Mixing-in-the-Moment: A Smart Technology Disruption Relating to Consumer Systems

June 2021

Mixing-in-the-Moment (MITM) is a smart technology disruption of traditional value chains surrounding consumable additives (like detergents, fragrances, drinks, cosmetics and other fluids).This is proving to be a consistent and predictable disruption, driving new go-to-market routes, and spreading within and between industries. MITM offers incremental value and opportunity to disruptors with commensurate pain, confusion and potentially an existential threat to the business model of the disrupted.

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Key findings for “Mixing-in-the-Moment” (MITM)

Contextual factors in the growing infrastructure of smart homes make MITM consistent, predictable, and to a degree, inevitable

Sensor types and pumps are consistent across industries, data sharing is consistent and AI analytic capability is consistent. With that in mind, a disruption becomes inevitable in any situation where consumable fluids are dispensed from a smart device - there are enough examples now to gain confidence in projecting future disruption. A standard multi-industry execution consists of value created by personalising and customising product experiences, turning the mundane into emotionally resonant and relevant value.

There is a Darwinian performance advantage from smart auto-dispensing disaggregated ingredients at the perfect moment to serve a process

Generic “catch-all” fluids containing many ingredients is inefficient; each ingredient reacts well or poorly to a generic environment factor such as pH or °C; each ingredient in a fluid solution may be unstable with other needed ingredients; or expensive ingredients add unhelpful costs or are consciously avoided if generically applied rather than used only where and when absolutely necessary. With disaggregated ingredient solutions, you release just enough of what is necessary, at the perfect time in the process to optimise outcomes. This facilitates superior marketing claims for efficacy, efficiency, sustainability and immediacy.

There are substantial gains for the disruptors (and substantial risks for the disrupted)

One example from laundry care is reducing total spend by 26% versus conventional ownership. This is cheaper to the user, and the disruptor brand goes from retaining 31% of the total value to 84%, near doubling its physical cash earnings. That value is taken from other stakeholders in the conventional value chain; an appliance brand absorbs the revenue of both consumable brand and retailer. MITM is closely linked to incremental revenues for the disruptor, and consequential losses for those who are being disrupted.

This is driving new business models, particularly D2C and curated shopping journeys

Right now, auto-replenishment is niche - but this is spreading and expanding fast. This is creating more and more uninterruptable shopping journeys where users are locked into device and consumable formats, and because of value gains for users, they like it. There are global consumable brands beginning to react to MITM as an existential threat.

Introduction

Scope
Key findings for “Mixing-in-the-Moment” (MITM)

Consumer Systems

Overview of the Home and Technology strategic themes for 2021
An overview of the strategic theme: Consumer Systems
Aspects that give insight into how consumer systems work
Companies are meeting consumer needs using various strategies
Mixing-in-the-moment is a by-product of consumer system thinking

Introduction to Mixing-in-the-Moment

Disruptions from the increasing penetration of smart home devices
“Mixing-in-the-Moment” (MITM) as a consistent shape for disruption
Modularisation of ingredients has additional formulation advantages
MITM is not new; what is new is MITM technology in-home, at scale
Fluid pumps are a topic we will return to; they matter a lot in MITM
Mixing proximity (in location or time) to consumption defines value
Why all the effort from brands?
MITM delivers strong gains in value retention and user experience
System wide value is the new pursuit (after customer lifetime value)
Device and consumable brands both have MITM retention upsides
Where MITM in-home has reached, and why it continues to spread
The feeling of “disruption” from the perspective of the disrupted
Novelty in “predictable disruption” offers the rough with the smooth
First wave of smart was “pushed” but MITM is a “pulled” proposition
The evidence that MITM is driving growth for new business models
The MITM disruption has a “bridge over water” analogy
The first bridge between islands was a rickety and small affair
Smart technology makes experiments and bridge building easier
We cannot forget what this all means to the “shipping companies”
The same lesson can be seen in the Coke example of MITM in retail
MITM disruption impacts “friends” as well as a brand’s “enemies”
Frenemies: Are we heading into a future of conflict or collaboration?

