Amazon's new Amazon Go store ushers in a new era in brick and mortar grocery and convenience shopping. In the early 80's, electronic point of sale (POS) dramatically changed the checkout experience in grocery stores, speeding up checkout lines. Today, a checkout without POS is unthinkable unless it's a farm stand on the side of the road … and even here we're likely to see Square hooked up to a smartphone. But even with POS, the checkout has always been the big time waster in any grocery shopping experience. Until this week.
Six years ago, "The Ultimate Grocery Shopping App" described a future in which the grocery shopping experience was radically different from what existed in 2010. This week, Amazon has brought part of that vision to life by opening its first Amazon Go brick and mortar convenience store for Amazon employees in Seattle. A convenience store with no checkout lines … with no checkout.
Gone are the POS systems. Welcome to the era of automatic checkout. Amazon has used new technologies like image recognition and machine learning to go beyond at least some of the experience predicted back in 2010. Instead of shoppers having to scan items into their shopping cart, Amazon uses this advanced technology to track what shoppers pick up and add to their cart and what they put back on the shelf. No scanning, no checkout … just walk out and pay.
Why will this take off? Becuase it gives shoppers back significant time savings and it gives retailers potentially enormous costs savings.
Your business model is under attack. And it’s not by your competitors. It’s under attack from your customers. Three years ago, Forrester identified a major shift in the market, ushering in the age of the customer. Power has shifted away from companies and towards digitally savvy, technology-empowered customers. They now decide winners and losers: Our Empowered Customer Segmentation shows that more than a third all US online adults want new and engaging digital experiences. They will switch companies to find these experiences. In this environment, being customer-obsessed can be your only competitive strategy.
In Forrester’s 2017 Prediction Reports, we are tracking firms’ progress on their customer-obsessed journeys. In our annual collection of predictions, we look at business strategy, leadership, customer experience, and technology dynamics to examine progress and predict the key events, changes, and trends that will occur in 2017.
Here are three key findings from our 16 predictions reports:
The next wave of Customer Experience will have a profound impact on firms’ P&L: The shift to a customer-led market represents an immediate and prolonged threat to company survival. Our research shows a clear correlation between the quality of customer experiences and revenue growth; it also affirms that emotion is a core driver of customer loyalty and spending. The next wave of CX will connect these dots, blending analytics, technology, and design to evoke emotions to drive affinity and directly impact revenue.
On October 22, 2016, AT&T announced its intention to acquire Time Warner for an equity value of $85.4 billion. The deal is essentially about the combination of quality content and content distribution, as it transforms AT&T into a content producer and owner — rather than just a distributor of content. Many telecom regulators restrict revenue growth opportunities for telcos in highly regulated telco markets. As a result, telcos are increasingly looking outside their markets for growth opportunities. This deal is evidence of this trend.
Telco CIOs Must Become More Strategic To Prepare For The Content Opportunity
The AT&T-Time Warner deal deserves special attention by telco CIOs. The deal needs to be seen against a challenging backdrop for the telco industry, where revenue growth from traditional revenue sources is hard to come by. Yes, AT&T already operates the largest US pay-TV business through its ownership of DirecTV. The Time Warner deal — should it materialize — would enable AT&T to offer its own premium entertainment programming to its pay-TV, mobile phone, and internet customers. AT&T’s intention to acquire Time Warner opens a new chapter for telcos, because the combination of quality content and content distribution potentially helps telcos to:
CIO pushback is part of a typical growing pain of all business intelligence (BI) startups. It means your land and expand strategy is working. Once you start expanding beyond a single department CIOs will notice. As a general rule, the earlier the CIO is brought on board, the better. CIOs who feel left out are likely to raise more objections than those who are involved in the early stages. A number of BI vendors that started out with a strategy of purposely avoiding the CIO found over time that they had to change their strategies - ultimately, there’s no way round the CIO. Forrester has also noticed that the more a vendor gets the reputation of “going round” the CIO, the greater the resistance is from CIOs once they do get involved.
There is of course also the situation where the business side doesn’t want the CIO involved, sometimes for very good reason. That notwithstanding, if there’s a dependency on the CIO when it comes to sign-off, Forrester would strongly recommend encouraging the business to bring him/her to the table.
The two key aspects to bear in mind in this context are:
CIOs look for transparency. Have architecture diagrams to hand out, be prepared to explain your solution in as much technical detail as required, and have answers ready regarding the enterprise IT capabilities listed below.
The pace of business – heck, the pace of life, gets faster and faster. Faster processing, faster delivery, faster innovation – and faster adoption and abandonment of that innovation -- is the reality we all live in today.
Leaders run fast businesses to win and to stay apace or in front of dynamic customers and disruptive competitive forces. They can’t out-slow the competition. Speed is the only option.
