IoT & Edge Transforming Financial Services

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In this Insight, guest author Anupam Verma talks about how a smart combination of technologies such as IoT, edge computing and AI/machine learning can be a game changer for the Financial Services industry. “With the rise in the number of IoT devices and increasing financial access, edge computing will find its place in the sun and complement (and not compete) with cloud computing.”

Anupam Verma, Leadership Team, ICICI Bank

The number of IoT devices have now crossed the population of planet earth. The buzz around the Internet of Things (IoT) refuses to go down and many believe that with 5G rollouts and edge computing, the adoption will rise exponentially in the next 5 years.

The IoT is described as the network of physical objects (“things”) embedded with sensors and software to connect and exchange data with other devices over the internet. Edge computing allows IoT devices to process data near the source of generation and consumption. This could be in the device itself (e.g. sensors), or close to the device in a small data centre. Typically, edge computing is advantageous for mission-critical applications which require near real-time decision making and low latency. Other benefits include improved data security by avoiding the risk of interception of data in transfer channels, less network traffic and lower cost. Edge computing provides an alternative to sending data to a centralised cloud.

In the 5G era, a smart combination of technologies such as IoT, edge computing and AI/machine learning will be a game changer. Multiple uses cases from self-driving vehicles to remote monitoring and maintenance of machinery are being discussed. How do we see IoT and the Edge transforming Financial Services?

Before we go into how these technologies can transforming the industry, let us look at current levels of perception and adoption (Figure 1).

Adoption and Perception of Emerging Technology in Financial Services

There is definitely a need for greater awareness of the capabilities and limitations of these emerging technologies in the Financial Services.

Transformation of Financial Services

The BFSI sector is increasingly moving away from selling a product to creating a seamless customer journey. Financial transactions, whether it is payment, transfer of money, or a loan can be invisible, and Edge computing will augment the customer experience. This cannot be achieved without having real-time data and analytics to create an updated 360-degree profile of the customer at all times. This data could come from multiple IoT devices, channels and partners that can interface and interact with the customer. A lot of use cases around personalisation would not be possible without edge computing. The Edge here would mean faster processing and smoother experience leading to customer delight and a higher trust quotient.

With IoT, customers can bank anywhere anytime using connected devices like wearables (smartwatches, fitness trackers etc). People can access account details, contextual offers at their current location or make payments without even needing a smartphone.

Industries of the Future

Use Cases of IoT & Edge in Financial Services

IT and Digital Leaders in Financial Services are aware of the benefits of IoT and there are some use cases that most of them think will help transform Financial Services (Figure 2).   

Top Use cases of IoT in Financial Services Industry

However, there are many more potential use cases. Here are some use cases whose volume will only grow every day to fuel incessant data generation, consumption and processing at the Edge.

  • Smart Homes. IoT devices like Alexa/Google Home have capabilities to become “bank in a speaker” with edge computing.
  • In-Sync Omnichannels. IoT devices can be synced with other banking channels. A customer may start a transaction on an IoT device and complete it in a branch. Facial recognition can be used to identify the customer after he/she walks in and synced IoT devices will ensure that the transaction is completed without any steps repeated (zero re-work) thereby enhancing customer satisfaction.
  • Virtual Relationship Managers. In a digital branch, the customer may use Virtual Reality (VR) headsets to engage with virtual relationship managers and relevant experts. Gamification using VR can be amazingly effective in the area of financial literacy and financial planning.
  • Home and Auto Purchase. VR may also find use in home and auto purchase processes with financing built into it. The entire customer journey will have a much smoother experience with edge computing.
  • Auto and Health Insurance. Companies can use IoT (device installed in the vehicle) plus edge computing to monitor and improve driving behaviour, eventually rewarding safety with lower premiums. The growth in electric mobility will continue to provide the basis for auto insurance. Companies can use wearables to monitor crucial health parameters and exercising habits. The creation of real-time dynamic rewards around it can change behaviour towards a healthier lifestyle. Awareness, longevity, rising costs and pandemic will only fuel this sector’s growth.
  • Payments. Device to device contactless payment protocol is picking up and IoT and edge computing can create next-gen revolution in payments. Your EV could have an embedded wallet and pay for its parking and toll.
  • Branch/ATM.  IoT sensors and CCTV footage from branches/ATMs can be utilised in real-time to improve branch productivity as well as customer engagement, at the same time enhancing security. It could also help in other situations like low cash levels in ATMs and malfunctions. Sending live video streams for video analytics to the cloud can be expensive. By processing data within the device or on-premises, the Edge can help lower costs and reduce latency.
  • Trading in Securities. Another area where response time matters is algorithmic trading. Edge computing will help to quickly process and analyse a large amount of data streaming real-time from multiple feeds and react appropriately.
  • Trade Finance. Real-time tracking of goods may add a different dimension to the risk, pricing and transparency of supply chains.

