17/10/2024
In many industries, companies operate with huge warehouses in several remote locations, and the very location of items in those warehouses is a matter that is difficult to deal with unless a warehouse management system (WMS) is implemented - which is a set of procedures and rules that organise a warehouse or a distribution centre in a fast, efficient and transparent way. If the company, which is often the case, also deals with the transportation of items from those warehouses (say to sales facilities), then it is necessary to implement the additional system for truckers (their availability, capacities, location, etc.), as well as a function for intermediaries. All this can be solved with one holistic software solution that would unite warehouse management, people management, as well as mediators, vehicles and other important factors. A warehouse management system (WMS) helps reduce lead time, increase product delivery speed, and minimise distribution costs. Grand View Research states, however, that the global warehouse management system market size was valued at $3.94 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 19.5% from 2024 to 2030, and Europe (incl. Russia) is the largest market with 31.16% market share.
Why adopting the holistic warehouse management system solution?
The fundamental function of any WMS is to record elements such as the arrival and departure of each inventory item, as well as the location of the inventory item - in which warehouse it is located, in which hall, in which part of the hall and on which shelf, and so on. Things that are also important are the optimisation of the used space, as well as the coordination of the forklifts that transport the inventory items, their availability, position and paths (avoiding crossing paths, reducing time etc). In this way, the maximum efficiency of the storage itself, as well as delivery and procurement, is achieved.
Gartner defines WMS in the programming sense as "a software application that helps manage and intelligently execute the operations of a warehouse, distribution centre (DC) or fulfillment centre (FC)".
This is almost always implemented through mobile devices (usually tablets), which are user-friendly both for people working with bare hands and for those working with thick gloves, and the icons are made, for example, large enough so that even forklift drivers can accurately “pinch” the right icon.
Also, barcodes, RFID and scanning technologies are used, with which the position of the item, its status if it is in the delivery stage can be easily read, and with their help, the following persons responsible in the logistics chain are promptly informed. Statuses such as "receiving", "storage", "retrieving", "packing" and "shipping" are the basic elements of WMS. All this optimises efficiency and ensures real-time accuracy, while saving time and energy. SAP cites improved operational efficiency, reduced waste and costs, real-time inventory visibility, improved labor management, and better customer and supplier relationships as the biggest benefits of WMS.
Facts and figures tell you to speed up and adopt
In 2019 alone, Statista reported that U.S. online retail sales amounted to US$343.15 billion – and they’re projected to reach almost $476.5 billion by 2024. This imposes precisely the need for warehouses and logistics, so it is not surprising that Markets and Markets states that the value of WMS in 2024 is estimated at 4 billion dollars, while it is expected to increase to 8.6 billion by 2029, which is a CAGR of 16.3% in the period 2024-2029.
Markets and Markets also says that "the analytics & optimisation segment is expected to emerge as the fastest-growing segment, registering a CAGR of 21.8% from 2024 to 2030."
The fastest growing market is Asia-Pacific (specifically Central Asia, Indian Subcontinent, Far East, Indochina and Australasia). North America lags behind for the first time, and this is explained by the fact that WMS is much more advanced in Europe, more innovative, less inclined to paperwork, and that Europeans are more inclined to cloud-based solutions.
China is the country in the world that has the fastest growing segment of WMS and logistics systems, which is not surprising.
Why is adoption of the holistic or partial warehouse and logistics management concept important for your company?
Bearing in mind that the situation on the Eurasian continent is very dynamic, it is not possible to rely on “ancient paperwork” and remain competitive. The entry of an increasing number of trade chains into many areas, as well as the signing of more and more free trade agreements (with the opposite trend of new barriers), complicates logistics processes and makes them rapidly changing, increasing the need for WMS.
