Kevin Benedict is a TCS futurist and lecturer focused on the signals and foresight that emerge as society, geopolitics, economies, science, technology, environment, and philosophy converge.
Speed impacts us in many
different and unexpected ways.It can
alter how we perceive the world.For
example, a person might say they live 5 minutes from town.Five minutes of walking is a third of a
mile.Five minutes by automobile is 5 miles - by airline it could be over
40 miles.Our perception of five
minutes, and the distance and space that can be covered, changes as technologies advance.Our expectations about what can be
accomplished in 5 minutes are transformed.Instead of one hour of shopping in a brick and mortar store, we expect
to accomplish the same in one minute online.Dr. Paul Virilio a “philosopher of speed” wrote that increasing speeds
destroy space, compress time, and alter the way humans perceive reality.
Time-space compression occurs
as a result of technologies that seem to accelerate speed and reduce distances.
Digital technologies such as broadband internet,
IoT, smartphones, social media, webcams, Skype, mobile messaging apps,
satellites, mobile payments, mobile banking, digital commerce, etc.All of these digital technologies and capabilities
enable us to experience events, participate in activities and collaborate instantly
from anywhere in the world.These
capabilities change our expectations and habits, both personally and in our
commercial dealings. Organizations that don’t
recognize how their customers’ realities and perceptions are changing and why -
won’t succeed.
***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.
In 2016, total worldwide retail sales reached $22 trillion, of which digital commerce makes up $1.9 trillion, or 8.7% of the total. While the majority of retail sales still occur in brick-and-mortar stores, overall growth is predominantly driven by digital commerce, which was expected to expand rapidly worldwide at a 23.7% growth rate in 2016, and by 2020 to represent 14.6% of total retail spending of $27 trillion. Of course, digital commerce numbers vary depending on the product category. Online sales penetration for many product types – electronics, apparel, furniture, home improvement, etc. – are significantly higher than worldwide retail sales projections, while categories such as petrol, convenience and grocery have a much lower penetration.
In the U.S., sales at department stores fell almost 6% in 2016, while online retail sales rose 11%. As a result, bricks-and-mortar retailers have been forced to re-evaluate their business performance, and many, such as Sears, Macy’s, Aeropostale, Chico’s and American Eagle, have needed to close stores. Still others – especially those who have failed to digitally transform – are going out of business altogether, including The Limited and Wet Seal. In an industry with razor-thin margins and intense competition, missing out on key growth opportunities are a ticket to irrelevancy, or worse.
Given the rapid rise in digital commerce, retailers are increasingly concerned about profitability since online sales are believed to contribute to margin erosion. In fact, some retailers fear that an over-reliance on digital technologies will dilute margins. These concerns, however, are not supported by our research. Rather, retailers with strong to very strong revenue growth, which we correlate with digital leadership, also tend to realize higher profits.
Retailers have enjoyed consistent revenue growth through their digital channels for the last several years. This growth is expected to accelerate into the foreseeable future. In fact, retailers are increasingly dependent on digital commerce growth as sales soften through traditional channels. In fact, 22% of retailers in our study said they generate 30% or more of their sales from digital channels. By 2020, 79% of retailers forecast they will receive 30% or more of their sales from digital channels, a massive 259% increase.
Nearly all retailers (98%) achieve at least some of their revenue through digital channels today; most respondents anticipate much of their future growth to be driven by digital commerce. Retailers with exceptionally strong (11%-plus) revenue growth already derive a higher percentage of their sales from digital channels, according to our research. These retailers also forecast a more bullish future than lower performing retailers. You can download the full report, "How Digital Thinking Separates Retail Leaders from Laggards" here.
Watch the 3-minute video on digital thinking in retail.
Follow Kevin Benedict on Twitter @krbenedict, or read more of his articles on digital transformation strategies here:
***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.
The military strategist Colonel John Boyd wrote that success depends on three things, 1) People, 2) Ideas, and 3) Things, in that order. People have to be trained to think and do the right things, using the right ideas (doctrines, strategies and tactics) and then utilize the best things (equipment, materials, design, etc.) that you can. In my new report, “How Digital Thinking Separates Retail Leaders from Laggards,” we focus on the differences in thinking between leaders and laggards.
Here are some of our key findings:
Digital commerce outpaces brick-and mortar. Already a significant retail driver, digital commerce is predicted to increase in importance by 68% for surveyed retailers between now and 2020. This trend has motivated many retailers to invest strategically in digital technologies.
