What is the Industrial Internet of Things?

What is the Industrial Internet of Things (IIoT): definition, usage, benefits and overview with data and charts.

Source: What is the Industrial Internet of Things?

The Industrial Internet of Things or IIoT initially mainly referred to an industrial framework whereby a large number of devices or machines are connected and synchronized through the use of software tools and third platform technologies in a machine-to-machine and later an Industry 4.0 or Industrial Internet context.

Today it is mainly used in the scope of Internet of Things applications outside of the consumer space and is about applications and use cases across several sectors, to distinguish between consumer Internet of Things applications and business/industry applications.

The Industrial Internet of Things is defined as “machines, computers and people enabling intelligent industrial operations using advanced data analytics for transformational business outcomes”.

Industrial Internet of Things.jpg

Machine-to-machine communication and the Industrial Internet of Things

In the pure machine-to-machine and Industry 4.0 context, the advantage of the frameworks and systems that the Industrial Internet of Things refers to, is that they can operate semi-independently or with very minimal human intervention.

Such systems will increasingly be able to intelligently respond and even change their course of action based on the information received through the feedback loops established within the framework.

As mentioned a keyword here is machine-to-machine communication (M2M), which is an element of the Internet of Things but also refers to specific activities and to the initial stages of the Industrial Internet of Things.

The idea behind machine-to-machine communication is to reduce human interventions as much as possible so that the highest level of automation could be achieved. If we look at the concept of the Internet of Everything, this M2M dimension of the Industrial Internet of Things happens within the sphere of the things as you can see in the original depiction of the Internet of Everything by Cisco.

The place of machine-to-machine or M2M in the Internet of Everything view of Cisco - source Cisco
The place of machine-to-machine or M2M in the Internet of Everything view of Cisco – source Cisco

The IIoT in this sense can be considered a movement towards ‘smart machines’ whereby the accuracy levels of the operations involved in the respective systems are heightened to a level that cannot be achieved through human interventions.

Benefits of the Industrial Internet of Things in manufacturing and beyond

One of the greatest benefits of Industrial Internet of Things has to be seen in the reduction of human errors and manual labor, the increase in overall efficiency and the reduction of costs, both in terms of time and money. We also cannot forget the possible underpinnings of IIoT in quality control and maintenance.

Industrial Internet of Things revenue - source IndustryARC Analysis and Expert Insights
Industrial Internet of Things revenue – source IndustryARC Analysis and Expert Insights

The Industrial Internet of Things is part of the Internet of Things.  Internet of Things or IoT is data-rich: large amounts of data get collected, aggregated and shared in a meaningful way. Here again the goal is to increase the automation level at domestic and commercial levels. In the Industrial Internet of Things, data is crucial as well and this causes a change in the human tasks in an Industry 4.0 context whereby automation leads to a decrease of specific types of work but at the same time requires new skillsets. The goal of the Industrial Internet of Things is also not to fully replace human work, its goal is to enhance and optimize it by, for example, creating new revenue streams and business models with a big role for data (analysis).

The intelligent communication loop setup between machines enables timely attention to maintenance issues. The safety level of the operations is also boosted by alleviating the risk factors.

The Industrial Internet of Things takes the benefits of the Internet of Things in general to a higher level and also to the industries with high-stakes where human error could result in massive risks. The precision level that can be achieved through the IIoT is one of the greatest advantages, that makes this discipline one of the most welcome gifts of IoT.

Times are not far whereby entire manufacturing plant operations and processes could be made to operate almost independently. Moreover, the Industrial Internet of Things is used for many use cases which help us reduce the exposure of human workforce, which will always matter, to scenarios with high industrial hazards.

In the coming years, IIoT is likely to force more unified device protocols and architectures that will allow machines to communicate seamlessly and thereby enhance interoperability.

To summarize, here are some of the key benefits of IIoT in an industry context

  • Improved and intelligent connectivity between devices or machines
  • Increased efficiency
  • Cost savings and
  • Time savings
  • Enhanced industrial safety

More benefits and (thus) drivers in the image from a report by Morgan Stanley on the Industrial Internet of Things below.

Most important drivers of IIoT adoption according to Morgan Stanley - source and more information on the survey here
Most important drivers of IIoT adoption according to Morgan Stanley – source and more information on the survey here

It is certainly a worthwhile space to watch as the developments here bring about the biggest industry revolution of the Internet era but also because most Internet of Things deployments today happen in the Industrial Internet of Things and, specifically in manufacturing and factory environments.

The industries and evolutions in the Industrial Internet of Things

As mentioned there has been a shift from the pure M2M and Industry 4.0 dimension in the Industrial Internet of Things whereby it is used to distinguish between the Internet of Things in the sphere of consumer devices and applications across all sorts of industries where systems and deployments are mission-critical.

Obviously, in the end and in several Industrial Internet of Things applications, for instance in smart metering or smart city projects, the customers can be consumers so both worlds are not completely different.

The difference between the Industrial Internet of Things and Consumer Internet of Things as depicted by Vector Software - source - courtesy Vector Software
The difference between the Industrial Internet of Things and Consumer Internet of Things as depicted by Vector Software – source – courtesy Vector Software

Major industries include oil and gas, transportation, manufacturing, healthcare and energy but they are certainly not the only ones. Many use cases in government (smart cities) and agriculture, for instance, are also seen as IIoT.

Last but not least it’s important to mention that the focus of the Industrial Internet of Things is increasingly moving from some of the mentioned benefits and other benefits such as cost savings, better automation and productivity gains towards innovation, the development of new business models, services and/or products and even the development of new revenue streams in a world where data is money. In the infographic from the Industrial Internet Consortium below you can find more information (note: the Industrial Internet is not entireley the same as the Industrial Internet of Things but in practice the two terms are used as synonyms – more on the Industrial Internet here).

The Industrial Internet of Things as depicted by the Industrial Internet Consortium - source and copyright Industrial Internet Consortium.gif
The Industrial Internet of Things as depicted by the Industrial Internet Consortium – source and copyright Industrial Internet Consortium

10 tendances clés en matière de transformation digitale​ d’ici 4 ans | FrenchWeb.fr

D’ici 4 ans, l’économie mondiale sera entrée dans l’ère de la «DX Economy», l’économie de la digitalisation, selon le dernier «IDC FutureScape Report».

Source: 10 tendances clés en matière de transformation digitale d’ici 4 ans | FrenchWeb.fr

Une majorité d’entreprises aura totalement intégré le digital à sa stratégie d’ici 4 ans, selon les résultats du «IDC FutureScape Report». Conséquence directe de ce phénomène, l’économie mondiale entrera dans ce que le cabinet d’études américain appelle l’ère de la «DX Economy» (l’économie de la digitalisation pour IDC, ndlr).

Comment cette accélération de la transformation digitale se traduira-t-elle concrètement pour les entreprises? Tour d’horizon des 10 grandes tendances à surveiller dans les 4 années à venir.

Cloud, IA et réalité virtuelle: les grands gagnants de la transformation digitale

  • Les investissements réalisés par des entreprises pour soutenir des projets de transformation digitale devraient augmenter de 60% d’ici 2019, pour atteindre les2,2 trillions de dollars, pour les auteurs de l’étude.
  • En 2019, les trois quarts des investissements IT concerneront des technologies qui créent de l’interdépendance, telles que le mobile, le cloud, le big data ou l’IoT.
  • C’est plus précisément le cloud qui devrait être le grand gagnant de cette digitalisation de l’économie, avec 67% des budgets IT qui seront alloués à des offres dans le cloud d’ici 4 ans.
  • En 2019, 40% des projets de transformation digitale intégreront un volet d’intelligence artificielle pour exploiter au mieux l’ensemble des données collectées par les entreprises. Conséquence directe, les trois quarts des équipes de développement intégreront des compétences en IA.
  • Dès l’année prochaine, 30% des entreprises en B2C les plus importantes devraient intégrer la réalité virtuelle et la réalité augmentée à leur stratégie marketing. En 2021, ces nouvelles technologies devraient être massivement adoptées selon les estimations de IDC.
  • Le nombre de plateformes collaboratives dans le cloud devrait être multiplié par 3 dans les 2 années à  venir, pour atteindre les 450 plateformes. En 2020, 8 grands groupes sur 10 seront ainsi des fournisseurs de services digitaux, grâce à ces plateformes.
  • En termes d’organisation interne, 7 grands groupes sur 10 auront constitué une équipe dédiée à leur transformation digitale d’ici 2017. Pour pouvoir s’adapter suffisamment rapidement aux évolutions de leurs marchés, ces derniers devront multiplier par 2 voire par 3 la taille de leurs équipes de développement d’ici 2 ans. Un challenge de taille face à la difficulté à recruter et à fidéliser ces profils techniques.
  • D’ici 2020, 70% des revenus des fournisseurs de services dans le cloud seront générés grâce à des intermédiaires et des partenaires.
  • Dans 4 ans, les entreprises utiliseront des benchmarks totalement différents pour mesurer leurs performances, qui intègrent des KPI propres au digital. Les auteurs de l’étude estiment qu’au moins un tiers des entreprises actuellement leaders sur leur secteur ne parviendront pas à atteindre leurs nouveaux objectifs de performance.
  • Enfin, d’ici 2020, les premiers dispositifs de e-santé totalement intégrés devraient voir le jour. Au milieu des années 2020, les offres liées à «l’humanité augmentée» devraient être monnaie courante, si l’on en croit les auteurs de l’étude.

 

How the convergence of automotive and tech will create a new ecosystem | McKinsey & Company

Source: How the convergence of automotive and tech will create a new ecosystem | McKinsey & Company

As four technology trends reshape the global automotive sector, customer preferences are moving away from its traditional strongholds, such as chassis and engine development. This shift in customer preferences and the sheer size of the automotive sector have attracted new players: a potent mix of large high-tech companies and start-ups. Both differ from the automotive incumbents on virtually every level.

These new entrants and the disruptive trends they bring—electrification, autonomous driving, diverse mobility, and connectivity—will transform typically vertically integrated automotive value chains into a complex, horizontally structured ecosystem. The newcomers are well positioned (and expected) to make moves in novel areas such as autonomous driving. Consequently, today’s OEMs and tier-one suppliers must abandon strategies aiming at total control of vehicles and instead pick and choose where and how to play by shedding assets, streamlining operations, and embracing digital acquisitions.

