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Data for today’s episode is provided by Mercator Advisory Group’s Report: Internet of Things Technology and Consumer Devices: Machine Triggered Payments Continue Growth in U.S. Households
IoT Case Study: Laundry Detergent and the IoT Replenishment Revenue Potential
- A useful consumer convenience product category to examine through the lens of IoT transactions is laundry detergent.
- An estimated $1.6 billion worth of packaged (pods and comparable) laundry detergent products were sold in the U.S. in 2020.
- The average U.S. household expenditure on laundry products for the year 2019 was $183.50.
- However, only a few manufacturers (including LG, Samsung, and GE) offer auto-replenishment enabled washers, and more importantly, all of them rely on the Amazon Dash platform to offer customers IoT transactions for detergent purchases.
- If one excludes the option of Amazon replenishment, U.S. consumers are devoid of smart replenishment options for their IoT-enabled washing machine.
- An increasing proportion of consumers are shifting to online purchases for critical household supplies such as laundry detergents, which is a positive development for an IoT platform.
Mercator Advisory Group released a report covering IoT transactions and payments titled Internet of Things Technology and Consumer Devices: Machine Triggered Payments Continue Growth in U.S. Households.The research explains the current market, discusses the driving factors that influence rate of adoptions, and describes how different stakeholders can gain a foothold in this rapidly growing ecosystem.
The research covers how consumers currently pay for subscription models, leveraging that data to infer how IoT payments have a market-entry template for U.S. households. Mercator also provides an analysis of the industry-level developments in the smart/IoT consumer device sector, including strategies to influence card-on-file choices for smart replenishments. Research also includes data on VC investments in the IoT technology landscape.
“IoT transactions are not a new development, they have already become an integral part of the commercial payments space. However, the explosion of IoT devices and associated auto-replenishment purchases in the consumer marketplace is an emerging phenomenon that necessitates analysis,” comments Amy Dunckelmann, Vice President Research Operations, at Mercator Advisory Group. Dunckelmann continues: “Financial institutions and other stakeholders in card-on-file products need to leverage the growth of IoT transactions to create new channels for revenue and data. Consumers are indicating an increasing preference towards auto-replenishment for individual smart devices over traditional shopping patterns. This segmentation of one-time purchases is an expansion opportunity for all financial entities and payments specialists.”