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8 experiencetransforming

trends for 2018

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8 For 2018

2018 marks our 20th anniversary in the digital transformation business and we see no relent in the pace of industry change on the horizon.

We see new services and experiences backed by cheaper, smarter AI, delivered in a way that we hope will lead to a fairer internet.

We combined the views of our digital transformation teams, distilled our research partners predictions and correlated this with what we’re seeing on leading brands roadmaps to formulate 8 areas we feel will make the biggest impact in how we interact with digital experiences.

For each area we look at what the From and To will be for the experience, and what is the tipping point for 2018.

Enjoy.

# Bots With PurposeFrom: Gimmick-driven chatbot trialsTo: ”Purposeful bots” with real impact

2018 Tipping Point: Apple + Facebook innovations expand brand chatbots beyond conversation to support people across their journeys 1

People are now used to chatbot interaction

In 2018, 10% of purchase decisions will be guided by a platform agent(Source Forrester 2017 - 2018 predictions)

Chatbots will power 85% of all customer service interactions by the year 2020 (Gartner)

By 2020, the average person will have more conversations with bots than with their spouse.(Gartner) 0

32,000

±100,000

Jan 2016 Sep 2016 Apr 2017

Chart: Number of bots deployed on Facebook messenger. Source Facebook 2017

The majority of chatbots in 2017 were poor experiences

A focus on conversation not people's goals meant the majority of chatbot experiences were ineffective or irrelevant.

For example, the now defunct Pret A Manger bot which focused on menus added no value

NHS Wellness

Visabot Immigration services

We’ve seen a small number of chatbots emerge that made an impact helping people their achieve goals

2018 tipping point: Facebook and Apple extensions allow brands to deliver stronger purchase and service journeys

Invite others to services. Loop

a bot into a conversation

Improved discovery

and payment journey

Service and support journey automation

e.g. for booking appointments

Leading Example LEGOGift Finder that simplifies choice across the purchase journeyLEGO released a version that helps users find a gift in the run up to Christmas.

Questions are based on country, age of recipient, their personality and your budget.

Push to purchase and a discount code for free shipping help close the sale.

Example: DiageoWhisky Matcher demystifies a complex categoryDesigned to help people navigate the sometimes steep learning curve of whisky, in less than 6 questions you can find the perfect Single Malt Whisky for you or as a gift.

Questions quickly draw out your taste preferences, budget and personality - backed by 4 years of taste research. Learn more about its heritage, how to drink it, have it delivered to you the next day with Amazon Prime.

Whisky MatcherDemo Time

To try the chatbot click this link.(Or search Friends Of Classic Malts on Facebook Messenger)

Case study video link https://youtu.be/omA8rIbw94Q and case study here http://www.whiskymatcherbot.com/

2018 will see these services break free of social channels and onto brands websites

Example: The North Face + IBM WatsonExample: Mermaid Pillow company

# Home Sweet SmarthomeFrom: 'Alexa, play that track' music and information servicesTo: Brands developing services that run your home life.

2018 Tipping Point: Consumer adoption goes mainstream. Home hub tech connects brands to provide new service experiences

2

Smart speaker adoption has outpaced the first years of iPhone sales.Amazon’s Echo dot was 2017 best selling seasonal item on All of Amazon

Dec 2017 most downloaded app

50% of homes predicted by 2020 to have a least one smart speaker

In 2017, 35.6 million Americans will use a voice-activated assistant device at least once a month. That’s a jump of 128.9% over last year (eMarketer)

Amazon’s Echo speaker will have 70.6% of users in 2017, with Google Home at 23.8% of the market (eMarketer)

The number of users of virtual assistants in the U.S. will grow 23.1% in 2017 (eMarketer)

60.5 million Americans will use Siri, Cortana or another virtual assistant at least once a month in 2017 (eMarketer)

33 million voice-activated devices will be installed in the U.S. by the end of 2017 (VoiceLabs)

56% of U.S. households own and use a smart speaker (Technalysis Research)

50% of smart-speaker-owning households use it at least daily

2018 tipping point:

Smarthomeusage moves towards retail and home automation

24% of Amazon Alexa owners have used it to buy something through a third party app. Source: Forrester 2017

Brands partner with smarthome tech providers creating new opportunities for services

Sonos

BMW

Smarthome technology embedded in brand servicesExample: Insurance startup Neos

Home insurance and mortgage providers will promote safety monitoringThat's why two US insurance companies, Liberty Mutual and American Family, just started subsidizing Nest Protect smoke detectors in return for monthly confirmation that the homeowner is keeping them on and connected to Wi-Fi.

