Have you heard the phrase “the Internet of Things” and wondered what exactly it meant? This term has grown increasingly popular in the last five years and is an important one to know. The Internet of Things (IoT) refers to the digitalization and connectivity of any item or device. Your smart phone and laptop aren’t the only things that can connect to the Internet anymore. Anything from your refrigerator to your lightbulbs can be enabled with internet access and controlled wirelessly. These types of devices have been around for several years now: smart watches, at-home security systems controlled via app, and virtual assistants such as Amazon Alexa and Siri are now in millions of homes.

However, the future of IoT goes way beyond what we see today, and that future is coming soon. According to a HubSpot report, there will be 31 billion IoT devices in the world by the year 2020—more than four for every person on earth. Clearly, Internet-enabled devices are here to stay, and the possibilities are endless. Businesses that can capitalize on this trend will be better prepared for a future where everything is connected. IoT is already impacting business in several key areas.

Product development. Almost any business has the potential to add internet connectivity (and, therefore, interactivity) to its products. Appliances such washing machines and dryers, coffee machines, and cash registers are being programmed to sense and respond to the environment around them. Medical devices, factory equipment, and transportation are all areas that are delving into the realm of IoT as well. Businesses that are able to find creative ways to implement IoT into existing products will be a step ahead as consumers start to expect their devices to be “smart.” Technology from companies such as Arduino make it easy for anyone to add interactivity to existing products.

Production and inventory management. Manufacturing and inventory management are already incorporating IoT. For example, sensors on packaging automatically alert employees about changes in temperature, weight, condition, etc. Also, inventory tracking can be automated, which means that companies can more efficiently get products to consumers and keep track of shipments. Order fulfilment is another aspect of the IoT that will likely be prevalent in homes within the next couple of years. The Amazon Dash Button is a Wi-Fi-connected device that automatically reorders products such as soap, toilet paper, and plastic wrap with one press. As these devices become smarter, they will be able to automatically sense when a reorder is needed. Companies will need to have the ability to manage this type of instantaneous order fulfillment.

Data. Data generation is another aspect of IoT that has massive implications for business. Every device that is connected to the internet is constantly collecting data about usage and users. For example, if a washing machine can automatically sense that your family uses a load of detergent every two months, companies could use that to market detergents to you right as you run out, giving you a promotional discount right when you need it. This type of data increases the level of customizability of marketing campaigns and the ability to directly target customers. IoT will help companies get to know their customers better than ever.

Marketing. One example of IoT in marketing is in the retail space. Technology called “beacons” send notifications to shoppers based on their location. A shopper walking by a department store might receive a notification telling her/him that the store is having a 20% off sale this weekend. This can help improve sales and get customers through the doors.

Customer relationship management. The current state of customer relations is fairly passive—customers come to companies when they have a problem, and companies attempt to solve the issues. However, with the Internet of Things, companies will know when service is needed. They can reach out and solve the issue without customer involvement or action. This will build customers’ expectations that their needs will be fulfilled before they become aware of them.

Increased efficiency. The Internet of Things also offers companies improved internal efficiency in areas such as energy savings, employee effort, and productivity. Businesses can monitor processes and operations digitally, determining where productivity and costs can be made more efficient.

Need for employees. If the Internet of Things becomes as prevalent in the workplace as anticipated, most companies will likely see a need for fewer employees than they currently have. Many of the routine tasks completed by people will become automated. Meanwhile, employees who are skilled in IoT processes and knowledge will become more valuable.

Security concerns. The Internet of Things, with all of its benefits, also leaves us more vulnerable to hackers and malware. As the Internet of Things amasses more information about people and businesses, this information becomes vulnerable to hackers. It is important to consider the country (or countries) in which the product is made. Many supply chains are global, but regulations around technology are local. Products are often not made with security features in mind, which can save time and money. This past September, California enacted the United States’ first Internet of Things security law which mandates “reasonable” security features on “smart” devices.

