In this guest post, Dr Peter Steidl (pictured below), principal at Neurothinking, takes a good, hard look at how technology will shape the future of marketing.
The impact of new technologies will be more complex and disruptive to marketing than many of us realise. In case you are not yet worried about your future as a marketer, let me explore some of the major trends and developments that will create unprecedented risks and opportunities for marketers.
McKinsey, the Oxford Martin Institute and other credible parties predict that technologies that are already being deployed – artificial intelligence, blockchain, 3D printing, virtual and augmented reality, the Internet of Things, drones and robotics – will eliminate around 50 per cent of today’s jobs. Unfortunately, these technologies will not create many new jobs, leading to a massive disruption in the way we live.
As an example: technologists have proudly announced that autonomous vehicles will create some 120,000 new jobs in the US. What they didn’t mention was that close to eight million truck, delivery van, taxi and other professional drivers will lose their jobs. Add to this the expected job losses in the car insurance, auto repair, hospital and health services, car manufacturing and other related industry sectors, and we are looking at well over 10 million jobs lost compared to a gain of 120,000.
Of course, governments are not going to sit idly by while half the population lives on unemployment benefits. A number of countries are exploring the introduction of a universal basic wage as a means of dealing with the expected high levels of unemployment. But what does this mean for marketers?
As a marketer, you will find it easy to imagine how the prospect of a fixed, merely adequate income will impact on a consumer’s spending. Australia’s current household debt stands at just above 120 per cent of GDP. Of course, debt is no problem as long as income growth allows the consumer to catch up with their payments. Australia has had the longest uninterrupted period of growth of any country in the world, so consumers have got used to taking on debt based on the reasonable expectation that they will earn more in the future and thus be able to comfortably manage their indebtedness.
Now imagine how consumers will react when they know – with a high degree of certainty – that their future income will be safe, moderate and stay the same for the rest of their life. They will no longer be able to expect year-on-year income growth. What will these consumers do? What will happen to consumer spending?
And this is only the tip of the iceberg when it comes to technologies changing consumer behaviour. The use of digital home assistants is spreading rapidly in the US (e.g. Amazon’s Echo, Apple’s Siri, Google’s Assistant) and consumers are starting to delegate the ordering of many goods and services to them. Developments in new delivery systems – notably drones – are facilitating home delivery of many items, including groceries. Australia is not yet that advanced, but the US situation is a sign of things to come.
These developments, in turn, will have a profound impact on the retail scene. For example, when a significant share of groceries is ordered online and home-delivered, we are likely to see a reduction in mainstream retail outlets and a growth in emotionally engaging destination stores.
From a marketer’s perspective, there are a number of key challenges that must be addressed. Some of the most important questions that need to be answered are:
- How will consumer behaviour change when close to half the population will be on a universal basic wage (or unemployment benefits if the Australian government screws up)?
- How can we ensure that our offer is still seen as relevant and something the consumer doesn’t want to trade for convenience and lower prices by delegating the purchase to a digital home assistant?
- How will we ensure our brand is the one chosen by a digital home assistant?
- How can we adjust our offer and the positioning of our brand to be relevant and desirable in the new, emerging market environment?
If we can’t be the price leader (and the vast majority of brands can’t), then the only way to succeed in this environment is to build a strong emotional relationship with the consumer. This means that we need to develop a clear brand positioning because familiarity and buying habits will no longer drive purchases, and this which demands that we move increasingly from exposure to engagement.
Marketers can no longer afford to continue spending their time on short-term issues, with the quarterly budget consistently taking priority over the long-term health of the brand.
We are looking at an emerging environment where marketing will either be propelled to the most important business function or will start the quick slide to its demise, and this choice will depend on what marketers do between today and when the technological disruption hits and consumers change their behaviour in ways we have never experienced before.
A branch of marketing that is arguably in the best position to deal with these changes is sports marketing. More about this in my next contribution.
If you want to learn more from Dr Peter Steidl about the future of marketing, click here to secure your ticket to the Ministry of Sports Marketing conference next month.