By Ajit Sivadasan, VP/GM, Lenovo.com
On a recent business trip to Beijing, China, I witnessed the beginnings of a society that has slowly begun to transform itself into a frictionless digital entity. Simple things caught my eyes that even a few years ago would have been the stuff of science fiction, it was truly remarkable. A lady at the airport paid for her soda in a vending machine by waving her phone at the machine, a colleague of mine paid for the taxi with his WeChat account, completely intuitive and frictionless.
While these are simple anecdotes of how daily life is changing the major breakthroughs and transformations are on its way that will make bigger impacts in the way we live and do business. Healthcare, logistics, education, and pretty much every field we can imagine will change dramatically, thanks to the innovative nature of business and technology. But, all of these changes are a very natural extension of how innovation evolves; once it unravels, it’s going to continue to disintermediate the inefficiencies layer by layer, function by function. The more interesting question is how organizations will evolve, how our customers will evolve and how the new way of business will change. For instance, what will the new rules of commerce be, how will marketing change, or where will arbitrage exist etc. So here are a few things that I believe will be challenges and opportunities in the very near future.
1. Brands will need to master how to build relationships at a transactional level: What do I mean by that? For long, businesses have talked to customers about their products and services and customers chose products based on what they perceived as a good “deal” More and more individual relationships will begin to resemble the traditional b2b or Small business relationships. Purchases will be judged on the quality of the relationship rather than merely look and feel of the product. Brands with the ability to deal with individual customers like business entities will have an edge. Life time value, 360 degree view of customers, but on steroids.
2. ‘Seamless’ will get redefined: Current friction in various systems from purchasing to logistics to payments will need to disappear. The shortest and the fastest paths will win and win big. Traditional payment methods will come under tremendous pressure to integrate much more seamlessly. Today’s payments processes are archaic, cumbersome and extremely inefficient. Army of people checking for fraud, orders on hold for days, address mis matches causing false positives and negatives. In short, it’s a mess that costs the industry billions and customer’s patience and time.
3. Move to continuous from discrete: another side of the relationship coin, except in this case brands will need to figure out how to become extremely flexible in how we charge customers for goods and services. In some rare instances companies do a version of this but it is primitive and inefficient.
Healthcare, logistics, education, and pretty much every field we can imagine will change dramatically, thanks to the innovative nature of business and technology
4. Virtual reality because less virtual and more real? The ability for customers to experience everything as they would in a physical store. Home decoration, clothes/ fashion, home and office automation and so on. Customers will have the ability to experience a vastly rich virtual reality based experience that rivals in store experiences, with the ability to make in application purchases using voice and gestures.
5. Reinvention of retail: This process has already started in a dramatic fashion with major brands making plays for more complete O2O (online to offline) experiences. Amazon buying Whole Foods is a well known example, but there are plenty of others. The current use case however is still rudimentary and in many ways looks forced and dysfunctional. Add autonomous and driver less cars, robots and drones to the mix and we will have a completely new and radical retail experience. Sounds like science fiction, but it really isn’t. It will start with places with low population density, or high traffic or expensive labor—but surely it or a close form of it is coming to a store very near to you.
6. A “living” home: Smart home and smart office concepts have been in development for a while, use cases are now beginning to look more sensical and cost effective. But we are very close to an Alexa and/or Siri controlled home or office that is less gimmicky and more useful. Extend this to all things SMART in the house (spouses and children excluded). Will commerce be embedded into the house, most likely, water filters for your refrigerators, detergent sensors for your washing machine, bulbs, air conditioning filters, pretty much everything that is sensor/usage based. We talked about this in the context of the IOT/sensor enabled landscape, but this is more Minority Report like sophistication.
We can keep going, but the shape of eCommerce and digital transformation will be remarkably apparent to us and the speed of change will surprise us. Organizations will have massive challenges in keeping up with this. While there will be many challenges, the following few from my standpoint will be significant.
1. Talent scarcity: everyone these days is talking about digital transformation. The quality talent required to do this is scarce and will continue becoming scarcer as the appetite for digital grows. China, India and other traditional places for talent sourcing are themselves significant consumers of this talent. Expect costs to skyrocket and organizations struggling to retain talent.
2. Bridge between normal and the future is big: What do I mean by that? The world we are going to is significantly more sophisticated than the world we live in, digitally speaking. The gap will continue to widenand the arbitrage will be significant for brands. So, making investments and starting on these transformations is no longer a matter of choice, its mandatory.
3. What got us here, will not get us there: Our way of developing tools and processes from the past may have to get overhauled substantially. With the advent of new technologies and competencies, the way we make decisions, the way we use inputs and outputs, the way we implement projects…all of that has been changing for a while, but, if you have not been close, it can look like a monumental shift in your environment. This will call for massive focus on change management, culture etc. These soft skills are fickle and require extra love.
I will close by saying that, we are very fortunate to be in the middle of change that only comes in a millennium, but it extracts a high price, will likely leave a lot of new losers and create a new set of winners. Brands, now more than ever are susceptible to getting disrupted. The work will be relentless, and challenging but very rewarding and meaningful. Are you there yet?