“Fad” and “trend” are both terms that indicate a rising level of the popularity of a style, behavior, or product, but the difference between them is crucial, especially while navigating digital transformation. Leisure suits were a fad in the 70’s, and wearing jeans is a lasting trend that started in the 50’s. Denim’s popularity has fluctuated over the decades, but denim has never disappeared from popular use entirely — the same cannot be said for the leisure suit.
Trends and fads are both subject to the public’s whims and tastes, and it’s true that they often follow the same pattern. Some trends burn out so fast that they resemble a fad almost entirely. So, if trends fluctuate frequently and rapidly, with many of them never amounting to any game-changing technology or practice, why should business leaders pay attention at all?
Fads are primarily two-dimensional — a style, a single popular product, a phrase (“YOLO,” “No soup for you,” “#winning”) — while trends are large, complex, and intersecting concepts that play increasingly relevant roles in a given sector. In the case of digital, each trend represents a combination of popular software, hardware, and behavioral components.
The result of this combination often takes the form of technology that actualizes a new capability. Take, for example, digital music: as a handheld music player, the iPod is the articulation of this trend in hardware and software while the cloud has enabled software-only innovations, such as Spotify and Bandcamp. The advent of the digital music device also lead to mass behavioral change. Streamed music now accounts for the majority of all music sales.
Business leaders need to monitor trends because some trends become cultural staples that permanently change the way we live and interact with the world and undergo digital transformation. When the Sony Walkman debuted, the public response was less than positive. First, public reactions to the portable music player suggested that it was an unwelcome innovation, but eventually, sales picked up, and its emergence marked a vast improvement over clunky, portable 8-track players. 38 years later, following the introduction of portable CD and digital music players, people are nearly constantly jacked into their phones for music on their commute, accompaniment for a jog, or even listening while they work.
Now that we know how important these developments are, the question becomes: how does one measure a trend? Properly gauging the value of new technology and digital transformation trends requires a solid conceptual framework. Merely following intuition can be catastrophic, if one can even remember MiniDiscs or Jaz drives. While there are many ways to identify lasting digital transformation trendsM, one strong method of categorization is to identify from where the trend starts.
Industry Level Trends
Content creation is a great example of a trend that started its own sector. In 2007, the founders of YouTube posted the site’s first video, a rudimentary 19-second clip shot at the San Diego Zoo. Today, over a billion people worldwide use the video platform, and YouTube celebrities (YouTubers) are more popular among U.S. teens than Hollywood stars. Notable YouTubers such as Yuya, Jenna Marbles, and PewDiePie each have significantly more subscribers than the New York Times does for all its editions and are creating personal empires from their homes without an agent or production team — just with a computer and a webcam.
On the enterprise scale, Apple’s Business Chat has recently launched as a forward-facing initiative that competes directly with Facebook Messenger and other premier messaging platforms. Business Chat will be part of iOS 11, rolling out in Fall 2017, and will use the phone’s messaging function to open an iMessage window from inside Safari, Maps, Spotlight, Siri and other apps. Customers will now be able to initiate a text chat with a business. This sounds deceptively straightforward but, where all chatting was formerly initiated by the company rather than by customer, Business Chat will be integrated with a growing array of non-Apple customer service products. Apple is hoping to shape the future by adding Business Chat to its already massive digital ecosystem, moving past phone and email into a true omnichannel experience, which includes customer touchpoint tracing and data collection.
In comparison to YouTube, Business Chat will not revolutionize industry communication overnight. Though the bells and whistles of app integration will undoubtedly open new doors, Business Chat is currently just another aspect of Apple’s classic approach. Their philosophy of building the future and broadening customer interactions is a valuable, and challenging, long-term strategy that will see benefits in almost every company that it interacts with.
New Entrants Leveraging a Trend in an Existing Sector
Before Uber and Airbnb, people could still hire their own cars and book places to stay; however, neither of these types of transactions were orchestrated on a grand systematic scale. Both companies brought the sharing economy to their respective industries with existing technology, software, and a trending behavior (sharing), and combined them to create billion-dollar companies.
While investment can grow a company, demand is what grows an industry and its trends. “Hoteltech” has revolutionized tourism by infusing digital transformation in every element of traditional hospitality, which has persevered unchanged throughout millennia, with technology. Through its disruption, hospitality is becoming essentially an app experience: booking and concierge services are conducted online, or even by chatbot; all matter of clientele needs are capable of being handled by interactive technology rather than by staff; and keyless entry departing from cards and fobs towards simple verification from an app, where your phone acts as a universal signal for entry.
By taking more tedious human interactions out of the equation — which makes the guest experience as natural as being at home, while adding a spark to its more menial aspects — the new hoteltech norm has found traditional hotels in a race to keep up with the velocity of their key demographics.
Consumer Adoption of a Trend
That being said, using investments as indicators of a trend is a dangerous proposition, especially in the digital transformation world. In fact, investing patterns could end up creating a bubble similar to the dot-com bubble at the end of the 20th century. Blind investment in supposedly sound companies resulted in very little where no demand followed it.
While investment can grow a company, demand is what grows an industry and its trends. The consumer demand for responsive mobile banking services is currently driven by third-party financial technology (fintech) firms, and traditional baking models are struggling to catch up with the host of services resulting from their natural proliferation. For the movers in fintech are independent startups, not legacy banks. Wealthfront offers accessible investment management, with transparent pricing that is free for investors starting with less than $10,000. Moven provides a mobile “financial wellness platform” which combines a budgeting app with access to free ATM and banking services. Venmo, owned by PayPal, offers peer-to-peer payments in a social media context, rendering digital payments simple and organic.
These firms, which flout many of the federal regulations that legacy retail banks are bound by, start with a wholly different operational philosophy and are creating consumer-friendly products which are engineered to be agile. And there could be no larger endorsement of this facility than the response of legacy banks, who are dead set on procedurally replicating fintech’s array of adaptable, easily-accessed experiences.
Applying the Digital Transformation Trends Assessment Framework
Firms need to apply the right tools and expertise to identify trends, and they need to begin every day at the office with that expertise in hand. Centric Digital uses its Trends Relevance Index (TRI) to identify which topics are currently driving change in your particular industry and to then narrow that scope to the areas of focus which will disrupt the status quo.
By lensing your industry through the amplitude, velocity, maturity, and impact of new developments within its scope, Centric Digital provides actionable insight into one digestible figure that helps your business identify and react to the trends most relevant to you for a successful digital transformation. When the context and timeline of your industry, and where your company is situated within it, is clearly and properly illustrated to you: trends become plans, and digital readiness becomes a matter of organic implementation.