The Ever-Connected Consumer
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The document discusses how technology will change consumer behavior as connectivity increases. It explores trends like seamless shopping, transparency and authenticity, and how disruptive technologies like the Internet of Things, artificial intelligence, augmented and virtual reality, and blockchain will transform industries like travel and retail. While some technologies like voice assistants and chatbots are already having an impact, the future may bring about a more fully connected world with implications that could range from utopian to dystopian.
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The Ever-Connected Consumer
- 1. The Ever-Connected Consumer LOOKING BEYOND THE TRAVEL INDUSTRY TO ANTICIPATE HOW TECHNOLOGY WILL CHANGE CONSUMER BEHAVIOUR Dr. Wouter Geerts Consultant – Travel
- 2. OVERVIEW © Euromonitor International 2 DIGITAL DISRUPTION CONSUMER TRENDS TOP DISRUPTORS WHERE NEXT?
- 4. © Euromonitor International 4 Connectivity is the New Normal THE EVER-CONNECTED CONSUMER
- 5. © Euromonitor International 5 Connectivity is the New Normal THE EVER-CONNECTED CONSUMER
- 6. © Euromonitor International 6 Connectivity is the New Normal THE EVER-CONNECTED CONSUMER
- 7. © Euromonitor International 7 Connectivity is the New Normal THE EVER-CONNECTED CONSUMER
- 8. © Euromonitor International 8 Connectivity is the New Normal THE EVER-CONNECTED CONSUMER
- 9. © Euromonitor International 9 Face-to-Face is So 2017 THE EVER-CONNECTED CONSUMER 48% OF THE GLOBAL POPULATION ARE INTERNET USERS IN 2018 53% OF CONNECTED CONSUMERS REPORT THEY WOULD BE LOST WITHOUT THE INTERNET 31% OF CONNECTED CONSUMERS PREFER ONLINE INTERACTION OVER OTHER MEANS
- 10. © Euromonitor International 10 Digital Rising: From 1990 to Today THE EVER-CONNECTED CONSUMER
- 11. © Euromonitor International 11 Digital Rising: From 1990 to Today THE EVER-CONNECTED CONSUMER
- 12. © Euromonitor International 12 Digital Rising: From 1990 to Today THE EVER-CONNECTED CONSUMER
- 13. © Euromonitor International 13 Digital Rising: From 1990 to Today THE EVER-CONNECTED CONSUMER
- 14. © Euromonitor International 14 Digital Innovation THE EVER-CONNECTED CONSUMER 1995 2000 2005 2010 20151990
- 15. © Euromonitor International 15 Travel Innovation THE EVER-CONNECTED CONSUMER 1995 2000 2005 2010 20151990 ?
- 16. © Euromonitor International 16 Retail Remains Largely Offline THE EVER-CONNECTED CONSUMER 11% OF GLOBAL RETAIL SALES ARE MADE ONLINE IN 2018
- 17. © Euromonitor International 17 Travel Is Moving Online THE EVER-CONNECTED CONSUMER 49% OF GLOBAL TRAVEL SALES ARE MADE ONLINE IN 2018
- 19. © Euromonitor International 19 Rate Everything, Everywhere Transparency and Authenticity Seamless Shopping Changing Consumer Behaviour through Connectivity THE EVER-CONNECTED CONSUMER
- 21. © Euromonitor International 21 The Transformative Concept of the High-Street Store THE EVER-CONNECTED CONSUMER Stores Mobile apps Website Social media Customer
- 22. © Euromonitor International 22 Sephora Fuses Its Online and Offline Brand Image THE EVER-CONNECTED CONSUMER F2F to AR Best-in-class experiential retailer, fusing the online and offline consumer experience US$ 6 billion Sephora sales in 2017, outpacing the specialist beauty retailer market
- 23. © Euromonitor International 23 The End of Cash THE EVER-CONNECTED CONSUMER
- 24. © Euromonitor International 24 Mobile is Key THE EVER-CONNECTED CONSUMER 71% 2014-2022 CAGR for Mobile Proximity Payments 28% 2014-2022 CAGR for Mobile Remote Payments Note: Data for 20 countries
- 25. © Euromonitor International 25 Amazon Lets You Just Walk Out THE EVER-CONNECTED CONSUMER US$ 321 billion Amazon.com Global Sales in 2017 Amazon Go Latest venture offering a checkout-free shopping experience
- 27. © Euromonitor International 27 Our Reliance on Independent Ratings THE EVER-CONNECTED CONSUMER
- 28. © Euromonitor International 28 Routehappy Utilises the Power of the Crowd THE EVER-CONNECTED CONSUMER US$ 8.3 million Funding raised by Routehappy since launch in 2011; company today rates over 300 airlines Smile! De-commoditising flight sales through Happiness ratings provided by fellow travellers
