Hard as it is to believe, an average South African spends approximately five hours online every day. That estimate – taken from We Are Social’s annual digital report – backs up claims that Africa is one of the most connected continents, especially when it comes to mobile devices.

The majority (92%) of adult South Africans own phones with 60% having a smartphone.

The study, which is a snapshot of internet usage across 30 countries, shows that half of South Africans (26.84 million representing 49%) actively use the internet. There are 13 million active social media users and 10 million mobile social media users.

So much for slow broadband and high data charges slowing evolution.

Instead, increased connectivity is likely to completely revolutionise how we do business, how we market our businesses and how we consume goods and services.

While the techies amongst us are eagerly awaiting a fully virtual business world, the naysayers are predicting a world of sci-fi horrors where machines rule the world, robots replace jobs and big brother can monitor almost every move.

The reality is probably somewhere in between – but the pressures on both producers of goods and services and consumers is growing by the day.

%

Population that owns a phone

%

Population that owns a smart phone

%

Population that uses the internet

Business butts heads with the 4th industrial revolution

Speaking at a recent Deloitte Digital Experience event at the financial services firm’s Umhlanga regional office, head of the South African arm of Deloitte Digital and Innovation, Valter Adão, warned Durban business leaders there was no safe haven when it came to what he described as the rapidly unfolding fourth industrial revolution.

Apps were launching almost daily and it was a case of “Uberise or get kodaked” – something of a tongue-in-cheek in-house description of the inevitable consequence of companies not taking digital disruption seriously.

Kodak, which became synonymous with photography and film products for most of the 20th century and was known for urging consumers to recognise and capture that life changing “Kodak moment”, failed to take its own advice and identify and respond to the rise of digital photography. The company, which was founded in 1888, began to struggle financially during the late 1990’s. A too-late attempt to transition to digital photography failed and, in January 2012, Kodak filed for bankruptcy protection in New York.apps

Uber, an American multinational which developed a mobile app which allows consumers with smartphones to submit trip requests to owner driven service providers who are able to transport passengers more cheaply and efficiently than conventional cabs, has threatened to completely unhinge the existing metered taxi industry. Despite repeated attempts to stop it globally, it has become synonymous with inevitable digital disruption.

Explaining that the digital side of a company’s business now needed to be central to its overall business strategy rather than something delegated to the techies, Adão said that the move towards all things digital would fundamentally change the way organisations operated.

It would also completely transform the customer experience with digital technologies being adapted to serve the customer rather than customers being forced to conform to standard customer processes. Everything would be built around customer needs with the customer experience actually driving change.

This is the age of artificial intelligence, the internet of things, cloud computing, 3D printing, drones and crypto currencies, he explained.

And just when you thought that South Africa might be in the dark ages, he noted that experts from this country were leading in the space of crypto currencies which were the basis for digital asset and payment systems such as Bitcoin, with local experts playing a central role in creating a new block chain bank for a large multi-national organisation.

makerbotThat sounds pretty sci-fi. The reality, said Adão, is that millennials had begun to look at brands with centuries of history differently. The younger generation no longer trusted established brands such as VW, providing an opening for disrupters. Today, the world’s largest hotel company, Airbnb, doesn’t own a single bed, the largest taxi company, Uber, doesn’t own a single vehicle.

The problem is when large brands don’t move with the times and try to talk away disrupters and start-ups. An example is Proctor and Gamble which is now butting heads with the Dollar Shave Club which delivers razors and related personal grooming products straight to consumers’ doorsteps, bettering conventional retail when it comes to both price and convenience.

Adão said when companies disregarded potentially disruptive start-ups there was often chaos. Inevitably, business leaders declared they never saw it coming. “But that’s not always true. They often saw it coming and ignored it.”

Threatened industries often turned to regulators for protection as a last resort. “If you are there then it’s probably time to bow out and sell. Regulators cannot protect you. It’s just a matter of time,” he warned.

Next on the list of threatened sectors was the telecommunications industry with many venturing into other sectors in order to diversify their revenue streams and minimise risk. Then financial services with technology companies such as Google and Microsoft already venturing into the banking, insurance and even healthcare spaces.

