disruption in the manufacturing industry: what product companies must do to survive
When it comes to surviving and thriving in the manufacturing industry these days, a company can no longer simply manufacture and sell an analog product and expect to connect with customers in the fashion they now demand. Customizable, programmable, IoT compatible...these are some of the new, operative terms that manufacturers must consider in the fundamental design of any new product. Failure to do so is to invite a progressively-dwindling customer base.
This sea change in the relationship between manufacturers and customers must be taken seriously by all product companies, in every single industry. Electronics, cars, toys, medical devices...all are facing disruption from the new, information-powered customer. The only choice is to evolve or fail.
Five Customer Trends of Transformation
To understand what is truly happening with the average customer these days, and thus be properly-informed on how to evolve and thrive in this new, disruptive atmosphere, the following five customer trends must be understood:
Trend 1: Technology Adoption:
Only a decade ago, new technology was almost always introduced and adopted at work. Said technologies then, slowly, found their way into the home. Today, we are seeing a total reverse. A great example of this is the iPad, and how people discover technical tools (on the iPad) and then employ them directly in the workplace. For example, a person might find an app for spatial organization on the iPad and then bring it into work, using it for re-arranging the showroom floor. Or, a person might use an iPad app to record a meeting, later sharing the .wav file with all meeting attendees (and thus driving information retention). As technology blurs the lines between work and home, the possibilities are nearly endless.
Trend 2: Customers’ Expectations:
Information available online has created a more informed consumer. Take cars. No longer do customers show up at a car dealership to 'begin' an information gathering process. Rather, they come pre-loaded with knowledge and (most-likely) a "walk-away" price in mind. People are making much more informed decisions when it comes to what they buy and they are basing these decisions on more than just price/quality. Social and environment concerns are now differentiating factors. Information is indeed, "customer power," and it is out there for everyone. Yet going much further, customers are demanding new and myriad features from manufacturers, made possible by continually- updatable onboard operating systems (from cars to toys).
Trend 3: Convergence of Industries:
Industries are converging rather than operating in silos and verticals. Because of powerful software and advancements in technology, many workers (and robots) can perform multiple tasks that used to take a team. Some good examples of this are industrial robots being used in filmmaking (e.g., Gravity); and construction companies could build high-rises with an assembly-line, modular-construction approach, snapping building components into place like Lego blocks.
Trend 4: DIY Maker Movement:
The DIY, maker movement is expanding everyday. People now expect custom products and/or produts that, once bought, can be customized on their own. Programmable, conformable, changeable, it's all about the 'refresh'. Consumers demand a way to express their own personality and design into what they play with, what they wear, what they drive and where they live. Further, with the advent of 3D printing, people are already "printing" their own products, based on either self-made designs, or design downloaded from other designers and manufacturers. Mass customization will end up infiltrating practically all consumer categories and industries.
Trend 5: Internet of Everything (IoT) Implications:
On an increasing basis, customers will seek products that interact on an IoT basis, adding to the collective devices they can harness, analyze, set and enjoy in a digital format. Connectivity between devices, and the if this then that scenarios that can be set-up...well, this area is by definition limitless. It's like the web is being invented all over again, but with a fourth dimension: IoT relationships and cause/effect (if/then) programmability.
A Forceful Combination and the Hurdles to Clear
Considering the above trends together is eye-opening. Yet now, take things one step further, and factor in speed. The velocity of change, in all of these areas, is still accelerating...and each trend is feeding of the other. It's a clear and definite upward spiral, set to leave behind those who fail to embrace.
In view of the need to change with morphing customer demands, there are three main hurdles or goals that need to be considered.
Hurdle 1: Clearing the Disruption:
Direct connection with customers is key these days. The connection between customers and core, internal product designers must be made...or the risk of disconnection simply increases.
This doesn't mean industrial designers need to be cross-trained as customer services reps, doing active Q&A. Rather, it means that designers MUST view and appreciate the pulse of customer preferences by seeking out intelligence on customer preferences. This means viewing social media, receiving reports from internal, information specialists set with this task, and including customer service reps directly in design meetings.
Take Tesla for example. What makes Tesla different from other electric cars? Its “over-the-air” software updates. The embedded digital experience and integration between hardware and software is critical. And this "on-the-fly" upgrading is something customers seek (and increasingly) expect from higher-end vehicles. Let's take a closer look at Tesla in Case Study-format:
CASE STUDY: Tesla Motors
If there’s one way to add value to your vehicle over time, Tesla Motors (NASDAQ:TSLA) has found a way to do it.
