Next Up: Performance Coaching
If HOVR shoes only offered simple personal feedback reporting on the data collected, this would be considered a value-added product feature for many consumers. Being a connected product means that data collected on an individual level is also transmitted back to servers associated with the application developer and host. UA is able to gather and analyze, in a more centralized manner, the activity data from customers using the HOVR and MapMyRun™. This ability to gather data directly from the end-user consumer is a cornerstone of digital business. Rather than product sales to consumers being a one-way street, the connected product experience allows for information to be shared in both directions, directly between the consumer and brand manufacturer. No matter how the shoes are sold to the consumer, e-commerce retail, specialty retailer, brand owned retail stores, it is striking that once the connected product is set-up, communications and information are able to become frictionless between the brand and consumer. The implications of this nascent development are enormous. Imagine what it would mean for increasing numbers of product categories to be equipped with this capability. Knowledge of consumers and their usage habits for products goes to a whole new level. Consumption patterns of all types can be imagined, all giving the brand manufacturer new levels of analytic power with which to adjust its products, services, and supply chains.
Returning to the UA story, this growing knowledge base of athletic performance behavior at the UA labs enables a number of strategic actions. The first is that UA is able to extend the product service package for the consumer by offering individuals feedback about their running activities. UA compares the individual data for a runner against the data generated and researched by its athletic coaches and data scientists. This service manifests itself for the consumer through an app-delivered feature called “Real-Time Form Coaching.” The idea behind this feature is to “help runners reduce risk of injury and make running feel easier.”5 This part of the product value proposition obviously goes far beyond simply protecting a runner’s feet while running. The value-added benefits also align directly to the UA brand by helping its athletic consumers perform better. The app features also include social media type connects where runners can share data and challenge each other, as well as create training plans for 5K races or marathons. UA has added another extension to this concept by partnering with Samsung and its wearables product business. As of this writing, UA has developed technology integration with the Samsung Galaxy watch (Garmin and Apple watches are also supported). This device also has heath-based sensors that gather and communicate real-time and post-activity feedback on parameters such as heart rate, blood pressure, emergency fall detection, and GPS map integration.
It’s a dizzying array of data points for individuals and creates the possibility of pooling data from large numbers of users to open up even more business possibilities.
What Large Amounts of Meaningful Data from Consumers Means for Supply Chains
While one objective of providing added connected services to consumers is to enhance the product experience and value proposition, there are also strategic supply chain opportunities created by building a connected product data base. One way in which better insights into consumer behavior and product usage data could benefit supply chain performance is through more timely and accurate demand forecasts. In our UA example, we should have a good idea, based on the number of runs, length, conditions, steps, and so forth, when a pair of running shoes will need replacement. Making personal offers to consumers that reduce the friction of the replenishment transaction is attractive to both the brand and the consumer. From a consumer standpoint, I may begin to feel some larger switching costs once my shoe purchases are linked to more than the product itself. Now I stand to lose my running history and plans, coaching, and social connections should my new replacement pair of shoes not link to my existing data and app. There is value in being alerted to when the physical performance of my shoes may be dwindling as well. A push reminder and offer, direct from the brand, makes it easier and more satisfying to keep my running habit going. From the brand perspective, there are some intriguing additional benefits as a connected product relationship has been established providing the firm with a legitimate chance at forging a direct-to-consumer business. Irrespective of where the consumer purchased the initial connected product, online data connections and service streams between the brand and consumer create new advantage disintermediating retailers and distributors. The brand is in the best position, based on its knowledge about the consumer, to satisfy their needs for the category. The supply chain can, in this model, be a source of driving demand and revenues, rather than simply fulfilling orders from distributors and retailers.
We have discussed the positive business impacts of improving the supply chain’s ability to forecast in a more timely and accurate way, direct manufacturing resources, manage inventories, and optimize transportation and storage costs amongst other things. What could supply chain leaders do if they utilized consumer-level product usage and behavioral data to collaborate with product innovation designers and new manufacturing techniques? What if these processes were, in fact, connected to the rich and voluminous data stores that are being produced, and enriched each day by connected product end users?