Four trends that favor software-driven innovation

The fortunes of players in the automotive sector have always depended on what customers see as valuable. Most of this value has resided in the hardware of vehicles and in the automakers’ brands. However, future innovations will probably focus on disruptive technology trends, so the customers’ perceptions of value will shift, increasingly putting incumbents in danger. The four trends that willfavor the newcomers are these:

  • Electrification. Drivetrains will shift toward hybrid-electric, electric, and fuel-cell technologies as they mature and become cheaper.
  • Autonomous driving. The operation of automated cars will move from advanced driver-assistance systems to fully autonomous driving as the technology matures.
  • Diverse mobility. As the sharing economy expands and consumer preferences change, the standard model will continue to evolve from outright purchase or lease to rentals and car sharing.
  • Connectivity. The possibilities for “infotainment” innovations, novel traffic services, and new business models and services will increase as cars get connected to each other, to the wider infrastructure, and to people.

Attracted by the shift in customer preferences, the importance of the new trends, and the global automotive market’s massive size and value-creation potential, technology players are making their way into the sector. As they develop new software options, cars are evolving into computers on wheels, a change similar to events in the computer industry 20 years ago and the cellphone industry10 years ago. As a result, we anticipate that a complex ecosystem will emerge in the automotive sector (Exhibit 1).

In the future, cars will become computers on wheels as tech players move into the automotive sector to leverage their existing capabilities.

Although the sector adheres to a vertically integrated business model, with OEMs in full control of their supplier networks, the new tech players are more focused on horizontal moves:

  • A number of high-tech players are developing autonomous-driving systems that are quite likely to merge into what the computer industry calls an operating system (the central system that makes a unit run).
  • Disruptors from the taxi and ride-sharing industries are developing innovative new business models.
  • Two leading online and technology companies are focusing on in-car entertainment platforms, which they hope will become the standard for applications.

No single player is likely to dominate any part of such a horizontally organized, complex value chain by itself. But many of the new tech entrants are well positioned to take the lead in the software-focused parts. For each part of the ecosystem, there might be room for only a few winners, since few players will be able to invest the resources necessary to reach scale (Exhibit 2).

A couple of specialized players will probably dominate each niche of the future automotive ecosystem.

The automakers have invested billions in car hardware, from engine plants to stamping facilities and beyond, so they have the best position to dominate the hardware-focused areas. In software, the tech players enjoy significant advantages, including leading-edge capabilities, agile operating models, and the financial muscle required to pursue exploratory investments aggressively. For the automakers and tech players, success in tomorrow’s mobility sector will depend on how well they build on these natural advantages.

 

Les chatbots, un support efficace de la relation client

Les chatbots simplifient la relation client. C’est ce qui ressort d’une étude Eptica. Si les agents conversationnels sont plébiscités pour les réponses qu’ils apportent en temps réels, les Français attendent avant tout d’eux qu’ils soient un support client et permettent de suivre la commande.

Source: Les chatbots, un support efficace de la relation client

Pour 51% des consommateurs, les chatbots sont utiles. C’est ce qui ressort d’une étude menée par Eptica (1). Autre enseignement: les Français attendent des chatbots qu’ils soient utilisés par les marques pour offrir un support client, avant d’être un canal de vente. Ainsi, pour 31% des sondés, les chatbots doivent avant assurer un service de premier niveau en renseignant sur les horaires d’ouverture, les conditions d’échange et de remboursement d’un article… 51% des sondés attendent un service plus avancé comme le suivi de commande ou l’aide à la résolution d’un problème technique. A contrario, ils ne sont que 18% à envisager les chatbots comme un canal de vente. Pour 57% des sondés, le principal intérêt des chatbots est le temps réel. Toutefois, pour 46% des répondants, les chatbots ne pourront pas remplacer l’interaction humaine, même si 32% plébiscitent leur capacité à simplifier la relation client. Enfin, dernier enseignement: il reste encore des progrès à faire sur les agents conversationnels. La technologie des chatbots n’est pas maîtrisée, soulignent 40% des sondés. (1) Étude réalisée au mois de novembre 2016 auprès de 662 consommateurs français

Retrouvez cet article sur : www.relationclientmag.fr – “Les chatbots, un support efficace de la relation client”

Trips l’offre de voyages de Airbnb – Airbnb Trips | L’ADN

Après les hôtels, Airbnb s’attaque aux voyagistes en lançant une offre de voyages inspirée par une expérience globale.

Source: Trips l’offre de voyages de Airbnb – Airbnb Trips | L’ADN

Les signaux étaient là. Airbnb se diversifiait petit à petit organisait des circuits et des expériences qui laissaient présager une phase de beta-test avant de lancer une offensive plus globale. Cette fois-ci c’est officiel, la marque a annoncé la sortie de Trips « une plateforme communautaire conçue pour rendre le voyage à la fois facile et magique. Trips est lancé aujourd’hui avec trois offres clés – Expériences, Lieux et Logements. Les Vols et les Services seront ajoutés à l’avenir » précise le communiqué. Autrement dit, Airbnb se diversifie pour devenir un voyagiste complet intégrant toute la chaîne de valeur du voyage, du choix de la destination au retour d’expérience en passant par le vol et le logement.

Airbnb Trips présentation

Une nouvelle entrée dans le voyage

La grande originalité de Trips réside dans son approche par thème. Oubliez les « simples » vacances que vous choisirez avant tout pour la destination, le dernier né d’Airbnb mise sur l’expérience comme clé d’entrée pour une meilleure invitation au voyage : boxer à Detroit, apprendre à fabriquer un violon à Paris, vivre l’esprit du marathon au Kenya, atelier Samuraï au Japon, initiation aux voitures anciennes à Malibu, chasse aux truffes en Toscane… En proposant de vivre un centre d’intérêt avec les locaux, Airbnb vise juste pour les voyagistes en quête de sens, d’authenticité et d’expériences.

