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eCommerce-driven business models in the IoT age

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Do you still remember the keynote speech from Stefan Hamann at the Shopware Community Day 2017? Stefan gave us a look into the networked world of his home which contained 84 active, network-capable devices. Eighty-four devices – insanity! One can only wonder how many devices the Hamanns have in their home now, two years later....

Network-compatible devices have clearly become a part of life everywhere today: Washing machines can send a message when the wash is clean via an app. Heating systems can lower the temperature when we leave the house and ensure that it’s cosy and warm when we return. Lawn mowing robots can be controlled using Apple watch, and Alexa can tell children how far the earth is from the moon. Do we need all of this? Yes, we do!

Here our Enterprise Partner NEXUS United gives you insight into IoT driven business models and explains the possibilities of Shopware 6.

IoT offers retailers and manufacturers a wide range of possibilities 

Granted, at first glance, many applications are just convenient technical gadgetry. But for companies that network their devices and make them smart, there is an underlying strategy to transform an existing business model or create a new one. For example: A heating system can transmit its operating state and service requirement to the manufacturer, whilst the customer can use the app to view the status, change the settings or order a service partner with one click. The connected service technician pays the manufacturer for access to the service portal through which incoming maintenance orders are forwarded. The manufacturer can make use of a variety of options to turn the networked services into revenue. It can also use the operating data it receives to further optimise the digital twin. This is a clear gain in convenience for the customer, and the service partner generates new orders and wins customers.

The number of networked devices on the Internet of Things is growing steadily

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Consultancy giant Accenture expects 70% of a products benefit in the future to be based on digital technologies, with the main driver being connectivity. The challenge for companies is to create digital products and services that meet customer needs on the one hand, whilst generating income streams for themselves on the other. It is a huge challenge, but the opportunities are equally large.

A networked shelf that automatically reorders goods or a machine that predicts its maintenance needs and orders materials have added value with competitive differentiation, in particular in the B2B business. By offering such a service to its customers, a manufacturer is creating a sales channel without competition because the machine, of course, only triggers the order to its own shop. This way of ordering is convenient for the customer, and it saves processing costs compared with placing an order manually.

Networked devices also allow completely new types of business models. For instance, pay-per-use models that bill based on usage and sidestep investment hurdles: A manufacturer of compressors no longer sells compressors but just the generated compressed air. Another example is a consumable material stored in a dispensing machine on the customer’s premises which is only billed once it is removed. The customer saves storage costs and the manufacturer is able to ensure that the customer does not resort to a cheaper substitute product.

The options are endless. Well thought-out, digital products and services tailored to meet the needs of the customer will be reshuffling the market – we are expecting considerable movement here, particularly in B2B. The challenge for companies is to seize opportunities and offer solutions early on. It is great that the new Shopware 6’s API-first approach offers the necessary flexibility to connect further sales channels and, thus, also networked devices and machines. This means that Shopware 6 is already perfectly prepared for current and future transaction-based business models. The B2B Suite with its release processes and additional functions makes the new Shopware platform an optimal tool for all companies that need more than “just” a shop and would like to implement new ideas efficiently.

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