I had the pleasure of participating in a webinar panel to discuss what it means to work at one speed (fast) versus at two speeds as bimodal IT advocates. We discussed why businesses are forced to go fast, the reality and downside of a bimodal IT strategy, and the strategies and approaches to winning based on speed. Here is a quick view of the ground we covered.
The first part of our discussion focused on the factors that are making companies operate at fast speeds. Broadly, it comes down to three factors:
Hyper-adoption and hyper-abandonment: Customers are willing to rapidly try, use, and then possibly discard content, apps, and services in a world of seemingly infinite choices and extremely low cost to entry and exit. This dynamic fundamentally changes – speeds up – what it means to “have” a customer.
CEOs and their leadership teams are at a crossroads as technology underpins virtually all customers' expectations and unlocks new sources of customer value. The choice is rather straightforward: invest heavily in business technology (BT) to win, serve, and retain customers, or flounder under the weight of legacy IT.
This is no time to hedge. Strategies like bimodal IT that advocate for silos and two operating speeds may appeal to risk-averse leaders, but bimodal won't get the job done. In fact, it works directly against the key operating principles of customer-obsessed firms in B2B and B2C industries like General Electric, Netflix, and USAA. These firms and other leaders use the customer as the central design point for their business technology strategy and strive to be:
It’s that time of year! The time when every prognosticator comes up with their predictions for the next year. And this year my colleague Pascal and I took the lead in developing our 2016 predictions for the CIO role.
Rather than call out banal and obvious trends I wanted to make a stronger call on the CIO role in particular. In part this is because so many people gleefully post blogs predicting the demise of the CIO. And in part simply because it sometimes feels like I see the role of the CIO differently to many; as first and foremost a business leader.
So will 2016 be the end of the CIO role as we know it?
“No" is my simple answer. In 2016 the Age Of The Customer will further accelerate the role of technology in creating new sources of customer value to drive revenue. As a result we’ll see more and more CEOs expecting their CIOs to help lead their firm toward a clear digital future.
CEOs realize that, increasingly, future growth is tied to their ability to continuously deliver new digital services that create value for customers – across both B2C and B2B business environments. But failure to meet evolving customer expectations will result in losing customers and ultimately lower revenue growth. Without a technology team focused on building the digital platforms of tomorrow, companies cannot hope to keep up with their evolving customer expectations. 2016 will be a pivotal year for CIOs and CEOs – one that will see a significant change in leadership thinking when it comes to a company’s technology capabilities and digital assets.
We’ve been telling you that you need to transition from strictly managing an IT Agenda to owning a BT Agenda, too. 2016 is the year that needs to happen: your CEO will be looking for you to drive digital in your company — and increasingly digital is becoming your business.
Winners in the age of the customer will embed digital into all parts of the business, harmonize virtual and in-store experiences, and be able to rapidly shift to meet the hyperadoption/hyperabandonment behavior of customers.
The scary news? Only a quarter of businesses have a coherent digital strategy to create customer value as a digital business. The onus is on you to deliver that strategy. As CIO, you need to offer a holistic view on the digital transformation that encompasses not just how your firm can harness emerging technology to create customer value, but how your team can help drive synergies across the customer experience ecosystem. We believe the only way to achieve this is a customer-obsessed operating model that will permeate throughout your business and focus on six elements: structure, talent, culture, metrics, processes, and technology.
Here are three things you can do in 2016 to win at driving digital:
The age of the customer demands more of companies, forcing them to change how they develop, market, sell, and deliver products and services. In response, CIOs must invest in business technology (BT) — the technology, systems, and processes to win, serve, and retain customers. At Forrester’s Forum For Technology Leaders in Lisbon (June 2-3), leaders from firms like BMJ, Portugal Telecom, BBVA, Mastercard, Alliander, DER Touristik and UniCredit will share strategies that you can use to achieve Read more
CIOs will be orchestrators of digital ecosystems to boost innovation, production, and go-to-market capabilities. In the age of the customer, every business needs to put the customer at the center of marketing, sales, service, and delivery in order to support the brand promise.
Business ecosystems comprise many market players, including suppliers, distributors, customers, competitors, and government agencies. People, processes, and technology are the fundamental building blocks of business ecosystems. They evolve as a form of collaboration between these market players as part of the process of developing and delivering products or services. Now business ecosystems are going digital.
The digital transformation is a huge challenge and opportunity for each individual business. Business processes are changing significantly as a result of real-time information exchange, the mobile mind shift, always connected and mobile devices, and the opportunity to collect and monitor structured and unstructured data. As a business enabler, no CIO can ignore the digital transformation. Digital ecosystem management is much more than a sourcing project: According to Capgemini, businesses with the digital maturity to build digital innovations and to drive enterprise-wide transformation are 26% more profitable than their average industry competitors on a range of measures including EBIT margin and net profit margin. The CIO must actively help the organization to deliver value in the emerging digital ecosystems.