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Retail businesses accumulate a lot of consumer data. You can use it to your advantage thanks to the Internet of Behaviors (IoB)—a powerful tool expected to track at least a third of the world's population behavior.
In fact, you can grow your business 2.7 times faster and influence your customers to make a purchase decision by incorporating behavioral data, digital marketing, and digital advertising.
But only smart implementation of behavioral science can guarantee success. So what is it? Let’s find out more about the benefits and challenges of the Internet of Behaviors and how to enhance your value chain using it.
In this article:
Internet of Behavior Definition
In simple terms, the Internet of Behavior is understanding how people make purchasing decisions using technology.
Undoubtedly, retail businesses generate a lot of user data that the Internet of Things (IoT) implements, such as household electrical devices and wearable technologies, and can collect. Businesses can then pull insights from available data and use behavioral psychology to predict and influence behavior based on interests and activities.
The Main Benefits of IoB
Let’s examine what businesses can do with IoT and IoB data:
- Check customers’ past and present purchasing patterns and predict future consumer behavior.
- Launch targeted advertising programs and engage customers with real-time POS notifications.
- Provide data-driven value through discounts and promotions.
- Extend marketing research with insights into how users interact with products and services to improve user experience.
Now, you might be wondering how IoB creates so much value. IoB uses Google Analytics, email conversations, social media profiles, website cookies, artificial intelligence such as Google Home, and other marketing tools.
IoB also allows you to check built-in data analytics, different reports, and data collected by governments and agencies.
Industry Examples of IoB
Understanding whether the IoB approach can help market products and grow your business is easier through real-life cases. So, let’s review a few Internet of Behavior examples:
Advertising and Client Acquisition
Google, YouTube, and Meta services have millions of users. But did you know these companies use behavioral data to explore human psychology and interests? Once analyzed, the data goes directly to advertisers to align with their users' current interests and actions. Not surprisingly, Google earns most of its profit from storing, analyzing, and distributing user data but providing a better advertising experience.
Filtering Commercial Propositions
Another great example of Internet of Behavior (IoB) is it can help filter user activity. For instance, if the device senses a user is spending more time at the gym, a connected health app will start showing advertisements or personalized offers related to gym products, such as gym equipment and protein supplements.
Improving Customer Service and Getting Feedback
Users often grant Google access to location tracking on their mobile devices. So, whenever Google asks to share your experience at a location, it does so to get direct feedback. But do you know such activities are used to enhance the overall user experience?
Now, with the knowledge of some sales industry examples, let’s shift our focus toward using IoB in retail businesses.
By the way...
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Let's seeHow to Start Using IoB in Retail Businesses
Using the above information, you might be ready to start IoB (Internet of Behavior) in your business. If so, here are the steps required to implement IoB in your business:
1. Data Collection
When customers purchase products from your business, it generates data. So, to implement Internet of Behavior, you must first collect data produced by users. Customers might be attracted to an ad or organically purchase from your business. Collect this usage data and, for ethical and legal reasons, store it in a secure database.
2. Gather Insights Based on Collected Data
Once the data is secured, you can start looking for trends and insights within it. Look for patterns from the user buying habits that can answer questions such as:
- Does the customer buy online or at the store?
- Do they visit your company website or page along with other brands in between?
- What feedback do you receive for your online store on web review platforms or Google Maps for your physical store?
- What online or physical stores do they visit often?
You have the data and the insights. Now what?
3. Construct a Hypothesis
In this step, you have to find product and marketing strategies that make purchasing decisions easy and fast for your customer. Also, find the best place to advertise to attract customers. Based on these studies, prepare the hypothesis to test it out.
4. Run Experiments
Test your hypothesis by running experiments and reviewing the results. You have to rinse and repeat the cycle until you get the actual results.
So far, the implementation strategy looks good, right? So, where’s the catch?
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What Are the Challenges of IoB?
You’ve seen the bright side of IoB, but there are some challenging aspects you should know about. Studying these challenges will increase your chances of success in implementing an IoB program.
Malevolent Actors' Manipulation
There’s a thin line between using IoB technology and behavioral analysis to influence consumer choice and customer experience and manipulating customers into overspending. This can become a problem.
There are reports of governments charging corporate penalties for manipulating user behavior through data. Also, IoB has been used by political parties and governments to control citizens' votes through manipulation.
Ethical Use and Privacy Concerns
Сompanies sometimes profit by selling and otherwise exploiting sensitive data. This is how consumer privacy is violated, and third parties get ahold of user data they can use at will.
Laws and Regulations
There’s always a risk of a data breach, even more so without proper regulation, data security measures, and standardization.
Dangers of Cyber Attacks
SMBs, mostly dependent on digital technologies, are the most vulnerable to such attacks. It is a threat you need to consider, even with cybersecurity tools or cybersecurity insurance.
Persuading Users of Data Sharing
Statistics show that 45% of the global population is concerned about sharing personal data digitally. However, through IoB, public and private organizations can collect data, such as internet browsing history, and exploit it.
Our Expertise in IoB
By now, you have relevant information regarding how to implement the IoB concept in a smart way. So, here are a few examples of our experience with IoT devices that can be used for collecting big data.
We provide such IoT development services as
- IoT solution architecture design;
- IoT protocol implementation for your specific devices;
- Сloud application development;
- IoT gateways and connectivity;
- Embedded IoT client design.
You can take a look at the results of our clients for yourself, it is worth a thousand words. For example, Realmfive received the AE50 Award “Best AgTech Software” shortly after working with Geniusee, and also fundraised $7.3 M. You can find more details in the Realmfive case study.
You can also see what our Ajuma client said about developing an IoT solution with Geniusee - “Geniusee provided an app and helped establish our backend and website solution that put Ajuma into a position to “go for the market” in Germany and neighboring countries in spring 2021. The launch of the product took part as part of the German TV show “Höhle der Löwen” (equivalent to “Shark Tank”) and was therefore causing an immense echo with ~100.000 unique visitors to the website,” – says Julian Meyer-Arnek. You can also find out more details about IoT software development in the full Ajuma case study.
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Take a lookFinal Words
The Internet of Behavior (IoB) is not only the result of the current world dependency on digital technologies but also emerging technological innovations and the future of retail business success. IoB can provide valuable information that creates a human behavior and user-based business model to help companies get customer insights through an accurate journey mapping of the user to predict and provide them with what they desire.
To make things easy for retail business owners, Geniusee can provide a solution to IoT data and other IT struggles using our expertise on the Internet of Behavior.
