Realizing the new value potential of the “Internet of things” and the wearables wave revolution
Value is often attributed to the financial aspect of what an object or experience may mean to an individual or a business enterprise. Indeed, a marketplace may be defined by something that exchanges value between participants who share a common understand of its mutual value and want to trade.
Value can have intrinsic and extrinsic properties, its material functional value and those that we could attribute to its more aesthetic and emotional qualities – what we might the experience of value. The definition of worth is an interesting perspective in that reminds us that value may not always been an absolute set up a market or a sovereign policy. A picture or other personal artifact may have high worth to an individual but little monetary value. The principle is that both value and worth are valid in determining the overall meaning of value of the objects and places we experience and consume value.
This back-and-forth aspect of value exchange has seen an explosion in growth brought on by the digital effect of the enabling products and services and people to connect and trade. What was the physical economy of old has and is becoming rapidly a convergence with technology that may increasingly integration with our everyday lives, our social and work activities.
A the “network effect” has entered the lexicon of business language, as people on social networks and mobile devices enable rapid connectivity and expanding possibilities of value from the multitude of relationships and access to more and more “online” content and experience. The network effect is this driving, scaling effect that multiplies the potential access and impact of a network of objects or experiences.
This additive scaling effect is potentially pushing past the old physical economy order into a new digital economy where value is in the connections and reinforcing feedback that enable scaling and further value to be shared and created.
Understanding the economic value mechanism in the “internet of things”
This is where a new kind of feedback is drive a new value cycle.
The connection between the user and the object or service through the process of “digitization” now has “feedback” that can reinforce and multiply its value potential for both the user or consumer and the provider and wider marketplace potential. It can reinforce good and bad experiences in the way it can provide behavioral and mechanical incentives. For example
“The traffic is increasing up ahead in 5 km, do you want to take this detour?” – Satellite Navigation
“Well done, you reached your goal today for calories burned” - lifestyle health
“Stock price is bull market, changing 3 percentage points, sell or buy?” - Financial markets
“The room temperature need adjusting to ambient setting” – Smart home
These have not only an impact of the human user experience to improve their lifestyle, wellbeing; but also in how the wider social, societal and economic activity of supply chains might be better optimize and synchronized to reduce waste, increase productivity efficiency, and This is the economic lifecycle that is drive new value from the “Internet of things”. Its not a single set of back-and-forth transactions but is a “loop” of finer grained activity information that can “fine tune“ and adjust the experience and value.
The rise of Wearables - wave
This connected experience is driving new possibility that in the field of “wearables” is starting to be real in many industries. The term “Wearables” are devices that are worn on the human body that enable sensors and feedback to be captured to and from the person. This is not science-fiction but a rapidly evolving class of technology that is creative new ways to create customer experience, augment lifestyle outcomes and build new economic markets for revenue and value creation. We see this as a social and economic revolution in how a new kind of economic and social value most can be enabled with this technology.
We have only just started to touch on the potential of this new kind of dynamic interactivity. With the ability to miniaturize sensors to measure most all types of data telemetry now possible, to falling cost of computing resources to embed into a mobile device and collect and send the data over the internet into “a cloud”. The potential is to image and make real a new era of digital capabilities that push past a static world into a more immediate and responsive experience for customers, products, and services.
KEY OPPORTUNITY 1 : Wearables are part of a modern Digital business strategy for the “Internet of things”, an emerging new digital economic model for connected products and services. Wearables are moved beyond a fad and lifestyle add-on into a main stream s augmented capabilities to enable digital customers and a digital workforce to driver high value outcomes.
Scaling a new digital value model
The idea of digital value we see as extending beyond the basic products and service revenue of physical products and services. Perhaps there are four stages or generations that are emerging in the way digitization is pushing the potential for new economic value.
At the bas ic level, the direct selling and exchange of products and service online is the early stage of the ecommerce that represented the early stage of internet business. At this level it is all about discovery, usually via search engines, and Customer acquisition. The transition of legacy business in the physical world has moved online” as a first stage pre-requisite to be “on the net”. This stage perhaps is now long gone as many organizations across industry now recognize this reality but often this may be little more than a product and services catalog of information. Further developments have been in recommendations to stimulate and to attract further direct product and service purchasing and consumption behavior.
The second generation has been the development of cross-selling and up-selling of secondary products and service revenue. This is something more akin to “customer Experience” that is seeking to “follow the customer journey”. A simple analogy is how additional services can be offered adjacent to the customer immediate needs. In a retail store, for example, how can other services and products be added to the customer experience.
A third level of monetization is also emerging at the ability to create finer grained contextual services specific a personal, a place or situation can be created using digital technology. We see this in the automated contactless payments of purchasing to digital wallets that capture consumer activities and preferences. This aggregated and personalized service further enlarges the potential addressable market because it is pushing further into contextualized experience that is specific and personalized. It means the time spent and decisions made are more efficient and effective for both customers, provider and intermediaries.
The fourth level, we describe as “generative growth”, where not only are there contextual fine grains experience but this is self- reinforced and built on as an active dynamic digitized lifecycle process. The ideal is a connected business and economy that value keep generating more value to scale a wider addressable economic market.
How can we define the scale and value of this digital market ? e.g. it not just a smart watch, it’s a strategic investment in new value networks and ecosystems of potential
Driving Wearables market
The path of Wearables is transforming the value of digital in new ways. We can perhaps see several emerging levels that are building on the size of value opportunity that wearables represent.
KEY OPPORTUNITY 2 : Wearables are part of an ability to create a level of granularity of services that makes it possible to better reach and engage customers, workforce and partners in their moments of interactivity and consumption of products and services. They enable a more focused customer experience and a potential to better connect and drive value driven feedback.
Wearables follow the path trajectory of value enablement in the digital economy.
KEY OPPORTUNITY 3: Connected Wearables to the “network of things” such as WiFi, iBeacons, mobile apps, bluetooth and other technologies together with digital platforms that can generate analytics and insight . This is way competition will evolve in the in the ecosystem with greater levels of granularity to address and engage customers and markets
The emerging hockey stick moment – connected wearables
The wearables is a rapidly evolve market of business technology pushing at the boundaries of what is possible today. We believe there is a fast emerging new moment that is being created and driven by early adopters in the sports wearables, healthcare research and community assisted living, public services, citizens emergency services and defense, lifestyle and consumer product markets. These are pushing the boundary of digital innovation and the new “connected economy”.
How wearable technology may reshape the current market?
It enables new customer experiences to be leveraged, to be able to scale new services to customers and grow larger addressable market share by customer value , retention and reinforced high value experiences for customers and supplier partners.
How wearable technology may change the competitive landscape ?
Moments in locations, smart building spaces, smart products and services can be “connected” to customers and communities in a more intimate and personal ways.
Issues over privacy and choice will create opportunities and challenges that can disrupt the marketplace and the attention of customers. Ultimately reshaping what may be bought, and consumed.
How the “digital workforces” respond to the customer needed better with wearable augmentation, and how customers themselves use wearables with shape new performance and expectations
How wearable technology may change the financial model, and the way organization realize value?
Wearables are a link to how the value chain (vertical and horizontal integration), revenue streams and new approach to realizing digital businesses, cost drivers, funding/investment required, etc.
How wearable technology may change the size, profitability, and growth of the market?
Wearables change the granularity of the addressable market and consumer experience
How wearable technology may set new market trends?