By 2025, mass adoption of connected consumer goods and subscription services, combined with the progressive use of blockchain and artificial intelligence, will have redefined our economic models and working practices as fundamentally as the emergence of the Web has done from the 1990s to today. These developments in technology have the potential to create an economy which tends towards minimalism and efficiency - meaning that we will only consume the goods and services that we use in their totality, and share or redistribute the ones we need only temporarily or partially.
The sharing economy and customer expectations
A car journey, a luxurious handbag or a pair of skis, a washing machine, an apartment: these are all examples of things that can be used both by an individual and shared with neighbours, friends or communities. When sharing items with others in this way, two current innovations become essential: the blockchain, because it simplifies and secures contracts between parties, and artificial intelligence: because it enables the analysis of real time massive data processing and provides personalized recommendations.
To adapt to these new ways of creating and sharing value, businesses must themselves undergo transformation. And they have got to do it quickly, if they have any hope in gaining a decisive lead and ensuring customer loyalty.
Customers today expect to be proactively presented with solutions tailored to their needs – from the personalisation of their autonomous cars, the design of their homes, or more simply, recommendations for IT security services, education, or leisure activities. But ensuring that companies can meet these expectations requires a complete mastery of technology, alongside the power to integrate it into existing IT systems and processes.
Because Time is accelerating (as customer decisions and business transactions take place in real time), because Space between us is contracting (as we make use of the ability to control and maintain connected devices remotely and share them with others) and thirdly because Value Chains become increasingly complex (as we add many more players to the operation), innovation and agility are now key.
Monetisation, which is the best way of describing the transformation of the purchase or use goods or services into turnover and profit, must therefore be agile. This means that the processes, management, innovation and technologies supporting monetisation must have the ability to create new offerings by rapid iteration, and so accelerating the speed with which a company can benefit from them.
Today, buying something is no longer just a simple purchase of a product. It more closely relates to the consumption of value-added service or an experience. Today, every customer expects that the brand they choose to commit to is not only relevant and trustworthy, but also accessible through their preferred means of communication – whether that is social networks, instant messaging, a connected device, the internet, mobile, etc. This also means that voice assistants and chatbots have become the new frontiers of online shopping.
As an example, as FEVAD observes, almost one-third of sales figures is now realised through mobile phones, which represents a rise of 6 points compared to the previous year. The ICM indication, which measures purchases made on Smartphones and pads is also rising: +38 per cent in 2017. Voice assistants also are becoming more and more important: 47 per cent of French e-buyers already used the voice assistant on their phone, among who 29 per cent use it for products online searches and 15 per cent to buy online.
Recent technologies such as open architectures (via standard interfaces) and decomposed into micro-services that can be shared between several companies allow to face up to with constraints to develop an approach of agile monetisation.
Challenges to implementing agile monetisation
So what are the challenges that companies who want to deploy an agile monetisation approach currently facing?
Firstly, there is the integration of products and services from multiple providers to create personalised and relevant offers in real time. Secondly, they have to ensure that commerce solutions are fully integrated and at the heart of all products and services – such as in-game purchases in video games. Thirdly, the consumer must have flexibility in the way they want to consume the product – will it be single use, a recurring subscription, or usage based.
There is also the challenge of collecting, processing, analysing and protecting data: this is particularly important to comply to GDPR in Europe. Payment methods are also vital: businesses have to ensure that they offer a diverse range from the most traditional to the most innovative. Finally, companies must think about individual markets: they must be compliant with the standards, taxes and regulations specific to each country in which the goods or services are consumed.
There are steps being taken to tackle these challenges. Recent developments in technology such as open architectures (via standardised interfaces) and micro-services that can be shared between several companies are all positive advances that can help companies achieve results.
In Europe, we are lucky enough to have a fertile breeding-ground of innovation and expertise, particularly in e-commerce, AI, digital marketing, and payments. This is what will allow us to take a decisive lead and offer agile monetisation on a large scale, and enable a straightforward and efficient economy by 2025.
In order to take this lead, it’s clear European companies must launch agile monetisation pilot projects in 2018. How? Speaking from my own experience in digital transformation and innovation projects, each company must find its own champions and its own method. However, it will also be essential to build a dedicated, multi-disciplinary team, free from the constraints of operational structures, in order to create a centre-of-skills from which others can learn. This will then become a centre-of-excellence and can be applied across operational units.
It goes without saying that the executive team must also communicate the meaning of these projects to the rest of the organisation and ensure that they are managing the company from above. As with any agile approach, the most important is the first step. What’s yours? When will you start?
Renaud Sibel, CEO, Nexway
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