In May 2020, Shopify’s COO Harley Finklestein was commenting on the outcome of forced digitalization in retail. “The retail world that would have existed in 2030 has been pulled into 2020. Brick and mortar retailers that were thinking of moving online have done so at an incredible clip over the last 8-10 weeks. It feels a bit like a story of 2 retail worlds. You have the legacy retailers – the Neiman Marcuses, the Barneys, the J Crews – that are no longer around because they did not adapt fast enough.”
Finklestein pretty much sums up the spiral effect of huge behavioral shifts and fast-paced technological developments that have been going on for the past nine months and we will continue to witness in the year(s) ahead.
Before the pandemic, we used to view forecasts with a large degree of confidence. Assuming the future is largely predictable, it was easier to trust the experts’ predictions and to set off to fulfill prophecies that were very much tied to reliable current data. Nine months into a pandemic that nobody foresaw have taught us that holding on to certainty is a fragile thing, when change happens at the fast rate that we’re experiencing.
Nonetheless, realizing the level of uncertainty around us doesn’t stop us from pursuing certainty. In the context of such ambivalence, we analyzed the latest most trustworthy forecast reports from McKinsey, Gartner, Forrester, and Forbes, and extracted 15 business & tech trends heavily fueled by this year’s accelerated learning curve, creativity, agility, and customer obsession.
By the looks of it, one of the few things we can be certain of it’s that technology will keep mirroring ‘the new normal’ , the ways we do pretty much everything – sell, buy, communicate, collaborate, do business, engage, trust, etc.
Artificial Intelligence, Machine Learning & Data
1. Automation & AI to govern the workplace
With remote work rising to 300% of pre-Covid-19 levels, many companies will look to AI to boost automation and augmentation needs. More than a third of companies undergoing digital transformation or experiencing growth will employ AI for intelligent document extraction, customer service agent augmentation, return-to-work health tracking. (Forrester)
Remote work will continue to force companies to automate and enhance processes such as talent acquisition, employee self-service, budgets, payments etc. (Forbes)
By the end of 2021, 1 out of every 4 remote workers will benefit from new forms of automation, which can be direct or indirect. A case of direct automation support, which will occur less often, is where employees will collaborate with bots designed to help them carry out their daily tasks. Indirect automation support is expected to gain popularity. Robotic process automation bots combined with conversational intelligence and other forms of intelligent automation will be used to handle business tasks that will often remain invisible to the remote worker.
2. AI will increasingly enable B2B sellers to deepen buyer relationships
As the remote and digital environment will keep getting larger and larger, B2B sellers will continue to adapt their methods and build new competencies that allow them to engage with prospects and customers in more meaningful ways.
According to Forrester, more than 60% of B2B sales leaders are planning to make deeper investments in AI and automation tools that will leverage buyer and seller activity data. By reducing their effort in administrative tasks, sellers will enjoy more time and space to conduct deeper customer research, gather insights from data and build more meaningful interactions with buyers. AI will step in to corroborate patterns such as the buyer’s preferred channel and recommend sellers the next best action.
3. AI chatbots to become a top-10 engagement channel
Juniper Research predicts that companies will save $8 billion by 2022 through the use of chatbots, particularly banking and healthcare industries.
How will we reach that number? With the ability to accomplish more and more complex tasks for customers, chatbots will become one of the key drivers for customer engagement. With practice, and as the technologies grow, chatbots and virtual assistants will leverage first- and third-party data along with AI and machine learning to offer more personalized, guided experiences.
More than a third of B2B technology buyers will rate chatbots as a top-10 engagement channel.
4. AI and Machine Learning will blossom
AI & ML are expected to reach new frontiers allowing for new case studies and enabling companies to beat social distance with state-of-the art tools such as holographic meetings for remote-work and boardroom simulations. There will be a move to using no-code automated Machine Learning (AutoML) to implement 5, 50 or 500 AI use cases faster. (Forrester)
IDC forecasts that by 2023 worldwide spending on AI systems will hit nearly $98 billion. Retail and banking industries will spend the most on AI, with investments targeted at automated customer service agents as well as diagnostic and treatment systems.
5. More progress towards trusted data for AI
Forrester predicts that next year we will witness both the upside and downside of artificial data, which comes in two forms: synthetic data (used to create data sets for training AI) and fake data (used to perturb training data and deliberately throw off AI).
Because of that, companies will be facing increasing pressure to prove data’s lineage for AI, including data audit trails to ensure compliance and ethical use. The best outcome – blockchain and AI will start joining forces more seriously to support data provenance, integrity, and usage tracking.
6. Digital adoption surging differently through Europe
The lockdown has pushed Europeans to take advantage of the digital offerings, especially with shopping and restaurant delivery, entertainment, and communication. Even though in Europe the online growth has increased by 10% to 25%, it’s still behind the 20% to 40% growth rate in the US.
What’s particular about the low rate in Europe – not only the lag compared to US, but also the behavioural differences. While Germany is more reluctant to online shopping, Spain and the UK are leading the online growth in all categories. Spain is more open to buying over-the-counter medicines than Italy. (McKinsey)
It could be cultural differences, which should be left to behavioral science and anthropologists. And then to AI.
7. Increase of digital business divisions
Forrester anticipates that digital engagement will be the main driver of customer value. Many global organizations will invest in tech partnerships in order to launch data, artificial intelligence, and software-driven divisions.
