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Future of Business & Commerce in next decade: Part 1

Origin of business and commerce dates back to circa 150,000 years back(1) when prehistoric people started using trading to get things they needed. As it is assumed that it must have started by offering whatever one person has in exchange for some other thing which he wants. It established three basic elements of business; Buyer, Seller and Transaction. With progress in civilization, Business & commerce has evolved a lot and would continue to change in future too.  However, I believe, fundamentals of business has always been remain same and in coming future too, they would remain valid i.e. customer on realizing need for some product (buyers) would approach sellers of the product (organization) and make payment to get the product (transaction).  What is going to change in future is the way customer's need is recognized by customer herself and by organizations, the way alternatives are searched and information is processed by customers and organizations, and the way purchasing decisions are made by customers.
In this series of blog, I am going to analyze changing dynamics in business environment and what can be expected in coming few years from it. In this series of blog, I would focus on three primary elements of business; Customers, Organizations and Transaction. There might be some other players too (e.g. suppliers, government, law agencies etc.), however, I think, they can be categorized either as internal/external customers or guided by changes in business environment.

Starting with customer, can we think how they would make purchase decisions in future? There are few clues for it:

(1)    Around 2.26 billion people (around 32% of entire population on earth) in world uses internet today, 528% growth from Year 2000(2)
(2)    Mobile phone penetration is reaching to saturation in most of the developed/developing countries, smart phone penetration is on rise in all countries (Australia, Sweden, UK, Norway, UAE etc. has more than 50% smartphone penetration)(3)
(3)    Social media website has gone viral (800 million active users for Facebook, 400 million users on twitter)(4)

With fast adoption of internet, mobile, computers as a mean for searching information, interacting with world around, making decisions and doing transactions, there is an introduction of new customer segment based on their affinity for internet/mobile/social media usage. This tech-savvy segment have found a platform to search for any products and services, seek feedback from other users, see all information available about products and take a decision, all in few clicks. When a customer talks about any products/services, it can be seen by millions of users instantaneously and other users can make an opinion based on that. This segment is growing fast and has capability to force organizations to look at their current processes and make a shift. In coming years, organizations would witness this new customer segment growing in size making traditional campaign, lead, sales and support process redundant. Also, once customers would find many choices available for their need, they would focus more on personalization. It would again throw another challenge for an organization to deal with.

While saying that these tech savvy consumers are going to make a big impact on business environment, it is assumed that technology progress would make the transition a seamless process with secure, reliable and hassle free system. Without any location or device constraint, customers would be able to participate in all levels of sales process.  In response to this change, organizations would also be forced to change and they would adopt new things. In my next blog, I would discuss how changing customers' behavior is going to impact organizations processes.

References:
(1)    http://en.wikipedia.org/wiki/Commerce
(2)    http://www.internetworldstats.com/stats.htm
(3)    http://www.electronicsweekly.com/blogs/eyes-on-android-updates/2012/05/smartphone-adoption-goes-global--google-mobile-planet-2012-data.html
(4)    http://www.mediabistro.com/alltwitter/twitter-active-total-users_b17655
(5)    http://www.infosys.com/building-tomorrows-enterprise/digital-consumers/Pages/index.aspx

Comments

This is a nice and an easy read Amit, good work!

With personalization, there is also the inherent focus on customization.
The differentiator is now the various means of relationship marketing employed by organizations towards customer retention and not just about cutting prices to land deals.

Thanks Sapna. You rightly pointed out that cutting prices to get deals will only commoditize the service and the key is to manage customer relationship through all phases of sales.

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