12 business and technology trends shaping the ‘new normal’ – Consultancy.eu
As the world emerges from the pandemic, a range of trends are touted to disrupt the fundamentals of sectors and organizations – in the process shaping a ‘new normal’. Experts from The Next Organization share twelve trends that according to them will play an influential role in pushing the boundaries of economy, society, organizations and people towards new frontiers.
Shift in power
The ‘polarization of capital’ is getting stronger and China is becoming very dominant. Whilst the US remains the largest economy in the world today, China is rapidly taking over that role. Accelerated by Covid-19, China is expected to become the largest economy by 2028.
As part of this growth, China is expanding its influence in Europe. In 2020 the large majority of outbound Chinese M&A deals were European. Furthermore, targeted European Corona aid to countries such as Italy and Serbia, bought China international prestige, influence and support. In addition, many companies are very dependent on their Chinese trading partners. Their dependency is expected to increase further, with the ‘Belt and Road Initiative’: the new silk road.
To prevent Europe from lagging behind the US and China, the European Union needs to act as truly one union. Europe needs to build complementary partnerships regarding topics such as (work) migration, security and climate change. Such collaborations reduce risks and costs and accelerate growth by increased market power, removal of (trade) barriers and creation of jobs.
When European companies and countries work together, they remain competitive on a global scale and preserve their strategic autonomy.
This trend should not come as a surprise and has been around for a while. All of us actually already use a lot of artificial intelligence (AI) products and services in our day-to-day life. AI allows machines to mimic human intelligence and perform tasks while improving itself in the process based on the information gathered. Spam filters, personal assistants such as Siri and Google Translate’s language recognition feature are all frequently used AI services.
However, the current technology isn’t even close to its full potential. AI will cause a major revolution in almost all industries, by for example, lowering the CO2-footprint and decreasing operating costs through automation. Some companies announced that they plan to enter the market with more advanced AI-driven products.
This revolution shows that our future is largely determined by robots, machine learning applications and black box algorithms. This trend offers both opportunities, like possibly more efficient communication, and threats, like for instance biased discriminating algorithms. It concerns people, organizations and society as a whole.
How we take advantage of those opportunities and handle the related threats is something that will become apparent in the future. In any case, one thing is for certain: AI will not only affect organizations, but also have an impact on our day-to-day life.
Rise of social e-commerce
E-commerce increased tremendously during the Covid-19 pandemic. Building brand recognition is vital for e-commerce businesses to remain competitive during the ‘battle for the digital marketplace’.
Today, most companies use social media to build their brand, because studies say that 87% of the e-commerce shoppers believe they are able to extract ‘purchase’ insights from social media. Especially ‘millennials’ and ‘generation Z’ are more likely’ to get inspired through these platforms. So, the use of social media increased, which made platforms such as TikTok, Instagram, Twitter and Facebook more powerful channels for ‘social marketing’.
It is therefore expected that we will witness increasingly more of such ‘social e-commerce’ in the future.
Influencer marketing is a prime example of ‘social ecommerce’. ‘Influencers’ review products or services, endorse them and try to influence their followers to buy the endorsed product or service.
While most consumers dislike ads, they seem to enjoy being ‘influenced’ by a person they like or idolize. Therefore, influencer marketing has become a very viable strategy for different brands out there: the overall industry has grown from €1.7 billion in 2016 to €13.8 billion in 2021. With more corporate funding for content marketing and proven effectiveness, we can expect to be influenced even more in the future.
When the Covid-19 pandemic hit, life as we knew it changed. Boarders closed as well as retail facilities and offices. The pandemic resulted in a crisis leaving society in uncertainty. In times of crises, like this one, we find it difficult to break free from our current mindset when we reflect on past and future situations. Psychologists call this the projection bias.
If you look at actual behavior, we see a social rebound effect. What we lack now, we will want back to a greater extent when the corona crisis is over.
Social psychologists found that tragedies, disasters and health crises make us somewhat more aware of our own mortality for a period of time. Rationally, you would expect this mindset to make us a little more cautious, but the opposite is true. It turns out that it makes us more sensitive to everything that transcends our mortality. We ‘want to live again’, treat ourselves and are seeking thrilling experiences after being ‘stuck at home’ for the last two years.