Fortune Business Insight states that, according to the MHI Annual Industry Report, 2021, almost 80% of respondents agreed that the digital supply chain will grow in the future
Manufacturing industries, health industries, food and beverage, logistics, chemicals and furniture are the industries that use WMS the most. Although for SMEs the cost of introducing a WMS is significant, for larger companies it is a mandatory part of the investment. The integration of video AI technologies will give WMS a new momentum. The In the event that an integrated system is too expensive at a given moment, WMS users can always decide to implement one part of the system, e.g. Truck Driver App, which determines the optimal route for transportation, only the application that covers storage, only the application that covers the intermediary part, etc. since integral solutions consist of independently usable parts. With more and more demanding customers and clients, who want to monitor products at all times, this is becoming a business standard that cannot be done without, and therefore - should not be done without.
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05/09/2024
As industries move toward greater automation of production, the idea of fully automated factories and production facilities is gaining more and more public attention. Although it is still a provocative idea of the future that would cause numerous discussions and societal breakdowns, fully automatic factories or fully autonomous factories, also known as lights-out factories, or even unmanned factories, represent in reality the use of a series of applications with the help of AI in order to bring the discrete production systems as far as possible to a state of autonomy and automation that does not require the presence of a human. Essentially, this goal would be achieved with the help of the connectivity of the control centre and one or more factories around the world, through networked sensors managed by AI, using the Internet of Things (IoT) and cloud-based technology. All of this would be managed by a single system that would remotely intervene in cases of disruption of production processes or security. SCADA systems in power distribution or railway control systems already function much in this way. The market is estimated to grow by 13.5% yearly by 2030, and this time Asia-Pacific is the leading region in adopting this new technology.
Are we reaching the unmanned smart manufacturing?
We can say that step by step we are really getting closer to this type of production, since part by part of the production processes are increasingly being replaced by automatic elements. And the ideal case is so-called lights-out production, where figuratively "lights can be turned off in the factory" because production and control are carried out without people entering the plant, in which case light is unnecessary and energy is saved. However, what is important in terms of management and software here is not the automation of the production process itself, which is the subject of the procedures of the factory itself, but the automatised monitoring process.
The fundamental function of any WMS is to record elements such as the arrival and departure of each inventory item, as well as the location of the inventory item - in which warehouse it is located, in which hall, in which part of the hall and on which shelf, and so on.
Unmanned factories should work in a more or less autonomous way, and respond to external disturbances such as a change in temperature outside the working range, a change in humidity, a change in the time for making an element, and the like, in real time, in an intelligent and human-like way. These external disturbances can go as far as a machine failure, system crash, power outage, storm, flood, lightning strike or other natural disasters, in which case the system would recognise the parameters, and according to them recognise the events that caused them and consequently take adequate measures.
In this present phase, until unmanned factories are reached, by using software solutions for remote monitoring of sensors and production facilities, managers and production controllers in this kind of factory management will control the data not in the factories themselves, by reading sensors, but by accessing data in the cloud, and react to possible disturbances and malfunctions, if the system itself does not reach equilibrium.
Over time, such a digital learning factory becomes such a factory that can be tailor-made and reprogrammed to meet the production needs of each client, and the manufacturing knowledge base becomes additive in time.
What is the value of a management system in smart manufacturing?
Fortune Business Insight says that the market size of Smart manufacturing itself was 277.81 billion USD in 2022, and that it will grow to 310.92 billion in 2023 and that the growth projections are estimated to 754.1 billion in 2030, which is a CAGR of 13.5% during the period 2023-2030, and this is an extremely fast-growing market.
North America and Europe are not leading the game here, but the smart manufacturing industry is in the hands of Asia-Pacific with a 36.33% share in 2022.
Precedence Research has somewhat more modest, but almost equally spectacular forecasts, and claims that the global smart factory market size is expected to hit around USD 321.98 billion by 2032, growing at a CAGR of 9.52% from 2023 to 2032.
Therefore we can be sure that the automated control systems will have a market value that corresponds tightly with the smart manufacturing market value.
