New IoT Business Models: Ten Examples from Practice

How do I retain customers more effectively? How do I develop a new business model? By using the Internet of Things! We highlight ten use cases from different industries.

Designing new features for your products? Moving forward from being a device manufacturer to become a service provider? Developing a new business model with data-based services? Or expanding your customer service? The Internet of Things (IoT) offers futureproof options in all industries for your business. For its “EY Reimagining Industry Futures Study 2023” (PDF) the management consultancy Ernst & Young asked 1,325 companies around the world about their IoT plans. Thirty-seven percent said improving the customer experience was a major incentive for their IoT expenditure. One in three aims to develop new applications, products and services while 30 percent plan to revise existing business models and 28 percent to open up new markets with the aid of the IoT. All these measures make a company more flexible and more resilient and enable it to position its business sustainably. This is Part 2 of our small series of articles on futureproofing businesses by means of the IoT with ten examples from practice.

Connect your products via the IoT, be it during the production process (embedded) or retroactively (retrofit), and make them smart. Data collected by sensor technology and sent to the Cloud by a mobile communications module can be analyzed to optimize product functions, provide software updates or improve customer service. Deutsche Bahn, for example, has connected its rental bikes via the IoT. DB Call a Bike customers now benefit from a faster and simpler hire process that improves the user experience. And cellular connectivity enables the manufacturer Kässbohrer to offer buyers of its snow groomers new services such as fleet management, remote monitoring or remote maintenance, not to mention national and international roaming.

IoT sensors monitor the condition of plants and equipment to prevent outages and plan maintenance more efficiently. By optimizing processes and reducing downtimes, companies can not only boost their efficiency and cut their costs but also develop new business models such as predictive maintenance. Ziehl-Abegg, a family firm based in Baden-Württemberg, fitted out its industrial ventilation and air conditioning systems with sensors that monitor  the operating data. Ziehl-Abegg customers benefit from a more needs-based maintenance of their ventilators and are notified of malfunctions automatically and in good time. Compressed air service provider Petko is also able to offer its customers a more efficient maintenance service now it has connected its compressors with the Telekom IoT Cloud.

Companies that analyze their customers’ purchasing behavior can make custom-fit product recommendations. That can boost both customer satisfaction and customer retention. In retail the integration of IoT solutions facilitates an improved customer experience by means of personalized offers, automated checkouts and smart shelves. Electronic price tags, for example, are directly linked with the merchandise management system so that price changes can be centrally controlled and put to use. Customers might be able to scan price tags in the store with their smartphones and pay directly for articles or order them in another size. Both customers and staff can also locate and find goods in the store by means of an app.

Sensor technology and intelligent control systems help to reduce energy consumption in buildings and production facilities, leading not just to cost savings, New business models such as energy consulting and optimization, energy audits or customized energy saving recommendations take shaoe. IoT sensors in power networks provide real-time data on electricity generation and distribution. That enables power utilities to optimize their capacities, forecast demand more precisely and prevent bottlenecks. At the same time they can give customers more control over their energy consumption by enabling them to monitor and optimize their consumption in real time.

GPS trackers and sensors monitor the location and condition of goods in real time and can automate processes and optimize the supply chain. Arrival times can be forecast precisely and shipping disruptions are discovered at an early stage. Two German waste disposal companies are now using sensor technology and the cellular network to improve their collection service. Rhenus and REMONDIS habe equipped their data bins and glass containers with filling level gauges that report when a container is full. Collection routes can be optimized, empty runs avoided and customer satisfaction increased as a result.

More precise agricultural methods based on IoT technologies like Precise Positioning reduce consumption of resources such as fertilizer, water, seeds or pesticides and can lead to higher yields. IoT systems help farmers to monitor soil quality, weather conditions and plant growth. New business models such as Precision Farming take shape and open up access to new customers for manufacturers of agricultural machinery.

Smart City solutions improve the traffic situation, road safety and the quality of the urban environment, which creates new business opportunities in public infrastructure and the service sector. Companies can offer new, IoT-based solutions for traffic management and looking for somewhere to park that ease the burden on cities and improve the quality of life for residents. New market opportunities open up and cities and local authorities become customers.

Wearables and networked medical devices can help healthcare providers to improve the quality of patient care and develop new business models in the digital health sector. That creates new market opportunities such as the development of telemedicine and connected medical devices. One example of this is the networking of BIOTRONIK 's pacemakers with Telekom's global mobile phone network. This enables the automatic daily transmission and analysis of health data to the attending physician, even if the patient is in another country. Continuous monitoring of the heartbeat using home monitoring technology has led to a 60% reduction in the mortality rate of the patients concerned.

IoT solutions that increase energy efficiency, safety and comfort improve facility management. New business models such as smart building technology services or data-based optimization of room occupancy can take shape. ISS, a leading international provider of facility services, has digitized its building management by using sensor technology and the IoT. It can now offer its customers data about room status and occupancy – an additional service that boosts customer retention.

IoT sensor technology can also be used to monitor inventories in real time and manage them. That leads to more efficient warehousing, faster delivery times and an improved customer experience. New services such as automated repeat orders can be developed at the same time to increase customer retention and sales. The Bavarian construction specialist PERI has connected its formwork elements by using Telekom Low Cost Trackers. Elements can now be located much faster on the construction site and the manufacturer can offer its customers an additional location service.