Micro and Macro Sensing

Smart infrastructure drives both new data sources and data sharing
Sensor types in proximity to the user and mission are scaling
A wider societal tension around data use and privacy is a factor
Health risks are something nearly all of us agree to share data over
When data sharing leads to an ethical or valuable outcome, it is OK?
Common data limits make this disruption consistent and predictable
The difference between micro data and macro data
What local sensing and micro data allow an MITM system to do
Air care gives a better micro example of scent personalisation
What connectivity macro web data allow an MITM system to do
Macro data sources vary by industry; but outcomes are predictable
A driver of edge computing and more intelligent sensors/algorithms
Empathic detection and facial recognition cameras arriving in-home
This is a major hardware upgrade strongly boosting personalisation

Personalised and Customised Reactions

Disaggregated ingredient dosing adds value via process precision
Modularity and the longer-term impacts of MITM on device design
Valves, pumps and fluid viscosity issues affecting MITM scale
Personalising versus customising, in the context of MITM
Personalised and customised “Sense and React” is a force multiplier
The MITM AI balancing act in the “potency versus gentle” dilemma
Creating demand and supply in the same moment adds immediacy
Ingredient customisation to meet user priorities in real life
There is a need for feedback loops in any self-correcting system
The first technology is device and task-specific voice assistance
The second (and game changing) technology is empathic detection

Replenishment Business Models

MITM is incompatible with traditional retail; D2C models are implied
Auto-replenishment reduces disruption points in a purchase journey
Pressure for more intelligent forecasting skills in these algorithms
The forecasting algorithm receiving device sensor input is critical
Subscription models blending device/consumable revenue streams
Consumable choices curated by device and retailer stakeholders
Considering wider relationships, this creates an immediate strain
Commoditisation of consumables inherent in auto-dispensing devices
The proximity of private label
The role of voice services in consumable shopping journeys
Ring-fenced shopping journeys: a curiosity or an existential threat?
Consumer System synergy – fabric care futurology
Consumer system synergy: home insecticides futurology

MITM State of Play (Q1 2021)

How to interpret MITM progress metrics shared on following slides
Laundry care MITM progress to Q1 2021
Laundry care’s best in class: Candy’s WashPass
Dishwashing MITM progress to Q1 2021
Most advanced so far in dishwashing: Henkel’s Somat Smart
Somat smart is doing very well and extended into China in 2021
Air care MITM progress to Q1 2021
Most advanced so far in air care: Moodo
Beauty MITM progress to Q1 2021
Most advanced so far in beauty: P&G’s Opté (1 of 2)
Most advanced so far in beauty: L'Oréal’s YSL Perso (2 of 2)
Drinks MITM progress to Q1 2021
Most advanced so far in drinks: Soma Bar
Robot wet floor cleaners MITM progress to Q1 2021
Most advanced so far in robot wet cleaners: Bissell’s Spinwave
For robot wet cleaners, there are two fluid routes possible already
Household insecticides and vaping disruption by MITM has begun
Interesting observations about the executions of MITM so far
Will MITM replace conventional technology, or remain niche?

Conclusions and Recommendations

A predictable disruption with consistent patterns can be exploited
MITM brings value to the disruptor (usually at someone else’s cost)
Who’s cake gets scoffed varies by industry; but cake stealing is universal
MITM is one way consumer systems are breaking down silo walls
MITM is tapping into the “who owns outcomes?” wider dynamic
There is a move from traditional value chains to MITM D2C
The shape of things to come
MITM solutions offer a Darwinian level of change to task emotions
This is an early glimpse of how AI and smart tech will really help
These are expensive devices at launch but that is already changing
Conventional stakeholders face a potentially existential threat
Select retailers are in position to cover entire consumer systems
It is better to be the “disruptor” rather than the “disrupted”
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