Airbnb va faire mal aux voyagistes

Renforcer le maillage local

Pour proposer le meilleur de l’offre locale à ses clients, Airbnb compte bien sur sa communauté d’utilisateurs pour recommander des lieux mais également sur les locaux. Pour cela la marque a constitué des Guides d’Experts composés d’experts culturels et d’initiés de quartiers qui proposeront leurs adresses. C’est ainsi que le chef montant vous recommandera le tout dernier restaurant tendance quand le barman mixologue vous confiera son bar local préféré. Car Airbnb a un véritable lien affectif avec les locaux mais surtout économique. Comme l’expliquait un récent article de Bloomberg, Airbnb générerait 4,5 milliards de dollars pour les restaurants locaux car les utilisateurs du service privilégierait les commerces de proximité lors de leur voyage.

Airbnb va faire mal aux voyagistes

Le logement : fondation du système

Ce développement n’aurait pas été possible sans une base travaillée depuis 2008 : celle du logement. Grâce à cet élément la marque a conçu un système de confiance qui lui a notamment permis de créer une communauté, de couvrir le monde et d’être au plus proche des locaux. Ce travail a permis à Airbnb de pouvoir proposer aujourd’hui plus de 3 millions de logements dans 191 pays, soit l’offre « la plus large et la plus diversifiée d’hébergements uniques pour les voyageurs » comme l’explique le communiqué.

Airbnb va faire mal aux voyagistes

Cette annonce semble bien faire écho à la dernière levée de fonds de 555 millions de dollars par la marque la valorisant ainsi à 30 milliards de dollars.

Si l’offre devrait faire trembler les voyagistes, elle devrait également tuer dans l’œuf des jeunes startups qui proposaient des verticales similaires (Trip Flint, Routes, Tours by Local…) sans la force de frappe globale travaillée depuis 2008 par Airbnb.

Apple’s new MacBook Pro ad celebrates invention of the Touch Bar

The new MacBook Pro finally lands in stores this week, and an awesome new Apple ad celebrates the arrival.

In the new spot, called “Bulbs,” Apple links the invention of fire, the wheel, plow and more to the creation of the Touch Bar, the thin OLED strip that completely changes how you interact with your Mac.

The brilliant new ad basically argues that ideas push the world forward. And the Touch Bar is “a tool for all the ideas to come.”

Apple introduced the new MacBook Pro with Touch Bar at an event last month.

The new Touch Bar feature replaces the function keys with a touch-sensitive screen that display dynamic keys based on what app you’re using.

The first shipments of the new MacBook Pro has just started shipping to customers. You can finally pick up the new MacBook Pro at Apple Stores this week.

 

Apple introduced the new MacBook Pro with Touch Bar at an event last month.

The new Touch Bar feature replaces the function keys with a touch-sensitive screen that display dynamic keys based on what app you’re using.

The first shipments of the new MacBook Pro has just started shipping to customers. You can finally pick up the new MacBook Pro at Apple Stores this week.

How data, technology and changing consumer expectations are shaping the marketing mix – Smart Insights Digital Marketing Advice

Source: The five Ps of marketing for 2016 – Smart Insights Digital Marketing Advice

The advancement of so many transformative new technologies over the last five to ten years is shaking up the modern marketing world. From the emergence of wearable technology, to chatbots and mobile payment apps, disruption is taking place nearly everywhere we look.

All of these technologies have the potential to give marketers new opportunities to meet and surpass consumer expectations. However, this is only possible if marketers can keep their skill-sets up to date and look at ways to integrate new ways of working into existing processes, for example through an effective digital transformation agenda.

The technological advancement we’re seeing is not linear. Instead, it is occurring rapidly in the form of major leaps, with consumers and pioneering tech companies leading the change:

tech-companies-change

Many businesses are struggling to keep up and it’s therefore interesting to take note of the innovations making the biggest impact. In an excellent article for the CIM, David Benady recently outlined how these innovations fall into categories that form what he refers to as the new ‘Five Ps’ of marketing:

– Payments

– Products

– Promotion

– Place

– People

It’s worth reviewing each of these in turn and the different implications and opportunities for marketers:

Payments

As frictionless commerce continues to grow and transform the shopping experience, Apple Pay, Amazon, Google’s Android Pay and many other platforms will provide more opportunities for consumers to make mobile payments in ways that reflect their needs and lifestyles.

Google’s ‘Hands free’ app will potentially offer further, more transformative opportunities for consumers, whilst overall the trend is clear that mobile payments will only continue to grow. More and more payments are taking place on smartphones and tablets as they become increasingly ubiquitous in our daily lives.

annual-consumer-spending-forcast

Source: A.T. Kearney 2016

It will be interesting to see how these opportunities merge with other major trends, such as the Internet of Things, and where the increased use of biometrics and geolocation play a role for more advanced passwords, verification and authentication.

Opportunities for marketers

The development of digital/ mobile/ frictionless payments will give marketers new and different ways to reach consumers. With the continued rise of ad blocking, effective, value-adding payment strategies will provide opportunities for more targeted banner ads, push notifications and loyalty programmes across the devices that matter most to consumers.

