What is Devicification?
When consumers walk down the grocery store aisle, they're bombarded with choices. For each product line, there is immense competition for market share and traditional packaging methods don't provide the differentiation brands (or consumers) are seeking. But advances in smart packaging are delivering added-value through connected product-dispensing devices and consumables.
What is Devicification?
Devicification (device-ification) is the opportunity to create a physical packaging platform that interlocks with smart devices. The physical platform may have various benefits such as smart materials that extend shelf life. It could also utilize the Internet of Things (IoT) as a means of communicating with a mobile device or computer, with most of the intelligence built into a smart device or appliance.
Jabil Packaging Solutions and Radius Innovation and Development explored devicification and how brands can leverage it to enhance the consumer experience, find incremental revenue streams and reach higher profit margins.
Adding Value to Existing Devices
The convenience provided by devicification elevates the consumer experience. The capabilities of existing devices like coffee makers, paper towel dispensers and water filters can be amplified with the addition of connectivity features.
What once was a passive device can now learn a user's behaviors and consumption habits and use that data to make proactive decisions such as auto-replenishment. Here's how devicification utilizes IoT:
Sensors are used to measure the analog world and convert the information to digital signals to provide a corresponding output.
Through wireless connectivity or remote control capabilities, digital signals are analyzed by intelligent local devices and placed onto networks.
Contextual, raw data is analyzed. This cleansed data is distributed to inform decisions or affect actions.
Brand Enhancement and Growth
Brands can build a differentiated consumer experience by creating a conversation between machines, consumables, and people. Imagine a coffee machine that automatically orders a consumer's favorite coffee pods when its running low on supplies, thereby removing the decision-making burden off the user. Convenience becomes a standard.
But the benefits of devicification don't end with convenience – they begin there. The brands that ease day-to-day living will be rewarded with customer loyalty, recurring revenue streams and perhaps barriers to entry for their competitors.
New Business Models with Devicification
With the advent of the IoT, brands have access to a treasure trove of customer data. By utilizing this information, new possibilities are created in the forms of e-commerce and direct to consumer business models.
Early adopters of IoT will help their businesses reach their goals by helping them move from selling products to services and create new and innovative business models. Devicification will be the main driver of this trend.
Brands can create incremental revenue streams by providing auto-replenishment services through connected devices. There are very high-profit margins for consumables, especially those that are dispensed through premium devices.
The benefits of consumer devices and consumables may be obvious, but innovating, launching and supporting such a product ecosystem can be quite challenging for even the most seasoned brand.