Altimeter’s Top Digital Trends for 2020

Every year the Altimeter analyst team predicts digital trends that will have the biggest impact on business. This year, we have the predictions from Charlene Li, Omar Akhtar, Susan Etlinger and Ed Terpening. Here’s their take on the most important trends for 2020.

Omar Akhtar – Digital Marketing Innovation

The martech industry consolidates to a few big players

2020 will be the year that martech vendors either go big or go home. In this past year, the martech industry saw the continued acquisitions of smaller vendors, and one major player dropping out of the race entirely. IBM announced that it was getting out of the martech business altogether, while Oracle barely announced any new features or enhancements to its Experience Cloud products. That leaves Adobe, Salesforce and to a lesser degree, SAP as the remaining heavyweights in the enterprise martech field. According to our research, 90 percent of marketers used software from either Adobe, Salesforce, Oracle or IBM, as their primary or backbone martech platform. This means that in 2020, enterprise marketers will be hard-pressed to find options that aren’t any of those companies, and will be forced to define themselves as either an “Adobe shop” or a “Salesforce shop” and exclusively use the integrated suite of tools from those platforms.

Goodbye “data-lakes”, hello CDP’s

Marketers are under increasing pressure to use as much data as possible, but they’ve never had the right tools to get exactly the data they need. The data they’ve been given access to was either too small and siloed (e.g. web analytics, CRM) or too big (i.e. data lakes). The solution lies in CDP’s or customer data platforms. These platforms are essentially marketing analytics platforms that allow marketers to plug in exactly the analytics that are most relevant to them, and more importantly, the customer experience.

CDP’s can plug into channel analytics such as display ads, web, email and social, and the really good ones have killer visualization tools. The big martech vendors Adobe, Oracle, Salesforce, SAP and SAS all have CDP platforms in-market or in development. So why wouldn’t marketers rush to implement them? It’s yet another martech tool in a crowded stack, and many departments are barely able to make sense of the analytics they currently have, let alone another platform to manage. My prediction: in 2020, it’ll be a top priority of most marketing teams to evaluate their need for a CDP.

Account based experiences > Account-based marketing

B2B companies were all about embracing account-based marketing in 2019, although as a marketing practice, it’s been around forever (just not digitally). With account-based marketing, B2B marketing teams can target specific accounts for new sales, or cross-sell/upsell opportunities, with a combination of hyper-personalized digital ads and traditional lead nurturing techniques.

In 2020, we’ll move away from account-based marketing, to account-based experiences, which means a much more holistic approach to engaging your top customer accounts in an ongoing way. Account-based experiences utilize far more channels than marketing usually manages (such as in-product messaging or chatbots) and is based more on serving the needs of the target customer in the moments they need them, rather than targeting than with personalized messaging/campaigns.

Charlene Li – Digital Transformation, Experience and Innovation

Failed Digital Transformation Efforts and 5G Will Force a Reckoning

With 60-80% of digital transformation efforts failing to meet their targets, the reality is setting in that initial approaches must be re-examined. Problems range from lack of clear and aligned outcomes to canceling initiatives when they hit roadblocks. Company boards refuse to approve costly digital transformation proposals because they have seen the same silo-stifled, over-ambitious plans before and want no more of it.

Revamped digital transformation initiatives will focus more on “minimally viable product” -like programs, designed to be both agile AND cross-functional to show results quickly and build confidence and digital competency throughout the organization. Interestingly, the widespread availability of 5G will be a forcing function as faster backend processes and data sensors will need to be integrated into front-end customer experiences.

Leaders Will Develop New Scorecards and Strategies for a Modern Business

It was a watershed moment last year when nearly 200 CEO members of the Business Roundtable issued a statement about the purpose of a corporation moving beyond creating shareholder value to also deliver value to customers, invest in employees, deal ethically with suppliers, and support communities in which they work. Along with growing concerns around ethics and AI, a topic well-covered by my Altimeter colleague, Susan Etlinger, leaders face rising expectations to deliver against many bottom lines that fuel reputation and purpose, as well as financial results.

