When the Internet of Things (IoT) lays claim to the corner laundromat, it’s time for every industry – not just manufacturing – to pay attention. WASH Laundry has connected laundry equipment and facilities to a cloud-based network that helps owners monitor machine usage, performance, and maintenance needs. Owners can also adjust pricing, based on demand.¹

 
Similar networks of connected devices, predicted for decades, are now being strung together worldwide. The gradual but steady trajectory of smart device usage has led to more than 12 billion smart devices in use today, with 30 billion anticipated by 2020.² This so-called “Internet of Things” has not caused more connectivity and data sharing, it has merely given the movement a name, or, actually, several names: IIoT for Industrial Internet of Things; IoTSI for Service Industry; and IoT-MD for Medical Devices.

Into whichever industry IoT is leaping, the catalyst is the same: Connecting with, and learning from, the supply chain and customers is becoming a prerequisite for innovation, efficiency and profitability.  

But are companies heeding the signs? Yes, to a degree. A study by the computing technology association, CompTIA shows that sixty percent of IT and business professionals say their companies have an IoT initiative underway (27%), or are conducting a pilot (33%). However, 25% say their first initiative is up to a year away; 15% have no plans at all to start.

Ready or not, the evolution has begun. Connected devices are linking doctors with patients, retailers with consumers, and even connecting competing businesses, to improve outcomes and reduce costs. No one, from mom-and-pop to mega-chain, seems to be immune. If IoT hasn’t yet come to a business near and dear to you, odds are that it will soon. 

The Consumer Pull of IoT

Do-it-yourself confidence and user-friendly technology has made the service industry fertile ground for the Internet of Things. Consumer demand is strong and growing for DIY home devices -- connected home technology, such as thermostats, appliances, and security systems are big business to the tune of a projected $1.2 billion in sales by the end of 2016.  

Connected home devices offer consumers cost-savings and control, but what will the future hold for legacy businesses in this space? Those in security monitoring, HVAC and utilities – and their suppliers -- who haven’t explored a Plan B to retain or capture new customers, certainly should hurry.

IoT has reached into the insurance industry as well, with Usage-Based Insurance (UBI) and telematics devices that monitor driver behavior. Depending on the arrangement between driver and carrier, insurance rates can be assigned based on miles driven, rush-hour driving, or on factors like speed, lane changes, and hard braking. Drivers receive “feedback” on their driving through data analysis and, ultimately, higher or lower insurance rates.

“Telematics is a powerful tool, but you also need an analytics engine that can provide insight, in order to reach the data’s true potential,” says Jack Levis, Director of Process Management at UPS. Levis is a pioneer of the ORION telematics program, processing millions of data points per second to guide UPS driver routes. “If the data you gather doesn’t lead to better decisions, it’s just trivia,” he says.

Warming up to Wearables

From connected devices, to connecting people to devices, wearables are gaining traction in the service realm as a way to monitor and manage people, experiences and processes.

Disney’s MagicBand smart wristband gives visitors access to park attractions via radio frequency technology, while also compiling a history of the behaviors, preferences and purchases of park guests. In the workplace, wearables are enabling team leaders to monitor staff and redeploy people to match workflow. Devices have made their way into warehouses, with the visual display guiding workers to the correct location for picking an order or replacing inventory.

Perhaps nowhere could wearables have a more profound impact than healthcare. Dozens of startups have contributed devices, such as headbands to monitor brain waves and pill bottle sensors that monitor compliance.

In an effort to harness captured data, partnerships are forming to turn healthcare data into vast knowledge bases. In early 2016, the American Diabetes Association and IBM began working on a repository designed to predict, manage or, ideally, prevent diabetes. Recently, Philips and Qualcomm joined forces on a data initiative to reduce avoidable hospital readmissions.

If such fountains of knowledge are realized, the predictive power would be immense. It’s possible that a patient who shares a continuous stream of biometric data is matched to a “lookalike patient” in the database who developed a related, serious illness. The monitored patient could get a text suggesting an urgent doctor’s appointment, and a health crisis is ultimately averted.    

