Where Are Those Smart Products?
Does anyone remember the Innovations Catalogue? My brother and I would eagerly await the delivery of the Sunday Papers and every few weeks there’d be this paean to gadget lovers everywhere, the Innovations Catalogue. It was mostly tat but the males in the house would read it avidly and buy stuff. There was the key-fob that beeped when you whistled at it (me); the micro bugging device (my brother) or the lawn shoes with 9inch nails through the soles that would aerate your lawn as you walked over it (I kid you not, my father was obsessed with his lawn and I totally get it now that I have one of my own.) I often wonder how the innovations catalogue would look like today and then a colleague shared this Internet of Things slideshare with me. It’s the innovations catalogue for the smart product age and the smart tennis racket is going on my Christmas list.
The media is awash with smart products, from the gimmicky to the more serious offerings. Smart products will radically reshape an experience with a product or lead to a dramatic upswing in outcomes (see my post on Healthcare Hits the Melting Point to the impact from Smart Products within healthcare). A slew of newly connected gadgets controlled through mobile apps, feeding personal data into the cloud which is continuing to drive interest in these products and their apps that tie and make them personal to us. They’re mostly badged under the Internet of Things (IoT) moniker. And it’s no wonder we’re all watching as the interest in IoT plays out in our personal lives, but a closer examination of the IoT from a product perspective reveals the full extent of how a billion interconnected devices and products will change the rules of business. We set out to chart these changes in our survey we ran with help from the Economist Intelligence Unit, the research arm of the Economist magazine. Together, we surveyed over 200 product design and innovation executives across Europe and the US to chart the phenomenon of smart products. I call the respondents our smart product pioneers and their development initiatives underway may surprize you.
A huge amount of media interest around smart things is focused on the wearables space, such as the Apple Watch and Google Glass, or broad infrastructure initiatives such as “Smart Cities.” However our pioneers are looking elsewhere. Our survey reveals that the real market for smart products (particularly over the short to medium term) is aligned more with manufacturing process improvements, product packaging innovations or reconfiguring consumer products so that they communicate and deliver to us an enriched customer experience. (See the figure below taken from a question we asked “Which categories of smart products have you/will you develop?”)
Response base: 202
Source: Cognizant/Economist Intelligence Unit, Smart Products study, Q4/2014
Roughly 58% of our survey respondents focus their organization’s smart product development on making industrial equipment smarter by gaining insights as the product embeds itself into and around a manufacturing process. A similar number (57%) focus development on making product packaging smart, whether by highlighting the expiration status on perishable foods, or reminding a patient how and when to consume their medication. The next significant development opportunity (40%) is on making a consumer device smart— like the dreaded smart toothbrush I posted about last week or a fitness band that tracks your personal hygiene and wellness. I believe these initiatives are set to dramatically change the dynamics between product creation and product sale because customer insight and business meaning are flowing through from a product’s data—its Code Halo. And they are triggering new revenue models as a result.
What strikes me is where smart product development is happening today. This is a business efficiency play and its steering clear of the frothy eye catching wearables space typified by the Apple Watch or Google Glass (intriguingly though, most of the 19% charted above came from European rather than US respondents to the survey…) Smart products strategies are set to drive efficiency and innovation throughout a product’s eco-system, from its design, manufacture, sale and the after-care servicing once in the hands of a customer or installed onsite at the customer’s premises. It’s in the product data where an unprecedented level of customer insight is being found and it’s accelerating away, triggering new strategic options (for the companies we surveyed at least). Get ready for a new product model to emerge for the digital age. Watch this space.