Waves of Change: digitisation, psychographics, and hyperlocality

Posted on Sunday, 13 May 2012

If you dislike change, your're really going to hate being defunct. Because that is what is looming behind the choice to either adapt with the constantly changing business landscape, or not. Change doesn't care whether you like it or not. It happens without your permission, and the bad news is that 2012/2013 is shaping up to be another financial year of massive disruption. 

Here are three trends that present your organisation with either threats or opportunities depending on how you're positioning yourself along these waves of change.

The digitisation of everything

Cash is no longer king. Kids no longer have physical wallets, but transact via Google Wallet, iTunes, or PayPal. Digital access to music is more important than analogue ownership. Even downloading seems inconvenient in a world where streaming access via the cloud is replacing the need for physical storage. Your Yellow Pages goes straight to recycling, and Amazon currently sells 180 ebooks for every 100 analogue books that it retails. Meanwhile, Borders has gone bust, and Blockbuster is a distant memory because it didn't keep up with changing customer expectations for digital content. Kodak's moment lapsed this year as its largely analogue business model was finally dealt its death knell.

Ultimately, everything that can be digitised will be digitised. 

So, how does this affect your business model? 

It's evident that if you're a bank, a retailer, a record label, an artist, an advertising firm, a printer, publisher or production house, that you're going need to find new business opportunities that are focussed on adding value to your clients. 

Otherwise you're running the risk of exchanging analogue dollars for digital pennies, and inviting disruptive, non-traditional market players to compete for your market share.

Equally, though, this digitisation is disrupting industries whose products and services haven't necessarily been directly upended by this wave of change. Think about the pharmaceutical industry for example. At this juncture a pill cannot be replaced by 1s and 0s (albeit that future may not be too far away), but the digitisation of everything means that electronic health records, mobile communications with customers (payers, patients, and providers), and iHealth trends are going to abruptly shift the pharmaceutical business model.

What do you think are the implications for pharma companies that have traditionally relied on glossy printed brochures, analogue product packaging, and the physical prescription pad for branding?

Think about the financial advice or accounting industry. Here is a product or service that deals in numbers and dollars - something which can easily be digitised, and already is to some level. What value add can a financial advisor or accountant offer, that we cannot already receive online via our iPads? Data is abundant, and the low end of the profession will seriously struggle as digital software like Xero, Salesforce, and Shoeboxed change how we deal with future projections, sales figures, and physical receipts. The threat here is that if you're doing work that can be automated, digitised our outsourced to overseas, you'll really struggle for relevance. 

The opportunity here is to focus on building human relationships, adding value through thought leading education of clients, ensuring that advice is clearly communicated, and strategies are crafted and implemented in a way that is heavily focussed on client ROI. 

So what does this wave of the digitisation of everything mean for your industry and your organisation?

Debate this question with an agent provocateur at work:

• What touch points can be / can never be digitised?

• For both answers, list 3 opportunities for how this can provide an opportunity for better connecting with customers/clients.

Psychographics, not demographics

We're all high maintenance today. Social media is teaching consumers to expect tailored communications. Often these are disturbingly relevant to us based on our digital browsing habits.

Think about it for a moment. Have you recently seen an ad display in your Gmail account or on Facebook pitching you a product or service that is really relevant to your last email, search term, or status update? Someone is listening in to each and everyone of your digital conversations, and an algorithm is constantly tweaking bespoke advertisements designed to get your attention.

So what does this mean for marketers and communication professionals?

The old model of marketing was based on demographic segmentation. Demographics is based on statistical data relating to the population and particular groups within it, for example women aged 35-39 who live in Mosman, Sydney. This used to be quite useful as communications campaigns could be loosely tailored around a particular segment. However, today we are all generational and psychographic transvestites in the sense that we have become more eccentric, and demographic labels thus no longer stick. 

Many would be offended to be lumped together with a cohort based purely on age, gender and location. And social data shows that consumer behaviours are now so diverse, that demographics is dead. 

