Brief
Today, more than a year after the World Health Organization declared a pandemic, Covid-19-related themes continue to dominate digital transformation plans, from training remote workforces to digital customer experiences (for previous themes, see “Ten Technology Trends Moving into 2021”).
But as leaders start to form a vision of a post-pandemic reality, new technology trends are joining the list of strategic priorities. Many executives are placing a heightened emphasis on pre-pandemic themes that became more urgent with the events of 2020, including diversity in recruiting, supply chain optimization, and sustainability. And some are turning to emerging technologies, such as quantum computing, AI-enabled collective intelligence, and brand-owned online marketplaces.
Venture Ecosystem
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To identify the most disruptive trends, Bain met regularly with hundreds of carefully selected technology companies and start-ups. Combining those conversations with our experience from working with large corporations and our innovation ecosystem partners, we selected nine trends that have recently risen to the top of C-suite agendas:
- “Nudging” customers
- Reskilling with gamification
- Diversity in recruiting
- Owned marketplaces
- Integrated business planning (IBP) for supply chains
- AI-enabled collective intelligence
- Transparent sustainability
- Quantum computing
- Non-fungible tokens (NFTs)
1. Businesses “nudge” their customers toward desired behaviors
Almost 60% of global executives across sectors said they adopted customer experience tools to improve different stages of the customer journey over the past five years. The pandemic profoundly amplified the need for this digital transformation, shifting consumer behavior and accelerating trends by two to three years.
In the digital customer journey, “nudging” is an increasingly prevalent tool to push consumers toward desired outcomes. It influences customer behavior through positive reinforcement and subliminal messaging, often helping to better fulfill their wants and needs.
Vitality, a health insurance solutions provider, set the goal of helping 100 million people increase their physical activity by 20% before 2025. To achieve this ambition, it developed a platform that rewards daily healthy habits through a point system and site credit. Since adopting the platform, high-risk users (those with a body mass index of more than 30) in the US, UK, and South Africa have more than doubled their physical activity. In turn, through the platform, insurers have gained lower claims on premiums, higher margins, less customer churn, and a better understanding of customers’ underlying risks.
2. Gamification reskills the remote workforce
The World Economic Forum predicted that more than half of all workers will need significant re- or upskilling by 2022, in order to meet growing demands for proficiency in new technologies, analytical thinking, and emotional intelligence, among other skillsets. But the pandemic has thrown a wrench in that timeline. Most companies—already struggling with a lack of agility and employee engagement in their training programs—found their issues were exacerbated by remote training. In addition, Covid-19 highlighted the need for new ways of working, not only to adapt for future crises, but also to meet the growing demand for remote work.
To make training more efficient and enjoyable, leading companies across industries such as retail, healthcare, and professional services have turned to gamification. Start-ups like Attensi are transforming training with gamified simulations by immersing employees in authentic situations and providing incentives—like points systems or leaderboards—for performance. Attensi believes training games encourage the engagement and repetition needed to durably change behaviors. It also enables employers to track skill levels and improvements against real KPIs, such as sales, customer experience, and productivity, allowing them to measure learning and development.
3. Diversity becomes a core recruiting metric for successful companies
In the past year, a racial reckoning prompted many companies to publicly commit to improving their diversity, equity, and inclusion (DEI) agenda. A recent study by LinkedIn Talent Solutions found that the number of people in head of diversity and chief diversity officer roles increased 75% and 68%, respectively, over the last five years. It also proclaimed head of diversity as the “job of the moment.” A diverse talent base has also become a requirement for young job seekers, who increasingly prioritize personal values when deciding where to work.
Beyond the response to systemic injustice, businesses are beginning to understand that diversity is beneficial to both decision making and return on investment. Teams with gender diversity make better business decisions 73% of the time, while age- and geographic-diverse teams do so 87% of the time. And 64% of consumers say they are more likely to consider or purchase a product after seeing an ad that they consider to be diverse or inclusive.
To help organizations achieve their DEI recruiting goals, companies like pymetrics are using a combination of behavioral science and audited AI technology. With forward-looking behavioral assessments, pymetrics’ platform evaluates candidates on potential, while removing implicit bias from the recruiting process. In addition, it provides solutions for data-driven talent management, as well as the redeployment of displaced employees, to help them find a “soft landing” in a new role.
4. Brands and retailers turn into marketplaces to benefit from network effects
Global, centralized marketplaces such as Alibaba, Amazon, and Rakuten have seen exponential growth over the last decade. A convenient shopping option, marketplaces represented almost 50% of online purchases in 2019.
However, recently, individual businesses have started moving away from these platforms to establish their own marketplaces. These owned marketplaces allow brands to benefit from the network effect: They can aggregate and sell adjacent products and services, creating a one-stop shop for their target customer. The network effect can boost customer acquisition and retention. It can also increase interactions, in turn lowering the cost to serve each customer.
This emerging trend has given rise to companies like Mirakl, which helps brands quickly launch marketplaces and provide quality service at scale through a fully configurable platform, a curated ecosystem of sellers and partners, full security, and advanced automation. For instance, one global DIY retailer built a marketplace for its expansion into a new region. Within 18 months, its offerings grew eight times through 300 sellers, and the marketplace made up 30% of total e-commerce in the new region, without cannibalizing existing product sales.
