What Is Design Thinking And Why Should Retailers Care About It?

Maria Morais

The problem with the rat race is that even if you win, you’re still a rat. – Lily Tomlin

There is no single definition of what design thinking is, but most people who use design thinking would probably agree that a design-centric mode of thinking is distinct from a critical mode of thinking as an analytic process.

In a world of constant change and disruptive technology, design thinking is a framework for a human-centric approach to strategic innovation and value creation. And who wouldn’t want this in their organization? Arguably, only companies competing in the rat race.

Design thinking has been oversimplified

The application of design thinking in business is often oversimplified. It’s not about Post-It notes on a wall and creative ways to brainstorm new ideas. It’s a different way of analyzing — more focused on forms, relationships, behavior, and emotions.

The process of understanding how to meet people’s needs isn’t simple. Design thinking helps structure team interactions aligning all participants around specific goals and results.

Why do retailers need to apply design thinking to their business?

For the first time in history, individuals are developing the ability to share information with everyone at any scale and in just a few seconds. The consequence of this is that traditional retail is becoming volatile as a business model and retailers have to adapt their business proposition to a continuous change process that is being led by their customers.

Between 2014 and 2019 total online sales is expected to grow by 82%, which will take the Internet’s share of retail sales to more than 18% in 2019 (Source: Mintel, 2014).

Channels are driving the retail change

In the past, when average-quality products used to be what all customers aspired to acquire, retailers looked at whether or not their distribution channels could manage peaks such as the holiday shopping season. Now the important thing to know is whether retailers are ready to offer customers personalized and consistent experiences across both their online and physical stores.

Channels are driving the retail change, and their composition has an impact across both the revenue and the cost base of the organization. With new online channels emerging every year, all throughout the customer life cycle, there are more interaction options for retailers and their customers.

Experience design as a design thinking approach

Retailers competing in the experience design space are looking to create meaningful contexts of interaction among customers, products, services, and systems on physical and cognitive levels. They know that it’s not just about the interface, integration, usability, or customer service. It’s about the experience; it’s about the customer journey.

For more information about IBM cognitive business, visit:

Do you hear the voice of your customer? Learn why you should take a customer-centric approach to your business.

You can also discover more about design thinking in the SAP eBook, Digital Disruption: How Digital Technology is Transforming Our World.

For an in-depth look at business innovation in the digital era is, download the SAP eBook, The Digital Economy: Reinventing the Business World.

Digital technology is changing the game for multiple industries. Learn the warning signs of digital disruption.



About Maria Morais

Maria Morais is Customer Engagement and Commerce Retail Lead at IBM GBS. You can follow Maria Morais on Twitter @ceumorais.

Marketing Meets Blockchain: What’s A Fair Price For Customer Data?

Jacqueline Prause

For everything from insurance to supply chain management, blockchain technology promises to upend traditional business practices – sometimes in the most surprising ways.

Even the modern marketer will not be spared from the blockchain revolution. On a recent episode of Internet talk radio show Coffee Break with Game-Changers, presented by SAP, a panel of three leading industry experts discussed the potential for blockchain technology to disrupt marketing.

During the show, titled Blockchain Technology: Turning Marketing on its Head, host Bonnie D. Graham moderated an energized, technology-focused discussion that revolved around a central question: What if the customer charges the marketer for access to his or her data in the blockchain?

For marketers long in search of a unified customer profile – that Holy Grail of marketing that provides a holistic picture of the customer, as mined from reams of marketing data – this question is sure to give serious cause for thought. Panelist Jeremy Epstein, CEO at Never Stop Marketing, summarized what this means for the future of marketing: “In a blockchain world, marketers will have to earn customer permission in an entirely new way. Identity will be controlled by the users.”

New challenges ahead in quest for unified customer profile

For those not familiar with the concept, blockchain technology is the infrastructure that forms the underpinning ledger of the Bitcoin crypto-currency, a technological marvel unto itself that is currently more highly valued than an ounce of gold. The decentralized network of computers and protocols that form a blockchain provide increased privacy and security for all data that resides therein. The encrypted nature of the blockchain puts the control over access to personal data squarely in the hands of the individual user.

