Monday, January 30, 2006

This is only the warm up act

Cast your thoughts back two years, would you really have thought that we would have so many ‘smart’ devices or applications being used by so many people. Many people tend to think about technology advances when the word ‘convergence’ is used but I tend to also think about the potential impact of more social division and the imbalance this creates in the digital world and of course lets not forget the opportunity.

Let’s start by trying to define what ‘convergence’ actually means. Well ok lets not, far too difficult, the term encompasses integrating technologies, services, applications, market changes the list goes on. Better to start by looking at some numbers.

1 billion people are now online across the globe.
180 million global subscribers to broadband.
54 million VOIP (Skype) users in 24 months
1.3 trillion SMS messages sent across the globe
1.8 billion blogs live and doubling every five months
54 million mobiles in the UK with around 90% internet ready
150,000 wireless hotspots worldwide
80 million+ paypal accounts

I could go on – the list is rather endless – but the key point is it’s not just all about a PC and a website; you have to think about more than that if you are going to embrace convergence. It does not take a genius to establish what’s driving this paradigm, it’s a number of events: technology, convenience, experience, social interaction and fundamentally a consumer driven appetite.

Currently there is much talk about Internet 2.0 [a recent conference in San Francisco and Travolution’s own blog] and more recently I have seen articles that talk about the look of Internet 3.0, a good indication of the pace of change. Brands like Amazon, Napster and Ebay have fundamentally changed the way commercial businesses work by adopting what’s commonly being named The Long Tail. if you haven’t read Chris Andersons article, you should.

Putting all this aside, this ‘New Media’ is still young: only 4% of total retail sales were made online in 2005 across Europe, with the UK doing marginally better at 7%. The good news is travel performs particularly well, with an estimated €41 billion in 2006 coming from leisure and unmanaged sales online.

With all of these new experiences online, offline has to up its game, as consumers are rather well informed nowadays. Online offers more information on products and services, more fulfilment options and better control of the experience; however offline still wins hands down on service.

Can you get the best of both? The US have seen some great results in testing this, such as kiosks in store (DIY in particular), un-manned check in desks and mobile shopping buddies. All are being embraced enthusiastically as they add value and enhance the offline experience – but is this just another step in ‘convergence’.

I recently purchased a new HD (high definition) LCD TV and created a wireless environment in the front room. Suddenly the PC has moved from the office into the living area and we constantly move between the TV and the internet using Microsoft Media Centre. But it’s worth pointing out the pitfalls as my five year old has suddenly discovered he can buy PSP games on Ebay.co.uk!

One theme that cuts through all the best innovations – they are all consumer driven. I believe the last ten years of the internet were nothing more than the warm up act for what we are about to see. Consumer driven innovation and convergence is happening, the question is who will have the most valuable customer base as the transition happens and who will have it when it ends.

My advice is embrace, test, learn, involve your customers then deploy. Not everything will work, but if it did then what would be the fun in that.

Graham Donoghue, head of new media at TUI UK

12 comments:

Anonymous said...

Worth pointing out that Skype actually claim 245m downloads, obviously not all being used, i assume the 54m is the active users. Regardless an incredible number. I agree 100% that its all consumer driven and you have to design with the customer at the centre of everything you do, if its does not add value then dont do it...

Anonymous said...

1.8 billion blogs live...are you sure about that? That's about 1 in 3 of the world population. Technorati claims about 28m, which sounds a bit more credible.

Anonymous said...

I agree 1.8 billion seems high, I did however read a post recently that talks about over 1 billion blog pages that have active posts less on them. This post claims over 70m blogs back in july, http://www.blogherald.com/2005/07/19/blog-count-for-july-70-million-blogs/

Travolution blogger said...

Original message defintely said 1.8 billion live blogs. Mr Donoghue's TUI tentacles reach far and wide, so perhaps he just knows more than the rest of us.

Graham Donoghue said...

I was not clear, so apologies, according to my figures at the time their was 1.8bn blog links being tracked, I should have added across 29m blog sites. Looking today that’s old news with http://www.technorati.com/ now claiming 31.2 million sites and 2.2 billion links. Not bad growth in 2 months

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