IoT Knowledge Gaps Exist In Consumer Product Industry
The internet of things (IoT) is already beginning to change how consumers shop and how consumer and packaged goods (CPG) companies do business. Brands are also exploring ways to build upon these efforts and use the IoT to deliver more personalized customer experiences.
Whether it’s monitoring the supply chain, tracking how products are used or gaining more insight into shopper preferences, the IoT is ushering in an era in which data can be used to personalize consumer experiences and deliver proactive services. However, there is also a knowledge gap in the consumer product industry, with just 36 per cent of consumer products (CP) organisations having the knowledge required to build an Internet of Things (IoT) business case, reveals the findings of SAP’s global study on IoT adoption trends in the CP industry.
On how the industry will derive value from the fast-growing IoT market, expected to reach US$1.29 trillion by 2020, the study revealed that only 41 per cent of CP organisations surveyed recognise clear applicability of the IoT to their business and that just 39 per cent even have a solid understanding of what the IoT is. The study indicates that these are foundational elements to strategic adoption of the IoT in the CP industry.
“To effectively utilise the IoT, aligning business objectives throughout the supply chain has to be a top priority,” said E. J. Kenney, senior vice president, Consumer Products Industry Business Unit, SAP. “A digital core and real-time platforms are key to digital transformation,” he added.
As some others see it as a wait and watch policy. the IoT may not immediately have as dramatic an effect on CPG as it does on retail, there are signs that both investments and applications are increasing. A September 2015 KPMG poll of global technology business executives found that consumer/retail topped the list of industries with the greatest monetization potential over the next several years.
According to an August 2016 report by Retail Systems Research, 80% of retailers worldwide agreed that the IoT would have a dramatic effect on consumer products in the next three years. This indicates, given the many new and exciting ecommerce developments and the opportunities that retailers and CPG companies will have to gather and share IoT data and use it to their mutual benefit.
The survey also also revealed that the true business value of adopting IoT technology in the CP industry will be found in process efficiencies, and accordingly, organizations leading in IoT adoption are prioritising processes and skills, while those lagging behind are still mired in conducting research or consulting third-party experts. For example, 46 per cent of leaders reported that a key step to unlocking potential business value is the allocation of more budget to their IoT strategy; however, just 14 per cent of laggards prioritized increasing their budget allocation.
While there are ample challenges brands need to overcome in this area, industry enthusiasts can look forward to witnessing the new innovations that consumer goods brands will unlock through IoT and helping brands along the way.
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