While COVID-19 has accelerated the move towards digital technology and platforms that allow people to connect, work, shop, learn and play online, these digital experiences are also causing major opportunities (and disruption) for brands. At the forefront of those industries that are facing long-term risk are the ones that rely on branded environments and physical locations, such as banks, retail stores and services.
This article does not argue against technology, but instead focuses on how to humanize the digital experience and find the right balance between technology and human interaction. When done right, digital technology can empower businesses and lead to greater employee engagement and customer satisfaction. Without this balance, though, we believe many of the things that we take for granted when visiting a physical store will disappear, leading to fewer jobs, a worsening of service experiences, and ultimately the lessening of consumer’s buying power.
PLEASE RANK THE FOLLOWING FROM MOST IMPORTANT (1) TO LEAST IMPORTANT (8) TO YOUR ORGANIZATION POST-COVID-19 CRISIS?
THE THREE HORIZONS OF STRATEGIC FORESIGHT
In the past decade, we have witnessed massive disruption driven by a shift in consumer attitudes, a move to digital and most recently, the COVID-19 pandemic. These changes have challenged many of the beliefs we share regarding how past trends will ensure a smooth transition to the future. As Strategic Foresight strategists, we define this view as part of three horizons, where the first represents an industry’s expected future state. The first horizon is based on assumptions formed through what has occurred in the past and imagines these trends will continue well into the future before they crest.
However, we have learned the future never unfolds in a straight line and the assumptions that a business may make are often disrupted by a second horizon event – one that ushers in newly discovered innovations such as AI, genomics and robotics. We are currently witnessing many of these emerging trends and how they will shape the future of physical places of commerce, such as retailers and banks. These technologies are also putting at risk the relevancy of people and industries, creating a potential scenario divided by the haves (those with relevant careers) and have nots (irrelevant jobs displaced by technology). In his book 21 Lessons for the 21st Century, author Yuval Noah Harari speaks of the risk technology will bring to our working society’s very fabric, creating a great schism between different working classes. The second horizon is anticipated and appears to be game-changing – but it does not necessarily represent events as they will unfold, and can even be a red herring.
The third horizon is one that eclipses the second by offering a more innovative approach. It relies on the dynamics of visionary leaders who are challenging the varying fundamentals of business by redefining what can be. Think of Steve Jobs, Elon Musk or Bill and Melinda Gates. This last horizon is usually unforeseen because most of us were unable to see past our biases. Fortunately, visionary leaders can. If allowed to flourish, the third horizon can bring about more meaningful change – in this case, allowing businesses and humanity to continue to thrive. Of the three horizons, the last has the most significant impact on industries since it represents a major shift in thinking based on unmet needs and offers a better future, instead of creating a newer, shinier version of the what we already have, built on past behaviors and experiences.
Companies such as Walmart, whose core value is the democratization of goods for the masses by squeezing every penny out of operations, had invested heavily in robotics to further that goal. However, they discovered that a fleet of shelf-scanning robots do not make great employees, nor do they generate revenue for their stores. In the end, they found that humans could do the task just as well as a robot, and that there were other values humans brought to the role a robot could not. Due to the pandemic and the high level of unemployment, more companies may revert to human labor as a vehicle in driving growth and goodwill. Indeed, we may be seeing the emergence of a new weak signal that, pending the pandemic’s long-term impact, may result in a shift away from robotics in retail.
THE THREE FUTURE HORIZONS
THE THREE FUTURE HORIZONS
Taking a taxi from point a to point b is Horizon 1. It represents the status quo.
Uber is Horizon 2 where we change the business model slightly by moving to a gig economy model enabled by technology to address certain pain-points for consumers.
However, Horizon 3 will come when autonomous vehicles are ubiquitous. Only then will we truly see a completely different approach to taxi transport services.
- We are a society lost in the promises of future technologies.
- An expected future based on current assumptions seldom comes to fruition.
- A future horizon based on the foundation of human vision provides humanity and businesses with the most significant opportunities.
TECHNOLOGY IS MAKING US LESS HUMAN
There is no denying that technology has allowed humans to be more connected through social media, AR and VR platforms and video conferencing. In the banking industry, it has allowed for frictionless transactions while reducing the cost to bankers. In China, it is becoming a standard practice to have robots as lobby greeters to help direct customers to the right department. For retailers, online and mobile shopping has allowed for a new channel to engage with their customers. All of these trends have been accelerated due to the pandemic and the need for self-isolation. However, scientists have identified that not all is great in the Kingdom of Digital Oz as we get a closer look behind the curtain. Many studies are identifying the negative impact technologies are having on consumers beyond putting job security at risk.
With search engines such as Google, behavioral scientist Matt Wallaert has identified that we are becoming dependent on the ease they provide. By having our search queries pre-populated and the results curated for us, serendipitous discovery (a core tenet of what separates us from animals) is becoming less common. And it’s not just undermining our ability to challenge our thinking through discovery. The heavy reliance on mobile devices is turning humans into mobile zombies, altering everything from how we interact with people face-to-face to how children are being raised. Unfortunately, these emerging behaviors have led to disorganized and lower development levels in the brain’s white matter for children – an area key to language, literacy and cognitive skill development based on a study published in 2020 that involved MRI scans of brains.
