Trends in Consumer Behavior With Technology

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01
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Part
01

Financial Services Technology Impact Trends

To stay relevant in the current consumer market, financial service organizations have to stay on-top of customer-centric technology trends. Current trends surrounding the impact of technology on consumer behavior in the financial services industry includes mobile banking, consumer privacy and security, and artificial intelligence.

Mobile Banking

Consumer Privacy and Security

Artificial Intelligence (AI)

Research Methodology

To identify the current trends surrounding the impact of technology on consumer behavior in the financial services industry, we searched for news articles, press releases, blog posts from reputable organizations, and media publications on the topic. After reviewing several lists of consumer trends, we determined the most prevalent trends based on recent, repeated behaviors. From the core list of three current trends, we developed the research by continuing to research the same patterns across the financial services industry.
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Part
02

Consumer Technology Impact Trends

Some current trends of the impact of technology on consumer behavior in the consumer products industry include smart speakers reducing consumer screen interactions and exercise equipment technology drawing some consumers away from boutique gyms.

Smart Speakers are Changing How Consumers Interact with Technology

  • Consumers who adopt voice-activated home speakers, such as Google Home or Amazon Echo, spend less time using other devices with screens. This group also reports listening to more audio.
  • Some in the technology field describe this trend as a move toward conversational A.I. These experts believe that touch as a consumer interface is losing ground to the new trend of voice-based assistance.
  • Thirty-three percent of mainstream early adopters reported spending less time with other technology. Forty-three percent of early adopters also reported that they bought the device to reduce screen time.
  • A majority (66%) of smart speaker owners report using their smartphones less.
  • More than half (56%) of early adopters of smart speaker devices say that they are using the voice assistant on their smartphone more.
  • Fifty-three million US residents own smart speakers. The number of smart speakers in the United States jumped by 78% in 2018.
  • Some consumers use smart speakers to multitask, get instant answers, or streamline their routines. Fifty-four percent of users report using their smart speakers for home management activities such as music and lighting control.
  • A large majority (72%) of consumers who own these devices say that they use this technology daily. Almost half (44%) make purchases using the device at least once a week.
  • Several companies have entered the smart speaker market, including Amazon, Google, and Apple.

Smart Gym Equipment is Drawing Some Consumers Away from Boutique Exercise Studios

  • Smart gym equipment, also known as connected gym equipment, is gym equipment connected to an application that records workouts and displays personal workout-related data. Such equipment may also tap into health information to create personalized workouts.
  • These devices have the capability to stream live instructor-led classes or on-demand fitness lessons. Some use cameras to provide one-on-one personal training.
  • These devices can include smart treadmills, form-checking mirrors, sensor-embedded boxing bags, digital weight machines, and smart stationary bicycles.
  • Consumers are opting for a home-based version of studio-style exercise classes. Some claim the subscription-based financing model makes it an alternative to boutique gyms.
  • The global market for connected gym equipment was valued at $888 million in 2018.
  • The digital fitness market is growing ten times faster than the fitness market as a whole. Digital fitness is slated to make up 25% of the gym market in the next few years.
  • Fifty-four percent of Americans who work out from home reported interest in buying an in-home fitness system.
  • Customization is a key advantage of these devices over traditional gyms or studios.
  • Platforms that incorporate coaching into exercise equipment have seen significant demand.
  • Some companies in this field include Peloton, Fight Camp, Tonal, and NordicTrack.

Research Strategy

These trends were identified via repeated mentions by technology industry experts and articles about consumer technology products. Trends that emerged within the last two years and which showed rapid growth were favored. Volume of product sales and percent market share were also used as secondary indicators of trend relevance. Further information about consumer behavior was gathered from consumer survey data.


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Part
03

Retail Technology Impact Trends

Technology is increasingly playing a bigger role on consumer behavior in the retail industry. Some current trends surrounding the impact of technology on consumer behavior in the retail industry include omnichannel commerce, extended reality, and mobile payment.