Promotion

The relationship with brands and consumers is likely to become deeper over the next few years. As suggested above, the rise in adblocking means it’s becoming more difficult for brands to reach consumers with traditional advertising strategies and therefore the way forward will involve an increased emphasis on relevance and value.

The data already indicates that consumers are using messenger apps more than social networks and chatbots may give brands an opportunity to create more meaningful content to engage and connect with consumers within these channels and make commerce more interactive.

messaging-apps-surpass-social-networks

Creating more personalised, one-to-one experiences is one way to create more relevant connections and the key platforms for marketers to be aware of include WhatsApp, Facebook Messenger, Skype, Google Hangouts and Viber.

It’s also worth reflecting that the days of creating a half-hearted brand profile on a social network that simply broadcasts mass messages to users may be coming to an end. Chatbots, by contrast, have the ability to use natural language processing and AI to learn from conversations and therefore enable brands to offer exclusive new deals and promotions that are tailored to specific customer groups and followers.

Opportunities for marketers

Although it’s a valid strategy to create a presence across multiple channels, we’re seeing today that customers are using fewer apps more regularly. Of these, messaging apps are some of the most popular and therefore one of the big opportunities for brands will be to create services and content within these apps to reach consumers in the places that matter.

With the advancement in speech recognition technology, it’s also worth reflecting on the opportunity of voice and it’s potential influence via AI assistants and wireless headphones.

As part of KPCB’s internet trends briefing, Mary Meeker called voice “the most efficient form of computing input”. After all, we can speak 150 words per minute compared to typing just 40. Voice interfaces can learn about us and therefore improve their understanding and prediction of our intent. 

hands-and-vision-free-interaction

Products

Wearable technology is transforming the relationship between brands and consumers. As the technology continues to advance, brands can use more intelligent ways to connect with consumers.

One way of connecting with consumers is by becoming smarter through the use of different forms of data. For example, biometric heart data from a wearable wristband or piece of clothing could provide feedback on an ad or product on a website, which can then be tailored or adjusted accordingly depending on the signals.

The trend away from ownership with the rise of the sharing economy is another factor that is influencing people’s relationship with products:

the-sharing-economy-life-cycle

Millennials in particular are more likely to use Uber or Airbnb to get around and stay somewhere respectively. We can also see this in the demand for streaming television, films and music via Netflix, iTunes or Amazon rather than owning DVDs or CDs.

It will be interesting to see how this trend develops and we could one day see this spread to other areas of life, including household appliances, furniture and technology.

Opportunities for marketers

Wearable tech gives marketers the opportunity to create new and extended brand experiences. Wearables are devices we use nearly all the time, everyday, and therefore loyalty is an area that could be explored further. The technology that wearables use also enables links and connections to other apps and services, providing real-time consumer behaviour data that could be harnessed (in a responsible and ethical way) by partner brands to develop more integrated customer experiences.

The sharing economy is another area of huge potential, with peer-to-peer finance, online staffing, accommodation, car sharing and video streaming all continuing to disrupt traditional markets and savvy marketers should learn from how these new disruptors are challenging the status quo and communicating the benefits to consumers.

Place

Place will become an increasingly important element of the marketing mix as people look for context and convenience. Location is a major indicator of purchase intent and it’s unsurprising that consumers are increasingly using ‘near me’ when searching for shops or services.

google-micro-moments

Beacon technology allows brands to connect with consumers when they enter a particular location and to target them in more meaningful ways. A few years ago Google published research around ‘Micro-moments’ that encouraged marketers to consider how mobile has shaped changing consumer behaviours. The demand for relevance is a key facet of this research and something location can help marketers to use as they develop more meaningful propositions.

Opportunities for marketers

Location-based marketing bridges the gap between the online and physical customer experiences and enables ‘in-the-moment’ purchases to be promoted more effectively. Location targeted ads are set to continue to grow in prominence and technology will continue to advance to improve relevance.

As programmatic marketing becomes more sophisticated, marketers will find greater opportunities to target the right people, at the right moments, in the right context. With the right balance, consumers will experience better relevance and brands will realise better results.

People

Customer relationship management (CRM) is no longer about storing just basic customer data and keeping track of emails. CRM technology is beginning to impact the entire organisation, from managing communication internally between employees to building a detailed picture of the customer through multiple datapoints.

Technology has transformed customer expectations. With all the data companies have, customers expect more from the marketing they receive, particularly in terms of the frequency and relevancy of messaging:

top-reasons-for-unsubscribing-from-an-email-program

Brands must therefore listen to and communicate across multiple channels, including websites, apps, email and social media, to build a truly 3600 view of the customer.

Marketers are now entering the boardroom and becoming a vital part of the sales process through the customer insights they’re able to obtain. It’s therefore likely that the role of the marketer will change, becoming more strategic by identifying ways to connect with consumers via multiple touchpoints.

Opportunities for marketers

CRM gives brands the opportunity to engage with consumers across multiple touchpoints and become more responsive and agile to market demands. Marketers must identify ways to use data and insight to build a more detailed and nuanced picture of the customer and map the customer journey accordingly.

However CRM isn’t just about connecting with customers. There are now opportunities for multiple departments, from finance to HR and client services, to use CRM to build deeper relationships with internal teams and in the process improve collaboration, processes and new ways of working.

