By: Juerg Kronenberg, Partner at Bain & Company Middle East
Today, more than a year after the World Health Organization declared a pandemic, Covid-19-related themes continue to dominate digital transformation plans, from training remote workforces to digital customer experiences. Many executives are placing a heightened emphasis on pre-pandemic themes that became more urgent with the events of 2020. To identify the most disruptive trends, Bain met regularly with hundreds of carefully selected technology companies and start-ups. Combining those conversations with our experience from working with large corporations and our innovation ecosystem partners, we selected nine trends that have recently risen to the top of C-suite agendas:
- Businesses “nudge” their customers toward desired behaviors
Almost 60% of global executives across sectors said they adopted customer experience tools to improve different stages of the customer journey over the past five years. The pandemic profoundly amplified the need for this digital transformation, shifting consumer behavior and accelerating trends by two to three years. In the digital customer journey, “nudging” is an increasingly prevalent tool to push consumers toward desired outcomes. It influences customer behavior through positive reinforcement and subliminal messaging, often helping to better fulfill their wants and needs.
- Gamification reskills the remote workforce
The World Economic Forum predicted that more than half of all workers will need significant re- or upskilling by 2022, in order to meet growing demands for proficiency in new technologies, analytical thinking, and emotional intelligence, among other skillsets. But the pandemic has thrown a wrench in that timeline. Most companies—already struggling with a lack of agility and employee engagement in their training programs—found their issues were exacerbated by remote training. In addition, Covid-19 highlighted the need for new ways of working, not only to adapt for future crises, but also to meet the growing demand for remote work. To make training more efficient and enjoyable, leading companies across industries such as retail, healthcare, and professional services have turned to gamification.
- Diversity becomes a core recruiting metric for successful companies
A recent study by LinkedIn Talent Solutions found that the number of people in head of diversity and chief diversity officer roles increased 75% and 68%, respectively, over the last five years. It also proclaimed head of diversity as the “job of the moment.” A diverse talent base has also become a requirement for young job seekers, who increasingly prioritize personal values when deciding where to work. Beyond the response to systemic injustice, businesses are beginning to understand that diversity is beneficial to both decision making and return on investment. Teams with gender diversity make better business decisions 73% of the time, while age- and geographic-diverse teams do so 87% of the time. And 64% of consumers say they are more likely to consider or purchase a product after seeing an ad that they consider to be diverse or inclusive.
- Brands and retailers turn into marketplaces to benefit from network effects
Recently, individual businesses have started moving away from these platforms to establish their own marketplaces. These owned marketplaces allow brands to benefit from the network effect: They can aggregate and sell adjacent products and services, creating a one-stop shop for their target customer. The network effect can boost customer acquisition and retention. It can also increase interactions, in turn lowering the cost to serve each customer. This emerging trend has given rise to companies that help brands quickly launch marketplaces and provide quality service at scale through a fully configurable platform, a curated ecosystem of sellers and partners, full security, and advanced automation.
- AI-enabled collective intelligence curates frontline insights for a more agile strategy
According to a 2020 study by Harvard Business Review, 86% of executives say frontline workers need better technology-enabled insight to make good decisions in the moment. As companies become increasingly customer centric, the need to create a flow of data and insights to and from those closest to customers—the front line—will continue to grow. To filter and analyze massive amounts of input, leading companies are looking to AI-enabled collective intelligence. While AI is highly effective in pattern recognition, it is incapable of creativity and misses insights in nonstructured data. But combining AI and human capabilities can help curate frontline insights, bringing greater agility and efficiency to problem solving and decision making.
- Savvy consumers demand sustainable products
When it comes to sustainability, consumers are paying far more attention and taking far more action. According to a 2018 Nielsen study, 73% of global consumers say they would definitely or probably change their consumption habits to reduce their impact on the environment. This shift in consumer preference has pushed sustainability to the top of the corporate agenda, especially in the wake of the pandemic. According to a Bain survey, more than half of executives say Covid-19 has only increased the importance of sustainability for their business.
- Quantum computing starts to address specific applications
With an estimated market size of $1.1 billion in 2019—expected to grow five times by 2025—quantum computing is an emerging technology poised to radically reshape the world, by solving difficult problems beyond the power of any conventional supercomputer. Moving away from ones and zeros, quantum computers can process exponential combinations of multiple dimensions, enabling 10,000 times the speed and complexity management of supercomputers. IBM and Google remain front-runners in the quantum sector, but venture capital activity is accelerating, with investments of about $480 million in 2020—more than double the estimated $200 million invested in 2019. However, there are still significant challenges regarding cost and energy effectiveness, hindering the technology’s commercial scalability.
As companies chart their post-pandemic path, winning organizations will consider these seven trends, and proactively identify strategies and innovation partners to help them navigate their journey.