The “Twin Transitions” to a green and digitalized world puts every achievement of previous upheavals into the footnotes of history. The 4th Industrial Revolution brings into being a new humanity of machines, interfaces, and neural-lace. Coal was the driver of the First Industrial Revolution with steam-powered machines powering the mechanization of production. The Second Industrial Revolution began with the discovery of electricity, gas, and oil which led to the development of assembly-line production. Henry Ford transposed the idea of mass production from a slaughterhouse in Chicago to automobile assembly lines. The combustion engine went hand-in-hand with new fuels. Electronics and nuclear energy were next. During the Third Industrial Revolution, partial automation using memory-programmable controls was introduced using tools like robots that perform programmed sequences. BMW is using AI and a platform called Omniverse, developed by the chipmaker Nvidia, to hone the assembly line inside a Virtual Factory. Machine-learning algorithms now simulate robots performing complex manoeuvres to detail the most imaginative processes.
Covid-19 is accelerating the 4th Industrial Revolution as we shift to blue and green hydrogen. But, the momentum through the present portal does not come solely from the climate crisis but from the Rise of the Network. The digital world offers real-time connection across components of the production line, both inside and outside factory walls. As the development of the Industrial Internet of Things, cloud technology and AI continue to evolve, a virtual world is under construction that is a plangent chord to Kant’s transcendental idealism.
New Networks and interfaces already dominate. They lean towards “cyber-physical production systems” and smart factories, in which production systems, components, and people work and study as lifelong learners. But- is humanity ready for the Network? Experience excellence is key to competitiveness. The anthropology of urban and rural life and shopping in department stores like Bergdorf Goodman will carry over many of the semblances of habitual psycho-social behaviours. But, many traits and refinements in retail are fresh, including the “New Customer Experience of Excellence.” The retail hybrid that is now berthing is a paradigm shift. The brands that consumers interact with – digitally or, as lockdown eases, physically – will have to deliver enhanced and seamless interaction at the right price-point. Touchless shopping and banks like Niyah which are simply an App along with ghost kitchens and embedded finance are already here.
The “KPMG Global Covid-19 Tracker, Customer Connections: Competing in the new reality: June 2020” summarizes how businesses should respond to the “New Consumer”. The Tracker identifies four (4) key trends that have altered the purchasing patterns of the digitally savvy shopper. The mismatch between corporate values and those of customers is at the heart of the erosion of trust. Companies must care for their workers. They must exhibit a clear sense of purpose other than the mere accumulation of wealth. The climate crisis is no longer an arrière-pensée. Companies must commit to the earth and social policies of inclusion. Life is fragile. Reputational risks are more severe than the risks associated with an investment.
Companies must now focus on the wellbeing and safety of consumers. A second trend is “Home as a new Hub” as remote work becomes more mainstream. This trend is driven by the shifting role of the house as a home to a family, a virtual classroom, and a place to work from remotely. A home is also a place in a community that is localized with thick interactions using digital wallets and clickwrap contracts on market platforms inside industry clouds. The KPMG Tracker also highlights that businesses must take into account the shifting demographics of consumers as the Coronavirus has altered the consumption patterns of their customer base. With face-to-face (f2f) brand experiences on the decline, companies must stratify and simplify their product offerings and focus on brand differentiation. They must manage cyber security risks with Open Data policies.
New Purpose Statements must help the Digital Consumer to see that the firm stands for something more than the publically published balance sheets that revel in profits. This shift in purpose is also a source of differentiation in the market. What is it about your environmental and social and brand purpose that makes employees and consumers desirous of buying into your business proposition? Equally, the shift to online needs investment, but margins and revenue are under pressure. Businesses must rethink the cost of doing business. This does not require cost-cutting measures, but removing costs in some areas by building living supply chains that are resilient and shifting costs in other areas.
Covid-19 has impacted employment. Companies now need to understand financial segments of risk and opportunity and help their customers to manage the challenges of financial uncertainty. In the 2020 KPMG Customer Experience Excellence Report for the UAE, Pilar De Miguel Veira, states that the new digital customer, requires business leaders to re-evaluate their offer. That offer is: the experience. The experience “spans products, sales, service, marketing and countless other interactions with the consumer.” The new experience is sandwiched between the New Customer and a digitally savvy firm that is competitive. The trick remains the art of finding the balance between growth and adding value through margins.
