In light of the Political events of 2016, what does 2017 hold for the Retail, Technology and Finance Sectors?
At the start of 2016, the idea of a Trump presidency or Britain voting to leave the EU was unthinkable. However, only a few weeks before the end of 2016 we are facing a different reality. The world we live in is shrouded in uncertainty, with UK and US moving towards a new, riskier path.
Through our analysis of audiences and consumer movements online, we looked at what potential trends will dominate in 2017.
2016 was a turbulent year for the retail industry. Online and brick & mortar retailers alike found themselves scrambling to stay relevant and competitive. We’ll see more of the same in 2017. Shifting consumer attitudes and needs will force retailers to rethink their channel, product mix and service strategies.
In 2017 more consumers, especially millennials, will expect higher engagement before buying stuff. They increasingly rather spend their money making memories than on material stuff. So, after years of choosing the speed and wide selection offered by retailers such as Amazon, customers are demanding higher engagement if they’re going to buy something in store. To meet consumers’ desire to connect with brands on a deeper level, Athletica offers yoga classes while Apple holds workshops.
Retailers will look to strengthen ties with customers by combining convenient payment and rewards. Dozens of companies including Starbucks and Apple have already introduced mobile wallets. By absorbing the functions of loyalty cards, mobile wallets can beat credit and debit cards for convenience. Starbucks’s wallet lets customers earn free drinks and order and pay ahead – it makes up about 25% of the chain’s US transactions. Two-year-old Apple Pay leads in mobile in-store payments, but most big banks and retailers are expected to get their own wallets soon. Combining loyalty and payments lets retailers woo new users, especially smartphone-savvy millennials.
Our analysis indicates that the demand for both Apple Pay and Android Pay had a stellar performance over the last 12 months. In the UK demand for Android Pay has seen an increase of 123%, while demand for Apple Pay 22%. In the US the demand for Android Pay remained unchanged. However, the demand for Apple Pay has seen a slight decline towards the end of the year by 18%, probably a result of seasonality.
According to experts, artificial intelligence startups will be big next year, along with startups in cybersecurity, chatbots and VR. Over the next 18 months, we will see many different providers of AI services launched. Some similar to consumer devices, such as Amazon Echo, but also healthcare equipment with Google’s DeepMind looking at MRIs and smart stethoscopes. Embedded things, such as intelligence being built into switches, are also becoming more popular among consumers. We expect to see a rise in chatbots, virtual personal assistants and appliances which are conversational systems.
We expect to see improvements in adaptive security that will be focused on using machine learning and AI to look at platforms to uncover problems and deter hackers.
A faster trans-Pacific/Atlantic data transfer is also likely, as Facebook, Microsoft, Google and Amazon are boosting their investments in private undersea cables to carry their data around the world. Increases in data speed will improve commercial and transactional capabilities. If companies are technically robust enough to cope with consumer demand for speed services, they shouldn’t be left behind.
We looked at the demand trends for virtual personal assistant over the last 12 months for both UK and USA. In the UK, the demand for Amazon Echo increased sharply since August 2016, when the device first became available, and since then demand increased by 3,617%. Demand for Google Home also increased by 1,011%, over the same period. Lower demand for Google Home could be due to steeper pricing.
In the USA, both Google launched their AI assistants prior to the UK release date. Since the release date in January 2016, the demand for Amazon Echo declined by 123%, however, it recovered by 49%. Google Home had overall better demand in the US with an overall positive trend.
As we know, it is the accumulation of smaller risks that triggers a crisis.
China is in a difficult position, its phase of hypergrowth is ending. The IMF projects 2017 growth of 6.2%, down from an estimated 6.6% this year. President Xi Jinping is trying to shift the economy toward consumer spending and away from corporate capital investment, infrastructure spending and exports. That’s good for Asian nations, that make goods that the Chinese buy. But bad for European, Japanese and American companies that sell high-tech machines to Chinese manufacturers.
London has long been one of the world’s financial hubs, but the easy access it has provided global banks to the rest of the EU cemented its status. If Brexit sets up new barriers, the Capital will become a far less attractive place to do business. That scenario would cost banks and companies almost £40 billion in lost revenue and put 70,000 jobs at risk. Frankfurt, Paris and Dublin are wooing banking talent from the UK, but no European location matches London’s markets and expertise. While banks will move some operations to Europe to reassure clients in the region, they’re unlikely to coalesce in a single hub. Lenders could also ship jobs across the Atlantic if New York proves to be the only other strong location for business.
2017 will be a volatile year, with experience-driven retail on the rise and an uncertain financial and political future. However, advancements in technology and better connectivity between customers, retailers and the finance sector could seek to calm this volatility.