“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Nan Nayak, global design strategy lead at Fjord from Accenture Interactive.
The Internet of Things (IoT) is a well-worn phrase that describes a connected future in which appliances talk to us, our smartphones and each other.
But IoT does not adequately convey the seismic shift in the way businesses and consumers are beginning to interact. Mass digitization, liquid consumer expectations and open-source technology are fast leading to a service environment that is more responsive than any we might have envisioned just a few years ago.
Consider a world in which brands start to use the vast network of sensor-rich objects and contextual data connected by the IoT to create digital services that wrap themselves around people’s lives and evolve with usage. These mobile services will use behavioral heuristics and personal data to constantly anticipate individual preferences and evolve to meet changing consumer needs.
To survive in this responsive environment, brands must embrace atomization, the provision of branded services over many different touchpoints or platforms. It requires brands to think about their products and services within the construct of a connected consumer journey across devices and contexts, and also across connected products and services to enable higher order value for customers.
Focus On The Journey
To do this well requires brands to take a customer journey-centric approach to the value being provided, rather than one that focuses on a specific product or service. For example, if BMW considered itself to be in the automotive business, it would be thinking of its company as a car provider. But if BMW views itself as part of the transportation business, that expands its opportunities because the automobile is just one aspect of its overall value proposition. BMW then becomes a platform that connects cars to maps, music and entertainment services, location-based services and sharing economies.
A brand must deliver and market its product and services as atoms in the larger connected structure of customer experiences. Most importantly, it allows brands to more closely listen to the signals emitted by a broader set of human experiences in which it can participate.
Despite the challenges, atomization is well underway. One of companies that best embraces this approach is Spotify. The brand’s music streaming service is available across multiple digital platforms, including desktop, iOS, Android, Sonos home entertainment, Samsung Smart TV and Ford's automobile dashboards. Spotify now not only is more omnipresent, but is also able to understand the patterns of usage across these contexts and tune the experience along the way. This data can be shared with its partners to create a deeper understanding of customer mindsets and behaviors.
Parts of the financial services industry recognized early on the need for atomization, notably with payment processing and social banking services where many banks are integrating services with retailers or social media channels.
Payment processing brand PayPal’s business model largely hinges on the concept of atomization. It operates in more than 200 markets, with more than 148 million active accounts, and is plugged into multiple retail sites – via open APIs – and those of many independent merchants.
Even global banks have entered the fray by launching mobile applications enabling frictionless peer-to-peer payments with personal contacts via social networks, illustrated by the recent partnership between Snapchat and Square. Expect to see atomization spread further as more banks join peer-to-peer instant money transfer networks, such as the US-based clearXchange.
Not An Easy Task
Although atomization provides incredible opportunities for customers it can pose serious challenges for brands. Used to maintaining control of their image and relationships with customers through visible means, such as logos and display ads, brands now have to measure their value in terms of the reach they have and the contextual data and relevancy they generate, often behind the scenes.
Similarly, where brands have traditionally regarded customer data as something to be retained, they will increasingly be required to share and exchange this data with partners. Contextual data may soon become the new currency of evaluating brand value.
Brands have to think about how to manage their relative primacy in the value chain and learn how to stay relevant within the right “value circles” to stay alive. Brand alliances are the new norm and increasingly common as many businesses provide plug-or-socket interfaces allowing other brands or platforms to weave in their services.
This can take the form of a service provider interface (SPI) for third-party use or a software development kits (SDKs), allowing third parties to create mash-up services that connect to the proprietary software. Or it could mean platforms, such as Birchbox, which allow the experiencing of multiple brands.
Think of the possibilities if, for example, a retail brand integrates into Foursquare or its spinoff, Swarm. A mashup between services would allow consumers to share retail information with friends during the purchase process, thereby improving their shopping experience, targeting offers and potentially deepening brand loyalty with the retailer.
So what’s required? Knowing how a brand’s value proposition sits within the framework of a consumer journey along with a view to the context of use and adjacent products and services at play is the starting point to understand the reach that could be explored. Being able to elegantly flex a brand’s visibility and promise to the appropriate level of participation in the broader value proposition is the parallel challenge.
Atomization and the need to flex a brand are new territories for many marketers, and mature companies with entrenched marketing processes might find changing behavior particularly challenging. Smaller, more nimble companies may take advantage of this lack of agility by connecting to the right platforms to become ubiquitous.
The brands that can cope with this paradigm shift to reach and engage their consumers and are resilient and flexible enough to atomize will be party to one of the biggest paradigm shifts in the digital economy.