GfK presents Tech Trends 2016 – your guide to understanding the future connected consumer
Let’s first speak about the challenges you are facing today in an increasingly complex market which is driven by continual innovation of technology
Then, we’ll look at our 10 key trends for 2016 – areas where you need to focus to understand how technology will impact consumer behavior and, ultimately, your business strategy.
And, last but not least, we’ll show you our capabilities and provide examples of how we empower our clients – you – to make smarter business decisions.
We are currently in a transitional period – there is an in-between generation – brought up in the old world but well adapted to the new one…..internet-savvy and digital…..the so-called ‘connected consumers’. In their daily lives, these consumers are motivated by:
Freedom - which is enabled through higher levels of convenience
Acceleration - speed of change has substantially increased, and will continue to do so
Intimacy - human connection is more valued and more sought after.
Think about your markets, consumers and brands in this context – to succeed in this transitional period and beyond, your products and services need to address the evolving consumer behavior.
We at GfK are connecting consumers and businesses. With the strong belief that consumers’ needs and requirements drive market and brand evolution, we make the voice of the consumer heard. We enable our clients to create winning strategies to enrich consumers' lives.
This flow chart shows how technology is the starting point for changing consumer needs and behaviors, which subsequently informs how brands change and develop their strategies. This then effects how the overall market evolves.
As such, it’s important for brands to get insights into how technology is transforming our world. These insights help shed light on evolving behavior. Market and brand evolution are driven by consumer’s needs – what they deem to be beneficial and relevant for them.
In Tech Trends 2016, we point you to the key trends that impact consumer behavior.
As consumers become increasingly connected, they leave a trail of their interactions with businesses
More organizations are utilizing the large data sets they collect from their consumer interactions and doing so in more sophisticated ways
Invisible analytics is about maximizing more of that data and converting it into meaningful innovation and insights as a basis for better business decisions
Benefits: provides crucial competitive advantage, improves return on marketing investment and supports new product development
Artificial intelligence and machine learning will have a pivotal role to play in making sense of the weight of data, filtering it to deliver the right information to the relevant person exactly when it’s needed
Organizations need to use their clever analysis with caution, however. The way that data is used in marketing activities, for instance, needs to be seamless, not spooky
Businesses need to adopt an analytical culture but if they overstep the mark, they risk putting off consumers; if they overstep what the consensus deems to be acceptable behavior, we could see more legislation to protect consumers.
The ultimate AI recreates the human thought process. A man-made machine, it has our intellectual abilities: learning, reasoning, using language and formulating original ideas
This is a long way off
But early forms of AI based on machine learning are increasingly infiltrating our lives – think Siri, Google Now, Cortana and Amazon Echo.
In 2016, we expect AI assistants to take the significant step of evolving beyond smartphones, enabling connected consumers to have their personal assistant at home and on the move - offering alternative route for brands to reach consumers.
Machine learning is already a big part of Apple’s “intelligent assistant” Siri and there’s evidence to suggest that the company is investing heavily in this space, albeit quietly
Speech recognition is also a key focus in AI
Brands need to be monitoring and assessing the market impact of this advancing technology.
For connected consumers, AI presents even more opportunities for brands to reach them with relevant messages and recommendations. For brands, there is the chance for a dialogue with consumers that builds trust.
2016 is going to be big for VR in the gaming industry, with launches of head-mounted displays from big brands in the space.
Sony, Valve, HTC and Facebook are among those leading the way in creating VR content for gaming platforms.
Estimates suggest a $2.8 billion global VR hardware market by 2020, with head-mounted displays (HMDs) for gamers leading the charge (Source: business Insider UK, The Virtual Reality Report, April 2015)
The gaming market won’t be limited to first-party HMD manufacturers; third parties are already working on accessories that increase the perception of immersion via haptic feedback – e.g. gloves
Beyond gaming, travel brands such as Marriott and Qantas Airways, and retailers such as ASOS, are experimenting with the technology to offer consumers promotional, exciting experiences.
Applications in business include architectural design, home and office space planning, and rapid prototyping in product development and engineering
With this technology in its early stages focused on gamers, it’s still unclear if awareness and familiarity will be enough to drive appetite among mainstream connected consumers. Brands need to monitor the success of HMD headsets in 2016 and beyond, and be poised to respond if the consumer reaction is positive.
Consumption of video is growing faster than anyone anticipated and online is becoming the go-to channel on which to enjoy it.
Consumers are turning to over-the-top (OTT) delivery platforms, streaming services and social media to curate their own personalized viewing mix
This is causing disruption to the traditional free and pay TV distribution models.
Video consumption is increasingly migrating to smartphones, particularly among Millennials and pre-teens
Increasingly, this audience is engaging with video advertising on their smartphones too, and brands are maximizing the opportunity to use this platform to engage with them in this highly personal and targeted way
With so much video content being consumed, it is becoming more important to understand audience behavior
The vast amount of video consumption online is leaving a data trail for media owners and brands alike
These organizations have an opportunity to use this information to target content creation, distribution and interaction more accurately.
