Living digital

Using digital to make the future bright

PwC insights

The 3 waves of digital development

The changing tides of our digital world and the opportunities ahead

First wave: economy of products and services

E-commerce has been around for about 20 years now. Put simply, it’s the process of shifting your existing business model into the digital world. Most organisations treat e-commerce as a channel to market. However, contrary to popular belief, multi-channel doesn’t always work. It can result in a multiplication of cost, fragmented experiences across different channels and in the worse case scenario, damage to the brand.

We believe organisations need to think beyond channels. Instead, they should focus on the customer and aim to deliver a valued experience while helping them achieve their desired outcomes. It’s about bringing digital to the heart of your organisation.

Second wave: economy of outcomes

Music is a good an example here. Going back a few years, we used to buy a tangible product: the record. Jump forward in time, and it was all about purchasing the album for our iPod. Nowadays, we buy a service that streams music to us – wherever we want and whenever we want it. We’re not buying a product; we’re buying the outcome.

And this is the critical difference. Leading-edge organisations (both B2C and B2B) are engaging customers with technology to understand and help them achieve their desired outcome. This isn’t just by selling them products and services. Digital technology allows you enable the outcome. This in turn creates greater customer engagement and loyalty, and for longer. To do this requires a new mindset, new capabilities and a new relationship with customers. One which is founded on unprecedented levels of trust.

Third wave: economy of wishes

Consumers’ digital identity is becoming more and more valuable to organisations. In the future we predict that consumers will give businesses permission to interrogate their data. That way, companies will be able to provide a better, more personalised service. Put simply, it’s like the consumer saying “here’s my data, what can you offer me that’s better or cheaper than your competitor”. We call this the economy of wishes.

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PwC insights

How much is a digital life worth anyway?

We would never dream of leaving our belongings outside our house. So why are consumers so blasé about their digital assets; and what should businesses do about protecting their own?

Although we may not even be aware of it, we are all living double lives – one in the real world, and one online.

In fact, the lines are more blurred than that because many of us are already running a huge proportion of our ‘real’ lives digitally. This might be through shopping, working, banking, enjoying entertainment or simply interacting with our friends.

It’s fun, it’s convenient and it’s often cheaper.

UK consumers have digital ‘assets’ worth anything up to £25 billion

But the rules and norms by which we manage our digital lives are still evolving. In some ways, we’re struggling to keep up with what technology now allows us to do. You only have to look at how much we now keep online to see what this means in practice. A recent PwC survey suggests that UK consumers have digital ‘assets’ worth anything up to £25 billion, ranging from things they’ve paid for, like downloads, to things with no monetary value but which are still irreplaceable if lost, like photos.

The risk of losing these assets is very real – whether by theft or simply by accident. We would never dream of leaving our physical belongings as exposed as most digital assets are: 1 in 5 of us use the same password for everything and – perhaps surprisingly – the ‘digital natives’ who’ve grown up with the internet are far more blasé than the older generation about protecting their possessions and their privacy online.

What does this mean for businesses? First, and most important, cyber security is as much an issue for organisations as it is for individuals. The digital world represents a whole new realm of risk, from people, to processes, to public perception. Companies need to be as careful about their data and their digital assets as they are about their tangible ones. Second, consumers are getting savvier about the potential value of their own data, and how they can use it to get better deals. Any company in consumer goods needs to get with this particular programme, or risk losing ground to those who do.

PwC insights

Digital natives. Who are they and how will they affect your business?

Over the last few years, business has changed at an astonishing rate. This change has been triggered by the explosion of digital technology in four key areas…

Each has had a significant impact on businesses and, more importantly, on the expectations and behaviour of their customers and employees. Among these customers and employees is a group of people who are more tech-savvy than any other demographic.

We call them digital natives.

Digital natives are consumers and employees born into a culture of digital technology. In the next few years they will become the most dominant demographic. A recent study by PwC highlighted how their extraordinary ease with technology permeates every aspect of their lives – as both consumers in the marketplace and employees in the workforce.

How will digital natives affect your business as customers?

Digital technology has given rise to a new generation of consumer who want their products to be accessible, portable and flexible. And they want their services and experiences to be customised and personal. How well do you know the needs of this new customer group?

More than half of the CEOs in our CEO Survey are concerned about the change in consumer behaviour and spending among this generation of digital natives. We see this as a clear opportunity to create value by meeting their needs as they consume, but achieving this goal goes far beyond traditional transactions.

Digital natives want more access to, and control over, their own data when it comes to consuming and transacting online. The challenge will be encouraging them to share their data, so you can not only help them achieve their desired outcomes, but also provide an experience that is unique and special. But how do you go about this? How do you engage with digital natives to earn their trust? To do so, businesses need to develop a business strategy fit for the digital age.

How will digital natives affect your business as employees?

Debates about the potential of digital often focus on an organisation’s relationship with its customers, but there are enormous possibilities within the business as well.

Digital natives will shape the world of work for years to come. Their career aspirations, attitudes to work and knowledge of new technologies will define the culture of the 21st century workplace.

To foster a greater sense of commitment and motivation among digital natives, businesses will need to change the way they work.

Have you got what it takes to survive in the digital age?

The generation of digital natives is growing up fast. Nowadays, all B2C and B2B markets are digital in some way. This creates issues and threats for all businesses. One thing is clear: continuing as you are, or just trying harder is unlikely to work. However, the opportunities to grow and win are out there.

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