What are smart products?
Generally speaking, smart products are physical products with embedded sensors, software, and connectivity that allow them to collect and exchange data real time. The smart product category includes a huge variety of items, from fitness trackers to smart thermostats, from vocal assistants to connected cars, and much more. However, even products that don’t have sensors or independent means to connect to the internet can also be ‘digitised’ thanks to smart tags. These tags allow consumers to connect to the product using the Internet connection of their smartphones. Through a web application, consumers access information about the product as well as services or other relevant experiences. In addition, this connection allows the company to collect feedback and data on how consumers use the products.
Smart products and IoT are the same things? No. The "Internet of Things" is a much larger concept that includes smart products but also extends to other connected devices and systems. For example, an IoT system might include sensors in factories, connected traffic lights, or even the monitoring of ocean conditions. On the other hand, smart products are more consumer-oriented.
And what about smart products and connected products? Connected products are those that can exchange data with other devices or systems, but they don't necessarily have smart features built-in. A connected product might be a traditional device that's been equipped with connectivity, such as a USB port or Bluetooth. A smart product, on the other hand, has smart features in addition to connectivity, such as the ability to collect and use data.
How do they work?
So, smart products use sensors to collect data about their surroundings and the people using them. Then, they transmit this data wirelessly to a central database, where it can be analysed.
At this point, a company can have insights into how customers use the product, their habits, preferences, personal information, and so on. In other words, it can reach a deeper knowledge of its customers.
At the same time, smart products send data about their performances and status. In this way, the company can constantly monitor how they are working, and if there are any malfunctions or unexpected behaviour.
By combining consumer and product information, a company has enough data to make better business decisions regarding products and, of course, customer engagement.
For example, through a smart thermostat it might collect data about temperature, humidity, and occupancy and use them to optimise energy usage. Through a smart fitness tracker it might collect data about heart rate, steps taken, and calories burned and provide personalised feedback and recommendations.
Smart products, AI and Machine Learning
To make sense of the data smart products collect, companies often rely on Artificial Intelligence algorithms to turn them into useful insights. In addition, Machine learning helps to build predictive models.
Imagine you're a company that sells smart thermostats. You want to know whether a customer will buy a new smart thermostat in the next year. In order to do that, you can use Machine Learning to build a predictive model based on data about previous customer behaviour.
If you have enough data, you can even make predictions about more detailed customer behaviour. For example, you might be able to predict that a customer who buys your smart thermostat is also likely to buy your smart light bulb. You can use this information to offer discounts on both products or bundle them together.
In this way, you will improve customer satisfaction and customer loyalty.