Classroom Implications

Ask students what types of IoT devices they have in their homes. How have these devices changed the way they live, shop, or complete routine tasks? What IoT devices are used in school or in their workplaces? Use these questions to spark a discussion about the potential for new “smart” devices. Ask students to brainstorm products that they think could be effected by the Internet of Things within the next few years. Also, lead the class in a discussion about the ways that IoT can improve business operations and efficiency.

Links for further learning:

https://www.forbes.com/sites/michelleevans1/2017/01/24/5-ways-the-internet-of-things-will-influence-commerce/#76d6184f4a0f

https://www.kidscodecs.com/what-is-internet-of-things/

https://www.businessinsider.com/internet-of-things-definition

https://www.networkworld.com/article/3270961/internet-of-things/10-hot-iot-startups-to-watch.html

https://internetofthingsagenda.techtarget.com/definition/IoT-device

Many companies are struggling to sell material goods to customers—or even to attract their attention. Consumers have too much “stuff” already. The sheer amount of products (and advertisements) are hard to break through. It is difficult to reach customers through traditional media, especially when the product does not offer significant value. Customers can easily and cheaply obtain the material goods they need and want. Unless a company has the lowest price and the quickest delivery, they aren’t likely to be swayed based on the products alone.

So how do brands stand out? By providing a unique experience. Experiential marketing means immersing customers within the product and allowing them to form an emotional connection with the brand. It means selling more than a material item—instead, companies are offering memories.

Over 75% of millennials prefer to spend money on experiences rather than material things. But it’s not just millennials. In the past 10-15 years, consumer spending on cars and household goods has decreased, while spending on travel, recreation, and eating out has increased. Companies such as Airbnb have bloomed because of the desire to travel and experience the world.

Social media is a significant reason why experiences are so powerful. Studies show that consumers are much more likely to support brands that offer value—and they place a high value on unique, social media—worthy experiences. People seek ways to attract attention with aesthetically—pleasing snapshots of their lives. The desire to “keep up with the Joneses” hasn’t gone away. Instead of competing with neighbors’ cars and houses, though, consumers want to show that they are having the best time at the best places.

The companies that have excelled in this area have a unique combination of physical product, experience, and brand power. Consider Starbucks. When customers spend $5 on a cup of coffee, they are getting so much more: the warm, inviting atmosphere of the coffee shop, the iconic cup emblazoned with the logo, and the feeling they get when hundreds of people “like” the photos they post of their decadent drinks.

Steve Weaver, owner of The Candle Lab, who recently spoke to High School of Business educators and MBA Research staff, understands the value of marketing an experience rather than just a product. Steve knew that people wanted candles, but the market was saturated. He decided to do something that he hadn’t seen before—offer candle lovers the experience of making their own candles. Steve has achieved great success by giving people the opportunity to have an enjoyable night out—and take home a candle, too. To learn more about selling experiences and the future of marketing, join us at Conclave 2018 in Kansas City, MO, where Steve will be our closing keynote speaker.

FRANK (which stands for “frankly speaking”) is a new brand and concept of OCBC (Oversea—Chinese Banking Corporation) in Singapore. FRANK is geared toward providing members of Gen Y with positive banking experiences. The FRANK retail store is designed to provide fun and relaxing banking experiences for customers, including the option to design their own debit and credit cards. Customers who bring in three friends to open bank accounts win $50 worth of free Ben & Jerry’s ice cream. Thanks in part to tactics such as these, OCBC already owns 26% of the total youth market in Singapore.

What can companies do to provide more experienced-based interactions with customers?

• Figure out what sets them apart
• Use video to create experiential-value ads
• Engage brand ambassadors (influencers)
• Integrate existing products with experiences

Keep in mind that while it may take a number of positive experiences to build brand loyalty, it only takes one bad experience (in many instances) to lose a customer to a different brand.

Classroom Implications

Have students provide examples of experiences that they have bought into—and shared on social media. Ask them to share why they were motivated to spend money on the experience and whether they felt it was worth it.

Ask students to take an existing product and brainstorm ways that it could be combined with an experience to make it more valuable.