- 30. © Euromonitor International 30 Distrust and Disloyalty THE EVER-CONNECTED CONSUMER
- 31. © Euromonitor International 31 Carrefour Goes for Transparency to Win Chinese Consumers THE EVER-CONNECTED CONSUMER US$ 96 billion Carrefour sales worldwide Visual Trust Allowing Chinese shoppers to check quality and origins of food before purchasing
- 33. © Euromonitor International 33 BlockchainAR/VR AIIoT Highly Disruptive Technologies THE EVER-CONNECTED CONSUMER
- 35. © Euromonitor International 35 IoT To Revolutionise Society THE EVER-CONNECTED CONSUMER Consumer Business Cities Electronics Smart home Energy Appliances Transport Logistics Fulfilment logistics Customer care Automation
- 36. © Euromonitor International 36 Still Early Days for the Ever-Connected Consumer THE EVER-CONNECTED CONSUMER
- 37. © Euromonitor International 37 Would You Talk to Your Toilet? THE EVER-CONNECTED CONSUMER 41 million Global volume sales of connected appliances in 2017, up 67% from 2016 Kohler Konnect Voice controlled appliances for bathroom and kitchen
- 38. © Euromonitor International 38 Bosch Wants You to Cook More THE EVER-CONNECTED CONSUMER 50.3% Over half of Millennials say they currently use or used a subscription service in the past Hello Fresh! Partnership between BSH and food subscription start-up points at future of home cooking
- 40. © Euromonitor International 40 Alarmists, or Just In the Know? THE EVER-CONNECTED CONSUMER “Once humans develop AI, it would take off on its own and redesign itself at an increasing rate. The development of full AI could spell the end of the human race.” “Our greatest existential threat.” “First the machines will do a lot of jobs for us and not be super intelligent. That should be positive if we manage it well. A few decades after that though the intelligence is strong enough to be a concern.”
- 41. © Euromonitor International 41 AI Comes in Many Shapes and Sizes THE EVER-CONNECTED CONSUMER Embodied AI Disembodied AI Material embodiment Human-like embodiment Super computers Voice- powered PAs Chatbots
- 42. © Euromonitor International 42THE EVER-CONNECTED CONSUMER The Rise of Messaging Apps – and Chatbots
- 43. © Euromonitor International 43 Three Other Ways AI Is Transforming Travel THE EVER-CONNECTED CONSUMER IMPROVE STORE EXPERIENCE Autonomous robots have the ability to greet customers and aid employees MORE POWERFUL SEARCH Leveraging machine learning, software can automatically tag, organise and visually search content IMPROVE RECOMMENDATIONS Using artificial intelligence, brands can more intelligently comb through data to offer personalised recommendations
- 44. Augmented and Virtual Reality
- 45. © Euromonitor International 45 Strong Growth of VR/AR Headset Sales THE EVER-CONNECTED CONSUMER 30% 2017-2021 CAGR for worldwide volume sales of headsets 35% Western Europe has highest forecast CAGR
- 46. © Euromonitor International 46 Intel’s Glasses Offer Ubiquitous Connectivity THE EVER-CONNECTED CONSUMER 65 million Smart wearables in use by 2022 The Vaunt Trying to succeed where Google Glass failed
- 47. © Euromonitor International 47 Three Ways VR/AR Will Change Travel THE EVER-CONNECTED CONSUMER INFORMATION/ENTERTAINMENT Leverage AR to layer the digital world over the physical world. REIMAGINED MEETINGS Leverage virtual reality to enable users to have face-to- face meetings, while being in different locations. IMMERSIVE EXPERIENCES Travel operators can use VR headsets to immerse consumers in a virtual world in order to shop for travel destinations.
- 48. Blockchain
- 49. © Euromonitor International 49 Blockchain Explained THE EVER-CONNECTED CONSUMER Crypto-currencies Smart contracts Supply chain certification
- 50. © Euromonitor International 50 Crypto-currencies: Winding Tree THE EVER-CONNECTED CONSUMER 16,278 ETH In a public ICO, Winding Tree raised equivalent of USD14 million (today), more than Airbnb. Revolution! Winding Tree has big plans to cut out all middlemen in the travel industry.
- 51. © Euromonitor International 51 Smart Contracts: Loyyal THE EVER-CONNECTED CONSUMER 28.1% Less than a third of consumers shop more often at stores/websites they are a member of Loyal to Loyyal Use blockchain to get rewarded for all purchases, no matter from which brand
- 52. © Euromonitor International 52 Supply Chain Certification: Go Go Chicken THE EVER-CONNECTED CONSUMER 36% Only about a third of Chinese consumers believe that a “free-range” label is trustworthy Big Brother Blockchain and facial recognition are used to record the life of a chicken
- 53. Where Next? 4.
- 54. © Euromonitor International 54 Utopia or Dystopia? THE EVER-CONNECTED CONSUMER INSERTABLESBIOMETRICS BRAIN WEARABLES UNIVERSAL RATINGS Basic Artificial Intelligence Artificial General Intelligence Artificial Super Intelligence 2018: We are here…
- 55. Thank You Dr. Wouter Geerts Consultant – Travel wouter.geerts@euromonitor.com @emi_WGeerts Linkedin.com/in/WouterGeerts
Hinweis der Redaktion
- Connectivity is the new normal. Internet became publicly available in 1991, and since then the uptake has grown strongly. Today, almost half of the global population uses the internet, with Euromonitor International projecting that three-quarters will have access by 2030.
- Today then, almost half of the population is connected to the internet. Of those connected, over half would be lost without the internet, while almost a third would rather interact with others online rather than face to face or over the phone.
- The traditional way to access the internet is of course the personal computer. In developed countries like Germany and the US, almost all households have a pc.
- However, in developing countries, the possession rate is significantly lower. Especially in India, less than 20% of households have access to a pc today.
- Interestingly, though, the picture is very different when looking at mobile phone possession rates. Again, in developed countries almost every household has at least one mobile phone.
- And in developing countries, as well. Digital connectivity in emerging markets has been largely driven by mobile, leapfrogging older and more costly technology like personal computers. While smartphones have ushered in greater convenience for consumers in developed markets, the mobile phone has become a lifeline for consumers in emerging markets, enabling governments and companies to deliver new services. This more widespread internet access serves as the backbone for many other technological advances.
- We can see the speed of innovation, and the impact of increased connectivity, in the development of Apple. 1990: Macintosh Classic was first personal computer under $1000, launched in 1990, becoming accessible to the masses, released at the dawn of the world wide web. 1998: First iMac, all-in-one computer 2001: First iPod, revolutionising portable music 2007: First iPhone launched 2010: First iPad launched 2015: First Apple Watch launched 2018: HomePod launched
- In the same timespan we also see how the travel industry has changed immensely, on the back of this growing connectivity. As internet giants like Amazon, eBay and Google started between 1994 and 1996, the two largest OTAs Booking.com and Expedia also started in 1996. Airbnb celebrates its 10 year anniversary this year, while Tripadvisor, Ctrip and Facebook exist less than 20 years.
- While consumers still buy a lot of their goods through offline channels like high-street stores…
- Travel is increasingly booked online. Next year, we expect that half of travel sales will be made online.
- This near ubiquitous connectivity, and increasingly mobile connectivity, is changing how consumers research, buy and interact with brands, both in the travel industry and beyond. We are seeing the same consumer trends impacting how consumers shop and behave in every consumer industry, and I want to highlight 3 important trends here which relate to this new connected world.
- The concept of seamless shopping can be divided into two parts. The first part is that of having a seamless, universal offering across different platforms. The second part is that of the seamless checkout, which is being easier as mobile connectivity improves.
- So, regarding the first part (providing a seamless, universal offering across all platforms) we see that the high-street is no longer king. The largest travel agencies used to be on the high-street. Today they are online, and the only high-street agents that have survived were forced to become more multichannel, or specialise. Interaction with brands today happens in stores, online through websites, social media and mobile applications. E-commerce, M-commerce, S-commerce are increasingly important to today’s brands.
- One company which has utilised the changes in how and where people buy products is Sephora, a US beauty retailer. The company has high-street stores where it provides in-store classes and events. Participants can download the app and find out how to recreate what they learned in store. Sephora’s app uses augmented reality to provide personalised make-up recommendations. It is clearly working for Sephora, which has over 10 million loyalty members (which is more than many travel companies) and is outpacing its competitors.
