By Venkatesh Shankar, Mays Business School at Texas A&M University
Courtesy: The Financial Brand
As we near the end of 2017, what’s in store for 2018? Will it be economically better for us? What technological shifts will we witness? How will it change our and organizations’ behaviors? What will be the major business trends? How will marketing change? How will retailing transform? Marketing Professor Venkatesh Shankar of Texas A&M University offers his predictions for such questions.
The world and U.S. economies are expected to continue their growth in 2018. Although the world economy is predicted to grow by about 3.6 percent, developed economies are anticipated to grow just under 2 percent. The U.S. economy will grow in the low-to-mid 2 percent level. Unemployment in the U.S. will remain in the low four percent level. Inflation will continue to be modest. U.S. wages might rise by 3 percent, but U.S. healthcare costs will also likely grow faster, by 6 percent. China’s economic growth might slow a bit, but China will march on in economic prosperity. Interestingly, next year, Chinese tourists will far outspend American tourists, a trend that will continue until 2025.
2018 will witness the emergence of Gen Z or centennials (those born 1995 or after), the first generation born with devices in hand. Currently numbering 70 million, members of Generation Z are entering college or the workforce and are rising in influence. Because they are more digitally native than the baby boomers and millennials, they will play a huge part in digital transformation. Regardless of the level of their influence, the interplay among three generations, baby boomers, millennials, and centennials will lead to interesting digital dynamics in the society and workforce.
Deeper into digital
More people will be connected and will be digital. For example, by the end of 2018, half of adults in developed countries will have at least two online-only media subscriptions.
Spurred by Pokemon augmented reality (AR) experience, AR will become more mainstream with AR enabled apps and smartphones. More than a billion smartphone users around the world will create augmented reality content at least once during 2018.
Livestreaming will become more mainstream. China will become the world’s largest livestreaming market at $4.5 billion, almost doubling in size from 2017.
Consumers will increasingly use visual and voice searches. In fact, as more devices, people, content, and services become intertwined, we will see a super digital network – or what Gartner calls a digital mesh.
By the end of 2018, digital will impact more than half of the $4 trillion U.S. retail market. Groceries, the last bastion of brick-and-mortar retail, will start moving more rapidly online. The role of sales associates in retail will diminish or dramatically transform.
Artificial intelligence (AI) will continue to make rapid strides, affecting our daily lives, business decisions, and societal changes. AI will reshape customer experience. Chatbots will become the face of AI and will change the way apps are configured. However, these technological enhancements come with downsides. About 30% of the organizations will see a decline in customer experience performance.
Companies will use more of machine learning and AI tools to enhance their businesses. For example, about one-tenth of the purchase decisions will be guided by AI or machine-learning powered agents.
Behind the learning curve
The negative rub of the technology advances is that by 2018, the United States could face a shortage of 140,000-190,000 people with deep analytical skills as well as 1.5 million managers and analysts with big data analysis expertise. This creates huge challenges as well as opportunities for data science and analytics programs.
Finally, cryptocurrencies like bitcoin, ethereum, and litecoin will surge in popularity. Blockchain technology, the backbone behind the cryptocurrencies, will start to take a stronghold in financial exchanges and collaborations. Speculation will keep the cryptocurrencies’ values wildly volatile, but they will rise in importance as a viable future alternative. In fact, if one had invested $1,000 in bitcoin in 2008, it would be worth over $40 million now. Similarly, litecoin has returned 5,700 percent in 2017 alone!