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Espresso of Innovation: Connect to Compete

By Thorsten Linz, Director of Emerging Media & Technologies at Draftfcb Munich

Hello and welcome to this week's Espresso of Innovation; the hottest news and strongest stories from the world of creativity and technology filtered into a quick shot of inspiration. This week, open the pod bay doors, HAL.

Everybody is talking about connected homes but what is it really all about? And what does it actually all mean? Although many may think that the entire world of “connectivity” is fascinating and cool, the reality is that if brands cannot look past that point and identify true consumer needs, they are really just missing the bandwagon. In fact, connected homes represent an enormous source of data and potential for gathering consumer insights. This allows companies and brands to foster this data to better understand their consumer’s behaviour, identify consumption patterns and respond to their needs in a more accurate and educated manner.

Let’s takeLG as an example. The company has already started integrating wireless technology into their appliances such as Wi-Fi, touch screens and will soon add NFC to the equation allowing consumers to receive push notifications or send commands to their devices from within or outside their homes. While some may be thinking “Why should my fridge be able to access the internet?” or “Do I really need Facebook on my dishwasher?” brands are  thinking; there’s never been a better way to build a first-hand consumer shopping history list and target these consumers with promotions based on individual habits as well as build solid personalised loyalty programs. The possibilities for marketers are endless. Simply imagine your fridge notifying you that you are out of water, as theEvian Smart Drop was meant to do. Your fridge could either automatically order a new pack of water for same day delivery or maybe sync with the GPS service on your smartphone to inform you where you can purchase water near you and instantaneously send you a personalized coupon.

The reality of the fact is that, connected homes do not just benefit brands but also consumers. This future development has the potential to transform our everyday life. How? Think about a time when you left the windows of your house open during a long vacation or when you came back home after doing your weekly groceries and realised you were out of milk. What used to cause an awful amount of frustration or make you have to drive all the way back to the shop now only takes about ten seconds to fix. Nonetheless, connectivity also allows for big cost savings. Since we are able manage our appliances, this also means that we are able to manage our energy consumption in a more efficient manner.  For example, connecting these to a home energy management systems can ensure that appliances make the most out of “off peak” electricity times by either automatically timing defrost cycles for night time or even making sure that the air conditioner is at its lowest energy consumption level during the evenings.

This entire idea might sound daunting to some but in fact, this is the world we are quickly moving into. 2013 is the year of “smart devices”. According to a report fromPike Research, the smart appliance market is forecasted to grow from $613 million in 2012 to $34.9 billion by 2020. Therefore, companies which do not focus their efforts on connectivity today might just not be able to compete tomorrow.