Say, what? The “Internet of Things” or IoT may not be a term that you’re too familiar with – although you’ve probably experienced it. In fact, the IoT has been around since 1999 and refers to the next evolution of the internet when everyday objects are networked to the web and each other. Smart watches, connected cars, appliances, houses, and more – very soon every physical thing will be connected via sensors and monitored and controlled over the Internet. In fact, Gartner estimates that the IoT product and service market to exceed $300 billion, mostly in services, by 2020.
But what does IoT mean for small business?
Seamless mobile payments
Apple is already in pole position when it comes to dominating the IoT space with Apple Pay, the mobile payment and digital wallet service that lets users make payments using their iPhones, iPads and soon to be released Apple Watch. Apple Pay is already being used at 220,000 retail locations nationwide.
Small businesses have been slow adopters of mobile wallets due to the cost of installing readers, but American Express OPENForum thinks Apple Pay is about to change that.
For starters, 20% of U.S. consumers could have access to Apple Pay by the end of 2015 as adoption of the iPhone 6 and Apple Watch grows. Furthermore, consumer concerns about credit card fraud are likely to entice consumers to the enhanced security that Apple Pay boasts.
Whether all this pans out remains to be seen, but it would behoove small businesses to keep an eye on demand for digital wallet transactions among their customer base, particularly in high-volume retail and food service environments.
Attract new customers
In addition to innovative payment options, IoT can also attract more customers to your business by offering exciting experiences. For example, tablet-based menus and apps that allow you to order food from your table without a waitress is happening now at Chili’s restaurant. That data can also be captured and further mined to understand customer preferences and demographics.
Other developments that small businesses can draw on include beacons that sense and transmit data to nearby consumers via their mobile devices thereby personalizing their in-store experience and smart media carts that display store maps, product information, and offers.
Being able to connect more devices to the Internet offers many opportunities for streamlining operations. For example, a point-of-sale scanner connected to a system in a warehouse can send information in real-time and increase efficiencies in inventory management. As more and more intelligent products and services come to market and prices come down, new insights and capabilities will make a huge difference in how small businesses manage operations.
A healthier bottom line
According to online security company AVG, 57% of small businesses expect the Internet of Things to have a big impact on their bottom line – lowering costs, reducing waste, and increasing productivity:
“By remotely monitoring the data on these devices a business can achieve much greater all-round efficiency through raised productivity, lower costs and reduced wastage. And as cloud services become the default way to make sense of this data you no longer need heavy up-front investment so IoT starts to become affordable for small businesses.”
Among the IT decision makers surveyed 84 percent indicated that their organization would shift its product/service offering to make the most out of the rise of IoT. AVG notes that four industries that stand to benefit the most are IT/telecoms, pharmaceuticals, utilities and manufacturing.
New business opportunities
But it’s not just through the use of IoT that small businesses are expected to benefit – they are also at the frontlines of development. Gartner predicts that small businesses and entrepreneurs will drive the use growth and acceptance of IoT over the coming years, with 50% of IoT solutions originating in startups that are less than three years old.
Entrepreneur.com suggests three offerings that small businesses might consider – sensor enablement (development of sensors for machines, gadgets, transportation systems, etc.), data analytics (services that draw intel from data gathered by sensors), and infrastructure investment (secure networks, etc.).
It all sounds very futuristic, but IoT is here now. But what technologies can small businesses take advantage of to provide more value back to the business?
Start small and think about your goals. Retailers and restaurants could begin simply by adding a free Wi-Fi network to their store or physical location, giving customers the ability to browse products online, compare prices, read reviews, and so on.
Then talk to your customers. What they would like to see and what services would enhance their experience of doing business with you? This applies to service-based businesses as well as retailers. For example, if you run an A/C repair business, would your customers benefit from a notification system on your website that tells them the precise location of the engineer and their estimated time of arrival?
With IoT, the opportunities are endless.