2013 Trends

Thank you.

What will the key changes be in business and design during 2013, and what should you do about it?

Slide 1 Fjord 2012 | Confidential

AN INTRODUCTION
At Fjord we work across multiple domains that are going through major transitions 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. So we constantly think about what tomorrow will bring. At the end of the year we ask teams at Fjord to offer their predictions on the major trends that will impact businesses and society in the year to come. We know that trends can both inspire and worry those responsible for shaping the next wave of products and services. So we've also tried to give some clear advice that will help both designers and business leaders understand how to interpret the opportunities that lie ahead. As usual, the trends point at some recurring themes: for 2013 the following weave their way in and out of our forecasts: That mobile is still changing everything if anything faster, and now including new ways of working. That personalisation will be a hot topic for success. That data and the success of new systems are tightly bound together. And as ever for truly great service design - people come first. We hope you find our 2013 trends interesting, provocative, inspiring, and importantly, actionable. If you want to delve deeper into our thoughts on what you should be doing to stay ahead of the curve, please reach out for a customized presentation by Fjord on the trends that will have the most impact on your business.

Slide 2 Fjord 2012 | Confidential

#1

PEOPLE ARE RUINING EVERYTHING

for traditional businesses
Slide 3 Fjord 2012 | Confidential

The single biggest source of digital disruption over the past decade has been people the users of technology themselves. Access to technology has made it possible for anyone with an idea, a vision and determination to build a service that circumvents traditional businesses. And the platforms that people use to trade with one another are far richer than any single business could build.

#1 PEOPLE ARE RUINING EVERYTHING

for traditional businesses

2007
YouTubes bandwidth equaled that of the entire internet in 2001

2011
THE NOW
AirBnB saw 500% growth in nights booked 2011.

2012
Lyft, Sidecar & Uber were each fined $20K by the CPUC for alleged "public safety violations"

2012
Crowdfunding is expected to reach $500 million in 2012, up from $33 million in 2010. Slide 4 Fjord 2012 | Confidential

This trend began with user-generated content. The first wave was well underway by 2000 with Napster and Blogger. Now, 80% or more of the content consumed online is user-generated. This has caused massive disruption across all the content creation and publishing industries, from broadcasters to newspapers to the music industry. But the emergence of new business models that sit between traditional ownership and illegal exchange (see our trend, Access is the New Ownership) suggests that the area is as much an under-exploited opportunity for businesses as a potential threat to their livelihood. The past few years have seen a dramatic upswing in peer-to-peer services, which has begun to disrupt several industry verticals including travel and transportation. Services like AirBnB, Getaround and Lyft have understandably caused much alarm amongst traditional businesses, which has contributed to political action in some areas and raised the possibility of regulation. Peer-to-peer funding platforms like Kickstarter and Indiegogo have also begun to disrupt the way that businesses are created and grown, bypassing the traditional investment framework. While these platforms are facing their own challenges, Kickstarter's funding success rate is far higher than many industry experts predicted, at around 45% on average and as high as 70% in the top category.

WHATS NEXT 2013 THE PAST

#1 PEOPLE ARE RUINING EVERYTHING

for traditional businesses

2012
Etsys sales have grown around 69% Year-on-Year 2010-11 and 2011-12.

2013
Staples will launch Easy3D, a 3D printing service available to all its customers in the US.

2013
Car sharing is rapidly growing in the UK and EU, with Whipcar about to close a round of funding

Peer-to-peer services will continue to grow, in areas of finance and personal services as well as the segments in which they are already substantial players. Traditional businesses will continue to try to arrest this growth through legislative or political action, but the startup community has come to see these kinds of challenges as a badge of honour. This disruption will be joined by a third wave, in the area of peer-to-peer manufacturing and distribution. This wave began long ago with resale and exchange platforms like Ebay and Freecycle, but it has been transformed through craft-focused peer-to-peer platform Etsy. Looking further, Fjord anticipates this peer-to-peer manufacturing revolution to crest as 3D printing becomes accessible to everyone. We are already seeing movement in the creation and publication of peer-to-peer 3D printing plans: although fraught with legal difficulty, we expect this movement to gather momentum in 2013.

2013
Makerbots Replica 2 will be available from January 2013 for less than 1800.

2012
TaskRabbit announces marketing partnership with Gap in December

Slide 5 Fjord 2012 | Confidential

WHATS NEXT 2013

#1 PEOPLE ARE RUINING EVERYTHING

for traditional businesses

If you can't beat 'em, join 'em: shutting down peer-topeer services through legislative action is unlikely to be productive in the mid-term. Instead, traditional businesses will need to find new ways to remain competitive. Explore new business models that bring traditional and P2P players together through partnership or acquisition, extending the traditional business' value and the peerto-peer service's reach. Well-established brands can facilitate peer-to-peer engagement in relevant areas to extend their brand value and customer relationships. Old-fashioned and controlled branding and marketing is not effective anymore. Upgrade your brand to ensure interactivity and digital are in the core brand DNA, encouraging not fighting feedback and peer-to-peer engagement.

