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Blogpost - November 25, 2015

Digital Transformation; The 3 Biggest Digital Developments For 2016!

As we get more and more connected, our ways of communication will be faster. Time to map the 3 biggest digital developments for 2016.

As we get more and more connected, our ways of communication will be faster. Our time to communicate with each other will decrease dramatically while our expectations towards companies reaction speed grow rapidly. The digital world is constantly on the move. Time to map the 3 biggest digital developments for 2016. Developments for companies to make the necessary digital steps and to become more relevant by delivering a unique customer experience.

We’re not talking about trends, but developments that are already changing the digital market and are inevitable.  

Extreme Connectivity | Customer Centricity | Data-Driven Ecosystems 

Want to know more about the 3 biggest digital developments for this upcoming year? Have a look at the Slideshare presentation to find out more about this digital transformation.

1) Extreme Connectivity & Social Sharing

The internet is OPEN for the social sharing economy

We’re on a path in which consumers are sharing products and services with each other. We’re familiar with the principle of social sharing. Everybody knows Snappcar, BlaBlaCar (sharing a car) or Airbnb (sharing a home). If we look at the unprecedented growth of Airbnb over the last 5 years, the immense impact of the social sharing economy is clear in an instant.

Airbnb3

Our personal belongings will play an important role in earning money. The idea of this principle is simple; what is mine is yours, for a fee. The next couple of years this phenomenon will take on different shapes with new initiatives rising from the ground. Think of initiatives like Meetsies (sharing diner with unknown people) or iCow (helping the agricultural sector to improve their productivity). 

This social sharing economy isn’t something new. We’ve been sharing stuff for ages. For centuries people have been making arrangements in sharing products. Like sharing clothes with your friends or relatives. The new thing is the innovative construction, enabled by technology, which creates the trust needed to do business with strangers. And the reasons for doing this? Convenience, better price and a better product/service quality. It will not surprise people that this social sharing economy will rapidly increase over the next couple of years, also being confirmed by recent research of Goldman Sachs Global Investments Research.

It’s not about technology, it’s about speed, convenience and connectivity

We’re more connected than ever before. We’re addicted to information and interaction. The emerging of extreme connectivity will help this ‘positive addiction’ to take on greater shapes. But remember that it isn’t an addiction based on technology; it’s based on speed, convenience and connectivity. And the technology will contribute to these factors

These three factors will also make sure that companies need to step up their game in order to create a relevant customer experience. As we get more and more connected, our ways of communication will be faster. Our time to communicate with each other will decrease dramatically, while our expectations towards companies reaction speed grow rapidly. Research of SDL showed that 60% of the millennials (born between 1980 and 2000) expect a consistent experience from brands whether they interact online, in store or via phone. And that happens to be the most potential target audience. Crazy as at may sound, but emoticons are going to make our way of communicating with each other faster. Wearables will make it even more relevant and efficient.

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The further development of Internet of Things 

Internet of Things (IoT) as we know it will disappear. People expect products to become smarter and more connected. This would mean that IoT will become the standard at the end of the day. But we still have a long way to go. IoT is still in its infancy according to research of Juniper Research

Ericsson

Also Ericsson confirms that IoT will rapidly increase over the next couple of years. We’re talking about the rise of the amount of connected devices per person. Connected devices such as mobile devices, wearables, electronic consumer products, automotive devices and environment devices like sensors. The same research from Ericsson predicts that there will be more than 50 billion connected devices on the planet in 2020, a growth of 373% in relation to 2015.

2) Customer Centricity

Okay, we know we’re getting more digital and connected, but that also means that companies need to step up their game. It’s important to have customer centric focus within your company’s strategy. This means no more short-term sales, but a long-term customer experience.

This digital transformation (in the age of the customer) doesn’t happen overnight. It requires organizational changes, new processes, other tools and platforms. But most of all it requires a new mindset, whereby the customer's buying journey, individual preferences and life cycle take centre stage for everything we do as companies. 

Being relevant on every customer touchpoint, whenever the customer wants it.