Shame or Glory / Games of Thrones

Shame or Glory website:
http://www.ShameOrGlory.net
Shame or Glory Facebook page:
https://www.facebook.com/Shame-or-Glo…

Concept and Production: Allenby Concept House
allenbyny.com

Director: Ohav Flantz

Story and Screenwriters: Yoash Foldesh, Guy Assif and Ronen Harten

Producer: Aya Hecht

Featuring: Thor Björnsson, Hannah Waddingham, Ross Hatt

SodaStream Team
Daniel Birnbaum: CEO
Matti Yahav: VP Global Marketing
Itai Bichler: Head of Global Digital Marketing
Shiri Hellmann: Head of Global Communication Marketing
Maayan Nave: Chief Communication & Global PR Manager
Jodi Ben-Meir: Global Communication and Research Manager

Digitizing the consumer decision journey | McKinsey & Company

Source: Digitizing the consumer decision journey | McKinsey & Company

In a world where physical and virtual environments are rapidly converging, companies need to meet customer needs anytime, anywhere. Here’s how.

Many of the executives we speak with in banking, retail, and other sectors are still struggling to devise the perfect cross-channel experiences for their customers—experiences that take advantage of digitization to provide customers with targeted, just-in-time product or service information in an effective and seamless way.

How consumer behavior keeps changing

 This quest for marketing perfection is not in vain—during the next five years or so, we’re likely to see a radical integration of the consumer experience across physical and virtual environments. Already, the consumer decision journey has been altered by the ubiquity of big data, the Internet of Things, and advances in web coding and design.1Customers now have endless online and off-line options for researching and buying new products and services, all at their fingertips 24/7. Under this scenario, digital channels no longer just represent “a cheaper way” to interact with customers; they are critical for executing promotions, stimulating sales, and increasing market share. By 2016, the web will influence more than half of all retail transactions, representing a potential sales opportunity of almost $2 trillion [≈ California GDP, 2011].2

Companies can be lulled into thinking they’re already doing everything right. Most know how to think through customer search needs or have ramped up their use of social media. Some are even “engineering” advocacy—creating easy, automatic ways for consumers to post reviews or otherwise characterize their engagement with a brand.

Yet tools and standards are changing faster than companies can react. Customers will soon be able to search for products by image, voice, and gesture; automatically participate in others’ transactions; and find new opportunities via devices that augment their reality (think Google Glass). How companies engage customers in these digital channels matters profoundly—not just because of the immediate opportunities to convert interest to sales but because two-thirds of the decisions customers make are informed by the quality of their experiences all along their journey, according to research by our colleagues.3

To keep up with rapid technology cycles and improve their multiplatform marketing efforts, companies need to take a different approach to managing the consumer decision journey—one that embraces the speed that digitization brings and focuses on capabilities in three areas:

  • Discover. Many of the executives we’ve spoken with admit they are still more facile with data capture than data crunching. Companies must apply advanced analytics to the large amount of structured and unstructured data at their disposal to gain a 360-degree view of their customers. Their engagement strategies should be based on an empirical analysis of customers’ recent behaviors and past experiences with the company, as well as the signals embedded in customers’ mobile or social-media data.
  • Design. Consumers now have much more control over where they will focus their attention, so companies need to craft a compelling customer experience in which all interactions are expressly tailored to a customer’s stage in his or her decision journey.
  • Deliver. “Always on” marketing programs, in which companies engage with customers in exactly the right way at any contact point along the journey, require agile teams of experts in analytics and information technologies, marketing, and experience design. These cross-functional teams need strong collaborative and communication skills and a relentless commitment to iterative testing, learning, and scaling—at a pace that many companies may find challenging.

Let’s consider what an optimized cross-channel experience could look like when companies target improved capabilities in these three areas.

A new normal …

Imagine that a couple has just bought its first home and is now looking to purchase a washer and a dryer. Mike and Linda start their journey by visiting several big-box retailers’ websites. At one store’s site, they identify three models they are interested in and save them to a “wish list.” Because space in their starter home is limited—and because it is a relatively big purchase in their eyes—they decide they need to see the items in person.

Under an optimized cross-channel experience, the couple could find the nearest physical outlet on the retailer’s website, get directions using Google Maps, and drive over to view the desired products. Even before they walk through the doors, a transmitter mounted at the retailer’s entrance identifies Mike and Linda and sends a push alert to their cell phones welcoming them and providing them with personalized offers and recommendations based on their history with the store. In this case, they receive quick links to the wish list they created, as well as updated specs and prices for the washers and dryers that they had shown interest in (captured in their click trails on the store’s website). Additionally, they receive notification of a sale—“15 percent off selected brand appliances, today only”—that applies to two of the items they had added to their wish list.

When they tap on the wish list, the app provides a store map directing Mike and Linda to the appliances section and a “call button” to speak with an expert. They meet with the salesperson, ask some questions, take some measurements, and close in on a particular model and brand of washer and dryer. Because the store employs sophisticated tagging technologies, information about the washer and dryer has automatically been synced with other applications on the couple’s mobile phones—they can scan reviews using their Consumer Reports app, text their parents for advice, ask Facebook friends to weigh in on the purchase, and compare the retailer’s prices against others. Mike and Linda can also take advantage of a “virtual designer” function on the retailer’s mobile app that, with the entry of just a few key pieces of information about room size and decor, allows them to preview how the washer and dryer might look in their home.

