It’s the time of year when we dust off our crystal ball and have a go at predicting what the next twelve months might bring in technology and media.
While 2017 hasn’t exactly been a dull year on the world stage, we think 2018 is going to eclipse 2017 in terms of developments in the TMC sectors. Here are just a few areas where we’re likely to see disruption bring real change.
"Omni-channel" has been the retail buzzword of the last few years but, given what we're seeing in the market, we think 2018 will be the year in which we see the first truly cohesive multi-channel Customer Experience (or 'CX' as lots of our clients like to call it). Customers will increasingly be able to browse, select and buy products across multiple devices and channels (including in-store) in a seamless way. However, retail is changing in many other ways, all of which we think will also gather pace in 2018.
The biggest changes are likely to be experienced in-store – earlier this year, Farfetch founder José Neves set out his vision for the future retail experience, and Farfetch's plans for the "Store of the Future" - an augmented retail solution that "links the online and offline worlds, using data to enhance the retail experience". According to Neves, physical retail will still account for around 80 per cent of sales in 2025, and physical retailers need to find ways to collect data about their customers while they're in-store, just as they collect data from online searches – sort of like an offline cookie, enabling a true omni-channel experience.
It's not just about the data though; hardware is also likely to play a part. Canadian business Nobal has, for example, developed an interactive mirror, now deployed by a number of retailers, bringing the ecommerce channel into the fitting room, allowing customers to receive curated offerings of complementary products via the mirror. These sorts of improved links between the in-store and online systems can massively reduce the number of sales lost through items being out of stock, significantly boosting both profit and customer engagement with a brand.
Perhaps the most pronounced change to come about through the omni-channel model will be the empowering of sales people both in-store and via web-chat, to personalise their conversation with each customer. For example, UK business Hero, has pioneered a platform that allows retailers to connect online shoppers live with sales associates in the physical stores, turning associates into "connected, high-performance sales advisors". It's easy to see how extending the in-store commission structure to online sales can really help narrow the gap between the in-store and online experience, and enrich the relationship between customer and brand.
We could never miss an opportunity to mention AI, particularly after a recent trip to Montreal which is fast becoming the AI centre of the universe. It's been predicted before, and whether 2018 will be the year AI really matures to a level of scale previously predicted is questionable, but the next twelve months will see an acceleration in AI proliferation. What is AI? Today most applications of artificial intelligence perform a relatively small range of skills, such as Facebook's newsfeed, or internet search technology, and thus, the technology remains 'narrow'. This is some way off the science-fiction take or 'strong' AI, where computers can replace human intelligence in order to perform tasks and exhibit characteristics which are inherently human. Is this now on the horizon? According to Gartner "Although using AI correctly will result in a big digital business payoff, the promise (and pitfalls) of general AI where systems magically perform any intellectual task that a human can do and dynamically learn much as humans do is speculative at best."
As such, narrow AI, where machine-learning solutions target specific tasks, remains the order of the day, and (again according to Gartner) 59% of organisations are still gathering data on which to build their AI strategies. Having said that, neural networks, which can process huge amounts of data through synaptic structures similar to the human brain, have been around for decades, but have recently shown immense promise when coupled with more recent big data capabilities. When neural networks are trained with sufficiently large amounts of data, they can achieve 'deep learning' and, in some respects, mimic human cognition. 2018 may not be the year Arnie returns, but it's going to be a year of rapid development in AI, with some interesting headlines along the way. Read more about uses of AI in business processing in our article.
Battle of the voice assistants
According to Tractia, there will be 1.8b users of voice digital assistants by 2021. Becoming the consumer’s default voice assistant is going to continue to be a major battleground for the tech giants. As voice assistants proliferate more devices (from speakers such as Echo to TVs, through to white goods, and cars), they will become as much a part of our lives as smart phones have. Amazon already has a number of Alexa-powered devices, and Google is hot on its tails having launched smart speakers Google Home Mini and Google Home Max. Apple is soon to join the party (despite a delay in its technology recently being announced). According to The Motley Fool, the smart speaker market is expected to grow from 4 billion units (now) to over 7 billion units by 2020. As noted by Campaign, accessories such as Apple's Airpods and Google's Pixel Buds are helping to enable even more effortless connectivity through voice. 2018 is likely to be a pivotal year when user adoption hits the mass market level.
According to Ditto Labs, 2.8 trillion photos were shared on social networks in 2017, and this is set to increase 15 percent each year. AI is transforming the smartphone camera into a tool that brands can use to learn about consumers, and ultimately, to sell to them. As social conversation transforms from voice, to text, to image, the value of shared photos to brands is huge.
Brands that can effectively listen to the conversation and engage with consumers through images are going to be the winners. Ditto Labs states that of the socially shared photos that include a brand, 85 percent do not have a caption that references the brand – a gigantic opportunity for publishers (such as Facebook), and the brands themselves. Facebook is harnessing this, telling its users to “let your camera do the talking”, and it's worth noting that when Mark Zuckerberg introduced Facebook's new products at its 2017 conference, he stated that Facebook wants to “turn smartphone cameras into the first AR platform.”