Rather than conforming to the popular stereotype of the latte sipping, Baby Bjorn-sporting Mosman mum, a 35-39 year old residing on the north shore could be a single, career-focussed woman, who enjoys triathlons, Japanese anime, Angry Birds, and has a secret penchant for marijuana and World of Warcraft. 

This information is now available to marketers, which makes a letter box drop to 35-39 year old women in Mosman a case of physical spam. 

Thus, for organisations to reach an ever-changing and ever more high maintenance consumer, you need to increasingly focus on psychographics - the study and classification of people according to their attitudes, aspirations, and other psychological criteria. This is where big data comes in, because with every touch of the keyboard, with every song you download, every page you like, every stumbleupon you dismiss, and each tweet you construct, you contribute to Big Brother's knowledge about you. 

While social ads have now become disturbingly relevant to us, their effectiveness is still being debated, because they have a certain stalker-ish feel. This presents opportunity for both digital and analogue cross-channel communications - through Personalised URLs and landing pages for targetted campaigns, or bespoke physical brochures with variable imagery and text tailored uniquely to you based on your recent Woolworths spend, Amex liabilities, frequent flyer points, and Facebook likes.

Because psychographics is replacing demographics as the primary segmentation mode, we are now dealing with segments of one. This has huge implications for how your organisation collects data, how it strategically maps customer behaviour, and for citizen privacy. 

More importantly, given that tailored communications are approximately 4 times as effective as static commications, smart organisations need to ask themselves the following question:

• where is the data?

• who can I partner with to access and use this data (in a legal way)?

• what communications providers can analyse that data, and turn it into meaningful, cutting-edge tailored communications?

The rise of hyperlocality

With every major wave of change, there is always a counter-trend. The faster the world moves for example, the more we have a need to reconnect by disconnecting and going slow. Equally, the more global our world becomes, the more we crave the hyperlocal. In a sense all business is local, and even though we are interlinked, hyperconnected and online 24/7/365, a computer interface can never really replace a human face. There is still no substitute for 'pressing the flesh', the conference hall-way conversations, or wine-stained rapport building. There may be one day, but we are simply not there yet. 

Hyperlocal holds one of the key attributes to great marketing - story. This is why Champagne can only be called Champagne if it's from Champagne, and why Aussie and Californian sparkling wine producers have never been able to achieve the premium brand allure of their French competitors, and why Champagne vigorously pursues anyone messing with their brand. Equally, Parmiggiano-Reggiano cheese only derives from this region in Italy, and story is imbued in every syllable of that name. 

Our craving for the local is perhaps a response to globalisation's benefits and disadvantages.  Seasonal, local produce is back on the shelves. Farmers markets are the fastest growing market in food retail in the US and Australia, and in New York you'd be hard pressed to open up a restaurant that's not 'farm-to-table'. Locality is one of the reasons why Google and Facebook haven't cracked the Chinese market, and is equally the reason why mobile devices place so much faith in geolocation as a form of tailored marketing. 

Who you are matters, but where you are is becoming equally important. Imagine the story, the relevance, and the rooted connection that is possible when you're driving through the Hunter Valley or Napa Valley, and as you're manouevring through the country roads on an autumn day against a back-drop of shifting colours, your partner is able to tell the digital story of the 4th generation vineyard owner and his wife who have a geolocated Bed and Breakfast with a view across their organic plantations, and who have a special offer on a comfortable night's stay. 

This bridges the analogue and digital divide. Hyperlocality told via the mobile medium is a way for the small, family owner, micro enterprises to tell their story. If the social medium is a way for large business to seem small, it is equally a way for small enterprise to connect in a global, yet local way. 

What does this mean for your organisation?

Ask yourself the question:

• how are we currently engaging and connecting with our local community?

• what unique and old school stories do we have that we are currently not telling the world?

• how could we be more effective and profoundly connected to our market place by nurturing the hyperlocal history and knowledge, and broadcasting it via digital media?

