How do you prioritize IoT investments when ROI is not always immediate?
When prioritizing IoT, it's important to be able to demonstrate ROI as early as possible. The best way to do that is by integrating data from your PoS – your transaction-level data - into a cloud environment, and then integrating data from the app into that same environment. You then have a unique way of identifying a mobile offer when it's redeemed at the point of sale and it's easy to split your PoS data into those transactions that included a mobile app and those that didn't.
Then you can work out the average transaction value for those that include mobile offers vs those that didn't, and what we typically find is that transactions that involve mobile are typically 30-40% higher value than those that don't. The reason is that when people use mobile, they come in with what is typically an upsell offer - an incentive to drive spend by adding another product, or by buying a more premium product with higher margin. It's actually very quick to establish – even with just a month's data – a trend that transaction value with mobile is higher.
Once you start demonstrating that, getting investment in mobile is easier as people start to see the returns. People see mobile customers are worth more, and understand the importance of investing more to create more mobile customers. We invest more in getting people to download the app. We invest more in the engagement program, to get lapsed users coming back and using the app more often. All of which contributes to more of those high value mobile customers, which increases average transaction values right across the business.