The Importance of Being Future-Ready: Lessons From CES 2020
This piece was originally published in The Economic Times's Brand Equity.
This year’s Consumer Electronics Show, like past editions, brought us a bevy of impressive new devices and products, many of the world’s biggest brands showcasing their newest, latest and greatest. But for us, the key to this year’s CES, the first of a new decade, was that it represented a sort of line in the sand for companies of every distinction. The best products of the future will provide an incredible experience for the consumer, one that hopefully keeps them coming back for more. But that experience only means something for brands if the connection that’s forged with the customer contributes to growth.
With the reality that nearly every possible analog item can and will be digitized in some way in the near future, it’s time that every company focus on finding its digital business model—if it’s not already too late.
Often at CES, we see the “Uber-ization” of products or experiences. That doesn’t necessarily mean they get delivered to a consumer via app, but the traditional thought of what this product does or how it works is upended and reframed in a personal, customer-centric way. And that re-framing ultimately leads itself to opening up a digital business model for the brand.
So coming out of a major event like CES, companies should be taking a high-level view of your digital abilities and where they currently fit in your increasingly-digital context. How are major technological innovations changing the perceptions of shareholders, employees, and most of all, customers? If digitization hasn’t yet come to your industry, or certain aspects of your business, why not—and how can you get ahead of the curve?
To illustrate how modern companies need to be thinking about this new world, let’s use the example of the recipient of this year’s CES Innovation Award in Health & Beauty: Colgate, and its Plaqless Pro smart electric toothbrush. It is “a first-of-its-kind toothbrush that detects biofilm buildup in the mouth so it can be removed”, alerts the user when an area is clear and is integrates with a mobile app that keeps track of brushing behavior and offers feedback and personalized data.
When a brand like Colgate launches a product like the Plaqless Pro, it has made the first big decision that many brands still avoid—it has now entered the digital realm in a direct-to-consumer way. By making a digital play, a brand moves into the omnichannel world, instantly generating data from consumer experience that’s coming from a digital element. Now the brand has a data connection point telling it about its buyers’ behavior, as well as information about how they use the product. The brand can now use this data in many ways, including defining ways to evolve the specific product and inform what new products the company should may look into creating.
This can be a big step for a company. For many it might seem like a good enough foray into joining the digital world. It’s not nothing, but it’s not enough if you want to be a truly future-ready company. And it likely won’t go far enough for the consumer, too, which limits the potential growth of the brand. Going back to the Colgate example—for a consumer, the ability have a better, more informed brushing experience is a positive, and the features of a smart toothbrush set the product apart from its analog predecessors. But a smart toothbrush is still just one product, with one specific use.
The untapped value lies in a smart toothbrush being a part of a consumer’s full digital health profile. In order for that to happen, the product needs to be part of an ecosystem. Ecosystems represent the more ambitious path for companies to take, because that’s where growth opportunities lie. For many companies, the best opportunity is to join an ecosystem (though they can also create their own ecosystem). Being a part of an ecosystem allows for a company to grow its reach and scale, to reach customer sets they wouldn’t be able to on their own. This speaks to the importance of external APIs; no company can be truly future-ready unless it has the ability to partner with other brands and integrate with the largest ecosystems, where consumers are living their digital lives (Facebook, Amazon, Google, etc.).
It’s worth noting that when a brand chooses to join an ecosystem, it has to sacrifice much of the data that consumers have agreed to share with it. Unfortunately, that’s just the price of doing business with the tech giants, but the scale of their audience leaves many brands without much of a choice. Still, whether to join one ecosystem or all of them can be challenging, which is why we were heartened to leave CES 2020 with the strong sense that the competing ecosystems of Facebook, Amazon, and Google (among others) seem to be more open to integration with each other. We’re hopeful that, soon, we can see the end of living rooms filled with devices that aren’t talking to each other because of their differing software—even the biggest companies in the world need to think customer first, and customers are not going to stand for siloed tech much longer.
And we would be remiss to speak about CES 2020 and not mention Artificial Intelligence. Many impressive AI innovations were on display, but again, it’s about how these innovations are going to affect consumers and what it means for brands that we’re interested in. If we think a smart toothbrush creates a lot of data about consumers, just wait until more products and services employ machine learning to gather even more information. Brands should be preparing for how AI will fit into their digital future, whether it’s something they want to build on their own, or rent out from the Googles or Microsofts of the world. The future of how AI will truly change the lives of consumers and brands is still uncertain, but we know that it will move quickly.
The last few years has shown us that every experience, from the bedroom to the kitchen to the commute to the boardroom can be impacted by convenience. Everything consumers want to interact with or buy or use can be accessible on demand. And all of this accessibility is a data opportunity. How a company takes that opportunity will determine whether it is truly future-ready and in position to grow.