7 Things We Learned About IoT Smart Products in 2017
As we embark on 2018, I wanted to stop for a moment and take a look at some key disruptive technology trends emerging over the last 12 months. Here are 7 of the most significant which are certain to shape the year ahead.
2017 was a turning point for mass-scale consumer engagement via product packaging. This came about from 2 key developments:
- Apple enabled QR codes and NFC support in iOS 11. Alongside QR code support in Chrome, now up to two billion devices can natively scan and interact with products, taking a huge amount of friction out of the user journey and removing one of the biggest inhibitors for brands to digitally-activate their products.
- Consumer behaviors have now changed dramatically thanks to the likes of WeChat, Facebook, Spotify and Snapchat all promoting ‘social codes’ and physical-to-digital engagement. 8 million snapcodes are scanned each day and over 800 million WeChat users scan QR codes in their daily lives to pay for goods, get information and interact digitally.
Blockchain was widely promoted as the ‘solve-all’ solution for provenance, trust and transparency. Startups like Provenance.org and Ripe.io tap into the current zeitgeist of consumer desire for transparency and accountability.
But the maturity and scalability of Blockchain technology remains in question: In one year, Bitcoin mining and transaction processing consumed the same amount of power as Ireland. Many will put this down simply to ‘bumps on the road’.
EVRYTHNG joined the Blockchain Research Institute, and published a white paper detailing how Blockchain works effectively in the Internet of Things. We’ve also developed a PoC which we’ll be rolling out in 2018.
Away from Blockchain, we saw drives towards transparency everywhere. The Sustainable Apparel Coalition (SAC) collaborated with EVRYTHNG to make provenance and sustainability information on clothing and footwear items directly accessible to consumers through the products themselves. And working with the Grocery Manufacturers Association (GMA), EVRYTHNG and SmartLabel now provide detailed product information for food and beverage products in the US. In early 2018 we’ll be rolling out a recycling scheme with Unilever as part of a European project whereby consumers can recycle product packaging and earn rewards.
In 2017 Amazon’s vice-like grip has squeezed retail and big brands even tighter. Over 5,000 stores closed across the US through the year and as Amazon gains more and more data on consumers buying habits, brands have in turn focused on building their own Direct-to-Consumer capabilities to compete.
Physical products have emerged as the crucial asset that manufacturers can control and leverage as the ‘brand in the hand’ – the trigger for an online transaction or interaction, and a direct relationship between the brand and its customer or consumer.
Nike, as an example, is forecasting their DTC business to grow from the $6.6 billion generated in 2015 to $16 billion by 2020. Under Armour are applying similar focus.
Rebecca Minkoff worked with EVRYTHNG to launch new ranges of digitally-enabled accessory products that connect directly with consumers to offer new experiences and content. This provides CRM data, new sales and brand building through their products.
Other brands will follow in 2018 as their focus narrows onto gathering direct 1st party data on consumers to furnish vital these CRM initiatives. They will increasingly redirect marketing spend from digital media to their DTC initiatives to gather this data and close the loop of measurability in marketing dollars spent and consumer relationships and sales acquired.
End to End visibility is the number 1 supply chain challenge facing global consumer product brands, hindered by the fragmented nature of supply chains, silo’d information and data locked-up in legacy systems. This was the takeaway from a survey we conducted in 2017. And a glance at industry data paints a worrying picture on the impacts of this:
- Fulfilling omnichannel is costing a whopping 18 cents for every dollar of revenue.
- Retailers are losing are $1.1 trillion each year due to overstocking and out of stocks.
- Counterfeit is costing the apparel industry 9.7% of revenues (and the figures for Wines and Spirits and Cosmetics are equally troubling.)
But the IoT offers a solution. Products can now be followed as they move through the supply chain. With a digital identity in the cloud, product data can be easily aggregated from many different role players – from manufacturing, to distribution, to retail, to consumer – providing a full picture of the product journey and analytical insight. EVRYTHNG has worked with several global consumer brands during 2017, implementing traceability on tens of millions of products. We’re also now combining machine learning with supply chain product tracking data to identify counterfeit and integrity issues and we expect this to grow substantially in 2018.
2017 also saw the maturing of Low-Power WAN technology – making it possible for battery-powered sensor devices on pallets or cases of products to provide real-time tracking of location and state. EVRYTHNG teamed up with Sigfox, The Things Network and Things Connected to provide standard integrations for how any device could report data automatically to the cloud. This technology makes it possible to track inventory in real-time, redirect shipments as they’re on the road, and monitor quality of product in transit.
EVRYTHNG pioneered the concept of every product in the world having a digital identity on the Web – what we call ‘Active Digital Identities’™. Last year ‘Digital Twins’ entered mainstream vocabulary, with Gartner defining it as: “a dynamic software model of a physical thing or system.” As we enter 2018, EVRYTHNG is managing close to a billion Active Digital Identities, each one representing a physical product in the real world, accessed via standards-based Web APIs. The digital identity connects a product to the Web, which is the world’s application platform and makes it possible for products to participate seamlessly in the digital application ecosystem.
Another important step concerned product coding. As the global industry product standards organisation, GS1 serves two million companies globally. This is how every point of sale system in the world is able to understand a barcode. In 2017 GS1 and EVRYTHNG established an important partnership to give an Active Digital Identity to the physical GS1 identifiers on packaging (think barcodes, QR codes or RFID tags).
This is a crucial step for the large scale digitisation of consumer products. The combination of GS1 standards-based coding with EVRYTHNG digital identity means that manufacturers can use one tag or code on their product packaging to drive a multiplicity of applications, including point-of-sale, consumer engagement, authentication and supply chain management. 2018 will see this model rolled out around the world, with packaging service provider, point-of-sale and application services integration.
Connected clothing took off last year. Levi’s experimented with their smart jackets. Nike went a step further with the launch of their connected NBA jerseys. And as mentioned, Rebecca Minkoff brought out their new Fall range of smart handbags to give consumers style tips, recommendations and location-specific offers.
While these examples focus on consumer engagement, in 2018 we’ll see applications expanding to include brand protection, self-checkout and real-time inventory management. EVRYTHNG’s strategic partnership with Avery Dennison, bringing digital identity and digital application capability to billions of apparel and footwear products is a crucial foundation to these developments.
The World Economic Forum estimates that the Digital Economy will reach $100 trillion by 2025. More specifically, the global IoT market is projected to grow from $2.99T in 2014 to $8.9T in 2020 (Statista) and Bain predict that the B2B IoT sector will generate annually more than $300B. These are huge numbers, demonstrating growing momentum and uptake.
In 2017, we witnessed a convergence and integration of the four major technology streams AI & Machine Learning, IoT, Big Data and Blockchain. The boundaries between them will blur as they interplay with each other.
EVRYTHNG is generating big data from close to one billion individual product items, applying machine learning to drive predictive applications and intelligent response to supply chain and product usage events, and working with Blockchain technology to authenticate product transaction and provenance data. These technology areas are likely going to dominate enterprise investment in 2018, central to the digital transformation strategy global product manufacturers and brand owners are pursuing.
Product digitization will be at the core of those transformation strategies as brands use their physical products to connect directly with their customers, transition to business models with services linked to their products, and apply real-time intelligence to operate their businesses with more efficiency.
We’re excited about what is to come – it is set to be an exciting year ahead. Wishing you all a happy and prosperous 2018!
If you want to talk about how product digitization could transform your business, we’d love to hear from you! Email us at firstname.lastname@example.org