Cloud vs Edge

The decision to use cloud or edge will depend on multiple considerations. At the same time, all the data from IoT devices need not go to the cloud for processing and choke network bandwidth. In fact, some of this data need not be stored forever (like video feeds etc). As a result, with the rise in the number of IoT devices and increasing financial access, edge computing will find its place in the sun and complement (and not compete) with cloud computing.

The views and opinions mentioned in the article are personal.

Anupam Verma is part of the Leadership team at ICICI Bank and his responsibilities have included leading the Bank’s strategy in South East Asia to play a significant role in capturing Investment, NRI remittance, and trade flows between SEA and India.

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Why Do You Fail to Deliver a Consistent and Memorable Digital Customer Experience? – Part 1

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More than ever before you are having to cater to digital-savvy customers and create a competitive edge through the customer experience (CX) that you provide. In this two-part feature, I explore the barriers organisations face in their goal to create a memorable CX; and what the organisations that are getting it right have in common.

Spend on digital services, technologies, platforms, and solutions is skyrocketing. As businesses adapt to a new normal, they are increasing their spend on digital strategies and initiatives well beyond the increase they witnessed in 2020 when all customer and employee experiences went digital-only. But many digital and technology professionals I meet or interview maintain that their digital experiences are poor – offering inconsistent and fragmented experiences.

The Barriers

Digital, CX and tech leaders highlight their laundry list of challenges in getting their digital experiences to deliver a desired and on-brand customer experience:

A poorly informed view of the customer and their journey.  Sometimes the customer personas and journey maps are simply wrong – they were developed by people with an agenda or a fixed idea of what problems need solving.

Inconsistent data. Too much, too little, or plain incorrect data means that automation or personalisation initiatives will fail. Poor access to data or lack of data sharing between teams, applications and processes means that businesses cannot even begin to build a consistent CX.

Too many applications and platforms. As digital initiatives took hold, technology teams witnessed an explosion of applications and platforms all conquering small elements of the digital journey. While they might be great at what they do, they sometimes make it impossible to create a simple and consistent customer journey. Some are beyond the control of the technology team – some are even introduced by partners and agencies.

Inconsistent content. For many businesses, content is at the heart of their digital experience and commerce strategy. But too often, that content is poorly planned, managed, and coordinated. Different teams and individuals create content; this content is then inconsistently delivered across customer touchpoints; the content is created for a single channel or touchpoint; and delivers to customers at the wrong stage of the journey.

Little co-ordination across channels. Contact centres, retail or other physical locations and digital teams often don’t sing from the same songbook. Not only is the customer experience inconsistent across different physical and digital touchpoints, but it may even be inconsistent across digital touchpoints – chat, web and mobile offer different experiences – even different parts of the web experience can be inconsistent!

Figure-1-Biggest-Challenges-Organisations-Face-in-Driving-Consistent-CX

Knowledge is not shared between channels. Smart customers will “game” a company – finding the best offer across different customer touchpoints. But more often than not, inconsistent knowledge leads to very poor customer experiences. For example, a telecom provider might give different or conflicting information about their plans across web, mobile, contact centre and retail outlets; and with the increasing popularity of marketplaces, customers receive inconsistent product information when they deal with the brand directly than through the marketplace. Knowledge systems are often created to serve individual channels and are not trusted by customer service or retail representatives. We see this in Ecosystm data – when customer service agents are asked a question, they don’t know the answer to, the first place they look is NOT their Knowledge Management tool.

Poor prioritisation of customer pain points. Customer teams may find that it is easier to tackle the small customer challenges and score easy points – and just deprioritise the bigger ones that will take significant effort and require considerable change. Unifying the customer journey between the contact centre and digital is one big challenge that many businesses continue to delay.