Slide 6 Fjord 2012 | Confidential

FJORD SUGGESTS

#2

I BELONG TO ME
The personal data battlefield

The past year has seen a massive rise in the number of organisations gathering personal data from their users. Theres also been a growth in user awareness of data collection issues, mainly in Europe rather than the US. 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. The data exists in two forms: Aggregate information, in which anything that identifies the individual is stripped out, enabling businesses to show broader trends and comparisons. Individual information, which is tied to the specific person.

Slide 7 Fjord 2012 | Confidential

#2 I BELONG TO ME The personal data battlefield

THE PAST THE NOW

2007
Netflix launches the Progress Prize, $1,000,000 to anyone who can improve their recommendation engine.

Online retailers and services like Amazon, Google and Facebook have been gathering user behavioural data for years. Aggregated data drives recommendations engines, and personal data drives targeted marketing and advertising. The argument around use of personal data intensified during 2012. Notable examples include the Facebook class action launched by Austrian law student Max Schrems, the pending EU legislation it has influenced, the argument between advertisers, service providers and users around recognising Do Not Track requests, and the ongoing discomfort amongst users - some surveys have indicated that users even believe that advertisers on Google's platform know their home address. In service terms, we have seen that misuse of information has immediate and severe impact on relationships - when Facebook began "transparently" posting all the articles we read through their apps, usage of these publication apps dropped like a stone almost overnight. The fact that there are so many alternatives available for virtually any service means that users are increasingly walking away from experiences that they find creepy or uncomfortable, taking their business elsewhere. Finally, targeted advertising is less effective than true advocacy in building profitable relationships. Advocates spread the word to their peer networks, where it is far more likely to be heard than from the brand or business itself.

2010
Nike+ GPS app launches, enabling runners to track their data on iOS.

2011
Citibank launches iPad app with data enhancements.

2012
Scandinavian operator Three makes the mobile bill visual and transparent Slide 8 Fjord 2012 | Confidential

#2 I BELONG TO ME The personal data battlefield

EU legislation in 2013 will have an impact. Whether its rulings will be immediately enforced is a legitimate question, but affected businesses certainly need to start thinking about a course of action immediately. At the very least, 2013 will see dramatic growth in user awareness around their data, and potentially also a series of tools aimed at helping normal people manage and control who sees their data, when and how. As the proliferation of service players continues, particularly as we see more and more traction for over-the-top players in verticals like personal finance, striking the right balance between data gathered and value delivered will become increasingly critical to the success of many large businesses, notably banks and insurance companies. Fjord also expects the wave of data visualisation to continue to grow, driving value and building relationships between individuals and those who help them to extract value from their own behaviours. Finally, three new mobile operating systems will arrive in 2013, and we expect at least some of these to include some level of personal data management as part of their software.

2012
State Farm & Ford team up to gather actuarial data direct from the vehicle.

2013
Ubuntu, Mozilla, & Tizen OS released.

2013
EU Legislation will define privacy terms.

2013
Services like ReclaimPrivacy, Untangle, Unroll.me begin to gather steam. Slide 9 Fjord 2012 | Confidential

WHATS NEXT 2013

#2 I BELONG TO ME The personal data battlefield

Make the most of aggregate data. It can go a long way to improve your product and customer service without demanding hyper-personal information. Work to turn your customers data into actionable insights for them. Transparency builds trust and lasting relationships. Be the one who makes sense of Big Data for the little guy. Design for data re-use; Allow data to be exported and aggregated, not stuck in proprietary silos. FJORD SUGGESTS
Slide 10 Fjord 2012 | Confidential

#3

DAWN OF THE PERSONAL ECOSYSTEM

Connected objects start to take their place right by your side
Slide 11 Fjord 2012 | Confidential

Well soon start to see connected devices infiltrating more areas of our lives but this could lead to information overload for some of us. As we are confronted with more data visualisations about our lives, homes, jobs or health, we are likely to develop what's been called 'chart fatigue', making it difficult to extract meaning from data that should be valuable to us. This 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.

