Pär Håkansson May 26, 2016
It may be tempting to brush aside such questions as geeky nonsense. But if you’re an appliance manufacturer, try rephrasing it like this: Why doesn’t the coffee machine that I make have an app? If your customers haven’t started asking already for it already, they soon will.
Quality vs Convenience
Appliances are getting smarter all the time. More and more products are connecting to the internet and gaining new – and sometimes quite novel – features. As you probably know, this connectivity race is often called the ‘Internet of Things’ (IoT).
- Your garage door can open automatically as you approach it in your car
- You can initiate pre-heating of your stove from your phone, before you get home
- Your washing machine can learn to run only outside peak hours, to save energy costs
Appliances no longer survive just because they do a great job. After all, despite offering much higher sound quality than MP3s, your CDs are probably in a box in the attic. And streaming covers all your movie needs, even though Blu-ray Discs beat the competition hands down on image quality. In many markets, quality has taken the back seat. A quite basic standard is often considered enough. Beyond that, it will earn you just a few points with most buyers. It is convenience that sets your product apart.
User expectations are changing fast, due to the growing number of smart products with user-friendly apps appearing in many markets. Users will choose a connected product over a non-connected one, because they know it will make their lives easier.
Such expectations are starting to apply to other products and services too. If you haven’t already addressed this, then you need to. And fast. There are plenty examples of major players left behind by new startups that have vision, speed, tenacity and no baggage.
Your answer should not be to recreate the functionality of an unconnected machine and put it in an app. Your customers don’t want to take out their phone just to press a button in an app, if they could just press it on the coffee machine. You need to make sure you add value to your product when you connect it. Along the way, you may also have to change a few other things, maybe even your business model.
A connected cup of coffee
Some examples how something as basic as a cup of coffee is now changing:
Starbucks are well known for innovation within the coffee market. In 2014 they started playing with Apple iBeacons, enabling customers to pre-order coffee from an app and pick it up without waiting in line. Tracking and payment is done via their app. The result is more effective order processing, which benefits customers, staff and, of course Starbucks’ bottom line. Starbucks have stated that 20% of their US in-store transactions in 2015 were through their Mobile Order & Pay solution. They have increased sales during peak hours, when long queues would cause customers to skip the idea of buying coffee.
At Apple’s offices in Cupertino, they have a high-end coffee solution with a connected app. There are no buttons, just a very stylish tap on the bench. As you approach the machine, it can start preparing your coffee.
Each employee has their own personal coffee cup, with their name engraved and a chip embedded in it. Beacon technology enables the machine to read the data from each individual cup, containing the owner’s personal profile and coffee preferences. Their smartphones act as a gateway for the connection, to a cloud-hosted service.
New business models
Of course, adding new technology to connect your appliance does not automatically put you ahead of your competitors. But when used creatively, to add value and convenience for the consumer, it can open up new business models.
If you also supply consumables, such as coffee, milk, cleaning gear and filters, you can add an inexpensive RFID tag to these products. With a convenient storage unit for the consumables close to the coffee machine, the machine can then keep track of stock levels and prompt the user to order more when stocks are running low. Or, even easier: The machine could tell you, the vendor, directly about usage levels. And you would in turn use that data to predict when new supplies or service is due.
I am sure similar opportunities will exist in your business. Are you ready to capitalize on them?
So when should I start?
If you (for example) primarily sell to senior citizens, you will most likely be able to survive for several years without changing much. But if you target twentysomethings and millennials, you are already late to the game. The last new car to be equipped with a cassette deck was sold in 2010. A 20-year old buying a car at that time probably didn’t know what a cassette player was! Instead, if there was no connection for a mobile phone or MP3 player, the car would likely be disregarded as old-fashioned.
Tomorrow’s customers demand connected products with added value, today. So the ultimate question is: When will your coffee machine have an app?