Thanks to technological developments like IoT, the line between offline and online experiences are blurring and new customer touchpoints will arise. Google calls it micro-moments. These are the micro customer touchpoints in which the customer would like to know more, wants to go somewhere or wants to buy something. For example, 82% of smartphone users turn to their phone to influence a purchase decision while in a store.

micro moments 

Companies need to map the context (micro-moments) in order to know when to communicate which message and on what kind of device. The expected customer experience (speed, convenience and connectivity) need to perfectly match on any device or channel. Only then you can deliver the best customer experience in a world where online and offline meet. You can imagine that communication between governments, companies and consumers will be simplified by the further development of personal assistants based on machine learning.

Philips already announced to team up with Amazon. Philips is not only interested in the digital health but also in IoT. Philips is one of the first companies to work towards ‘digital personas’ and their role within the context of Internet of Everything.

Machine learning to further improve virtual personal assistant

Machine learning will create a whole new set of ‘smart devices’. Think of devices such as robots, self-driving cars, smarter homes and virtual personal assistant (also known as VPA’s) like Google Now, Microsoft Cortana and Apple’s Siri.

VPA’s will become smarter and seamlessly connect with the expected customer experience. Users will no longer have to deal with complex menu structures or long forms. They only have to use their voice to book a complete vacation.

An example. You tell your VPA that you want to book a room for a hotel in Berlin from 26 January till 30 January. Your VPA will show suggestions so you don’t have to compare all those different options. Your VPA will be independent, so it can collect multiple suggestions from different providers. In a dialogue with your VPA you can determine the price, number of beds and other details. You’ll give the information and your VPA will bring results.

3) Data-Driven Ecosystems

All those digital developments ask for an improved ecosystem. Nowadays a lot of devices are connected with each other but too often we see that back-end systems are operating separately from each other. Companies still need to improve their data-driven marketing activities. Only a few companies possess a complete customer view. Therefore, integrated and one-on-one marketing is still a bridge too far. Thanks to new technological developments it’s already possible to connect all those systems to get a better picture of your customers. But keep in mind that this digital transformation is based on generating the best and most unique customer experience possible.

Working towards a holistic view on your customers

Everything we touch as consumers generates, uses or sends out information. The information we collect from this is more than just plain text, audio or video. It also contains sensor and contextual information. This data is brought together in this data-driven ecosystem. A database in which different data sources are being connected but are also able to communicate with each other.

Complete customer focus can only be achieved when you give attention to technologies that will help you to create a holistic view on your customers. That starts with relevant data at the heart of your ecosystem. Integrate different data sources such as eCRM, email marketing, website, apps, wearables and other sources. Move from unstructured data (data lake with a chaos of information) towards a structured data warehouse in which data is being classified.

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Machine learning will help you to collect new insights from your data warehouse. Imagine that it is a machine that can process information with tremendous power, classifying and judging (algorithms) the information and turning it into efficient and effective prescriptions to deliver a unique customer journey. These real-time prescriptions will make sure that you as a company can add value to the customer experience, operate more efficiently and can even reduce costs.

“Micro-moments + connectivity + data + algorithms = the right customer journey”

How consumers’ intentions are leading in the ecosystem of Airbnb

The logical next step in ecosystems is the intent-driven ecosystem. Companies like Airbnb are already working on this ecosystem, but we’re talking about years before it goes mainstream and is used by other companies. The intention of a consumer is in this case the ‘trigger’. A trigger of a person on a specific location, accessing specific information, on a specific device and with an action to activate the intent-driven ecosystem. Airbnb recently launched the Hosted Walks campaign aimed at the local customer experience.

Airbnb is using technology to deliver custom made content on the moment it matters the most, when it’s most relevant but also when it’s most useful. And that’s the moment the user is asking for this information and has the intention to take action. In the case of Airbnb, based on interesting locations, it’s the route from A to B. And using locals to deliver useful information at that location.

 

Intent-driven campaigns will develop the next couple of years. The fact that marketers can deliver custom made content on the moment it matters most to a consumer will open a lot of new doors. Doors to new initiatives and new technologies.

Recap. The 3 biggest digital developments for the upcoming year will aim at:

  • A further development of the IT landscape with data-driven ecosystems.

  • A unique and personalized customer experience

  • Smarter machines thanks to the growth of connectivity and the impact of the social sharing economy.

In the next blog I will further highlight the development of an intent-driven ecosystem. You can find the Dutch version of this on Frankwatching

Tags transformationdigital customerjourney strategy content datainfrastructure

Leo Bekhuis Technical Strategist 3 posts

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