Digital leaders outperform digital laggards. There is a correlation between companies with strong revenue growth and digital leadership, and retailers with a higher percentage of online sales. Companies that have experienced early digital commerce success are also likely to express a more positive outlook on the value of digital technologies to the overall business.
Retailers don’t know if they are winning the race. Many retailers find it difficult to evaluate their relative digital maturity and how they compare with competitors.
Digital leaders think differently about the role and value of digital technologies, including the ability of these tools to enable competitive advantage in the form of revenue growth, and positively impact work and jobs. As a result, leaders are developing more aggressive technology plans and strategies than digital laggards.
Digital technologies will transform jobs in positive ways. Digital leaders believe digital technologies will help them increase efficiency, manage people better, work faster, be more creative and innovative, make better decisions, boost freedom and flexibility, and even help them make more money by 2020.
Digital leaders believe digital technologies will have a big impact on work by 2020. Far more so than laggards, digital leaders believe work will be significantly impacted by technologies such as business analytics and artificial intelligence. They are simultaneously concerned about data security and privacy, bots, new regulations on digital businesses and hyper-connectivity of people and things.
Retailers with very strong revenue growth have different opinions than moderate growth retailers as to which skills will be needed by 2020. The biggest differences in opinions are in the areas of fabrication, verbal and written communications, and language and design skills.
What are the ideas that Colonel John Boyd spoke about? I need you to help me identify those good ideas for digital strategies by taking a short 5-minute digital strategy survey, https://goo.gl/forms/bquUpmkaYFK6QZQt2. I am giving a copy of the book, "What to Do When Machines Do Everything," to the first 50 people in North America to complete the survey.
***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.
Amazon knows me. Oh boy, do they know me! Our dog thinks the deliveryman is part of our family. Amazon knows what I like, and does their very best to create a wonderful and personalized experience for us by using their "system of intelligence" to provide it. Amazon Prime membership now offers movies, music and audio books in addition to other membership services all tailored to my family and me. Alexa, Amazon’s hit home bot, can be set-up to automate my home and much more to enhance convenience and comfort. All of these offerings and services are designed to improve and personalize my experiences so I will feel inclined to increase my business, loyalty and commitment to Amazon.
Airlines, on the other hand, seem determined to drive their users away in 2017. From personal experience, airlines don’t seem interested in your welfare or quality of experience, or what you like, what kind of trip your are on, or how much current and future business you can provide them. They are not using "systems of intelligence" to provide wonderful and personalized experiences. As a million-miler quickly heading toward a 2 million-miler status, my legacy airline does not seem interested in considering my short or long term business value in any of their algorithms or considerations. This seems to be a rejection of systems of intelligence.
It’s not just me whining (I swear)! I did some research on many different travel sites this week and travel experts are advising many of their readers to abandon rewards programs and airline loyalty as the value has disappeared for most travellers.
Let me provide a few examples. A couple that is traveling together on a romantic holiday must reject all upgrades (upgrades they earned) in order to stay together on a flight, or pay full price for an upgrade – that doesn’t feel right. They are now being told to pay for upgrades, even if they are potentially eligible for free ones – just for the opportunity to sit together. And if one of the couple accepts an upgrade leaving the other in the back of the plane, there goes the romance!
One airline recently dropped a level of elite status, from being considered a “real” status level (changed late in 2016). So the money and loyalty that helped them earn their status has now been devalued to nothing – that treatment doesn’t feel right.
One of the key benefits of earning status is the ability to select better and more comfortable seats, and to manage your experience at time of booking. In 2017 that is gone, and you must now pay to play. If you wait for an potential upgrade based on status, you may be placed in an uncomfortable center seat that you had no role in choosing. Your upgrade becomes the source of discomfort and inconvenience. In order to ensure you are not placed in the center seat between two overflowing travelers, you must reject automatic upgrades, and pay for any upgrades even though you are eligible for free ones. You now have less control, less predictability, less personalization and less comfort because of your elite status – that doesn’t feel right.
It is not hard, using analytics and algorithms, to estimate the lifetime value of individual customers - that is a basic function for a true system of intelligence. Many of us frequent travelers represent many hundreds of thousands or even millions of dollars, euros, etc., worth of real and potential lifetime value to an airline. To reject that data and its intelligence in their decision-making and customer service treatment – just doesn’t feel right.
