Digital disruption is impacting businesses and industries everywhere. Here are our top 3 predictions for 2016.

Posted Jan 8th, 2016 in General

Digital disruption is impacting businesses and industries everywhere. Here are our top 3 predictions for 2016.

Last month I was delighted to be a guest on the 2016 Predictions Show on SAP Game Changers Radio with host Bonnie D. Graham.

The format of this program was different than weekly SAP radio broadcasts, which are more conversational in nature. In the 2016 Predictions show, guest experts had just two minutes to share their "crystal ball visions" for the business landscape that awaits us in the coming year. 

It was a challenging task! Two minutes sounds like a lot of time, but it isn't. I barely managed to articulate the first of three predictions that I had in mind. Here is my first prediction, summarized by the program editor in their recap on the SAP News Center website:

Prediction #1:

"We will see an increase in digital spend, and also a corresponding reduction in decision-making times. We will also see real transformational data emerge that connects our digital activity – social networking, social selling, and employee advocacy initiatives – to tangible business results and real business value."

With Facebook now in its 12th year and other networks constantly evolving to meet user needs, we'll now have more compelling data about social media's reach and the impact it has on building corporate bottom lines.

Bravo to companies who did not have the benefit of anything resembling a business cycle's worth of data to begin to their engagement activities on social media. Companies like Caterpillar, Virgin Group, and Westjet were early social media adopters, and their instincts to jump in have given them a clear-cut advantage in achieving social media milestones and building customer loyalty through these channels. 

With no time or space constrictions on this blog, I'm happy to share my other two predictions for 2016. Perhaps I will be able to discuss these on a future SAP Radio program!

Prediction #2:

We will see an increase in digital disruption to Commercial Real Estate due to mobile technology.

I include this prediction because I see "For Lease" signs all around me – in small town plazas, bigger shopping centers and in the downtown skyscrapers of major cities.  

World Trade Center

I was in New York City at the end of last year and visited the World Trade Center Complex. It was there I learned about the newly constructed towers 2, 3, 4 and 5, and how the reconstruction plans that were made more than a decade ago would be impacted by mobile technology and a subsequent reduction in the demand for office space.

When the World Trade Center complex construction is complete (scheduled for 2019), the total leasing opportunity will be 30% less of what it was before 9/11. A telling truth for the demand for commercial bricks and mortar.

Beyond the reduction in total office space for lease, there has been a shift in the profile of the tenants, from those in the financial services industry (the clear majority in 2001) to tenants predominantly in government & communications, such as Condé Nast. Financial services represents only 2% of the current occupancy of One World Trade Center. Communications companies are definitely on the rise!

Shopping Malls

As with commercial office space, I see risks for a variety of retail shopping centers whose tenants are not delivering rewarding in-store experiences, nor are they providing 'omnichannel' selling opportunities (and if they do, the omnichannel integration is very poor). The shopping mall "as a destination" is at risk because of improved online shopping & more customer-focused, experiential Main Street shopping options.

We know that the worlds of “bricks” (the physical stores), and “clicks” (the digital and online versions), are colliding. Research from Google suggests that 75% of high-end shoppers research products online before making an in-store purchase. According to Accenture, the same number regard in-store stock level information as forming a critical part of their purchase decision. Shoppers have developed more sophisticated, digitally influenced buying habits and accordingly, expect more of a VIP treatment in-store.

Ultimately, the shopping center whose tenants understand that what ends with an in-store purchase begins online, will be the ones that will thrive. 

To conclude, I predict a decline in demand for traditional corporate office space – probably with some re-zoning and conversion of existing office space to residential space, and strain on traditional shopping centers.

Prediction #3:

We will see increased investment in 3D Printing, and higher levels of disruption.

Don Tapscott, author of The Digital Economy, says we’re in for serious levels of structural unemployment in manufacturing and even construction. We’re 5 years out from actually 3D printing houses. Ford is 3D printing engine prototypes in days in what used to take 6 months. And we’re able to 3D print knee replacement parts based on a scan of our individual body shape.

When digital looms are available on a cost effective basis the way home computers are, people will be able to design and print their own clothing at home – this is already being done. Disruption to the apparel industry is heading our way!

In summary, I don’t think 2016 is the year we’ll see the collapse of traditional manufacturing, but heightened awareness and think-tanks about what lies ahead will, or should definitely be, on corporate agendas. 

I am always interested in hearing your comments and your own predictions for 2016 and beyond. Please feel free to share them!

Yours in digital,

Hilary Carter


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