Samsung NEXT on Connectivity Within the ‘Experience Economy’

On any given day, new apps and electronic devices enter the market, promising to make our lives easier, more convenient, or just more fun. In the midst of this highly saturated market, how does a tech company make its offerings stand out?

On this episode of Mastering Innovation on SiriusXM Channel 132, Business Radio Powered by The Wharton School, Brandon Hoffman (WG’15), a member of the Strategy & Innovation team at Samsung NEXT, discusses the role his relatively small innovation group plays in transforming the customer experience that Samsung delivers. Hoffman touches upon different areas where they strive to add more value for customers, whether that’s fitness, food, or other wellness categories, and the ways Samsung NEXT targets these areas to differentiate its products.

An excerpt of the interview is transcribed below. Listen to more episodes here.


Siggelkow: You stressed this notion of custom experience. Obviously that’s something that I’ve become really interested in through the work that I’ve done with Christian [Terwiesch] on Connected Strategy. Maybe you can expand on that a little bit. You stressed the point that you’re trying to create these new software applications that go a little bit beyond functionality and go into customer experience to unlock insights. Can you give us one or two examples of what you’re working on, if you can?

Brandon Hoffman (WG’15), Samsung NEXT

Hoffman: At a high level first, a lot of it is really this notion of the experience economy, right? Rather than just looking first at the technologies themselves, we’re trying to take a step back. What are the experiences that could be unlocked? The importance really is how we’re seeing consumers prioritize experiences over things, right? Being a consumer electronics company or any company that’s selling a good, that’s very important to be cognizant of, to be in front of. You see this across categories and especially with millennials: they’re putting off purchases of goods that formerly were must-haves. They’re delaying them, whether that’s an additional electronic device or a house or a car, or even luxury goods.

All of that is so important and core to the way that we think of things. An example I could touch on a little more deeply is in the area of health and wellness, specifically fitness. It’s something that I’m quite interested in looking at, as well as the food experience or the kitchen experience. We like to layer not only the experiences, but consider how do they really interact with the home and the future of the home, especially since a lot of our electronics and devices are core to the home. To your point, you mentioned connectivity, connected devices, and strategy from an IoT standpoint. How do we see each room within the home evolving and delivering an experience, perhaps in ways that it hadn’t before? Are there experiences that used to only be available outside of the home that are now able to be brought in and unlocked through technology on our devices?

So, touching on just the food experience in the kitchen, one of our product teams is Whisk. Through working with data, various recipes, cooking sites, they’re trying to ultimately unlock a more meaningful food experience for the consumer at the end of the day within the kitchen, more than just a simple appliance that’s serving one function.

In the area of wellness or fitness that I’m looking at and intrigued by, a place such as the living room used to be sedentary. You’d formerly be there and just speak with guests or people in the household. Then, people were tied to the TV, right? You’re glued to the content — maybe gaming for kids, whatever it is. But now all of a sudden, a personal training experience you used to only have at a gym or a studio is unlocked through thoughtful integration of hardware and software. And that fitness experience, that adds value to your life. Now the living room serves a purpose beyond what it ever had before. Thinking of the home in ways like that, it’s just very exciting.

“Experiences, to truly be unlocked, require thoughtful integration of both hardware and software.” — Brandon Hoffman

Siggelkow: Indeed. So there is the product angle and then the experience and service angle. Now, as you’re exploring the fitness field, what are some of the initial insights and initial barriers that you’re finding as you’re doing this research? Obviously, Samsung is not the only one that tries to put devices into our houses, right? Everyone is thinking about the connected house and a connected home, and so we all have this vision of trying to create a more connected life and using that data to create better experiences for customers. But there are probably also a lot of barriers, not just on the technological side but also on the customer side. As you’ve gone through that research in the health and fitness area, what are some of the barriers to adoption that you’ve seen in creating these experiences for customers?

Hoffman: Yeah, that’s a great question. One of the most important takeaways that I’ve observed with fitness — and I think this applies to many other experiences — is that the world is generally split into this dichotomy of hardware or devices, and then software and services. So you get these pure plays. If you look at fitness, you could even try to do a brief history lesson in terms of various fitness equipment and devices being sold over the years trying to make their way into the home — exercise bikes dating back to the ’60s, or infomercials in the ’90s pumping out all sorts of pieces of equipment that do all these different things.

At the end of the day, if and when someone purchased a piece of equipment, how much utilization was truly captured, right? You can only sell so many of those before people started to realize, “Okay, I’m not buying another one. I don’t use my current one. I hang my clothes on it.” It was in the corner of the room, or in the garage. That could only go on for so long. Then over the past 20 years, every startup, every company, the way they’d scale was just software, right? And then you got these app stores, so now it’s even easier to reach potential users and customers. There’s clearly still a lot of difficulty in acquiring a user because of all the competition, and that’s what you see, right?

So, across fitness and health and wellness broadly, tens of thousands of apps out there are continuing to come out. How does one differentiate itself from another? How does one acquire the end user? What do the customer acquisition costs look like over time? That’s where unit economics are so crucial. Even then, as a standalone pure play software application, how great of an experience could you truly offer if this experience really requires both [hardware and software]? And that’s my biggest takeaway, and a recurring theme around here with the way we approach things as both NEXT and Samsung Electronics: these experiences, to truly be unlocked, require thoughtful integration of both hardware and software.

About Our Guest

As a member of the Strategy & Innovation team at Samsung NEXT, Brandon works to create the thought leadership agenda on behalf of the Chief Innovation Officer delivering insights on disruptive trends relating to Industries, Consumers & Technologies, and Geographies. In this role, he leverages his expertise to educate Samsung NEXT, Samsung leadership and the wider Samsung community on both the challenges and opportunities facing the organization, all while driving collaboration between Samsung NEXT and the broader startup ecosystem. He also co-founded and leads the Diverse Founders Initiative, which is focused on finding, accelerating and investing in early-stage startups founded by diverse entrepreneurs.