- The second part of seamless shopping is making the checkout process less of a hassle, and we are seeing a lot of innovation in this space. A major part of becoming more seamless is becoming cash free. Germany is rather conservative in this aspect, with more than 60% of transactions still done with cash. In other countries, however, we see strong increases in the use of card payments. South Korea and Sweden are the forerunners in this aspect, with almost all transactions being cashless.
- When looking at the evolution of digital payments from 2014 onwards, we see that it is especially mobile payments which will grow the strongest. Proximity payments are expected to grow an average of 71% per year, so these are payments where you put your mobile phone to a reader. Mobile remote payments are expected to become the largest digital channel by 2022, with an average growth of 28% per year. Remote payments are those made using a mobile phone to buy something on the internet. Tablet: 210,648 to 665,033 -> 15% PC: 1,711,415 to 2,942,601 -> 7%
- One shop which is using mobile proximity and remote technology is Amazon Go, the latest venture of the online behemoth Amazon. Customers scan their Amazon Go app when entering the store, and sensors and cameras in the ceiling automatically register what products customers take from the shelves. They can then walk out without the need to check out and will be charged through their Amazon account.
- The second trend relates to the fact that today everyone has the power to rate a service or product. Especially in the travel industry, of course, we are very familiar with this concept. Tripadvisor has become one of the best known company in the industry through user reviews. And Airbnb would not have been at top of everyone’s minds today if its platform was not heavily based on a two-way review system where hosts and guests rate each other to provide trust. The power of the crowd is truly shaping today’s online landscape.
- According to research done by Euromonitor, independent reviews are highly influential on what products and services people buy. Recommendations from friends and family still trump all other influences, but half of respondents state that independent reviews have an impact on their buying decisions.
- One example where you can really see the power of the crowd is with Routehappy, a flight meta-search site which next to offering the usual lowest prices and flight availability also offers traveller reviews. These happiness scores help cosnumers select flights based on comfort and suitability. Routehappy has consumers rate their airline experience based on seat space, layout, whether wifi was available, rate the entertainment, availability of USB ports and how good the food offer was. This data is used by an increasing group of travel players, including Expedia, Google, Airbus, Amadeus, Skyscanner and a range of airlines. ATPCO acquired Routehappy (which was launched in 2011) on February 2018.
- From Fake News to the horsemeat scandal to the trouble around sex workers and charities which has come to light in the past weeks, transparency and authenticity of products and services is more important than ever.
- According to research by Edelman, trust is at an all-time low, with the largest economies now having more distrusters than trusters. This distrust is reflected in people voting against the establishment in the US election and Brexit referendum. The Panama Papers and websites like Wikileaks further increase distrust in institutions. There is growing distrust around data protection, which means that in May 2018, the EU will implement the General Data Protection Regulation that aims to give back control of data sharing and privacy to the consumer. Brands will have to rethink how they collect and use consumer data.
- One example where digital connectivity is used to enhance consumer trust is the Visual Trust app by French retailer Carrefour in China. The app, which is made in partnership with Augmented Reality designer Blippar, lets Chinese shoppers check the quality and origins of food before they purchase it. Carrefour is using smart packaging in its stores to help give customers access to a vast array of information on products with a tap of their smartphone. It provides supply chain transparency “from farm to fork”, adding another layer of trust to the Carrefour brand.
- Now, having seen how near-ubiquitous connectivity is changing how consumers shop, let’s take a look at some of the main digital disruptors today and tomorrow.
- Internet of Things is the third wave of internet – in the 1990s we saw the rise of internet on personal computers; then around 2005 this started to move towards mobile. Today internet is moving to things. In simple terms, IoT refers to a virtual network that connects things, people and devices. In a futurist world, everything in our surrounding environment could communicate without human intervention. For Internet of things to really take off, 5G has been identified as a major enabler. Without 5G, the current network (which is mostly 3G or 4G) cannot facilitate this greater need for connectivity. While 5G is a powerful cellular network and is expected to have a major impact on the global digital ecosystem, it might not be viable for many nations in the immediate future. It is more costly, consumes more power and non-compatibility with existing mobile devices is an issue.
