Last year our predictions for the year ahead were, without sounding too smug, not too wide off the mark. You can check out the article here if you like. Ok, perhaps with topics like AI, data-led design, metaverse, sustainability and NFT’s we were onto a sure bet. But in large these topics did grab the digital column inches and bag page dwell time. Even if they didn’t necessarily all make a significant commercial impact for many businesses. However, the early adopters in digital continue to learn and pave the way for the inevitable trickle down effect and where some of these trends and talking points become viable mainstream considerations.
The digital environment has always favoured the brave and inquisitive. Those who continue to test and learn and dig for the 0.1%, will get clear of the pack and continue to gain competitive advantage. For ‘competitive advantage’ read ‘lower CPM’s’ or ‘greater share of voice’ or perhaps even just the kudos and brand upticks of being associated with being innovative and at the front of the curve.
So, here are our predictions for the big digital talking points of 2023, the overarching theme here is ‘get real’. This may become the year when fanciful talking points and concepts start to develop into usable technology that impacts businesses and consumers in real and useful ways.
With the heightened visibility of COP27 and real financial support pledged to battle the climate crisis alongside the stark reality of a year of unprecedented climate related disasters, sustainability is firmly on the agenda for 2023. Sustainability is an all-pervasive topic for most industries, some like fashion, beauty and transport have more visible and tangible challenges but sustainability can and should also be central to all technology initiatives. Gartner predicts that by 2025, 50% of CIOs will have performance metrics tied to the sustainability of the IT organisation. Currently, however, sustainability efforts in IT require balancing the need for increased business productivity against the company’s environmental goals. The challenge here is in the need to dig deeper than the first layer of information. Even technologies that are perceived as more sustainable solutions, such as blockchain also contribute to greenhouse emissions for example. In 2023, we’ll see a continued push toward making supply chains more transparent, as consumers demand that the products and services they invest in are energy efficient and backed by more sustainable technology.
In 2023, artificial intelligence will become real in organisations. More than just a buzzword, no-code AI, with its easy drag-and-drop interfaces, will enable any business to leverage its power to create more intelligent products and services. There is a watch out though, with companies increasingly reliant on AI-enabled solutions and analytics, managing risks and ensuring the security of AI operations becomes imperative. Gartner has found that inadequate trust or security controls severely hamper AI projects — almost half of AI models don’t make it into production due to security, ethics, or privacy issues.
Wireless technology is great, is much easier and slicker and things just work better. But beyond getting rid of unsightly wires and even beyond the Internet of Things (IoT), where is the real value and future of wireless technology? Realising value from wireless technologies now involves extending digital services to include a wide variety of new contexts and customers. Next-generation wireless technologies will soon deliver new and improved services and reduce capital costs.
Wireless technology is evolving in two key directions. First, the basic communication capabilities of wireless continue to improve, which means that they can enable a much wider range of tasks than in the past. Second, wireless is moving beyond simple connectivity to add capabilities that serve as a foundation for digital innovation in such areas as:
So, this featured in our 2022 top 10 and continues to gain momentum as more businesses and brands figure out how to engage with this technology and ‘space’. First step is for more people to understand it and be able to describe it! For those still getting up to speed, it’s a collective virtual 3D shared space, created by the convergence of virtually enhanced physical and digital reality. Got it? No? Well, effectively the ‘Metaverse’ has become shorthand for a more immersive internet where we’ll be able to work, play, and socialise on a persistent platform. It’s expected that a complete Metaverse won’t be owned by a single vendor and will be device-independent. Gartner’s researchers predict that over 40% of large organisations worldwide will be using a combination of Web3, spatial computing, and digital twins in metaverse-based environments. Financial predictions state that the metaverse will add $5 trillion to the global economy by 2030, and 2023 will be the year that defines the direction of the metaverse for the next decade.
This is of course linked to the Metaverse point above, but as its building block, Web3 most definitely earns its own spot on the list. Blockchain technology will also advance significantly in 2023 as companies create more decentralised products and services. For example, at the moment, we’re storing everything in the cloud — but if we decentralise data storage and encrypt that data using blockchain, our information will not only be safer, but we’ll have innovative ways to access it. Non-fungible tokens (NFTs) will become more usable and practical in the new year. For example, NFT tickets to concerts will potentially give you access to backstage experiences and memorabilia. NFTs might be the keys we use to interact with many of the digital products and services we buy, or they could represent contracts we enter into with other parties.