5. IBP platforms optimize supply chains
With demand unpredictability and supply shocks from trade restrictions and product shortages, Covid-19 threw fragile global supply chains into disarray.
Yet even prior to the pandemic, companies struggled with supply chain optimization programs. According to a Bain survey of cross-industry executives, 75% of companies do not achieve their cost productivity targets. Silos across business divisions and geographies are often at fault. They obstruct data sharing and communication, causing issues such as long lead times or inefficient inventory management.
IBP platforms are helping global companies bypass silos to transform their supply chains, revenue and financial planning, and decision-making processes. For instance, o9 Solutions has developed a platform to connect all relevant input across structured and unstructured data, providing end-to-end supply chain visibility. Replacing a manual, spreadsheet-based planning process, one oil and gas company established the integrated platform as a single source of truth. With full visibility, it was able to improve planning accuracy, while reducing inventory and the costs of unused ships and vessels.
6. AI-enabled collective intelligence curates frontline insights for a more agile strategy
According to a 2020 study by Harvard Business Review, 86% of executives say frontline workers need better technology-enabled insight to make good decisions in the moment. As companies become increasingly customer centric, the need to create a flow of data and insights to and from those closest to customers—the front line—will continue to grow.
To filter and analyze massive amounts of input, leading companies are looking to AI-enabled collective intelligence. While AI is highly effective in pattern recognition, it is incapable of creativity and misses insights in nonstructured data. But combining AI and human capabilities can help curate frontline insights, bringing greater agility and efficiency to problem solving and decision making. By addressing the untapped potential of the front line, organizations can uncover new ways to address strategic priorities, particularly around the customer experience.
Technology firm bluenove has built Assembl, a massive collective intelligence platform, to help large organizations rapidly identify insights. Assembl draws on natural language recognition to highlight recurring concepts and keywords in debates, allowing users to follow trends of discourse in real time. Using Assembl, one financial services firm engaged more than 11,000 local employees in a conversation to cocreate the company’s development strategy in Africa, across business models, products, M&A, and more. Coming out of the discussion, employees were able to determine, prioritize, and present 20 strategic priorities to the board—15 of which the board endorsed for the strategic agenda.
7. Savvy consumers demand sustainable products
When it comes to sustainability, consumers are paying far more attention and taking far more action. According to a 2018 Nielsen study, 73% of global consumers say they would definitely or probably change their consumption habits to reduce their impact on the environment. This shift in consumer preference has pushed sustainability to the top of the corporate agenda, especially in the wake of the pandemic. According to a Bain survey, more than half of executives say Covid-19 has only increased the importance of sustainability for their business.
Working with Bain, one global agricultural food company created a comprehensive sustainable sourcing solution that allows customers to track their food from field to factory gate. It reports across sustainability metrics, enabling consumers to differentiate between products and pressure brands to commit to social and environmental targets.
8. Quantum computing starts to address specific applications
With an estimated market size of $1.1 billion in 2019—expected to grow five times by 2025—quantum computing is an emerging technology poised to radically reshape the world, by solving difficult problems beyond the power of any conventional supercomputer. Moving away from ones and zeros, quantum computers can process exponential combinations of multiple dimensions, enabling 10,000 times the speed and complexity management of supercomputers. IBM and Google remain front-runners in the quantum sector, but venture capital activity is accelerating, with investments of about $480 million in 2020—more than double the estimated $200 million invested in 2019. However, there are still significant challenges regarding cost and energy effectiveness, hindering the technology’s commercial scalability.
Seeqc, a spinout of superconductor developer Hypres, is approaching the quantum challenge differently. Using application-specific superconductor chips, Seeqc aims to deliver scalable, cost-effective, and energy-efficient solutions. For companies like Merck & Co., which has partnered with Seeqc, this could eventually mean quantum computers specifically tailored to solve different issues across its businesses. While it’s still early days, the platform demonstrates a clear path to scaling quantum computing for commercial use cases.
9. NFTs remain the talk of the town
It’s impossible to ignore the current buzz around NFTs. These digital identifiers attach verified ownership to virtual items in blockchain, protecting them from replication, making them identifiably unique, increasing their value, and generating business opportunities.
NFTs can be used to sell digital collectible items: Consider how the NBA has grossed more than $230 million from NFT-enabled video highlights. In addition, NFTs have the potential to transform the relationship between brands and customers by unlocking exclusive incentives. They can also serve as secure digital passports that guarantee the authenticity of products, making them useful to luxury retailers and consumers, among others. For example, Swiss watchmaker Vacheron Constantin launched the Hour Club, an owners-only digital platform offering NFT-enabled tracing and authentication for its timepieces, bespoke content, and event invitations.
While NFTs are primarily concentrated in consumer products and media, this phenomenon is quickly accelerating. Only time will tell how the technology will evolve across industries.
As companies chart their post-pandemic path, winning organizations will consider these nine trends, and proactively identify strategies and innovation partners to help them navigate their journey.
The Bain Innovation Exchange (BIE)
With its cross-industry focus and extensive experience with leading corporations and innovation players, BIE is a trusted partner for leading corporations looking to get ahead of emerging digital trends.