“In a blockchain world, you’re going to have a shared data layer worldwide where the information is put into a blockchain and kept there,” Epstein explained. “But the control of that information will reside with each of us. For example, I as a customer will grant or revoke access to my personal information to a given company on a need-to-know basis.”

This is a vastly different approach from the current marketing process model of capturing customer data, storing it in databases, mining it, and possibly selling it to a third party. “It really is the inversion of the user model,” said Joel Monegro, investment analyst at Union Square Ventures. “If you think about how the web works today, you have to go to a whole bunch of different services to get different pieces of information: You have to go to Google to get your notifications or to get information of things that you are looking for; you have to go to Facebook to get information about your friends; and you have to go to Amazon to get information about products to buy.

“Instead, what is happening with blockchains is that we’re developing an architecture where services come to the user for their information. It’s creating this comprehensive view of the user that is user-centric and user-controlled.”

How much is my data worth to you?

“The user will have a blockchain-based identity,” explained Amanda Gutterman, chief marketing officer, ConsenSys. “You will control all of the different reputational and data attributes connected to that identity. You can selectively share or not share, or sell.”

In this new marketing environment, a brand may approach the customer with an offer to receive its weekly sales newsletter, as is often the case today when you make a purchase with a new vendor online. What will be new is that the customer can respond with the price that she will charge for reading that newsletter. Per the example given in the show, that customer might say, “Okay, for me to even look at your email there’s going to be a micropayment of .003 cents.” The brand could decide if it is willing to pay that or not, based on how much it values that customer’s interaction, and then initiate a transaction for payment in the form of a crypto-currency, like the Bitcoin. Assigning value to customer interaction is common practice in marketing today, however the customer is typically not paid for this interaction.

“What blockchain is going to enable, with the ability to create very sophisticated micropayment structures and governance structures, is kind of a sliding scale of media. So at any moment you’re either paying to consume media or being paid to consume media, based on whose interests are at play,” said Gutterman.

The brand will be able to assess on a case-by-case basis if it should continue paying that customer. In turn, the customer will be able to decide to raise her rates, perhaps because she is getting inundated with marketing information from other brands competing for his attention.

“It’ll be a negotiation for your attention and for your information, which are all assets that [marketers] want. If these weren’t assets, they wouldn’t be trying to capture and mine it,” concluded Epstein. At the very least, it means that marketers will be challenged to engage with customers in new ways – and will need to continuously prove the value of the relationship to their customer.

Listen to a recording of the full show here: Blockchain Technology: Turning Marketing on its Head


About Jacqueline Prause

Jacqueline Prause is the Senior Managing Editor of Media Channels at SAP. She writes, edits, and coordinates journalistic content for, SAP's global online news magazine for customers, partners, and business influencers .

How A Space Selfie Is Transforming Trends [VIDEO]

Judith Magyar

Taking selfies in space without ever leaving the ground? That’s not rocket science any more.

The new app by SnapPlanet won this year’s Space App Camp Award at the Mobile World Congress in Barcelona. SnapPlanet is a social network that brings Earth observation data to the mass market, so users can play around with and post the latest space imagery on social networks.

The fact that ordinary people and businesses can now access space data easily through the European Space Agency (ESA) is not only changing consumer perceptions but transforming the way companies do business. For example, German insurance company Munich Re is leveraging geospatial satellite data to accurately calculate costs and risks related to wildfires and to gain insights into the future probability of wildfires.

There is nothing new about digital transformation. The idea was first introduced in 1703 by Gottfried Wilhelm von Leibniz when he refined the binary number system. The digital aspect developed over the centuries into its modern day form. The transformation part refers to the fact that digital technology enables new types of innovation and creativity, rather than simply enhancing and supporting traditional methods.

Consumers shape the trends

“What’s new today,” says Pat Bakey, president of Industries at SAP, “Is the transformation of entire industries. Consumer trends control every aspect of an industry. When consumers want something new, the industry transforms to meet their needs. There are hundreds of macro trends and micro trends forging new industries all the time.”

For example, consumer products goods (CPG) companies around the world have tapped out on growth in emerging markets. They are looking for new opportunities.