- The impact of IoT can be divided in three areas which are important here today: Consumers: More and more electronics and also appliances are connected to the internet. In a smart home, all these appliances will be connected to the network, and can communicate without human intervention. Devices like Amazon’s Alexa are giving us a glimpse of what the future could look like. You can turn the thermostat up while you’re on your way home. The vacuum cleaner has cleaned the house while you were away. The fridge has ordered new milk, as you were running low, and the washing machine has run a cycle and ordered new detergent. Business: Having everything connected increases automation in the production process. It also allows closer taps on the supply chain, with companies being able to closely track each aspect of a product they are making, as well as track the product once it leaves them. Washing machine manufacturers, for example, would be able to track consumers’ use of their machines, and see when a machine is broken, what parts need replacing etc. For cities, the internet of things can result in much greater efficiencies. Finding out where and when energy is used, where there are leaks or where there are broken street lights, for example, is very important. Logistics and transport can greatly improve if there is a better understanding of where people travel. Ford, the automotive manufacturer, for example, is working on a platform for connected cities. It has created an open-sourced platform for companies and cities to join, which can connect all cars and drivers, with the aim to reduce pollution and congestion.
- Euromonitor survey results show that there is still a ways to go. Of all the devices consumers use to connect to the internet, smartphones are the most common. Nearly 90% of connected consumers globally reported owning one. Portable speakers, like the Amazon Echo, are showing some of the strongest growth, but smart home appliances are still in its infancy.
- But there are some examples of what the future home can look like with IoT. US bathroom and kitchen manufacturer Kohler introduced its connected home concept called Kohler Konnect. It offers voice controlled smart devices for bathroom and kitchen, so you can tell your shower to turn to a different setting, your toilet to flush or your bath to fill.
- Another example is the partnership between Hello Fresh and Bosch Hausgeräte. HelloFresh supplies customers with recipes and pre-measured ingredients needed for home-cooked meals. In 2016, HelloFresh teamed up with Bosch to integrate the Bosch’s Home Connect technology with the HelloFresh app. This means that users of HelloFresh can operate their oven using the HelloFresh app, preparing the food beforehand and turning on the oven remotely on their way home.
- The second disruptor is AI, which is closely linked to IoT in that most appliances will need to have some intelligence to use their connection to the network. Out of the 4 disruptors, AI is probably the most discussed, the most controversial, and also the one with the potentially largest impact on not just the travel industry, but human life.
- Controversy originates from the fact that artificial intelligence is likely to surpass human intelligence in the future, which could be dangerous if not governed correctly. We have all seen movies like Terminator and I-Robot. And some of the people that know the most about AI are cautious about its use. In December 2014, professor Stephen Hawkins said that AI could spell the end of the human race. Elon Musk, founder of Tesla and Space X, has said that AI is our greatest existential threat, while Bill Gates has said in 2015 that AI will become strong enough to be a concern. Stephen Hawkins: BBC in December 2014 Bill Gates on Reddit in 2015 Elon Musk: Speaking at MIT in 2014
- Today we are seeing AI in many shapes and sizes, with a clear distinction between embodied and disembodied AI. Embodied AI comes in material or human-like forms. Examples are the Roomba vacuum cleaner, or the Botler robot in Aloft hotels. More human-like versions are the Pepper robot, or Thosiba’s ChihiraKanae which was showcased at ITB 2 years ago. Many of these robots are currently rather gimmicky, but as they become more versatile, we will start to see them around more, and they will become a very visible part of our lives. On the other hand we have disembodied AI, which includes super computers like IBM Watson. These computers are extremely smart, but also need a lot of power and capacity. They have come a long way though, from Deep Blue beating world chess champion Kasparov, to IBM Watson winning Jeopardy!, AlphaGo winning Go, and most recently Libratus beating 4 of the best poker players. Voice powered personal assistants and chatbots are the other two disembodied AIs, and these are currently having the largest impact on consumers’ lifes. Voice-powered assistants include Amazon’s Alexa, Microsoft’s Cortana, Apple’s Siri, and Hey Google. The implications for the travel industry are wide, especially as these assistants need third parties to make the product more appealing. Brands such as Expedia, Kayak and Sabre have been quick to develop apps, whereby consumers can receive information about flights, hotels and make bookings through Alexa. Hotel chains such as Marriott, meanwhile, use Alexa as virtual concierges, and for voice-controlled lights, room temperature and music. Finally, chatbots. More and more of our social and brand interactions are not face-to-face but via the internet. Social messaging apps are increasingly powerful in facilitating this online brand interaction. Chatbots are increasingly found in messaging apps to provide tailored and instant responses to enquiring consumers. Booking.com, for example, has a chatbot which can answer 30% of all questions within 5 minutes, without any human intervention.