By the end of 2021, 30% of $1 billion-plus firms are expected to increase their digital product portfolio. 20% of such businesses will stand up digital divisions dedicated to launching disruptive products.
8. CIOs will be the new COOs
According to Gartner, many end-user businesses do not have a COO, which is a key role in digital acceleration. By 2024, 25% of traditional large-enterprise CIOs will be held accountable for digital business operational results, effectively becoming “COO by proxy.”
The pandemic has shown that CIOs can drive digitalization across the organization. Instead of just focusing on IT, CIOs can work across the business on digitalization, creating alignment between what technology can do, what the business can do and what the business wants to do. By doing so, CIOs will be effectively working as COOs.
9. CMOs will take control over the full customer lifecycle
CMOs are expected to be the main driver of customer obsession or to delegate their role to a chief customer or experience officer. CMOs will put the customer at the center of leadership, strategy, and operations. As a result, companies will increase their spend on loyalty and retention marketing by 30%.
CMOs need to reinvent not only themselves, but also their teams. Marketing and customer experience teams will join forces to acquire customers who stick around long-term. CMOs will focus on full-fledged loyalty programs to better deal with the forced evolution of CX caused by the pandemic and to drive growth.
10. The shift to a cashless society
The “Internet of Cash” trend was already under way. On the one hand, we had innovative cash-free stores like Amazon Go. On the other hand, we had Sweden – also known as the country of early adopters – where the proportion of people paying with cash has already fallen from 40 per cent (2010) to less than 10 per cent (2020).
Precaution measures related to Covid-19 infection and prevention control discouraged people from using cash and intensified the need for cashless payment tools. While the transition to cashless transactions increases convenience and reduces crime, the number of fraud attacks keeps growing. Just to give you an example, at the height of global pandemic fears, phishing incidents rose by 220% compared to the yearly average.
To eliminate the systemic banking fraud, the financial industry is doubling down on the effort in creating new payment standards around the use of digital cash and financial transactions in digital channels.
11. Paperless banking will gain ground
Before the pandemic, the fintech industry was already getting closer to the reality of a paperless world. We were already on the way. Social distancing has only pushed consumers and businesses to trust technologies that eliminate paperwork – something that normally would have taken longer.
People already find it easier now to connect their bank accounts and use platforms such as DocuSign. According to Joe Camberato, National Business Capital & Services, “in 2021 paper bank statements and other financial paperwork will become obsolete.”
12. Physical experiences to expand through extended reality
According to Forrester, in 2019, 36% of US consumers had experienced augmented or virtual reality.
In 2021, social distancing will attempt another 10% to 12% of US consumers to try extended reality as a new form of consumption that allows for comfort, control, and happiness.
The main reason why is that the pandemic has changed the conversation about what people can do without being physically present or risking their safety. So now people are more willing to embrace virtual experiences that rival the physical ones, especially because they allow them to relieve in-person experiences long after they’re over or share them in real time with people who cannot participate.
Extended reality, which includes augmented, virtual, and mixed reality technologies, will enable brands to engage with customers through experiences that can be more creative, entertaining, and immersive than ever before.
By extending into paid virtual, 40% of physical-experiences businesses are expected to improve financial results and outperform competitors by 2024.
Paradigm shifts in technology
13. Cloud-first strategies will take priority
After years of accelerated tech spend, in 2021 the US tech investment is believed to fall 1.5% , more precisely— a $135 billion drop from 2019’s spending peak.
However, the cloud industry will be rising. The reason for that is that, even though CIOs will spend less overall, they will apply cloud-first platform strategies to adapt faster. So, investment in cloud, security and risk, networks, and mobility will take priority, even for companies struggling to keep up. This will push the global public cloud infrastructure market to 35% growth, reaching $120 billion in 2021.
14. DNA data storage becomes a reality
The big shift to the digital world will generate an exponential growth of data. Collecting such large amounts of data will be easier, and storing them long term in a safe way will become harder. By 2024, 30% of digital businesses will mandate DNA storage trials to avoid overwhelming existing storage technology.
Presently, most data can be stored for a maximum of 30 years. DNA storage enables the storage of binary digital data in the double helix, taking binary coding and turning it into coding that fits in the human DNA strand. This means that a year’s worth of human knowledge could be stored in a gram of synthetic DNA for thousands of years. In fact, all of human knowledge could be stored in a small amount of synthetic DNA.
15. Traditional technology tanks will be challenged
Traditional computing technologies will gradually reach their performance, economic, and sustainability limits, eventually pulling back digital initiatives and innovation. In order to grow, businesses will look to new computing paradigms such as neuromorphic computing, where the computer thinks and acts more like the human brain.
We strongly recommend in detail the sources of this article:
- Gartner | Top 10 strategic predictions for 2021 and beyond
- McKinsey | The Conflicted Continent: Ten charts show how COVID-19 is affecting consumers in Europe
- McKinsey | What’s Next for Remote Work: An analysis of 2,000 tasks, 800 jobs and 9 countries
- Forrester | Predictions 2021
- Forrester | Technology and customer obsession help firms emerge from crisis mode
- Forrester | The time is now for AI to shine
- Forbes | 14 Finance experts share their biggest fintech predictions for 2021