In this, the first installment of a three-part series about the drivers behind digital disruption, we’ll look at the five trends I see influencing executives’ strategies.
1. Someone is stealing your audience: Interfaces, or the middlemen, are nudging into your relationship by inserting themselves between you and your customer. Finance app Moven, for example, connects all of a customer’s financial accounts across multiple banks. Apple TV is streaming video content direct from Redbull TV and Netflix. News aggregator Flipboard filters preferred content from various publications to its single app.
These interfaces are examples of a number of content collectors becoming a third voice” and commandeering the customer relationship.
2. Millennials ditch banks: According to the “Millennial Disruption Index” study, by Viacom Scratch, 33% of Millennials believe they won’t need a bank at all in five years. Nearly half are counting on tech startups to overhaul the way financial institutions work, and 71% would rather go to the dentist than listen to what banks are saying.
In a nutshell, financial services and insurance are the industries at most risk of disruption from Millennials. For now, Millennials--a key market segment for credit cards, car loans, home loans, and superannuation--are not listening to financial institutions, meaning marketers will need to innovate to encourage engagement and traction.
3. Innovation investments: To date, many businesses don’t possess the agility to innovate at speed, while startups continue to chip away at market share, especially in the financial-technology space. Lately, however, that is changing. Corporations around the world are realising they aren’t keeping pace with startups and are choosing to buy them outright or take part ownership of them.
In Australia, Telstra, CBA, and UNSW have co-invested in quantum computing, while trading platform Alibaba has invested in startup supply-chain management company Cainiao.
Large companies that have the resources to adopt flexible startups will continue to reap the rewards.
4. Internet of Things: The Internet of Things (IoT) is growing exponentially. Compared with the 5 billion connected devices shipped year over year to date, an estimated 35 billion connected devices will be shipped in 2020.
The exercise industry provides many examples of how IoT is filtering our daily lives, with Fitbit, Jawbone, and the Apple iWatch.
For an increasingly connected world, the interesting trend here is how businesses are moving from the industry of their core capabilities into adjacent capabilities in hardware and software. Sports drink Gatorade, for example, is now manufacturing a smart bottle (hardware) with sweat patches that will connect to their mobile app (software) to manage a person’s hydration level. Amazon has developed “dash buttons” for the house that, when pushed, automatically orders an item for day delivery, such as dishwashing tablets, nappies, and milk.
IoT is empowering businesses to expand their offerings between hardware and software--with no signs of slowing down.
5. Sharing is caring: The rise in a sharing economy, exemplified by firms like Uber, Airbnb, and Click&Boat, is disrupting industries across the board. Additional examples include Peers, a peer-to-peer platform that offers a home-sharing insurance product; Chrysler, which offers members the option to share a car for $99 a week; and Audi, which allows up to five people to buy a car, then cuts a set of keys for each one.
Indeed, the sharing economy is building momentum and trust among users through its two-way transparency and self-regulation. Uber provides a fair rating mechanism used by both passengers and drivers, which is now being adopted by the hotel industry to rate guests and provide incentives.
Next Week: 5 Technologies Driving Change