Great leaders know that you manage what you measure so we will need new scorecards that reflect the new realities of business. But how do you create a scorecard for ethical behavior? What are the metrics that reflect increasing employee value? And what does good look like when making trade-offs between all of these areas? Organizations will set aside time at the executive and board level to ponder these questions and develop goals and metrics that will serve as the foundation for a robust, modern business strategy.

Strategic Planning Goes Agile Thanks to Digital

One of the great frustrations of business is that the strategic planning cycle almost always follows an annual calendar cadence – while business cycles and disruptions rarely do so. The atrophied strategic planning process, locked-in budgets, and annually-incented leaders can’t respond if a disruption or opportunity arises mid-year. The biggest shortcoming to the traditional “waterfall” strategic planning approach is that you don’t make changes until you see the results for the previous period.

Given the realities of a fast-changing business environment, look for more organizations to shift to a more agile approach to strategic planning as this department undergoes its own digital transformation. Gathering operational data and marketplace shifts becomes an ongoing process thanks to digital backends and collaboration platforms that enable real-time analysis and adjustments to the strategy. More importantly, the strategy becomes a living, breathing entity that is constantly tended to, cultivated, and shaped, rather than placed on a shelf someplace to ferment.

Susan Etlinger – The Intelligent Organization, Innovation and Trust

Organizing for Blended Reality

The digital world today looks very different from the world of the past decade. Social media is the de facto communication channel for up to half of the 4.3 billion internet users worldwide. Connected devices powered by intelligent technologies enable us to speak or gesture to virtually any device to communicate our needs. Computer-generated imagery is no longer confined to Star Wars; it’s being used for everything from puppy filters to information wars. But, as we enter 2020, the biggest change we’re facing is that we’re no longer able to separate digital from analog, business from personal. We blend.

What it means: digital experiences are brand experiences. In the early 2020s, expect “digital transformation” to become an artifact, much the way “e-business” or “social” has become in the last two decades. Digital is table stakes now, and it’s time to take a hard look at organizational silos, whether they’re focused on data, technology, process or people.

Brand Integrity Under Pressure

Many of us have never known what it means not to live in a digital world. At the same time, the norms we’ve evolved over the past thousands of years are frequently unable to anticipate the consequences of intelligent, automated technologies that can painstakingly construct realities around us using personalization technologies.

This can be useful and fairly innocent—color preferences, sizes, whether you’re likely to want fries with that—or it can threaten democracy, as we’ve seen with the Cambridge Analytica scandal, the crisis in Myanmar or on any given hour on Twitter, YouTube and Facebook. Technologies like deepfakes and cheapfakes have some interesting brand use cases—watch Bill Hader subtly morph into Tom Cruise and Seth Rogen in this interview with David Letterman—but they also make it harder to distinguish between legitimate content and misinformation. While we’ve seen these issues play out in social media, they’re trickling down to the rest of us very quickly.

What it means: information warfare hits the business. In the 2020s, we’re going to see information warfare spread to business, particularly in the areas of brandjacking, cybercrime and stock price manipulation. In one recent case, fraudsters used conversational AI to mimic a CEO’s voice, requesting a transfer of €220,000 to a “Hungarian supplier”. This will require a new level of awareness, quickly followed by internal controls and processes. This is not just an issue for video and images; it is also a risk of text generation technology.

Business Ethics as a Business Strategy

For our 2017 trends roundup, I forecast that AI ethics would need to become an integral part of the customer experience. In 2018, I predicted that ethics would finally go mainstream; that “as AI continues to infuse more products, services and business models, the way companies use it will inform the brand experience”. Last year, I forecast that “we’re going to see a big wake-up call in 2019 as organizations discover just how challenging it is to define ethics, much less engineer it into scalable processes and practices.”

