Month: June 2014

Small Towns and Connected-World Privacy

I grew up in a small town, a town with more animals than people and with not even one traffic light until well after I moved away.  Families have lived there for generations.  Everyone knows everyone, their business, their religion, their background.  Those who chose to live in small towns chose to concede privacy for the benefit of community, community safe for business and for family; knowing everyone around you in a small town network is a tremendous safety net.  Image

Our family ran an auto parts businesses.  In small towns you can serve customers in ways unheard of in densely populated areas because you do know everything about your customer.  In some cases frequent customers from town could walk in, say they are changing their oil and my dad or uncles could walk to a shelf and grab the right oil filter for their vehicle without asking more questions.  Along the way they could generate conversation about other maintenance areas for their vehicle that might need to be addressed.  That’s small town personalized service and people love it.  People in small towns can rely on it in more than just an auto parts business, every small town business can personalize their customer experience because they know you, your family, your habits, where you live, where you work, if and where you worship, where you went to school, where you like to fish and on and on.  Small town business owners understand a customer’s context!

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I came to the Bay Area in 1997.  Community is different in a metropolitan area.  Most people don’t even know their neighbors, let alone their neighbor’s oil filter.  Yes, there is a lot of privacy but there is also a lot of mistrust.  People don’t know everyone they interact with and connections and service are not as personalized; that small town familiarity just doesn’t happen.  Not only that, even though humanity has survived for thousands of years with small town familiar type relationships, it seems that sort of familiarity in today’s metropolitan areas is unwelcome.  This presents a service challenge as businesses have grown into large chains with operators who cannot know their customers at a familiar level.

Of course, businesses have tried to scale small town-like personalization because they know of the benefits; that’s why Ritz Carlton tracked which candy bar wrappers were in the garbage in guest rooms on 3×5 cards long before databases could store long-tailed customer data.  When people started buying with credit cards, things started to get easier.  Marketers could get to know their customers by accessing info through data brokers.  Loyalty cards brought more change and insight.  Businesses could analyze a basket of goods and anticipate future behavior.

But then Target determined a daughter’s pregnancy before her father knew and then people became concerned about privacy because they thought marketers were getting too familiar for their own good.  It gets more interesting, though, if you look at the game changing role of the internet and networks.  Why?  Because in order for a network to work, it needed everything to have a unique identifier and MAC addresses were introduced for every electronic device.  Flash to the small town: everybody knowing everybody is a network of people and businesses where one’s identity is akin to a MAC address, all nodes are known to the network.

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Here is a snapshot of the available Wi-Fi signals inside the Walgreens around the corner from my place.  There are five and all five are full strength. They are all secured so this is not Walgreens providing superb free internet to its shoppers.  Having a great connection for staff and registers is no justification for five either; the whole store could be covered with one, maybe two.  There are five because of a little known fact that your phone’s Wi-Fi broadcasts its MAC address and, while I have no insider information on this from Walgreens, my guess is that Walgreens is using MAC address tracking on every MAC address emitting device that comes in range.  There are more than enough points for triangulation through some basic trigonometry, the same math taught in my small town high school, for Walgreens track every Wi-Fi enabled device is as it moves around the store.  With this information Walgreens can not only analyze the basket of goods at purchase but how that basket of goods was constructed.  There could be huge marketing benefits for both the business and the consumer because of that type of analysis at scale.

BUT wait, isn’t this an invasion of privacy knowing how someone walks up and down the aisles in a store and connecting it to what is in the basket at the end of the purchase?!?!?!  Well, go back to the small town stores example.   You might also think about small boutique shops.  In more personal, intimate shopping experiences the shop keeper watches you, interacts with you, knows you and provides you with better service; they know how the basket of goods is constructed and they know to a certain level how it might fit into your life.  Walgreens understanding how their customers construct their baskets of goods is not that different from the thousands of small town store owners who understand how their customers shop in their stores.