And it gets worse… According to Ecosystm data, 55% of organisations consider getting board and management buy-in as their biggest CX challenge. This means that Chief Digital Officers, CX professionals and digital teams are still spending a disproportionate amount of time selling their vision and strategy to the senior management teams!

But some organisations are getting it right – creating a memorable digital experience that retains their customers and attracts more. I will talk about what is working for them in the next feature. 

Customer Experience Insights
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Shift Your Focus from Omnichannel to Opti-Channel

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Customer Experience teams are focused on creating a great omnichannel experience for their customers – allowing customers to choose their preferred channel or touchpoint. And many of these teams are aware of the challenges of omnichannel – often trying to prise the experience from one channel into another. Too often we create sub-optimal experiences, forcing customers to work harder for the outcome than if they were using other channels.

I know there have been times when I have found it easier to jump in the car and drive to a store or service centre, rather than filling in a convoluted online form or navigating a complex online buying process. I constantly crave larger screens as full web experiences are often better than mobile web experiences (although perhaps that is my ageing eyes!).

One of the factors that came out in a study conducted by Ecosystm and Sitecore is that customers don’t just want personalised experiences – they want optimised experiences. They want to have the right experience on the right device or touchpoint. It is not about the same experience everywhere – the focus should be on optimising experiences for each channel.

We call this “opti-channel”.

Use an Opti-Channel Strategy to Guide Investment and Effort

This is what you are probably doing already – but by accident. I suggest you formalise that strategy. Design customer experiences that are optimised for the right channel or touchpoint – and personalised for each customer. Stop forcing customers into sub-optimal experiences because you were told to make every customer experience an omnichannel one.

The move towards opti-channel accelerates your ability to provide the best experience for each customer, as you ask the important question “Does this channel suit this experience for this customer?” before the fact – not after the experience has been designed. It also eliminates the rework of existing experiences for new channels and provides clear guidance on the next-best action for each employee.

Customer Experience Insights

There Will be Conflict Between Opti-Channel and Personalisation

The challenge for opti-channel strategies will be to align them to your personalisation strategy. How will it work when you have analytics driving your personalisation strategy that say customer X wants a fully digital experience but your opti-channel strategy says part of the digital experience is sub-standard? And the answer to this lies in understanding the scope of your experience creation – are you trying to improve the existing experience or are you looking to create a new improved experience?

  • If you are improving the existing experience, then you have less license to shift transactions and customer between channels – even if it is a better experience.
  • If you are creating a new experience, you have the opportunity to start again with the overall experience and prove to customers that the new experience is actually a better one.

For example, when airlines moved away from in-person check-in to self-check-in kiosks, there was an initial uproar from customers who had not yet experienced it – claiming that it was less personal and less human. But the reality is that the airlines took the check-in screen that the agents were using and made it customer-facing. Travellers can now see the seats and configuration and select what is best for them.

This experience was reinvented again when the check-in moved to web and mobile. By turning the screen around to the customer, the experience actually felt more human and personal – not less. And by scattering agents around the screens and including a human check-in desk for the “exceptions”, the airlines could continue to optimise AND personalise the experience as required.

Opti-Channel Opens Many New Business Opportunities

Your end-state experience should consider what is the best channel or touchpoint for each step in a journey – then determine the logic or ability to shift channels. Pushing customers from a chatbot to web chat is easy. Moving from in-store to online might be harder, but there are currently some retailers looking to merge the in-store and digital experience – from endless aisle solutions to nearly 100% digital in-store. Some shoe and clothing stores offer digital foot and body scans in-store that help customers choose the right size when they shop online. And we are beginning to see the rollout of “magic mirrors” – such as one retailer who has installed them in fitting rooms and you can virtually try different colours of the same item without actually getting them off the shelf.

Businesses are trying to change customer behaviour – whether it is getting them into stores or mainly shopping online or encouraging them to call the contact centre or to even visit a service centre. Creating reasons for why that might be a better option, while also providing scaled-back omnichannel options is a great way to meet the needs of existing customers, create brand loyalty and attract new customers to your company or brand.

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Nuance Acquisition Strengthens Microsoft’s Industry & AI Capabilities

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Last week Microsoft announced the acquisition of Nuance for an estimated USD 19.7 billion. This is Microsoft’s second largest acquisition ever, after they acquired LinkedIn in 2016. Nuance is an established name in the Healthcare industry and is said to have a presence in 10,000 healthcare organisations globally. Apart from Healthcare, Nuance has strong capabilities in Conversational AI and speech solutions to support other industries. This acquisition is in line with Microsoft’s go-to-market roadmap and strategies.

