Only 20 years ago Sergey Brin and Larry Page registered the google.com domain name, 10 years ago Steve Jobs presented the first iPhone in San Francisco. In this short term, the digital technologies have reshaped our world.
Today, the volume of the market of online advertising in search engines amounted for 90$ bln. The smartphone market amounts for 435$ bln. The development of new technologies have led to the emergence of new markets and growth of related industries. The world is changing so fast that we can state that the future is here. But in various cities and countries the movement to digital planet still goes with different speed.
That’s why the ability to see new trends and adapt in real time ensures competitive ability and success in digital economy.
Noventiq Digital Lab researches the consumer, technological and industry trends to find the growth opportunities for our clients, helps them generate and test the digital transformation idea. With this in mind, we can create commercially successful digital products for our clients.
In this article, we would like to share our observations for megatrends lying at the core of most changes in industries and business models.
Globalization of world economy has created a single market and information space and liberalized the sale of products and services. Consumers received access to a wide range of goods and actual and trustworthy information about products and their marketing characteristics. The role of consumers on the markets is growing, and they dictate their preferences to vendors.
- 1/5 of global products and services are produced by multinational corporations. Examples include Microsoft, Oracle, Procter&Gamble, Mars, Gazprom, General Motors, LUKOIL, McDonalds, etc.
- Year 2007 marks the moment when the number of people living in cities for the first time exceeded the number of people living in rural areas. In future, the population will mostly grow in cities.
- In 2020, over 80 billion devices will be connected to the internet. Ubiquitous access to information increases the transparency in all fields, including economy. Companies will strive to make the business and processes hyper-transparent.
- In the conditions of economic and political globalization, the migration flows are increasing each year. Labor migration is prevalent, but one third of migrants are refugees from countries in the state of war.
2. Lean consumption
In the modern world, lean consumption is becoming more and more important, and experience becomes better than ownership. These two trends have given rise to the Sharing Economy. One of the main principles is access to some resources instead of owning it: some people have a resource or an abundance of resource that can be useful to others: tools, equipment, car, residence, skills, information, free space. The lean consumption concept means finding balance between the decrease in value and increasing the quality of materials and components with lower logistic costs.
Mass consumption and production in the beginning of 1990s changed to personalized consumption and manufacturing customization:
- Pebble wristwatch synchronizing with iPhone and Android devices: more than 10 million $ was raised for the project of their development in 2012. This is the most successful crowdfunding campaign of the largest fundraising website – Kickstarter.
- Airbnb is considered to be a successful example of Sharing Economy. With this company, travelers can study offers from owners of real estate everywhere around the world and rent it.
- Carsharing helps saving around 70% of the transport costs, as clients pay only for the time when they really use the car. Cars are used more effectively and the number of forced trips is decreasing.
- Yandex.Taxi tests the Combo tariff, with which cab drivers will be able to drive several passengers that do not know each other.
- Taxi aggregators are a good example: Yandex.Taxi, Uber and Gett are created for consumers that do not want to wait, lose time speaking with the taxi operator, and want to receive the service within 5 minutes.
3. Technologies and innovations
One of the most important factors affecting the behavior of modern consumers is quick development of technologies. From one side, the technologies expand the consumption potential, opening access to a widest spectrum of goods and services. On the other side, development of technologies makes our life more complex and changes it.
Technologies comprise a large potential for business development. Technologies are considered to be an efficiency driver, but they can also create new customer experiences and sources of income.
- The Internet of Things: technical tools have learned to communicate between each other and transfer data. Nowadays even fridges, kettles, or vacuum cleaners can generate information.
- High-tech companies can’t do without cloud computing. Problems caused by server overload, cyberattacks and immense capital investments are now a thing of the past.
- Products can be paid via phone. Apple Pay, Android Pay and LG Pay technologies have simplified the lives of consumers and made transactions on the basis of magnetic switching technology available to each other.
4. Digitization of communications
Information and communication technologies change the models of communication between people or between customers and businesses. It becomes simples to establish and maintain contact, and there are more distance communication capabilities.
- People all over the world become dependent from smart devices, such as mobile phones and tablet PCs. The consumer’s behavior evolves heavily.
- 37% of daily communications in Germany are performed with digital devices.
- Almost 80% global consumers have smart phones.
- The omnichannel trend is on the rise: people can make purchases via various channels, like brick-and-mortar points of sales, mobile devices, and personal computers.
- Opinion leaders in social networks become one of the most important promotion channels. 60% consumers say they listen to their recommendations.
5. Social transformation
Society is in constant motion. The main vectors of global demographic changes are: economic development and urbanization; growth of Earth’s population; increasing average life expectancy and more significant migration. The attitude to aging changes, as well as the gender roles and the concept of family. The share of senior people is growing.
The change of generations is one of the most important facts that define the society of tomorrow. Generation X will be substituted by generations Y and Z, and their set of values differs dramatically.
- The planets population will grow by 15% by 2030.
- An average age of parents at the birth of the first child has grown from 26 years in 1995 to 29 years in 2015, and it will continue to grow.
- There will be 2.47 babies per one woman in 2020 (in 1995 this ratio was 1 to 3).
- In the UK, the number of men taking a parental leave has increased by 10 times now in comparison with the last 10 years.
- 2/3 of people in the age from 14 to 34 say that gender no longer determines the lifestyle or behavior in a way that it used to determine.
6. Growing pace of changes
Innovative technologies significantly change the actions we are accustomed to, and become more and more compelling to consumers. Due to the pace of innovations, companies have to change the existing business models, elaborate new approaches to products and services, processes and support of business operations. The speed of introducing such products on the market is growing continuously.
Businesses have to operate under the conditions of uncertainty and constant changes. Pressure from consumer demand, quick development and propagation of technologies have increased the importance and complexity of innovative process in companies.
- It took 30 years for the ¼ of the population of USA to become familiar with phone and radio, but internet reached the large audience in just 7 years.
- Since 2000, 52% of Fortune-500 companies have been acquired or wen bankrupt.
- Knowledge and skills that were important 10 years ago are morally obsolete with respect to the trends of the new world.
- The lifespan of large companies has already decreased by 1.5 times.
- The activity of 1/3 companies from Top-20 will be disrupted by new technological platforms. 10 years ago, it took a day or more for mass media to spread the news. It takes just one mouse click now.
- 60% new jobs demand skills that only 20% of population have.