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The consumer goods sector is under siege, as profit margins are being attacked from all directions.

On the one hand, energy and commodity prices continue to rise pushing up costs. Yet discretionary spend is being squeezed by tough economic conditions with the result that the consumer, like the commercial buyer, wants more for less.

However, technology developments – in particular the emergence of machine-to-machine (M2M) communications – are providing increasing evidence of another potential avenue for profitable growth. The advent of ‘smart homes’, described by industry analyst Ovum as “homes full of Internet-connected devices, from security systems to kitchen appliances”, is moving M2M beyond the world of the enterprise to that of the home and the consumer market as ‘the internet of things’.

Telecoms will play a key role here, as mobile networks connect people, homes and devices in an increasingly sophisticated ecosystem which forms the basis of everyone’s daily life. And such developments will be pushing at an already open door, as consumers already used to sophisticated communications devices such as smart phones and tablets will be comfortable with a similar level of functionality provided by other consumer electronics items.

First-generation consumer products based on ‘the internet of things’ include cameras, e-readers and handheld gaming devices. Looking ahead, tomorrow’s ‘connected home’ will also allow the householder to monitor domestic energy use, as well as remotely access and control appliances, thermostats and house security systems – via any device.

Everybody wins. This is good news for the consumer, for example, as they will be able to improve energy usage and make domestic lives easier. At the same time, consumer electronics manufacturers and network providers can generate new revenue streams by developing cost-effective value-added products and services which enhance the consumer experience.

There is another important dimension here. The emergence of such M2M-enabled products resonates well with the consumer’s growing desire to interact with the products they buy. By making this valuable connection in real-time, the manufacturer will create an engagement platform with potential for a step-change improvement in customer loyalty.

For more information, download the M2M white paper, ‘Global Machine to Machine Communication’