Citibank will morph into or partner with home maintenance services firms that help property owners enjoy, monitor, and maintain their home using smart home devices as part of the overall package, rather than just offering today's arm's-length financing and catastrophic insurance.

The ultimate trust challenge for smart homes: the front door

Example: Amazon Key opens up new home automation abilities, if they can overcome trust concerns

Link https://youtu.be/wn7DBdaUNLA

# Reality Recognised From: Rabbit ears Snapchat lens To: Mobile tech that recognises people and products

2018 Tipping Point: AI comes baked into the majority of new smartphones (Apple’s ARkit, Google’s ARCore) and recognise the world around them, really REALLY quickly.3

A step change in the speed to recognise context products, people, sounds

Image recognition services on Facebook and Apple's IPhone X inhandset abilities make understanding people and products around us faster and simpler.

"I think this is very much like in2008, when we fired the gun in theoverall App Store … and I think it will just get bigger from here." Tim Cook on Apple’s Augmented Reality plans

Topology ‘The best fitting glasses ever’

From recognising products to recognising people

Topology Eyewear is an augmented reality app providing custom-fit glasses from a 3D scan of your face.

Link https://youtu.be/LzoWqKwK4ao?t=4

Snapchat have begun to recognise objects in camera

Snapchat recognises objects and then suggests relevant filters - for a video of a dog, show the user a list of canine inspired filters.

This is relevant for brands as it opens up opportunities to promote, buy and provide information based on what’s seen in camera

Transforming the experience from phone to instore

The step change will not be limite to mobile. From the lower cost of installations we see in mobile innovation moving into the retail theatre quickly

(Example: Mac and Modiface AR mirror)

Example: Lego instore displays help visualise the final product

# Powerful PersonalisationFrom: Ads that follow you To: Services built for you

2018 Tipping Point: Cheap, accessible AI that enablebrands to offer bespoke services at scale4

Cheaper, accessible AI enables deep personalisation

Brands are experimenting with what was once startup territory in AI personal shopping services

Brand Tuesday: a new stylist service from M&S apes cutting edge personalised shopper approach from startups like Thread.com

Orders through Tuesday are 4x M&S’s average basket value

Finery - your wardrobe recommendations built from your email receipts

Adapting a shopping golden rule ‘ Only buy something if it goes with 3 things you already own’ Finery have developed a ‘wardrobe operating system’ that recommends fashion based on all your purchases

Clever closetsCher Horowitz’s digitised wardrobe in 1995’s Clueless – the stuff of many a teenage girl’s dreams – becomes a reality thanks to Finery, a “wardrobe operating system” launched earlier this year in the US by Brooklyn Decker and Whitney Casey. The online system allows you to upload garments and purchases to create a virtual wardrobe on a computer or smartphone, for a digitised archive that will aid in planning your outfits. The service can pull data from emails of receipts for items bought online for a fully automated process.

Brolly: your personal insurance assistant to tailor an insurance policy for you

The service analyses your existing insurance and analyses gaps or duplication in coverage, and can research the market on your behalf so you don’t need to keep going back to price comparison sites

Payment EmpowermentFrom: Finance service frustrationTo: Payment freedom

2018 Tipping Point: PSD2 standard drives open and social banking whilst disruptor banks hit mainstream. Their offerings go beyond user friendly apps into useful services for your financial life.

