IIOT
Jun 13, 2018

Deep personalization: the next big challenge in consumer electronics

Today's consumers resist being treated as one large mass. They demand personalized interaction on all their devices. People who use fitness wearables are a good example. They now expect these products to offer recommendations based on their specific health and lifestyle as well as their diet, workout routine and work schedule.

We call this approach deep personalization. Deep personalization uses artificial intelligence (AI) and machine learning in a cohesive and integrated ecosystem to explore and learn the underlying patterns that define users' lifestyles and journeys. Now, advances that can detect emotion and interpret health data in real time are on the horizon. They'll coalesce in next-generation consumer electronics devices and appliances, making them context-aware on a much deeper level.

Many top consumer electronics brands have already recognized this. Some have started using smarter ecosystems, such as devices connected via the internet of things (IoT), that have mobile applications to control and manage alerts and notifications. This was evident at a 2018 consumer electronics show, where LG, Samsung, Sony, Whirlpool, and many others showcased IoT- and AI-enabled applications.

Certainly, wearables are one place where smarter electronics have really come into play. Cell phones, connected appliances, and related accessories are integrating to make offers in various ways. And consumers willing to pay a premium for a personalized experience are already gravitating toward devices that provide individualized dashboards.

An exploding smart home market 

But the demand for personalized experience is broadening, too. Research suggests that the smart home market, worth $7 billion in 2015, will explode to over $32 billion by 2021. That means in the next few years we can expect to see many more people adopting new IoT- and AI-enabled smart devices that provide everything from home automation to security, entertainment, and lighting and energy management. Amazon's Alexa and the Google Assistant are already making inroads when it comes to personalized services. They can create playlists based on users' tastes, for example, and sync them with car entertainment systems. They manage day-to-day activities like booking cabs and hotels, they can operate air conditioning, schedule laundry – and much more.

In this new reality, consumers are insisting on faster services, delivered anytime and anywhere at a reasonable price. And in the present service economy, every transaction is critical – whether it involves a purchase decision, device usage and engagement, or upgrades. The good news is that sensors and beacons on electronics mean manufacturers and service providers can amass valuable information to customize offerings for consumers. Of course, firms will have to safeguard personal identifiable information, data privacy, information security and compliance, but the delight of devoted customers makes the effort worthwhile.

The path to personalization 

To take advantage of all the new tools available, companies must align real-time information across channels with individual behavioral patterns (see figure 1). Here's how:

  • Gather information from customer profiles, social media interactions, and search histories. The sentiments, preferences and desires customers express in these forums can help companies design a personalized in-store, in-line, or mobile buying experience.
  • Connect intelligent devices and appliances that recognize usage patterns through AI, natural language processing, and machine learning, and allow them to be controlled and managed through wearables and smart phones. When combined with automation, these devices can take the personalized user experience to a whole new level. For example, consumers can get recipes on their cell phones based on their interests and usage. Or they can save money by automatically scheduling laundry for when energy demand is at its lowest.
  • Use IoT to predict when maintenance is necessary – and alert consumers. Plus, with an automatic service request function, IoT can schedule confirmation calls and visits according to customer preferences, seamlessly sending skilled people with the right tools for the job. That's the human touch.

There's no question about it: With today's highly diverse consumer base, deep personalization is the next big challenge in consumer electronics – a challenge that requires three initiatives:

  • At the device, appliance, and product level, companies must make these tools intelligent by embracing AI, machine learning, natural language processing (NLP), augmented and virtual reality, IoT, 3D printing, and cognitive analytics.
  • At the customer engagement level, companies need analytics to provide seamless experiences. They should also take advantage of better voice interactions, cognitive chat bots, and simpler dashboards.
  • At the experience level, companies need analytics-driven insights to personalize offers for each user. 

Figure 1: Companies must align real-time information across channels with individual behavioral patterns

Three linchpins for success

There's no question about it: With today's highly diverse consumer base, deep personalization is the next big challenge in consumer electronics – a challenge that requires three initiatives (figure 2):

  • At the device, appliance and product level, companies must make devices intelligent by embracing AI, machine learning, natural language processing (NLP), augmented and virtual reality, IoT, 3D printing, and cognitive analytics.
  • At the customer engagement level, firms need analytics to provide seamless experiences. They should also take advantage of better voice interactions, cognitive chat bots, and simpler dashboards.
  • At the experience level they need analytics-driven insights to personalize offers for each user.

Figure 2: Consumer electronics industry is approaching with 3 pronged strategy to digital transformation

A company's reputation is only as good as the consumer's last experience. To stay on top, enterprises must strive for continuous innovation – and a better understanding of the individual consumer will be the key competitive differentiator.

And just consider what it might mean to offer personalized experience as a service. It's a way firms can boost revenue with new offerings while also improving efficiencies and controlling costs to keep the bottom line in check.

About the author

Abhishek Khetan

Abhishek Khetan

Assistant Vice President, IoT and Analytics

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