What is the advantage of adopting this technology?
If the reading of the sensors and the decision to initiate the reaction are not made by humans, they can be sent to other tasks, such as quality control (with retraining), and productivity would be increased, while costs would decrease, including the costs of maintaining the physical parameters in the environment, noise, light and air quality, heating, all the way to the general abolition of lighting systems since this technology will effectively render them obsolete.
Systems that would do this automatically are programmed to monitor all sensors at all times, which is an impossible task from the human side.
Also, some of the benefits are the precise determination of the life of equipment based on the assessment of use and wear of parts, costs reduction caused by failures that lead to loss of income, waste reduction and identification of defects that are transferred to product before defective products leave the production area and even reach the quality control area.
We can also reduce downtime when replacing/repairing reactive equipment or unexpected production stoppages, reduce the cost of external cleaning services by preventing large spills of raw materials, improve efficiency and profitability by minimising unnecessary maintenance costs, enable currently unavailable diagnostics through richer data sets to be rapidly analysed by AI in the cloud. This includes software tools for root cause analysis and predictive analytics for improved process efficiency, as well as obvious, real-time visibility into the manufacturing process.
If the system is programmed to make human-like decisions with AI, instead of simple and automatically pre-programmed decisions (in which scenario the humans are still necessary), the safety is increased.
Why adopt this concept?
There are several clear advantages for early adopters: reduction of human errors, improved efficiency, better and faster performance of repetitive tasks without human fatigue and errors, cost savings, improved safety, addressing issues proactively by remote sensor-reading before accidents occur, increased flexibility, enabling rapid changes in case of changes in market requirements, and enhanced quality control. All these savings in time and money cumulatively create a better position in the market and a competitive advantage for the company that adopts the concept before others.
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09/08/2024
In a modern factory, especially in a factory that has a lot of CNC machines, there are also a lot of different tools, which are often mounted and dismantled on the machines, depending on the needs of the work process. These tools can vary from large to very small, which are easy to lose. And all together, they are all often difficult to locate, that is, their exact location, number and use are kept in the tool data records. Therefore, the flow of data about the tools is integral to success and crucial for good management of the work process with as little downtime as possible. To ensure a seamless process, all systems in planning and on the shop floor must communicate with each other. A uniform database for tools is an essential prerequisite, and Tool Data Management (TDM) with a suitable software-supported system, brings the desired uninterrupted flow of the work process. As far as cost reduction is concerned, if TDM is applied consistently and skillfully, this kind of software tool can bring you up to 20% tooling savings, i.e. the cost per workpiece is reduced by 10% to 20%, while the avoidance of downtime can bring up to 15% more profit to a company that uses TDM software tools.
Why is it important?
Tool data management is required in CNC machine production in order to organise the information about the existing tools in a uniform manner and to integrate it into the environment. The tool data is stored in a database and is recorded and used with the tool data management software. In contrast to a general solution for managing resources, tool management includes specialised technical data fields, graphics and parameters that are required for use in the manufacturing process.
Tools must be in the right place at the right time, and must not be used so much that their useful life has passed and they are worn so much that they will fail during the production process.
Sometimes these cloud-based software solutions are called "tool finder software" and similar names, but in reality many such solutions have been developed and are constantly being improved and upgraded. Their benefit is reflected in the fact that they optimise work processes and bring a more efficient workflow without breaks, bring less downtime for machines that need to work with individual tools, lead to less time for setting up tools on CNC machines, lead to greater transparency and clarity of where which tool is finds and in what usable condition it is, and ultimately, it all leads to savings in money costs and time savings, which translate into money savings. Also, less downtime brings greater machine utilisation.
If the right tool is brought to the CNC machine on time and assembled and put into operation on time, downtimes are avoided, which can, according to Swooshtech research, increase production time and machine utilization even by 30%, which can bring up to 15% more profit to a company that uses TDM software tools.