Companies like Ditto Labs use visual listening technologies to help brands understand their place (or the place of their competitors) in consumers’ lives – where are people using my product? When? With whom? What about my competitors' products?
New ad tech offerings are allowing instant engagement for brands – for example Canadian business Cluep Pics has developed a mobile ad platform that targets people based on what they are sharing, including allowing advertisers to serve ads to people who have posted photos that feature specific competitors. It follows that a greater proportion of searches will be made not by text but by images captured through a smartphone lens. Google has long recognised this (think back to Google Image Search), and the 2017 launch of Google Lens (an app designed to bring up relevant information using visual analysis), confirms its ambitions. It's easy to see why Google is so heavily focused on this behavioural change – the ability to identify images is rooted partly in AI, but largely in data, of which Google has quite a lot. According to Android Central, the social lens model is ideally suited to Google, with "its vast reserves of visual information and growing cloud AI infrastructure", and "Google Lens goes a step beyond this by not only identifying what it's looking at, but understanding it and connecting it to other things that Google knows about.”
Pinterest could give Google a run for its money though, having recently updated its Lens offering. According to Techcrunch, Pinterest Lens is "very much a move to try to collapse the distance between the experience within Pinterest the app (or site) and the real world. Users point their camera at something and are looking for some additional information for it — such as a price tag, where to buy it, or what they can do with it. Many of Pinterest’s recent product updates are geared toward inching users closer and closer to that “do” moment. If it can get a user there organically, it can give advertisers a window into user behavior that they might not get on Facebook or Google."
Alibaba, the second-largest internet company in the world after Google, has integrated computer vision into each step of the user's journey from search to purchase – so that, for example, a customer who lenses a picture of a music album in the real world will be presented with the option of visiting the social profiles of the musicians, seeing more details about events, or buying concert tickets.
2018 will only be an early step on the journey for social listening, but it's clear that advertisers will increasingly use visual data to understand their customers and competitors, to engage with and sell to consumers, and create content that is tied to, and interacts with, real-world experiences.
Digital advertising remains an annoyance for consumers, and the uptake of ad-blockers such as Adblock Plus, is on the rise. Many commentators say technology only has itself to blame – the explosion of programmatic ad-purchasing, whereby machines purchase ad inventory in real-time, based on real-time data from other machines, with little or no human element, has allowed mass reach on an unprecedented scale and driven down costs, but has equally failed to enhance relevance. The major browsers are responding to consumers' negative experiences by shipping with blocking as the default setting. Google (Chrome) will block advertisements deemed as most annoying by the Interactive Advertising Bureau (IAB) while Apple (Safari) has introduced “Intelligent Tracking Prevention,” which will block the ability to send cookies to third parties determined to be trackers.
How do advertisers and publishers respond? "If you can't beat them join them" is one approach – Adblock Plus now allows advertisers to be 'whitelisted' if they can prove their ads meet certain criteria. Another tactic is to enter an arms race – Facebook has engaged software developers to detect and reverse ad-blocking technologies. Other players choose to appeal to the consumer by making it clear that users with ad-blockers switched on will not be able to see certain content - not exactly a positive experience for the consumer, nor indeed a halo effect for advertisers.
There may be a further way in which technology can help in improving the ad-buying process. Currently most ad purchase transactions involve numerous parties (middle-men), both 'demand side' and 'buy side'. Each party takes its cut, and some parties share the spoils through kickbacks and other payments for volume purchases. This means that for every pound spent by an an advertiser on an ad, only a few pence will reach the actual publisher (or in other words advertisers spend a great deal more than the actual price of the product). In 2017, there have been various initiatives to develop more efficient exchanges to ad sales. For example, The New York Interactive Advertising Exchange creates the "world’s first guaranteed advertising contract exchange" which connects the worlds of ad tech and financial tech by allowing publishers and advertisers to buy, sell, and trade advertising inventory in an open market, using blockchain technology. As a result, the purchases can be effected far more efficiently, with full transparency between all stakeholders. This should free up advertiser resources to spend on technology that enables them to better target relevant ads to the right consumers in the right context.
Consumers have been trying to avoid advertising for decades (making a cup of tea during the TV ad break, flicking over the ad pages in a magazine), and so 2018 will only see a continuance of the battle, but technological solutions such as those above, should enable brands to continue to evolve their advertising strategies and partnerships to reach their customers in better ways.