Learn more:

https://www.business.com/articles/the—modern—marketers—guide—to—selling—experiences/

http://fortune.com/2016/09/01/selling—experiences/

https://globaledge.msu.edu/blog/post/53437/millennials—and—the—business—of—selling—experiences—

http://blog.higherlogic.com/customers—buy—experiences—not—products

https://www.entrepreneur.com/article/290848

The #MeToo movement is challenging social norms and making some companies pay attention to the real risks of sexual harassment and misconduct. The media have publicized the movement, helping it obtain attention and momentum. Their coverage has encouraged people to speak out about the way they have been treated. This highlights the rampant and unaddressed problems with workplace harassment.

Companies are increasing their harassment discussion and reporting. They are working to change their policies and codes of conduct to address these concerns. Required anti-harassment training is becoming more common, both at companies and from a legislative standpoint. Entrepreneurs are developing new businesses to facilitate better harassment reporting.

Unfortunately, some people believe that the movement’s impact has been minimal. This feeling is escalated by large companies protecting themselves financially and legally by settling or covering up harassment claims, thus leaving the perpetrators largely unscathed. A recent study found that only 18% of Americans have admitted to personally changing their behavior because of the movement.

Many female employees still feel powerless because things aren’t changing quickly—particularly in low-wage environments. Self-employed workers and employees in industries such as childcare, house cleaning, and food service feel that there is nothing they can do about harassment. Federal law only covers workplaces with 15 or more employees. Short statutes of limitations and caps on damages make women wonder whether the harassment-reporting process is worth it.

Others are struggling to clarify what constitutes assault and harassment. Some men feel uncertain when socializing with female coworkers, not knowing what is considered inappropriate.

Companies are also unclear as to what punishments should be for different types of misconduct. They recognize the need for well-defined antidiscrimination policies and procedures as well as for fostering a culture of civility and respect that helps to reduce harassment. Overall, the movement is still in its early stages with its full impact yet to be seen.

What employers can do going forward

• Work with HR professionals to create or tighten up anti-harassment policies which include an established reporting protocol for potential violations
• Provide regular, small group training for all employees about the policies which includes information for bystanders
• Set a company culture and tone of mutual respect and civility with zero-tolerance of harassment/discrimination
• Encourage employees to report violations and launch formal investigations when appropriate, according to policy
• Find advocates for employees who can separate themselves from the interests of the company
  
  

Classroom Implications

A study by the American Association of University Women found that 85% of girls and 76% of boys at the middle and high school levels have experienced some sort of sexual harassment. Talking with students about the negative effects of harassment, and promoting values centered around civility in school can help students begin to mirror the behavior that will be expected in the workplace. Teachers can use real-life scenarios and examples to help students determine what is appropriate behavior. To further the conversation, students could create a campaign to stop harassment at their school.

Discuss with students the impact of social/political movements: do they make a difference? What are worthy causes for students to take up? What are responsible ways for them to use their collective power? What are potential negative consequences of social/political movements?

Discussion Questions:

• Why do you think it is important to talk about sexual harassment?
• What are the consequences of sexual harassment?
• How do you think workplaces can try to stop harassment?
• What have you heard about the #MeToo movement? How are people around you talking about it?
• Do you think that movements such as the #MeToo movement can impact real change? Why or why not?
• What do you think constitutes the need to have a social/political movement?

Links for more:
https://www.nytimes.com/2018/01/25/learning/lesson-plans/the-reckoning-teaching-about-the-metoo-moment-and-sexual-harassment-with-resources-from-the-new-york-times.html
http://www.discoveryeducation.com/teachers/free-lesson-plans/sexual-harassment.cfm

One of our ExecNet members, Rusty Poeppelmeier, from Cincinnati, had this to say in response to this Action Brief:

Harassment and bullying have always been around. The only way to reduce and eliminate them is to talk about them and expose them so the social norms change to the point that people have to change. The same can be said for everything from civil rights to smoking. But talking about it is key because some people don’t recognize where the line is in their personal lives or the workplace. You have to talk about it to make the people responsible for their behavior feel uncomfortable for others to be educated. Shame is a powerful tool, but people need the opportunity and strength to talk, and others have to be willing to listen and act for real change to happen, otherwise, it becomes a partial measure that postpones the real discussion. Recent examples that come to mind are the #MeToo movement and the protests over confederate monuments and flags. Issues that could have been addressed decades ago.