Last, but not least, is a shorter planning time, i.e. you can see which tool is specifically in a state of wear and tear, and you can order a new one on time, with visibility of the condition of all tools, their exact location in the warehouses, and the calculated time that is needed to get the tool onto the machine. All this cumulatively brings big savings that translate into profits.
Verified Market Research in its research states that “Tool Tracking Software market size was valued at USD 100.5 Billion in 2023 and is projected to reach USD 248.41 Billion by 2030, growing at a CAGR (compound annual growth rate) of 13.8% during the forecast period 2024-2030.”
Also, this is a game-changer in stopping tool loss and tool theft, and accidents in companies using TDM software are also reduced by 40%, Astute Analytica claims in its research.
Is it the right time to implement it?
Most companies using TDM software have seen their production timelines decrease by about 25%, according to Astute Analytica. According to the same source, 50% of improvements in cross-team communication and data availability are achieved by using TDM software, and 60% of companies prefer that data can be accessed via mobile devices (tablets or phones).
An additional 20% is saved on the search for tools and on tool replacement costs (tools are ordered and replaced on time based on data on wear and working hours).
Although RFID readers, scanners, and IoT sensors are elements that require investment, implementation leads to better workflow, lower costs, and the opportunity for SMEs to leapfrog other, larger companies by introducing TDM software, and to achieve improved market positions through implementation. Also, it is important to note that it is not always necessary to implement a new solution, but that it is possible to make improvements to an old, existing solution that no longer works efficiently enough, which saves both time and money (no new systems are bought, but old ones are upgraded).
All this, along with the transparent and efficient collaboration of on-field teams and management teams, brings real financial benefits to the company that adopts or upgrades the existing TDM software, and it is the moment to adopt this software solution - better sooner than later, as with any technological innovation of this magnitude.
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18/07/2024
There is an old Japanese proverb saying “To be fast means to be slow but with no pauses”. It is exactly the principle on which the machine customers work. Machine customers, also known as custobots, are virtual customers, in fact, programs designed by companies and equipped with the power to sell and buy things automatically, thus saving the production time. According to a Gartner research panel composed of executives, by 2030, machines could handle 25% of all market transactions, while 49% of CEOs anticipate that AI-driven customer bases will become a major trend by the same year.
What can (and will) machine customer do?
If the program detects that there is a shortage of some necessary part or raw material to continue the production process, or that the raw materials, materials and parts will soon disappear, it makes the order itself, without waiting for people to notice it.
By eliminating the potential for delays caused by human error or oversight, machine customers are saving valuable time in the production process. This innovative approach aligns perfectly with the principles of Kaizen, where small improvements lead to significant cumulative savings and increased profits.
By eliminating the potential for delays caused by human error or oversight, machine customers are saving valuable time in the production process. This innovative approach aligns perfectly with the principles of Kaizen, where small improvements lead to significant cumulative savings and increased profits.
Industry analysts and forecasters are hailing this invention as a game-changer with the potential to reshape the landscape of commerce in the coming years. Gartner has even gone as far as to dub machine customers as "the biggest new growth opportunity of the decade." With such high praise and promising outlook, it's clear that this technology is set to make a lasting impact on businesses worldwide.
And not only that. On the side of machine customers, we save time and money, but on the side of sellers, we have an incredible opportunity for sellers to position themselves on the market as those that machine customers will recognise and - choose, and buy from them. From a seller’s perspective, the rise of these digital entities offers a unique advantage: the chance to stand out and be chosen in a highly competitive environment. As machine customers—empowered by artificial intelligence and integrated into the Internet of Things (IoT)—navigate through bids and offers with remarkable efficiency, they evaluate parameters such as price, delivery speed, quality, and accuracy with unparalleled precision.
These machine customers, driven by sophisticated algorithms, possess the ability to swiftly discern the most favourable options while effectively bypassing traditional marketing strategies and see through the potential lies. Their decision-making processes are guided by pre-set criteria, allowing them to cut through promotional noise and zero in on the most optimal service providers.
