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A note from our CEO:
Hope you had a successful start to 2019. A key theme we see more of today is connection. In partnering closely with business leaders, we continue to help them connect digital across the company to
re-imagine how business gets done.
With connection in mind, this issue explores how companies use new tools and technologies, including AI, automation, and others to better understand and connect with their consumers.
We are also thrilled to announce the launch of our new website, which embodies our culture, impact, and innovation as we partner with clients to build next-generation businesses. We look forward to connecting with you.
– David Niles, CEO of SSA & Company and President of G100 Companies
Ideas That Made Us Think
How World’s Largest Beer Maker Uses AI and Sensors for Predictive Maintenance
AB InBev company installed wireless sensors that detect ultrasonic sounds, which are analyzed via machine learning to predict when motors might malfunction. The sensors transmit real-time sound information, which can be compared to a normal, functioning motor’s sounds to detect anomalies. While sensors have been around for a while, evolving capabilities in “edge computing” now enable companies to collect, analyze, and act upon real-time sensor data. These non-invasive sensors allow AB InBev to know days in advance that something will go wrong and within hours when it’ll fail. Installation at just one site cost AB InBev $20,000 and has prevented $200,000 in product loss and unscheduled production line halts. Industrial companies that wait too long to take advantage of low-cost sensors and machine learning will fall behind. Manufacturers that take the next step and reuse the sensor data to optimize operations can leapfrog competitors with improved productivity and quality at lower cost.
Fender Connects for Digital Success
A key trend from the NRF’s Big Show: companies need seamlessly connected digital and physical experiences. Fender offers a great example as it evolved from a physical-products only company to a digitally-engaged company. This revolution originated from an eye-opening consumer study that highlighted un-served market segments and demographics, as well as customer acquisition and retention strategies. Fender Play’s online lesson subscriptions help develop lifetime customer value. Subscribers who purchase on Fender’s website spend 40% more than those who don’t. Fender’s Mod Shop offers custom guitar design and construction, highlighting personalization and creating connections beyond the physical. Mod Shop capabilities also support Fender’s limited release guitar program. Fender considers a range of influencers—including elevating consumer/retailer experience, improving sales opportunity, increasing productivity, reducing cash needs, decreasing operational risks, and enhancing security—when evaluating digital investments. In other words, Fender connects digital across the organization—something we call “going horizontal.”
Faster Fulfillment Is Critical to Meet Consumer Demands
How can companies keep up with consumer demand for two-day delivery—an expectation set by Amazon and some would argue, funded via its AWS business model? Companies have had success with various tactics to meet the window. Have the revenues justified the costs? Target put its existing stores at the center of its fulfillment strategy. Best Buy sped up fulfillment by relocating a distribution center closer to demand and increasing automation. Others are deploying “pop-up” distribution centers and “micro” warehouses. Amazon’s disruptive forces and new consumer expectations are forcing companies to find creative ways to speed last mile delivery without destroying operating margins.
Wearable Tech Helps Healthcare Companies Create Stronger Customer Experiences
New capabilities from Apple and Alphabet allow consumers to get real-time health data in a more consistent fashion, allowing for faster medical interventions and lower-cost treatments that reduce the incidence of emergency care. Apple partnered with Aetna to launch a new app that uses Apple Watch data to provide insight into users’ health. Alphabet’s Verily is developing a shoe that can detect weight and movement. John Hancock’s Vitality Program gave discounts and rewards to users who linked their Apple Watch to its app and changed their diet and exercise behavior. Participants averaged a 34 percent increase in physical activity compared to patients without the Apple Watch. Health insurers historically have low customer satisfaction due to complex plans and unmet claims payment expectations. These new technologies can help companies differentiate themselves with meaningful wellness programs that create stronger, long-lasting relationships with members, potentially lowering non-routine clinical costs and overall member acquisition costs.
How Automation Could Impact Banking
As automation reduces consumer experience friction, bank customers have become increasingly comfortable with having a relationship with multiple providers to meet their financial needs. As a result, traditional banks face the risk of diminished relationship depth with their core customers and are confronted with the real possibility of becoming a transactional utility. Financial institutions that fail to effectively use their data to make decisions for customers may lose their competitive advantage. Automation allows for a more competitive, open market and can create convenience for the customer by matching them with the best product available. As automation continuously evolves, established banks and FinTech companies alike will have little choice but to adapt their operating model to better serve a less sticky customer, and one who demands a more digitally-enabled and nimble financial provider.
SSA & Company Quick Hits
Thought starters from the business world
1. Not sure if your honey is pure? Machine learning can now help you determine the truth
2. See yourself – Warby Parker introduced virtual try-on through its app
3. SSA & Company VP Nick Kramer describes the game-changing impact that 5G will have on driving growth in beauty retail
4. Google for DNA – computational genomicists are building a database for DNA and disease
5. What’s on tap? AI is now being used in the beer making process
6. SSA & Company Senior Advisor Deb Henretta shares three key takeaways on tackling digital transformation in this month’s #Run2Digital
7. A new wave of technology is hitting marine insurance
8. JPM Coin – the first cryptocurrency created by a major U.S. bank has arrived
Exclusive Content on Modern Leadership from TMG
When High-Performers Behave Badly
Taylor Griffin, COO and Courtney Hamilton, Managing Director of our sister firm, The Miles Group (TMG), contribute insights on how to spot and manage toxic behavior from top performers in the workplace. TMG is a leadership consulting firm focused on driving company performance through talent development. TMG’s services are customized to the client and focused around leadership development and include succession planning, assessments, and coaching.