Millennials have changed the optics as they are better positioned to challenge more of these behaviors. They have the support of a previous generation that has a history of challenging norms themselves. That bodes well for the future when it comes to advancing these issues and others. Maybe some believe the #MeToo movement has had minimal effect. I am certain it will have a profound impact on the future movements to come, as they will be able to more aggressively attack issues with the benefits of lessons learned from the movements that came before them. Once again, society marches forward regardless of rain, sleet, or Twitter.

By: Kristen Auletto, Research Associate

In the summer of 2016, Pokémon Go became a global phenomenon by bringing the digital world and the “real world” together. This mobile app, which was downloaded over 500 million times, is a location-based augmented reality game. Users across the world walked around their neighborhoods, holding their phone cameras up to various buildings and landmarks. They were looking for digital creatures that would appear on the screen, superimposed over their real life surroundings, that they could “catch” with the swipe of a finger. Pokémon Go faded in popularity, but the game was one of the more prominent mainstream developments in the field of augmented reality and virtual reality. The popularity of this game signified that virtual and augmented reality were about to be the next significant trend in technology.

Many people are still trying to understand what virtual reality is, and how it is different from augmented reality. According to the Virtual Reality Society, virtual reality is “a three-dimensional, computer generated environment which can be explored and interacted with by a person.” People can become immersed in the virtual world and become a part of it. Virtual reality stimulates the mind to create the illusion of reality. A person dons a headset or goggles and is transported into a new world. On the other hand, augmented reality is a blending of virtual objects in the real world. Augmented reality superimposes images onto the real world rather than creating a whole new digital world. Augmented reality often takes advantage of smart device cameras to add digital objects or effects to an image of the real world. While both of these technologies are of interest to businesses, augmented reality is much more accessible and widespread than virtual reality at this time.

Both VR and AR technology are gaining heavy investment from tech companies such as Microsoft, Facebook, Google, HTC, Lenovo, and Samsung. The industry is currently worth approximately $19 billion and is predicted to grow between 34-40% by 2023. Virtual and augmented reality are slowly becoming accessible to the mainstream public, but the technology is still too expensive for widespread use. While costs are decreasing quickly, currently affordable technology provides a lower quality experience than do costlier options.

To combat this problem, companies are developing a wide range of VR and AR options. Lower cost options use smartphones, while thousand-dollar high-performance systems are generally not for personal use. Prices have been dropping in recent months as companies struggle to compete for market share, which indicates that these devices are likely to increase in popularity.

Virtual and augmented reality have endless potential to impact the business world. Some industries, such as medicine, aerospace/defense, engineering/manufacturing, entertainment, gaming, and tourism, are well-suited for VR and AR. However, all types of businesses can benefit from this technology. It can touch almost every aspect of business, from product development to customer service to HR to sales. Organizations such as Ford, UCLA, Airbus, Snapchat, Sotheby’s, Carnival Cruises, The North Face, Marriot, and The Line are already using virtual reality in many ways.

The retail and ecommerce space has great potential to reach customers in an impactful way using virtual and augmented reality. Retailers can give shoppers the option to “try before they buy” in a completely new way. Many home furnishing companies such as Ikea and Wayfair have augmented reality apps that allow people to virtually place furniture or decorations in their homes before making a purchase, for example. Clothing, accessory, and makeup retailers are creating ways to virtually sample their products, which presents a new way to promote products and interface with customers. AliBaba and eBay have both experimented with virtual department stores, in which customers can see displays and make purchases with a nod of the head. Retailers are also using VR/AR to bring customers into traditional brick-and-mortar stores. The North Face, for example, recently used a VR headset in-store to allow customers to experience a winter landscape as they shopped for cold-weather gear.