Of course, Apple’s announcement that it will randomize MAC addresses affects what Walgreens might be able to do.  However, there are still other ways to circumvent the randomization if a customer ops in.  For example, Walgreens has an app and if a user agrees to install it and use it in store, MAC randomization does not matter because a customer tells Walgreens who they are regardless of MAC randomization so they can know the customer, their loyalty card and so forth.  Wi-Fi also isn’t the only way to detect a phone and Walgreens could partner with ProxToMe and use Bluetooth Low Energy to go beyond simple tracking as I discuss here.

Offering a contextual recommendation or coupon on a smart phone relevant to an individual and their location inside a Walgreens in my book can be just as helpful as an attentive shop clerk in a small town who knows their customer and offers contextually relevant recommendations.  And as far as privacy goes, even if Walgreens knows my detailed purchase history and shopping pattern, it isn’t the same as the small town drug store pharmacist knowing me and knowing what goes in my basket of goods for whatever medical ailments people in my household might have because to Walgreens I’m a number (maybe even a MAC address) and to the small town pharmacist, I’m a neighbor (at one point the pharmacist lived across the street).  There are some things your neighbor ought not to know so go ahead Walgreens, be innovative and partner with entrepreneurs and put technology to work offering contextually aware products and services without telling or being the neighbor.

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An Update on Wearable Predictions

GlazedConAfter the Glazed Conference by Wearable World in San Francisco the past two days, it is time for an update on the eight wearable predictions in the post Wearable Technology: Fashion, Fad or Future?

First of all, don’t expect quarterly updates.  An annual update that coincides with Glazed will do from here on out.  While I’m at it I’m taking the opportunity to add two more predictions. Ten predictions does sound better than eight but the new predictions are more than an attempt to round out the number; they’re important for the activity we will see as the wearables market grows and develops and wearable solutions put technology to work for you.

1)      Wearables of the future will be more than fad devices; they will satisfy customer needs.

This was a topic brought up in several of the Glazed sessions. We are still going in the direction of wearables being more than fad devices.  Nike’s move to shift focus away from wearable hardware means the Fuelband may become the first of the fallen fad devices.  Other devices like Google Glass may become to be seen as stepping stones to where we are going to go because they’ll be replaced with technology that better satisfies customer needs solving problems we do not even know can be solved today.  It will take a decade to decide which of today’s devices are fad devices and which will have multiple generations during that decade.

see more in Who to Watch for Prediction #1

2)      Where wearables are silo solutions now, in the future they will be better integrated with other wearables and the wider Internet of Things.

Apples HomeKit framework announced earlier this week is a prime example of where players are making moves to bring value to consumers through connecting devices.  Integrated solutions in the wearable world are beginning to emerge but there is still a lack of an accepted standard or definitive leader in this space; I see a silo to integrated transition starting in the next 18 months.

see more in Who to Watch for Prediction #2

3)      Companies that combine the information of multiple sensors in multiple wearable devices will create more value for their consumers than producers of single wearable devices.

Wearable fitness products appear to be the area where this prediction is being proven.  Another place is in manufacturing.  Because the overall wearable space is so new, there hasn’t been time for industry consolidation of complimentary wearables but it will start to happen in the same timeframe as the silo to integrated transition.

see more in Who to Watch for Prediction #3

4)      Wearables will become more intelligent because of developments in sensor technology and the ability to translate data from these sensors into insight via analytics.

We’re still on track to see sensor tech and data insight adding to the intelligence of wearables.  I’m excited to see the many solutions out there in health, fitness, manufacturing and many other areas.  Do you have an interesting product or data solution you’d like to talk about?

see more in Who to Watch for Prediction #4

5)      The cost of sensors will continue to go down, thus enabling more uses and innovation with sensors in wearable devices.

Robert Scoble pointed out that Bluetooth beacons retail for around $30 each but a company such as Walmart purchasing thousands of Qualcomm Gimbal beacons will see prices well below $10.  While not a sensor (and this prediction is about sensors), the pricing of BTLE beacons is an indicator we are still on track for prices of components for wearable technology to go down enabling more use and innovation.

see more in Who to Watch for Prediction #5

6)      Wearable devices will need less frequent charging because of better energy storage and lower energy consumption.