“CPG companies are competing on ‘taste,’” says Bakey. “They’ll map the taste profiles of their customers and make personalized recommendations regarding recipes or food groups. This requires an entirely new business model and new technology to support it. It also presents new challenges and opportunities, such as data privacy. Enterprises have reached a new level of maturity in terms of understanding their customers. Successful business today don’t create a digital strategy. They create a business strategy for the digital world.”

One good example is DPaschoal, a Brazilian auto parts dealer. DPaschoal went digital early on with a strategic omni-channel model to engage with customers every step of the way in every single channel.

“Many companies make the mistake of trying to build a digital addition on top of their brick and mortar business,” says Henrique Cavalhieri, e-commerce manager for DPaschoal Group. “We realized we had to stop thinking in terms of e-commerce and start thinking of commerce in the broader sense. We had to think about the entire end-to-end customer journey, which begins online and ends in the shop.”

By the way, there was no lack of creativity at the Space App Camp, which offers developers access to the latest space data from the ESA. Other apps developed this year include Droughtscan, which uses space data to assist water managers during periods of severe drought, SOUL, which provides air-quality data, and Saturnalia, an app that tells you the best year for a particular wine based on satellite and meteorological data about the soil, atmosphere, and weather.

The trends, they are a’changing – and not just in space!

For AI to make people happier, it needs to respect our boundaries. See Empathy: The Killer App for Artificial Intelligence.


How Emotionally Aware Computing Can Bring Happiness to Your Organization

Christopher Koch

Do you feel me?

Just as once-novel voice recognition technology is now a ubiquitous part of human–machine relationships, so too could mood recognition technology (aka “affective computing”) soon pervade digital interactions.

Through the application of machine learning, Big Data inputs, image recognition, sensors, and in some cases robotics, artificially intelligent systems hunt for affective clues: widened eyes, quickened speech, and crossed arms, as well as heart rate or skin changes.

Emotions are big business

The global affective computing market is estimated to grow from just over US$9.3 billion a year in 2015 to more than $42.5 billion by 2020.

Source: “Affective Computing Market 2015 – Technology, Software, Hardware, Vertical, & Regional Forecasts to 2020 for the $42 Billion Industry” (Research and Markets, 2015)

Customer experience is the sweet spot

Forrester found that emotion was the number-one factor in determining customer loyalty in 17 out of the 18 industries it surveyed – far more important than the ease or effectiveness of customers’ interactions with a company.

Source: “You Can’t Afford to Overlook Your Customers’ Emotional Experience” (Forrester, 2015)

Humana gets an emotional clue

Source: “Artificial Intelligence Helps Humana Avoid Call Center Meltdowns” (The Wall Street Journal, October 27, 2016)

Insurer Humana uses artificial intelligence software that can detect conversational cues to guide call-center workers through difficult customer calls. The system recognizes that a steady rise in the pitch of a customer’s voice or instances of agent and customer talking over one another are causes for concern.

The system has led to hard results: Humana says it has seen an 28% improvement in customer satisfaction, a 63% improvement in agent engagement, and a 6% improvement in first-contact resolution.

Spread happiness across the organization

Source: “Happiness and Productivity” (University of Warwick, February 10, 2014)

Employers could monitor employee moods to make organizational adjustments that increase productivity, effectiveness, and satisfaction. Happy employees are around 12% more productive.

Walking on emotional eggshells

Whether customers and employees will be comfortable having their emotions logged and broadcast by companies is an open question. Customers may find some uses of affective computing creepy or, worse, predatory. Be sure to get their permission.

Other limiting factors

The availability of the data required to infer a person’s emotional state is still limited. Further, it can be difficult to capture all the physical cues that may be relevant to an interaction, such as facial expression, tone of voice, or posture.

Get a head start

Discover the data

Companies should determine what inferences about mental states they want the system to make and how accurately those inferences can be made using the inputs available.

Work with IT

Involve IT and engineering groups to figure out the challenges of integrating with existing systems for collecting, assimilating, and analyzing large volumes of emotional data.

Consider the complexity

Some emotions may be more difficult to discern or respond to. Context is also key. An emotionally aware machine would need to respond differently to frustration in a user in an educational setting than to frustration in a user in a vehicle.



download arrowTo learn more about how affective computing can help your organization, read the feature story Empathy: The Killer App for Artificial Intelligence.


