5 Trends That Will Shape Digital Services In 2013

Olof Schybergson

December 10, 2012

What will the key changes be in business and design during 2013, and what should you do about it? Here are five predictions from the design firm Fjord.

From fastcodesign.com

At Fjord, we work across domains like media, health care, retail, education, and banking, and the work always involves an element of “new.” A new platform or technology, a new business proposition, or new target users. We work at the front edge of mainstream, where innovation meets mass-market appeal. The constant presence of “new” in our work feeds our curiosity, and makes exploration a necessity.

In order to guide our work and inspire our clients, we constantly think about what tomorrow will bring. Each year, we ask teams at Fjord to predict the major trends that will impact businesses and society next year. Here, we delve into five of our predictions for 2013 and share our thoughts on what designers should be doing to make sure they stay ahead of the curve.

1. Dawn of the “Personal Ecosystem”

Connected objects start to take their place--right by your side.

The growing number of devices and sensors that we incorporate into our lives will set the scene for what Fjord calls “living services”--the point at which individual smart objects interconnect to form a support network for their owner. This is when a set of connected objects becomes greater than the sum of its parts: your “personal ecosystem.”

The past 18 months have seen the beginnings of mass-market adoption for a select few connected objects, driven by the services that make them meaningful. Nike+ FuelBand, Jawbone UP, and the Nest self-learning thermostat are early pacesetters. The “battle for the wrist” will hit the mainstream in earnest in 2013, with a variety of approaches coming to market focused on everything from health and wellness to information and entertainment.

We’ll soon start to see connected devices infiltrating more areas of our lives. As we are confronted with more data visualizations about our homes, jobs, and health, we are likely to develop what we’re calling “chart fatigue,” where information overload makes it difficult to extract meaning from data that should be valuable to us.

How to get in on the personal ecosystem:

2. K.I.S.S. (Keep It Simple, Stupid)

How good old-fashioned K.I.S.S. principles are making a comeback.

As digital progress marches on, so does complexity. A growing family of personal devices, and ever-increasing volumes of data, constantly threaten the efforts of service designers to create elegant, focused, and simple solutions.

But at the same time, more organizations are finding that a focus on simplicity can have a transformative effect on services and businesses alike. As Albert Einstein said, “Everything should be made as simple as possible. But not simpler.”

Simplicity has a long track record of success and disruption. Ikea and Zipcar are good examples from the physical world. In the digital world, Skype was able to gain global market share with a very simple proposition, and Google disrupted the search-and-portal world with its singular focus and excellence. Other examples include Amazon’s one-click shopping, and Apple’s touch-focused iOS.

Now we’re seeing single-purpose apps and services gaining ground, feeding a desire for simplification. The payments startup Square is a good example: By simplifying the bureaucratic process of becoming a credit-card merchant, Square has managed to become a $3 billion company in under three years. Bank Simple has also changed the conversation in the financial-services sector with its radical approach to making finances transparent and easy.

Leaders in simplification will continue to disrupt and transform. As choices and options multiply, companies with solutions that can guide users through the mess will have an opportunity to become trusted advisers.

Simple rules for a K.I.S.S. world:

3. Access Will Supplant Ownership

What does it mean to own something in the digital age?

We’ve seen seismic shifts in the area of digital distribution of music, movies, and every other form of media. Users now expect their purchases to be portable and consumable on multiple platforms. We crave flexibility, and the way we buy and “own” is changing accordingly.

Spotify has proved that consumers are willing to pay to rent music if they feel they’re getting a valuable service. Services like AirBnB, 9flats, Getaround, and Lyft are making flat-sharing and car-sharing mainstream. The new competitor Jetsetter is helping to turn the concept of a luxury second home or family holiday on its head.

In the past, we projected our status and success through the things we owned--the car in the driveway, the vacation house, the books and the CDs that we displayed in our home. But increasingly status is now projected through our experiences and pursuits, and consequently the desire to “own” material objects fades.

Innovative new services will see companies generate increased revenue based on usage. For example, Microsoft’s Kinect technology could be used to charge for movies based on the number of people in the room.

As the focus shifts from ownership to access, these are key implications:

4. I Belong to Me

How to survive if you find yourself on the personal data battlefield.

In 2012, the argument around use of personal data got heated. As users become more aware of what can be done with their information, they are beginning to demand access--and real value--in return for their data. With so many alternatives available for virtually any service, users are increasingly walking away from experiences that they find creepy or uncomfortable, and taking their business elsewhere.

At Fjord, we expect the wave of data visualization to continue to grow, driving value and building relationships between individuals and those who help them to extract value from their own behaviors.

How you can survive the personal data battle:

5. A Personal Shopper for Everybody

The coming revolution in retail

Personalization is nothing new in the digital world, but in the world of retail, users often find that comparatively few services actually meet their needs. This is likely to change in 2013, as the online and offline retail environments merge, creating a more holistic and immersive customer experience.

A statistic to strike fear into the heart of any retailer: Almost half of U.S. smartphone users have used their devices in-store, and more than half of those have gone on to abandon their in-store purchase. For smartphone users, the distinction between online and in-store shopping has all but disappeared.

The key to retail success lies in creating experiences that make customers feel better. A shopping experience that feels smarter or easier can be more valuable for many customers than simply getting the best deal. Key factors that ensure success are increasingly going to be based on recognition, recommendation, follow-through, and support. Services like Intuit GoPayment and PayPal Here (both of which Fjord helped to design) are already revolutionizing commerce for small retailers by simplifying payment, and the next natural step is to offer digital customer relationship management for these small merchants.

Shop staff will increasingly be equipped with tablets or smartphones to deliver improved individual service, and opt-in location-based services will help customers find precisely what they’re looking for, when they’re looking to buy, and will enable them to pay on the spot without queuing. Virtual shops, in other words, will also take hold in the physical world.

Suggestions for the shopping services of 2013:

Making Sense of the Road Ahead

These trends give a glimpse into the dramatic changes in people’s expectations, habits, and relationships that are being driven by the fast-changing digital service landscape. They have affected both people’s personal relationships and their interactions with services and brands. There is undoubtedly more change and transformation to come. Looking ahead, we believe that these are the fundamental lessons that designers need to embrace to have a real impact on business and society in 2013:

Design for a growing range of devices and a growing range of interaction modes. The new form factors include a much broader range of tablets, phablets, and hybrid devices (pc/tablet combos). They also include a fast-growing range of wearables--wrist bands, wrist watches, and much more. The interaction modes move from purely the graphical touch paradigm to include additional modes like voice and ambient information. Flexibility and adaptability will be key properties for successful designers.

Data is the currency of today, and data visualization is all about meaning. Designers will hold a key role in designing not just beautiful but also sharp and actionable insights. They will design data visualizations for large corporations, and make sense of big data for the little guy.

The digital/physical divide is disappearing. Bits and atoms used to be competing enemies; now they’re becoming friends that hang out together. Examples include digital real-world shopping, digital payments, wearable fitness and health technology, the ubiquity of mobile map usage, the connected car, etc. Designers need to be very thoughtful when designing things that people wear (comfort/fashion/durability considerations) and that affect people’s "real"-world experiences.

We know that trends can inspire and at the same time strike fear in the hearts of those responsible for shaping the next wave of products and services. So with this, we hope we’ve given not just a showcase of predictions but also actionable insights that will help both designers and business leaders understand how to interpret the exciting opportunities that lie ahead in 2013.

Olof Schybergson is co-founder and CEO of Fjord.