DataIQ Future gave delegates an insight into what the future might bring and how leading brands are trying to become intelligent businesses. At the heart of these transformational trends sit consumers and all of the data they provide. So who is ready for the next decade? David Reed reports.
In “Mission Impossible”, Ethan Hunt has to steal a list of agents from CIA headquarters. This involves staging a fire alarm, entering the building in disguise, infiltrating the air conditioning, lowering himself on a trapeze and making sure none of the pressure or temperature sensors are set off.
If only he had heard of “smart dust”, which Dr Ian Pearson, founder of Futurizon, explained to the DataIQ Future summit in mid-October . This new espionage technique involves 50-micron sized chips - half the size of the smallest object visible to the human eye - capable of holding 4mb of data which are distributed into a company via its air conditioning ducts.
“They can pick up the signal from wires, use pressure sensors to pick up key strokes. You just send somebody in with a device to suck up all the information from those chips,” he told the conference. “There is a lot of money to be made by protecting against that.” There is also a lot of potential intellectual property which could be lost to this kind of innovation.
That might seem fanciful, although there is every chance intelligence services are already using it. But the continued miniaturisation of micro-processors is a trend which has undoubted consequences for all of us, both as consumers and as business executives. Current devices will be transformed by such innovations to the extent where, according to Pearson, “mobile phones will look like a transient trend that will not be around in the future.”
This will create a wide range of opportunities, from 3D printing through to “sponge networks” that transmit data from person-to-person, without using formal Internet connections. Sensors will be built into a growing number of products, yielding huge volumes of behavioural data. Payment technology will also converge into the mobile space, while there will be a new generation of simple, cheap devices, rather than ever more sophisticated, expensive ones.
Pearson argues that these technology trends will actually prove to have environmental benefits. “The faster we get there, the better. We can only get to more efficient devices by getting through the obsolescence cycle faster. In 1991, I had 19 gadgets weighing 700 kilogrammes. Now all of what they did fits into one phone - and that trend hasn’t finished yet,” he told delegates. One benefit from this accelerated development cycle would be to reduce the risk of an energy famine in the next decade.
Not all of the trends identified by Pearson are what might be expected or wanted. Globalisation may undergo a partial reversal, for example, as threats from viral infection or terrorism deter global travel. The rise of social networks paradoxically reduces its users’ horizons. “We have got a generation who live in the walled garden of Facebook - that is not the Internet, it is only 0.1 per cent of the Web. They need to understand that,” he says.
Forecasting the future may seem like a thankless task. After all, there are so many variables and potential “black swan” events (or even “grey swans”, as top ad man Martin Sorrell recently described known possibilities with uncertain outcomes). Yet business has to set out its plans for the coming years, even if the horizon is just three years from now.
In a fast-changing area like technology, it might seem that future-casting is even more fraught. Today’s digital breakthrough could end up looking like yesterday’s Betamax. But the impact of successive waves of IT is undeniable and the data being generated, managed and analysed by it will only continue to grow.
That is why DataIQ Future hosted not one, but two of the UK’s leading futurologists to help delegates gain an insight into the trends they need to take into account and the techniques which might help to make sense of them. Not every trend will prove to be robust or capable of commercial exploitation, of course, but they may contain a germ of some critical development.
Melanie Howard, executive chair, The Future Foundation, noted that the data has a very rosy future. “Data is at the tipping point. It is hitting a time where data is something everybody is playing with, not just the elite.” Competitive advantage is there to be won by intelligent businesses which recognise the opportunities and leverage them.
She pointed out that, “the future isn’t a unitary event that happens to us - we have to understand how change is happening at different rates and also decide what time horizon we want to work to: next year, two to three years, five to ten years?” That helps to set out the structure within which future casting can be carried out with more precision. Trends can be divided by their pace of change between slow, medium and fast and their outcomes considered across different time intervals.
An example of a slow rate of change is demographics. Within the population profile there are multiple waves reflecting birth and death rates and other social factors, such as 27 to 38-year-old “echo boomers” who represent a bigger segment than preceding decades and who are themselves responsible for a baby boom of 0 to 15-year-olds.
A medium-rate change has been the growth of the 24-hour society, fuelled first by access to services by landline phone and call centres and then the internet and mobiles. “Back in the late 1980s we could see a group emerging that needed services outside of the 9 to 5 which presented an opportunity to do things differently,” said Howard. First Direct is the best example of a business taking advantage of a mid-length trend like this.
Technology adoption is the ultimate fast trend, such as the rise from 40 to 70 per cent of the population who will have a smartphone by 2018, according to nVision. Some fads are even more rapid, like the explosion of “mommy porn” led by “Fifty Shades of Grey”. The forecasting business WGSN has thrived on the back of spotting these rapid trends and providing insights to businesses, although Howard wonders, “is it a self-fulfilling prophecy?”
Mobile telecoms are undoubtedly at the heart of many changes in society and commerce with a growing number of services converging onto a device that consumers have with them almost permanently. This has already led to new business models, such as the GiffGaff brand which has dispensed with customer service in favour of online community support. In return for providing help, subscribers win credit and can even end up getting new handsets for free.
John Belchamber, global BI and data transfer at Telefónica Digital, works with key markets around the global to identify best practice and embed it in other countries. “We are looking through customer data for opportunities to develop new models and new strategies. We recently did a ‘deep dive’ in six countries to determine their best practice so we can now draw a map for other countries of how to use that. We just need to relay it to them and get their buy-in to deploy it,” he said.
He noted that to become an intelligent business, “the technology is easy, it is the business process and how you use the technology that is the difficult thing.” Commercial benefits also need to be identified. One recent example of those is Smart Step, which can give retailers profiles of who is walking past their stores using anonymised data sets.
A similar initiative was reported by Ben Lethbridge of EE (formerly Everything Everywhere), as part of headline sponsor Experian’s keynote presentation. The network recently analysed cell data on the crowds at two matches during the Six Nations tournament - England v Ireland at Twickenham and Wales v France at Cardiff.
This allowed the company to identify key differences, such as that fans in England travelled from further afield than those in Wales and that they were also more likely to have attended horse racing at Cheltenham before the match. “We did something similar for Westfield looking at their footfall and store visits around match time. One of things we found was that 31 per cent of visitors to the mall then visit Amazon on their mobile and 7 per cent go to Groupon,” said Lethbridge.
Those insights allow the network to sell effective SMS advertising packages to retailers and brands which may increase in-store conversion and reduce sales lost to online e-commerce, for example. It is an example of the power of big data to make marketing more efficient while also delivering improved service to consumers.
A similar approach has been adopted by Aegon Direct Marketing Services, which aims to support partner brands through data and analytics. As Thomas Brennan, European data effectiveness manager, said: “It means they can stop worrying about what they are trying to do and just get better at it. It keeps them at the forefront of the right markets.”
More ways to apply data and insights to business problems were presented by DataIQ Future’s sponsors Callcredit, Communisis Data Intelligence, DQM Group, MarketReach, Neolane, RAPP, Teradata and Transactis. (You can view video summaries of their presentations at www.dqmgroup.com/reports.)
If these developments all point to the value of data to business, then they also indicate another facet of data’s future - that it might come to have an asset value on the balance sheet. Noel Penrose, chairman of Juniper2 Advisory, considered the challenges and issues that would be face when trying to do this. “It is an art, not a science and involves a combination of qualitative and quantitative analysis,” he said.
That will sound familiar to any data practitioner. It is one thing creating the perfect data set and applying cutting edge tools to understand it. It is quite another to come up with an intelligent outcome from that analysis. For many, achieving that is still in the future.