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BEYOND DIGITAL:
LIVING ON THE EDGE
For consumers, the world used to be a simpler, more binary place. Platform companies sold online. Brick-and-mortar retailers sold through physical stores in the real world.
Everyone, for a while, knew their place. But today the lines demarcating the physical and digital worlds are blurring. We’re seeing companies like Amazon, Alibaba and Apple aggressively grow their physical retail presence. But the digital natives’ incursions into the real world show no sign of stopping at retail. More and more platform companies are evolving their business models to take them far beyond their digital roots. Think about how Amazon Alexa and Google Home are making themselves indispensable assistants in consumers’ homes. Or what about Alphabet’s launch of its driverless taxi service, Waymo One, in Arizona?
These companies have large and loyal online user bases. So does the success they’ve enjoyed in the digital arena guarantee an easy transition to winning in the physical world? Not necessarily. Recent research by Accenture reveals several challenges lie ahead. We’ve also identified the key factors that will determine success in a digital + physical + human future.
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BRINGING DIGITAL, PHYSICAL AND HUMAN TOGETHER
“a whole generation of consumers is now unaware of a pre-internet world
A number of clear trends have helped to drive the ceaseless growth of platform companies during the last few years. Faster connectivity and smartphone adoption are approaching ubiquity. Social platforms have become ever more enmeshed in the fabric of society. And a whole generation of consumers is now unaware of a pre-internet world. No less significant has been the expansion of many digital-born businesses beyond their original domain. For example, Google and Snap have both designed and launched physical devices, including smartphones,
Digital experiences: through digital endpoints such as smartphones and PC screens, smart speakers and AR / VR equipment.
Physical experiences: through physical environments, smart appliances, connected products and vehicles.
Human experiences: through representatives, either employed by the company or acting through an agency model on behalf of the company.
smart speakers and smart glasses, with some moves proving smarter than others. Uber’s expanded into not only ferrying people and delivering food, but also providing the centralized kitchens that restaurants need to cater for online diners. Facebook acquired Oculus to provide virtual reality headsets. And Amazon has moved well beyond e-commerce, through physical stores (Whole Foods), physical devices (Echo), and human-centric services such as Amazon smart home advisors.
New services like these reach users and interact with them across three distinct sets of Edge Experiences:
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Critically, it’s how these Edge Experiences are combined to create a relevant service that gives companies a chance to differentiate in an increasingly crowded marketplace. For example, when a diner orders food delivery from an app, receives it on their doorstep and interacts with the delivery person, they are using a service that includes all three Edge Experience elements: digital, physical and human.
THE VIEW FROM THE CUSTOMERTo get a clearer picture of how consumers view the ever-evolving world of Edge Experiences, Accenture recently conducted a major survey. In general, consumers appear to support their favorite platform companies’ plans to move beyond their digital boundaries. But a closer look reveals some nuances behind that generally favorable reception. Below we highlight some of the key findings that should give platform companies food for thought as they plot their route to the edge and beyond.
About the research Accenture carried out an online survey in North America of 1,500 consumers between the ages of 18-65.
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“digital is seldom the most important criteria consumers apply when judging a service
of consumers say their rating of a person after an interaction directly impacts their opinion of the company
All too human
Consumers clearly are embracing many of the new Edge Experiences being offered from digital players. But it’s by no means an all-encompassing welcome. Consumers’ assessments of these experiences shows that digital is not, and in fact, is seldom, the most important criteria they apply when judging a service. If convenience is what consumers want most, digital wins. For instance, 80% of them say the digital element is the most important consideration for ordering a monthly clothing subscription delivered to the home. But when it comes to, say, click and collect services, consumers rate the physical element (e.g., the convenience of a locker location) as the key factor. What about the human element? That wins out for consumers using a ride-sharing service. Obviously, successful Edge Experiences depend on a carefully curated mix of all three elements: digital, physical and human.
Unsurprisingly, whatever the platform company, the people providing its services on the ground – for example, drivers or delivery staff – are its public face and influence the wider brand perception. Almost 50% of consumers say that a rating for a driver or delivery person after an interaction directly impacts their overall opinion of the company. That creates a whole new area that digital brands need to master. If they have a workforce out in the real world representing their brand and services to customers, they have to be able to make sure that their workforce consistently makes the right impression.
And those impressions will have a small but nevertheless material impact in terms of consumers’ willingness to continue using a specific service. Just over a quarter (28%) say that they have decreased their use of a platform company on the strength of an unsatisfactory human interaction. Over a third (35%) say they’re more inclined to use a service after a positive personal interaction.
50%
Digital mixology: curating experiences
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expect more from platform companies than from their traditional competitors
Limits of digital trust
Smartphones rule; voice is getting louder
Most consumers entering a new retail experience provided by a platform company bring the same expectations as they carry through the door of an established bricks-and-mortar retailer. Consumers welcome more opportunities to interact with a brand. In fact, nearly 40% of them say that they would be interested in having a smart home with all devices and services provided by a single brand.
