Staying on top in business comes down to navigating change, but it is no easy task. There are a multitude of drivers constantly reshaping the world. These societal shifts are often driven by a handful of factors, including population change, evolving consumer values and new technologies. Of these, technology has been the most impactful driver of the last decade. It has accelerated the rate of change, making it harder for companies to meet the demand of tomorrow’s consumers.
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Tech innovation and investment is top of mind for most businesses as they strive to stay competitive and meet consumer expectations. Euromonitor International’s Digital Consumer Voice of Industry Survey uncovers how companies are responding to this digital transformation and their thoughts about emerging technologies. These are the five technologies expected to have the most impact on business in the next five years.
1. Artificial intelligence (AI)
AI started gaining traction in the 2000s when machine learning truly took off. Now, the confluence of three powerful drivers – exponential data growth, more sophisticated distributed networks and smarter algorithms – propelled AI to center stage for end-user applications.
In the near term, respondents expected AI to enhance website search and improve customer engagement. In five years, respondents see AI most impacting voice-powered applications. Leading companies are actively deploying voice initiatives. Thus far, many commerce-driven ones tend to focus more on pre- and post-purchase activities. In time, consumers may merely speak to execute purchases. Euromonitor International estimates that roughly 5% of all digital purchases in the U.S. and China will be executed via voice by 2023.
2. Internet of Things (IoT)
More products becoming embedded with internet capabilities equates to exponentially more connections and a plethora of new opportunities. This ubiquitous connectivity is giving way to the intelligent interaction of humans and things, more commonly referred to as IoT. In a future world, everything in the surrounding environment could communicate without human intervention. Recent breakthroughs in the cost of sensors, processing power and greater bandwidth to connect more internet-enabled devices are opening the door to this new uber-connected ecosystem.
In the long term, IoT has the potential to alter commerce in different ways, such as creating new touchpoints between consumers and companies, as well as providing even more granular data upon which to build stronger brand experiences. Industry respondents expect IoT to improve consumer-facing applications and automate consumer purchase decisions. It will one day be commonplace for machines to determine when replenishment products, such as laundry detergent or printer ink, should be ordered and execute such purchases without human involvement.
3. Cloud
Cloud computing refers to the storing and accessing of data and programs over the internet instead of a computer’s hard drive. In its simplest form, cloud is a metaphor for internet-based computing. Users have easier access to files when stored remotely in the cloud regardless of their location, leading to greater collaboration and productivity. This technology is a cheaper alternative than companies building out their own infrastructure. Cloud computing provides both small and large businesses with a flexible, secured, highly scalable and low-cost option for handling their data.
For those operating e-commerce websites, cloud computing can lead to enhanced security and easier scalability. As an example, companies can operate websites at the highest possible speeds and showcase the most customer-friendly features using the cloud. Cloud computing also locks down data to only those with proper credentials, improving security and making it easier to conduct frequent audits of looming threats. Lastly, companies can push through updates faster on the cloud, giving them easier scalability.
4. Robots / automation
AI and automation are often used interchangeably as both are associated with physical robots or other machines that allow companies to operate more efficiently and effectively. However, both systems vary in terms of complexity. Automation is about hardware or software that can perform without human intervention. AI, however, is about trying to make machines or software mimic, and eventually supersede, human behavior and intelligence.
Automation is being used across a variety of commerce applications. Assigning menial and repetitive tasks to machines can increase production and output, improve safety and allow humans to focus on other related work that requires more strategic thinking. This is becoming more prominent in foodservice amid rising labor costs. It has been used for a number of years to drive efficiency in warehouses, including order fulfillment.
5. Augmented reality (AR) / virtual reality (VR)
AR and VR technologies offer an escape from reality. Gaming has been the main avenue for exploration, but commerce brands are starting to experiment. These technologies can drive foot traffic to create brand experiences or establish virtual storefronts. From beauty brands to home furnishing retailers to travel agents, companies are testing AR and VR to see how these technologies could be leveraged along the consumer journey.
In the near term, approximately one-third of industry respondents expect brand engagement to benefit the most from the rise of AR/VR technologies. Long-term industry respondents are most excited by the potential for these technologies to replicate the physical experience online. Merchants of all types can use VR headsets to immerse consumers in a virtual world in order to shop for products or even research travel destinations .
Prospects of tech-led commerce
The development of these technologies from a commerce perspective will be a multi-year process. Approximately 40% of industry respondents already see AI being leveraged for enhanced website search and to improve customer engagements. More infrastructure-heavy experiences like personalized mobility or VR applications that replicate the physical world are future propositions. In fact, more than 70% of the 26 use cases for tech explored in Euromonitor’s survey are not expected to take off for at least five years, which underscores it is about long-term progression.
Euromonitor International’s Digital Consumer Voice of Industry Survey was fielded in November 2019 and had 840 respondents across 80 countries.
