2021 Trends: The Year of Acceleration

To say 2020 was a year of uncertainty would be a massive understatement. While that uncertainty begins and ends with COVID-19, other factors have contributed throughout the year. From a tumultuous economy to social unrest to a dramatic election, this year brought a variety of unique challenges, one after another.

Of course, challenges often lead to new opportunities for companies and their customers alike. As customer demand increased, competitors capitalized on cracks in the façade of traditional brand loyalty. Smart companies understood, almost immediately, that customers were adopting new technologies, prioritizing safety, and expecting value—and that they were willing to change their shopping behaviors to meet these shifting needs.

Successful organizations have a modern, flexible architecture that allowed them to respond to these changing needs and transform both customer engagement tools and internal operations. Parallel growth occurred for companies and these technologies and concepts, allowing both to reach a new plateau of maturity during the past year. In fact, McKinsey found that the pandemic accelerated the digitation of customer interactions by several years. [i] And technology companies outperformed other sectors in the stock market in 2020, as evidenced in the graph below.

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TECHNOLOGY COMPANIES OUTPERFORM OTHER SECTORS

MARKET CAP OF FAANGM STOCK VS S&P 500® IN 2020

Taking a look at the performance of FAANGM stocks against the S&P 500®. FAANGM stocks include Facebook, Amazon, Apple, Netflix, Google (Alphabet), and Microsoft. Both classes of Alphabet were included.

So, for those organizations that didn’t respond as quickly, time is of the essence. Organizations must elevate the significance of and invest in technology to remain competitive.

The stage is set for 2021 to be the year of acceleration – for technologies and for organizations that increasingly rely on those technologies. At its core, this year promises to be about integration and refinement in a way that enables organizations to take advantage of more advanced data, technology, and processes. And, in doing so, refining operations and supply-chain logistics, and providing exceptional value to the consumer.

What were once considered innovative data technologies —artificial intelligence (AI), machine learning (ML), computer vision, and more—are now becoming table stakes. Companies that have more complete data are positioned to disrupt competitors by surfacing actionable insights. Indeed, Forrester research found that more than a third of companies in “adaptive and growth mode” will leverage AI in 2021 for the automation of tasks in areas like customer support, or by using semiautonomous robots to help workers in a physical setting. [ii]

More complete data doesn’t simply equate to volume, the first of the “5 Vs of big data.” Smart companies also take into account what we consider to be the other four: variety, velocity, veracity, and value. Veracity, in particular, will take center stage in 2021. According to IBM, one in three business leaders don’t trust the information they use to make decisions. [iii] Yet the more accurate a company’s data is, the better an understanding it will have in how to apply it and glean actionable insights.

THE FIVE V’S OF BIG DATA

This all dovetails with personalization and the customer experience (CX), especially with consumer expectations rising with the arrival of advancements in the form of cloud tooling, 5G networks, and more. Smarter, cheaper devices are increasingly able to communicate across networks. Since data tools are now more mature and more complete data is being collected, companies can identify patterns, predict behaviors, and personalize recommendations, all for the sake of enhancing the CX. Many organizations recognize the benefits of doing so; in fact, research from Forrester finds that organizations focused on customer insights outperform their peers. [iv]

With more complete data, 2021 will see more companies unleash AI and ML, in which computers use models to draw inferences from data patterns, since the potential exists to move beyond basic personalization. Thanks to the Internet of Things (IoT) and edge computing, data exists on where consumers are and what device they’re using—even what they’re doing in precise moments.

With the right tools in place, advanced analytics and ML models can be applied to a variety of industries to identify patterns, solve business problems, even mitigate risks – ultimately driving exceptional value.

HOW INDUSTRIES BENEFIT FROM ACTIONABLE INSIGHTS

Financial Services

Through ML, finance apps can assess data culled from spending behaviors to provide personalized financial guidance. Other companies use ML to mitigate consumer fraud—transactions are analyzed then flagged as risks to be investigated.

Retail

While retailers can also employ ML to tag potentially fraudulent purchases, recommendation engines offer various touches of personalization, ranging from making buying suggestions based on browsing histories to providing chatbots to answer frequently asked questions.

Manufacturing

For manufacturers, ML can be a game-changer for supply chain optimization. The technology can deliver more precise demand forecasting, enhance delivery performance, and deliver valuable insights to improve overall performance—all of which positively impacts the customer in the process.

Healthcare

From diagnostics to information management, ML is currently being used effectively in the healthcare industry, too. Through data analysis, doctors can make diagnoses more quickly and accurately for their patients while, in the back office, workflows can be improved and clinical data can be accessed to ensure patient records are updated and passed along correctly.

Utilities

Much like with fraud for financial companies and retailers, ML can discover suspicious energy consumption to nip it in the bud, ultimately saving their customers money in the process. Some companies are even using machine learning to predict—and prevent—potential outages.

We’ve mentioned the pandemic multiple times already, but it’s hard to overstate its impact on consumer behaviors in 2020. Behavior shifts have turned on a dime, serving as a catalyst for wider technological adoption. CapTech’s findings in a survey conducted earlier this year, Captivating Consumers During COVID-19,” bear this out in a variety of different ways across a range of demographics. Indeed, 72% of consumers are comfortable interacting with new technologies to make a purchase. And nearly three quarters of consumers are likely or very likely to interact with new technology to ensure enhanced safety and cleanliness.

Not only are consumers willing to interact with new technologies, motivating factors for brand loyalty have shifted, with over a third trying new brands due to convenience. The key takeaway is that consumers are more open than ever before to trying new and different activities, brands, and technology, with the increased interest in new technologies driven by a desire for enhanced safety. Of course, it shouldn’t come as a surprise that younger consumers are leading the way in trying the latest innovations. In fact, Gen Z consumers have increased their augmented reality shopping habits by 10% and are paying for products with their smart devices more than ever (growing from 33% pre-COVID-19 to 44%).

These shifts are significant. And since some of the findings show adoption or openness to adoption, companies would be wise to innovate at the speed of increased demand. Contactless payment solutions and self-service tools are fundamental expectations now. Concepts like augmented reality are becoming increasingly common for users of smartphones and tablets and, down the line, might even be used in stores.

2021 is not the year to rest on your digital laurels. Nimble companies—especially companies ahead of the curve on the three trends previously discussed—will bend over backwards to provide a seamless customer experience, online and off.