What is the ‘Internet of Things’? Why are Internet of Things products smart? What will this technology mean for companies? Euan Davis, senior director, centre for the future of work, Cognizant, takes us through all these questions and more.
A slew of newly connected gadgets that are controlled through mobile apps and feed personal data into the cloud are driving a wave of interest in the Internet of Things (IoT).
Home automation start-ups, established consumer electronics giants and large venture capital-funded technology companies are gearing up for competition as connected cars, homes and even smart cities emerge. However, examining the abstract world of IoT from the world of products reveals the extent to which a billion inter-connected devices and products are changing businesses as we know it.
Latest research from the Cognizant’s Centre for the Future of Work—a survey of over 200 global product design and innovation executives carried out in collaboration with the Economist Intelligence Unit—highlights practical steps that business leaders can take to benefit from the fast-accelerating trend of smart products—and the prizes on offer from the “Smart Product Economy”.
Rise of smart products
Whether it is smartphones, smart cities, smart cars or even smart toothbrushes, smart technologies are finding their way into, and around, the everyday things we like to buy and use.
Witness the ‘smart’ Johnnie Walker bottle, which sends a personalised message to every customer who waves a smartphone in front of it, whether it is a promotional offer (pre-transaction) or a cocktail recipe (post-purchase, once embedded sensors detect the bottle has been opened). The bottle can be tracked across the supply chain, from manufacture to consumption. The opportunities unleashed by smart products are seemingly endless for any company seeking game-changing innovation or new levels of efficiency.
Why make products smart?
Adding smart technology to products can deliver game-changing innovation, enriched customer experiences and higher levels of efficiency. From R&D and manufacturing, through distribution and after-sales support, product data is changing the way products are built, sold and supported. Survey results reveal where companies are focusing their smart product investments.
Smart product development focus on three primary objectives: making industrial equipment smarter, through insights gained from embedding smart products into and around a manufacturing process; and making product packaging smart by highlighting the expiration status on commodities such as perishable foods, or reminding patients how and when to consume their medication. The third significant development opportunity focuses on making consumer devices smart, such as a fitness band that tracks personal wellness.
All these initiatives are set to change the dynamics between product creation and product sale dramatically because customer insight and business meaning are flowing through and around a product’s data.
Value flows from the virtual and beyond
The digital data emanating from a smart product or the processes that surround it is where the value—or alchemy—can be found. Imagine that smart whisky bottle exchanging data with a chilled glass to help uncover the perfect temperature for that drinking experience.
If properly instrumented and personalised, smart products become the sources of tremendous insight on product usage and status across the value chain, inform continuous product improvements and influence strategic moves into connected and/or radically adjacent markets.
By distilling and applying the insights gleaned from product intersections, manufacturers and other players in the value chain can strengthen customer relationships and create new and more profitable sales channels. Smart products can be instrumented to communicate with one another and with other products and services. Like the toothbrush that monitors and tracks the user’s brushing performance and provides feedback, or a jet engine that beams live engine data to ground staff, or a connected car that sends driver data to an insurance broker to enable dynamically priced car insurance. This looks and feels like a new product model for the digital age.
A smart product economy beckons
As product functions become more tightly controlled and optimised, we expect to see the emergence of innovative workflows (or product stacks) that connect the various products with the companies that own and operate them together.
Visualise the Smart Product Economy as the opportunity around the connected home, the connected car or the smart city. Each features a stack of products interacting with one another and blending into a unified entity that can be controlled through a single platform or interface by the home owner, driver or city planner. The result is a fully integrated and sometimes a fully automated solution.
It is happening today. Consider the manufacturing, healthcare or retail spaces, where inexpensive sensors and embedded software running across IP networks enable once inanimate products to sense, monitor, optimise and regulate themselves in increasingly autonomous and meaningful ways. Beyond the whisky bottle, check out GE’s smart turbine, to Procter & Gamble’s smart toothbrush, to Babolat’s sensor-embedded tennis racket.
Where to start?
Our research demonstrates that the process of giving a product a virtual identity triggers productivity gains and offers the potential for game-changing innovation. Product companies need to engage quickly to ensure they are not left behind. Already, smart products are emerging across industries and creating profound impacts on product development, manufacturing, marketing, sales, after sales and the customer experience.
New ‘digital components’ can be added to almost any object without dramatically increasing its price. Sensors and processors, software controls and data storage can be added, accessed through an interface like a dashboard or app. By using data and analytics, companies can see and predict a product’s behaviour and, by extension, the wants and needs of its user by interpreting the data and anticipating how a product could solve current and future needs.
Over the longer term, strategic opportunities for smart products will emerge around interconnected solutions and the partnerships that underpin them. This inevitable disruption to the product model, and the opportunity it creates, is a natural consequence of what Cognizant terms ‘code halo’ thinking—leveraging the information that surrounds people, organisations, products, and processes to build new digital revenue streams and new commercial models.
Please login with linkedin to commentsummer campaign
Omnicom agencies are committing to move beyond the binary to mark International Pronouns Day as part of Open Pride, a global employee resource group committed to inclusion and diversity. As part of the initiative, Omnicom agencies, including DDB, PHD and Clemenger Group, have committed to ensuring all policies promote gender-inclusive language and have encouraged staff […]
As part of Lions Live in June, Lions Live challenged under 30s with a brief in partnership with the World Food Programme. It was free to enter, and nearly 1,000 young adlanders entered. It was such a success, Lions Live plan to run a second competition during Lions Live this week. This time the brief […]
Festival for business and creativity, Pause Fest, has confirmed the event will run in 2021 – and will be its biggest to date. The 11th Pause Fest – named Changes – will migrate from its Melbourne home to the online world for the first time, running 1-12 March 2021. “Pause Fest has always been at […]
Shutterstock today announced the highly anticipated addition of Editorial Video, a new premium, full-service editorial video offering that is now available for license. Critical Past, Celebrity Footage and Viral Hog are just a few of the new partners who will distribute their engaging video content worldwide through Shutterstock’s Editorial Video. In addition, current partners’ epa […]
Today at Adobe MAX, Adobe unveiled significant innovation across its Creative Cloud applications and services. In addition to ground-breaking new features like Neural Filters in Photoshop, the company released major updates to its flagship applications including Lightroom, Premiere Pro and Illustrator. Adobe also underscored its commitment to accelerating the development of mobile and multi-surface apps, with […]
Cat litter brand, Breeders Choice, produced by FibreCycle, has made a bold move to get pet owners caring more about cats’ waste with a series of animated videos featuring a new tagline and a full marketing program. The “Choose Better, Choose Ginger” campaign launched this week via a unique collaboration of independent Melbourne agencies led […]
To mark a twenty-one year milestone the iconic Victorian ice cream brand, Timboon Fine Ice Cream, has revealed a modernised new look for their take home tubs. Tim Marwood, third generation farmer and founder of Timboon Fine Ice Cream, explains why the anniversary provoked the upgrade. “There’s not too many small family rural based ice […]
Bendigo TAFE and Kangan Institute have launched their latest advertising campaign titled, Our Heroes, which is a celebration of the role their students play in the community. “Within a few short years, our students are building our houses, nursing our sick, fixing our cars, caring for our children and pets, designing our clothes – all […]