Cars will still have drivers, but not for much longer
There has been a lot of speculation as to how soon driverless cars will be deployed beyond test projects by tech giants. A recent report by independent think tank RethinkX, draws some startling conclusions that might mean that significant disruption will be upon us far sooner than we may have thought. According to the report, by 2030, within 10 years of regulatory approval of autonomous vehicles (AVs), 95% of US passenger miles travelled will be served by on-demand autonomous electric vehicles owned by fleets, not individuals, in a new business model dubbed 'transport-as-a-service' (TaaS). The report states “The TaaS disruption will have enormous implications across the transportation and oil industries, decimating entire portions of their value chains, causing oil demand and prices to plummet, and destroying trillions of dollars in investor value — but also creating trillions of dollars in new business opportunities, consumer surplus and GDP growth.”
Other conclusions on TaaS and AVs in the report include:
- As a result of using TaaS, the average American family will save more than US$5,000 per year, amounting to a wage raise of 10%, pouring US$1 trillion per year into the US economy.
- Adoption of TaaS will trigger a cycle of decreasing costs and increasing quality of service and convenience, and individual vehicle ownership, especially of internal combustion engine (ICE) vehicles, will enter a cycle of increasing costs, decreasing convenience and diminishing quality of service.
- The approval of AVs will unleash massive competition in expectation of the size of the market. Platforms like Uber, Lyft and Didi are already engaged, and others, notably car manufacturers, will join this high-speed race. Winners-take-all dynamics will drive massive investment.
- Margins will be slim and fleets will quickly transition from human-driven, internal combustion engine cars to autonomous electric vehicles.
- Because autonomous electric vehicles require little maintenance, and incur very little wear, vehicle lifetimes are likely to be 500,000+ miles.
- As a result, TaaS will offer vastly lower-cost transport alternatives, four to ten times cheaper per mile than buying a car, and two to four times cheaper than operating an existing vehicle in 2021.
- Other revenue sources from advertising, data monetisation, entertainment and product sales will open a road to free transport.
- Adoption will start in cities and radiate outward to rural areas. Non-adopters will be largely restricted to the most rural areas, where cost and wait times are likely to be higher.
- By 2030, individually owned ICE vehicles will still represent 40% of the vehicles in the US vehicle fleet, but they will provide just 5% of passenger miles.
See Download for more on connected and autonomous vehicles.
Wearables won’t wear out: sales of wearable technology will continue to grow, particularly watches, but fast growing segments will include disabilities. For example the “Sound Shirt” by Junge Symphoniker is a wearable device that converts sounds into nuanced vibrations, enabling deaf people to hear classical music. Another area of growth will be customisable clothing – for example Shiftware shoes allow users to display a world of designs on their shoes direct from their smartphones. Lastly, will 2018 be the year we see our clothing charge our devices, in particular our shoes?
Legal services will be free: a law firm in the US has pioneered the idea of offering free legal advice to clients on a 'freemium' model under which they are required to read advertisements included in legal documents such as Sale and Purchase Agreements, and Confidentiality Deeds. The law firm had previously developed a pricing structure that significantly slashed legal fees in December as part of a Christmas sale. Will these models take hold in the UK?
Wiping out crime: China is fighting toilet paper thieves with facial recognition software (bound to create a stink?).
Selfies save lives: more seriously, a team at the University of Washington is developing an app designed to spot early signs of pancreatic cancer through a selfie-image.
QR codes grow on trees: a village in China has created the world’s biggest QR code, made up of 130,000 Chinese junipers, and which can be scanned from above using a phone or tablet. Scanning the code will result in being connected to the village's tourism account on WeChat. To be honest, we're not sure this is going to spark a great trend in 2018, but it's entertaining to think it might.
Are popsockets the new fidget spinner?: perhaps not a ground-breaking tech trend but the smallest thing can be the next big thing – at least for a limited amount of time.
Talking pictures: further progress has been made in technology that allows photographs to be turned into talking images. Is a whole new level of fake news on its way?
Cameras that can see round corners: a team at MIT has developed a camera that uses subtle changes in lighting on the floor to determine what's around a corner. This technology could well help AVs get on the road.
Lights out for Bitcoin?: while cryptocurrencies appear to be on the rise, the enormous processing power required by blockchain (it's reported that the Bitcoin network uses more electricity in a year than the whole of Ireland), could prove a major barrier to growth.
Art imitates androids: this year our annual Taylor Wessing Photographic Portrait Prize drew some headlines when Finnish artist Maija Tammi’s picture of an android called Erica was shortlisted for portrait photography’s most famous prize, despite the rules stating “all photographs must have been taken by the entrant from life and with a living sitter”. The panel of judges concluded that the term portrait “may be interpreted in its widest sense”, and the National Portrait Gallery commented that the picture "made a powerful statement in its questioning of what it was to be alive or human", perhaps reflecting the narrowing gap between technology and humans.
Well that’s just about it for our crystal ball gazing. As always, the above are thoughts and definitely not advice! Oh, and the bit about the law firm giving away legal services and having a Christmas sale, sorry but that was made up. As if...
All the best to you, your families, your friends, businesses and colleagues for 2018.