Internet of Things & Commerce Series: Part 2 (of 3)

Welcome back to the second installation of my three part series on the Internet of Things & Commerce. A few weeks ago, I wrote “The Next 7,000 Days” about how we’ve become embedded in a digital architecture in the last 7,000 days since the birth of the internet – an architecture that everyday ties the massive expanse of the internet evermore closely with our physical lives. This blog series explores how this new blend of virtual and material will change how we shop and how businesses sell.

Now enjoy reading my interview with Brian Celenza, one of the chief strategists in our Oracle Commerce innovation group. He comments on the past, present, and future of the how the growing Internet of Things relates and will relate to the buying and selling of goods on and offline.

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QUESTION: You probably have one of the coolest jobs on our team, Brian – and frankly, one of the coolest jobs in our industry. As part of the innovation team for Oracle Commerce, you’re regularly working on bold features and groundbreaking commerce-focused experiences for our vision demos. As you look back over the past couple of years, what is the biggest trend (or trends) you’ve seen in digital commerce that started to bring us closer to this idea of what people are calling an “Internet of Things”?

Brian: Well as you look back over the last couple of years, the speed at which change in our industry has moved looks like one of those blurred movement photos – you know the ones where the landscape blurs because the observer is moving so quickly your eye focus can’t keep up. But one thing that is absolutely clear is that the biggest catalyst for that speed of change – especially over the last three years – has been mobile. Mobile technology changed everything.

Over the last three years the entire thought process of how to sell on (and offline) has shifted because of mobile technology advances. Particularly for eCommerce professionals who have started to move past the notion of “channels” for selling goods to this notion of “Mobile First”… then the Web site. Or more accurately, that everything – smartphones, web, store, tablet – is just one channel or has to act like one singular access point to the same product catalog, information and content.

The most innovative eCommerce professionals realized some time ago that it’s not ideal to build an eCommerce Web site and then build everything on top of or off of it. Rather, they want to build an eCommerce API and then integrate it will all other systems. To accomplish this, they are leveraging all the latest mobile technologies or possibilities mobile technology has opened up: 4G and LTE, GPS, bluetooth, touch screens, apps, html5…

How has this all started to come together for shopping experiences on and offline? Well to give you a personal example, I remember visiting an Apple store a few years ago and being amazed that I didn’t have to wait in line because a store associate knew everything about me from my ID – right there on the sales floor – and could check me out anywhere. Then just a few months later (when like any good addict) I went back to get the latest and greatest new gadget, I felt like I was stealing it because I could check myself out with my smartphone. I didn’t even need to see a sales associate OR go to a cash register. Amazing.

And since then, all sort sorts of companies across all different types of industries – from food service to apparel –  are starting to see mobile payments in the billions of dollars now thanks not only to the convenience factor but to smart loyalty rewards programs as well.

These are just some really simple current examples that come to mind. So many different things have happened in the last couple of years, it’s hard to really absorb all of the quickly – because as soon as you do, everything changes again! Just like that blurry speed photo image.

For eCommerce, however, this type of new environment underscores the importance of building an eCommerce API – a platform that has services you can tap in to and build on as the landscape changes at a fever pitch. It’s a mobile first perspective. A web service perspective – particularly if you are thinking of how to engage customers across digital and physical spaces.

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QUESTION: Thanks for bringing us into the present – some really great examples you gave there to put things into perspective. So what do you see as the biggest trend right now around the “Internet of Things” – and what’s coming next few years?

Brian: Honestly, even sitting where I am in the innovation group – it’s hard to look out even 12 months because, well, I don’t even think we’ve fully caught up with what is possible now. But I can definitely say that in the last 12 months and in the coming 12 months, in the technology and eCommerce world it’s all about iBeacons.

iBeacons are awesome tools we have right now to tie together physical and digital shopping experiences. They know exactly where you are as a shopper and can communicate that to businesses.

Currently there seem to be two camps of thought around iBeacons.

First, many people are thinking of them like an “indoor GPS”, which to be fair they literally are. The use case this first camp envisions for iBeacons is primarily for advertising and marketing. So they use iBeacons to push location-based promotions to customers if they are close to a store or in a store. You may have seen these types of mobile promotions start to pop up occasionally on your smart phone as you pass by a store you’ve bought from in the past. That’s the work of iBeacons.

But in my humble opinion, these promotions probably come too early in the customer journey and although they may be well timed and work to “convert” in some cases, I imagine in most they are just eroding customer trust because they are kind of a “one-size-fits-all” solution rather than one that is taking into account what exactly the customer might be looking for in that particular moment. Maybe they just want more information and a promotion is way too soon for that type of customer.

The second camp is more in line with where my thinking falls. In this case, businesses take a more sensitive approach with iBeacons to customers’ needs. Instead of throwing out a “one-size-fits-all” to any passer by with iBeacons, the use case is more around looking at the physical proximity of a customer as an opportunity to provide a service: show expert reviews on a product they may be looking at in a particular aisle of a store, offer the opportunity to compare prices (and then offer a promotion), signal an in-store associate if a customer has been in the store for more than 10 minutes in one place. These are all less intrusive more value-driven uses of iBeacons. And they are more about building customer trust through service.

To take this example a bit further into the future realm of “Big Data” and “Internet of Things” businesses could actually use the Oracle Commerce Platform and iBeacons to “silently” track customer movement w/in the store to provide higher quality service. And this doesn’t have to be creepy or intrusive. Simply if a customer has been in a particular department or aisle for more than a 5 or 10 minutes, an in-store associate could come over an offer some assistance already knowing customer preferences from their online profile and maybe even seeing the items in a shopping cart they started at home. None of this has to be revealed to the customer, but it certainly could boost the level of service an in-store sales associate could provide.

Or, in another futuristic example, stores could use the digital footprint of the physical store transmitted by iBeacons to generate heat maps of the store that could be tracked over time. Imagine how much you could find out about which parts of the store are more busy during certain parts of the day or seasons. This could completely revolutionize how physical merchandising is deployed or where certain high value / new items are placed. And / or this use of iBeacons could also help businesses figure out if customers are getting held up in certain parts of the store during busy days like Black Friday. If long lines are causing customers to bounce from a physical store and leave those holiday gifts behind, maybe having employees with mobile check as an option could remove the cash register bottleneck.

But going to back to my original statement, it’s all still very early in the story for iBeacons. The hardware manufacturers are still very new and there is still not one clear standard. 

Honestly, it all goes back to building and maintaining an extensible and flexible platform for anywhere engagement. What you’re building today should allow you to rapidly take advantage of whatever unimaginable use cases wait around the corner.

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I hope you enjoyed the brief interview with Brian. It’s really awesome to have such smart and innovation-minded individuals on our Oracle Commerce innovation team. Please join me again in a few weeks for Part 3 of this series where I interview one of the product managers on our team about how the blending of digital and in-store selling in influencing our product development and vision.