Next Generation ICTs and their Impact on Consumer Behaviour and Marketing: Are we Ready? Ethel Claffey, Lecturer/PhD Student, firstname.lastname@example.org Dr. Mairead Brady, Lecturer, email@example.com 1 School of Business, The University of Dublin, Trinity College Abstract This paper seeks to provide an overview of some of the key attributes of next generation information and communication technologies (ICTs) that could directly impact on future consumer behaviour and by implication on marketing practice. While it would be an arduous exercise to attempt to categorise all next generation technologies that may impact on consumers, there is significant value in providing an overview of the attributes and characteristics of emerging technologies. A significant research effort is necessary to determine the impact these technologies could have on consumer behaviour, and how marketers may have to adapt their strategies to successfully compete to gain consumer confidence in this ever changing technical environment. This paper highlights the need for marketing academics and practitioners to consider more fully how advances in information and communication technologies (ICTs) are fundamentally changing the nature of consumer behaviour and how emerging technologies present a variety of new marketing options to organisations, both tactically and strategically. Key Words: Next Generation ICTs, Consumer behaviour Introduction New information and communication technologies are constantly emerging, altering business methods, and particularly, the relationship an organisation establishes with its customers. Technological innovations ensure that, as soon as consumer behaviour in any field is on the verge of stability and explainability, new products and services are introduced to destabilise the consumer behaviour model so as to create competitive openings for challengers, niche players, and other contenders (Firat et al., 1995). In his article ‘Insatiable Customers and Technology’s Fast Lane’, McKenna (1998:20) bids us to welcome the ‘end of the future, the beginning of the present (where) technology and competition have changed the essence of how we live time …the pace has accelerated so much that long term marketing strategies must yield to the demands of the present’. Therefore, it is essential to analyse the impact of ICT on customer behaviour (Ricard et al. 2001). Some of the key existing information and communication technologies identified in the literature include mobile communications (Mullins and Doolin, 2005), the Internet (Chung-Hoon Park and Young-Gul Kim, 2003; Constantinides, 2004; Shwu-Ing, Wu, 2002), and databases (Desai et al., 1998; Fisher et al., 2000). Additionally, next generation technologies identified include Radio Frequency Identification (RFID) (Ferguson, 2002), pervasive communications services1 (Vrechopoulos et al., 2003; European Commission, 2005; Albrecht, 2002) and neuromarketing (Wahlberg, 2004; Wells, 2003). The following sections provide an overview of the attributes of emerging next generation ICTs and some of their potential At a simplistic level the term ‘pervasive service’ refers to the provision of mobile services to multiple users on multiple devices using enhanced technical techniques to make the underlying technology transparent to the users (European Commission, 2005). 1 impact on consumer behaviour. This research forms a part of a wider PhD study currently being undertaken by one of this paper’s authors. Ubiquity Sorensen and Gibson (2004) found that the vision of ubiquitous computing can be viewed as the ultimate convergence of society and technology, where there is no longer any distinction between the two. Ubiquitous computing represents the utopian realisation of human-computer interaction (Banavar et al., 2000). Weiser (1991:94) stated that “the most profound technologies are those that disappear … they weave themselves into the fabric of everyday life until they are indistinguishable from it”. From a marketing perspective, ubiquity represents a shift in the way marketers can provide information to consumers. In a truly ubiquitous technology society, consumers will have access to mobile devices and computers every where they go, and at all times during their day-to-day lives. This provides marketers with an audience for advertising information that is potentially “always-on” as opposed to the current state of play whereby consumers are contactable intermittently. Pervasive Communications At the recent Internet Global Congress, Doolin, (2005) explained that where ubiquity provides technology integrated into all aspects of society, pervasiveness brings this concept to another level. When a technology becomes truly pervasive it displays elements like personalisation and context awareness, using multiple media on multiple devices, e.g. wearable computers and embedded sensors. These technology aspects allow application and technology developers to create systems that are automatically personalised for each and every user, depending