COMMERCE OF THINGS Monetization of Internet of Things
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COMMERCE OF THINGS
Monetization of Internet of Things
Seat belts
required in all
vehicles1968
First state
introduces
Seat belt law 1985
Airbag law goes
into effect1998
NHTSA requires
backup cameras2018
SMART TRANSPORTATION
estimated
reduction in
accidents and
traffic deaths
50%
SMART CITIES
70%
cost reduction
in city utilities
SMART CITIESArray of Things
• air temperature
• surface temperature
• sky color
• cloud cover
• barometric pressure
• carbon monoxide
• nitrogen dioxide
• sulfur dioxide
• ambient sound
• vehicle traffic
• foot traffic
• standing water
reduction in city
trash costs
40%
SMARTER WASTE MANAGEMENT
agriculture consumption
of the world’s fresh
water supply
70%
SMART AG
50%
prescribed medicines are
not taken as directed
SMART HEALTCARE
SMART PACKAGING
Every product will have
its own digital identity
SMART ONESIES
SMART SPORTS
SMART PILLOW
14SMART LAUNDRY
SMART LAUNDRY
PICTURESCreativity is the key to success in the future,
and primary education.
SMART FORK
FRIDGE SELFIES
18SMART TOAST
ABANDONMENTOF THINGS
WITHOUT MONETIZATION STRATEGIES
IoT PRODUCTS WILL FAIL
Digital River is a leading global provider of
commerce, payments and marketing solutions.
22+ years of experience
200+ payment methods
1100+ commerce experts
22 offices around the world
More than 240 countries and
territories where we do business
INTERNET OF THINGSISN’T A THING
IT’S A SERVICE.
+ + +
Wi-Fi, Bluetooth, ZigBee,
Z-Wave, Cellular, NFC
Connected Device
Provide value-added
services/subscriptions
Services
Data Storage,
Data Analysis
Data Aggregation
Enable, Test, and Optimize
Business Models
Commerce
INTERNET OF THINGS
One-TimeIndividual Purchases
FixedScheduled Purchases
AdaptiveRules-Based Purchases
AutonomousContext-Driven Purchases
COMMERCE OF THINGS
BUSINESS MODELS
Usage-Based
Billing
Professional
Services
Micro-Transactions
& Add-ons
Freemium Subscriptions Ad-Hoc
Purchases
CUSTOMERS PRODUCTS
FREEMIUMFreemium
• Free subscription
• Subset of
capabilities
Challenges:
• Offer enough value
for free
• Determining
premium service
• 5% rule
FREEMIUM
Freemium is a
means to an end...
Limited access to
the full experienceEliminate the risk of trying something new
FREE TRIAL
PRE-PAID SUBSCRIPTIONSPre-Paid Subs
• Low barrier to entry
Considerations:
• Payment frequency
• Promotions
• Ongoing price
Challenges:
• Higher transaction
costs
• Payment failures
• Renewal rate is key
to profitability
PRE-PAID SUBSCRIPTIONS
TRANSACTIONSSUBSCRIBERS
TERM-BASED BILLINGTerm-Based
• Billing cycle
separate from
commitment term
• Smoother revenue
streams
Challenges:
• Lower AOV
• Higher transaction
costs
• Reluctance to
commit
HARDWARE-AS-A-SERVICE
SCHEDULE & SUBSCRIBE
AD-HOC PURCHASE OPPORTUNITY
AD-HOC PURCHASE OPPORTUNITY
VALUE COST
USAGE-BASED BILLINGUsage-Based Billing
• Bill in arrears
• Pay for what you
use
Challenges
• Ongoing tracking
• Accounting disputes
• Bad debt,
collections
MEMBER-BASED USAGE BILLING
MEMBERS CUSTOMERS
ADD-ONS & MICRO-TRANSACTIONS
PROFESSIONAL SERVICES
RELATIONSHIP TRANSACTIONS
Customer
Success
Logistics IT &
Infrastructure
Payments &
Financial
Product
Development
Systems &
OperationsCulture Marketing
CHALLENGES
CUSTOMER
SUCCESS
CUSTOMER
SERVICE
STRATEGY
AcquisitionMembers vs. Customers
Customer Success vs. Service
Retention MonetizationCustomers vs. Products
Subscribers vs. Customers
Relationship vs. Transaction
Value vs. Cost
COMMERCE OF THINGS
Monetization of Internet of Things
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