The Right to Experiment

Play, try, fail, learn and find the unexpected solutions for your challenges of tomorrow

Smart products do not have owners

Smart mirrors, smart thermostats, smart houses, smart contact lensessmart bikes and smart cars. Did you ever ask yourself why we call our products smart? Are they able to think? Do they have an IQ higher than 120? Or is it just a statement about the inventor?

Smart products, interesting concept. Let’s google for a definition: smart products combine a physical product with additional services, where these services are often enabled via information and communication technology (ICT). The best example is the phone, moving in 20 years from “dumb”, via mobile to smart phone, kick starting the Internet of Things in our everyday routines.

Almost without noticing, consumers adapt rapidly to two significant changes:

  • services differentiate more than products
  • use will replace own

Services differentiate more than products

Physical products offer traditional experiences to consumers. Most people know the product-capabilities at the moment they buy it. Digital services are able to offer unexpected experiences to consumers after buying the product. This makes digital services more important, reducing the role of the physical product to just another customer touch point.

From products to cloud-servicesWe start calling a product smart when it is able to anticipate on data. This data can be the time, your location, your agenda or any other source that give information about your environment, behavior and needs. The service is just the fulfillment of your need at that moment, location and job that you want to do. The digital infrastructure that enables you to use these services at the moment you need them and regardless where you are is something that we call the cloud.  As example, walking in a city during lunch time, where can I find a lunch room that offers my favorite lunch? Not so long ago, you needed to own your “dumb” copy of a Lonely Planet travel guide, now your smart phone is able to provide an answer, using a service from the cloud.

Use will replace own

Products are owned by customers, services are used by consumers. We are still completely used to the old idea that you have to own a product to fulfill your need. Why do you need to buy a lamp when you need light? Of course, there are already well-known business models that move away from the owning-concept (e.g. leasing a car). Digital services will drive the concept of pay-per-use in our daily life big time. As the owner of the smart phone, do you feel yourself also owner of all the (almost free) capabilities that are offered via applications in the AppStore?

ICT itself is a good example. Driven by cloud developments, you do not need to own your data-centers and software, ultimately you just want to use it only at the moment you need it. Owning means that you need to make significant investments before using it, increasing risks due to our ever faster changing world. Owning reduces your adaptive capacity. Using means that you pay for a service at the moment you need it, avoiding investments and reducing risks.

What if your products become really smart in future?

Digital services require high-speed of change in your business, being able to cope with ever-increasing customer expectations and competitor capabilities. This means that companies have to increase their adaptive capacity to stay in business. Starting point for this is a continuous testing of their business models, inclusive the willingness to change existing business models drastically when needed.

Is your company still focused on selling a physical product? Is there already a discussion on how to make it smart? How is it able to produce and consume data with its environment?

What if all your everyday “dumb” objects are connected and able to sense their environment (via RFID) and able to interact with other objects? What if your smart house communicates “found new visitor” and asks you via your smartphone if the coffee-machine needs to be started? What if the next generation products will be really smart and are really able to learn from and adapt to their context? That is where big data concepts – transforming data into wisdom – are being developed today to create real smart services for tomorrow.

Is your product still considered “dumb”? Then you better start thinking how to make it smart. And forget that your customers still want to own it.

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This entry was posted on April 1, 2012 by in Trends and tagged , , , .

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