Smarter by the Minute: The Rapid Rise of a Bespoke Economy (Pt 2)
The convergence of IoT and AI is no longer a future-state fantasy – it’s a powerful present-tense reality.
In Part One of this series, I looked at how brands are locked in a battle for insatiable consumers’ attention, spend, and loyalty – and how they’re increasingly turning to IoT and AI to meet rising demands for bespoke products and experiences. While it’s true that connected devices and intelligent computing are quickly becoming table stakes for companies to remain relevant, consumers aren’t the only winners in this equation. As always, disruption creates opportunity for organizations who are unafraid to step into the fray. Unrelenting customer expectations are driving unprecedented opportunities for business to leverage AI and smart products to increase revenue, decrease operating costs, and drive profitability while delivering better-than-ever experiences to the modern consumer. Considering the exponential tech growth curve, companies who make the leap now stand to reap significant rewards and gain a competitive edge that leaves laggards struggling in their wake.
Smart Businesses See Opportunity in the IoT/AI Imperative
The convergence of IoT and AI is no longer a future-state fantasy – it’s a powerful present-tense reality. Computing power is growing exponentially, connectivity is appearing in everything from refrigerators to running shoes, and billions of gigabytes of connected data are being generated each day. It’s an inexorable force driven forward by consumers and competitors alike. And with more connected devices than humans on the planet, IoT and AI are becoming bare necessities of a viable product strategy.
Smart devices already hum along in the background of our daily lives, autonomously tracking our activity levels, regulating our homes’ climate, reordering our favorite brand of coffee. We converse with chatbots as we shop online, watch the shows that Netflix recommends for us, trust Alexa’s answers about ancient history and today’s best restaurants.
Personalized experiences, anticipatory services, and actionable insights are becoming the standards of excellence for businesses looking to stay ahead in today’s competitive environment. The practice of marketing a one-size-solution to everyone is quickly dying, replaced by hyper-personalized 1:1 marketing. 80% of consumers say they are more likely to do business with a company if it offers personalized experiences, and consumers who believe companies are doing very well at offering those personalized experiences shop three times more frequently than those who are merely satisfied. Incorporating AI technology is going to be the key way for marketers to continue creating value, delighting customers and outsmarting the competition.
Personalized experiences, anticipatory services, and actionable insights are becoming the standards of excellence for businesses looking to stay ahead in today’s competitive environment.Jason Vazzano, CEO and Co-Founder, Vectorform
A new competitive reality lies beyond shifting consumer expectations. Falling costs are fueling rising opportunities for businesses to gain entry at the early tail of the growth curve, distinguishing themselves in the less-crowded field of early adopters. 63% of executives have already introduced new or updated products or services that incorporate IoT, and 84% say their IoT networks have grown over the past three years, with just as many expecting additional growth in the three years ahead. These investments are yielding unprecedented volumes of real-time data—but volume does not equal value. To extract meaningful, actionable insights from IoT systems, companies are investing in AI at a rapid clip. Gartner’s 2019 CIO Survey notes the number of enterprises implementing AI grew 270 percent in the past four years and tripled in 2018 alone, propelling the technology from a rarity to a business reality. The takeaway? “If you are a CIO and your organization doesn’t use AI, chances are high that your competitors do and this should be a concern.”
Encouraged by the results they’re seeing, leaders are doubling down and deepening their commitments to AI and IoT. PwC’s new survey found that a full 20 percent of executives said their organizations plan to implement AI enterprise-wide in 2019 – a tremendous step that scales far beyond function-specific AI trials. As these leaders pull forward they are staking claims in the consumer marketplace—and the highly competitive AI labor market—that will make it more difficult for laggards to ride in their wake or catch up.
The time to act is now, and mere “adoption” won’t be enough to ensure success in the fast-changing market. Organizations that win will be those who not only implement IoT and AI but leverage the tech’s disruptive powers to create smarter organizations, more nimble supply chains, and bottom-line profitability.
From Adopting to Adapting: The Dawn of the Bespoke Business Model
Driving customer visibility or real time customer transparency throughout your operation will drive significant organizational agility and reduce operating cost – but it doesn’t happen smoothly or overnight. The rapid growth of AI and IoT inevitably brings disruption, and most companies—at all points of the adoption curve—acknowledge that fundamental change is coming fast. A recent MIT survey found that nearly one-third of executives say AI solutions have already led to business model changes in their organization, and the majority of ALL organizations, across maturity levels and industries, expect AI to drive changes to their business models within the next 5 years.
The first wave of disruption typically follows the path of least corporate resistance: driving efficiencies and delivering cost savings. It’s no surprise that 3 out of 4 executives say they plan to use AI to automate tasks to a large or very large extent in the next three years. But despite the persistent hype around a “robot apocalypse”, human layoffs aren’t where the majority of operating cost reductions truly lie, and companies who attempt this short-sighted approach aren’t likely to succeed in the long run. In fact, 63% of business leaders expect that AI will result in net job gains for their business over the next 3 years, and almost all (97 percent) intend to use AI to enhance human workers’ capabilities.
As they engage IoT and AI to work alongside humans, organizations are being transformed from the inside out. Rigid, linear processes and corporate structures simply cannot keep pace with the modern demand for highly personalized experiences. New-found visibility into real-time customer data is driving significant organizational agility and reduced operating costs through processes, products, and supply chains that can flex on the fly, react to real-time data, and reinvent themselves over and over to meet the needs of what is happening in the moment. In this sense, the bespoke economy isn’t just about user-designed products and services but also about the rise of a bespoke ecosystem within companies themselves.
Are you ready to leverage IoT and AI to disrupt your company and create customer experiences that win in the market? That’s the question Vectorform is answering with clients like Jeep, DTE Energy, SharkNinja, and more. If you’d like to be part of the conversation, connect with me on LinkedIn or contact our team of experts.
Interested in learning more? Let’s start a conversation.