The Internet of Things (IoT) and marketing: the state of play, future trends and the implications for marketing

A revolution is happening via the Internet of Things (IoT) – one that will have tremendous impact on the world as we know it. The IoT, which involves interconnected devices, systems and services that rely on the autonomous communication of physical objects within the existing Internet infrastructure (e.g., Atzori, Iera, & Morabito, 2010), is a thrilling concept because it brings intelligence of the Internet to physical products (Hoffman & Novak, 2015), thereby making all products more connected and smart (Nguyen & De Cremer, 2016). The applications of the IoT span numerous areas, such as wearables, smart homes, smart cities, industrial automation and many more (e.g., Chuah et al., 2016). The IoT provides great benefits to numerous industries and society as a whole (Bi, Xu, & Wang, 2014), with applications such as heart-monitoring implants, automobiles with built-in sensors, biochip transponders on farm animals, search and rescue devices, or smart thermostat systems and washer/dryers that utilise Wi-Fi for remote monitoring (Kortuem et al., 2009; Porter & Heppelmann, 2014). Many of the IoT systems and technologies are novel and the IoT is expected to usher in automation in nearly all fields (e.g., Dholakia & Reyes, 2013). According to Gartner (2015), there will be nearly 20 billion devices on the IoT by 2020.

With such rapid expansion and spread of its impact, it is surprising that few marketing studies exploring the IoT have been conducted. There are still many untapped application areas, numerous challenges and issues that need to be improved, and the full impact for stakeholder groups is far from clearly charted. There are implications for how marketing may effectively embrace the IoT and how the IoT might itself shape marketing. The IoT has been proclaimed as essential for organisational innovation, adaptation and success, especially for firms with high amounts of connectivity, network and data (Jones, Suoranta, & Rowley, 2013; Yu, Nguyen, & Chen, 2016). However, more research is needed to explore the capabilities needed to adopt the IoT in the organisation and how these relate to different aspects of marketing, particularly for the relationship-oriented organisation that engages in CRM, alliances, joint ventures and partnerships. Many of the rules of marketing are changing and many new approaches will be introduced in this new IoT era.

This special issue of JMM focuses on the latest thinking and research in the IoT in the context of marketing, reflecting the enhanced interconnected world, exploring the implications for the marketing discipline. The aim is to provide the latest and most innovative contributions concerning the IoT and marketing solutions, involving interconnected smart things and inter-operation, with the objective of enhancing customer–firm relationships, providing strategic capabilities or improving integrated marketing systems. The topics presented here are varied and include value co-creation, adoption and use of wearables, interaction style and consumer resistance to smart products, among others. The special issue includes state-of-the-art marketing research in the IoT context, and in doing so, extends the literature to a setting that has both practical and theoretical importance. We publish four full papers and four commentaries in this special issue, covering specific issues related to both consumer and industrial IoT, as follows.

The first paper, by Balaji and Kumar, entitled ‘Value co-creation with internet-of-things technology in the retail industry’, investigates the way in which the IoT changes the customers‘ experience when shopping in a retailing context. Drawing on the service-dominant logic, their study proposes that customer interaction with IoT retail technology results in value co-creation, revealing that ease of use, superior functionality, aesthetic appeal and presence are key determinants of value co-creation for IoT retail technology. The authors show that value co-creation influences customers’ continuance intentions and word-of-mouth intentions. These findings are of particular relevance for retailers in delivering superior customer experience and the authors present managerial implications and discuss research directions for future developments.