#3 DAWN OF THE PERSONAL ECOSYSTEM Connected objects start to take their place right by your side
In the early days of smartphones, the range of available services was extremely limited, often based on the capabilities of the device, or on the restrictions of the mobile service provider. But since the concept of an app store was taken into the mainstream, users have increasingly been building their own personal app ecosystems made up of whatever they personally believe is useful and important. While Apple keeps a tight rein on what's allowed in its App Store, users in general have far more control over their software than ever before. The personal ecosystem, developed by the app store mobile experience, is migrating into the physical world. The past 18 months have seen the beginnings of massmarket adoption for a select few connected objects, driven by the services that make them meaningful. Nike Fuelband and Jawbone Up are two examples from the wellness sector, while Nest is a connected home example. Looking at Kickstarter, the next 12 months should see an explosion of connected and smart objects spanning a huge range of technologies and applications. At the same time, some telcos are beginning to measure their revenue in terms of account (ARPA) rather than by device or by single user (ARPU). This means they're taking steps to combine their views of customer behaviour across devices and contexts, building a picture that could be used to create a business and technical infrastructure to support Living Services. WHATS NEXT 2013 THE PAST

2008
i0S App Store & Android Market launch

2011
THE NOW
i0S App Store reaches 500K apps

2011-2012
Jawbone Up, Nike+ Fuelband launch

2012
Verizon launches Share Everything Slide 12 Fjord 2012 | Confidential

#3 DAWN OF THE PERSONAL ECOSYSTEM Connected objects start to take their place right by your side
As more and more objects come onto the market, overthe-top data services will begin to form around them to drive increased value. The earliest of these are likely to be wellness-driven (like Tictrac), or focussed on finance. In the near term, however, individual users will still have to engage with multiple services and touchpoints to get the value of their things. There will also be a rise in single-purpose objects that foster intimate relationships between people: one example is the Good Night Lamp, which makes its debut at CES in 2013. We are beginning to see a lot of innovation come from smaller, crowdfunded players and component companies. We may also start to see plug-in hardware that will extend the lifespan of a handset in the next two years BTLE technology means that a sensor can run for a year on a single battery, making these small devices far more viable than ever before. 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. WHATS NEXT 2013

2011
GreenGoose launches the first consumercentric sensor kit

2012
Tictrac enters beta launch

2011
Macaw launches on iOS & Android

2012
ToyTalk (founded by ex-Pixar employees) secures $11.5M in funding Slide 13 Fjord 2012 | Confidential

2013
Good Night Lamp to launch at CES

#3 DAWN OF THE PERSONAL ECOSYSTEM Connected objects start to take their place right by your side
Designers need to increasingly focus on designing for the glance. Service-based businesses can help users tie together elements of their object ecosystem to extract further value. Interactions should be segmented into things that are best done and seen on small dedicated devices, and things best done on the smartphone that they inevitably will connect to. Objects that fit naturally into peoples lives will be the big winners in this wave, if they can be simple and appealing while adapting to users habits and priorities. FJORD SUGGESTS
Slide 14 Fjord 2012 | Confidential

#4

KEEP IT SIMPLE STUPID

Good old-fashioned K.I.S.S. principles make a comeback

As digital progress marches on, so does complexity. 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 organisations 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.

Slide 15 Fjord 2012 | Confidential

#4 KEEP IT SIMPLE STUPID Good old-fashioned K.I.S.S. principles make a comeback

Simplicity has a long track record of success. Ikea's bare-bones proposition of modern, simple products at affordable prices has made it one of the world's leading retailers. Zipcar's straightforward and flexible offer led to extremely quick adoption of an entirely new transport proposition. In the digital world Skype was able to gain huge global market share with an unprecedented proposition because they made the service incredibly easy to understand. And every web browser still shows its basis in Netscape's simple browser controls, while Google search disrupted the search-and-portal world with its ultra-minimalism. Other examples include Amazons One-click shopping, and the Apple Touch iOS, which revolutionised mainstream mobile interaction by taking it from indirect to direct response. Some users have started to complain that they feel overwhelmed by the omnipresent digital world. Slow Living and Slow Food were just two examples of the backlash against our high-velocity digital lifestyle. Now we are also seeing that single-purpose apps and services are gaining ground, feeding a desire for simplification. Examples include how Square created a $3 billion company in under three years through simplification of the bureaucratic process of becoming a credit-card merchant. Or how Bank Simple has changed the conversation in the banking sector. WHATS NEXT 2013 THE PAST THE NOW

PRE-2000
Ikea, Netscape, Google

2003
Skype is founded. Since, it has become the largest international voice carrier.

2010
Slow Living lifestyle and philosophy brand founded

2010
Square launches in January. Less than 3 years later, the company is valued at $3 billion. Slide 16 Fjord 2012 | Confidential

#4 KEEP IT SIMPLE STUPID Good old-fashioned K.I.S.S. principles make a comeback

As personal ecosystems grow, so does the challenge. We will need to make meaning of more data from more sensors, public, private and corporate, and the simplest solutions will continue to win. Leaders in simplification will continue to disrupt and transform. As choice and options multiply, solutions and companies that can guide users through the mess will have an opportunity to become trusted advisors. WHATS NEXT 2013