Glazed was not immune from the midafternoon conference clustering around power points to charge up, a pretty good indicator this problem isn’t solved yet.  Battery life was talked about several times and some argue the inconvenience of carrying an extra battery pack is less important than the value some wearable devices create.  Intel’s charging bowl is an example of solutions aimed at keeping our wearable devices fully charged but if a smart watch spends the night in the bowl, it isn’t going to be able to do any sleep monitoring.   It may take several years for a breakthrough in this space.  Of course, I’d like to see it sooner than later so if you’re engaged in this space keep at it!

see more in Who to Watch for Prediction #6

7)      People are going to use wearable technology to make a statement about who they are.

Yup.  Fashion tech is happening with the devices that are out there and it is going to happen with more devices.  I met Emily from Keyrious and Ben from Connected-Designs who are both working on wearable jewelry.  Apple fans will be clamoring for the iWatch.  Other wearable solutions are out there and more coming, including in luxury brands.

see more in Who to Watch for Prediction #7

8)      People are going to use undetectable wearable technology by using wearable ultra-sensitive micro sensors, sensors smaller and more sensitive than the innovative seat belt microphone in Audi’s R8 Spyder that enables clear cell phone conversation with the top down at lightning speeds.

In the health/wellness space you may see more of this; for example, if someone is on 24 hour heart monitoring for a heart condition or a woman is using a wearable to monitor body temperature to detect ovulation they may not want others to know what devices they have on.  While the world may not know what you are wearing under there, check back on this prediction to see what secrets can be kept.

see more in Who to Watch for Prediction #8

Two New Predictions

Obviously this list is not complete and could literally include dozens of more points; however, I’m honing in on two things here that are highly relevant to wearables.

9)  The debate around ownership of wearables-generated data will continue.

The odds are not in favor of consumer ownership and much of what will happen depends on government actions.  With Google receiving 10,000 requests a day for search activity to be forgotten in Europe it is possible to see there is certainly interest by consumers in controlling their information.

While consumers requesting to be forgotten are concerned about privacy, the real issue here is the value exchange.  Whether they know it or not, consumers get the short end of the stick; they probably do not even know about today’s data broker marketplace.  If consumers received enough value for being all-in and offering their data, then this will be less of an issue.

Will data warehouses become like banks, where data is the currency on deposit and customers receive a quantifiable value similar to account interest offered by banks?  Probably not and, among other reasons, this is because if a consumer knows their data is on deposit they will want to control where the information is used, unlike in the banking situation where money is money and bank account holders have no real interest in how their interest is earned.

see more in Who to Watch for Prediction #9

10) Contextual awareness will be enabled by wearable device adoption and become the next big thing in marketing and customer experience.

You would be hard pressed to have attended a session at Glazed where the word context was not used; entire panels discussed contextual awareness!  The topic is hot and it is due largely because of the value that can be derived from contextually understanding a customer, a business situation or the world.  Social media marketing has received its lashings for being ineffective; however, social media along with other data streams can now be utilized to provide contextual marketing messages.  More importantly, context can be used, as Jeff Stevens of ContextM said, “to enhance the customer experience.”   Customer in this context is much more than a person in a store, this could be anyone in any situation, at home, at school, at work, at play, at…

As people rely more and more on their devices to provide them with valuable, relevant information, people will expect and prefer contextually aware information and experiences.  Context isn’t just a topic for the CMO; contextual awareness has the opportunity to impact many aspects of business and all industries, including industries that have been immune from major technology changes because of their rudimentary nature.  It is going to take a decade before we look back at irrelevant ads and experiences void of augmented information based on context the way we look at brick sized cell phones but it will happen; contextual awareness will be the next big thing in marketing and customer experience.

see more in Who to Watch for Prediction #1o

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