These waves of change are likely to shape the contours of the business landscape, to erode market share, and to create patent cliffs for organisations that don't stop to:

1. spot what's going on in the external environment
2. feel what the underlying currents of change really mean for them
3. position themselves to take advantage of these tectonic shifts and waves

What do you think?

What opportunities/threats can you currently see on the horizon?

Add your futurist thoughts and comments below to contribute to the global brain pool on this topic.

Digital Disruption Trends: Printing and Digital Solutions Industry #Drupa 2012

Posted on Saturday, 5 May 2012

Recently, I was invited to be the resident futurist keynote speaker at the 2012 #drupa conference in Dusseldorf, Germany. #Drupa is pretty much the Olympics of the printing and digital solutions industry, and the latest innovations, thought leading insights, and disruptive trends are on display at the event. The industry is one that is under a lot of pressure at the moment as the modes of communication and consumer behaviours are undergoing paradigmatic shifts. Dealing with change was one of the key themes of the #drupa conference, and as the closing keynote speaker I was invited to share insights on the key creative tensions between the old, analogue world, and the new, digital world. To scenario plan the future of the printing and digital solutions industry, I created the following model to ensure that industry experts could make sense of the external drivers of change that are influencing the industry. 

This model is a 2 by 2 matrix with Analogue and Digital Modes of Communication on the extremes of the X-axis, and with Knowledge and Data the key modes of analysis on the Y-axis. In an industry where cross-channel communications will be key to engage digital minds and analogue hearts of consumers in the future, the combination of effective analogue and digital communication modes is crucial. Equally critical for communications experts is to incorporate the constant flow of data into the marketing and communications mix, and to ensure that that data is turned into analytical knowledge of consumer behaviour and insights. 

Thus for effective cross-channel communications to exist, communications thought leaders need to advice their clients on how to circulate and spin through the above model. 

4 key areas need to be pointed out here.

1. Relate

2. Connect

3. Collect

4. Tweak

For example, in the top left hand quadrant 1, a communications piece like a tailored brochure must relate to the consumer in a personalised way, as we receive that printed brochure as a consumer with variable print, customised images, and tailored status, we should be connected in quadrant 2 to take some kind of action, for example via Personalised URLs to help us enter further data that the communications expert can collect. 

This data collection is a crucial step as the consumer is connected to the digital side of the model, where cross channel communications via mobile, desktop, and tablet devices drives new modes of interactivity between brand and consumer. At this stage, it is critical that the communications expert digital engages with the consumer, in order to start analysing consumer behaviour so that he or she can start tweaking the next sets of digital and analogue marketing pieces for the consumer, and so the cycle starts again, with continued refinement, agility and impressively relevant info being delivered to the consumer. 

• What do you think? 

• Is this a helpful way to think about the future of communications?

• How do you like being interacted with by brands?

Espresso Shot of Ideas: Analogue v Digital with Erik Schilp

Posted on Friday, 20 Apr 2012

This Espresso Shot of Ideas with Erik Schilp, then CEO of the Dutch National Historical Museum, from TEDGlobal 2011 in Edinburgh, explores the idea of the analogue versus the digital. Erik discusses the future of museums, how experiential and non-traditional museums represent Dutch culture in new ways, and how brands need to consider using multiple media to create experiences that not only moves minds, but also hearts. In this conversation from The Balmoral Hotel in Edinburgh with Australian futurist Anders Sorman-Nilsson, Erik explores storytelling through artefacts, how the notion of what a museum is is constantly changing, and how the tension between analogue v digital media can be used creatively in brand-building.

Check it out.

• What do you think - will digital media disrupt what museums will be like in the future?

• How can brands best combine digilogue - digital and analogue - experiences to gain mind/heart share?

• What is the most interesting and impactful museum experience you have had and why?

If you're interested in learning more about digital and social media integration for brand building, why not check out Thinque's recent B2B Social Media Lab Report, available for complimentary download here.