The day-to-day of keeping a business running can cause us to ignore or miss bigger trends that are shifting the market landscape. As strategy consultants, we are often asked to identify how businesses would be best placed to respond to changes in regulation, pricing or consumer behaviour. Increasingly, we are hearing the same trends being mentioned across different sectors. Strategy teams often want clarity over how urgently they should address these trends and what opportunity they present.
The team at White Space has researched three of the most frequently mentioned trends and uncovered actions that businesses should do now, things they should consider and areas to investigate. These actions can form part of a wider strategy to make the most of opportunities afforded by changes in product ownership models, development of payment technology and automation of customer services.
Product Ownership Models
One of the most obvious changes over recent years has been the shifting nature of product ownership. From the corporate and regulatory shift of ‘sharing economy’ startups Airbnb and Uber to the Home Depot’s move into leasing tools to customers, it’s clear that this is an area that’s still developing. Products being sold as a service such as Microsoft Office 365, increasing flexibility in service purchasing such as Cuvva’s ‘insurance on demand’ and subscription services’ leap into the mainstream last year with Unilever’s purchase of Dollar Shave Club are further evidence of this.
Each ownership model has its own benefits with advantages including removing the ‘burden of ownership’ for customers, accessing higher margins on short term bases, securing long-term income streams or brands developing direct relationships with their customers. Experts told us that companies need to determine which ownership model works best for their product and customer base and message on its benefits to make the most of this shift.
Changes to Payments
Contactless payments and Apple Pay have changed the way customers conduct simple transactions. While 2017 won’t bring such a visible shift in the way people pay for goods, there will be a dramatic shift in how payments are handled by businesses. Payments technology will make it possible to collect and share a richer stream of data, giving businesses far more information about their end customers. Retailers and suppliers should be discussing how to best implement this data flow preparing for how they will handle and make use of the new information they will receive.
HSBC has already enabled ‘voice passwords’ for their telephone banking, and Santander announced payments actioned and authorised through voice commands in February this year. Further biometric identification techniques such as iris scanning will be implemented by early adopters this year. Customers will expect businesses with security requirements and protected user environments to apply these technologies shortly after they become available.
Customer Services Automation
When it comes to customer service, consumers no longer compare like with like. Banks, FMCG brands, telecoms providers and insurance providers are being held to the same standards as retailers and digital startups. We have seen the start of a revolution of automation and self-serve to support customers to resolve queries and troubleshoot problems more quickly and easily and this will continue over the next 12 months.
Businesses are investing in tools to identify patterns of behaviour among consumers to help them predict customer queries and proactively contact them. This enables businesses such as Capital One and Amex to target valuable customer service resource where it is best placed. Proactive companies have been developing self-serve tools and directing customers to them for simple issues. Early adopters such as First Utility are leading the way with ‘digital concierge’ services which we expect to become more prevalent. These ask customers ‘what do you want to do?’ and interpret their responses to sidestep complicated menu systems.
Changing states can either present a challenge or an opportunity to businesses. It is by responding to trends such as those mentioned above that allow disruptors to shake up an industry and incumbents to remain relevant. Four questions arise:
- Are these trends playing out in my industry?
- What could be learnt from sectors they have already impacted?
- What opportunities and threats arise?
- What actions do I take?