The five causes of recent rampant business model disruption were brought about by the shift from a physical space to a digital space, for example, it is now common for transactions which would normally have occurred in a brick and mortar space to now take place online. This digital disruption has impacts beyond the retail space and I believe that this digitization will proliferate the consumer market from the most complex to the simplest consumer products.
Consider the following from Saul J. Berman in “Not For Free”:
“These trends do not effect only industries whose product can be wholly digitized. For all industries, the rise of ubiquitous communications, virtually unlimited low-cost bandwidth, virtually unlimited low-cost processing power, and changing consumer expectations means that vastly more information is flowing to and from customers, so that even physical products can now have a useful information component. Take, for instance, the automotive industry’s pursuit of information services like GM’s OnStar and Ford’s Sync. Those are digitized information products attached to a physical product. Or consider the wide range of industrial tool companies that now offer remote monitoring and preventive maintenance services to extend the life of their physical products.”
Berman further discusses the potential of these products being linked in a smart, cohesive manner:
“The increased information flow is set to grow even more rapidly in the decade ahead as the “Internet of things” that futurists have discussed for the last decade begins to find application in the real world. Over time, more devices will be connected to information networks able to create or react to data. The firm I work for, IBM, bundles these trends together under the rubric of a “Smarter Planet” – a phrase that suggests a world where information is created and consumed everywhere.”
The preceding passages have at least a couple of implications on consumer product development. First, not only high tech products will be digitized, at least in an informational sense. Consumer products all the way up and all the way down the complexity spectrum will contain informational components or some type of connectivity.
Second, the connected nature of these devices will over time evolve to operate in a cohesive manner. The combined consumer products have the potential to far exceed the functionality and performance sum of the individual products.
1. J.R. Sedivy. Business Model Disruption: http://jrsedivy.com/business-model-disruption/
2. Saul J. Berman. Not For Free: