Technological Advances

Information Explosion

We are in the middle of a digital revolution that is delivering more media rich information into our homes and when we are on the move.
 

All major, and many medium size towns, now have cable TV. Telephone service suppliers are increasing. They are accessing homes through other means that the fixed wire from the local BT exchange. Systems like cable and radio telephones, and there are satellite based services on the horizon. 22% of households now have at least one mobile phone. Pagers offer alternative lower cost access to mobile users. Digital TV with its 200 channels and interactive services is now definite - the government is asking when it should phase out the analogue system. In the US, TVs and telephones with Internet access can now be purchased. These are promoted as easy to set-up and easy to use, mass consumer items. New PCs and hi-fis come with CD players and most PCs are now Internet ready.

UK Gadgets1 In 1997 the percent of UK households owning: TV set (one or more) 99 Fixed telephone 94 CD player 50 PC 29 Satellite/cable receiver 27 Mobile telephone 22 Internet connection 5 Source: Office for National Statistics

All these technologies are delivering a mass of information into people's homes. To-day it is mostly entertainment based, but increasingly it will be infotainment and later plain information services. For more information on the various interactive mediums, follow this link.
 

	The end of mass broadcasting and a switch to narrow broadcasting, making mass marketing techniques obsolete. Consumers will be able to block electronic advertising. Companies will have to pay consumers to listen and see promotions (either directly or by subsidising other services (e.g. long distance telephone calls)).
	Many of the new mediums allow interaction between consumers and suppliers. They allow intangible products and services to be demonstrated and delivered in a variety of ways according to consumer preferences: time, place, user interface, level of expertise. Consumers will be able to enter into learning relationships.

Technology Use and Literacy

Society is becoming increasingly technology literate. This is no longer restricted to the young, who have been brought up to play with a variety of electronic games. All ages of people can be found using telephone banking, ATM, answerphones, fax machines, etc.. In an increasingly faster paced society, the telephone has found particular favour with consumers. They seem to prefer spending up to 60 minutes on the telephone doing a fact-find rather than traipsing into town. The financial service marketplace has now been renamed the financial service marketspace.

The UK has one of the highest penetrations of PCs in the home (4m) with many young people having access from their school, college and university. Currently only 10% of homes (0.4m) use the Internet. The remaining 0.6m Internet accounts are presumed to be with commercial, government and not for profit organisations. Nether-the-less, people who work for these organisations are being exposed to the technology, to e-mail and information databases and to the Internet.

With the predicted high growth of the Internet, an ever increasing percentage of the population will become accustomed to using it for information access and for shopping:
 

• Information access is considered to important for high value transactions or those with a long term commitment, such as life insurance, investment products and loans.
• Shopping is more likely for commodity product items where the user already knows what he or she is buying. Services and other intangibles such as insurance and loans have higher barriers of acceptance.

Whether for information access or purchase, established brand names that have a reputation for quality and service will inspire consumer confidence.

	New entrants are using these low cost delivery mechanisms, especially the telephone, to break into the financial services market. Consumers will be able to comparison shop without leaving the comfort of their arm chairs.
	Electronic mediums offer far lower transaction costs, though they need volume or higher margin products to offset the start-up costs. Suppliers will be able to interact with consumers and allow them to personalise and create their own unique products and services. In the process the supplier gains intimate customer knowledge and the customer builds his own switching barriers!

Next is Economic Trends

JS

External Resources

1. Arthur, Charles, Britain wired for fun, not wisdom, Independent, 25 November 1997
2. more to follow ......

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