The current market, valued at a staggering one trillion dollars, is increasingly influenced by these machine consumers – and you should make sure they choose you!
The current market, valued at a staggering one trillion dollars, is increasingly influenced by these machine consumers. As these digital buyers continue to operate with the sophistication and discernment of human customers, the stakes for sellers are higher than ever. Embracing this shift and leveraging it to one's advantage could unlock substantial business potential in this burgeoning landscape.
What is the specific usage of machine customers?
The machine customers could take over many purchases, especially in these areas which are highly automatised: ordering printer ink when the low ink is detected. Similarly, electric vehicles are harnessing advanced sensors to detect impending fuel shortages, enabling them to autonomously navigate to the nearest charging station. In the event of a flat tire, these vehicles can even schedule a repair appointment with a nearby tyre shop without manual intervention.
Moreover, any vehicle malfunctions can trigger automatic repair scheduling at the nearest—or most cost-effective—auto repair shop, further streamlining maintenance and minimising downtime. This integration of AI and IoT technologies exemplifies a significant leap forward in automating everyday tasks, providing users with unprecedented levels of convenience and operational efficiency.
According to a Gartner research panel composed of executives, by 2030, machines could handle 25% of all market transactions, especially in these areas which are highly automatised
And this is just the Phase 1 where machine customers buy specific things according to how they are programmed. They are “executive machines”.
How fast will machine customers spread?
Additionally, 22% of the CEOs foresee that machine customers will start making a substantial impact on their industries as early as 2025. This early acknowledgment highlights the urgency for businesses to adapt and prepare for the imminent integration of AI-driven purchasing behaviors.
According to the survey, Statista says, 49 percent of CEOs anticipate that AI-driven customer bases will become a major trend by 2030.
Phase 2, which is expected to arrive in 2026, implies that the machine customer will be able to choose between several competing products on the market, in an autonomous way. The decision will be "shared" between the person who programmed the machine customer, and the machine itself. By 2028, Gartner predicts, this behavior of machine customers to "see through the curtain" will cause 20% of the websites that are functioning today to be completely abandoned and obsolete.
By 2028, Gartner predicts, this behavior of machine customers to "see through the curtain" will cause 20% of the websites that are functioning today to be completely abandoned and obsolete.
Phase 3, predicted to arrive around 2036, will see machine customers become fully autonomous customers. Here it will be possible to program contexts, preferences or rules, so that, for example, if printer ink runs out, the printer will not automatically order the printer’s original ink, which is more expensive and takes longer to arrive, but cheaper of similar quality from the store in the next street we already do business with, and similar.
Why should you adopt the digital customers concept?
Machine customers will become as ubiquitous in the near future as there are now algorithms on sales sites that, after searching and shopping, offer you products that they think you will like and can buy, or music website algorithms. Therefore, the products that any company produces must in the future be tailored not only to human customers, but also to machine customers.
The companies who miss the introduction of machine customers in their purchasing divisions will be stuck in production pauses, while those who sell will be rendered obsolete if they fail to be “like” i.e. recognised and chosen by machine customers
Companies will create programs that will act as machine customers for purchase, while those they sell will create their offer so that the machine customers "like" it and choose them. The companies who miss the first part will be stuck in production pauses, while those who sell will be rendered obsolete if they fail to be “like” i.e. recognised and chosen by machine customers.
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23/06/2024
We can say that the “digital twins” are actually a product of the space age and a futurist concept, since it was first successfully introduced by NASA to create simulations or “duplicates” of the real-world spacecrafts and capsules, so the testing would be done on twins, not on real-life objects. A digital twin of a physical object, process or service from the real world is a digital recreation or simulation – to the minutest detail. It is a digital, virtual replica – it could range from simple things like mobile phone to e-vehicles, all the way to the whole (smart) cities with all possible infrastructure needed for its functioning. These digital reproductions can serve for monitoring the real world counterparts, repairing the errors and malfunctions, or they can serve as a field of experimentation – we can simulate the changes to improve the “real life twins” and see the results in the virtual world.
