Personalisation is an inevitable and necessary next step in the evolution of the Internet. Users often felt overwhelmed and resented by being bombarded with information or advertising that is not relevant to them. There were huge volumes of data being created that are costly to deliver and presented a bad return on investment.

Something had to change and that has seen a move away from spam towards much more targeted advertising. The likes of Netflix and Facebook have taken this a step further, building powerful curation engines tailored directly around the Internet of Me. Such providers have become adept at tracking their user’s preferences and using that information to create and hone feeds to fit individual interests. They’ve been so successful that other companies are now looking to emulate their approach using highly targeted data collation.

Think that’s the end of the journey? No way. It’s just the start.

The Internet of Things (IoT) will change everything. We are just starting to see the multitude of information generated on user buying habits, activities, work/life patterns and consumption that will effectively see the 2D profile we currently have of the customer become a 3D representation. The IoT will join the physical world with the virtual world in ways many people couldn’t have imagined just a few years ago. For the retailer, the IoT will create a massive opportunity to really get to know their customers and target them, as long as they can harmonise and consolidate the real and virtual views to give a holistic view of the customer.

This is already happening through loyalty programs that allow retailers to keep track of customers when they are offline but instore. Loyalty cards provide the ability to identify purchase patterns with next best patterns. But the IoT will gather even more data from multiple sources – your home appliances, your car, your clothing – giving unprecedented insights into what we do and when and how to target us effectively. This will see the focus shift from periodic purchasing to 24 hour tracking, with customer preferences tracked via detailed usage of a product.

It will be possible to see a constant data feed on consumption activity. The relationship for the retailer is now with both the customer AND the product, deepening the original relationship by providing insights into how often a washing machine is used, for example, and in which seasons, possibly prompting automated washing powder deliveries or signalling the need for a higher premium on an extended warranty offered via a partner.

All of this will of course require monumental changes in the way businesses operate. Managing this new data paradigm will require advanced forms of data analysis to deliver customer intelligence in near real-time. According to a recent report by Jonathan Gregory from Accenture, the IoT will be “particularly disruptive to retail” reshaping the buying experience, but also throughout the supply chain. Some of these changes are already happening with automated inventory management systems, while others have yet to become an online customer feature.

New practices will also emerge as the IoT expands. For instance, the Accenture report looks at “showrooming” – where users look at the physical item in store, but then purchase it online – and explores how this practice can be converted to see online customer become in-store buyers by joining the real and virtual shopping experience together. This could take a variety of forms from real-time pricing on electronic price tags to customer-centric coupons and promotions at the point of entry into the store.

Turning this concept of showrooming on its head, Internet retailers are replicating the in-store experience online. The emergence of virtual department stores, such as that being trialled by eBay, use the physical experience of Virtual Reality headsets together with virtual schematics to enable the user to experience and explore an online shopping store. Users ‘try’ products at home using their eyes to navigate, select and inspect items before committing to a purchase and their interests are learnt over time, enabling the system to refine the selection on each visit until the store itself becomes personalised.

The virtual department store is a great example of how data is enabling retail to not just diversify, but to redesign itself. Personalisation makes the point of conversion – whether it be online or instore – irrelevant because the customer is becoming channel agnostic. Choice and convenience are the drivers of this change and this can only be accomplished through the appliance of data. Such multi-channel strategies will increase conversion only when built on a data-rich insight-focused platform.

Mining this retail data will require systems that are able to track the user in both worlds. Unique personal identifiers will need to be able to track users on and offline to sync with data produced by IoT devices. The current model whereby users are tracked on the retailer’s website will need to be enhanced using technologies like AVORA’s Truetag to provide a holistic perspective of the customer, on and off site, that utilises all data repositories. This will see customer accounts over multiple related retail sites joined up with customer tracking across these sister sites and search channels. That may well be further extended through customer tracking over affiliate platforms. Accessing other IoT data may well involve partnering with IoT companies themselves, such as those controlling home hub systems, although a recent report by Oxford Economics suggests monetising data is still in its infancy, with only 8 percent of IoT companies having monetised more than a quarter of their data.

Yet collecting this data is only the start of the process. It will need to sorted and cleansed and analysed. But IoT analytics will make faster processing a must-have rather than a nice-to-have. Data cleansing previously done using the Extract Transform Load (ELT) process will be superseded by Extract Load Transform (ETL) making it possible to query in near or real-time as a report is being generated, with cleansing performed on-the-fly. There will be more demand for scalable real-time processing solutions, as opposed to the prohibitive cost structures associated with established cloud database providers. Avora has recognised this gap in the market and has developed a platform that can offer processing six times faster than rival offerings, helping retailers to seize the initiative and offer next generation personalisation.

Early adopters that incorporate the IoT into their analytics platform will be able to use this data to their advantage to offer a holistic customer experience that joins the virtual and real world. Those with strong brands will be able to leverage this information to provide unbeatable customer service, while agile retailers will be able to explore new revenue opportunities and connect with customers in different ways. Adding a data analytics platform like AVORA can give retailers the competitive advantage, ensuring they are ready to harness the data provided by the IoT tomorrow.