Brought to you by: MOO
Imagine products such as a medicine cabinet or refrigerator throwing off a constant stream of data points about a consumer. By the end of this decade, there will be over 50 billion connected objects -- approximately six objects for every person on the planet. More connectivity means more opportunities to use, as well as abuse, the resulting flow of information. Soon, manufacturers, brands and even employers and insurance companies could have unprecedented access to formerly private information about consumers.
The value of data outshines the value of product
In the IoT, selling a product is a catalyst for data transaction, not an end in itself. For example, an appliance manufacturer could make a fortune selling data about the contents of people's refrigerators to CPG brands. This would enable manufacturers to change their commercial model, perhaps offering a subscription or service fee model; or even offering free use of the appliance in return for data access.
When products become data-generation platforms, consumers will inevitably be more aware of the value of their own data. And while it is unlikely that they'll stop sharing it, the majority will demand to know what's happening with their data.
Gigya recently surveyed 2,000 UK consumers who said they will continue to share data as long as they receive transparency, relevance and convenience in return.
"Privacy contracts" connect man and machine
In the data-driven world of IoT, the data that gets shared is more personal and intimate than in the current digital economy. For example, consumers have the ability trade protected data such as health and medical information though their bathroom scale, perhaps for a better health insurance premium. But what happens if a consumer is supposed to lose weight, and ends up gaining it instead? What control can consumers exert over access to their data, and what are the consequences?
Consumers must have a "contract" with a product manufacturer that adjusts over time -- whether actively or automatically -- and that spells out the implications of either a rift in data sharing, or in situations where the data itself is unfavorable.
$142.5B 2015 U.S. ad spending for 200 LNA
CIOs need to plan for granular data-sharing controls that can accommodate both individual preferences and legislative requirements to keep the contract with the consumer intact. But that's only half the battle. Service providers and brands will have to work out complex rules to govern interactions with customers, often via platforms owned by a third-party manufacturer. Imagine an auto ecosystem like GM powered by Apple. Not only will these companies have to determine consumer data-sharing between them, but with partners such as gas stations, record labels and the various apps and relationships that consumers import from their own ecosystems.
Data is the new oil
Today, companies like Google, Amazon, Apple, and American Express
Not every company will have intimate access to consumers. Consumers don't have the desire, or the time, to interact equally with every product they use, but companies would be remiss to cede their data rights to partners. While product data will likely continue to gravitate toward brands and manufacturers that manage the most valuable or central products in a consumer's life, it is every company's responsibility to create a plan for capturing as much consumer data through their IoT programs as they can. CIOs will be the gatekeepers in the IoT data trade, and the stakes are high; the firms that capture and use data the best will be valued the highest.
Brands would be wise to understand that the coming influx of consumer data is a pseudo revenue stream that must be protected and nurtured. As such, the perception of privacy and respect are tantamount for long-term engagement with customers. So much so that it is likely that product manufacturers will start changing their business models to create data-sharing incentives and perhaps even give their products away for free.