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The consumer has always been the focal point of every business. Add the technology dimension and you get what’s termed as consumer technology – technology that’s bought or used by individual or retail consumers to directly meet their requirements. This differs from enterprise technology that’s utilized by institutions, Governments or business enterprises to meet their objectives. A key driver behind the consumer tech phenomenon is the consumer acceptance of online, fueled by the pandemic and the digital-first economy and digital transactions being enabled by the digital payments ecosystem. A Bernstein study zeroes in on B2C e-commerce, food delivery tech and ed-tech as 3 verticals of consumer tech that have huge potential to scale up.
Simpl: Bringing together consumer tech and consumer service
Simpl is a new-age consumer tech company that offers a frictionless digital payments experience with capabilities to successfully handle online payments transactions, at scale. At the heart of Simpl’s product philosophy is the ability to deliver an almost invisible, convenient and prompt payments experience.
What makes consumer tech tick?
Buy Now Pay Later, food delivery, e-commerce, D2C brands, e-logistics, online travel – the list is endless when it comes to examples of consumer tech companies. An EY study predicts that buoyed by robust digital infrastructure like 5G networks etc and enhanced liquidity, the consumer tech space is expected to witness steep growth in the coming 10 years.
At the core of consumer tech is the goal of providing a superior experience to the consumers, aided by technology. There has been a fundamental consumer shift to online platforms and digital payments. This stands confirmed by a Statista study which predicts that the share of e-commerce sales in the retail sector is expected to increase from 13.9% in 2019 to 22.4% by 2023. The following are some of the prominent characteristics and defining trends that are expected to influence consumer tech:
Collaboration as a means to growth
Along with strengthening their digital capabilities, it would do well for consumer tech players to collaborate with traditional players. For example, partnering with physical stores to adopt an omnichannel strategy and build an e-presence with the integration of digital payments. By enabling accelerated digitalization for other players in the ecosystem, consumer tech companies can widen their customer pool and also grow brand equity.
Health-focussed tech products to hold sway
The pandemic reinforced the importance of health, more than ever. A Deloitte study finds that venture funding towards healthcare tech innovations were 2x times in 2020 in comparison to 2019.
Consumers are making greater use of tech to take control of their daily health tracking through connected health monitoring devices – be it sugar control tools, smartwatches that track steps walked or smart bands that track hydration levels, activity options across walking, cycling, yoga etc, heart rate, blood pressure and many more vital signs which go beyond mere fitness. In fact, in certain cases, medical associations and doctors have gone one step ahead and even given a formal recommendation of specific product usage. The trend towards remote health monitoring and virtual healthcare is expected to continue to witness a surge in adoption levels, aided by innovative tech tools.
The phygital (physical+digital) store of the future
A McKinsey study finds that increasingly customers are demanding a digital shopping experience with digital screen browsing, convenient mobile, touchless payments, online ordering and seamless in-store pickup or prompt contact-free home delivery – all enabled by tech.
- Digital discovery: The first stage of the consumer buying journey has transformed into a largely digital discovery with most customers preferring to opt for online browsing to access product details, scan reviews and videos posted by influencers. A PwC study finds that shopping via mobile phones and apps is gaining traction.
- Almost instant fulfilment: Another key trend observed in the demand for as prompt a delivery as possible. Back home in India, players like Grofers (rebranded as BlinkIt) are pioneering the concept of delivery within 10 minutes. While this is not the industry norm as yet, we can expect fulfilment to become a key differentiation strategy in the days to come. A PwC study finds that 42% of global customers prioritized quick and reliable delivery as a top criterion while shopping online. Prompt delivery mandates an efficient supply chain, robust inventory management practices and greater tech deployment through the use of drones for critical supplies.
- Rise of the well-informed customer: Through IoT, chip technology, QR codes and the likes, customers can access info related to the product and its location, including tracking the delivery journey.
- Personalized shopping experience: Through AI, ML and data analytics, retailers can obtain valuable customer data related to consumer behaviour, buying patterns purchase history and suggest related items suited to buyer preferences via the app. Certain retailers send notifications on WhatsApp or email regarding deals and offers for each day.
The Brand Conscious Consumer
Consumer tech companies are increasingly drifting towards building a community of loyal consumers and followers who are aligned to their brand values. As per a PwC study, this has led to the rise of purpose-driven brands with the consequent emergence of socially-conscious consumers. An Edelman study finds that 71% of customers would disassociate themselves from a brand and lose brand trust that puts profit before people. Prioritizing the ecology, encouraging diversity and inclusion and supporting gender empowerment and poverty eradication- these are common themes that are believed to strengthen brand trust. Social media is playing a key role in building brand perception and dissemination of information of environmental, social and governance (ESG) initiatives by brands.
Home is where the heart is
With the remote work regime becoming mainstream, the demand for home-centric products has seen a massive jump. The rise of smart homes with a single-switch or universal remote to handle the lighting, sound system and home security along with control of kitchen gadgets have the potential to make living several notches easier. Globally, home solutions that deploy cutting-edge technology namely automated cleaning, home robots and augmented reality that blends diverse environments – across home, work and play are being showcased in consumer tech fairs. Virtual assistants like Alexa’s growing popularity and added functionalities reflects this trend.
Future of Consumer Tech Companies: Stay agile and rapidly scale
Since consumer expectations are constantly evolving, it is of paramount importance that consumer tech companies stay flexible in their offerings and adaptable in their operating models. Consider the commercial automotive space – once cab hailing or the taxi business was a disruptor, today it is electric vehicles and tomorrow it is slated to be autonomous driving. Similarly, pre-pandemic, cash was the primary mode of payment, followed by the onset of digital payments during the pandemic and in the post-COVID era, the trend is migrating towards touchless, mobile-first payments. Truly, change is a constant and a rapid phenomenon in the consumer tech space. Adapt or perish would be the mantra that would distinguish the winners in consumer tech.