- When looking at the largest messaging apps, it is clear that Chinese apps WeChat and Tencent’s QQ are by far the largest, although heavily reliant on Chinese users. Facebook Messenger has driven the use of chatbots when it introduced its Bot Engine, which made it easier for any develop to build a bot. Within months of its launch, 34,000 bots had been created.
- AI today is already transforming the retail and travel industry. Beyond chatbots, AI can improve in-store experiences, which is very important for high-street travel agents to offer something that online travel agents might not be able to. AI also improves search. Google uses AI to predict flight delays before airlines do so, and Travelsify allows you to book a hotel through the mood you’re in. Finally, AI can improve recommendations like Netfilx for example is doing, which provides a lot of opportunities for the travel industry.
- The third disruptor is Augmented and Virtual Reality. Immersive technology like virtual reality (VR) and augmented reality (AR) has been touted as having a massive impact in terms of marketing, design and product visualisation.
- Pokémon Go provides a glimpse of what may come, while 2018 is expected to be the year that AR will go mainstream, as it becomes more accessible. Apple launched its ARKit for app developers in 2017. Google also has its own AR developer software, Motion Stills. From a consumer perspective, gaming has been the main avenue for exploration, but commerce brands are starting to experiment, with the sale of headsets expected to grow strongly, especially in the developed world.
- AR and VR is likely to become very unobtrusive. Intel’s prototype smart glasses called The Vault are trying to succeed where Google Glass failed, providing contextual information to users. Google’s foray into smart glasses ended in failure, but Intel has taken a more thoughtful approach, removing the camera for privacy reasons. Using lasers and sensors, Vaunt will project real-time information onto the retina to enhance the consumer’s interactions with their surroundings. Smart contact lenses are also being developed, and Apple is also working on smart glasses.
- AR and VR is and can change the travel industry considerably. As with Pokemon Go, AR can layer a digital work over the physical world, which might be used increasingly during city tours for example. Using VR for meetings has been discussed for a long time now, but the technology is holding this back, with face to face still seen as trumping digital connections. As VR improves, however, this might change. Finally, VR can provide immersive experiences to consumers. Marriott, Thomas Cook and Expedia are some of the companies that are using VR to let consumers experience a destination, hotel or activity before they book it. give consumers a better understanding of what it offers.
- Finally, let’s talk about the disruptive power of blockchain. Blockchain is one of the hottest topics, but also very little understood. So let’s have a quick look on what it is and what it can do.
- Blockchain has widely speaking three uses. Firstly, many people think that crypto-currencies and blockchain are the same, but cryptocurrencies are only part of what the blockchain can do. Bitcoin was the first decentralised cryptocurrency, launched in 2009, and since then many more have launched. All transactions are recorded in the Blockchain, which is a peer-to-peer platform similar to PayPal, but without the intervention of a financial institution. Blockchain is also set to impact the industry by offering smart contracts and supply chain certification. Let me provide a little more context for each of these use cases.
- Starting with crypto currency: the company making the most waves in blockchain and cryptocurrency in the travel industry is arguably Winding Tree. The company wants to cut out the middlemen and connect consumers and suppliers directly; not a mean feat. Winding Tree launched its own cryptocurrency called LIF. 1 ETH = 1000 LIF. Between Febr 1 and Febr 14 it raised 16,278 ETH in its first funding round. With 1 ETH currently trading at around $880, that’s worth about 14 million USD. Airbnb in their Series A funding raised 7.2 million USD, so Winding Tree has started off well. With partnerships including with Lufthansa, Air New Zealand, Swiss Airlines, Eurowings, and Nordic Choice Hotels, it has momentum going for it. But there is a big stumbling block. One of the main issues of cryptocurrencies is that they are far too volatile at the moment, and it will be a long time until they stabilize. March 2017: 16278 ETH = USD 329,466; January 9, 2018: 16278 ETH = USD 19.7 million. In travel, consumers book in advance. You (and the provider) will not like to book a holiday for 1,000 LIF ($880 today), if there is a chance that that 1,000 LIF is worth double, or almost nothing, by the time you go on your trip. Either you, or the travel provider, can loose out big. (Not only a currency, also a smart contract. It can hold information about your booking, your passport information etc. It can bundle car rental and hotel booking. Can do more than ETH, it’s a layer on top of ETH. LIF has the benefit that it does not work with exchange rates, so losses there are negligible.)