The biggest concern for businesses, as outlined by Neema Moraveji, Director of the Calming Technology Lab at Stanford University, is the fact that sensory dynamism could be a problem when it comes to an over-reliance on computer technology. Moraveji explains how computer and mobile screens can sometimes cloud our sensory judgement as consumers, with only factual and textual information instead of an array of human emotions coming into play. He explains that technology drives us to be less human as we become more isolated and individual in behavior rather than interconnected, and primarily competitive rather than mostly collaborative. The loss of sensory judgment undermines consumers’ ability to emotionally connect, opening the door to apathy and losing brand loyalty.
THE RETAIL CONNECTION
There is no denying that technology has allowed humans to be more connected through social media, AR and VR platforms and video conferencing. In the banking industry, it has allowed for frictionless transactions while reducing the cost to bankers. In China, it is becoming a standard practice to have robots as lobby greeters to help direct customers to the right department. For retailers, online and mobile shopping has allowed for a new channel to engage with their customers. All of these trends have been accelerated due to the pandemic and the need for self-isolation. However, scientists have identified that not all is great in the Kingdom of Digital Oz as we get a closer look behind the curtain. Many studies are identifying the negative impact technologies are having on consumers beyond putting job security at risk.
With search engines such as Google, behavioral scientist Matt Wallaert has identified that we are becoming dependent on the ease they provide. By having our search queries pre-populated and the results curated for us, serendipitous discovery (a core tenet of what separates us from animals) is becoming less common. And it’s not just undermining our ability to challenge our thinking through discovery. The heavy reliance on mobile devices is turning humans into mobile zombies, altering everything from how we interact with people face-to-face to how children are being raised. Unfortunately, these emerging behaviors have led to disorganized and lower development levels in the brain’s white matter for children – an area key to language, literacy and cognitive skill development based on a study published in 2020 that involved MRI scans of brains.
The biggest concern for businesses, as outlined by Neema Moraveji, Director of the Calming Technology Lab at Stanford University, is the fact that sensory dynamism could be a problem when it comes to an over-reliance on computer technology. Moraveji explains how computer and mobile screens can sometimes cloud our sensory judgement as consumers, with only factual and textual information instead of an array of human emotions coming into play. He explains that technology drives us to be less human as we become more isolated and individual in behavior rather than interconnected, and primarily competitive rather than mostly collaborative. The loss of sensory judgment undermines consumers’ ability to emotionally connect, opening the door to apathy and losing brand loyalty.
WHY DO YOU SEE YOURSELF GOING TO
BRANCHES IN THE FUTURE?
Case in Point
Self-checkouts are a great example to study. When done well, self-checkouts can improve the experience for a consumer with a smaller number of items, is comfortable with technology and wants to do their shopping quickly.
But for a consumer who has a large basket, who requires additional assistance, lacks confidence with technology or who simply prefers to speak to a person, the self-checkout is a barrier. Not every shopping journey is based entirely on efficiency.
Offering a range of options that support different customer journeys is important in ensuring a digital transformation does not come at the cost of human connection.
- The pandemic has accelerated the adoption and use of digital technologies.
- Heavy reliance on digital technologies comes at the cost of how we discover and absorb information.
- The emergence of technology amongst children will have a far-reaching future impact on consumer behavior.
- Improved technology should be about elevating customer service experience.
- Emotionally charged relationships go much further than technology in driving brand loyalty.
- Customers prefer to bank with bankers, especially for more important transactions. Other retail models will likely find customers prefer to interact with people, especially for higher-level advice and service.
CREATING THE IDEAL SERVICE EXPERIENCE
THE MORE DIGITAL BANKING FOCUS, THE LESS LOYAL THE CUSTOMER
THE POWER OF PEOPLE
When you deconstruct an ideal service experience, what you discover is that the positive outcome has as much to do with the front-line staff as it does with the merchandise, services and marketing. This is one of the core reasons digital transformations have failed to reach their ideal outcome. They have forgotten the employee in the process, which has led to a disconnect between the external digital transformation and the service experience. The ideal service experience finds the right balance between answering deep consumer emotional needs and providing frictionless transactions or a wide range of product offerings. It allows organizations to leverage the full power of an empowered workforce. To achieve this, brands must lean into gleaning more significant insights from employees than third-party websites and search engine queries. Simply asking your front-line staff what your customers need will provide you with much greater insight than your expensive algorithm. Their input might even help you build a better algorithm.
The future of service experiences will rely on creating a knowledge-based, digitally-enabled ecosystem, one that puts people at the center of the experience. Marketers will need to have a deeper understanding of their customers beyond the conventional demographics and purchase behaviors to get at the root of their hidden needs and aspirations. As brands get better at collecting and utilizing data, they will have a much richer, in-depth understanding of their customer. Coupling clean data with AI will allow for a more robust predictive platform to anticipate and respond to each customer’s individual needs.
However, for all its benefits, if front-line employees do not activate the insights and customer-centric knowledge, much of the investment in knowledge and technology will fail to benefit the organization. The future value will be derived from linking data-rich insights to human-centric behaviors and service models.
FIVE STRATEGIES IN HUMANIZING THE DIGITAL EXPERIENCE
MOVING FORWARD BY NOT LOOKING BACK
The pandemic and major market disruptions due to technology have forced retailers and banks to rethink their connected world. There is a need to reinforce and better define the bricks-and-mortar channel’s value by giving customers a new and more compelling reason to visit and shop. It’s easy to look back at the negative impact of these various disruptions, but the real opportunity is to avoid incrementalism and take bolder steps providing a more optimistic view of the future. We cannot change the past but can shape a more positive and prosperous future.
