Brands need to transform their relationship with consumers in an increasingly competitive market by capitalising on the opportunities promised by Internet of Things (IoT) enabled digital services, according to a new paper by Deloitte ‘Connected products – restoring brand value and reimagining consumer relationships’.The latest Deloitte Pantry Study revealed three out of four brands have lost their ‘must-have status’. Consumers are no longer buying them irrespective of whether they’re on sale or not. On top of a decline in brand loyalty, businesses are being challenged to restore trust and brand value, as consumers increasingly buy low-cost private labels, or craft products. "A lot of branded consumer product companies are finding themselves stuck in the middle, and need to find new and different ways to reconnect with consumers," says Vanessa Matthijssen, Deloitte National Consumer Products Leader.
Businesses need to create value for their customers beyond the standard product. When used well, digital services and connected products enabled by IoT have the potential to thoroughly change the relationship between consumers, the product and the brand. They can boost consumer engagement to deliver substantial value for both consumers and businesses.
Companies that seek to differentiate themselves will need to create meaningful services and authentic experiences. Technology and the exponential rate of mobile adoption have led us to enter the era of digital services and experiences. Connected products powered by IoT will be important vehicles to create and deliver these experiences.
Matthijssen says there are broadly three types of digital services and experiences that can be offered to consumers through IoT enabled connected products:
Do consumers care?
IoT has seen uptake in the business world – think smart supply chains – but for consumer products the hype hasn’t quite translated into reality just yet. Australia has some of the highest smartphone penetration in the world, enabling people to interact with digital products and services with ease. Yet the latest Deloitte Mobile Consumer Survey revealed 97% of Australian mobile consumers are yet to purchase a connected home device.
The innovations that will drive IoT technology forward and weave them into our everyday lives are those that will evoke the “care factor” by demonstrating real value to the consumer.
Where is the win-win?
For brands there are five key areas of value to be gained from successful connected offerings:
The technology is here and consumers, shaped by other digital experiences, are receptive. The opportunity is for consumer product companies to embrace the connected product to restore brand value and reimagine consumer relationships.
About Deloitte Australia
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