Mike Owen looks at how 5G roll-out and IoT device connectivity will open new sales and marketing opportunities in the Consumer Electronics sector.
Due to the proliferation of wearable devices and technology, smart TVs, connected cars and household appliances, beacons, and other technologies, the consumer journey in the future will increasingly look complicated. Consumers can start and end their shopping experiences on a mobile platform, in store or online. It is a fluid movement that will be even harder for retailers to keep up with or predict because it will include a growing number of devices and touchpoints.
Increased connectivity and technology usage in the Consumer Electronics sector through IoT, AI, robotics, AR/VR and other technologies will transform the industry, and 5G network roll-out will be at the heart of it. Devices will be able to provide essential data from sensors faster, give new insights, boost efficiency, and allow companies to make more informed decisions.
Real-time applications, such as voice, video and eCommerce connectivity, have always been sensitive to disruptions. An unstable connection can result in jitter, latency, and packet loss that translate into obvious performance issues such as delays, echoes, slow checkouts and lost sales. 5G will prevent these disruptions by enabling users to stay on the same cellular network throughout the journey.
Growth in mCommerce and subscription-based eCommerce
Mobile commerce will also be boosted by technological innovations made possible by the 5G cellular standard and its massively increased bandwidth. 5G will even allow data-intensive applications to be integrated into online shop systems, without impacting the page load time and consequently the customer experience as well.
Such applications mainly include high-resolution video content; virtual reality and augmented reality; and playful content to gamify the mobile shopping experience.
In addition McKinsey believes the exponential growth in subscription-based eCommerce will be a natural result of improved service capabilities of streaming services and connected devices. Subscription-based eCommerce is a business model that allows customers to subscribe to products or services they need on a recurring basis which can increase customer lifetime value significantly. The effect of this will be to improve the customer experience dramatically, using data which can be obtained from connected devices.
Increased leverage from IoT applications
Information from IoT applications based in consumer products tell organisations what’s really happening, rather than what they assume or hope is happening. And the data they provide is precious for analytics and AI systems, which can identify patterns of use or behaviour that were previously hidden. As a result, the IoT market – which includes hardware, software, systems integration, and data and telecoms services – is expected to grow to $520bn by 2021, according to a Bain and Company report.
The use of IoT to enrich a direct communication with customers will be essential for brands to improve product experience and brand engagement. Data can be used to send personalized communications to customers. Product information could include tips and methodologies for using other features of the product or to find out which features of the product customers use most.
Data can provide the most valuable insights into the interests of customers. As a result, companies will be able to suggest other products and services that may be similar or complementary, improving the customer experience.
As connectivity speeds increase, so too will the number of wireless users and devices across the globe. This means increasing data collection as mobile connectivity reaches deeper and remote areas – and further into peoples’ homes with the spread of the IoT. As a result, not only will 5G connect more people and devices, it will also collect higher quality, hyperlocal, and granular data. This will give marketers more opportunities for better personalisation, as well as the ability to understand customers’ needs in real-time. The wider bandwidth will also mean stable AR/VR and video applications will be an acknowledged new output channel format over which to sell
Brands will be asking how can they further leverage the data existing within their internal systems to power external applications to improve supply chain efficiency; provide consumer transparency; deploy electronic labels and traceability data; and improve consumer experiences and more. They need to realize that the product information that employees have access to is equally valuable to customers if not more so. The purpose of IoT-connected products is to convert real-time data into actual business value. Brands will need to manage large repositories of data to make sense of it and expose it across all channels. In order to efficiently handle such monumental problems organisations are turning to Product Information Management systems such as Qliktaq or Sales Layer to connect PIM solutions and IoT applications with API Connectors to expose valuable product information to customers across all touchpoints.
The move to D2C channels
The results of connectivity in Consumer Electronics are bringing about changes in the way we shop and the opportunities that open up for brands and manufacturers. As an increasing amount of ‘value’-based data flows back to brands from sensors based in products, so they can use the data in different ways to innovate new products or differentiate communications. D2C allows companies to have total control over these factors, and at the same time a greater capacity to prolong this positioning without friction throughout its journey. Brands are beginning to see the benefits of building new direct sales channels with their consumers, after years of watching the boom in online and mobile eCommerce shopping, based purely on product spec. and price. New generations are looking for a more personalised product based on ‘purpose’ and this will play a fundamental role in the growth of D2C. These consumers are more environmentally aware than ever, and are looking to commit to brands that are not only greener and more sustainable, but also socially aware.
Direct-to-consumer means owning the entire customer relationship and leveraging all the data to create unique, personalised, more efficient, and highest return experiences. In turn, D2C strategies are already enabling the development of new recurring revenue streams through subscriptions, new product launches and customised tactics that lead to user loyalty much more efficiently than other channels can.
By eliminating intermediaries, brands are able to reduce distribution costs and gain greater control over their profit margin.
Opportunities of using ‘value’ data to be first to market
By taking advantage of new data and information, so brands will be able to drive new product innovation and development through to new ways of communicating information to the customer. In this way they will be able to differentiate their product strategies in more personalised ways, which up until now has been a stumbling block for many Consumer Electronic brands.
Brands are now entering the field of digital performance, where being first to market and getting global control of all channels, branding and conversion efforts under one funnel will be the key to their growth.