It just seemed to use like there was going to be a whole new requirement for a layer in the enterprise stack to manage stuff. And that’s why we started the company—as a Platform as a service (PaaS) to manage the data about your things in real time, to make them part of the web. That’s what we’ve been doing for the last five years, and luckily the rest of the world is slowly catching up.
If you think about the way the online world has evolved, when everybody started having websites suddenly content became a real problem to manage. So content management systems were invented. The same when customer relationship touchpoints became very sophisticated and multi-faceted and cloud CRM software helped to manage that data. This is a version of that. You subscribe to a software platform in the cloud to manage the relationships and the data flowing to and from your physical things.
You’ve said that with your recent partnerships, products will be “born digital.” Can you unpack that? How does it affect how consumers view products?
It’s a phrase we came up with to try to describe this new capability that products will have. Pick something that surrounds you right now that isn’t electronic—say, the jacket that you’re wearing. Imagine that that object is actually only half complete. So the stuff you’re wearing is made of atoms, and it’s the design and the fabric and all of the functional and emotional attributes that come with that designed product.
But actually, it’s only half there. The other half is in the cloud. It exists both in physical form, and in digital form. In the cloud it has a corresponding data profile, if you like, like a digital twin. A cloud half that maps exactly against that product. It knows where the materials came from, where it was made, when it was made. Where it traveled to. If you enable it to and you connect it, it now knows that it’s owned by you, because your digital identity is associated with that digital identity of the product. So now it can deliver a particular content and personalization in terms of services to you.
That half of the product is something that we’re working with the labeling providers to put in at source. At the point where the product is made at the factory, it will get made with a unique identifier that is actually attached to the product physically, like a unique serialized code that on the label of the clothing item, or an embedded NFC chip, or a serialized QR code on the top of every metal can that soda drinks are put into. At the point that product is actually created and manufactured, it has a physical serialization ID, and a corresponding digital identity in the cloud.
So by that definition, that product is born digital. It is both born physically and digitally. When it comes into the world, it has a data capability to it. And of course, from the point of view of marketing, that makes it very interesting for brands. The question for brands is not, “do you want to do this?”; it’s “what do you want to do with it?” This stuff now comes into the world with these capabilities; how do you want to leverage that?
What applications have brands been the most interested in exploring so far
It depends partly on sectors. In consumer packaged goods, food and beverage, we’re seeing a lot of interest in things like traceability in the supply chain, partly because of legislation for things like product recalls—a recall even happened at Ben & Jerry’s not too long ago. One machine goes a little bit wrong for one period of time, and suddenly there’s a whole load that gets made that need to be recalled.
The problem is that company has absolutely no idea where those things are. They literally don’t know. So they have to recall everything off every shelf, and this is a very expensive and inefficient process. The fact that you can now have traceability of knowing where the ingredients came from, which batches they went into and where they went means that you can run a report saying “The products that were produced between these time frames in this factory where there was a problem, where are they in the world? How do I get them back from the retailers?” And if you have unique codes on the products, you can also send messages to consumers when they engage with them, saying “Actually, there’s an issue.”
In apparel, anything that gets you closer to customers is incredibly attractive to people in an age where, frankly, Amazon’s eating all of their lunches. There isn’t a manufacturer out there who isn’t aware of the Amazon effect. They’re already the biggest apparel retailer, or about to be, in America. They’re now launching home products from coffee to diapers.
If you look at how Amazon succeeds, and Google and Facebook and all of these “new economy” companies, they are relentlessly forging one-to-one connections with consumers with scale, and networking that data and learning and personalizing. They have these intelligent data platforms that enable them to lock up those markets, and expand them, and continually innovate. Whereas most of the people who make products have no idea who their consumers are.
The idea of turning products into media channels that can engage with consumers and create a one-to-one enduring connection is a very, very powerful idea.
Are there any applications that you are excited about, or would like to see more brands experiment with?
The product is an interface for content and service delivery. It makes the world around you work better with that product, digitally as well as physically. The example being the Rochambeau smart jacket. You buy a jacket that you think looks cool and you want to be seen in. And the places that you want to go and be seen in, the jacket actually helps you get in and have a unique experience. These are logical adjacencies to the core raison d’être of that brand, and of that product expressing that brand.
So we often ask this question: What would the product do if it had a digital life? I think that’s a really interesting question to ask. The answer’s going to be different for a designer jacket than it is for powdered milk. But there is going to be a logical digital extension of what that product could do to help you get more out of it and help you enjoy life more. And some of those answers to what those applications could be, I think, actually need agencies to lean in and help the clients figure it out. Does the baby milk just give you nutritional information, or does it trigger digital cartoons that help entertain your baby so the mum can put her feet up and have a nice cup of coffee? These are creative ideas that have to be rooted in what’s the brand about, what’s it trying to be, and what are the digital powers it should give its product to have the maximum impact. And I think that’s a very interesting creative challenge—the new frontier of consumer engagement is the products themselves coming to life.
So I’m excited about the consumer engagement side, I’m excited about the tracking and the analytics. Data that was previously locked into the product becomes unlocked. What’s it made of? Where is it? Who’s using it? Is it being counterfeited? Is it trying to be sold in a place it shouldn’t be? What’s happening to this product? Is someone trying to return it fraudulently? All of these things are things the product knows, but it can’t tell anyone, because it doesn’t have any instrumentation.
The third use case would be to do with connected devices. If I’m actually controlling products with an app, because they’re in a smart home environment, how do I operate those in real time, at scale?
From where you stand, what stage are consumers at with engagement? Are they used to it, or do they still need to be pushed to engage with a product digitally?
Like many things, there’s a lot of variables. You go to China and parts of Asia and you can’t move without QR codes. The things that were written off in the West are literally impossible to do anything without. In China, I can’t imagine you would do any marketing campaign that was really serious without involving WeChat and QR codes. And let’s not forget that WeChat is actually the global model for every social network. Facebook is following WeChat’s roadmap, no question.
You go to the West and you look at things like swipe & scan behavior, people self-checking by scanning bar codes in supermarkets or Oyster cards in London where millions of people every day tap NFC. And there’s NFC contactless payments tolling out at scale globally. So there are different kinds of behaviors and norms emerging.
And obviously it completely skews depending on the age group. For millennials or the younger generation, the mobile phone is a remote control for the world. It’s how they live their life. So there’s a fluency and a familiarity with using the mobile to get information service about almost anything. Maybe different demographics would need more explaining than younger demographics would.
I think it’s an emergent behavior, but I think it’s also hugely dependent on the proposition. The oldest rule in the book is the value exchange. Is it something that’s worth doing? If you give a good call to action and a reason for doing it, people will do it. If you knew that scanning that bottle of Lynx deodorant gave you a month’s premium subscription to Tinder, and you were using that deodorant because you were hoping to pick up people because that’s what the advertising said, I think you’d probably do it.
The barrier is that it isn’t yet a default. People don’t walk up to products and expect them to do stuff digitally. But increasingly they are, and they will. So the question is, how do the brands that want to take a leadership role in this help define this layer of digital value that surrounds products? And don’t forget, if you don’t do that, the companies are out there who will do it on your behalf. There’s nothing to stop Amazon, with Echo and Dash buttons, who are already putting those interfaces in place. Shazam and Snapchat—all these companies would love to sell the brands the media access to consumers for interacting with their products, then they then own the data and the customers. It’s a crazy deal.