#5

Customer Experience is a increasingly important factor in switching bank

...and digital service is a key part of that decision. It's important to note there are no 5/5 customer experience scores for traditional banks

Source Forrester CX Index 2017, UKSCI 2016

Customer Experience

Score

Customer Experience

Rank

Net Customer Switching (July 16)

Nationwide 4/5 1 +28,000

Santander 4/5 2 +28,000

NatWest 4/5 3 -16,000

Lloyds 4/5 4 -15,000

Halifax 4/5 5 +29,000

Barclays 3/5 6 -22,000

HSBC 3/5 7 -16,000

Example: Cleoan AI powered banking assistant that helps manage your finances.

Modern open banking in Facebook messenger

Link https://youtu.be/zrdh4I1n4I8?t=15

Monzo’s marketplace feature shows how a bank can help beyond making payments

“let’s say you go to a jeweller to buy an expensive gift, and pay for it using your Monzo card.

Imagine being able to insure it from within the app in a single click, so you have peace-of-mind before you even leave the shop.”

Source Monzo November 2017

Clarity Moneygoes beyond money management to getting the best deals and canceling unused services

helps manage

Link https://youtu.be/m1jeXEP2HYw?t=21

See it. Buy it. Venmo, Paypal and Facebook Messenger make payment within social channels simple for brands

Venmo transactions top 5.6bn in Q4 2016 Messenger payments launch late 2017

# DeliveryDisruptionFrom: Delivery on the brand’s termsTo: Delivery on the consumer’s terms

2018 Tipping Point: Brands partner up with the autonomy economy to provide more people centric delivery services. 6

Innovator partners - and white label interfaces - make it easier than ever to offer consumer-centric distribution

Unilever + Quiqup: Ingredients on demand within the hour

Deliveroo “Edition” Kitchens: Fufilling consumer demand from behavioural data insights

Amazon Go rollout to 8 stores will make mainstream brands rethink the queuing experience

# An Accountable InternetFrom: Data breaches, Trolls, bullying, reactive moderationTo: Fairer communities and services

2018 Tipping Point: GDPR forces brands to take data privacy seriously

7

2017 was a year of brands and tech giants saying sorry

From fake news to data breaches, Privacy issues and Adserving on questionable content

For 2018 accountability is a key theme

Source: WARC 2018 Toolkit

In 2018 GDPR comes into effect

€20m or 4% of revenue (whichever is greater)

Brands will face more consumer scrutiny on their data policy - leaders like Apple have already raised the game with their transparency on how privacy is handled

Example: ‘Bumble for Business’ helps create a fairer internet

“Swipe right for equality”

We expect to see a rise in services that take accountability, privacy, a fairness and put them at the heart of their behaviour. Example here of mobile app Bumble takes the same equality approach it brought to dating into the business networking world challenging LinkedIn

# Transformationwith TeethFrom: Brands attempting to do ‘What’ GAFA (Google, Apple, Facebook, Amazon) doTo: Adopting ‘How & Why’ GAFA operate

2018 Tipping Point: Traditional brands with transformative outlooks take on silicon valley giants

8

Example:Dominos show that traditional brands can adapt to digital transformation

Source quartz

Source, Quartz 2017

They did this by reframing their why and how to transform their business

Their tipping point

Domino’s as an “ecommerce company that happens to sell pizza”

They have transformed their brand experience with category leading innovations

Add innvoations examples from Dominos

One click

Bot

Ecomm journey

Partnership

Self driving (or is it???)

Leading .com experience

Zero click ordering mobile app

Voice and messenger ordering

Partnerships and autonomous delivery

How could the 8 transform your brand?

#1 Bots With Purpose

#3 Reality Recognised

#8 Transformation with Teeth

#7 An Accountable Internet8 ways

experienceswill

transform in 2018

#2 Home Sweet SmartHome

#6 Delivery Disruption

#4 Powerful Personalisation#5 Payment Empowerment

Could bots solve choice problems and make your product easier to buy?

Does recognising people and product open up opportunities for your brand?

What techniques can you apply to trial and scale new experiences?

How can your brand support a fairer digital experience?

What does this mean for you?

Is there a service opportunity with voice search enable smarthomes?

Are there niche delivery services to exploit?

Would cheaper and scalable personalised services solve help the lives of your consumers?

Does payment in social channels open up sampling and trial opportunities?

Happy 2018!

peter.moody@mullenloweprofero.com