Digital Ecosystems Are Blossoming And Why You Should Care
Before we can begin to understand digital ecosystems, let’s rein things back to the basics: what even is an ecosystem? It may be a long time since Grade 6 biology, so in case you need a refresher, the classical definition is an environment where “plants, animals, and other organisms, as well as weather and landscape, work together to form a bubble of life.”
And while the digital galvanization of customers through complex channel transformations that threaten industry norms might seem a lot different than a maple tree blowing in the wind, loyalty vendors can simplify digital ecosystems with a few analogous concepts:
The plants, animals, and organisms of traditional ecosystems can be compared to the various stakeholders which intertwine and influence novel digital platforms. These can take the form of individual actors, such as customers and corporate leaders, but also brands themselves — which possess a unified and discreet power.
The weather and landscape components reflect the evolving trends, generalized societal behaviors, and technological developments which catalyze change. These environmental shifts, often seismic in nature, contribute to a large degree of evolutionary momentum toward the growth of digital ecosystems.
Ahh, the so-called bubble of life — more than just an idyllic metaphor, digital ecosystems really do create worlds of their own, filled with stories, emotions, mutually-valued interactions, and a kind of self-sustaining growth that resembles natural processes.
If you’re a loyalty vendor and you’re passing all this off as esoteric, overly-colorful, or academically-obtuse, tread lightly:
- companies with the world’s highest market capitalizations generate much of their revenue from the digital ecosystems they’ve created.
To get your strategic minds spinning, here are three trends that can help your own digital ecosystem thrive:
1) You’re Not On Your Own
It’s easy for loyalty programs to fall into the trap of trying to develop too many features in-house. On the surface, it might make sense to try: after all, your program is unique, with a certain tone and style to your brand; you pursue a particular audience, with categorically homogenous behaviors and traits; and the creative ideas with their corresponding tactical strategies were developed by your in-house silos, so you’d know them more intimately than external players.
But digital ecosystems grow from digital communities. Specialists, mavericks, and innovators constantly explore niche applications for technological breakthroughs, and many eventually provide white-labelled access for the benefit of other entrepreneurial thinkers. Chances are, if there’s a bespoke digital application you’re looking for, there’s a solution which exists that eliminates extra costs and inefficiencies that are racked up alongside custom creation.
Strategic digital alliances can also be exclusive — a timeless concept in loyalty terms. And these alliances, through the context of digital ecosystems, can create fulfilling worlds for customers.
Chipotle, for example, decided to dip into charitable causes through an exclusively digital partnership with EGALE, Canada's leading organization for 2SLGBTQI people and issues. Through an app-only feature, customers celebrating pride month can round their bill up to the next highest dollar, inspiring donations for a worthy cause while infusing positive sentiments back into Chipotle’s constantly growing digital footprint.
2) Work Quickly…Literally
As digital ecosystems become more immersive and more interactive, they also need to become more immediate. That’s because highly interconnected platforms must mirror the real-time environment that humans are used to navigating in the physical world. This is a more technologically complex challenge than it may first seem. Up until a few years ago, internet lag and latency within IT communications could be very apparent indeed, detrimentally impacting the customer experience. And beyond this dimension, the ever-growing number of parallel systems that must work together behind the scenes requires fast and faultless IT.
Fortunately, 5G networks are exploding across the nation, dramatically helping interconnections become faster and more seamless, while “as a service” cloud offerings have multiplied the ways partners can plug into ecosystems. These communications protocols are hundreds of times more efficient preceding offerings, and providers leveraging them have unique access into advanced technologies such as AI-powered databases to improve how digital ecosystems understand and attract customers in mere seconds. It’s no surprise that 90% of marketing professionals worldwide expect 5G to have an impact on their industry over the next decade.
3) Measure The “True Age” Of Customers
How old are your customers? Before you answer that, yes, this is a trick question. Because one important metric that you’ve probably ignoring has nothing to do with the year individual customers were born. It’s how the minds, behaviors, and expectations of your customers have changed in recent history in response to exponential market volatility. Just think about what’s happened in the last couple years, let alone the last decade; the landscape that your customer is now accustomed to is an alien world, and would be unrecognizable if they could peek through a time machine back in 2015 to preview what’s in store.
Ask yourself honestly; how often do you sit down with your team to review customer trends? Once a year? Once a quarter?
These intervals may not be prompt enough to allow you first-mover status and capitalize quickly on environmental features. Fortunately, with a well-connected digital ecosystem, you’ll have a real-time window into your customers’ lives.
This way of thinking is important for all industries, but is easily demonstrated in those affected by global currents, like fuel and automotive. For companies within these sectors, re-imagining the retail experience by creating digital ecosystems isn’t a nice-to-have: it’s a way to avoid falling into forgotten oblivion.
For Shan Roy, VP at global IT and business consulting services firm CGI, the present needs to build on the past:
“Ultimately, fuel retailers always had a captive market,” he explains. “People needed to fuel their cars, and car numbers were growing. All they needed to worry about was having a good product, and whether their fuel station was in the right location.”
Roy contends that when it comes to embracing digital technology, other retail sectors are light-years ahead of fuel. While consumers may have accepted this in the past, he continues, in the current climate, their engagement with the fuel retail experience is likely to diminish, unless their demands start being taken into consideration.
This lack of attention to changing consumer behaviour could be a costly mistake for the fuel retail sector, continues Roy: “I think they’ve missed a trick in understanding their customers….” But with digital ecosystems, a virtual safety net can be cast and the path to true loyalty can be swept clear of debris.
Imagine a modernized gas station environment with instant rewards integrations, compatibility with travel and map apps, contactless payment, automatic discounts, and perks for frequent customers — all fulfilled through a cooperative network of technology providers under a consistent, customer-centric platform.
So before you make your next move, think about how digital ecosystems might fit into your loyalty platform. Because if you don’t get your customers on board now, someone else just might get to them first.