Top Ten Ways Connected Products are Changing Companies

Contributions to this blog were made by JJ Conoscenti, Business Development Specialist.

As digital and physical worlds continue to merge, IT is becoming an integral part to all of our products. The Internet of Things (IoT) is growing, and according to Cisco, the number of connected products is expected to reach 50 billion by the year 2020. This translates to about 6.5 connected devices per person. Given the magnitude of this movement, businesses will inherently be disrupted. So let’s take a look at the top ten ways that connected products are changing companies.

1. Expanding Industry Boundaries

This new category of products - connected products - is changing and expanding boundaries of our industries. As competition shifts from individual physical products to increasingly comprehensive systems, businesses are beginning to offer a number of related products and services. Essentially, connecting a device turns it into something greater than the sum of its parts individually, so we’re seeing the rapid expansion of industry boundaries. One of the biggest examples is the evolution of the manufacturing industry, where the combination physical components, smart components, and connectivity components are changing the game.

2. Dramatic Improvements in Product Performance

Product capabilities are also expanding as they are becoming more connected. Product improvements can be seen in four main areas: optimization, autonomy, monitoring, and control. Products are optimized as they can gather their own performance data. As products become smarter, they become more autonomous by learning about their users. Products are more aware of their environment and can monitor external conditions. All of this amounts to more control, the ability to better respond to change and to personalize the user experience.

3. Data Collection

Connected products mean more data. The challenge for companies is how to best collect and leverage this data. What data should they capture? How will they secure and analyze this data? Are there opportunities to monetize their data collection by selling to a third party? Companies are being confronted with more challenges and opportunities related to data than ever before. Moving forward, the most successful business will be those that can pivot based on the data they collect.

4. Relationship Growth with Customers

More and more, customers are buying new products based on how well they integrate with their existing products. So, users are increasingly identifying with brands instead of just products. This equates to increasing customer loyalty, or adversely, increasing customer isolation. Similarly, based on the data that these connected products are collecting, businesses have the opportunity to know their customers on a deeper level. How are your customers using your product? Harnessing this data to make meaningful improvements for the user will be key to customer retention.

5. Reduction in Human Error

One of the most exciting use cases of a connected product is the ultimate mobile device - the car. Google’s autonomous vehicles have generated plenty of concern over safety and, rightfully so, the thought of a robot taking over your commute is scary to many. However, in the over 700,000 miles they’ve logged, the only time Google’s autonomous cars were in an accident is when human drivers were at fault. So what? Google’s car is a better driver than you.

6. New Skills Required in the Workforce

An evolving workforce will be the backbone of creating new product offerings. As these ecosystems of products grow, businesses will need an increased focus on hiring engineers, designers, and data scientists. A basic understanding of technology will be non-negotiable for all roles, changing the barriers to entry at companies. And, from a sales perspective, sales reps will need to understand the interconnectivity of your products to be able to sell the full breadth of your offerings.

7. Change in Overall Strategy

Similar to our consumer lives, you’ll have to choose a side when you start connecting devices. In order to reap the maximum benefits of the IoT, you will need to start committing to one ecosystem. Internally, you’ll need to determine how your employees can work most efficiently. For example, here at Solstice, our employees work off of Apple laptops. The easiest way to present to client? From a Mac using AirPlay connected to an AppleTV. Externally, you’ll need to decide the best way to build your brand, and the integration points that add the most value for your consumers.

8. Human-centered Processes are King

Conducting user research surveys and designing with their daily habits in mind is the best way to achieve the maximum adoption rate. Your new system should not only complement your pre-existing one, it should augment it. Users need to see the value in the new products and services you’re offering. Recently, Apple introduced HealthKit, the new digital platform for medical services that we never knew we needed. To date, health device manufacturers have targeted consumers who are either fitness-focused or chronically ill. However, between these two extremes sits a large and often overlooked population who seek better information to effectively manage their health. What we’re finding is that pursuing a human-centric model often means targeting your average consumer and Apple has capitalized on this space.

As the saying goes, with great power comes great responsibility. As noted above, connected products are offering companies more data than they’ve ever had before, and companies know more than consumers likely feel comfortable with. So, companies have to build the trust of their consumers by maintaining their privacy, and they need to know both what to secure and how to secure it. The winners in connected products will need to build customer loyalty around their brand and suite of products and services, and this begins with gaining user trust.

10. Connected Products are becoming a Standard

Interconnectivity between a company’s products will ultimately affect the bottom line. Shareholders and analysts are beginning to evaluate companies based on their ability to integrate connectivity into their businesses and product lines. This is best evidenced with companies like Amazon and Tesla, with their respective connected logistics and connected cars. These companies are trading at above average valuations. So, even before consumers feel a need for connected products, the market will require this of businesses.