Customer interaction of the future, part 1: Your personal digital ecosystem

Analogue and digital worlds will become increasingly connected

The fact that technical devices are getting smaller and more powerful all the time is old news – today’s smartphones are as powerful as the first supercomputers, and they fit in your pocket. But the progressive miniaturization and increasing convergence between analogue and digital worlds is changing not just the appearance of devices but also the way that we use them in our everyday lives. Now, for instance, so called “phygitals” – physical objects that are equipped with digital functions or linked to mobile services – are becoming increasingly widespread.

Fashion-conscious British consumers, for example, can currently make cashless payments with a jacket from Lyle & Scott – the cuff contains an NFC chip from Barclays Bank. Levi Strauss is currently working with Google to make its classic jeans fit for the future. In the fall, the company will launch an intelligent denim jacket that has conductive fibers and a Bluetooth chip in the left sleeve. The wearer can use that chip to operate a smartphone. And for a promotional campaign, the spirits maker Martini & Rossi developed a smart ice cube. It automatically orders the next drink when the glass is empty. The things that are now considered gimmicks or merely “nice to have” will be commonplace in the future. By 2020, every consumer is expected to have an average of five connected devices (Frost & Sullivan, 2015).

As sensors spread everywhere, consumers will obtain more and more product recommendations and suggestions for activities based on computer-generated predictions of future needs or preferences. The content offered to them pro-actively via their preferred channels will be personalized and situation-based: preferences like environmental data, social connections and even moods will be taken into account. For instance, electronic advertising posters will be able to use a camera to record the facial expression and therefore the mood of a passerby and display an appropriate advertisement. Or, a smartphone will notify its owner that there is an interesting sale right now in the store across the way.

The growing flood of data produced in this way will be more than just a technical challenge. In view of the continual monitoring being conducted by devices, consumers will also increasingly want their data to be protected against unauthorized access. This development is already visible today. For example, the start-up Dispel, based in New York, is offering a privacy-as-a-service platform that protects data and computers from being accessed without permission. By pressing a button, users can encrypt their Internet connection and thereby make their activities on the Internet “invisible” for third parties.

Consumers will live in networked ecosystems tailored to their own lives

Let’s imagine a scenario set in the future. Within the next decade, consumers will create their own personalized networks – in other words, each of them will use digital and analogue channels to construct a personal, adaptive ecosystem. Digital assistants will form the heart of this ecosystem and provide the consumer with whatever information is desired based on the situation. Technological developments like mood detection and positioning services will be linked with local services and will help to identify and supply relevant information. The individual ecosystem with its devices will act as more than just an interface to the digital world. It will also protect the consumer from unwanted information spam through a sort of “digital membrane.”

From the many currently available platforms and communities, such as Amazon or Facebook, a handful of central systems will have emerged, through which the first information about new products or services is distributed. For companies, it will become increasingly difficult to get the attention of consumers. They will have to position their products in at least one of the central systems and, at the same time, obtain access to the individual ecosystem of the consumer in order to interact with it. Product offers or brands will come to the attention of consumers to a great extent via their personal networks. In the future, however, these networks will include not just the analogue and digital peer groups, interest groups and relevant companies but also the aforementioned “phygitals” of the consumer. Through these, the consumer can be unambiguously identified and appealed to directly. For example, the personal Thermomix food processor of a consumer could notify her via Facebook that twenty of her Facebook friends are currently enjoying green smoothies and recommend a digital pack of recipes she could buy.

The customer dialogue of the future

These developments will lead to major changes in the dialogue between companies and end customers.

• Companies will have to position their products on central platforms and in the personal ecosystems of consumers in order to be able to interact with customers. For that, they will need special expertise in coordination and interfaces that can be built up with the help of suitable strategic partners.
• Because of the growing complexity, consumers will increasingly need support when it comes to managing their personal ecosystems. That includes assistance with the interconnection of various devices, or with the adjustment of access rights of a personal digital assistant to one’s own data. Consumers will also need support in the selection and usage of various modes of interaction with the interconnected devices (e.g., voice, typed commands or via facial recognition).
• Furthermore, they will need trusted contacts who give them the feeling they will handle their data securely and give them orientation in the complex digital world.
• New business models will arise: Using smart data analyses, the needs of potential customers will be ascertained and used to derive highly personalized marketing. This will increase the probability of getting the customers’ attention and the likelihood that the interaction with them will lead to the desired outcome.

In sum, there are a great many challenges and new opportunities that can already be foreseen. In the following weeks, we will present more forecasts regarding the future of the customer dialogue and its consequences for companies.

Author: Editorial team Future. Customer.
Image: iStockphoto/eternalcreative