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Consumer and commercial demand for connected products has risen steadily by 15% since 2000 and is projected to grow another 14% by 2027 according to projections by IoT Analytics Gmbh. Features that were once considered nice to have or premium functionality are now table stakes. This trend indicates a time sensitive opportunity for manufacturers to forge new avenues of revenue generation. It is therefore crucial for manufacturers to continue pushing the envelope of capabilities the market has come to expect, depend on, and demand more of in the future.
Perficient recognizes the value of thought leadership when competing for market share in a growing market. To provide key insights that would inform connected product manufacturers’ strategies going forward, we surveyed end users and manufacturers of connected products to discover the factors impacting their sales, user behavior, and future trajectory. Over 1,300 responses across industries, departments, and seniority levels reveal intriguing commonalities and discrepancies. We share in this piece some of the insight we gained from researching our survey returns.
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AI & ML is Where Manufacturer, Consumer, and Commercial User Interests Converge
Currently, emerging innovations enable completely new ways of leveraging connected products. Analysis of our results across manufacturers, commercial users, and consumers revealed that AI & ML are recognized by all groups as important, particularly with a market agreement on healthcare, home, and automotive automation and monitoring.
AI, ML, and 5G technology enable the next era of capability extending well beyond connected thermostats and remote start automobiles many of us have adopted already. Imagine an AI chatbot on your screen that can answer questions about how much gas money you should budget for your next road trip based on your route and vehicle mileage, fuel efficiency, and localized fuel costs by your designated octane rating.
Differing Perspectives on Interoperability
Our research uncovered a surprising gap between manufacturers and end-users in the perception of product interoperability within connected ecosystems. There was a strong proportional alignment among all manufacturer respondents on their products connecting “very well” or “well,” while a disproportionate number of responses from the market indicate a potential disconnect when it comes to products that connect “somewhat well.”
Knowledge is power. One of our hypotheses posits that the disconnect between manufacturers and their end users is lack of awareness of the connected features already enabled in their current devices. This not only impedes demand-side innovation but also inhibits adoption of new technologies because upgrade costs may be perceived as “not worth it.” This stimulated our curiosity to investigate the considerations our survey results indicate impact adoption.
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How Does This Affect Connected Product Strategy?
The above insights only cover a few of the many key takeaways that our team was able to derive from the research, but even diving into these alone will help uncover a wealth of opportunity. The results from our research highlight the clear need to take a step back and assess more deeply which areas of connected product innovation require more investment, such as rethinking data collection and utilization, product experience, and unlocking new business models.
Opportunity for Improved Product Experience, Data Strategy, and Revenue Streams
There are many opportunities to improve connected product functionality, usability, and transparency. For example, a companion app can make it easier to change settings and improve personalization from the app instead of directly interfacing the product. The app would also enable remote monitoring, which can enhance safety and convenience for consumers who want to check in on their property or devices while away or get alerts for hazards like fire, carbon monoxide, open doors and windows, or air quality-related issues.
Not only should manufacturers consider how connected capabilities and opportunities can improve the user experience but also look internally about how they’re organizing and utilizing incoming data from those products. For example, automotive OEMs can create automated, cloud-agnostic data processing platforms that support that help improve the process of making cars by studying telemetry data driver behavior and machinery functionality insights. In collecting and analyzing this data, manufacturers can then use it to inform new product features or improvements to issues like design flaws or poor user experience.
Ultimately, manufacturers should look closely at exploring new revenue streams using their improved data strategy and interfaces to increase profitability and enhance customer loyalty. Making some features freely available and upgrades available through subscriptions, for example, is an opportunity to improve user experience and customer retention while bringing in recurring revenue.
Do these insights resonate with you or ignite curiosity? Download our guide outlining the research and reach out to us today to schedule a workshop or briefing to collaborate on how all of our insights and more can inform your connected products strategy.
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