It seems like every day we take a step away from analog and toward digital.
In New York City, the restaurant Sweetgreen recently stopped accepting cash. The city is phasing out parking meters for mobile payments. At Amazon Go, the company’s new grocery store in Seattle, consumers can walk in, pick an item off the shelves, and leave without going through a checkout line—the payment is recorded via in-store sensors that connect to a mobile app. In China, a KFC restaurant uses facial recognition software to recommend items for customers based on their “estimated age and mood.”
What’s occurring is a grand fusion of the virtual and the actual. Consumers don’t see a delineation between what they do online and real-world interactions, and they are right to think this way. But for businesses, bridging those two worlds has been a huge task. For instance, because consumers use up to 7.2 devices on a given day, it can be very difficult to establish a single identity that encompasses their full range of activities.
In short, this consumer landscape is complex and is characterized by rapid change. Consider how the following industries have been upended in recent years:
Retail: Consumers now expect an omnichannel environment in which they can check their phones to see if an item is available at a nearby brick-and-mortar store, and then pick it up off the shelf or have it waiting ready for them via curbside pickup. In the Chinese city of Yinchuan, residents can order groceries on an app and pick up their items at a centrally located smart locker.
Healthcare: Video-based doctor visits are emerging as a rival to in-person visits. Artificial intelligence (AI) is increasingly being used to schedule treatment plans and make diagnoses.
Banking: Many consumers now rely on AI-based robo-advisors to give them investment advice. In some parts of the world, facial recognition is being used as an additional identifier for banking.
Automotive and transportation: Though auto sales remain robust, the momentum has shifted towards autonomous and semi-autonomous vehicles.
Advertising: In 2017, ad spending on digital is expected to surpass spending on TV for the first time. A mass-media model based on reaching the largest audience possible has given way to one based on individualized messaging to consumers.
Since this degree of change is occurring in virtually every sector, the only way businesses can keep up is by taking new approaches to monetization that are driven and powered by sophisticated, agile technologies. In publishing, for example, metered paywalls–which let consumers read a few articles a month and then decide if they want to sign up for a subscription to read more–are becoming the norm. Many services are being stripped to their essentials and reformulated as products, often sold via a subscription-based SaaS model. APIs can offer new customers by linking not-yet-developed apps. Walgreens, for instance, recently offered APIs that let other apps use the pharmacy chain to print photos.
Success often comes from implementing business solutions designed to support continuous cycles of change to the core business model based on a rapid feedback loop from customer engagement and market analysis.
In addition to offering new business opportunities, messaging to consumers on an individual level also gives companies access to game-changing data that lets businesses create detailed customer profiles. Employing machine learning and deep learning lets businesses analyze such data in new ways and find patterns and opportunities that humans would not be able to discern. For example, a toothpaste maker recently parsed its programmatic advertising data and found that a group of consumers was older than expected, so the company made the text on its packaging larger to accommodate aging eyes.
This exchange–of more refined messages on the consumer end and deeper data on the business side of the transaction–is only just starting. For businesses, this is both a huge opportunity and a danger, since ignoring the possibilities means falling behind. That’s why businesses need leaders to be the change and reject the standard ways of doing business. As such leaders take a clear-eyed assessment of the landscape, they will realize the only way forward is to abandon previous assumptions about business and embrace change in the market.
For more on how digital disruption is impacting business today, see Rewriting The Rules Of Retail.