Virtual reality has vast potential in marketing. Marketers can test displays or ads before actually creating them. Product prototypes can be developed virtually rather than using costly physical materials. It is reported that Ford saved $8 million dollars by testing new car parts virtually. Advertisements can be immersive, three-dimensional experiences that truly make products come alive to customers. VR/AR helps to build the emotional connection that marketers seek. Products and promotions can be made interactive as a way to make them stand out among the competition. 19 Crimes Wine, for example, has exploded in popularity thanks to an augmented reality app that allows each bottle’s label to come to life. Snapchat has experienced success with sponsored “lenses” that brands such as Taco Bell and Universal Pictures have used to create an augmented reality experience. These types of marketing efforts have much higher engagement and return on investment than other digital campaigns.

In human resource management, the recruiting and training process could benefit greatly from VR/AR. Potential candidates can have the chance to complete job simulations and experience the work environment without the same level of risk. The hiring process is expensive, and virtual reality can help prevent job turnover by giving candidates a realistic understanding of what jobs will be like. Virtual training can prepare new employees for their jobs in a more realistic way.

Business communications could change as well. Employees and clients across the world can use technology to host virtual meetings, conferences, and work spaces, eliminating the need for expensive travel and creating a better experience than a traditional video call.

While reality technologies bring the potential for positive change to businesses, they also have several issues that could be problematic. The cost of virtual reality devices and software is simply too high for more businesses to invest heavily in it. On the plus side, investors are seeing the potential of this technology and are willing to contribute funds to make the technology more accessible. Companies that want to implement VR/AR need to prove the value, and there isn’t enough information available to do so. As businesses start to experience success with the technology, they will need to track metrics to show success.

Another potential downside is that virtual reality has the potential to eliminate jobs, or at the very least, to change the nature of many occupations. If virtual shopping takes off, for example, the brick-and-mortar retail industry could suffer even more than it already has. Interior designers might be made obsolete. The tourism industry could suffer a decline if people believe they can get a similar experience from wearing headsets while sitting on their couches. Engineers/product designers who are in the habit of using certain software programs and/or physical materials will need to learn new technological skills to design products using VR and AR. However, many analysts are confident in the potential for virtual reality and augmented reality to create jobs rather than to take them away. It is difficult to predict the types of jobs that will become available in the future, but those who have a good grasp on these technologies are likely to succeed.

Overall, the impact of virtual/augmented reality is still widely unpredictable, but the possibilities are promising. Businesses that are able to successfully be “early adopters” of this technology will likely set the precedent for the future. Product design and development, marketing and customer experience, HR functions, and ecommerce are the most likely to experience changes as this technology becomes more and more accessible.

Classroom Implications

Students should understand what exactly virtual reality and augmented reality are. They should test out an example, such as Pokémon Go or the IKEA place app, which are both able to be used for free on a smart device. Even Snapchat and Instagram include augmented reality features (Lenses) that students probably use on a daily basis without even realizing it. After experimenting with these tools, students should brainstorm ways that this technology can be used in different business functions. They might provide examples of augmented reality marketing campaigns that they have seen or witnessed already.

Students should also spend some time reviewing past technological revolutions and how they impacted different industries and business activities. Doing so can help them consider how great of an impact VR/AR can have on retail, marketing, HR, etc. They should understand the value of embracing new technologies rather than being resistant to them. Finally, students should understand how knowledge of VR/AR could help them become more employable in the future.

Links for further learning:

Example technology — Microsoft HoloLens: https://www.youtube.com/watch?v=Ic_M6WoRZ7k&feature=youtu.be

The future of virtual reality in business: https://www.youtube.com/watch?v=81M0dS0gV9M

How reality technology is used in business: http://www.realitytechnologies.com/business

Examples of augmented reality campaigns: https://www.youtube.com/watch?v=Fd0XPKtqEV8

If you were an educator in attendance at MBA Research’s Conclave 2017 in Vancouver, Washington, you may remember one of our business speakers, Rick Turoczy. Rick is the Cofounder of PIE (Portland Incubator Experiment). Rick also helped cofound Oregon Story Board, a company committed to mentoring, teaching and advocating for VR in education. Oregon Story Board is a great resource for use in learning more about innovation in VR education.