on that user’s context (where context can be time, date, location, temperature, position, country, mood, and so on). This type of technology could allow marketers to harness the fact that consumers continually want to feel unique, and should make the opportunity to do this become less daunting (Venkatesh, 1998). It also enables marketers to target consumers with dynamic advertising strategies rather than the traditional static style. Emerging research is taking this dynamicity to another level with the concept of elucidation of user preferences. This is a concept whereby a communications network tracks a user’s day to day activity and draws conclusions from this in order to offer the services that a particular user wants (European Commission, 2005). The introduction of pervasive services, expected to become mainstream by 2010-2015, will generate an increased use of information technology and mobile communications, with an increased number of technical services and products being delivered to users on multiple devices. It is clear that future research is required to study the positive and negative aspects of this technology. Mobility The advent of the mobile device and mobile internet has provided marketers with a means to access globally located consumers. Vrechopoulos et al. (2005) indicated that the changing role of mobile communications is reflected in the increasing use of mobile devices for e-commerce purposes. Supported by the penetration of mobile devices and the evolution of mobile technologies, mobile commerce has promised to change the way certain business-to-consumer (B2C) activities are conducted, however, this has not yet been fully realised. An example of this is the use of 3G enabled mobile devices to send advertising information to potential consumers. This provides the potential to access more consumers, thereby creating a virtual global advertising marketplace. It also provides a means for consumers to make rapid product decisions and to purchase items from any location (Mullins and Doolin, 2005). The importance of the ability for consumers to purchase items regardless of location has become increasingly apparent when one examines the adoption of the Internet as a means to make purchases. Heralded since the dot com era and the late 1990s as the replacement for physical shopping, the shopping habits of customers have been altered but not changed fundamentally by the Internet. Future developments which could give rise to more changes in shopping patterns include allowing consumers to make purchases using multimedia messaging services, such as shopping ‘buddies’ or automated ‘bots’ (Doolin, 2005). From one perspective Shwu-Ing Wu (2002) argues that ‘all across Taiwan and around the world, shopping centres are closing their doors as consumers turn to the Internet for all of their shopping needs.’ Alternatively, shopping centres are the cathedrals of yesteryear and shopping has not lost its popularity but is increasingly a social and critical pastime for many (Moyagh and Worsley, 2002). Convenience We are the most monitored, tracked and surveyed people ever on this planet. One example from a range including biometrics, neuromarketing and nano technology is Radio Frequency Identification Devices (RFID). This “isn’t some sci-fi vision of the future” (Ferguson, 2002:138), indeed RFID already has many pragmatic uses in creating enormous value for both the organisation and the consumer. Following the natural evolution of barcodes and more primitive tags attached to clothing to prevent shoplifting, RFID is empirically better as it does not require human interaction. RFID will increase efficiency of interactions at checkouts in shops and supermarkets by speeding up transaction times or by tracking consumers’ usage of products. When this technology is fully integrated into product outlets, shoppers will be able to bring a trolley of goods to the checkout and pass a single scanning interface where all products will be instantly identified and the final price calculated. Additionally, the user’s mobile device can be integrated into the process to automate payment for goods. Ferguson suggests that while at the moment, “information flows with high speed through a few high-capacity channels, like veins and arteries, soon wireless technology will takeover creating multiple direct information flows-like capillaries” (2002: 142). Information Handling From a strategic perspective and writing in 2000, Struse claimed, “in the future expertise in information systems, database management, software development and other technologies will become crucial”. Indeed Holland and Naude (2004) go further by conceptualising the relationship between ICT and modern marketing as an ‘information-handling problem’, whereby businesses should be focusing their technologies on ways to bring the customer’s requirements in line with company resources. This idea of marketing being an ‘information handling problem’ is not new, but something which Piercy outlined in 1981. Piercy (1981:1) urged that “good information is a facilitator of successful marketing action and indeed, seen in this light marketing management becomes first and foremost an information processing activity” Conclusion From a tactical perspective, pervasive mobile services and technologies could be ideal ways for targeting consumers. Today’s consumer has variously been described in the literature as ‘active’, ‘knowledgeable’ and ‘post modern’ (Hawkins et al., 2004; Lawson, 2000; Assael, 2004). Current trends suggest that marketers must be sensitive to the needs and behaviours of specific groups. Moreover, the ‘new’ consumers have been described as individuals that want to gather marketing information and make purchasing decisions in real time and are tech savvy (Spero and Stone, 2004). A key point made by Mitchell is that no matter how advanced new technologies become, they will never be completely efficient without the input of the consumer. “They depend on customers ‘opting in’ rather than merely acting as passive targets,…making marketing a joint, cooperative process” (Mitchell, 2002 :77) In short, in the information age, the customer both shapes and directs the interaction between marketing and ICTs. It would seem essential that marketing managers must re-examine how best to integrate next generation technologies with existing marketing channels and practices. Within this orientation any detailed research agenda would need to address these challenges and also topics such as access, usage, literacy, trust, security and ethics. This could mandate rethinking, repositioning and changing the nature of communication and interaction between almost all parties involved in the value chain. Current and new technologies present many new opportunities and challenges for marketing academics and practitioners and a research agenda to study the dynamic developments in this area is a worthwhile and necessary challenge and one which marketing overlooks at its peril. References Albrecht, K. (2002),"Supermarket Cards: The Tip of the Retail Surveillance Iceberg." Denver University Law Review, Summer, Volume 79, Issue 4, pp. 534-539 and 558-565. Banavar, G., Beck, J., Gluzberg, E., Munson, J., Sussman, J., Zukowski, D. (2000), “Challenges: an application model for pervasive computing”, paper presented at the 6th Annual ACM/IEEE International Conference on Mobile Computing and Networking, Boston Chung-Hoon Park and Young-Gul Kim (2003), ‘Identifying key factors affecting consumer purchase behaviour in an online shopping context’, International Journal of Retail & Distribution Management, Volume 31, Number 1, 2003, pp. 16-29. Constantinides, E. (2004), ‘Influencing the online consumer’s behaviour: the Web from experience’, Internet Research, Vol. 14, No. 2, pp. 111-126. Desai, C., Fletcher, K., and Wright, G. (1998), Barriers to successful implementation of database marketing: A cross industry study, International Journal of Information Management, 18(4), 265 -278. Doolin, K (2005), “Discovering and Managing Composed Services in Pervasive Systems”, paper presented at the 2005 Internet Global Congress, Barcelona, Spain. European Commission Information Society Technologies Research Funding (2005), Available at http://www.cordis.lu/ist/ and www.daidalos.org, [Sourced 12/12/05]. Ferguson, G. T. (2002), ‘Have Your Objects Call My Objects’, Harvard Business Review, June, pp.138-144. Fisher, M., Raman, A., and McClelland A. (2000), Rocket science retailing is almost here – are you ready? Harvard Business Review, July-August, 115-124. Firat, F., Dholakia, N., Venkatesh, A. (1995), ‘Marketing in a post-modern world’, European Journal of Marketing, Vol. 29. No.1, pp. 40-56. McKenna, R. (1998), The Antidote from CSBS, Issue 15. Moynagh, M., and R. Worsley (2002), ‘Tomorrow’s Consumer-The Shifting Balance of Power’, Journal of Consumer Behaviour, Vol.1, No.3, pp.293-301. Mullins, R., Doolin, K. (2005), “Pervasiveness in Converged Telecommunications: A Business Opportunity for the Operators”, paper presented at eChallenges 2005, Lubjliana, Slovenia. Piercy, N. (1981), ‘Marketing Information bridging the quicksand between technology and decision-making’, The Quarterly Review of Marketing, Autumn, pp.1-15. Rideout, V. (2002), ‘Generation Rx.com’, Marketing Health Services, Vol. 22, Issue 1, pp. 26. Shwu-Ing, Wu. (2002), ‘Internet Marketing Involvement and Consumer Behaviour’, Asia Pacific Journal of Marketing and Logistics, Volume 14, Number 4. Sorensen, C., Gibson, D. (2004), “Ubiquitous visions and opaque realities: professionals talking about mobile technologies”, info, January, Vol. 6, Issue 3, pp.188-196. Venkatesh, A. (1998), Cybermarketscapes and consumer freedoms and identities, European Journal of Marketing, Vol. 32, No. 7/8, pp. 664-676. Vrechopoulos et al. (2003), ‘The critical role of consumer behaviour research in mobile commerce’, International Journal of Mobile Communications, Vol. 1, Issue 3, pp.1. Weiser, M. (1991), "The computer for the 21st century", Scientific American, pp.94-104.