Who have adopted digital twins already?
Just like AI which was a niche idea several years ago, until it was everywhere, the digital twin concept was at first highly specific in use, and in 2023 and 2024 it became widespread. In 2023, according to the data from Statista, 15% of the real estate companies around the globe used digital twins of the houses and buildings. Gartner estimates that by 2027, over 40% of large companies worldwide will be using digital-twin concepts in their projects to increase revenue.
McKinsey’s data claim that the product development leaders need digital twins as a tool to speed up the process of product development, reducing costs and eliminate errors, in order to enhance the results and profits and improve outcomes. Their forecast is that the investment in the concept of digital twins will rise by a whopping 60% annually, reaching $73.5 billion by 2027. It means that the digital twins are a new “goldmine”, if you ask the product developers and company thinkers.
The forecast of product developer leaders is that the investment in the concept of digital twins will rise by a whopping 60% annually, reaching $73.5 billion by 2027.
There is a lot of disparities in the digital twin adoption since the more advanced industries like energy, infrastructure, logistic etc. have a higher adoption rate – the McKinsey’s data show that almost 75% of these companies have already adopted the concept, at least at medium levels of complexity. It is especially so in defence industries, automotive and spacecraft industries, who are at the helm of the adoption process. They tend to expand the use of the concept at the levels of higher complexity, while the energy companies, logistic companies and those dealing with infrastructure tend to develop and use their first digital-twin concepts and use the lower levels of complexity. But soon they will follow the footsteps of the most advanced industries.
Impressive 75% of the advanced industries have already adopted at least medium-level digital-twin concepts while the most popular and omnipresent industries like energy, infrastructure, logistic etc. are currently adopting their first digital-twin concepts at low complexity levels
When should you adopt the digital-twin concept?
Most companies tend to launch new products to keep their competitiveness and keep up with the competition. Yet estimation from McKinsey says that $30 trillion of revenue in the next 5 years are going to be attributed to the products that do not exist yet. And the digital-twin concept is a risk-free tool to make all the necessary changes before the product is launched, thus sparing millions that could be lost because of the product’s potential shortcomings.
It is the crucial future tool for R&D sectors in companies that will allow them to test all the possible options they could imagine before they make an actual physical prototype. The concept also enables the R&D teams to test the developing product in extreme or unusual circumstances.
The R&D teams can make all the necessary changes to the product before the actual physical prototype is produced
In fact, the impact in R&D is so huge that the time spent for development of a prototype is shortened any way from 20% to 50% and the number of actual physical prototypes is cut from 3 or 2 to just one before the mass production starts.
It can also enable real-time and long-distance virtual repairs to some product or services, and it can increase the revenue from the product developed by digital-twin concept by 3-5% while it can go as high as 5-10% if the product has some value-added features.
The revenues from product developed by implementation of a digital-twin concept can reach from 3% to 10%, depending from the degree of value-added features embedded
It is the thing of future, but it has already arrived. It can give you a competitive advantage and cut the R&D costs and time and give you an opportunity to offer a better suited product that the customers will love.
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30/05/2024
During the last year and a half, the AI has become a hot topic – the investors have sensed the potential for a new surge in profits and have invested 2 trillion US dollars in the market value of the top 5 big tech companies during just the past year - which theoretically would mean that projected earnings should be around $300-400bn annually. However, the most optimistic projection shows that Microsoft will only earn $10b from AI this year, claims The Economist. Even with a growth rate of 20% per year, it is believed that the true market effects of investing in AI will only be seen by 2032. However, we have some ideas on where AI could already be used profitably.