But that welcome is far from open-ended. For example, almost half of all consumers say that they would have safety concerns riding in a car provided by a platform company, and 4 out of 10 say that they would not trust a social media company’s home devices. Digital brands that are famous for disrupting a market have also raised the bar for consumer expectations for interactions in the physical world. 43% of consumers say they expect more from these platform companies than from their traditional competitors.
There’s little sign that today’s digital devices will disappear from consumers’ lives any time soon. Smartphones rule across all age groups and in every area of activity – social media interactions, ride-sharing, entertainment and commerce – look set to remain the dominant go-to device in the medium term. But it’s a different story for desktop and laptop PCs. While these remain relatively popular among older users (46+ years), younger consumers (18-25 years) are moving on fast.
43%
Over the next 12 months voice will more than double as the preferred way to hail a ride
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want a single device to access all services
Across all four areas of activity, demand for voice is real and growing. While still at a relatively low level of adoption, this category displays the highest predicted growth of all, for example, more than doubling over the next 12 months as a preferred way of hailing a ride. However, people don’t want voice everywhere. We found that just 31% said they’d like ‘always-on’ services inside the home. What about AR and VR? Are they the next big thing? Our survey suggests that their time is yet to come. Younger users are most enthusiastic about these technologies. 40% of 18-25 year-olds say augmented reality is an important feature for their next smartphone, almost double the number of 36-55 year-olds who say it matters to them.
The one thing that all consumers say that they want more than anything else? A single device that they can use to access all their favorite digital services.
26-35 year-olds want to use voice more than 18-25 year-olds do
A generational digital divide? Maybe notAcross the board, it won’t come as a surprise that the youngest consumers are generally more enthusiastic about digital and new ways to interact with experiences. But there are exceptions. For example, more 26-35 year-olds want to connect to talk to their services more than they do today – by a significantly higher proportion than 18-25 year-olds. And more consumers between the ages of 26-35 want to use a single device for everything than do their younger counterparts.
63%
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LOYALTY POINTSEXPLORING FUTURE SCENARIOS
Doorstep of the future As well as asking consumers about the Edge Experiences they use today, we also wanted to find out about some possible experiences that may be offered very soon. Specifically, we set out to explore how comfortable consumers might feel about the types of providers who may offer them. The first scenario we tested— ‘the doorstep of the future’—would connect a consumer’s front door to enable home delivery in their absence. A delivery person would be able to enter the home using a one-time code and would be tracked with a smart camera system and alert the consumer once they had left. 66% would favor a digital retailer to provide this service, while only 46% would be happy with the same service provided by a platform company.
Future retail Future retail was the third scenario. This links shoppers’ store visits with their buying habits and smart devices in the home to offer a uniquely personalized retail experience. 61% of consumers would prefer that service to come from an established grocery chain, the leading choice. And 38% said that they would spend more on a service like this. The least popular provider here? A platform-first business.
These scenarios show that loyalty matters – but only up to a point. Consumers may be very happy logging into their social media platform every day, but they would not necessarily feel comfortable interacting with them in other ways that blend the line between physical and digital.
Personalized riding Our second concept was a travel experience that starts with a voice assistant calling a ride, personalizing every journey to a user’s known preferences and schedule, including communication options and automated refreshment orders and so on. Overall, 59% of consumers liked how this offer sounds, with 27% saying they’d pay extra for it. Interestingly, while digital retailers were the preferred provider (54%) for this service, traditional car rental companies were also seen as strong contenders (48%).
IMPLICATIONS FOR PLATFORM COMPANIESOur research overwhelmingly shows that consumers are hungry for and willing to explore new experiences. But digging deeper, we found that their perceptions and preconceptions create a more complex and differentiated future marketplace.Therefore, it’s vital that platform companies considering or launching new services have a very clear and granular understanding of their target market. Every company in this situation should position themselves for success by assessing at least these basic questions:
What can they learn from their previous beyond- digital ventures?
What is their customer base telling them in terms of how far they will allow them to move?
Which elements of edge services will be most important / valuable in their new service design?
How can they test and learn intelligently? How can they maintain trust, security and quality as they scale out the new service? How can they achieve scale and availability in a shared asset / agency model?
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About Accenture
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions — underpinned by the world’s largest delivery network — Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 469,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.
ROBIN MURDOCHGlobal Managing Director Accenture Software & [email protected]
KEVIN COLLINSManaging Director Accenture Software & [email protected]
Copyright © 2019 AccentureAll rights reserved.
Accenture and its logo are trademarks of Accenture.
This document makes reference to trademarks owned by third parties. All such third-party trademarks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such trademarks is intended, expressed or implied.
If you want to learn more about the primary research discussed above, or about the services that Accenture offers clients to help them as they evolve their Edge Experiences, please contact:
MARTIN STODDARTPrincipal Director Accenture Software & Platforms [email protected]
