The State of the Industry: What You Need to Know to Be Digital Best in 2021

The digital transformation has been underway for some time, but last year the COVID-19 pandemic accelerated it with warp speed. As we look at the state of the industry in 2021, it’s important to understand how consumer behaviour is potentially changed forever. In this report we’ll examine three key trends that will shape businesses across all industries in the new year.

But what changes when we return to “normal”? While the roll out of vaccines will no doubt allow us to return to things like traveling and eating in restaurants, not everything will bounce back to its pre-COVID ways. So, as we look at the state of the industry in 2021, it’s important to understand how consumer behaviour is potentially changed forever. In this report, we examine three key trends that will shape companies in all industries in the new year:

  1. The customer journey is online
  2. The digital transformation is exploding
  3. The rise of decoupled architecture

Trend 1: The customer journey is online 

From punch cards to the mouse to the advent of touchscreens, the experience of interacting with computers has seen several profound evolutions in the past 100 years. Today, we’re witnessing the next seismic shift: conversation.

With the rise of of natural language processing (NLP) and AI, computers can finally understand our language. And not just disparate keywords — we’re talking human language exactly as it is spoken.

The impact is profound. Because NLP is showing up in so many different places — from search engines to chatbots to virtual assistants — we’re actively being trained to use technology differently, yet more naturally. In other words, when we need something, we simply have to ask.

For example, years ago, if you typed “pizza” into Google, you’d see links to a bunch of blogs that just mentioned the word pizza. Today, that’s no longer the case: If you type in “pizza,” you get a structured list of pizza places. You get an answer — an answer that understands that you want to find a pizza place, not just read facts about pizza online.

Further, if you type in “best pizza,” you’ll actually get detailed, structured answers about where to find the best pizza. When we add more depth to our questions, we get better answers back. So now, we’re more comfortable asking things like, “where’s the best pizza place in New York that’s good for kids and has accessible bathrooms?”

As a result, our search behaviour has changed. Where we once used a single keyword and had to sort through a list of not-so-relevant links, NLP has made it so that search engines can understand our natural language questions – and give us full answers that meet every part of our query.

The ease with which this question/answer process now happens has us asking more specific questions, more often. Even before the COVID-19 pandemic caused online searches to spike, the rise of NLP was conditioning people to search more, making search foundational to our daily lives. (In 2020, Google processed more than 3.5 billion searches per day on average.) This expectation that we can ask questions and get relevant answers back has changed the customer journey.

To illustrate: Think of the last time you bought something. You probably went online and started searching. (In fact, that’s probably all you did last year: Online searches are at an all-time high.) You may have visited a brand’s website, talked to a chatbot, talked to Alexa, looked at Google — researching and reiterating, asking a bunch of different questions until you learned enough to make a decision. This is the new customer journey in a world where you can simply ask for what you want. But are brands really prepared to answer these questions?

Answering questions is difficult 

We’re living in a world where the customer journey starts with a question — and where people are posing these questions to search engines, voice assistants, bots, and brand websites. But here’s the thing: It’s really hard for brands to deliver answers the way customers have come to expect. Here’s why:

Let’s take a look at the anatomy of a question.In this single question, we see financial advisors, locations, hours, products offered, and even the modifier “best.” Where would you even get all of that data? Just to answer this one question, brands need information from all over your organisation — and the traditional methods of computing and storage data simply don’t allow you to relate all this information together. So in order to give customers the experience delivered by the consumer web, you have to rethink your tech. Specifically, your search technology.

Modern search is key to delivering answers and transforming your martech stack

Several big brands, like Amazon, have invested heavily in search technology. In fact, search is critical to driving millions of valuable transactions a day. (When was the last time you used a drop down menu to order something from the online retail giant?) Yet too many top brands can’t answer even a basic question about themselves with their own site search. That’s a big problem, as search engines like Google and websites like Amazon have trained people to expect a seamless search experience. So if a business can’t answer a simple question on their own site, it could be costly.

But it’s not entirely their fault. The problem is borne out of the fact that existing marketing tech isn’t built for a world where computers can speak our language — and that’s starting to change. This new model of computing will radically change the digital marketing landscape over the next few years, and the winners will be businesses who can answer users questions exactly as they ask them, wherever they search. Those who develop a truly modern, conversational search experience will be able to keep users on their site for longer, answer more questions, and convert customers more often — while avoiding sending them away to a search engine like Google.