In a digital age where real-time contextually relevant personalization is the gold standard of market leading customer service oriented companies, airlines have rejected it. This rejection of intelligence, I predict, will ultimately open up a competitive gap, an opportunity, for new kinds of airlines and/or service models willing to treat their customers as individuals with names, wallets, significant others, lifetime business values and butts.
***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.
Fingerspitzengefühl: Is a German word used to describe an ability to maintain attention to detail in an ever-changing operational and tactical environment by maintaining real-time situational awareness. The term is synonymous with the English expression of "keeping one's finger on the pulse". The problem with traditional fingerspitzengefühl, in addition to pronouncing it - is it is hard to scale. Today, however, in a world of sensors, GPS and mobile devices, having real-time situational awareness is far easier than ever before. In fact, today the challenge is not how to do it (answer: sensors), but what to do with all the information.
There are many dimensions of data that are available for work outside the four walls, which is mobile, remote and dynamic. We all know about 3 dimensional (longitude, latitude and altitude), but there are many more. We contrive:
Time
Start and stop tasks times
Travel times
Traffic conditions
Available workforces and associated costs
Available equipment
Activities
Events
Business process steps
Expenses
Security steps
Transactions
Compliance tasks
Performances against KPIs (key performance indicators)
All of these data points can be bundled together as Performance Impact Variables (PIVs). PIVs are the data points that can be used as inputs to algorithms that can be used by AI systems to optimize and manage the performance of the business in real-time.
All of this data can be used as overlays to simple GPS coordinates on a map. Each of these additional layers of information exponentially increases the complexity, decision-making options and possible combinations. This enormous volume of data quickly overwhelms humans. That is why non-humans (AI/software robots) can be used to such great effect to maintain productive situational awareness and strategic advantages in complex environments demanding real-time decision-making and action.
During the period between WWI and WWII, Western countries all developed new tanks and military aircraft to support their infantry. The Germans, however, went three steps farther by developing strategic advantages in:
Radios and frequencies for communicating between forces (tanks, infantry and aircraft) in real-time
Strategies for coordinated actions between the three groups
Mission oriented command structures – Commanders define the mission “intent”, but the details of how to accomplish them were left to frontline officers.
In today’s world, companies seeking strategic advantages in field services operations can learn from these three additions.
The modern equivalent of “radios and communication networks” is OILS (optimized information logistics systems) that sense, collect, securely and wirelessly transmit data, analyze and report on it, and support artificial intelligence (AI) and automation.
The modern equivalent of “strategies for coordinated action” is the ability to collect and analyze vast quantities of real-time data to automatically and dynamically manage and adjust (using AI and software robots) a whole series of activities and events such as: schedules, tasks, jobs, orders, transactions, etc.
The modern equivalent of “mission oriented command structures” is an algorithm. Once the algorithm is developed, it can operate without human intervention.
When massive amounts of real-time data are automatically collected and analyzed, they can feed algorithms and AI systems to optimize real-time activities and events. The speed at which data can be processed through OILS and AI systems today far exceeds human decision-making capabilities – so automation that works in digital-time is required. This is where AI excels. AI can analyze all the inbound data in nanoseconds and instantly adjust and optimize operations.
AI does not just impact field services. It impacts many business processes by supporting:
New ways of selling
New business models
New ways of managing
New business processes
New ways of collaborating
New ways of making decisions
New ways of engaging customers
New ways of working with products
New marketing and growth strategies
My mantra is, "Digital technologies without digital strategies are wasted." Having digital technologies without a digital strategy is like having tanks, mobile infantry and aircraft, but no coherent plan for combined action. In a recent report, 40 Months of Hyper-Digital Transformation, digital laggards were found not to receive as good of return on investments (ROIs) on their digital investments as digital leaders do. The difference I believe is in their digital strategies, or lack thereof.
In the book, Stray Voltage, War in the Information Age, author Wayne Michael Hall defines two more PIVs - cyberspace and cerebral. "Information superiority is firmly connected to making decisions that are superior to an adversary's and combines information technology and intellectual power to create conditions with which to make better decisions…human beings will need to improve their thinking capabilities to cope with the increasing complexities of the world...people will depend more on visualization to help understand complexity quickly. Visualization will fuse data and information and display the result in a multimedia format. Visualization will allow the integration of data, information and knowledge from all sources and will allow for the integration of numerous contributors." Visualization, although helpful to humans, is far less relevant once algorithm-consuming AI systems take over.