There has been a fundamental shift in the values of consumers over the pandemic period. This has placed a far greater emphasis on digital channels and therefore service and convenience as a differentiator between brands and businesses. With cross referencing and comparison only a few clicks away then service, convenience and brand experience become critical. The customer of 2023 and beyond will demand only the highest levels of personal communication and service and for this to be seamless between channels. They see no difference between WhatsApp, email, Instagram, website, app or store. Brands and retailers must have connected systems and customer data that allows the smooth transition and uninterrupted purchasing path between these increasingly complex communication and commerce platforms. More retailers will use AI to manage and automate the complex inventory management processes that happen behind the scenes, so convenience trends like buy-online-pickup-at-curbside (BOPAC), buy-online-pickup-in-store (BOPIS), and buy-online-return-in-store (BORIS), will become standard.
The phrase ‘phygital’ first came around in 2013. It was copyrighted by an Australian agency and to be honest it made me heave a bit back then. But a decade later, I'm now used to it and I have even used it myself (perhaps with a rye smile as a safety net). As digital experience has improved over the past decade it took over from physical brand locations and stores but hard and stark removal of physical interaction during the pandemic showed the human need for physical interaction and the ability to play and experience things in the real world. Yes we have incredible ecommerce, digital conferences and even the metaverse available but physical experiences, stores and events firmly have their place. A recent survey of 500 UK retailers showed that 46% are re-evaluating their strategies for physical stores. However, there seems to be enduring appeal for the format. The research company, Adyen, also spoke to 2,000 UK consumers and discovered that nearly half (49%) still prefer to shop at a physical store, particularly where technology is being used to improve the customer experience.
Commerce is everywhere. The purchase journey is non-linear. 2023 will see a shift in the mindset of marketers from conversion tactics to the realisation that buyers need nurturing rather than just being hit with the hard sell. More than ever, buyers need nurturing on their journey, and 97% of your customers are not ready to buy today in a landscape with rising costs of acquisition (see trend point 10). Marketers will be spending more on demand generation and upper funnel activity but the next stage on from this is to consider the buyer’s needs state at the different stages in their buying journey. This is about maximising the opportunity to sell, grabbing the greatest percentage of the 3% who are ready to buy. And it’s all possible today because the buying journey is largely a digital journey meaning buyers can be engaged, nurtured, tracked and converted through a digital experience.
In 2014 Gwyneth Paltrow infamously used the phrase "conscious uncoupling" when announcing her split with husband Chris Martin. Perhaps 2023 is the year for ‘conscious decoupling’? By which we mean decoupled Content Management as a tool for multi-channel marketing. The use of Decoupled Content Management Systems will continue to grow over the next few years. As organisations look to increase their user engagement, the number of their marketing channels, and the depth of content personalisation required will become increasingly complex (this links into the consumer trend in point 6 and the desire for personal service). A Decoupled CMS allows one team to manage all digital content without concerning themselves over device specific constraints or geographic idiosyncrasies. Content is created, moderated and localised centrally, and delivered to one or more channels via a series of APIs, providing content for websites, applications, blogs, social channels and other campaign management systems.
Customer acquisition has been at the heart of marketers plans and budget allocation. Digital marketing was built on the ability to prove acquisition and spend effectiveness. But at what cost? Customer acquisition costs have been on the rise for several years, and there is no indication that this trend will reverse any time soon. Digital spend boomed in the early pandemic for obvious reasons but since then privacy issues and increased competition have caused cost per acquisition (CPA’s) to rocket.
In these tough economic times, businesses are feeling the pinch as consumers become more selective about their spending. With household budgets tightening, customers increasingly seek value for money and are less likely to make impulse purchases. This is a major challenge for ecommerce businesses, as it becomes increasingly difficult to profit without raising prices. To compete in today’s market, businesses must find ways to reduce their customer acquisition costs – and one way to do this is to focus on retention rather than acquisition - with all the cross-sell and up-sell opportunities that come with it.
An effective customer retention strategy is essential for any brand that wants to be successful in 2023, here’s why:
So there we have it, our predictions for 2023. Any big topics that you think we have missed or that are lurking in the wings ready to make a big entrance? As ever, we don’t know what we don’t know and agility has always been a key trait of the most successful businesses. See you back here next year to mark our homework and see which predictions rang true and which petered away into false starts and ‘also ran’s’.
If you would like to discuss any of these trends and how they might impact your business, feel free to reach out to any of the Everything Connected team HERE
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