Trend 2: Digital transformation has exploded

Ecommerce has existed for more than twenty years; that’s nothing new. But there’s no doubt that the global pandemic accelerated digital transformation beyond by a magnitude of years: In a world where the “digital front door” quickly became the only door, even those claiming to be “digital first” struggled to maintain continuity in the new “online only” reality. And spoiler: much of that new reality is here to stay.

There’s practically no facet of life that didn’t move online in 2020.. But there are three specific changes affecting digital that have had the biggest impact on businesses: new service interfaces, product & service pivots, and unexpected scale.

1. New service interfaces

COVID has driven the adoption of a wide variety of new service interfaces that are becoming major drivers of business continuity and new revenue opportunities across industries:

2. Product and service pivots

It’s said that necessity is the mother of invention, and 2020 certainly put that to the test.

Faced with record-setting demand for certain categories of products, some companies shifted their production drastically at the start of the pandemic. GM pivoted from building cars to producing ventilators. Multiple retailers started making face masks in addition to clothes. Alcohol brands like Bacardi rushed to produce hand sanitiser. Others experienced drastic decline in demand, so they switched to serving different populations with new types of services: Airlines shipped cargo, and restaurants set themselves up as grocery stores or pantries.

The lesson is that any business can reinvent, but in order to be successful, companies will need the right technology — not only to adapt their products and services, but to communicate these changes to their customers in real time.

3. Unexpected scale

While some companies had to undertake full product and service pivots in 2020, others were faced with extreme demand for their existing offerings — and they had to scale up production quickly.

From workplace productivity tools like Slack or Zoom, as well as providers of essential goods (remember the Spring 2020 toilet paper shortage?), a number of businesses caught tremendous tail winds from the pandemic. But it wasn’t necessarily easy. First, they had to determine how to ramp up production to meet the demand of a populace in need. Next, they needed to effectively communicate updates to those same people during an intense period of delays, reorganisations, and technical issues that slowed supply, delivery and bandwidth.

All three of these shifts changed our world in the short term. But in the long term they remind us of the importance of getting your data ready for a new level of digitisation. Why? Because all of these product and service changes required significant data reorganisation, and many industries were left scrambling. That’s why it’s more than just being “digital first” — for brands to really thrive they need to be “digital best”. Future success will come if the right technologies are adopted now, including digitising product inventory, providing better service information, and rethinking website UI.

Trend 3: The future is built on a decoupled architectureTechnology seems to go through a cycle of consolidation and creation every few years. It happens for many reasons: It could be a transformational technology shift, like the cloud, or players in the market trying to capture market share by buying competitors and adjacent offerings. But today, we are coming to the end of an era of consolidation.

The “old” martech stack is couple and monolithic. Many vendors position themselves as a one-stop-shop for web, email, CDP, and social. When you are building a website, you typically use one tech provider and a single tool. A single marketing platform that takes care of every layer of the experience — the presentation layer or UI; the API layer, which connects to other tools; and the backend layer, which supports the whole structure.

But in the same way that humanity evolved out of early-Stone Age reliance on one or two tools, so too will marketers progress beyond the monolithic martech stack.

Prepare for the future with a martech stack that is decoupled.

Instead of relying on a one-size-fits-all approach, the “new” decoupled martech stack employs many different solutions to optimise performance and cost. The future is all about the right tools for the right job.

In this new world, each layer is decoupled from the others, so businesses have the opportunity to choose the tools that they want for each function of their martech stack. They aren’t bound by the limited functionality of a single provider. And if conditions change and they need to pivot the way you do business — as we saw everyone do in 2020 — can easily scale and switch to new tools.

The decoupled martech stack is economical, best in class, and flexible, which means it’s built for a future of uncertainty, a future that requires agility. When you have the power to assemble your own marketing stack based on your brand’s changing needs, it’s insurance against being stuck with clunky software that can’t change with you.

It’s still early days in the decoupled evolution. But as you look at the trends above, it’s hardly a surprise that this is a rising ride over the last few years — and that the pandemic has accelerated the adoption. Expect to see a lot more of this throughout 2021 — and beyond.

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