Paradoxically, AI is not being adopted fast enough - even though the frenzy around the potential use of AI has quickly engulfed the media and business circles, only 5% of companies have used AI in the past two weeks, and it is predicted that in six months, only 7% of companies will be using AI in any serious sense, says America’s Census Bureau. On the other hand, 75% of companies already use some form of AI, including Google Translate or similar Google tools.
All this raises questions - was the AI craze premature, and how can it be leveraged - now, until the full market and economic materialization of the tools is achieved?
CV cross-analysis
AI mainly serves to speed up some boring and laborious tasks, which, due to their complexity and number of facts, exceed either the power of man or his concentration. One such example that we have encountered and successfully dealt with is the analysis of the skills of candidates and employees through various CVs.
CVs are generally motley in form even when they are in a database that aggregates all CVs. If the company considers that it needs an employee with a certain skill or a certain set of skills, it is necessary to analyse all CVs that have been uploaded to the database by cross-analysis, regardless of whether they are in PDF or Word format - and here the traditional programmes proved ineffective, because it was necessary for all CVs to be uniform in order for the program to recognise and compare employee skills.
The AI-supported programme solves this problem because the program that uses it already at the start uses the "human" feature to ignore document formats and positions of individual categories, but intuitively understands them like a human brain, and compares them quickly like a computer programme. Thus, a manager looking for a candidate in the database can very quickly find a potentially suitable candidate in any part of the world.
User Manual Sublimation and Large Documents Analysis in Highly Regulated Environment
Also, another use of AI-supported programmes is the sublimation of all user instructions, again in a "human intuitive way" - generating a human-understandable "narrative" from a multitude of user instructions that are often very difficult to navigate, voluminous or diverse.
Highly regulated industries have product release processes that include an approval process that varies by project size and the department involved. Each project and/or department within the organisation establishes its own document approbation and distribution processes.
In, the pharmaceutical industry, for instance, during the production process, an extremely large number of reports are generated on the condition of the output products, which must be analysed in real time, and this is a problem known as Large Document Analysis.
Organisations requiring large-scale document analytics can leverage AI-powered solutions to automate approval notifications and create cloud storage processes that automatically distribute newly approved corrections and reminders. They can also streamline approval processes in terms of how they handle disapprovals and resubmissions, and surface only corrections that have not yet been approved for subsequent review.
Where do we go next?
For the AI market, it is projected to grow at a compound annual growth rate (CAGR) of 28.46% from 2024 to 2030, says Hostinger. Markets and Markets claim this figure to be even higher – 35.7% in the same period.
Yet, in spite of all this potential, the specific usage lags the high hopes. If we concentrate on the realm of the possible right now, we can solve many time-consuming problems right now. And accelerate the profit rate.
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16/04/2024
Since the COVID-19 pandemic, emerging 3D online virtual shops enjoyed skyrocketing growth, evidencing a significant change in customer behaviour. This paved the way for new, revolutionary solutions, mimicking the “wild dreams” of famous sci-fi writers. The early adopters have already positioned themselves at the helm of the online retail business, generating new profit, urging the others to follow suit and add 3D online virtual shops to their offer.
3D virtual online shops blend elements of e-commerce, virtual reality (VR), and augmented reality (AR), thus creating an immersive shopping environment that can be accessed from anywhere in the world. It's like stepping into a game where the objective is to shop in the most interactive and engaging way possible.
And what about the facts and figures?
Data from Invesprco show that 95% of shoppers choose things visually. The problem with static 2D imagery is that it severely lacks the whole vision experience and interactivity. A lack of confidence in the product shakes the purchase decision. 3D virtual shops often mend this. Shopify confirms that the conversion rate increases by 40% with 3D visualisations, thus enhancing brand loyalty. Vividworks mentioned on average, retailers using 3D content on Shopify witnessed a 94% increase in conversion rates.
