytics plan to manage that data and determine the types of services to offer, and they will require partners to do that.
Sensors in a Whirlpool washing machine, for example, can tell a consumer when it needs service, he said. A brand like Tide detergent could use information generated by a smart washer, as could a retailer like The Home Depot Inc., by tracking cumulative washes and knowing when to recommend a new washer to a consumer and, based on the types of loads washed, what models would best serve a consumer’s needs, McQuivey said.
A growing number of products have a sensor or several sensors, and more are coming. Multiply a single sensor by 100 and imagine the information available, he said. “Where were we in 1994 with the web? We’re not going to know what happens in advance, but you have to prepare,” he said.
McQuivey, 45, it turns out, labels himself as an early adopter. In an interview after his presentation that he always has been curious about and quick to try new technology. “I got my first computer when I was in seventh grade, and my parents said, ‘What’s this for?’ I said ‘I don’t know, but it’s going to be huge.’”
Also likely to be huge: an Uber-like service but with drones, he predicted, referring to the ride-sharing services that lets consumers hail cabs, town cars and ride shares online. People think “I’m never going to need a drone,” but consumers will someday call a drone—maybe not their own, but a company’s or their neighbor’s—for such tasks as delivering a forgotten lunchbox to school, he said. “Very rapidly we’ll be as comfortable with [drones] as we are with the phones in our pockets.”
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