The pandemic has changed many parts of our lives, but it has also spurred businesses on to experiment, rapidly innovate and pivot to digital.
Today, it’s safe to assume everyone is online. Consumers have proven to be ready and willing to shop, work, chat and even find love online. In fact, 40% of Americans met their partners online in 2017, according to a Stanford study.
In the latest Facebook Insights Live webinar, former Andreessen Horowitz partner, Benedict Evans, explored what digital acceleration means for brands, where the opportunity lies in 2021, and some of the bigger questions that will need answering moving forward.
Think ‘Smart Phone’
“A guiding principle is to presume smart phone,” said Evans.
It’s a savvy piece of advice. Of the 5.7 billion adults on earth, five billion have a phone and four billion have a smartphone. And that was in 2019.
Simply put, smart phones have become an entrenched part of our daily lives and they’re not going away any time soon. 83% of US teenagers use an iPhone. As Evans so aptly puts, “we’ve connected everybody.”
“This is the best of times and the worst of times.”
The pandemic has propelled companies to confront their digital future perhaps sooner than expected. According to ONS, UK ecommerce spiked from 20% (pre-Covid level) to well above 30% of retail revenue in lockdown. Now it is stabilising just under 30%.
In many ways, the pandemic has redefined e-commerce, thrusting brands to fundamentally reconsider their route to business. Should they maintain a high street presence? Should ‘returns’ be an essential part of their marketing strategy? Do you spend more on ads or faster delivery? As Evans added, “it’s all become the same question.” No longer can retail be viewed through the binary lens of ‘online’ and ‘offline’.
Brands need to listen very closely to the changing needs of their customers, and adopt a mindset of not only what if, but what’s next, to ensure maximum visibility in an increasingly dense but diluted digital world.
As Evans explained, “We have a level of penetration and density of internet population that means all sorts of businesses that would not have been possible in 2000 or indeed in 2010, are now possible.”
The time to innovate is now. Old consumer habits have been challenged and new ones have been formed. The digital acceleration has been ruthless for many but a great opportunity for others. The forward-thinking brands are starting to see all costs to reach and acquire customers through the same lens.
Sure, TV penetration is now down 25% from its peak. But Netflix has surged to be the UK’s biggest TV channel. And Shopify has seemingly come from nowhere to record 80 billion dollars of product sold in this year’s quarter-three on its platform.
The power of Artificial Intelligence
The unfolding AI revolution is allowing brands to ask new types of questions and identify new patterns and trends. AI, or as Evans coined it, machine learning, has allowed brands to analyse consumer behaviour by asking new types of questions and identify new patterns and trends.
“The best way to describe machine learning is it gives you infinite interns,” Evans said. “It’s not going to answer any question that none of us can answer. It just can do it at a massively greater scale.”
The big question: The power of predictability
Is algorithmic or discovery commerce the next trend after ecommerce to help businesses grow?
If you strip away enduring gatekeepers like Vogue and Harvey Nichols, how do consumers discover new products amongst an infinite library on Instagram?
According to Evans, there’s “20 years of innovation” ahead to solve this very question.
Facebook Insights Live webinars take place on the last Wednesday of every month and provide clear and actionable insights to help brands and businesses adjust to the new normal.
Upcoming episodes include: