The pace of innovation has changed. As technology has seeped into everyday life through phones, tablets and laptops, consumers have become more connected than ever before.
As a result, they are significantly savvier when it comes to data, technology and innovation than the businesses they purchase goods from.
Up until 2010, traditional consumer behaviour was the norm – organisations pushed out information which was consumed via traditional channels being print, radio and television.
The current decade is a time of flux. Digital natives, those consumers who have never experienced a world without the internet or social networks, are now becoming the dominant demographic. They are entering the workplace and are becoming the social group with the highest amount of purchasing power.
In 2005, 10% of 18-29s, 30-49s and 50-64s used social networking sites. In 2012, that number jumped to 90%, 80% and 50% for each respective age group – along with 40% of those aged over 65.
By 2020, the business and social landscape will have shifted completely, with digital native behaviour. This will completely change how businesses operate – customer service will be completely digital, and the role of retail will have transformed completely.
Most of the tech innovations over the past half decade have been adopted significantly ahead of businesses – such as social media. So how are digital natives proving they are savvier than organisations?
The virtual world
Customers are meshing together the next wave of digital innovation to suit their everyday lives.
In the virtual world, a range of products and services have combined to create personal databases to suit each individual. Cloud storage allows files to be sent across multiple platforms, while apps on smartphones and tablets fill a huge variety of needs. “There’s an app for that” isn’t just a catchy gimmick – it’s true.
Digital replacements are continually being made for everyday items. Identification, wallets, calendars, contacts and networking tools are all online. The proliferation of smartphones has made all of these tasks easier to complete online than in person.
Much of the growth in social networks happened not because businesses had adopted them into their everyday usage, but because individuals got to them first. As a result, they are entirely consumer-focused.
The ability to share information among peers is incredibly powerful – and purchasing decisions are heavily influenced by the reviews someone reads on Facebook or Yelp.
It’s only in the past few years that businesses have taken social networks seriously. Before 2011, companies wouldn’t have thought twice about adopting a social strategy – despite a huge, growing number of users signing up.
This has led to some liability. Although businesses have attempted to delete inappropriate social media posts on their own pages, the speed at which information spreads over the internet makes it nearly impossible to delete anything permanently.
Consumers are increasingly adopting hardware to suit their own lives. Wearable gadgets such as fitness bands have fuelled the latest wave of innovation at major technology companies, while the information gained from such devices are used primarily to point out areas where performance can improve – a virtual athletic coach.
Just as consumers use cloud storage to maintain data, and social networks to share it, physical hardware is helping consumers find the insights they need in order to improve their real-life behaviour.
Modern consumers have outstripped businesses when it comes to information and purchasing power. Bad news as well as good spreads incredibly quickly – which means businesses must constantly be on alert. (Some businesses have attempted to reverse this trend by gaming the social system with fake reviews – an act regulators have said they will continue to monitor).
But the pace of change isn’t just relegated to the behaviour of individuals. Businesses are often slow to adopt to the next new network or trend, whether it be Facebook, Snapchat or whatever else.
The economy is undergoing structural change. Consumers’ access to technology means they will constantly be faster at adapting than organisations. For business, this means constantly listening to their consumers’ needs and preferences – and never assuming what the target audience needs, wants or prefers online without seeking out feedback first.
To find out more about the increasing value of data and other digital trends, please visit our Digital Innovation research site and download your free report.