I have always travelled extensively given the nature of my work. In the past, travel bookings were always a cumbersome exercise. It involved endless itineraries, multiple bookings, involving coordination between my office and travel operators. Now, everything I require is in my iPad. TripIt, an app, is a travel itinerary organizer which combines all my travel details into a single itinerary. It instantly recognizes my flight, car rental and hotel confirmation emails, and keeps track of my schedule. I can track my travel plans without having to visit different sites or make several calls.
This is the new face of consumer behaviour—the emergence of the digital consumers. We are digitally active, connected and demanding personalization. These are the most significant trends in the behaviour of new age consumers that organizations will have to cater to. The number of Internet users in the world in 2010 was around two billion, up from around 360 million in 2000. So that’s a staggering growth of around 444.8%. The numbers are astounding, but the message is clear—digital consumerism is an undeniable phenomenon. And organizations have to adapt to the new consumer mindset to stay ahead.
Take the example of Nike, which collaborated with Apple, and began offering a wide range of services and social networking opportunities through Nike+. This platform helped create the Nike+ “experience” kit which consists of a wireless device for transmitting speed and distance information from sensor-equipped Nike running shoes to an iPod Touch or special wrist band.
The runners are then able to track their progress, set personal goals or run with their friends.
Nike+ now has over a million runners, 130 million miles uploaded and a market share increase of 10 points as of June 2009. Nike is able to, therefore, not just deliver a product but a unique experience for each customer. This example illustrates some significant developments and the three important trends that define digital consumers—self-service, personalization and co-creation.
Self-service is a trend that is redefining how organizations engage with customers. No longer passive and inactive, in a significant shift, digitally active consumers are now reducing their dependence on organizations. Take a look at online shopping—people go through reviews, discuss on online forums, use social networking for their friend’s opinions on products before they make a purchase.
Pioneers of the self-service system in websites such as Amazon, included a recommendation system and user reviews. Take for instance TripAdvisor, one of the world’s largest travel information sites, the content for which is created by its users in the form of travel reviews, opinions and discussion forums. It has over 40 million unique monthly visitors, 20 million members and around 40 million reviews. Consumers now connect with each other; so it’s important for organizations to track these changes and be able to adapt accordingly, like Amazon.
A few years ago, Time magazine’s person of the year was “YOU”. The cover page declared, “Yes, you. You control the Information Age. Welcome to your world.” This appropriately captured the concept that today it is the individual customer who is at the centre and is crucial to key business decisions. Digital consumers are active, informed, assertive and are demanding greater personalization in the way that products and services are delivered to them. Developments like TripIt and TripAdvisor, I believe, are leading to the disintermediation of an entire segment of travel agents.
Look at such as like BBC and Google, which offer customization of their homepage, allowing the users to create their own layout with widgets of their choice. Or take the example of Reebok, which, like several other retail giants, is putting in dedicated efforts to work with the new generation of consumers. Reebok has launched a widget that can be added to any social networking site and allows consumers to customize the design of the shoes they wish to purchase.
All these examples I referred to, and several more, highlight not just the ability to get customer feedback, but take it to the next level—co-creation. Co-creation is the ability to create new products, services and processes through customer interactions and input. The rise of digital consumers will lead to increased co-creation, the ability to communicate with organizations and to actually be a part of the creation of new products.
Technology will be a significant enabler in this process and co-creation will herald a new era of innovation, bringing a fresh perspective to how organizations approach it. Innovation will no longer be about an organization’s creativity but about being open to tap into the large stream of ideas that lie beyond the organization—a successful example of an innovative co-creation platform is the reference website, Wikipedia.
Wikipedia has grown rapidly since its creation in 2001, attracting nearly 78 million visitors monthly. There are more than 91,000 active contributors working on more than 17 million articles in more than 270 languages. It has 440 million edits, showing us an astounding trend that is fast catching up.
Digital consumers will, therefore, bring about a massive shift in the way organizations traditionally work. Organizations are being asked to provide personalized products and services.
At the same time, consumers are also collaborating with organizations to create a greater understanding.
I believe the future of this kind of connection and of personalization lies in seamless integration. This will happen through technology. A sensor in your body can tell the room you’re feeling warm; it can tell the restaurant you are allergic to nuts. Any hospital will be able to issue personalized medicine because a universal database stores your information.
Intelligent automobiles will be able drive themselves, sensing traffic, and with inputs on location and speed limits.
The opportunities are limitless. And organizations have to be prepared—the consumers of the future are already here.
The author is set to take over as chief executive officer and managing director of Infosys Technologies Ltd on 21 August. This is the first in a series of articles he’s writing for Mint on seven strategic themes that Infosys has identified and sees as transforming businesses going forward.
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