The second paper, entitled ‘Exploring the factors that support adoption and sustained use of health and fitness wearables’, written by Canhoto and Arp, advances current knowledge on the conceptual understanding of consumers’ adoption and sustained use of wearable technology for general health and fitness purposes. The authors note that the IoT and, particularly, wearable products have changed the focus of the healthcare industry to prevention programmes that enable people to become active and take responsibility for their own health. However, these benefits will only materialise if users adopt and continue to use these products, as opposed to abandoning them shortly after purchase. Their study investigates how the characteristics of the device, the context and the user can support the adoption and the sustained use of health and fitness wearables, finding that the factors that support the former differ from those that support the latter. For instance, features that signal the device’s ability to collect activity data are essential for adoption, whereas device portability and resilience are key for sustained use. Overall, the findings provide valuable guidance to firms investing in the development and marketing of these devices, as well as key insights for government initiatives aimed at combating rising levels of obesity and diabetes.

The paper entitled ‘The internet of things and interaction style: the effect of smart interaction and brand attachment’, by Wu, Chen, and Dou, develops and examines the effect of two different interaction styles (e.g., friend-like and engineer-like communication) on consumers’ brand perception using two laboratory experiments. Their study suggests that a smart interaction style in the Internet of Things (IoT) context can improve consumers’ perceptions of brand warmth and brand competence, and that these perceptions enhance the consumers’ emotional attachment to the brand. Specifically, the results indicate that a friend-like interaction style (1) produces more positive brand warmth than the engineer-like style, (2) enhances brand competence as much as the engineer-like style does, and (3) has a positive effect on users’ brand attachment, which (4) is mediated by brand warmth and brand competence. Furthermore, (5) the style of smart interaction and brand positioning has interaction effects on brand warmth, brand competence and ultimately brand attachment. The authors advance our current understanding of the stereotype content model, contributing to the brand attachment literature, and providing insights into how companies can better construct their brand equity through the use of IoT technologies.

The fourth paper, entitled ‘Drivers of consumers’ resistance to smart products’, by Mani and Chouk, develops a better understanding of the reasons underlying consumer resistance to smart and connected products. The authors note that the continued growth of the IoT raises significant challenges (security, privacy, trust, etc.) (Sicari, Rizzardi, Grieco, & Coen-Porisini, 2015) and ethical issues (Nguyen & De Cremer, 2016). Thus, concerns about information privacy (Hsu & Lin, 2016) and identified potential problems ‘related to data protection, lack of human control, and enslavement to devices’ (Slettemeås, 2009, p. 226), as well as increasing numbers of gadgets being added to the IoT ecosystem question the utility and added value of these innovations. To this end, the study was carried out to understand resistance towards smart watches, finding that perceived uselessness, perceived price, intrusiveness, perceived novelty and self-efficacy have an impact on consumer resistance to smart products. Moreover, privacy concerns have an effect on intrusiveness and dependence impacts privacy concerns. The study thus contributes to a better understanding of the factors that explain consumer resistance to smart products by examining original variables that have not been studied previously in the resistance literature, such as privacy, intrusiveness, perceived novelty and dependence, here in the IoT context.

Following the full papers, we also have the pleasure of presenting four commentaries about the IoT from highly respectable marketing scholars.

The first commentary paper, entitled ‘Vignettes in the two-step arrival of the internet of things and its reshaping of marketing management’s service-dominant logic’, by Woodside and Sood, proposes substantial revisions in the service-dominant logic due to the upcoming takeoff stage of adopting radically new IoT innovations. The authors offer vignettes on the introductions of the IoT and their impacts on revising the service-dominant logic paradigm in marketing. They note that except for smartphones, most consumer households are not participating now in the IoT revolution – but most product-service radical innovations include a 20+-year low-growth start-up. However, because the benefits really are enormous and the technical advances in smart devices are now rapidly improving, they expect the IoT revolution to hit hard in all areas of daily life before 2025, similar to the great impacts occurring now in business-to-business applications.