What will it take for wearable devices to go mainstream? If wearables are to become a part of more consumers’ lives, we believe 4 elements need to be addressed:
Invisible and seamless - being able to incorporate your wearable device into an existing personal technology ecosystem is going to be fundamental to market take-up
Style and substance - some fashion brands have spotted this opportunity and, recognizing they lack the technical know-how to make their own wearables, have instead opted for partnerships. The next step in the style stakes will be “made-to-fit” clothing and medical devices.
Accurate and efficient data collection, storage, processing and reporting - As sensor technology improves, the quality of the data output from wearables will become more reliable and accurate. Stored in the Cloud, this information will become contextual and actionable for consumers.
Compelling new use cases - we believe the use of distinctive, tailored characteristics will provide a link to the individual
We predict that innovation will focus on creating smarter ways to interpret the data collected using wearables. It is the processing, analysis, interpretation and delivery of the personal information that holds the key to success.
While the concept has existed for over 10 years, the mobile payments market is only really evolving now
While emerging markets like Kenya are already using their mobile to communicate with their banks, some developed markets are showing a slower uptake of the latest mobile payments technology.
In the UK and US, for example, the challenge is that only a small number of high-end handsets are enabled for “tap and pay”. This is something that Visa, Google, Apple and Samsung, in particular, are investing in heavily.
We expect to see a shift towards Payments 2.0 in the US – a move to value-added services including rewards, shopping lists, discounts and location-based offers.
What is certain is that overcoming security concerns and technical issues, while simultaneously communicating the positive consumer benefits of convenience, customized incentives and loyalty rewards, will be a key focus for retailers everywhere in 2016.
Over the coming 12 months, a key focus for retailers will be overcoming security concerns and technical issues, as well as offering positive consumer benefits.
What is certain is that overcoming security concerns and technical issues, while simultaneously communicating the positive consumer benefits of convenience, customized incentives and loyalty rewards, will be a key focus for retailers everywhere in 2016
The current challenge for manufacturers is that consumers still know little about the smart home and its capabilities
The lack of consumer knowledge of the potential of the smart home means that at present its adoption is piecemeal/incremental
In addition, the slow speed of take-up is because the market has been tech rather than consumer-led
The current situation means that, for now at least, homes will become smart by increment rather than by design as appliances and devices are replaced over time with newer “smart” models
To realize the opportunities of the smart home competitors will need to collaborate and unusual partnerships will be formed
Critically, the technology must be simple and seamless. Success will come when organizations work together to deliver the positive user experience that home owners crave
While many luxury vehicles already have large displays, and this trend is set to continue
This growth in display technology is already opening doors for an increasing number of consumer electronics technology businesses and startups
Understanding the needs and desires of customers in specific markets and tailoring in-car apps and services to meet them will be key to getting them to pay more for connectivity
With increasingly sophisticated technology coming online and new business models emerging that are helping to fuel further investment in developing the technology, fresh challenges are coming to the fore such as data privacy
As OEMs seek to promote more features and push targeted advertising via in-car displays, they will need to use more customer data
Consumers understand the need to surrender their data to these brands and value what they get in return - the automotive industry needs to clearly communicate the value to its customers of them sharing their data
Technological advancements will continue to provide greater opportunities for non-automotive companies to enter the field. However, having a clear understanding of the automotive industry will be essential to making this transition
With their wide-ranging applications, the drone market is on an upward trajectory
More brands are entering the space:
GoPro is set to launch a quadcopter in 2016
Facebook and Google want to use drones to expand the internet’s reach
Amazon and Google looking how they can be used for deliveries
Today’s drones aren’t without their challenges:
Limited “sense and avoid” technology
Lack of night vision
Short battery life
Businesses will increasingly use drones to meet the high expectations of connected consumers looking for a better, more seamless service across numerous industries
For businesses, drones will be a catalyst to reduced cost and increased efficiency
But there’s a long way to go and progress in this market rests largely on the evolution of automation technology
Without automation there can be no drone presence in urban areas – which means no deliveries, and no standards for drone flying technology
This market has huge potential, and appetite from the connected consumer will be key in growing its disruptive forces.
As more players enter the 3D printing market, B2B needs will be met by both distributors and IT/office dealers
As an emerging technology, cost is a major barrier to take-up for both business and consumers, but as costs fall and price becomes less of an obstacle, the benefits will become more obvious and prominent:
lower assembly costs
reduced waste
minimal transport and delivery charges
increased speed at which new designs can be brought to market
Manufacturers and designers will need to trademark, patent and copyright their intellectual property to avoid their latest designs going “viral” and appearing “in print” overnight
3D printing market could enable a seismic shift from today’s “historical” model of mass producing standardized items to producing tailor-made products locally
A major beneficiary of these more efficient and green supply chains will be the environment
Confidence – consumer confidence is key to brand trust
Communicate – your communication must be pitch perfect
Capitalize – capitalize on customer enthusiasm and appetite
Collaborate – be prepared to embrace unexpected collaborations
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Got any questions? Please contact: TechTrends2016@gfk.com