When we think about the future of connected Internet of Things (CIoT) devices that shape our behaviours in a meaningful way, we really have yet to see significant market traction outside of fitness trackers and smart speakers. You could argue that the latter is still in its infancy, says Rebecca Crook, chief growth officer at global digital transformation agency, Somo. The CIoT world is running ahead of market demand.
Usually premium products come out first, and as we see an increase in demand, cheaper options come to market. However, in the CIoT world, we have seen the marketplace get flooded with mediocre products from day one, many of which are not fit for consumers.
A lot of devices are made because they can be – not because they should be as they may not solve a significant audience problem. Smart light bulbs, thermostats, trackers and plugs are all available for us to buy at incredibly cheap prices but are not always meeting expectations of what a good customer experience should be.
Our expectation of what we believe to be a meaningful product experience is evolving at a rapid rate and the case of why we need most of these one-use products has not been properly established – therefore they are not being demanded at mass volumes.
Significant growth potential
However, we do know that the potential growth in this market is significant and people are looking for connected solutions to enhance their day-to-day lives. Research predicts that the number of IoT connected devices will rise to a whopping 4.1 billion by 2024 across the globe.
Consumers have now come to expect beautiful hardware and so the differentiator must be the experience offered. There are few rip-roaring success stories of hardware providing the digital experience consumers expect and so it’s the telecoms providers who are in the best position to own this and excel.
If they can identify a clear use case and a market demand for a SIM-driven product outside of the home, they have everything to play for in this evolving marketplace and are in a strategically better position than most to really demonstrate their digital expertise and provide something meaningful.
SIM connectivity is the strongest card telecoms providers have to play and it’s how they present this that shapes how consumers experience it, i.e. how much data is provided, how that data is reinterpreted, ease of use, cross-device offers, etc. Customers have so much choice that poor experiences will not be tolerated, this requires telecoms providers to find more ways of being able to create experiences over what they are providing, in much the same way we’ve seen utility companies do.
They are having to develop more of the brand experience in general, which creates the opportunity to emotionally engage more with consumers, offering a deeper connection overall. They are no longer seen as simply a utility provider but an essential component in daily lifestyles and must balance the cost of doing this with the value of the future.
Telco insights
Telecoms companies are also in a strong position globally. They hold large amounts of insights across countries which can be leveraged positively in shaping the future of connected device experiences. The key to the castle is the SIM connectivity driving exceptional experiences, supported by hardware design on top of existing products.
Sophisticated consumers expect a beautiful experience. Consumers will be put off by poor design – to fulfil a basic need with a disappointing experience is not good enough. There are real consumer needs across the world and those issues could well be solved with connected products yet to be created. These companies need to be talking on a global scale across their teams to try and understand where the real need for SIM-connected hardware devices are and not simply following what is being pushed because it can be, which is often driven by no real market insight.
Senior executives need to understand that we’re at the start of a long road and have barely scratched the surface of connected devices’ potential – things we have yet to dream of will be created. This is a long-term journey about consistent evolution and understanding.
Over the next five, 10, 15 years we will see ongoing changes where connected devices, from clothes to sports equipment, play a major role in the way we live our lives and telecom providers have a position to play in this experience. Long-term funding in this area could have immense value in terms of sales and brand value. Those who approach it from an angle of short-term shareholder return will not maintain a market share or be able to adapt to the fast-moving market changes.
Telecoms are at a juncture. They could look into expanding into hardware but the obvious direction in this evolving marketplace is to properly take advantage of furthering the customer journey and making the technology as human as possible. They must be looking at the huge opportunity in positioning themselves as far more than simply SIM card providers – they are the gateway to shifting consumer behaviours on a global scale.
The potential really is limitless and those who develop clever partnerships with those already playing vital roles in people’s lives, such as with companies like Rapha or Strada, will be in the strongest position to develop experiences that are more personalised. If they can identify real consumer problems they have the opportunity to create richer, better, faster, simpler, easier and more elegant experiences that make a real impact on future behaviours.
The author is Rebecca Crook, chief growth officer at global digital transformation agency, Somo
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