There is a transition happening akin to that of an industrial revolution, an inconspicuous shift from a tried-and-tested old economy to a brand new one, bringing with it digital assistants, such as Amazon Alexa, Google Home and Apple Homepod, that are irreversibly changing the way customers decide to purchase and interact with businesses.
The Old and the New
In the old economy, there were companies that enjoyed substantial growth during the first half of the 20th century as industrialisation expanded around the world. This formed today’s traditional sectors, such as construction, manufacturing, agriculture, healthcare and transportation, many of which do not depend entirely on technology.
Then there are the entrepreneurs and agile startups that have formed the new economy. Coming out of the think hubs of Silicon Valley, Shenzhen, Berlin and other innovative cities across the globe, these companies are creating new high-growth industries, products and services at a rate that the traditional manufacturing and commodity-based economy cannot match. These challenges are more visible when established companies are compared to the platform companies of the new economy in relation to their cash position.
What the above graph shows is that the larger, more established companies have too many targets, costs and pressures (external stakeholders, customers, and competitors) to remain successful. There is too little cash available to take risks and reinvest into creating new products and services. For large organisations, it is also very hard to suddenly stop the production line, change the business model and head in a new direction.
As an example, Volkswagen Group, a staple of car manufacturing, are almost coming to the end of their 5-year plan of investing $86bn (that’s only 6-7% of VW Group’s overall revenue) into research and development to stay competitive against Toyota and the Renault-Nissan Alliance, considered among the world’s largest automakers.
So what do the new platform companies do with all their available cash?
Well, they look at the world’s problems and go about trying to fix them. The oldest problems can often be found in the oldest industries, like in healthcare (AI company, Infervision, use artificial intelligence and machine learning for quicker and more accurate medical diagnosis) and transportation (Uber creating a peer-to-peer ridesharing network) for example. The flexibility (and benefit) of available cash for a platform company is that they have the possibility to try and fail at a problem and then maybe try again and succeed.
A Digital Assistant for the Digital Age
In the future of business, anything that is a process can and will be run by an AI. In the new economy, a digital assistant handles the process of a sale. A consumer can talk to their Google Home (or other favoured digital assistant product) and ask them whatever they want and the digital assistant will pick a selection of options according to the needs of the consumer (also based partly on previous data collected). In today’s world, the point of sale moves into the digital platform.
In this new model and economy, there are only eight real customers that need to be targeted/influenced. That is because there are only around eight companies at the moment that have the power to introduce a good quality digital assistant successfully into the marketplace. This is fantastic news for consumers as the new model reduces the probability of companies providing negative customer experiences (for risk of being lowered in a digital assistant’s recommendations). It forces companies to become more competitive through their pricing, strategy, marketing and customer service to remain both emotional relevant to the customer’s requirements and also technically relevant to the digital assistant’s search criteria.
To survive in this new economic environment and develop customer relationships further in the age of digital assistants and artificial intelligence, companies will need to:
Deliver exceptional service; exceptional service is the only way companies can connect regularly and personally with customers. Multiple touch points are beneficial for both parties for various reasons besides the sale, such as a feedback forum or product support for example.
Build a strong brand; if people ask for a company directly (by name) they are more likely to purchase solely from that company moving forward. The company will be saved as a favourite.
Innovate to survive; if a company has a new product or service that nobody else is offering in the marketplace, consumers that want it are obviously only going to be able to purchase it from that company.
Digital assistant are poised to disrupt the entire retail experience, and could reshape it in such a way that the past decade of growth in the e-retail sector may be seen in the future as only a precursor to its future form.
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