Microsoft’s Healthcare Focus

Microsoft announced their Healthcare Cloud last year and this acquisition will bolster their Healthcare offerings and market presence. Nuance’s product portfolio includes clinical speech recognition SaaS offerings – Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting – on Microsoft Azure. The acquisition builds on already existing integrations and partnerships that were in place over the years.

Microsoft Cloud for Healthcare offers its solution capabilities to healthcare providers using a ‘modular’ approach. Given how diverse healthcare providers are in their technology maturity and appetite for change, the more diverse the  ‘modules’, the greater the opportunities for Microsoft. This partnership with Nuance also brings to the table established relationships with EHR vendors, which will be useful for Microsoft globally.  

The Healthcare industry continues to struggle as the world negotiates the challenges of mass vaccination. But on the upside, the ongoing Healthcare crisis has given remote care a much-needed shot in the arm. Clinicians today will be more open to documentation and transcription services for process automation and compliance. The acquisition of Nuance’s Healthcare capabilities will definitely boost Microsoft’s market presence in provider organisations.  

However, Healthcare is not the only industry that Microsoft and Nuance are focused on. The Microsoft Cloud for Retail that was launched earlier this year aims to offer integrated and intelligent capabilities to retailers and brands to improve their end-to-end customer journey. Nuance has omnichannel customer engagement solutions that can be leveraged in Retail and other industries. As Microsoft continues to verticalise their offerings, they will consider more acquisitions that will complement their value proposition.

Microsoft’s Focus on Conversational AI

Microsoft already has several speech recognition offerings, speech to text services, and chatbots; and they continue to invest in the Conversational AI space. They have created an open-source template for creating virtual assistants to help Bot Framework developers. In February, Microsoft announced their industry specific cloud offerings for Financial services, Manufacturing, and Non-Profit, and also introduced a series of AI and natural language features in Microsoft Outlook, Microsoft Teams, Microsoft Office Lens and Microsoft Office mobile to deliver interactive, voice forward assistive experiences.

“There is no slowing down in this space and the acquisition clearly demonstrates the vision that Microsoft is building with Nuance – a vendor that has made speech recognition, text to speech, conversational AI the foundation of the company. This is a brilliant move by Microsoft in the Conversational AI space and a win-win for both companies.

This move could also mark further inroads for Microsoft into the contact centre space. With Teams now being integrated into contact centre technologies, working with large customers using speech and conversational AI, Dynamics 365 could herald the start of more acquisitions for Microsoft to bolster a wider customer engagement vision.

The Conversational AI war is heating up and various other cloud vendors such as Google and AWS are starting to get aggressive and have made investments in recent years to enhance their Conversational AI capabilities. Google Dialogflow has been seeing rapid uptake and they now have deep partnerships with Genesys, Avaya, Cisco and other contact centre players. Microsoft coming into the game and acquiring a company with years of history and IP in the speech space, demonstrates how the cloud battle and the war between Google, Microsoft and AWS is heating up in the Conversational AI. All of a sudden you have Microsoft as a powerhouse in this game.”


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Whitepaper – Think Your Business Offers an Omnichannel Experience? Think again!

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Prioritise your Customer Experience spend for faster Business Growth

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The past twelve months have been tough. Most businesses in Singapore (68%) still haven’t seen revenue recover to pre-pandemic levels. Many budgets are down and you are likely to have a long list of spending options that might help you grow revenue and pull your business out of the pandemic-induced slump. Even if your business is doing well, the pressure on budgets is real.

Businesses in Singapore have not recovered from the pandemic

Increasing your CX Spend

Despite the pressure on budgets Ecosystm data makes a strong case to not cut your customer experience (CX) spend! Businesses in Singapore that are cutting their CX spend are less likely to return to growth, more likely to be competing on price (hence cutting margins), not focused on their digital and omnichannel customers, and have lower levels of innovation. Funnily enough, these are also the businesses with complex, legacy systems which need more focus to provide an improved CX! To be quite frank, businesses in Singapore who are cutting CX spend are setting themselves up for failure. With other businesses increasing CX spend, the gap between the customer experiences will grow to a point where customers will leave and it will be hard to catch up.

