Anyone who guessed a few years ago that online consumers would find it natural to rely on an AI-based assistant to check their bills or set up the security of their home.
Service providers must keep up to date in the changing world of consumer technology, as in this market, not being relevant comes at a serious cost.
In the United States alone, the potential revenue that different companies in all industries lost to their competitors in 2017 because they were not relevant enough amounted to $1 trillion.
There is no simple answer to achieve greater relevance, however, companies that achieve it have one thing in common, have managed to really identify what their customers want and have delivered it to them, often adapting quickly to keep up with changing demands.
According to iProspect, companies believe that earning consumer trust and therefore standing out from the competition is vital to business growth, 76% executives say it is important to stand out for consumers to choose their company.
Digital voice assistants become part of the furniture
Voice continues to grow as the new preferred interface for users globally. Half of online consumers now use a Digital Voice Assistant (DVA), concentrated in China, the United States, India and Mexico.
The use of standalone DVAs (i.e. Amazon Echo, Google Home, or Apple HomePod) in the United States has surpassed the use of DVA built into smartphones and other devices. Voice assistants are on track to be one of the fastest adoption-rate technologies in U.S. history. This is reflected in the high percentage of user satisfaction (96%) with this technology.
Consumers who own a separate DVA are likely to own multiple devices, in fact, 46 of the owners have more than one. What is more important, however, is that DVA devices greatly influence which devices consumers buy and how they use them.
As such, DVA are influencing all technology and the consumer service ecosystem in a way that no other device, including smartphones, had achieved.
An example of this is that, more than half of the owners of an independent DVA claim that since they got their device, they are using their smartphone for fewer services.
Consumers are already comfortable with the increasingly advanced delivery of tasks and responsibilities for their DVA, however, this is just the beginning. There is a clear expectation about how these devices will take on progressively complex workloads.
When asked, consumers perceive real value in the ability for voice assistants to manage the security and automation of their home, control invoices (including alerts about problems or deviations), make restaurant reservations and even provide access to virtual medical advice.
Brands that can offer advanced artificial intelligence capabilities within devices and interfaces could control the ecosystem of products and services offered to consumers at home.
What about trust?
On the other hand, one concern that can block the growth that DVA promises is trust. Consumers believe they have less control over their personal data with a DVA provider than with other digital service providers and much less control than with, for example, banks.
The biggest difference is how consumer confidence is established. For some device and service providers, consumer trust establishment occurs from the beginning of the relationship, however, trust in a DVA device is short-lived and needs to be constantly renewed and strengthened.
If companies want to attract more customers they will need to be transparent about how they store, use and share data. In addition, it should give consumers control over all these variables. Privacy parameters are far from simple, however, it is essential for companies to set a “trust standard” before advanced use of DVA.
Extended reality comes out of its usual environment
Another area in which digital consumers are getting introduced is in virtual reality. To date, extended reality (XR) technologies have been held in a very particular area, however, that is changing rapidly. Many consumers are testing these immersion services in public places such as amusement parks or with their smartphones.
Along with this increasing use, interest in an increase in XR applications has been increasing. While games remain the extended reality app that most consumers have tried so far, other entertainment services (such as watching TV or as mere entertainment during the holidays) they’re also gaining ground.
There is a constant interest in finding new ways of use for XR technologies, including how to solve practical problems of the home. The most valued activities are: learn more about a place before or during a visit, acquire new skills or visualize how clothes look and feel in real life.
Linked to the idea of acquiring new skills, business applications focused on workforce and consumer training are emerging. An example of these is the ImmerseMe company that uses virtual reality to provide a realistic language learning environment for students.
Learning a language with VR
Although the goal is to profit from this type of technology, the reality is that it is still not easy to make money in this business. Consumers say they would be willing to use the spread reality at home, but there are actually few users who have the equipment to put that provision into practice.
63% of consumers cite the cost of these devices as the main barrier to adoption. In response, providers should look for ways to encourage consumers to purchase their own equipment rather than relying on public devices or their smartphones.
Retail is perhaps the strongest use case to drive adoption, as consumers often perceive deficiencies during their purchasing process, which can now be replaced by true immersive experiences that inform and entertain.
In addition to the price and design of the devices, the operation of these is also a barrier to adoption. Nowadays, many devices are difficult to use, and the functionality of the app is often a problem.
Better products will attract younger, higher-income users, those who are traditionally the first to adopt new technology services, however, improving usability could increase the audience’s range objective.
Reimagining the over- the top
Finally, the global Over the Top (OTT) market also has a problem of lack of relevance. The 50 of the video app subscribers believe they are paying for content they are not interested in. Correcting this issue has become more important than ever, as free digital video continues to attract consumer attention away from subscription offers.
Currently users will continue to pay for a subscription service, however, it is true, that this type of television offer is showing signs of erosion in both the use of combined services and in the viewing time.
Bycontrast, the adoption of video-on-demand (SVOD) subscription services is growing, particularly among younger consumers. One of the main reasons is its low cost, right now Netflix is the perfect example of this type of services.
Only about one-third of consumers are willing to pay to remove ads from their video subscription services, a figure lower than the previous year. Younger users are more tolerant of TV ads, implying that a future ad market could be an opportunity for OTT, not a threat.
Together, these are strong indicators of both the importance of ad-supported models and the need to reimagine the placement of ads for OTT digital content.
It would also be interesting for companies to explore the option of pay-per-view (PPV) services. Consumer interest in PPV is four times greater than interest in public television, which represents a serious untapped opportunity.
The willingness of consumers to provide personal data is also an important variable when contracting an OTT service. Nearly half of consumers are willing to share their personal data in exchange for exclusive services or deferential treatment.
This change presents an opportunity for OTT services to create more personally relevant content and advertising experiences for the consumer. OTT video players can better optimize consumer value by understanding their behavior, creating more engaging and valued content offerings.
Consequently, using personal data, more relevant advertising solutions can also be offered, which improve the value to the advertiser and the consumer experience.
Conclusions
Consumer preferences and behaviors are continually evolving. However, there is a constant: the clear need not only for improved products and services, but the modification of existing business models.
In some areas, such as smart homes, consumers can appreciate the offerings offered by new products or services. Backing this up, 61% consumers claim to be interested in having their smartphone connected to their Smart home. In other areas, such as online video, companies are looking for ways to avoid losing users, due to poor management of the content offered.
Technological trends including digital voice assistants, extended reality, and OTT content have far-reaching implications for market growth, advertising, and other critical elements of the business model.
In all cases, consumer technology and service providers need to ensure that they are moving in tune with changing consumer preferences. That means offering products and services that are:
Intelligent, flexible and scalable to customer needs.
Capable of being closely integrated with other products and services.
Highly
Available to consumers, when and where they need them.
To optimize the value of the product for the consumer.