About Christopher Koch

Christopher Koch is the Editorial Director of the SAP Center for Business Insight. He is an experienced publishing professional, researcher, editor, and writer in business, technology, and B2B marketing. Share your thoughts with Chris on Twitter @Ckochster.


What Will The Internet Of Things Look Like In 2027? 7 Predictions

Tom Raftery

Recently I was asked: Where do you see the Internet of Things in 10 years?

It is an interesting question to ponder. To frame it properly, it helps to think back to what the world was like 10 years ago and how far we have come since then.
iPhone launch 2007

Ten years ago, in 2007 Apple launched the iPhone. This was the first real smartphone, and it changed completely how we interact with information.

And if you think back to that first iPhone—with its 2.5G connectivity, lack of front-facing camera, and 3.5-inch diagonal 163ppi screen—and compare it to today’s iPhones, that is the level of change we are talking about in 10 years.

In 2027 the term Internet of Things will be redundant. Just as we no longer say Internet-connected smartphone or interactive website because the connectedness and interactivity are now a given, in 10 years all the things will be connected and the term Internet of Things will be superfluous.

While the term may become meaningless, however, that is only because the technologies will be pervasive—and that will change everything.

With significant progress in low-cost connectivity, sensors, cloud-based services, and analytics, in 10 years we will see the following trends and developments:

  • Connected agriculture will move to vertical and in-vitro food production. This will enable higher yields from crops, lower inputs required to produce them, including a significantly reduced land footprint, and the return of unused farmland to increase biodiversity and carbon sequestration in forests
  • Connected transportation will enable tremendous efficiencies and safety improvements as we transition to predictive maintenance of transportation fleets, vehicles become autonomous and vehicle-to-vehicle communication protocols become the norm, and insurance premiums start to favor autonomous driving modes (Tesla cars have 40% fewer crashes when in autopilot mode, according to the NHTSA)
  • Connected healthcare will move from reactive to predictive, with sensors alerting patients and providers of irregularities before significant incidents occur, and the ability to schedule and 3D-print “spare parts”
  • Connected manufacturing will transition to manufacturing as a service, with distributed manufacturing (3D printing) enabling mass customization, with batch sizes of one very much the norm
  • Connected energy, with the sources of demand able to “listen” to supply signals from generators, will move to a system in which demand more closely matches supply (with cheaper storage, low carbon generation, and end-to-end connectivity). This will stabilise the the grid and eliminate the fluctuations introduced by increasing the percentage of variable generators (such as solar and wind) in the system, thereby reducing electricity generation’s carbon footprint
  • Human-computer interfaces will migrate from today’s text- and touch-based systems toward augmented and mixed reality (AR and MR) systems, with voice- and gesture-enabled UIs
  • Finally, we will see the rise of vast business networks. These networks will act like automated B2B marketplaces, facilitating information-sharing among partners, empowering workers with greater contextual knowledge, and augmenting business processes with enhanced information

IoT advancements will also improve and enhance many other areas of our lives and businesses—logistics with complete tracking and traceability all the way through the supply chain is another example of many.

We are only starting our IoT journey. The dramatic advances we’ve seen since the introduction of the smartphone—such as Apple’s open-sourced ResearchKit being used to monitor the health of pregnant women—foretell innovations and advancements that we can only start to imagine. The increasing pace of innovation, falling component prices, and powerful networking capabilities reinforce this bright future, even if we no longer use the term Internet of Things.

For a shorter-term view of the IoT, see 20 Technology Predictions To Keep Your Eye On In 2017.

Photo: Garry Knight on Flickr

Originally posted on my blog


About Tom Raftery

Tom Raftery is VP and Global Internet of Things Evangelist for SAP. Previously Tom worked as an independent analyst focussing on the Internet of Things, Energy and CleanTech. Tom has a very strong background in social media, is the former co-founder of a software firm and is co-founder and director of hyper energy-efficient data center Cork Internet eXchange. More recently, Tom worked as an Industry Analyst for RedMonk, leading their GreenMonk practice for 7 years.