The 3rd Industrial Revolution and what it means for your brand

The 3rd Industrial Revolution and what it means for your brand

The innovative 18th century minds behind the first industrial revolution – which changed the way textiles were manufactured and led to the creation of the first factories – could never have imagined where industry would be in another 300 years.

We are now at the start of a new industrial shift, from mass production into mass customisation – a central driver behind what some have dubbed the “third industrial revolution”.

Like the revolution of the textile industry, and the vehicle assembly line a little more than a century later, the technological revolution of today will fundamentally change the way the world works.

At Techdept we think that this third industrial revolution will be greater facilitated by the trends we see online: of connected devices, frictionless sharing, and collaborative co-creation between brands, entrepreneurs and their consumers.

As the world braces itself for another wave of revolutionary technological change – how can you prepare your brand?

The Benefits Of Personalisation

According to the experts at The Economist, mass customisation using new 3D printing technologies, will greatly enhance the customer experience. The Realities of Online Personalisation report by econsultancy has shown that brand loyalty increases by 66% when customers have the ability to perfectly tailor a product, whether a T-shirt or an earpiece, to their specifications. It will also lead to a number of practical benefits, including using fewer materials – and therefore less waste, a focus for every brand now, for economic as well as ecological reasons .

An in-depth study on mass customisation released by the European Union in September 2013 illustrated how online clothing shops could “increase their conversion rate by two times and reduce their item returns by 10%. Rather than a company mass producing a single item and hoping it will sell, what if your customers could input their exact measurements along with desired design and colour into a web or social app, resulting in a product explicitly tailored for them?

Matt Stempeck, a research assistant at the MIT Center for Civic Media, found in 2012 that online retailers of mass-produced shirts see a return rate of 40 percent due to improper fit. Imagine the money and resources you could save if you could indeed cut that percentage down by using mass customisation.

Introducing The Internet

Much like the technology itself, consumers’ interests and needs are always evolving. We must be willing to ride the wave with them and evolve accordingly. “Mass customisation requires knowledge and anticipation of clients’ needs and expectations,” according to the European Union’s study.

Devices that are connected to the internet create streams of data based on the real world usage of that product. The advantage for brands being that they can learn about their consumers from a variety of these touchpoints and feed those directly into the personalisation process.

The ability to extract both ‘Big’ and ‘Social’ data from the web has advanced massively over the past 5 years. We can now track consumers positive and negative social emotions to create an idea of what a potential customer wants before they’ve even shown an intent to buy. Therefore the way brands can engage with consumers will become more personal, and personalised.

Indeed in the future consumers may advertise their data – for brands to choose them – rather than brands advertising their products for the consumers to choose.

Better To Know Than Assume

During the early 20th century, the innovation of the automobile was seen as fantastic and almost impossible: getting from point A to point B in a personal vehicle that could rival a train for speed was a world-changing phenomenon.

Today brands should aim to inspire the same sort of awe, combining insight from open and social data with mass customisation, to create products that inspire.

A phrase coined in 1999, the Internet of things can improve the consumer experience by letting internet connected devices talk to each other – assuming consumers can get over the, not insignificant, hurdle of trust to actually connect their devices together.

The Economist study claims that “companies now want to be closer to their customers so that they can respond more quickly to changes in demand.” Because so many of us are connected via cloud computing, the ‘Internet Of Things’ will allow brands to more easily follow trends in usage. Your fridge could let your fridge manufacturer know how full your freezer compartment is: maybe you need a bigger freezer!

In effect a product will become a combination of physical attributes, digital services, and temporal qualities – features that change based on real time data to better fit your needs.

The data generated from Facebook’s Open Graph also gives you the ability to know people’s preferences from the things that they share online – as part of their web browsing activity (think about how Spotify shares your plays on Facebook).

By personalising brand suggestions based on interests and recommendations of connected friends, consumers in the Open Graph won’t feel like they’re being sold what they don’t need, which, in turn, increases brand relevance, loyalty and trust.

Social platforms – combined with these new production processes – allow brands the opportunity to develop product ideas which are then produced in small batches. These means a brand could “narrowcast” ideas at micro groups of consumers that are identified online, using Open Graph or other big data sources like Pentaho and Cloudera.

This could become the age of the truly personalised brand.

Mass Customisation

Creating A Brand That Fits – Literally

In 2000, Nike introduced their ‘Nike ID’ product range, where users could customise their own trainers, a great innovation. Yet with data and mass customisation we can foresee an entirely new shift in consumer expectations, which could include true customisation or the product, and indeed the anticipation of consumer need.

It is feasible that a brand could pre-design products in advance, based on the usage data for an existing product. Imagine your Nike trainers containing a chip which sent data on how often you run and your running style, precisely correcting any flaws in that running style. The product is then iteratively improved based on both how often – and how – it is used.

You could feasibly “lease” your household appliances and get a new one every two years that is custom configured to how you use the appliance, removing features you don’t use – to save money and simplify the interface.

Collaboration between businesses, and with their customers – the co-creation of ideas for advertising and product and service development – is now becoming the norm. Kickstarter has this week reached a $billion of funds raised for its projects.

As philosopher John Hagel says: “Since there are far more smart people outside any one organisation than inside, gaining access to the most useful knowledge flows requires reaching beyond the four walls of any enterprise”.

Software companies routinely ask for your feedback on how their products are performing (you know, when they crash!) – why not ‘physical’ brands?

By literally engaging the consumer in the collaborative development of a brand based on transmission of data – both via the product and social platforms – brands can create unique “tweaks” in product design to better fit the needs of that consumer.

The consumer then becomes the co-creator of the brand, with the brand itself becoming a set of core values, and a marque of quality assurance which the consumer aligns themselves with.

The technologies discussed are revolutionising the industrial world, but to take advantage of these technologies, brands will need to undergo a similar revolution in thinking across all areas of the business, from the top down.

Those that do this – thinking laterally about the shifts in culture and technology – will gain the upper hand in this brave new world. What do you think? I’d love to hear your thoughts.

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