IoT, Digital Transformation, and the Consumer Experience
IDC recently published a report entitled, IoT and Digital Transformation: A Tale of Four Industries, which takes a look at how digital transformation is at the heart of many business strategies today, including in Consumer Products, and considers why IoT is rapidly emerging as an essential element of generating innovative customer and consumer experiences.
In the report, IDC shares research showing that 33% of industry leaders will be disrupted by 2018, and that the urgency surrounding this disruption potential is heightened by the threat of digitally enabled competitors. Because a starting point for digital transformation is innovating the customer and consumer experience, the report points out that companies are now pressured to transition traditional operating models from mass-market approaches to more consumer-centric models.
The report also explains why IoT is considered essential for helping to generate new and innovative customer and consumer experiences and why worldwide organizations consider IoT as strategic (58%) and transformational (24%) to their business.
IoT brings a multitude of benefits
To understand how digital transformation and IoT are affecting businesses today, IDC took an in-depth look at several industries, including Consumer Products. Here are a few highlights:
The CP industry across all segments, including food, beverage, home and personal care, durables, fashion and even agribusiness, all place a premium on consumer-driven product innovation. As a result, developing a deeper understanding of consumer needs, preferences, behaviors and consumption patterns can be leveraged directly to improve consumer experience. Collecting all of that data and leveraging it to generate consumer and customer insights and respond to customer and consumer needs in moments of opportunity is something that’s increasingly being enabled by IoT.
However, industry segments define IoT in different ways. For instance, some companies are primarily focused on connecting with consumers in order to influence their choices, while for others, it’s all about connected products and how to service them and sell related offerings. For others still, the primary emphasis is on efficient operations and how to improve demand forecasting and service levels.
Potential that can’t be ignored
For the Consumer Products industry, one thing is certain. IoT will help to increase productivity and effectiveness. For instance, IDC predicts that by 2018, the proliferation of advanced, purpose-built analytic applications aligned with the IoT will result in 15% productivity improvements for manufacturers.
Another prediction says 60% of Global 1000 companies will integrate IT and operational technology (OT) at the technology, process, security, and organizational levels to fully realize the value of their IoT investments by 2018. With potential like this, IoT-related opportunities will likely soon emerge at the forefront of investment strategy and prioritization discussions.
The bottom line? Better performance
IoT investments will benefit consumer products in many way, from increased capacity on production lines and easier product customization to more effective and timely innovation and tighter links between supply and demand. All of these benefits collectively will help drive improved financial performance.
There is a clear bottom line message here: in this industry, IoT is about the consumer and customer experience. Therefore, to reach their aspirational goals, consumer products companies must ensure that IT and business process investments are prioritized over more pressing and definable business priorities.
To read more about IDC’s insights on the IoT for this industry and others, download the full report, IoT and Digital Transformation: A Tale of Four Industries here and visit Consumer products: Reimagined for the new economy.