IoT for Manufacturers Could Throw More Than just Things out of Whack
At Insite we talk a lot about the need for a unified commerce environment. For manufacturers, that is beginning to mean a lot more than integrating online and offline customer experiences, and synchronizing with enterprise systems. As smart factories become a reality, and devices begin to deliver more data than we’ve ever seen, IoT for manufacturers is causing specific, dramatic disruptions. In fact, we think it could be one of the biggest disruptors 2018 has to offer where two very major components of eCommerce are concerned: customer sales, and customer service.
According to McKinsey & Company, the economic impact of IoT applications within the factory environment alone will be between $1.2 to $3.7 trillion by the year 2025. As early-adopter manufacturers begin to implement smarter factory “objects” the expectations of the customer will accelerate even faster. In fact, some IoT impacts are already accelerating customer expectations. Take, for example, the need to provide logistical efficiencies like immediate drone delivery for marketplaces, or the experience of building a custom, personalized product in real time. Manufacturers need to begin planning for the IoT in 2018 to stay competitive not only within their markets but within the desired customer experience as well.
Some of the earliest disruption to come will be in the area of customer support. We’ve already discussed how price transparency and aspects of digital transactions can drive lead generation and personalization of the customer experience. By the end of 2017, research group Gartner says we will have 8.4 billion connected “things” this year. Many of these “things” – electronics, sensors, and software for example – are part of the commerce ecosystem for manufacturers. Already, many companies are using AI and IoT to create what RFID Journal calls “predictive failure models” that schedule preventative maintenance and find issues well before they become problems. Manufacturers with the ability to deploy AI-based processes can easily be viewed as the more reliable option.
It’s important also to note that Pew Research has reported more than 70% of customers stop doing business with a brand due to a poor support experience. As connected maintenance and other customer support processes become more sophisticated due to AI and IoT, the definition of “poor” may become defined as those manufacturers who are simply “disconnected.”
According to a Verizon 2016 report, 76% of manufacturers “early movers” say that IoT is increasing insight into customer preferences and behaviors. As more of the manufacturing commerce cycle moves to a digital customer experience, the ability to personalize the customer experience becomes critical both as a competitive and an efficiency factor. Digital interactions offer scores of data about the past, present and future behavior of customers. IoT for manufacturers provides even more data from personal interactions, in many cases from devices we’ve never had the chance to capture before. Personalization is the biggest opportunity to use that data to capture new customers and retain them. As manufacturers become adept at hybrid sales models where some customers are direct and others are delivered to valued distributors in the form of leads, IoT data will become the competitive edge where personalization is concerned.
Perhaps one of the most exciting disruptions from IoT for manufacturers is that they can begin to experience real-time engagement. Instead of waiting for data to be crunched, many manufacturers are already gaining information in the present that can be used for re-orders, service requests, lead generation, and many other pieces of the complex B2B commerce landscape.
At Insite, we often talk about manufacturers needing to think “beyond commerce” to a unified experience where the B2B commerce can meet its true goals and really transform an organization. If planned well, IoT for manufacturers provides the most exciting disruption that will not only lower costs and increase efficiencies, but provide manufacturers the ability to enhance the experience of every customer they meet throughout this unique, complex buying journey.