Five Big Ideas That Could Transform the Future of Commerce
Commerce is evolving at a furious pace with new technologies, markets, competitors and best practices emerging every day, presenting brands with opportunities to innovate and differentiate. Over the course of my research and discussions with industry peers, I’ve identified five technologies and concepts that I believe have the potential to dramatically influence supply and demand. If you’re involved in any aspect of commerce and the supply chain, these ideas should definitely be on your radar.
Tap and Go Is Ready to Go
Near Field Communications (NFC) technology is increasingly being embedded in smartphones, allowing devices to communicate by tapping. For example, tap your phone to a poster to buy a shirt; tap it to a kiosk to buy a ticket. The tap-and-go concept is intuitive, versatile and a great way to share data between mobile devices. NFC is highly versatile, standards-based, interoperable and security-ready. Its adoption in retail and supply is already starting.
Consider this: by 2016, 700 million NFC smartphones are projected to ship. Customers with digital wallets embedded in NFC-enabled phones don’t need a special app to make payments, nor do they need to carry dozens of debit, credit and loyalty cards. They simply touch their phone to the NFC-enabled payment device, sign and go.
Beyond payments, NFC has the potential to positively impact commerce in other ways, including:
- Quick and easy ticketing, much like a “Fast Pay” toll tag on a car.
- Sharing files, contact information and more by simply tapping NFC phones together.
- Tag reading via applications that enable identification, physical access, transportation, inventory, loyalty and marketing opportunities up and down the supply chain.
Who’s the Next Lady Gaga?
Big Data has the potential to unleash a new wave of innovation, responsiveness and service for companies that are able to harness its value. Many pioneering companies are already creating value and competitive differentiation by mining extremely large quantities of typically unstructured data for hidden patterns and insights. The potential impact is virtually unlimited. In retail, we’ve seen brands successfully gathering and analyzing consumer sentiment, then creating personalized recommendations for millions of customers.
Another example is music analytics leader, Next Big Sound, which is using unstructured data to figure out who the next Lady Gaga might be. It uses big data to scan all the different music and social networks (Spotify, iTunes, Facebook, YouTube), analyze likes, plays, downloads — and ultimately provide insight to music executives into how artists become stars.
A New Take on Reality
Augmented reality (AR) presents practically limitless applications. AR is used to superimpose computer-generated sensory input (sound, video, graphics, haptic feedback, etc.) to create a mediated reality overlaying and enhancing the live real-world environment. It’s already being used in navigation, manufacturing, logistics, military services, entertainment, sports, healthcare and numerous other industries.
In commerce, AR has the potential to be a significant driver of sales and conversions. Forward-thinking marketers are already taking advantage of AR to cleverly deliver useful information that adds value to the buying process.
One example of a brand cleverly using AR is Lego. In collaboration with AR technology company Metaio, Lego created an in-store AR system called the Lego Digital Box (LDB). The LDB allows customers to simply hold a Lego box up to a scanner, which recognizes exactly which Lego set it is, and then displays what the set looks like fully assembled on a video screen. You can tilt it up, down and around to see the set in 3-D interactive animation. The initial trial period of LDB in select stores was so successful in increasing customer satisfaction and product sales that Lego made the decision to roll it out in all 80 of its stores, displaying over 200 products.
The Power of the Crowd
Thanks to the Web, brands can tap the vast possibilities of crowdsourcing to shape a product or service. Examples are plenty, with undeniable results. Take, for example, the auto brand Fiat that, in partnership with Brazilian interactive agency AgenciaClick, launched a Web site inviting Brazilian consumers to invent a concept car that Fiat would exhibit at Sao Paulo’s 2010 annual auto show — the Fiat Mio. The challenge was a hit: The site’s 17,662 registrants submitted over 10,000 ideas.
The site was organized much like a social network displaying comments, photos and a Twitter-like sidebar feed. Ideas were divided into categories such as design, materials, safety and infotainment. All designs were shared online for a completely transparent process — turning the traditionally secretive model of auto production on its ear. Dozens of users’ ideas made it into production, contributing to the Mio’s final propulsion method, shape, infotainment, body materials, biometry and driving aids. Throughout the process, Fiat’s engineers reviewed ideas submitted, consolidated the technical design and published the results via open source software in early 2010 before then turning the discussion toward a branding and marketing campaign for the October car show.
Don’t Buy, Rent
According to the Ellen Macarthur Foundation, the circular economy is not a new technology but rather an innovative industrial model that is restorative or regenerative by design. Its key goals include replacing the “end-of-life” industrial concept with “cradle-to-cradle” restoration, shifting toward the use of renewable energy, eradicating toxic chemicals and eliminating waste.
In the world of commerce, collaborative consumerism aligns with the principles of circular economy by allowing consumers to pay for the use of a product, rather than buying and eventually discarding it. One prime example is Netflix. With over 23 million users, the video streaming and DVD rental company focuses not on selling to customers, but on loaning DVDs/streaming videos. Similarly, car-sharing company Zipcar provides automobile reservations to members who are then billed for the time spent using the cars. Another example is Rent the Runway, which rents dresses from top designers on a four- or eight-day basis.
Dave Bruno is marketing director for RedPrairie, a supply chain and retail technology company. As part of RedPrairie’s research into Commerce in Motion, the company conducts research and analysis of the ever-changing dynamics of global supply chains and the hyper-connected consumer. None of the companies mentioned in this post are clients of RedPrairie.