Prioritising your CX Spend

So now that you have secured your CX spend, where will you get the biggest bang for your buck? Let’s look at where businesses in Singapore are focusing their CX initiatives in 2021.

Offering an omnichannel experience. Your customers expect more than just a great digital experience – they want the right experience at the right touchpoint. The CX leaders in Singapore (who, unsurprisingly are often the market leaders) are already offering great omnichannel experiences, so this is quickly becoming about catching up – and not about getting ahead. Providing a consistent, personalised, and optimised experience across your digital touchpoints needs to be a top priority for your business today. If you are not offering conversational commerce solutions, start that strategy as soon as possible – you need to be where your customers are today. Extending this to physical channels and broader ecosystem partners should also be on your agenda.

Improving knowledge systems. Your knowledge systems don’t do what they say on the box. They don’t provide answers to questions – for employees or customers. In fact, if your customer service agents get asked a question they don’t know the answer to, their number one source for answers is actually their colleagues or team leaders – NOT the knowledge management system! Start investing in systems – or ideally a single system – that help your employees get better, faster answers to questions. Make sure that the system is providing the same answers to both your employees and your customers across all touchpoints – physical and digital.

Where do Customer Service agents go for answers

Migrating customer service platforms to the cloud. Over half the businesses in Singapore that we assessed have this as a top CX priority. Cloud solutions offer faster time to value, lower management costs, give access to more regular improvements and often provide the ability to easily integrate with partners who offer product extensions and customisations. This trend will continue in 2021 and 2022 as more businesses realise that their legacy customer service or contact centre platform is inhibiting their ability to innovate their customer experience. These systems also help businesses to stay compliant and reduce the reliance on internal IT – which has traditionally struggled to keep up with the fast-changing nature of the contact centre and customer service teams.

Reasons for Adopting Cloud Customer Service solutions

Investing in AI and machine learning. Many businesses are using AI to provide the personalised and optimised customer experiences they aspire to. AI and machine learning are allowing businesses to create personalised offers, offer a next-best action and automate services. Advanced banks in Singapore can create interest rate offers for each individual customer based on their credit profile and history. 46% of businesses in Singapore are already using AI to offer recommendations for customer service agents, 44% to optimise or test messaging and campaigns and 43% to provide faster, more accurate access to information and knowledge. 18 months ago, AI was a business differentiator – allowing your business to create a stand-out CX. Today AI is quickly becoming a standard practice – the battle now is around using AI to create personalised and optimised experiences.

A great customer experience will be the most important factor in lifting your business to pre-pandemic growth levels and helping your business remain competitive in today’s tough business conditions. When it comes to CX, there is no such thing as “saving your way to growth”.


Your opportunity to drive greater business success lies in your ability to better win, serve and retain your customers. Refresh your customer strategy and capability today to make 2021 an exceptional year for your business.

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The rise in Conversational Commerce – meeting customers on their terms

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Customer needs are changing. Quickly. In 2020 having a great digital strategy went from being a nice-to-have to an absolute necessity. And in 2021, businesses that have great omnichannel experiences will go from a small minority to a majority as customers demand that they are served on their terms in their chosen platform. Only 14% of businesses in Singapore offer a complete omnichannel experience today – serving customers on their terms regardless of the location or platform (Figure 1). These businesses are setting the benchmark that the rest of the market needs to meet soon.

Singapore Businesses Struggle with their Omnichannel Strategy

The Growing Importance of Social Media in Delivering Customer Experience

Chat and messaging are quickly becoming the normal way to interact with businesses – the view of a few years ago that “no one wants to chat with a bot” has quickly turned around. Now virtual assistants and chatbots are the second most important self-service channel for businesses in Singapore (Figure 2).

The growing relevance of Virtual Assistants and Chatbots

In fact, Zendesk’s global study shows that most customers (45%) use embedded messaging over social messaging apps (31%) and text/SMS (20%). That might be great for self-service, but for commerce, boundless opportunities exist to move to where the customer lives, communicates, and socialises today.

Smart businesses understand that customers spend their lives in other chat and social media platforms – such as Facebook Messenger, TikTok, Instagram, WeChat, Discord and WhatsApp. More customers expect to be served in these channels; they expect to be able to transact with their brands of choice. Why should they go to a mobile banking app to find their balance? Why can’t they get it in WhatsApp? They are often learning about the next Jordan or Yeezy shoe drop from their social network in Messenger – so why not transact with them there? Consider all your own personal WhatsApp, Messenger and other messaging platform groups discussing social activities, sporting teams, school activities or the latest fashion – these are ALL opportunities for commerce (Figure 3).