While that scenario may seem futuristic, the level of industry investment implies otherwise. Price Waterhouse Coopers has estimated that the market for connected healthcare will grow to $61 billion globally by 2020, and the market for connected services by $45 billion.³

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UPS’s Levis sees IoT Analytics in three phases:

• Descriptive Analytics, the phase most companies are in now, simply monitors what’s happening. After a machine stops working, you’ll know and can react.

• Predictive Analytics looks at relationships and trends to forecast what will happen next. This phase is more forward-looking, allowing you to predict and plan for the future.

• Prescriptive Analytics automates and optimizes the planning process and determines an appropriate course of action. This phase finds answers to problems that are not readily apparent and may even be counter-intuitive.

IoT and the Shopper

All eyes among retailers are focused on improving the customer experience, whether online, in-store or any combination – the so-called Omnichannel experience. The connectivity and data gathering of IoT are keys to realizing those improvements.  

An important IoT milestone for retailers has been radio frequency identification technology (RFID). Those using RFID, who also have the ability to track ROI, claim an average 5% increase in gross margin due to better inventory management and order fulfillment. However, only one-third of U.S. retailers report using RFID technology – most are chains with over $1 billion in annual revenue.

“The tipping point is coming,” writes Mark Roberti, founder and editor of RFID Journal. “We don’t know when, but if you are not exploring the potential now, you are going to waste a lot of money later trying to catch up.”

IoT and the Smart Shopper

Shoppers, most with smartphones in hand, have come to expect timely news and sale notifications from their preferred retailers. Taking timeliness a step further, some retailers use Bluetooth beacons to send messages to shoppers when they walk in the door. As data mining grows more sophisticated, messaging will advance from suggestions based on past behavior to offers predicted with high confidence to result in a purchase.  

UPS’s Levis emphasizes the value of building a real-time dialogue with customers. “Picture what could happen if shoppers’ feedback automatically flowed from a retailer’s mobile app back to their suppliers, who then make design changes on the fly. Improved products could be on shelves within weeks instead of months or years.” Such supply chain agility could not only set a retailer apart, it could reduce dead or slow-moving inventory. And, no less important, it could engender loyalty by making customers feel understood and validated.  

Will it be long before B2B customers demand from their vendors the timely and relevant notifications they’re getting as consumers? After all, B2B customers who brought their consumer mindset to work seemed to influence the growing sophistication of B2B e-commerce. And given the pace of technology-driven change, it’s unwise to brush off ambitious-sounding scenarios. In fact, it’s more likely that data privacy issues will slow the pace of IoT than any limits of technology. 

IoT Is Happening. Who’s on Board?

Now that laundry machines, thermostats and theme park guests are becoming smart devices, what becomes of businesses not subscribing to the IoT revolution?   

“The Internet of Things is an actual network of real, physical things,” says Daniel Cooley, general manager of at Texas-based Silicon Labs, Inc. “Maintaining a growing network of real, physical things involves all kinds of costs and needs you don’t see in software at scale.”3 Not all companies are comfortable adding high-tech to their repertoire, of course; and Cooley concludes, “Not all of them will be around in the future because of it.”

Charlie Covert, Vice President of Customer Solutions at UPS sees another hurdle to IoT. “Inertia is the enemy,” he says. “Because IoT sounds like a buzzword, it is often relegated to a long list of corporate initiatives.”

Covert adds that greater connectivity and smarter decisions through data are becoming the new normal for every industry. “History has shown that fundamental change in business caused by technology is inevitable,” he says. “And history has also shown that it’s better to embrace the disruption than to be run over by it.”

Learn more about the value UPS can bring to your IOT journey.

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[1] Jernigan, Stephanie, et al., MIT Sloan Management Review, “Data Sharing and Analytics Drive Success with IoT” (8 September 2016)

[2] Jankowzki, Simona, Goldman Sachs video, “The 5G Revolution: The Internet of Things Meets Everything” (May 2016)

[3] Jernigan, Stephanie, et al., MIT Sloan Management Review, “Data Sharing and Analytics Drive Success with IoT” (8 September 2016)