All the input is favorable, so the couple decides to take advantage of the15 percent offer and buy the appliances. They use Mike’s “smartwatch” to authenticate payment. They walk out of the store with a date and time for delivery; a week later, on the designated day, they receive confirmation that a truck is in their area and that they will be texted within a half hour of arrival time—no need to cancel other plans just to wait for the washer and dryer to arrive. Three weeks after that, the couple gets a message from the retailer with offers for other appliances and home-improvement services tailored toward first-year home owners. And the cycle begins again.

… requires new capabilities

As this example makes clear, the forces enabling consumers to expect real-time engagement are unstoppable. Across the entire customer journey, every touchpoint is a brand experience and an opportunity to engage the consumer—and digital touchpoints just keep multiplying. To maximize digital channels, companies need to focus on improving their “3-D” capabilities.

Discover: Build an analytic engine

Even in this era of big data and widespread digitization of customer information, some companies still lack a 360-degree view of the people who buy their products and services. They typically measure the performance of direct sales activities such as product pitches and encourage downloads using “last-action attribution” analyses, which assess campaigns in isolation rather than in the context of the entire cross-channel consumer decision journey. Usually these data will have been stored in disparate locations and legacy systems rather than in a central server. Complicating matters further is the range and quantity of unstructured data out there—information about consumers’ behaviors and preferences that is, for instance, captured in online reviews and social-media posts. In our experience, this type of data is usually the least understood and therefore the least utilized by companies.

To get the full customer portrait rather than just a series of snapshots, companies need a central data mart that combines all the contacts a customer has with a brand: basic consumer data plus information about transactions, browsing history, and customer-service interactions (for an illustrative example of how companies can lose potential customers by failing to optimize digital channels, see exhibit). Tools like Clickfox and Teradata can help marketers gather these data and begin to pinpoint opportunities to engage more effectively with consumers across the decision journey. This collection effort requires input from people across multiple functions—a complex undertaking, to be sure, but the payoff can be big. Our work in this area suggests that the growth rate of earnings before interest, tax, depreciation, and amortization of grocers that focus on customer analytics is 11 percent, compared with just 3 percent on average for their main competitors. For big-box retailers, the difference is 10 percent compared with 2 percent.4

With a comprehensive data set in hand, companies can undertake the sort of quick-hit “shop diagnostics” that many tell us is lacking in their marketing and e-commerce programs. Using analytic applications such as SAS and R, and by applying various algorithms and models to longitudinal data, companies can better model the cost of their marketing efforts, find the most effective journey patterns, spot potential dropout points, and identify new customer segments. Based on its analysis of click-through behaviors, for instance, one regional retailer saw that a particular set of customers preferred digital shopping over physical and always read e-mail on Saturdays, and so the retailer altered its e-mail campaign to send this cohort online offers only on Saturdays.

Additionally, by using business-process software and services from vendors such as Adobe Systems, ExactTarget, Pegasystems, and Responsys, companies can identify in real time the basic “triggers” for what individual customers need and value—regardless of the product or service—and personalize their approach when making cross- or up-sell offers. They can also use these tools to generate automated reports that track customer trends and key performance indicators. For instance, the regional retailer’s analytics suggested that two of the customers who read their e-mail only on Saturdays were in the midst of a career change; both had revised their profiles on LinkedIn within the past three days. Based on its analytics efforts, the company was able to create targeted offers for each—one received information about laptop bags (based on her previous purchases) while the other received information about suits (based on his previous purchases).

Already, the companies employing these types of advanced analytics have seen significantly improved click-through rates and higher conversion rates (between three and ten times the average). Additionally, McKinsey analysis shows that using data to make better marketing decisions can increase marketing productivity by between 15 and 20 percent—that’s as much as $200 billion ≈ cost of NASA Space shuttle program

≈ Annual credit card fraud as of 2009
≈ cost of San Francisco 1906 earthquake
≈ all real estate in Brooklyn, NYC, 2010

“>[≈ UN estimated cost to end world hunger, 2011] given the average annual global marketing spend of $1 trillion ≈ Value of US natural gas reserves”>[≈ Public US health care spending, 2005].5

Design: Create frictionless experiences

Careful orchestration of the consumer decision journey is incredibly complex given the varying expectations, messages, and capabilities associated with each channel. According to published reports, 48 percent of US consumers believe companies need to do a better job of integrating their online and off-line experiences. There is a premium for getting this right. One major bank unlocked more than $300 million in additionalmargins by making better use of digital channels. It tapped into underutilized customer data and delivered targeted marketing messages at various points in the purchase-decision process. The bank used the data, plus various personalization and testing tools, to inform changes in marketing campaigns for certain product lines; every next step for every customer was progressively tailored to help the customer take the best action.

Digital natives such as Amazon, eBay, and Google have been leading the pack in resetting consumers’ expectations for cross-channel convenience. (Think of eBay’s Now mobile app, which provides one-touch ordering from any of eBay’s retail partners and same-day delivery in some US cities, or Amazon’s recent incorporation of a help button in the company’s latest-generation Kindle Fire tablet, linking users to a live help-desk representative.) These players have perfected the ability to test new user experiences and constantly evolve their offers—often for segments of one.

This lean, start-up approach might sound counterintuitive to large, entrenched marketing organizations in which decisions are made at a snail’s pace, but test-and-learn methods can help companies decide how best to optimize (and customize) critical design attributes of the consumer decision journey at various points along the way. In the appliances example discussed earlier, the retailer’s customer analytics allowed it to design an experience for the couple that was completely customized to their context—from their initial online searches to their physical and virtual interactions at the store and to their follow-up with the company postpurchase. Rather than push what could be construed as intrusive (even creepy) messaging, the retailer provided Mike and Linda with the most useful information at every point in their decision journey and offered the easiest possible path to purchase and delivery.