The second commentary paper, by Ehret and Wirtz, entitled ‘Unlocking value from machines: business models and the industrial internet of things’, argues that the Industrial Internet of Things (IIoT) offers new opportunities and harbours threats that companies are not able to address with existing business models. The authors use Entrepreneurship and Transaction Cost Theories to explore the conditions for designing non-ownership business models for the emerging IIoT with its implications for sharing uncertain opportunities and downsides, and for transforming these uncertainties into business opportunities. Non-ownership contracts are introduced as the basis for business model design and are proposed as an architecture for the productive sharing of uncertainties in IIoT manufacturing networks. The authors identify the following three main types of IIoT-enabled business models: (1) provision of manufacturing assets, maintenance and repair, and their operation, (2) innovative information and analytical services that help manufacturing (e.g., based on artificial intelligence, big data and analytics), and (3) new services targeted at end-users (e.g., offering efficient customisation by integrating end-users into the manufacturing and supply chain ecosystem).

Next, the commentary paper, entitled ‘The internet of total corporate communications, quaternary corporate communications and the corporate marketing internet revolution’, written by Balmer and Yen, suggests the advent of what they call, ‘The Corporate Marketing Internet Revolution’, which necessitates a radical rethinking of marketing practice and scholarship. They emphasise the mindful of the importance of the Internet, and in particular, the IoT phenomena, and formally introduce and elucidate the Internet of Total Corporate Communications (IoTCC) notion. Moreover, the authors particularise the nature and importance of quaternary (fourth-order) total corporate communications, which, to date, the total corporate communications effects of the Corporate Internet Marketing Revolution have not been accorded importance in the extant. As such, their article seeks to address this omission, discussing what they are and their impacts.

The final paper, entitled ‘The integrity challenge of the internet-of-things (IoT): on understanding its dark side’, by De Cremer, Nguyen, and Simkin, considers the influence of the IoT on marketing practices and addresses the overlooked area of the dark side of the IoT. The authors note that dysfunctional forms of IoT have been neglected as an area of research, so identifying the different types of IoT providers’ dark side behaviours will assist in the development of an integrated approach to the IoT that will help overcome or mitigate these dark side behaviours. Based on an extensive literature review, supplemented by expert insights drawn from the authors’ study of the IoT, they develop a framework that classifies the varying IoT dark side behaviour types. The framework reveals eight forms of dark side behaviour that are grouped into four broad categories. This classification illustrates how different types of dark side behaviours are linked to key strategic IoT processes and also outlines how these dark side practices may be addressed by adopting a more strategic and integrity-oriented approach. It is concluded that with the adoption of a more holistic approach to the IoT, dark side behaviours can be addressed and move in the direction of more effective marketing practices.

We hope the papers in this special issue will encourage further discussion and debate in this interesting research field, linking IoT with marketing studies. This special issue focuses around strong theoretical, methodological and managerial aspects of marketing processes, thereby giving it a long-term vision for the IoT in marketing. However, much more work is needed to understand the implications of IoT further. With the thought of extending the scope of the papers presented here, we encourage future studies to examine these ‘IoT marketing’ issues more broadly, with more original empirical, behavioural, analytical or managerial work, for example, by studying the following.

• How should firms develop fully integrated IoT channel and communication strategies to best reflect the wide variety of the IoT options? How should IoT firms evaluate the consistency of messages across multiple touch points? How can marketing effectiveness be measured in an integrated IoT communications system?

• How much control do firms have over their customers in this environment? How much control should they exert over their customers with so much available data?

• What is the relationship between CRM and the IoT in such a data-driven environment?

• How should firms develop relationships, alliances and partnerships in an IoT environment?

• What factors affect consumer’s engagement with firms? How can firms use the IoT to design and develop a better customer experience?

• What are the optimal metrics and marketing strategies that firms should employ with the IoT?

• How are customised ads, promotions and other communications processed by consumers via the IoT as compared to traditional counterparts?

• What are the costs and benefits of firms adopting the IoT to optimise marketing?

We would like to thank the Editor of Journal of Marketing Management, for providing us with an excellent platform for presenting these research studies. We sincerely hope you will enjoy reading these papers and to develop these ideas further.

Disclosure statement

No potential conflict of interest was reported by the authors.