You see this process reflected in society today. As indicated above, what we lack, we will want back to a greater extent. In the context of consumer behavior, this means a complete rediscovery of everything that was ‘just not possible’. And this is not only related to shopping sprees, expensive holidays or going to a restaurant.
We fall back on, and underpin the importance of, cultural traditions that make us feel comfortable. According to analysis in some European countries, shaking hands was normal for most people several weeks after the Covid-19 measures were reduced. Old traditions, such as shaking hands, will be back in no time.
Think global act local, again
The phrase ‘think global, act local’ is not new, but it is now more relevant than ever. It means taking responsibility of the health of the Earth by taking action locally and it directs all levels of society.
In 2000 Coca Cola made it their strategy to adapt marketing and operations on local customers. Since the past two years, ‘glocal’ has been relevant again, but now on many different levels. National lockdowns exposed many vulnerabilities and unfolded new necessities of being locally independent. At the same time they exposed the fact of international dependencies and therefore stressed the necessity of global cooperation.
Through international collaborations, vaccines have been developed at an unprecedented speed. This is setting new standards for other challenges that require global cooperation such as security, climate change, labour migration, and poverty reduction.
On the other hand, due to lockdowns and cargo ships being stuck, many realised how vulnerable international supply chains are. So, supply chains are redesigned with the goal to buffer local stocks and centralising the purchase of goods.
Besides that, there is a general urge to support local businesses as consumers recognize the importance from an economical, social and sustainable perspective. The new generation realizes that an individual has an impact on the whole planet and therefore is determined to be ‘glocal’. So, they expect organizations and institutions to answer the local needs of customers and to contribute to the movement.
New rhythm of organizations
With the increasing technological innovations and the effects of the pandemic, the rhythm of the organization changes. New studies show more productivity when working from home. Rethinking how to execute work in the innovative context, unfolds in new opportunities.
Experts expect the impact of the internet of things and artificial intelligence on the function and environment of the hybrid way of working to be the biggest business trend for the next ten years.
This trend results in an increasing amount of smart offices across the globe. The biggest drivers of this trend may be vendors scaling out legacy systems and introducing smart connective systems. Companies and end-users have no choice but to go along with the developments. Although remote working was already underway before lockdowns caused by the pandemic kicked in, the government restrictions have prompted organizations to facilitate solutions that enable remote working.
Both organizations and employees embrace the positive effects of remote working, resulting in a reconsideration of the function of the office. Experts believe that the role of the office moves towards a social co-working space, where employees purposefully meet.
In rebalancing online and offline work, hybrid organizational models emerge, and platform business models become the point of departure. However, the success of the new rhythm and working methods depends on a firms’ goals.
A more personalised relationship with the customer is partly driven by the increase in online purchases, which have grown exponentially since 2020. With the help of omnichannel sales strategies, organizations are trying to win the competitive battle.
The need for a personal relationship is driven by organizations and consumers themselves. Digitalisation offers organizations the possibility of using analytics to gain more insight into the entire customer journey. On the other hand, consumers seek a personal approach that responds to their unique needs, regardless of the channel they choose.
It turns out that consumers who are omnichannel users, make more shop visits and recommend brands to friends and family more often. Investing in an omnichannel strategy is worth trying. However, the shift towards an on-demand and app economy calls for an evolution of the shopping experience. Complemented by digital developments such as artificial intelligence, the omnichannel shopping environment becomes even more personalised.
The accelerating development in personalisation of customer journeys offers opportunities for organizations that can differentiate themselves with their omnichannel strategy. It creates and delivers value for both consumers and own brand and therefore attracts and retains customers.
Since the pandemic, awareness of a healthy lifestyle has accelerated. Not only do older people appear to be susceptible to the virus, but the younger generation who are struggling with obesity and underlying diseases are also at risk. Since lifestyle is one of the most important factors, the focus on prevention and a healthy lifestyle has increased.
People try to encourage each other to exercise more and live healthier. But also challenges like how to cope with stress and the work-life balance, makes people more concerned with their mental health.
In the service industry, the changes that come with awareness for a more healthy living, are also implemented. Insurers are considering lifestyle-dependent policies and employers are focusing on the mental and physical health of their staff through various vitality and well-being programs.