Number of Monthly Active Users on Social Media Platforms

And there are use cases now. Airlines – such as KLM and Etihad Airways – are engaging customers on WeChat, Kakao Talk, and WhatsApp, helping them reschedule flights and answering customer service queries.  Telecommunications providers are allowing customers to raise issues on messaging platforms – and are also using them to upsell and cross-sell new services. Transportation providers are making it easier to find a car or the the next scheduled bus right there in the messaging platforms. Retailers – such as 1-800 Flowers and Culture Kings – are not only serving customers but finding new customers on these messaging platforms.

Going beyond the messaging platforms, businesses are also looking to serve customers on their smart devices – such as Amazon Alexa/Echo and Google Nest/Home devices. Alerting customers to order updates, shipping details and product promotions is becoming standard practice for leading businesses. Digitally-savvy banks are allowing customers to not only track their balance but also make transfers and payments using these smart platforms.

Customers are more comfortable with these conversational commerce options – and they actually expect you to offer such services on your site, in your app, on their smart devices, and on their messaging platforms of choice. Your ability to provide outstanding customer experiences will not only be your ticket back to revenue growth but the recipe for long term business success. Meeting customer needs on their terms is a good place to start.

Delivering a Personalised Conversational Customer Experience

Customer experience (CX) decision-makers will have to rethink how they approach building richer CX capabilities to deliver personalised conversational interactions with customers.

Messaging should become part of a wider AI, Data, and Mobile strategy. Contact centre teams might feel that this is too ambitious a project and would prefer to continue to serve customers through the more traditional channels only. So, it is important to identify the key stakeholder/s who will drive the initiative. And the contact centre team should work with the Digital, Innovation and Marketing teams.

Designing the mobile experience and in app messaging for CX should have some of the following features:

  • Ability to click a button to request for a service or escalate an issue that will, in turn, result in the company contacting the customer either by messaging or calling.
  • Giving customers the option to contact through popular messaging platforms such as Facebook Messenger, WhatsApp, LINE, WeChat, and others. Unifying these systems in a single interface that integrates with your customer service application is best practice.
  • Having one single interface to manage and make payments – within the app itself or on the social messaging platform. Conversational commerce is about creating an ongoing relationship with customers throughout the entire customer journey. Don’t just focus on the sale or the post-sales experience – customers expect to be able to interact with your business from their platform of choice regardless of their need or stage in the customer journey.
  • Embed deep analytics into the communication services to help the organisation better deliver a personalised CX.
  • Ensure you have a solid, unified knowledge management interface at the backend so that all questions lead to the same answers regardless of channel, platform or touchpoint.

Your opportunity to drive greater business success lies in your ability to better win, serve and retain your customers. Refresh your customer strategy and capability today to make 2021 an exceptional year for your business.

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Ecosystm Predicts: The Top 5 Retail & eCommerce Trends for 2021

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The Retail industry has had to do a sharp re-think of its digital roadmap and transformation journey – Ecosystm research shows that about 75% of retail organisations had to start, accelerate, or re-focus their digital transformation initiatives. However, that will not be enough as organisations move beyond survival to recovery – and future successes. While retailers will focus on the shift in customer expectations, a mere focus on customer experience will not be enough in 2021. Ecosystm Principal Advisors, Alan Hesketh and Alea Fairchild present the top 5 Ecosystm predictions for Retail & eCommerce in 2021.

This is a summary of the predictions, the full report (including the implications) is available to download for free on the Ecosystm platform here.

The Top 5 Retail & eCommerce Trends for 2021

  1. There Will Only be Omnichannel Retailers

The value of an omnichannel offer in Retail has become much clearer during the COVID-19 pandemic. Retailers that do not have the ability to deliver using the channel customers prefer will find it hard to compete. As the physical channel becomes less important new revenue opportunities will open up for businesses operating in adjacent market sectors – companies such as food and grocery wholesalers will increasingly sell direct to consumers, leveraging their existing online and distribution capabilities.