Also, a study from 2021 found that 40% of online shoppers are willing to pay more for a 3D experience. This indicates the possibility of expanding the average order size and value if the customer uses 3D. The returns, due to a product’s inadequacy in size, design, etc., are sharply reduced (by an estimated figure of 32%) if a shop uses a 3D version, and interestingly, alleviating returns has proven to be one of the most frequent reasons for financial losses retailers.
A study from 2021 found that 40% of online shoppers are willing to pay more for a 3D experience, indicating the possibility of expanding the average order size and value if the customer uses 3D.
By 2023, the global market for E-commerce with integrated 3D configurations had reached $11.47 billion, up from $3.65 billion in 2020. It will be an even hotter topic and growing trend in 2024, and it is expected to grow 20% per year in forthcoming years.
Looking closely, we can see that people are immersed in 3D shopping since 3D shops have 300% higher user engagement—people like to play, and businesses must leverage this to their advantage.
People immersed in 3D shopping since 3D shops have 300% higher user engagement.
How did we get to the 3D virtual shops, and more importantly, why?
Several factors have contributed to this change: putting the pandemic aside, the ascendance of Generation Z with their “virtual preferences” from solitary environments, the overall dominance of “m-everything” (mobile banking, mobile shopping) and the dissatisfaction with the lack of dimensionality and tactility have all paved the road to 3D virtual stores, which are a step beyond the old experiences of online shopping. They transform the usual interaction between consumers and products, profoundly changing the purchasing decision process. Personal customisation was an old option in the physical shop but is a new must for online stores, and successful companies have taken this to heart.
New generations of users changed their “virtual preferences”, dissatisfied with the lack of dimensionality and interactivity, paving the road for the adoption of 3D shops.
To be successful in the future, brands will have to provide an immersive virtual environment and experience. This experience can refer to the opportunity for customers to see the product in 3D, in all its volume, instead of just an unsatisfactory “flattened” 2D image. The capability of rotating the product image through 360 degrees along one, two or even three axes and using virtual and augmented realities to create even more immersive experience, like virtual showrooms with free customer movement (browsing virtual shelves), virtual trying of items on themselves (like trying clothes on their avatar), virtual interior design is critical. 3D virtual online shops are the “wedding of the best of both worlds” – the digital and the physical. Of course, it all ends with an easy purchase in a couple of clicks if the items are satisfyingly good. This speeds up the process and enhances the money flow and annual revenue for brands and businesses.
The capability of rotating the product image through 360 degrees along one, two or even three axes and using virtual and augmented realities created an immersive experience.
Present and future markets
The potential for greater market penetration and customisation is immense since the shopping zeitgeist of today is characterised by individuality; everyone wants their personalised, tailor-made experience, almost like in the days of actual tailor-made products in traditional shops. It’s clear that people miss that experience and quality of products, so the future demand for 3D e-commerce platforms is here to stay and continues to gain traction. Companies know that software solutions can be expensive. Still, the potential of lucrative markets forces them to differentiate themselves from the competition and find their niche by investing heavily in 3D virtual shops. Time and cost, large file sizes, and user education are the “challenge sides” of this business area.
The shopping zeitgeist of today is characterised by individuality; everyone wants their personalised, tailor-made experience.
Finally, this phenomenon is global. Everyone owns a mobile phone, and a great majority own computers, so the 3D virtual e-commerce movement is global, from Australia and the Pacific to North America, South America to Africa. As expected, early adopters are in North America, with this continent holding a 45% market share. Asia-Pacific closely follows the United States with the highest growth rate: Asia is expected to outgrow the United States in the next few years, while Europe is firmly holding ground in the middle with a more conservative approach.
The early adopters were in North America, and Asia-Pacific closely follows with the highest growth rate.
So, what to do? And when to do it?
Therefore, consumer spending in 3D virtual-enabled e-commerce is not just here to stay— it is here to touch the sky. The best time to act was yesterday. However, today is the second-best time to act and switch to 3D online shops.
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