- Secondly, blockchain can revolutionise contracts. Loyyal is at the forefront of an exciting era of disruption that is set to blow wide open the entire transaction-payment-loyalty landscape. Loyyal has partnered with IBM to establish blockchain infrastructure for loyalty and rewards. Imagine if you could access all your loyalty rewards programs, across different companies and industries, in one digital wallet. Imagine being credited your reward points in near real time and being able to redeem them immediately, or transfer them to a friend. Imagine receiving only promotions personally relevant to you. According to the Harvard Business Review, the future of loyalty schemes will exist of 4 to 6 major schemes which have one major player like an airline or hotel, and many other smaller players attached to it. Consumers can collect and spend rewards with all retailers attached to the scheme. The impact of smart contracts goes further. German start-up Etherisc, for example, has used Blockchain to write a fully-automated travel insurance pay-out programme. Meanwhile, TUI uses an internal blockchain to increase efficiencies and create a single database of its hotels across all countries. In the future the company might open up its platform, which if enough other players do the same, couldn lead to a data commons of all accommodation available, which will reduce the value of players like Priceline and Expedia significantly.
- Finally, blockchain can be used for more accurate and trustworthy supply chain certification. Blockchain is based on a shared distributed ledger which is open to see by all. Anything that is entered into the blockchain can not be removed or altered without a record of this change being left behind. This leads to great transparency. Chinese insurance tech company ZhongAn Online is using blockchain technology to record the life of a chicken – providing more transparency to the consumer. Following a number of food scandals, Chinese consumers are very sceptical of any information provided by companies about their food. All information related to the chicken can be verified in the blockchain, such as the age of the chicken, whether it is free-range, when quarantined, etc. ZhongAn Online is expanding the initiative to use facial-recognition that would allow consumers to pre-order chickens and watch them grow remotely. This has been sparked by consumers’ increasing interest in farm tourism. The travel industry will see more of blockchain, where the hotel and airline supply chain will become more transparent, as well as employee history to improve workers rights. Environmental certification schemes will also be greatly transformed using this technology.
- So what can we expect next?
- Depending on your outlook, the future with technology can be a utopia or dystopia. We will see increased use of biometrics. We already see facial recognition and fingerprints on your phone, and biometric scanner at border control. Now also biometric scanners for check-in by BA and Delta. Insertables: The MIT project DuoSkin showcases the future of wearable technology – using metallic tattoos that are conductive that can share data with another device, allow the skin to be used as a touchpad to turn on lights for example. SJ, Swedish Railways is trialling a microchip implant for passengers so that they can enter and exit the barriers to travel in a seamless way, removing the need to carry cards and tickets. Brain wearables: Today we already see companies like Expedia using emotional recognition through facial expressions in their Usability Labs to improve their website for different user groups. And beyond recognising emotions through facial expressions, the future might lie in reading brain activity. Computer headsets from Emotiv record brain activity, registering different emotional states. Brain-tracking wearable devices will lead to deeper levels of human/computer interaction, and lead to new ways of developing consumer relationships and brand experiences, as well as additional benefits such as new product development through improved data on feedback. Finally, universal ratings: The Chinese government has started to implement a social credit system to rate how trustworthy its 1.3 billion citizens are. Currently voluntary, it will become compulsory in 2020. The government has given licences to eight companies to come up with systems to score citizens’ behaviour, with the developer of WeChat and Alibaba the frontrunners. The latter gives users a score between 350 and 950 points, based on credit history, fulfilment of contract obligations, but also personal behaviour, preferences and who you interact with. Your score decides whether you can take out a loan or need to put down a deposit when buying a flight. Stand alone these technologies, together with those disruptors I’ve discussed before, will greatly change consumers’ expectations and behaviour. We should also consider the advancements that will be made in technology that needs no human intervention at all. We are currently experiencing Basic Artificial Intelligence, where the machine is as smart as the programmer lets it be. However, when machines become smart enough to perform any intellectual feat a human can, we start talking about AGI. Beyond that, we have ASI, where machine learning outpaces and surpasses human intelligence, which is the future the likes of Stephen Hawking, Bill Gates and Elon Musk deeply fear. All in all, get set for a very turbulent, disruptive future!