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Platforms Are Becoming The 'Bundles' Of The Digital Age

This article is more than 9 years old.

The Internet of Things was a big story at CES, but there’s a related narrative already delivering one of its best outcomes: Old-school forced media bundling replaced by flexible customer-centric platforms.

The un-bundling of media the last few years has been noticeably disruptive. iTunes singles and Spotify have replaced purchases of full albums, so we now only have to buy what we want. Or consider the rebellion underway against cable companies’ triple-play packages that lock us into internet, phone and TV — stuck with services we don’t need and channels we don’t want. Old-school media couldn’t figure out how to create convenience and value in a customer-driven way and still make money, and they’re paying quite a price to stay relevant.

But platforms are onto something.

To me, the platforms to look at aren’t the operating systems of iOS and Android. Sure that’s a massive and important war, but there are also a thousand skirmishes a day for your everyday choices among networks of brands, such as Nest, Amazon and Uber. They’re bundling and re-bundling their products and services with others — without taking you total prisoner.

For example, my husband and I just bought a house, and getting Nest as a thermostat was an obvious priority. What I underestimated wasn’t the ease of installation or alleged benefits of cost savings and control, but the ecosystem of other products that would follow. The carbon monoxide detector. The remote controlled padlock. The lamp on a timer. And yes, the Big Ass Fan. Brian and I had intended to buy a ceiling fixture with light from the Modern Fan Company, but when we saw some Big Ass Fans work with Nest, we quickly jumped ship from our original plans. That’s right — brand preference now driven not by only the brand itself, but by with whom a brand is friends.

Platforms are quickly becoming the ‘bundles’ of the digital age.

And they’re going to change everything, which is where the Internet of Things does come in. Andy Kangpan, a colleague at my firm, pointed out why this is so timely: Consumers, he aptly reasoned, still don’t fully understand the value of connected devices because we’re all still stuck in the “bundling” mindset of a recently deceased era. Sure, Nest and Amazon Echo seem cool to everyone, but do I really need them? Even buying the beloved Nest, which promises the allure of living in a Jetson-esque environment, requires a real leap of faith that this thing is going to be worth the money.

Idea: Market the net effect.

What brands could better communicate (but don’t) Andy argues, is the value of the ecosystem across brands — i.e., the net effect of brand friends. What truly makes connected devices valuable is that they connect with other products and services, and without emphasizing the potential value this paradigm shift brings to consumers it's going to take much longer to convince them to adopt these new products.

Why should a consumer care if they can control their thermostat with a smartphone? Big whoop. What makes things interesting is that my thermostat can automatically adjust temperature to control the costs that I set out in my personal finance application (e.g., Mint), that also syncs with my AmEx mobile application to auto-pay my electricity bills every 13th of the month.

Simply put, in the post-bundle era marketers have been too focused on what makes individual products unique to consumers, and what marketers need to start doing is making the shift towards focusing on the value proposition of the entire connected ecosystem.

Obviously, this will be far easier to pull off for brands like GE, Samsung and Apple, given they have umbrella brands and already play a central role in consumers’ lives. But new and exciting brands like Nest, Big Ass Fans and August locks can harness the value of their collaborative ecosystems to tempt and engage prospects and build stronger businesses together.

That would be big.