Commerce is on the cusp of radical change. Is your organization ready?

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Author: Anna Sofia Martin, Editorial director, sparks & honey

Activities traditionally associated with commerce are being disrupted and transformed by innovations that will redefine how we produce, distribute, market and consume products and services. Our analysis points to a redefinition and upgrade of commercial practices around the rapid technological, operational, and societal shifts that are changing how we experience reality, as well as what and who we trust. From fake news to disinformation and the collapse of institutional trust, businesses and governments are waking up to a different world. While leaders formulate strategies to deal with massive structural changes, signals are pointing to an even larger wave of cultural shifts that will have long-standing implications for the future of commerce, and for your business. These shifts are brought on by a number of factors: the growing capabilities of technology to manipulate reality; an increase in both the volume and intimacy of the data we generate; and operational innovations that radically improve the ability of organizations – both productive and malignant – to adapt and respond to contextual input. The exponential pace of technological development is a defining factor of the Fourth Industrial Revolution, and it provides the backdrop to the transformation of commerce. The Fourth Industrial Revolution is seen as a new stage of human development, one defined by “a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres”, as well as disrupting virtually every industry. If the merging of our physical, digital, and biological contexts sounds like science fiction, think again.

Humanity is becoming a measurable concept, quantified by data through our increasingly intimate connection to technology across all areas of our lives. From biology to emotions, our devices and the growing cadre of smart homes and smart cities are measuring and structuring our locations, preferences, habits and general existence throughout the day. We can measure everything from the steps you take (or don’t take) to the quality of your sleep and your preferences for personal items – and even life partners. Our devices are on the cusp of understanding our emotions, perhaps even before we do, as emotion recognition algorithms increase in accuracy. In addition, genomic data (in which your DNA plays a starring role) from sources such as uBiome’s Home microbiome test can be applied to anything from health to entertainment to fine dining. Our quantified lives are opening up a level of hyper-personalization that can increase the value and contextual resonance of products, services and experiences. The investment of key technology players in genomics startups and intellectual property will accelerate and potentially disrupt the way we think about personalization across every activity associated with commerce. Consider the forays of Google and Amazon into the genetics industry. Google is making genetics and genomics accessible and searchable, while Amazon is focused on the technology backend of the process. Both efforts could enable organizations to incorporate genomics data in any aspect of the value chain. At the same time, companies such as Apple, Microsoft and Samsung have expanded their health tracking technologies to arm consumers – and themselves – with their biotech data. The integration of genomics into consumer products could be hugely disruptive, presenting highly personalized information gained from data on our mood, emotions or genome.

We are only at the early stages of true personalization, even with progress in a wide range of commercial applications, including personalized product recommendations from e-commerce giants such as Amazon and personalized entertainment content on YouTube and Netflix. In fact, investments by some of the most powerful global technology players indicate that we can expect to see personalization embedded in real-time across entire business models.

The growing use of wearables and under-the-skin technologies that quantify everything from our steps to our biometrics and heart rates, such as Oura or electrogastrography wearables, further indicate our hyper-personalized future. Data will tell stories of nuanced behaviour, such as time spent with work or family, daily rituals, people who come in and out of homes, decisions about dinner, the food we finally eat, and more. Such increased contextual awareness enhances capabilities to read and react to emotion, and therefore to manipulate individuals.

While this level of personalization is potentially revolutionary in the way it creates value, it will enable a future of commerce in which data reveals where you are, where you live, how you live and with whom. It will leverage your emotional state and unique biology for hyper-personalized manufacturing, distribution, pricing, services, experiences, content and more.

People are beginning to understand the power of their own data, particularly after headline-grabbing data breaches from organizations such as Panera, Grindr, Equifax and Facebook. Technology entrepreneurs are already addressing the topic of privacy. The advent of digital verification with blockchain technology makes consumers the masters of their own data.

Companies such as MadHive are working on a future in which ownership of data falls on the consumer, or co-creator, who can share it with businesses and organizations without giving up their privacy. In this model, data becomes the link in a co-creator economy. People gain the benefits of hyper-personalization, transparency and security, while businesses benefit from access to data without the burden of its ownership. This is a glimpse into a future in which the benefits of commerce and ownership of data do not need to be compromised, and in which redefined expectations of data privacy will render many organizations obsolete.

Governments are stepping in with increased regulation. In May 2018, the EU’s General Data Protection Regulation (GDPR) imposed stringent laws on technology companies and organizations in EU countries to ensure users’ data privacy.

“GDPR is really about who controls the data and under what conditions”, says Stefaan Verhulst, co-founder and chief research and development officer of the Governance Laboratory (GovLab) at New York University.

While systems and tools are emerging as authentication solutions, experts warn that they are also vulnerable to being hacked. In this accelerating cycle of unprecedented infrastructure upgrades, technological advancements and scientific breakthroughs, it is easy to lose sight of who is responsible for what.

The cultural forces outlined above demand initiatives that focus on our relationship with facts and truth. This landscape calls for organizational policies and behaviours that provide a new set of guarantees to the public, by mitigating the risks and impact caused by the fragmentation of reality. Below are some of the key findings, outlined in further depth in sparks & honey’s report, ‘Truth, Trust and The Future of Commerce’. Organizations building the foundation of the future of commerce are aggressively investing in a wide range of data verticals that are able to mine and structure individual biological, physical or digital contexts, and emotions. They are also designing business models to enable the self-organization and self-optimization of every segment in the value chain, from design to production, and marketing to distribution. These adaptive models are fuelled by data. They will grow in complexity and significance, as new datasets will inevitably involve human emotion and biology. The foray of genomics into the commerce ecosystem is ushering in an era of unprecedented intimacy of data, which will demand new models of data security and management. As investments in artificial intelligence, genomics, and other sectors mature within ecosystems, including those of Alphabet, Tencent, Baidu and other technology giants, we will face radically new business models. These will demand new standards for data privacy and management. This further emphasizes the present need for more transparency, and choices that prioritize the development of technologies to enable data management and ownership at the consumer level. What we perceive to be real is being altered, with the advent of technology designed to hack our human senses. The emergence of emotion recognition technologies, brainwave-to-cloud interfaces, wearables and sensors that translate thoughts, and devices that can change your expression in an image, are among a growing cohort of technologies that have the power to hack the very senses we rely upon for communicating to and understanding the world. The application of these technologies across commerce, from manufacturing to marketing and corporate communications, will soon outpace our ability to develop ethical and regulatory frameworks around them.