Beyond the device: Monetizing the intelligent ecosystems behind connected products

From cars to wearables, connected products are an integral part of our daily lives, to the point that 67% of consumers consider them a necessity, a recent Capgemini Research Institute study reveals. And the number of connected devices globally is expected to double between 2022 and 2028. However, the true value of these products isn’t in the devices themselves, but in what they enable.

What’s everyone saying?

• The popularity of connected products stems from the unprecedented value they offer customers. This value can be delivered directly on the device, as with Epicore Biosystems’ connected patches, which analyze users’ sweat to deliver insight on hydration, nutrition, or stress. It can also be provided through platforms, with connected devices serving as gateways: Samsung Electronics’s new AI-powered fridge-freezer lets users know when supplies are low, suggests meals, and provides a view of the fridge’s contents on smartphone.

• What do these products have in common? They trade data for valuable knowledge or personalized advice.

What do we have to say?

• A Capgemini Research Institute’s recent study confirms consumers’ enthusiasm for connected products: a third use them around the clock, and 51% say they offer insights into their routine and better self-understanding. But the most striking aspect of this connected lifestyle lies beyond the consumer side – it’s the new opportunities it creates for businesses.

• Companies can leverage data from these products to generate new value and revenue through digital technology, AI, and data-driven analytics. For instance, an object as mundane as a toothbrush can now offer personalized insights on how to improve oral health thanks to data. Better yet: connected devices can now form a network of interconnected products, providing an intelligent, rich, and seamless customer experience. A practice business can – and should – capitalize on.

• In short, devices are becoming gateways to an “intelligent ecosystem” brimming with opportunities. To seize them, companies must redefine how they design, distribute, and support products, focusing on selling experiences rather than just products. Our study reveals consumers would welcome this shift.

• This intelligent ecosystem is also transforming manufacturing. Connected products are becoming vital to the operations of many Smart Factories, a key part of the Intelligent Industry framework. And factory floor systems are shifting from isolated operations to AI-driven, large-scale, unified processes that are also increasingly interoperable.

• In fact, lack of interoperability has been one of the key obstacles standing in the way of this intelligent ecosystem. Integrating all systems will thus be crucial for scaling and taking solutions beyond localized initiatives. That is precisely the goal of Margo, the open source-standard created by Capgemini and a consortium of industry players (ABB / B&R Industrial Automation, AVEVA, Microsoft, Rockwell Automation, Schneider Electric, and Siemens). This standard allows vendors to participate without needing specialist knowledge of others’ infrastructure.

• The opportunities born of this intelligent ecosystem also bring new risks and consumer concerns, starting with sustainability: our research shows 50% of consumers prefer connected products with a smaller carbon footprint, even if they are slightly more expensive.

• Connected devices also pose significant privacy risks, of which consumers are aware: only 36% of them are satisfied with data privacy, and 62% are concerned about personal data being shared with third parties without consent. Rightly so – ovulation-tracking app Premom shared sensitive health data with third parties without informing users, causing outrage.

Who’s doing it right?

Purina Mills, LLC has leveraged connectivity to offer original new value with its Petivity Smart Litter Box Monitoring System,  which can track pets’ weight loss and detect emerging health concerns or conditions. A physical device placed under the litter box analyzes pets’ bathroom behavior, sending data to the cloud, where AI algorithms translate it into personalized insights, which consumers can then view on a mobile app. Purina partnered with Capgemini’s reinvention and experience experts – frog, to build a cohesive system where hardware, software and AI work together to create a pricing and operating model that delivers new value to Purina.

What’s the bottom line?

• To harness the value of intelligent ecosystems, companies need consumers to share their data willingly. This requires strong privacy assurances and a clear value proposition; in other words, companies must offer benefits that make customers willing to both pay for the product and share their data. For example, customers will share their location with a smart thermostat if it adjusts their home temperature when they are away and anticipates their return, saving them money and ensuring optimal comfort. Conversely, a large majority (86%) of consumers remain unwilling to share financial data, even for health purposes.

• Addressing customers’ privacy concerns can also open new opportunities. For instance, companies can offer subscription-based services to audit and guide consumers on the privacy standards of their connected devices. This can include a centralized portal providing an overview of all devices and the data they access, improving transparency and security.

• To meet customer demands, connected product providers must also prioritize sustainability. For now, only 22% of organizations focus on sustainability in product design, and only 17% emphasize circular design (reducing, reusing, repairing, refurbishing, remanufacturing, and recycling). And e-waste is shaping up to be a major issue.

• Conducting a data-powered life cycle assessment of intelligent products’ footprint – from raw material extraction to disposal – can help organizations implement effective changes in this area. Reorganizing supply chains to ensure a steady supply of recycled materials is another solution, as is promoting recycling among consumers. Through its Tech Refresh & Recycle program, for instance, Dell Technologies allows users to recycle old systems, with 26% of the returned equipment going towards manufacturing refurbishment.

Looking for more?

• Find out how we partnered with leading hearing aid solution provider Phonak to harness the latest technology and healthcare developments in order to make life easier for people with hearing loss.

• Curious about the current revolution in manufacturing? Our experts Brian Bronson, Sheetal Chawla, and Lisa Mitnick dive into the meaning of Intelligent Industry.

• And speaking of Intelligent Industry, meet Design + Industry, the award-winning Australian product design and development consultancy due to join the Capgemini family soon. At the forefront of intricate medical, scientific, and wellness devices since 1987, D+I will help us grow our leadership in Intelligent Industry, notably in the development and delivery of products from initial concepts to production.

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And you, what are you saying?

How are you and your organization leveraging the current connected revolution? Share your thoughts in the comments section!