Most customers transact on mobile device – either a mobile phone or tablet.  New capabilities will remove some of the barriers to using these mobile devices. For one, technologies such as Progressive Web Apps (PWA) and Accelerated Mobile Pages (AMP) will provide a better customer experience on mobile platforms than existing websites, while delivering a user experience at par or better than mobile apps. Also, as retailers become AI-enabled, machine learning engines will provide purchase recommendations through smartwatches or in-home, voice-enabled, smart devices.  

  1. COVID-19 Will Continue to be an Influence Forcing Radical Shifts

In driving the economic recovery in 2021, we will see ‘glocal’ consumption – emphasis on local retailers and global players taking local actions to win the hearts and minds of local consumers. There will be significant actions within local communities to drive consumers to support local retailers. Location-based services (LBS) will be used extensively as consumers on the high street carry more LBS-enabled devices than ever before. Bluetooth beacon technology and proximity marketing will drive these efforts. Consumers will have to opt-in for this to work, so privacy and relationship management are also important to consider.

But people still want to “physically” browse, and design aesthetics of a store are still part of the attraction. In the next 18 months, the concept of virtual stores that are digital twins will take off, particularly in the holiday and Spring clearance sales. Innovators like Matterport can help local retailers gain a more global audience with a digital twin with a limited technological investment. At a minimum, Shopify or other intermediaries will be necessary for a digital shop window.  

  1. The Industry will See Artificial Intelligence in Everything

AI will increase its impact on Retail with an uptake in two key areas.

  • Customer interactions. Retail AI will use customer data to deliver much richer and targeted experiences. This may include the ability to get to a ‘segment of one’.  Tools will include chatbots that are more functional and support for voice-based commerce using mobile and in-home edge devices. Also, in-store recognition of customers will become easier through enhanced device or facial recognition. Markets where privacy is less respected will lead in this area – other markets will also innovate to achieve the same outcomes without compromising privacy but will lag in their delivery. This mismatch of capability may allow early adopters to enter other geographic markets with competitive offers while meeting the privacy requirements of these markets.
  • Supply chain and pricing capabilities. AI-based machine learning engines using both internal and increased sources of external data will replace traditional math-based forecasting and replenishment models. These engines will enable the identification of unexpected and unusual demand influencing factors, particularly from new sources of external data. Modelling of price elasticity using machine learning will be able to handle more complex models. Retailers using this capability will be in a better position to optimise their customer offers based on their pricing strategies. Supply chains will be re-engineered so products with high demand volatility are manufactured close to markets, and the procurement of products with stable demands will be cost-based.
  1. Distribution Woes Will Continue

Third party delivery platforms such as Wish and RoseGal are recruiting additional international non-Asian suppliers to expand their portfolios. Amazon and AliExpress are leaders here, but there are many niche eCommerce platforms taking up the slack due to the uneven distribution patterns from the ongoing economic situation. Expect to see a number of new entrants taking up niche spaces in the second half of 2021, sponsored by major retail product brands, to give Amazon a run for their money on a more local basis. 

As the USPS continues to be under strain, delivery companies like FedEx in the US who partner with the USPS are already suffering from the USPS’s operational slowdown, in both their customer reputation and delivery speed. In 2021, COVID-19 – and workers’ unions – will continue to impact distribution activities. Increased spending in warehouse automation and new retail footprints such as dark stores will be seen to make up for worker shortfalls.  

  1. China’s Retail Models Will Expand into Other Markets  

China’s online businesses operate in a large domestic market that is comparatively free of international competitors.  Given the scale of the domestic market, these online companies have been able to grow to become substantial businesses using advanced technologies. All the Chinese tech giants – among them Alibaba, ByteDance, DiDi Chuxing, and Tencent – are expanding internationally.

China’s rapidly recovering economy puts those businesses in a strong position to fund a competitive expansion into international markets using their domestic base, particularly with their Government’s promotion of the country’s tech sector. It is harder to impose restrictions on software-based businesses, unlike the approach that we have witnessed the US Government take for hardware companies such as Huawei – placing constraints on mobile phone components and operating systems.

These tech giants also have significant experience in a Big Data environment that provides little privacy protection, as well as leading-edge AI capabilities. While they will not be able to operate with the same freedom in global markets, and there will be other large challenges in translating Chinese experience to other markets – these tech players will be able to compete very effectively with incumbent global companies. Chinese companies also continue to raise capital from US stock exchanges with The Economist reporting Chinese listings have raised close to USD 17 billion since January 2020.  


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