In January 2022, the world will have been two years into a devastating pandemic, and businesses will be coming to terms with the permanence of its impact.
As our research has shown, COVID-19 accelerated digital transformation at an unprecedented pace as companies scrambled to build better digital experiences and virtual presences, and to update aging software platforms to meet the demands of the new pandemic-era customer. We’re now entering a period where there is an uncharacteristic lull in the digital transformation world. Companies that successfully survived and thrived in the COVID era are pausing to take stock of what’s next. And companies that struggled are in the last laps of catching up. After the successive eras of disruption that happened with social media, cloud computing, mobile and AI, we’re now poised to prepare for the next big one.
Altimeter’s trends this year might not have the definitive prediction for the next big disruption. But we do have a few clues about where things are going, and we’re placing our bets on seven digital trends that we think are harbingers of the next era of digital transformation.
1. Environmentally-Friendly Marketing
We know that consumers today expect the products they buy to be ethically produced in an environmentally-friendly way, by businesses that value diversity and inclusivity.
However, it’s not just the products—today’s consumers also expect the same values from the marketing campaigns that sell to them. A recent survey from Microsoft and Dentsu found that 77% of consumers only want to spend money on brands that practice green and sustainable advertising. A few ways brands can do this include: pivoting digital spend to low/no carbon providers and shortening the journey from the data center to the audience; creating OOH posters with recycled paper; using ‘carbon eating’ paint for murals, or incorporating elements of search spend in platforms offering carbon off-setting.
2. The Data “Have-Nots” Fight Back
It’s true that companies have access to more customer data than ever before. But when you think of actual data that companies own, it’s nothing compared to the companies that ACTUALLY have access to all the customer data in the world. We’re talking about Google, Meta, Apple, Samsung, Netflix, Microsoft. The sheer scale of customer data owned by these companies dwarfs anything that an individual company owns, and as a result, there isn’t a business out there that can hope to reach and analyze its customers without these giant collectors of customer data. And for years, they have made their billions by providing access to that data at increasingly premium rates.
So it’s clear we live in a world of data “haves” and data “have-nots”. And the “have-nots” are thinking of ways to fight back. Companies are investing in building their own digital properties and filling them with their own content to keep customers engaged and generate accessible data. They’re also partnering with other companies to pool their data resources on common customers (think airlines sharing customer data with credit card companies or hotels). This won’t end our reliance on the big data companies anytime soon, but it does give companies a fighting chance when the data access rug gets pulled out from under them—either in the form of greater government regulation, or increasingly cost-prohibitive conditions for access.
3. Taxonomy is Trendy
Speaking of the proliferation of data, most companies don’t know what to do with it. After years of investing in access to all kinds of customer data generated from their own digital platforms, digital devices, customer surveys, advertisement networks and third-party marketplaces, businesses are now spending their resources on sorting into actionable categories. And it’s not just data — companies have had to exponentially scale their production of content to meet the increasing demands of personalized, channel-specific content for a variety of customer segments. This means creating a clear system of categorization for tagging, storage, access and reuse, providing a need for taxonomists to bring order to any marketing function that is serious about running large-scale, personalized digital campaigns.
4. The New “Converged” Go-to-Market Function
A key learning from our most recent report on The State of Digital Transformation was the increasing convergence of marketing, sales and service teams (i.e., our “go-to-market” function). We found that the majority (54%) of companies have shared targets for customer satisfaction and revenue, with half of them even sharing cross-sell and upsell goals across those three functions. Additionally, we found that 80% of companies were now operating off a unified customer journey that plotted digital interactions with the customer spanning across marketing, sales and service touchpoints. All of this points to an increased convergence between these previously separate functions. That means greater sharing of data, more transparency in collaboration, and even unified leadership in some cases. While we expect specialized practices in each of these functions to continue, the trend towards a highly collaborative “uber” team across marketing, sales and service is a compelling one.
5. Formalizing the Future of Work
If you’re a consultant specializing in the future of work, this is your time. COVID-19 has permanently changed the way we work, and in some ways, it has even fundamentally altered the perception of what work is. Any company that doesn’t accept that reality is in denial. In 2022, we can expect to see wholesale changes across industries, including hybrid work, new environments and software for collaboration, different incentive schemes for employees, and a transformation of traveling for work. Things (at least at work) aren’t going back to the way they used to be and companies are realizing that the temporary measures they took must now be formally incorporated.
6. Brands Make Bank with NFTs
It’s entirely possible that cryptocurrencies and NFTs are one giant bubble inflated by finance and VC bros who are facilitating a giant wealth transfer from late adopters to early adopters. Having said that, you can still count on brands to take advantage of the trend, and there’s a big incentive to jump on the bandwagon early. Adidas recently dropped a collection of NFTs, in the form of digital artwork (pictures of…apes?) that netted the sportswear brand $23 million. And digital art is only the start. Nike is experimenting with NFTs for virtual shoes (yep…shoes that exist only in the Meta-verse) and other brands are experimenting with NFTs that link to real experiences, such as a token that provides entry into a community or exclusive club.
7. Prepare for the Meta-Verse
All this commerce in the NFT space is based on a giant bet being made on the creation of the “Meta-verse”. Put simply, the Meta-verse is going to be an interconnected collection of virtual “worlds” where you (or your digital avatar) can work, play, create, transact and socialize. It’s the natural evolution of the things we’re already doing online, but in a far more immersive way (you access it through virtual reality). Furthermore, your identity (and a record of the things you own) will exist on blockchain technology which makes it harder to falsify or be hacked. A few months ago, Facebook publicly pledged to be at the forefront of building the Meta-verse, famously renaming itself “Meta.” And there you have the beginnings of “Web 3.0”.
So what should we lowly Web 2.0 companies do in the meanwhile? It’s important to understand two key truths. First, the “Meta-verse” is an inevitability, although its final form might continually change. And so preparing for it is inescapable, even if that just means thinking about the possibilities. The second truth is that we’re rushing headlong into building Web 3.0, while the problems of Web 2.0 (harassment, hacking, manipulated elections, spreading of falsehoods, etc.) are still very much there, and are likely to carry over to Web 3.0 unless we’re actively trying to fix them. And that means retaining a healthy dose of skepticism and caution when imagining how your brand or business will navigate the Meta-verse.