Why digital disruption is near impossible to halt is that it is driven by the very thing that ushered in the original industrial revolution – market demand for more… and more.

“Even for what is now termed the hyper connected consumer, the digital world is becoming overcrowded and the stream of information close to overwhelming.”

Business butts heads with the 4th industrial revolution

Speaking at a recent Deloitte Digital Experience event at the financial services firm’s Umhlanga regional office, head of the South African arm of Deloitte Digital and Innovation, Valter Adão, warned Durban business leaders there was no safe haven when it came to what he described as the rapidly unfolding fourth industrial revolution.

Apps were launching almost daily and it was a case of “Uberise or get kodaked” – something of a tongue-in-cheek in-house description of the inevitable consequence of companies not taking digital disruption seriously.

Kodak, which became synonymous with photography and film products for most of the 20th century and was known for urging consumers to recognise and capture that life changing “Kodak moment”, failed to take its own advice and identify and respond to the rise of digital photography. The company, which was founded in 1888, began to struggle financially during the late 1990’s. A too-late attempt to transition to digital photography failed and, in January 2012, Kodak filed for bankruptcy protection in New York.

Uber, an American multinational which developed a mobile app which allows consumers with smartphones to submit trip requests to owner driven service providers who are able to transport passengers more cheaply and efficiently than conventional cabs, has threatened to completely unhinge the existing metered taxi industry. Despite repeated attempts to stop it globally, it has become synonymous with inevitable digital disruption.

Explaining that the digital side of a company’s business now needed to be central to its overall business strategy rather than something delegated to the techies, Adão said that the move towards all things digital would fundamentally change the way organisations operated.

It would also completely transform the customer experience with digital technologies being adapted to serve the customer rather than customers being forced to conform to standard customer processes. Everything would be built around customer needs with the customer experience actually driving change.

This is the age of artificial intelligence, the internet of things, cloud computing, 3D printing, drones and crypto currencies, he explained.

And just when you thought that South Africa might be in the dark ages, he noted that experts from this country were leading in the space of crypto currencies which were the basis for digital asset and payment systems such as Bitcoin, with local experts playing a central role in creating a new block chain bank for a large multi-national organisation.

That sounds pretty sci-fi. The reality, said Adão, is that millennials had begun to look at brands with centuries of history differently. The younger generation no longer trusted established brands such as VW, providing an opening for disrupters. Today, the world’s largest hotel company, Airbnb, doesn’t own a single bed, the largest taxi company, Uber, doesn’t own a single vehicle.

The problem is when large brands don’t move with the times and try to talk away disrupters and start-ups. An example is Proctor and Gamble which is now butting heads with the Dollar Shave Club which delivers razors and related personal grooming products straight to consumers’ doorsteps, bettering conventional retail when it comes to both price and convenience.

Adão said when companies disregarded potentially disruptive start-ups there was often chaos. Inevitably, business leaders declared they never saw it coming. “But that’s not always true. They often saw it coming and ignored it.”

Threatened industries often turned to regulators for protection as a last resort. “If you are there then it’s probably time to bow out and sell. Regulators cannot protect you. It’s just a matter of time,” he warned.

Next on the list of threatened sectors was the telecommunications industry with many venturing into other sectors in order to diversify their revenue streams and minimise risk. Then financial services with technology companies such as Google and Microsoft already venturing into the banking, insurance and even healthcare spaces.

Why digital disruption is near impossible to halt is that it is driven by the very thing that ushered in the original industrial revolution – market demand for more… and more.

 

 

 

 

 

 

When consumer convenience reaches overload

While experts like Adão suggest that the desire for digital transformation is not only inevitable but also unquenchable, there are hints that the seemingly endless consumption of apps and short cuts could have limits.

In fact, people are increasingly looking for a digital detox.

What started out as an insatiable appetite for information, online shopping and convenience, runs the risk of becoming much like too many sweets at a kiddies’ birthday party.

Even for what is now termed the hyper connected consumer, the digital world is becoming overcrowded and the stream of information close to overwhelming.