Omnichannel Commerce

  • Omnichannel commerce is a trend that first developed in 2010 but is now becoming more prevalent as consumer's online and offline experience are more integrated.
  • Omnichannel refers to a concept in which "Customers can purchase wherever they are—rather than treating channels as independent silos, omnichannel accounts for the spillover between channels and offers customer experiences within and between channels."
  • Data collected about each consumer across multiple platforms (including in-store, mobile, catalog, and online) can be utilized to personalize the shopping experience to create a "seamlessly connected experience."
  • Nordstrom is considered a leader in utilizing omnichannel to drive consumer's buying behavior. For example, Nordstrom connects their in-store digital signage with Pinterest to enable their customers to connect with Pinterest boards on specific products to learn how the products work. In another example, Nordstrom uses Instagram to pique the curiosity of a potential consumer. For example, Nordstrom shows an image in an Instagram post with multiple products highlighted. A viewer, if interested, can click on a highlighted product to learn more about the product. Finally, the viewer can seamlessly purchase the product from an online store by clicking on a provided shopping link.
  • Another leader in the field is Amazon. In addition to the online and mobile shopping experience, Amazon has also integrated voice into its omnichannel commerce strategy. Prior to the introduction of Alexa, consumers relied on their mobile devices to utilize voice for their consumer experience. However, with the introduction of Alexa in 2015, Amazon has become an integral part of about 50 million households. By using Alexa as a personal assistant, consumers can perform daily chores with minimal effort. For example, if a person runs low on essential items, such as toilet paper, he/she can easily make a voice request to Alexa instead of having to manually log onto the ecommerce site in order to make a purchase. As a result, Amazon now dominates about 70 percent of the "smart speaker" market, which is estimated to be growing at about 50 percent a year.

Extended Reality

  • The extended reality (ER) market is expected to be about $1.6 billion dollars in the retail industry by 2025.
  • Extended reality is an "umbrella term used to describe immersive technologies that can merge the physical and virtual worlds." For example, a home buyer can use extended reality to virtually shop for a home anywhere in the world as though he/she is physically there.
  • ER currently includes augmented reality, virtual reality and mixed reality.
  • ER can be utilized as an in-store navigational tool for helping consumers find specific products.
  • ER can also be utilized to provide the consumer with an in-store experience without leaving the comfort of their home.
  • Ikea, a home-accessories and furniture store, provides consumers with an ER application that enables a consumer to "place" store products in the consumer's home space to determine if the store products will meet the need of the consumer.
  • In another example, L'Oreal introduces Style My Hair, an ER application, that allows consumers to test out new hairstyles and share the new potential look with their friends and family to receive feedback before making the final decision.
  • Similar to Ikea, Sherwin Williams provides an ER application called ColorSnap that enables consumers to match colors with rooms in their homes in order to help the consumers feel confident about their color choices before purchasing.

Mobile Payment

  • Mobile payment is becoming a popular mean of performing financial transactions. First introduced in 2014 by Apple, about $4,296 billions in mobile payment transactions have occurred in 2018 and this number is expected to triple by 2022.
  • Mobile payment is "a money payment made for a product or service through a portable electronic device such as a tablet or cell phone."
  • Apple Pay, the Apple mobile payment application, can be found in about 65 percent of all retail stores in the United States. To increase consumer's usage, Apple offers rewards and discounts that are only available through the application.
  • Since then other companies have joined the mobile payment movement, including store specific mobile payment application. For example, over 23.4 million consumers utilize the Starbuck mobile payment application to buy in-store products. The popularity of this mobile payment application is due to the fact that Starbuck rewards the users with special rewards and discounts. A benefit to Starbuck is that it does not have to share the buying patterns of its consumers with outside sources.


Part
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Part
04

Entertainment Technology Impact Trends

Current trends that surround the impact of technology on consumer behavior in the entertainment industry include content reaggregation, the combination of 5G and legalized betting, and the use of data for personalizing fan engagement.

Content Reaggregation

  • While the growth of video streaming continues to explode, consumers are becoming increasingly frustrated with having to manage and pay for multiple subscriptions to watch what they want.
  • Consumers are generally only willing to pay for three subscription services, an average that has remained consistent over the past two years.
  • Companies such as Amazon and Roku have recognized this and subsequently been pioneering the way for "content reaggregation." This approach allows the service to have the best and broadest content libraries available, thus allowing the service to be more successful as consumers have access to more of what they want.
  • This approach allows services to offer streaming video, music, and game content. Additionally, it allows for consumers to opt into advertising supported videos in exchange for "free" content.
  • To fulfill the demand of consumers, streaming services, TV companies, social networks, radio networks, podcast companies, and telecoms are all competing for rights to esports, television show licenses, music, and more. The trend of reaggregation applies to all of these companies in the industry as they continue to merge and acquire the need businesses in order to fulfill their customer's demands for content.
  • PwC’s US technology, media, and telecommunications leader Mark McCaffery said concerning this trend: “We expect more and more content consolidation in the U.S. as traditional media companies fight for market share against newcomers, such as Netflix, Amazon Prime, and Google. And I think the impact of those deals, regardless of what the decision is, will potentially create a cascade of events within the industry.”
  • This trend is driven by consumer's appetite for video content, which will account for 85.6% of total data consumption in 2022.