Sensors, already powerful, are being developed with more capabilities to sense more things every month. Each year when I attend GSMA’s Mobile World Congress in Barcelona, I am astonished to see what additional capabilities sensors have added. Here are some examples:
Sensors able to identify and classify vegetation - natural and artificial
Sensors able to identify and pinpoint distressed crops
Sensors that can identify soil moisture content
Sensors that can detect heat sources and leaks
Sensors that can detect movements and changes in defined objects
Sensors that can detect the chemical make-up of make-up
Each of these sensors and their real-time data collection capabilities adds to decision-making complexity, but they can also be the very PIVs that give you the competitive advantage you need to win.
Watch my latest video on digital technology trends:
***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.
We asked 50 futurists, professionals employed to review trends and develop strategy, to identify and rank the top five ways they believe digital transformation will drive value generation between now and 2020. Here are their top five answers:
Accelerates speed to market
Strengthens competitive positioning
Boosts revenue growth
Raises employee productivity
Expands ability to acquire, engage and retain customers
These top five value generators offer significant business advantages; but if your organization can achieve them faster than your competitors, there is a bonus advantage. We call it the Ax2 phenomenon (advantages have advantages). Not only do digital leaders realize competitive advantages before others, but they also have the advantage of insights from new data, which leads to new actions and new insights not yet understood or possible for laggards.
Research In Motion (RIM), the progenitor of the Blackberry, responded slowly to Apple’s launch of the iPhone. Years passed before RIM responded with its first smartphone. During this time, Apple worked at “digital speed” to improve its iPhones and the iOS operating system, and hundreds of thousands of software applications were developed for it. Each of these versions provided additional insights into consumers and their behaviors. The Ax2 phenomenon enabled Apple to rapidly widen the gap between leader and laggard, a competitive advantage that proved impossible for RIM to overcome.
Executives must closely watch the innovation efforts of competitors, and recognize that it is not only the new products and services that are being introduced that can be differentiating but also the data they glean from new innovations that can spawn additional advantages.
Information dominance is the strategic imperative of the 21st century. The good news for executives is that investing in digital technologies to gain information dominance makes sense as the return on investment for digital technologies averages nearly 50% among survey participants, but jumps to an astounding 230% for the top 25%.
Achieving information dominance involves understanding the data required to achieve competitive advantage, and then collecting and analyzing it to glean business meaning faster than the competition. Information dominance, however, is meaningless unless it results in actionable insights, which lead to appropriate actions, at the right time and place. It’s not the ability to collect and analyze data faster; it is the ability to understand and act on it faster. Businesses that can “understand and act with speed” will dominate those that are slower.
In today’s age of hyper-digital transformation, enterprises must digitally transform and implement OILS (optimized information logistics systems) that can respond and change with self-sustaining business agility. These abilities take more than digital technologies; they require a new way of thinking, which is revealed in our data on digital leaders:
Digital leaders recognize and respond to underlying market forces, and are budgeting and planning to implement specific business strategies and digital technologies in specific sequences to maximize ROI and competitive advantage.
Digital leaders recognize the impact of digital technologies on the expectations of consumers and markets. These expectations are speeding the tempo of operations beyond human time to digital time. The demands for digital time require humans to upgrade IT environments and augment their capabilities with AI and robotic process automation (bots) to enable mass volumes of transactions to be processed in milliseconds in order to support real-time and mobile environments.
Digital leaders develop a digital doctrine and strategy to unify and guide all business and technology strategies, tactics and investments and provide a shared frame of reference across their organization.
Digital leaders are exploiting the Ax2 phenomenon. The Ax2 phenomenon enables enterprises to gain new and unique business insights earlier than their competitors, leading to competitive advantages that result from the collection and analysis of data not yet available to digital laggards.
Digital leaders identify the digital technologies they expect to have a significant impact on their businesses across the three digital transformation ages spanning 2016 to 2025. These technologies are not all created equal in their business impact, and some are still not ready for prime time, but are maturing fast. As a result, it is critical to carefully time the adoption and implementation of digital technologies in accordance with the age in which they will deliver maximum ROI and competitive advantage.
First and foremost, digital leaders understand the reality and degree of impact that digital technologies are having on their customers, and their ability to compete. They recognize the pace of change and are aligning their strategies and budgets in ways that will provide them with competitive advantage now and in the future.
Watch my latest video on digital technology trends:
***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.