In fact, there are now apps that actually cut through the digital clutter indicating some sort of consumer ambivalence to the very devices that consume around five hours of their time each day.

Holiday destinations have taken to marketing a lack of connectivity as an attraction for those wishing to escape the over connected rat race.

According to Daphne KasrielAlexander, a Consumer Trends Consultant with Euromonitor International, mobile love rules but it can be toxic”.

She says that, because many consumers were now trying to silence the digital noise, new initiatives and even apps are emerging to help consumers sidestep incessant digital engagement. There are also increasing alarm bells that normality might not be a bad thing and warnings that we could be creating “pathologically home bound populations” that purchase everything on line and teens who spend so much time interacting with social media via their mobile devices that they no longer develop healthy social skills.

So how best to connect with the hyper connected customer

Euromonitor International recently hosted a global webinar entitled The New Connected Consumer: How to Identify Digital Commerce Opportunities  and it was hosted by Michelle Evans, digital consumer manager at Euromonitor International.

She set out to show businesses how to market to the new consumer and leverage digital capabilities to find new business opportunities – but said there were limitations driven by customer preferences and concerns and that consumer responses to online was ambivalent.

Referring to the Euromonitor International consumer survey, Hyperconnectivity Survey 2014, she looked at marketer perceptions of how closely consumers interacted with brands on social media.

The survey revealed that just under 50% of respondents were prepared to follow or like a company while 35% did not interact with a brand on social media. Less than 30 percent shared a company’s feed or post while around 25% actually bought something via social media. The lowest percentage –under 20% – used social media for complaints, preferring one-on-one interaction.

It also seems that although consumers may have an insatiable appetite for incoming information, they are becoming increasingly aware of the risks of sharing their own. Location beacons which are used by many marketers to provide a wealth of data do not necessarily go down well.

According to the Euromonitor survey, 65 percent of consumers believe that advertisers who track phone location without permission are invading their privacy.Sixty percent indicated they were uncomfortable sharing phone location with brands and retailers, while 58 % actively avoided brands and retailers that tracked phone location.

Other telling data is that nearly 60% of consumers taking part in the survey avoid public internet if the connection was not secure, while just over 40% only made online purchases from trusted brands.

But once trust is established, it is not hard to see why conventional retail is already well on the way to being completely disrupted to the point where digital becomes inseparable from the bricks and mortar shopping experience.

Shoppers, according to Evans, are looking for three things – immediacy, transparency, and convenience.

Immediacy included earning loyalty points for entering a store, the provision of mobile information based on store location, quick site and app loading times and “being able to buy whenever, wherever”.

Transparency meant making information accessible on interactive displays and providing feedback from other users while convenience required free wi-fi throughout a store, same day home delivery, free shipping and returns.

Many of these desirable attributes were shared with online retail platforms.

But the game changer is mobile. According to Evans, 36% of all hyper connected consumers make regular purchases using their mobile phones while 48% under the age of 30-years do so regularly.

The next step is when digital completely transforms payment and consumers stop dipping into their wallets to pay.

Evans said globally, 46% of hyper connected consumers had used in-store mobile payment at least once which meant this was not too far away. In South Africa, apps such as Zappa and Snapscan are becoming increasingly popular with hyper connected consumers enjoying the convenience of always having a phone to hand and the security of safer, traceable transactions

%

of hyperconnected consumers currently share their phone location with brands or retailers in exchange for special offers

%

of hyperconnected consumers make regular purchases using their mobile phone

%

of hyperconnected consumers under 30 make regular purchases using their mobile phone

Drawing the digital line

At this point, it seems that both businesses and consumers find themselves in a state of “damned if you do and damned if you don’t. The pressure to keep up is both massive an relentless but the possibilities are seemingly endless.

Saleem Cassim, Associate Director at Deloitte  says: “The world has changed fundamentally. You can now do things you would have never thought possible 10 years ago and do business in a way that you would never have imagined a decade earlier. The evolution of new technologies that enable companies to leapfrog the way business has been done up until now opens up exciting opportunities.”

The same is true for consumers.