5G Combined with Legalized Sports Betting

  • Deloitte and the Wall Street Journal both have identified 5G technology in combination with legalized sports betting as a serious trend among consumers and big money for telecoms and the betting industries.
  • The speeds produced by 5G technology allow for cloud based apps that are faster and more reliable than the current iterations. This trend allows for developers to push the boundaries of what apps can do and allow users to act in real-time with minimal delays.
  • Industry heavy-weights T-Mobile and Sprint have already made acquisitions to position themselves in the 5G space for delivering fast entertainment options. Location based services and high-speed delivery are key factors driving this trend. Adobe comments that from a "content perspective, the opportunities to innovate in the next five years—and beyond—are seemingly endless."
  • Deloitte expresses that 5G and sports betting are made for each other and that the legalization of sports betting is an entirely new growth opportunity for telecoms and the media and entertainment ecosystem.
  • "5G is already being deployed in sports stadiums, sports bars, and other venues where such betting might take place." The NFL and Verizon have already installed 5G Wideband in 13 stadiums throughout the US. This technology allows fans to interact with the players and "pose" with them via their devices. Additionally, augmented reality allows players to see live player statistics based on which player is in front of their camera.
  • Some media giants like Fox have created betting apps such as "Fox Bet". Other TV networks are taking a more conservative approach, providing betting content on their streaming services but not yet giving fans an app to place the actual bets.
  • According to the Wall Street Journal, fans in the US are driving the need for sports betting because US sports like baseball provide an opportunity to place a bet at every at bat. 5G fulfills the high-bandwidth need to quickly process these interactions.

Personalizing Fan Engagement

  • Organizations are increasingly turning to and relying upon incorporating data to engage and enhance their connections with their most important constituents — their fans.
  • These organizations have always collected fan data through loyalty programs, season ticket holders, and other engagement programs. However, this data is often housed in disparate systems. Creating a holistic view of a fan by linking all of this data together is the key strategy and current trend.
  • The impact of this trend on consumers is an increase on the lifetime value of the fan. This is due to the personalized connections and experiences they have with the brand/organization/team. The data collected allows organizations to be more nimble and automated while still engaging in personalized conversations with every fan. It also results in engaged fans who continue to buy tickets and fill stadiums.

Research Strategy

Our research for trends surrounding the impact of technology on consumer behavior is based primarily on reports from Deloitte and Adobe with their expert observations and isolation of trends. We then consulted other industry resources for further specific details concerning each of the above presented trends.
Sources
Sources

From Part 01
Quotes
  • "We’re at a tipping point for consumer and business transformation, with globalization, technological change, digital growth, regulatory compliance, a changing economy and the future of work all impacting 2019 digital consumer trends. These trends have the power to dramatically impact the success of brands moving forward."
  • "Change is happening faster than ever before — yet it will never happen this slowly again."
  • "The evolution of digital consumer behavior is never static. "
Quotes
  • "We will see big changes this coming year, especially for the banking giants, many of which have operated with a legacy-era brick-and-mortar mindset for hundreds of years. The truth is, consumers now have so many options when it comes to banking that even the most established financial institutions will need to work to stay relevant if they want to stay ahead. "
Quotes
  • "​Disruptive forces are changing how banking is done. "
  • "Foremost among the drivers of disruption should still be technology."
From Part 02
Quotes
  • "Edison Research’s report found that 33 percent of early mainstream adopters, those who have recently purchased a smart speaker, spend less time with other technology."
  • "An additional 43 percent of early adopters said they bought the device to reduce screen time."
  • "It’s certainly the fastest-growing consumer technology that we’ve tracked in the history of the yearly study on the topic … including smartphones. There’s something about the connection of the human voice."