Innovation per se always changes business, prompting new ideas, boosting effectiveness and improving the decision-making process. Innovation does not just help increase profit but creates jobs and contributes to customer trust.
One of the most recent innovations, the Internet of Things (IoT) has become a household name in the tech industry, promising to change how we interact with the environment and devices around us. These smart objects can already collect and exchange data, contributing to seamless integration of the physical and digital worlds. As of 2021 alone, the number of inter-device connections in the world was three times higher than the number of internet users (14.6 bln against 4.9 bln). By 2030, the share of the Internet of People will become small compared to device-to-device interactions. During this period, the role of the IoT in the global economy will be worth trillions of dollars, significantly influencing the global GDP. IoT applications will substantially speed up trade, improve public safety, reduce road fatalities, increase harvests and cut expenses in industrial production and other sectors. IoT implementation effects across industries are amplified by its convergence with 5G technologies, Artificial Intelligence, BigData processing, cloud and edge computing as well as distributed ledgers.
E-cоm and Artificial Intelligence
Retail is one of the leaders in using Artificial Intelligence (AI) in customer service and distance service. According to a 2023 survey by Yakov and Partners, all companies in e-commerce have already identified AI implementation as their key strategic goal and successfully scale up AI solutions corporationwide.
AI not only helps build dynamic pricing but also creates personalized recommendations based on the analysis of preferences and purchases of all customers with similar behavioral patterns. For example, here is a case of Russia’s fashion retailer: Lamoda launched a virtual assistant in its app that helps pick out clothing and find the right item using visual search. Integration of AR for trying clothes in real time can become the next stage to expand customer experience and effectiveness.
By analyzing data about real customer behavior, AI can identify unique patterns and find new audience segments. This helps predict conversion more accurately, optimize advertising campaigns and increase the general ROI that shows the effectiveness of investment. One example is Askona, an orthopedic mattress and sleep product manufacturer. The company used machine learning to analyze customer behavior on its website and created detailed profiles for customers buying bedroom furniture. This effort reduced advertising costs in this segment almost six times.
AI implementation is not limited to major corporations. Generative AI can be helpful to small and medium-sized retail companies – for example, for prompt communication with customers. It is possible to teach a neural network to respond to customer reviews. It will give a standard response to happy customers who left a positive review. For example, Ozon and Wildberries have already linked accounts to the Review Helpbot for quick responses.
Cloud cities, or new reality for businesses and beyond
Many big cities in Russia are creating their digital duplicates, the largest having been developed in the capital. Moscow’s digital doppelganger is its exact 3D copy (a photogrammetric model) of its territory with all utilities and transport networks mapped out, along with vector models of certain buildings, BIM models, underground communications models and dynamic layers. This photogrammetric model is enhanced by 5,000 analytics layers with data sets covering all areas of life in the city that are updated in real time. This platform is used at every stage of renovation, urban planning for entire neighborhoods, and for monitoring waste disposal, public transport and housing and utilities operations.
Innovation in business opens new horizons for companies in many industries. Real-life examples show how this technology can improve processes, boost performance and create unique user experience. In the future, we can expect deeper implementation of AI and IoT by SMEs, leading to further transformation of the economy and society in general. Successful integration of technologies requires changing management approaches in addition to tech solutions. It is important to build a culture of innovation in a company, encourage cross-functional interaction and, most importantly, set clear and digitized goals to prevent becoming hostages of the implementation for the sake of implementation mindset.
By Konstantin Negachev, CEO and founder of VRT