Will VoIP do to telephones what the PC did to computers? It’s still too early to say but the quick answer is probably yes. In case you’ve been napping Voice-Over-Internet-Protocol (VoIP) has been widely promoted as the next big idea – a killer Internet application that will reshape the global telecommunications industry and any company that comes into contact with it. A case in point is eBay’s acquisition of VoIP provider Skype for around US $2.6 billion. Not bad for a loss-making company. But that’s the price companies are willing to pay to protect themselves from disruptive technologies or to align themselves with the growth opportunities offered by a rapidly maturing Internet. VoIP means that people can make telephone calls over the Internet for free – so distance and call duration are irrelevant.
It’s predicted that by 2015 all calls will be free, which is creating something of a headache for telecommunications companies. Traditionally, the business model employed by phone companies is to use voice as the major revenue generator and to then focus on maximising revenue per customer. However, the model used by Skype throws this out of the window. Skype’s aim is to be the largest communication platform in the world. In the short term this is limited to voice communication, but there’s no reason why it can’t include video or text as well. Skype has no cost per customer because users buy their own hardware (a computer and Internet connection) and there’s no marketing cost either because customers recruit other users. The last time I looked, Skype had around 50 million users and was adding to this at the rate of 150,000 per day. This isn’t the death of telephony, but it’s certainly the end of telecommunication companies as we know them. In the future voice applications will probably be given away free as part of a larger bundle of services, so companies that offer mobile-only access could be in trouble. People may also ditch telephone numbers in favour of ‘name addresses’, much in the same way that numbers have already moved from being physically tied to a building (a house or an office) to the individual. So how long before we see Apple computer bringing out an iPhone?
The use of cheques fell by 50% in Australia between 1998 and 2003. At this rate the humble cheque book will disappear sometime early in 2020.
According to AC Nielsen, 90% of transactions in the US will be cashless by the year 2020. PayPal had 63 million accounts last time I looked, which makes it larger than most national banks,while in Korea during the month of June 2004, 300,000 people purchased cellphones into which you can insert a memory card containing all your financial data. So will physical money soon be a thing of the past? Most observers say yes, but don’t underestimate the power of human nature and tradition.
If everyone from supermarkets and search engines to phone companies and airlines offer banking services where does this leave the banks? The answer could be as back office low margin sub-contractors or maybe banks will re-frame themselves as ‘wealthcare’ businesses
With cases of identity theft going through the roof in most countries, there will be a boom for companies and technologies offering electronic and other forms of identity verification. There will also be an increase in products and services aimed at helping people get their identify back after its been stolen.
By 2015 the middle class will have disappeared in most developed countries taking mid-price retailers with them (or is it the working class that will disappear?). Whichever it is, most consumer markets are already polarising between economy and premium sectors (low price versus luxury). However, customers can happily live in both segments buying $15 T-shirts one minute and $500 jeans the next.
We’ve already got sweat-shop-free clothing brands, the return of neighbourhood retail and anti-supermarket sentiments, but we still haven’t seen anything yet. In the future customers will be interrogating brands online and scanning products in supermarkets with mobile phones to check on the ethical policy of brands (you can already do this in Japan). Ethically based retail concepts (think Body Shop or fair trade coffee) will grow in the future although customers’ willingness to pay high prices or suffer inconvenience will naturally limit growth in this area.
As I have already noted, we are moving out of the era of mass and cheap into the age of luxury and ‘made for me’. For the fortunate few this means bespoke (tailor-made) products (sold in brand experience stores with concierge level service), while for others it means limited run products or mass customisation (products created for specific niches or groups, often with the help of the customers themselves). Mass customisation is a trend created by commodification, which has in turn been created by globalisation. Links with localisation trend.
Customer service costs money and is notoriously difficult to do well, so why not get customers to do it themselves? Everyone saves money and your customers think they’re in charge. Current examples include self check-in kiosks in airports, self-scanning machines in supermarkets and DIY check out services in hotels. Similarly, expect to see a boom in very intelligent vending machines very soon. If you prefer your service delivered by someone else, there’s even a car dealership in Japan that ‘employs’ robots as salesmen.