It is estimated that there will be an astonishing 75 billion devices connected to the Internet of Things (IoT) by the year 2025. While some of these might seem like luxuries to us now (Amazon Alexa or Nest thermostats for example), many more have very real and very practical implications.
In the business world, new IoT technologies are growing like wildfire. Here are five areas where we feel these devices will be making a very tangible positive impact on profitability in the next 5 years.
- Big Data Collection
Perhaps the broadest category on the list, there is big money at stake here. By 2027, the Big Data software and services industry will be worth over $100 billion. The value of that data is worth untold amounts to businesses around the globe. According to an Accenture study, 79% of executives believe companies that don’t embrace data will likely lose their competitive edge and could face extinction.
Leveraging Big Data gathered by IoT devices at the point-of-purchase will shape the future of retail strategy. One such example is Cooler Screens. The Chicago-based company builds digital displays for food and beverage coolers that use eye tracking and computer vision to track customer behavior and display customized marketing right on the cooler. The Cooler Screens displays have already begun rolling out at Walgreens in select markets. The data gathered by these screens is invaluable for food and beverage manufacturers, who can leverage it for marketing and planogramming in the future. Expect to see many more technologies like this in the retail environment.
- Increased Workplace Security
Data breaches are quite expensive. It is estimated that the average data breach costs and enterprise-level business $1.23 million and the average small business $120,000. And that doesn’t even take into account the cost of recovery.
Improved security features using IoT technology can take many forms: controlled security access with facial recognition, voice ID and automated gate access are just a few. IoT-connected terminals and machinery can grant access and lock out certain individuals. These more secure technologies can offset the risks of a stolen ID badge or password, which in many cases, is all it takes for a costly breach to occur.
- Driving Down Insurance Costs
One of the biggest expected growth areas for IoT technology is the health and wellness sector. This can include wearables and monitoring devices, dosing devices and more. As these devices become more prevalent, companies may be able to use them in wellness initiatives that can drive insurance costs down.
IoT devices can also be used to monitor the health of vehicles and machinery. In 2017, there were 4.5 million reported workplace injuries and 4,414 preventable injury related deaths in the workplace. The overall cost? A stunning $161.5 billion dollars. Most of these injuries occurred in construction, transportation and warehousing. Using IoT technology to increase vigilance over potential injury-causing mechanical failures could save vast amounts of money, and more importantly, lives.
- Increased Production Efficiency
Computer vision and the Internet of Things will no doubt have a measurable impact on production efficiency. At the Mobile World Congress event in February, SK Telecom showcased a 5G-connected manufacturing example using IoT technology and computer vision. With powerful the sensor technology, it used robotic cameras to monitor for defects, sort away the bad product and increase production efficiency.
In the U.K., British grocer Ocado uses networked robots in fully-automated warehouses to fill thousands of grocery orders every day. U.S. grocer Kroger bought a stake in the company in 2018, and just broke ground on their first domestic automated warehouse. If it is successful, which it likely will be, you can expect this ultra-efficient automated warehousing trend to become the new standard, a few years down the road.
- Energy Savings
IoT technology has massive potential for energy savings. One area is building climate control. Using automated sensors and machine learning, IoT connected devices can see when a room is unoccupied and take the appropriate steps to conserve energy. This may include automatically dropping the temperature on the thermostat, or even opening and closing automated blinds.
Autonomous vehicles and drones are two more IoT-connected solutions that will rise sharply in popularity over the next several years. Autonomous vehicles can drive down energy costs by moving goods using less fuel. According to a 2017 article in Forbes, passenger-sized autonomous vehicles will reduce fuel consumption by 44% by the year 2050, while commercial-sized autonomous trucks will reduce fuel consumption by 18%. Considering the U.S. used 142.86 billion gallons of gasoline in 2018, the potential savings here are pretty jaw dropping.
What other IoT technologies do you expect to increase profitability? Which of these 5 do you expect will have the biggest impact on companies’ profitability on a global level? We’d love to hear what you think. Sound off on social media now and join the conversation.