AI – where fortune will favour the brave
Artificial Intelligence – the multiple technologies that are enabling a generation of increasingly complex and productive machines – is ramping up in importance almost daily. The emergence of big data is the catalyst for such transformational change, and the more we have, the more we can do with it. Within six years, our digital universe will house around 180 zettabytes of data.
For consumers, the applications of AI will have increasingly significant influence on all our economic, social and political lives. They affect our road transport, the way we interface with technology, and bioengineering which has the potential to help consumer companies predict and order items before the customer even knows they need it.
That said, many firms are held back by legacy IT infrastructure. The likely winners in this race will be autonomous driving companies, whose vehicles are forging ahead with data accumulation which in turn is generating ever-smarter AI.
The tipping point for AI has already been reached, shifting the balance of power between vendor and retailer and accelerating efficiencies across the board.
The augmented self, and why the individual is set to reign supreme
The revolution in data – and how we use it – is presenting companies with parallel opportunities and challenges.
Historically, data that was considered robust covered gender, age and race. Today’s level of sophistication means that consumers’ online behaviour, transaction history and specific interests are feeding a pot of ever-richer data, to give companies a better understanding of their needs.
And where AI is helping us to profile consumers in a better way, key advances in biological and health data gathering means companies are at the point of a truly holistic understanding of our needs and predisposition to certain purchases.
In short, our location, driving routes, sleep patterns, glucose levels, social activity and gut health are now becoming fair game. The question is how companies can curate and customize this information to their advantage.
The Cloud will dominate business growth models for the foreseeable future
The Cloud represents a force multiplier among growth-minded companies positioning themselves for the future. A model which by nature mitigates the challenge of data storage and centralizes software platforms, is good news for a company’s economies of scale and ultimately for the end consumer’s purchase price.
Customers are increasingly able to avoid the heavy upfront investment in a digital product or service, in favour of subscription-based purchase models accessible cross-platform – whether on their smartphone, tablet or laptop.
Vendor-hosted purchase models on the Cloud are not just a driver for established businesses; innovative new firms can exploit the Cloud as a rapid and efficient enabler for their ideas. Those efficiencies benefit the company from within, too. The Cloud is an always-on growth driver that can be used in real time, which also ensures your business is at the forefront of IT innovation.
If the Cloud is an opportunity for companies to get bigger quicker, it also represents a threat. Business does not want to be on the wrong side of relevance, and it needs to plan accordingly.
People power – how companies should negotiate the new marketing paradigm
Global connectivity has empowered the “masses” over the last 25 years, motivating groups to join forces and effect change in their lives rather than rely on traditional institutions. And while the mass of information available online is arguably a force for good, it has resulted in a loss of trust in established public bodies and corporations where face-to-face customer interaction has plummeted, unsavoury secrets have been uncovered, or public bodies have been accused of selling their citizens short.
The implications for consumer power and influence going forward are profound, shaking up the way in which brands and retailers will grow in the future.
Where TV advertising was once the gold standard in mass marketing, companies now need to navigate the online space to build consumer advocacy, demonstrate their sustainable values and supply chain, but also realign their whole business models in the quest for future growth.
Navigate your way through the fog of uncertainty
It may be clear that the old rules dictating global capitalism are dying out – but it’s much less clear what is taking its place. This state of flux is not prompted by business, but is the result of geopolitical upheaval, populism and climate change among others.
Companies are therefore faced with tough future decisions in an environment where water will likely usurp oil as the commodity of security, and politics will reflect the disillusionment of society at large by shifting towards more authoritarian structures of power.
The economic implications of such a move away from post-war liberal globalist values are stark for consumer companies, manifesting themselves through labor shortages, inflation risks and a potential drop in living standards overall while they are compelled to increase prices to mitigate the impact.
Agility is not a choice; it’s a necessity
Why is agility important? In an ultracompetitive corporate climate with multiple pressures coming from customers, institutions, governments and sustainability lobbyists alike, it is those agile businesses that stand the best chance of navigating these challenges successfully.
An existing asset base and brand equity no longer ensures security and stability for a company; the risk today lies in doing nothing. With KMPG reporting around 60% of CEOs as feeling they lack the capabilities and innovation to handle rapid disruption, the imperative to act is clear.
Feedback loops and network effects amongst consumer and investor bases are helping to either create landslide corporate winners or raze companies to the ground, which is why the price of dominance in the future is the courage to be the best, move first and dare to self-cannibalize.
We recommend four agility mandates to future-proof your business in this climate. First, make people believe in your mission; second, consider a new business model; third, seek out allies that could make good corporate bedfellows; and fourth, lighten the load on your assets to be more in the mould of Airbnb than Marriott.