Programmatic Commerce.

The Internet of Things has grown astronomically over the past few years from a buzzword status to the next big revolution in the technology space. Innovative technologies are cropping up everywhere with the recent CES event bringing forth a raft of new ideas such as a smart connected hairbrush and Lynx, a humanoid robot which uses Amazon’s voice-enabled Echo system. Some technologies fail to even move beyond its buzzword status, and some quite frankly just shouldn’t exist. Achieving the tricky balance between new ideas and an ultimately pointless concept is more complicated than it would seem, but the key to doing so lies in making the product personal to the customer.

Simply put, the IoT is a network of physical devices that are connected online, and communicate via internet-enabled systems. Gartner understands that by the time we reach 2020 an astronomical 20.8 billion ‘Things’ will be connected. It is, however, important to remember that these figures are predictions and it is almost impossible to accurately measure how many devices there will be. The impact may be clear – it’s unsurprising to see every top brand from Amazon to Fujitsu embracing the newest IoT-driven concepts – but the onus is down to a brand to consider how an IoT-led system can benefit its business and, more importantly, its customers. So, one must ask how marketers can embrace the Internet of Things and successfully consolidate their status as a leading brand?

Programmatic Commerce puts personality into retail

Retail is one of the most fast moving industries in the world. In 2016, we saw the introduction of Amazon Go, a physical store that customers can visit, shop and purchase products at without having to pay in-store, with items automatically billed to the customers’ Amazon account. Morrisons, a top-four retailer in the UK, took its delivery service one-step further by striking a deal with online only vendor Ocado. As consumers increasingly shift to online, shops are beginning to realise the importance of creating a strong brand that embraces the most up-to-date technology.

In retail, Programmatic Commerce is another idea that has the potential to completely revolutionise the industry but only if businesses take notice of it. Consumers can benefit from Programmatic Commerce, the concept that products are automatically re-ordered and refilled through IoT-connected devices. More simply, a smart coffee dispenser would automatically detect a deficiency in coffee beans and buy the customer’s favourite brand for them; a smart nappy dispenser would detect if stocks were low at home and buy a pack of Pampers. The possibilities are well and truly endless!

Similar to Amazon’s Dash button, Programmatic arrives at a point where consumers want to experience the benefits of technology in shopping. Salmon’s research found that an automatic style of shopping, where there is no need for purchasing approval, would be accepted by 57% of consumers in the next two years; 13% agreed they would be ready right now, while 58% said they would opt for smart technology that facilitated this type of shopping.

For brands it’s important to recognise that customer loyalty will become even more important as new technologies begin to dominate all industries. There is an argument that eradicated brands, such as BHS & Woolworths, failed to grow and retain a healthy customer base because it didn’t innovate along with the technology-driven opportunities available. When it comes to IoT devices, retailers can fight this trend and give the power back to the user by providing a convenient and easy-to-use service.

Online pulling power and how Programmatic can ‘lock in’ the customers’ loyalty

As Programmatic Commerce continues to grow alongside the emergence of IoT, it’s paramount that retailers must strengthen their relationship with the customer. Through Programmatic, a brand can retain and grow its customer base by providing a service that continually re-orders the same product. Therefore, the first brand a consumer purchases will in all likelihood be the one a consumer remains loyal to. Marketers can ‘lock in’ a customer in certain ways too: offering special discounts, giving away free gifts or highlighting other benefits that might entice them. If brands fail to act early on in the process, they will be ‘locked out’ and their competitors will reap the benefits of having engaged earlier. The success of a company now and in the future truly boils down to both embracing new technologies and providing a service that is quick, smart and innovative.

Amazon does this impeccably well because it understands that the shopper consistently wants the best service. Amazon Dash, Go and Echo all embrace the Internet of Things and provide a platform for shoppers to become better connected. Dash enables shoppers to easily purchase products at the push of a button, Go is a transformative concept that highlights the consumers lasting desire from a strong omnichannel approach and Echo follows the trend of Zero-UI devices (the idea of removing the barrier between user and device through sound). Amazon ‘locks in’ its customers by continuously innovating, and is rightly a leader in its field.

Data is also an important factor in securing the customer’s loyalty and trust. A recent Kantar report, Connected Life, confirmed that businesses must first understand their customer base: 38% of 70,000 respondents said they would allow their data to be shared with brands if they saw the reward of doing so. Not only does this support the concept of ‘locking in’ a customer, but it provides a challenge for the IoT industry. Without data, access to the customer is impossible. Luckily for the retail sector, as consumers shift online, data will become increasingly accessible.

The shift online will benefit brands

Last year’s Black Friday event underwent a similar and significant on-going shift, with shoppers switching to ecommerce platforms. Our own data found that 51% of orders made over the Black Friday period were made on mobile devices, with consumers seeking luxury in being able to buy items while travelling to work. While mobile recently transformed the way shoppers make their purchases, who’s to say IoT won’t do the same in the next year or two? For brands, ignoring this shift would be a fatal mistake, not only financially but also in terms of the longevity of the business. Brands will need to look to traverse the complex, competitive business world while also gaining a better understanding of its customers. Amazon doesn’t lead the retail space by chance – it innovates from the top.

Thus, brands must embrace new technologies now and ‘lock in’ their customer, or face losing out to a smarter competitor.

Hugh Fletcher

Hugh Fletcher


Hugh Fletcher, Global Head of Consultancy, Salmon