To create similarly frictionless experiences, some companies have created 24/7 digital “window shops” to test product ideas and customer interactions and collect rapid feedback without the need for additional labor or inventory. Several companies that offer inherently complex products or services have incorporated “gaming” elements into their experiences—tweaking the navigation, content architecture, and visual presentation to allow consumers to trade off and test various options and prices associated with a product before making a decision. One financial-services firm redesigned its mobile app for collecting credit-card applications to incorporate the customer context. Previously it had a one-size-fits-all interface; in the redesigned version, various elements of the mobile app’s interface—such as pricing, stage of process, and designated credit limits—are dynamically generated based on existing customer information. And the app’s page layout and navigation are rendered simply, allowing for easy completion within just a few clicks. The result has been a significant uptick in online applications.

Deliver: Build a more agile organization

In our experience, too many companies are afraid to launch “good enough” campaigns—ones that are continually refined as customers’ purchase behaviors and stated preferences change. Under the direction of conservative senior leaders, teams tend to launch campaigns that take too long to get off the ground and end up revealing few new insights. Instead, they must be willing to conduct lots of small-scale experiments with cloud or proxy website services to pilot new designs and prove their value for investment.

These types of agile, data-driven activities must be supported by an organization that has the right people, tools, and processes. Many companies will have some of the talent required, but not all, and executives will inevitably face resistance when it comes to introducing lean tools and techniques into their sales, marketing, and IT processes. The most successful omnichannel marketers we’ve seen have established centers of excellence in both analytics and digital marketing, and they practice end-to-end management of microcampaigns. Their campaign-building processes typically include systematic calendaring, brainstorming, and evaluation sessions to allow for one-week and two-week turnaround times. And roles and responsibilities are clearly defined. Far from creating a rigid, hierarchical process, this model frees up individuals to iterate quickly—what is sometimes called “failing fast forward” in the world of high tech.

At one bank, for instance, business-unit leaders gather each month to talk about their progress in improving different consumer journeys. As new products and campaigns are launched, the team places a laminated card illustrating the journey at the center of the conference-room table and discusses its assumptions about the flow of the experience for different segments and about how the various functional groups need to contribute: Where does customer data need to be captured and reused later? How will the design of the campaign flow from mass media to social media and then on to the website? What is the follow-up experience once a customer sets up an account? The team has also appointed dedicated mobile and social-media executives to become evangelists for strengthening the omnichannel experience, helping business units raise their game along a range of consumer interactions. The company’s first wave of fixes and new programs generated tens of millions of dollars in the first six months, and the team expects it to continue scaling beyond $100 million [≈ Large city office building] in added annual margins.

Building an agile marketing organization will take time, of course. Companies should start by assembling a “scrum team” that will bring the right people together to test, learn, and scale. The team should incorporate cross-functional perspectives (marketing, e-commerce, IT, channel management, finance, and legal), and its members must adopt a war-room mentality—for instance, making tough calls about which campaigns are working and which aren’t, and which messages should take priority for which segments; launching new tests every week rather than every six months; and mustering the IT and design resources to create content for every possible type of interaction.

Companies likely will need to hire people with skills that differ from the ones they rely on now. Some organizations have developed innovative, venture capital–like strategies for finding and recruiting the people they need. Staples, for instance, has built an e-commerce innovation center in Cambridge, Massachusetts, to better recruit technology talent from nearby Harvard University and MIT, and it recently bought conversion-marketing start-up Runa to act as a talent hub on the West Coast.

New types of information systems may also be required. The best technology solutions will vary according to a company’s starting point and objectives. Generally, though, companies will get the best results from tools that enable large-scale data management and the integration of databases; the generation of next-best-action and other types of advanced analyses; and simpler campaign testing, execution, and metrics.


Companies need to make strategic decisions about the best pathways to build customer value. Many cite digital as one of their top three priorities in this regard, but few have taken the time to measure the level of digital maturity their organization has achieved. A company’s digital quotient (DQ) is a function of how well defined its long-term digital strategy is, its effectiveness in implementing that strategy, and the strength of its organizational infrastructure and information technologies. The companies that incorporate the notion of DQ into their short list of performance metrics can more effectively monitor their progress across the digital capabilities we’ve outlined here, enabling more targeted investments and accelerated rates of digital growth.

Indeed, the companies that ultimately succeed in omnichannel marketing and sales will likely resemble tech companies and, interestingly, publishers—effectively using big data and digital touchpoints to drive growth and reduce costs, while producing and managing a variety of content (catalogs, coupons, web pages, mobile apps, and user-generated content) in real time across multiple platforms to create breakthrough customer experiences. This means rethinking the analytics that inform their segmentation strategies, the flow of the experiences they design, and the way they set up their internal operations for faster iteration and delivery of service.

About the author(s)

Edwin van Bommel is a principal in McKinsey’s Amsterdam office, David Edelman is a principal in the Boston office, and Kelly Ungerman is a principal in the Dallas office. They are leaders in McKinsey’s revenue enhancement through digital (RED) initiative, which redesigns the consumer decision journey to encompass all commercial levers, across all channels and touchpoints, thereby creating growth in revenue and profits.