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Juha Hotti: Technological development to solve problems we are unaware of

04.11.2016

Science and technology are advancing ever more rapidly. Change is inevitable; the only ambiguity that remains is its magnitude.

According to a study by Gartner that was widely covered in the media last spring, an astonishing 51% of Finnish business decision-makers do not believe that digitalisation will affect their business, although we have already witnessed how technological development and its indirect effects have broken down established business models in highly traditional sectors. Indeed, we should not ignore the multiplier effects of technological advances, since many developments have hinted at future changes in, for example, consumer behaviour.

Over the past decade, we have seen how social media has brought us closer to each other and increased our communication. Thanks to smartphones and high-speed mobile connections, we are price-conscious when we go shopping, and we base our purchasing decisions on product reviews made by other customers.  Generally speaking, we trust other people more than we trust businesses, and we listen attentively to the opinions voiced in our networks. We expect companies to be open and transparent in everything they do because we have access to information anytime and anywhere.

Since we are used to always getting answers easily, we have become more impatient: we expect better and better service and ready-made solutions from the companies that serve us. When planning our Christmas grocery shopping, we would like the supermarket to know in advance what we need, and we hope the retailer has made good choices and picked interesting new products for us without receiving any requests from us. These solutions are enabled by customer data, which has generated considerable public discussion.

Every customer is different, and that is why data collection is essential for excellent service. As customers, we want to receive service that has been tailored to our specific needs: rewards, useful benefits, interesting recommendations and solutions that will make our lives easier. However, we do not want businesses to have access to our personal data if we feel we will not get anything out of it. For this reason, companies need to develop useful data-driven service models for their customers, ensuring they deliver value to customers in exchange for data. Sufficient privacy protection is also a clear trend: we prefer to submit data only to organisations that deserve our trust. However, in many cases it is impossible for humans to draw conclusions from data without any help. We need machines that can process and analyse big data – and become better at this every day.

The dream about self-steering cars has been around since the days of Knight Rider, but this year they have received more attention than ever. Many car manufacturers have promised to take fully autonomous cars into serial production in the 2020s, but the US-based Tesla, which has vowed to include full autopilot capabilities in its cars as early as 2018, has been most in the limelight. According to statistics released in early October, Tesla cars, which are constantly connected to the Internet, have already collected 350 million kilometres of self-driving data. This means that Tesla cars are continuously learning more about how to drive at a given junction or in a specific situation. When the full autopilot feature is released as a software update for cars already manufactured by Tesla, there will be a huge amount of driving experience behind it. Small wonder then that in a test video recently published by Tesla, the autopilot seemed to be entirely at ease driving in an urban environment, and even found itself a free parking space.

With self-driving cars around, fewer and fewer of us will want to own a car and keep it sitting idle in a parking space. PricewaterhouseCoopers has estimated that a minuscule one percent of all cars in the US could handle all driving needs if the cars were used actively instead of being stored in car parks. Among the expected multiplier effects of autonomous driving is a decrease in hotel occupancy rates and railway and air traffic, since self-driving cars will enable drivers to sleep on the way to the destination. If cars and mobility services are provided by companies in the future, the car insurance business will also be faced with a transformation.

How will all this affect shopping? In many ways, although we do not, of course, know what the exact end result will be. In the future, technology will offer us solutions to problems of whose existence we are unaware today. At K-Group, we have already prepared for future shopping trends – because the one thing that is certain is that change will never again be as slow as it is today.

Juha Hotti, Head of Mobile, Kesko, K Digital

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