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New technologies continue to play a critical role in the evolution of society, including the upheaval of consumer industries. With these new advancements and other impactful drivers, consumer expectations are evolving, industry lines are blurring, and digitally-inspired disruptors are emerging.
Nearly every company now finds itself in the midst of a digital transformation as it aims to maintain relevancy in the digital era. In order to better understand how companies are responding to this epochal shift, Euromonitor International conducted an Industry Insights Survey of 1,445 professionals around the world. The survey gauges where companies are placing their tech bets and how industry players see these initiatives impacting commerce in the future.
In the next five years, respondents identified the cloud and Internet of Things (IoT) as the top two technologies for planned investments. More than half of respondents indicated their company was planning to make such investments.
Despite the buzz surrounding technologies like autonomous cars, 5G networks and blockchain, fewer respondents expected to see their companies making planned investments in those technologies in the next five years. Investing in technologies like autonomous cars is likely lower given the limited number of use cases across a range of industries as compared with IoT or artificial intelligence, for example, that have far-reaching implications to those selling cars as well as those selling clothes, laundry detergent or consumer appliances.
Respondents also identified cloud as the most impactful technological investment for businesses in the past 12 months. This is expected to shift in the next five years with IoT moving center stage. Nearly 60% of those surveyed ranked IoT’s impact ahead of both the cloud and artificial intelligence, among other buzzworthy technologies.
This shift toward more internet-enabled products has been dubbed IoT for short. This technology has gained steamed in recent years as the cost of sensors declined and processing power increased thus making it possible to connect more things, people and devices. In a futurist world, everything in the surrounding environment could communicate without human intervention. While IoT is likely to have far-reaching implications, including smart city applications, for example, its impact on commerce will likely drive generational shifts.
For example, IoT could provide greater visibility across the fulfillment process, enabling retailers to track orders from the moment an order is placed until it reaches the consumer’s doorstep. Durable goods manufacturers could leverage the connectivity to establish long-term relationships with consumers by offering ancillary services like predictive maintenance and performance analytics. The number of connected things also equates to more data from which marketers could gain insight into consumer behavior, leading to more intuitive websites customized to the individual consumer.
In the near term, those surveyed see IoT as having the most impact in terms of improved customer engagements, which would include tailored marketing and personalized recommendations. In five years, though, those surveyed see IoT most impacting the final purchase decision as commerce automation becomes more widespread. The arrival of machine-aided commerce might be the most profound shift ushered in by the IoT era.
One company with a strategy that best illustrates an intent to capture on this shift is Amazon. The world’s largest online retailer enables consumers to order products with the tap of a button through its Amazon Dash service, making the execution of the purchase easier for consumers. The second installment of Amazon Dash introduced Amazon Dash Replenishment Service, which is a platform for manufacturers to incorporate this system into their own products in one of two ways: either a manufacturer builds a physical button into their hardware for shoppers to use when reordering products, or the technology can measure usage of consumables and enable reordering to take place automatically. The latter is more passive.
This is an example of what IoT will do for commerce once it is fully developed and integrated into consumers’ lives. Some commerce sectors, which require continuous replenishment, are likely to become almost entirely automated. Subscription services started to do this by measuring how frequently a family orders specific items from a retailer, based merely on their purchasing history. In the IoT era, consumption could be more accurately measured by the durable goods themselves. This will give way to machine-aided commerce. Out of all the tech-inspired shifts unfolding today, this is the one that industry professionals view as being the most impactful long-term commerce development.