The luxury electric car maker just announced that it will be providing a new over-the-air update to their vehicle’s software systems, in similar fashion to what most people experience with their smartphones. Tesla has issued software updates previously, which have enabled their cars to enact new features like sleep mode and hill start assist. The latest press release detailing Software V6.0 says the latest slew of updates gives Tesla owners even more options for customization.
“The Software v6.0 update introduces traffic-based navigation and commute advice, provides an in-car view of daily schedules, enables location-based air suspension settings, and allows owners to name their Model S and start it remotely using their mobile phone,” the company announced.
The changes that Tesla are implementing are likely coming as a result of consumer feedback, which the company is taking a unique approach to. While many companies are sufering from PR nightmares regarding their customer interactions, Tesla is instead inviting suggestions for improving its products, and responding to it.
The way Tesla is handling customer suggestions, along with the method it has chosen to implement those changes, is a refreshing new approach in the auto industry. The company has already paved its own way in terms of vehicle design, technology and sales, and is now apparently revolutionizing customer service as well.
Every brand you know has to adapt and change the way it builds its product(s). The questions each brand has to consider internally are: "What is the future of play? What is the future of health? What is the future of driving? What is the future of travel? What is the future of work? What is the future of home?" Brands must changeover from being analog companies that create only physical products to copmanies that embed digital experiences within their devices. Such "digital embedding" allows consumers to create their own, custom experience...turning a product into a "new" product for themselves. Not only does this attract customers, it gives any product long legs...for if you can continually change a product, you don't tire of it as quickly.
A good example of this is how Mattel is looking at toy design. Mattel asked internally, “How will kids be playing in the future? Can we take our incredibly successful, popular physical toys and associate them with a digital experience, so kids can play across both the physical and the digital? Then can we take it a step further and help kids turn these into new toys that they can show their friends?”
The strategy builds on Mattel’s existing strength, which it’s taking advantage of during a transformational period in the market. But look at it from a parent’s point of view: If your kids are having an experience that is playful but seems educational, you’d be encouraging it rather than discouraging it.
Another example of responding to the four, transformative customer trends can be seen in the medical device industry. Take a look at hip replacements. One can now print an artifcial hip, custom designed and fit for a person's exact body type and size. To do this, only software and a 3D printer is needed, along with the printing material required by the design. Compared to the not-too-distant past, where your only option was the one-size-fts-all hip, which would you prefer?
The same, disruptive thinking goes with other medical devices, such as heart valves, stents, knee replacements, hearing aids and more. The transformation is enormous as now, instead of buying of-the-shelf products, patients can simply have them easily built (or build them themselves).
Hurdle 2: Capturing (and Keeping) Consumers’ Highly-Divided Attention:
Social media, rapidly-emerging new technologies and fast, user adoption rates combine to create a new workflow, new habits and an entirely new way of communicating with customers that previously just simply did not exist. These days, people avoid commercials like the plague, using advents like TiVo to skip past such interruptive messages. Rather, they give their attention to areas they elect and control entirely themselves. Failure to recognize this change in where consumers point their attention is, once again, an invitation to become extinct.
A great example of this can be seen in perceptual computing. Most of today's camera's still take 2D or "fat" photos and video. Yet Intel, and other companies, have been introducing 3D-depth cameras. As such devices allow for a much richer experience, making possible all kinds of interesting edits and views not possible with a simpler, 2D device, social media has gone wild. News of these new, innovative cameras has spread like wildfire across Twitter, Facebook and the like. Yet with any new, advanced technology come questions, requests and even detractors. The importance of watching what is happening on social media with a given product and working to manage it, respond to it, consider it...is critical in shepherding a product to its fullest potential.
Hurdle 3: Staying with the Changing Times:
There is little doubt that product manufacturing companies (in particular) are facing disruption across the many fronts outlined here today. The only question is, what will they do about it? Will they stay stuck in the not- too-distant past or make important, categorical changes that acknowledge consumers' changing behaviors? Given the very rapid pace of technology and innovation, companies looking to survive and, better yet, thrive, can face this disruption head-on, embrace it, and use it to their advantage. Doing so is to follow the forward path of success, well into the future.