But the conversation about ethics has spread far beyond AI and technology to business as a whole. We’ve seen controversies over charitable donations, to whom companies sell their technology, from whom they should accept donations, how they treat activist employees and employee movements, policies for managing “ghost” and gig-economy workers, diversity and inclusion in hiring and performance evaluation, and deep discussions as well on the ethics not only of technology use cases but whether certain technologies should exist at all. This adds up to a reckoning; not only with technology and power, but with the fundamental responsibility of businesses and civic organizations toward the people they employ, and the people they serve.

One of the outcomes I feared in 2019 was that business ethics would “jump the shark”, leading to cynicism and an inevitable backlash. The good news is that, in some organizations, we did see promising momentum toward building ethical capacity in 2019, turning values and principles into practice and processes.  Some of these initiatives were informed and advised by leaders from academia and human rights organizations, many of whom are women, people of color and people in the LGBTQIA community. There is still a tremendous amount of cynicism and polarization to contend with, and concerns that any attempt to address business and technology ethics is simply a public relations fig leaf. The situation, as always, is a bit more nuanced than that.

“We can’t let the perfect be the enemy of the good, or at least the less bad.”

The upshot: we can’t let the perfect be the enemy of the good, or at least the less bad. Cars became widely available in the early 20^th century, and traffic signals became common in the 20s, but it wasn’t until 1968 that seatbelts were mandatory. While we haven’t eliminated traffic accidents, we haven’t stopped trying, and I hope we never will. The same must be true in the digital world. Technology will not make humans less biased, just as seatbelts won’t make them better drivers. AI won’t fix problems society can’t solve. Regulation can only do so much. But that doesn’t absolve us of the responsibility to face the hard questions, find and test solutions, and remain accountable throughout. Certainly, this is true for society, but it is also healthy for businesses and their leaders, which are increasingly judged by the choices they make, both in the digital and physical worlds.

Ed Terpening – Digital Selling and E-Commerce

The Growing Trust Deficit

One by one, trust in customer channels has been degrading under unchecked parasitic forces. The explosion of robocalls has ruined the effectiveness of telemarketing.  What should otherwise be a useful—even necessary support call—between a customer and business often goes ignored. According to Consumer Reports, 70% of Americans don’t answer their phones when they don’t recognize the incoming number.

Spam and the explosion of fraud is degrading email effectiveness, and social media users started to level out and decline in 2016.

No doubt, you’re feeling this. The building of confidence between brands and consumers through trusted platforms—from the start to the end of the sales funnel—should be a significant part of the digital strategist’s agenda in 2020.

Mounting Organizational Stresses

Organizational silos in business are nothing new, but they have never been more of a threat to success than now.  Organizational stresses are being exacerbated by digital transformation that attempts to unify experience and outcomes through shared data and tools.  Even a definition as foundational as “the customer” must be orchestrated in such a way that each team’s expertise and role—from Marketing to Service—is optimized to make 1+1=4.

Teams must increasingly orchestrate their work by following a common thread of customer and business insights, success metrics and processes that ensure value isn’t lost (but rather, built upon) between them. Key strategic decisions such as how or whether to organize around customer type, product, geography, customer journey step, etc. will remain a key 2020 challenge.

Blended Commerce

I’ve been creating e-commerce solutions since 1995, many lifetimes ago in the tech world.  Recently asked to write about it, I struggled.  What does the term mean today in a world where digital jumps from the web browser to the store aisle?  We used to be able to draw solid lines between e-commerce and everything else: if it was a website or app, it’s e-commerce. Now, the lines are blurring. Consider Amazon Go, a brick-and-mortar convenience store customers can use without ever interacting with a human. Is it e-commerce?

This trend is being fueled by the proliferation of IoT devices like beacons in physical locations that absorb customer behavior to create more efficient—and for the enterprise, more data-rich—experiences. “E” vs. “In Real Life” commerce will continue to evolve and blend in 2020—and, by the way, will require mastery of my previous leading trends, building digital trust and resolving organizational stresses in digital.

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