This shift wherein consumers value quality over quantity with a focus on their health, disrupts various industries. High-quality local products and various gadgets to monitor overall health are becoming increasingly more popular. As a result, companies have to take a closer look at the content of their products and possibly redesign their strategy. This development offers companies and start-ups the opportunity to respond to new customer needs.
More than just an economy
Now that the current economy, which is based on infinite growth, is becoming less sustainable due to climate change, international conflicts and social discontent, a new economic school is gaining ground: More than just an economy.
An economy should no longer be ‘addicted’ to growth and fossil fuels, in which the selfish ‘homo economicus’ takes centre stage, but should be a sustainable and social economy in which human welfare, social connection and a flourishing nature go hand in hand. Hence, the supply and demand for sustainable products continues to rise, as does the number of consumers who are prepared to pay extra for sustainability.
Sustainable investing is also gaining momentum. Investments in companies which focus on the planet’s biggest challenges and operate in a sustainable and social manner, with responsible governance codes doubled since 2013. This shows that institutional investors, companies and individuals are committed to make the planet ‘inhabitable’ for the future generations as well. Furthermore, sustainable investments are expected to more than double in the next 7 years.
This demand means that it is possible to make a return on an investment, while contributing to a better world. The combination of companies which focus on sustainable products and services and investors willing to fund them, makes that we are truly moving to a new paradigm: More than just an economy.
Focus on talent and well-being
Nowadays, management teams of many companies do not only give their employees the rights and privileges they need. They go much further and find ways to improve the happiness and thus the entire well-being of their employees.
Worldwide, there is an increasing trend in the number of people suffering from burnouts. Currently, the number of burnouts has doubled during the corona crisis. People are struggling with loneliness, work-related stress and mental health issues. Working from home also plays a major role. It is more difficult to have an overview of the well-being of employees when they work (for the majority of the time) at home.
Awareness of the causes and consequences of burnouts and stress is increasing, and organizations are expected to set up the (home) working environment of employees in such a way as to prevent this as much as possible. The importance of mental and physical health is increasing for both individuals and employers.
Moreover, a study has shown that happy employees are about 12% more productive. To respond to employee needs and happiness, many companies are now focusing on finding a balance between employee growth opportunities, well-being and productivity. In doing so, they attract loyal, hard-working employees and reduce absenteeism and staff turnover.
In the past few years, the participation society increasingly developed. Consumers, as well as employees, want to participate and help each other more and more in organizational and daily life processes. Nowadays, many organizations are implementing a “think tank” in the form of a client council.
One of the reasons for the increase of the participation society is the Covid-19 pandemic. This gave rise to two kind of movements. The first were solidarity movements. For example, an online platform was created where people could sign up to provide free support to others in need. The second movement was the (online) sharing of knowledge between organizations and their customers, within organizations and between different organizations.
To keep in touch with customers, organizations want to involve consumers through, for instance, online panels. Customers can share their feedback and ask questions. Because of this online focus, it is easier for organizations to reach their target audience and to share and collect information. Informing the consumer in a more efficient and effective manner leads to fewer questions and higher customer satisfaction. This in turn leads to an improvement of the customer journey.
In addition, it has also proved very valuable for teams within institutions or between institutions to team up (online) and share information. By sharing, getting feedback or suggestions, but also by listening, learning and exploring, all parties can develop further and come out stronger.
Work, live, consume with meaning
For many, 2022 marks the year where they want to change their routines. Old habits were forcefully disrupted and thus many came to reflect on their life. With that, people became more aware of their actions and the impact those have on themselves and the environment around them. Once a person reaches the top of Maslow’s pyramid, they need meaning in their life.
In the US, a recent movement called ‘the great resignation’ has been identified. A huge number of people voluntarily quit their (successful) jobs in the past 1,5 years, all with the reason of doing something that they believe will make them happier. A big search for more meaning in daily life is reborn due to unfulfilling work conditions, new opportunities of remote working and insights in health challenges for people and planet.
Organization are being scrutinized and expected to take their responsibility to society. Not only employers, but also their products and services should ‘offer a meaning’. In the current market, where consumers have plenty of options to choose from, setting brands apart through a strong reputation and emotional connection with consumers is a must to find success.