2012
Misfit Shine, the quarter-sized personal activity tracker, announced to critical acclaim.

2012
Dropbox grows to over 100 million users worldwide

2012
PayPal announces reorganisation around the principle of Simplicity Slide 17 Fjord 2012 | Confidential

#4 KEEP IT SIMPLE STUPID Good old-fashioned K.I.S.S. principles make a comeback

Focus on what can be removed rather than what could be added. Make sure every single feature, element, and interface drives real value for the user. Be ruthless about prioritization. Bravely go to the pain threshold that separates extremely simple from plain dumb. Use mobile as a primary tool to drive simplicity across products and services. Apply the principles of simplicity internally: how could your teams, your structure, be leaner and more effective? Take action to simplify internal communication and ways of working, and this will enable you to reflect that simplicity outward as well. FJORD SUGGESTS
Slide 18 Fjord 2012 | Confidential

#5

REVOLUTION IN RETAIL
The Online/Offline distinction disappears
Slide 19 Fjord 2012 | Confidential

Personalisation is nothing new in the digital world, but comparatively few shopping services actually feel close to the individual. Fjord expects this to change in 2013, as the online and offline retail environments continue to merge, creating a more holistic and immersive customer experience. Mobile payments have definitely been disruptive in 2012, with a huge rise in the number of transactions made on mobile - but the changes well see next are about far more than just mobile payments.

#5 REVOLUTION IN RETAIL The Online/Offline distinction disappears

Personal service was the promise of the independent local shop for the better part of the 20th century. Even now, consumers feel deep loyalty to the sellers who recognise them, get to know them, and help them discover the best deals on suitable merchandise. Weve seen these interactions mirrored in the digital world with Amazon's and Netflix's highly-regarded recommendation engines. Suggestions for shopping have become the norm in the online world. As the Internet went mainstream, peer-to-peer reviews also began to inform shopping, while price-comparison engines play to our desire to get the best deal. A statistic to strike fear into the heart of any retailer: half of US 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 mobile payment disruption we saw in 2012 has led to the additional side effect of shared retail spaces in some European cities, giving independent merchants unprecedented access to the purchasing public. Apple has reinvented the in-store experience, transforming it from traditional shop to showroom by eliminating the need to queue at a till. Now that geofencing technology has opened the door to completely frictionless payment and location and ambient data make it possible to hyper-tailor services, there is a big field of opportunity and risk. WHATS NEXT 2013 THE PAST THE NOW

PRE-2000
Local shops, Amazon, Netflix

2010
RedLaser is Guardian's Consumer App of the Week

2010
Starbucks announces partnership with Square

2012
Apple launches fully DIY shopping in US Slide 20 Fjord 2012 | Confidential

#5 REVOLUTION IN RETAIL The Online/Offline distinction disappears

Fjord believes 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, followthrough, and support. The penetration achieved by new mobile payment systems, as well as the ready availability of mobile devices, will kickstart a revolution in in-store customer service. Shop staff will be equipped with tablets or smartphones to deliver improved individual service. 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. 2013 will see the introduction of frictionless payment in more markets around the world, with security and shrinkage challenges arising from this technology. Virtual shops will take hold in the physical world, with grocery aisles on train platforms and social network ratings on hangers. We will also see QR codes and other buying methods in more shop windows and restaurants, opening entirely new revenue streams for some while extending shopping hours for others. These changes will see customers move closer to effectively managing their shopping lives, in similar ways to how recent technology shifts have given them new powers over their social lives. WHATS NEXT 2013

2012
EU chain DM begins offering customers ereceipts for in-store purchases

2012
C&A tests Facebook Like hangers in Sao Paolo

2012
Neiman Marcus to equip sales staff with smartphones

2013
Tesco to launch virtual grocery at Gatwick Airport

Slide 21 Fjord 2012 | Confidential

#5 REVOLUTION IN RETAIL The Online/Offline distinction disappears

Design commerce services that make use of smartphone sensors and contextual data camera, gyroscope, time of day and location. Design innovative and simple solutions for small merchants. This is a big group of merchants, yet they are not digitally savvy at all. Inventory management, customer relationships, loyalty solutions, digital storefronts these can be life-changing services for small merchants. Businesses that team up with local independent merchants and makers (both online and offline) can drive value within the local economy. Providing a 'memory' of a customers past purchases can help small and large vendors alike develop the kinds of relationships only small boutiques traditionally have, with face-to-face recommendations that are more effective than digital ones. Re-imagine the boring things and make them engaging. As PayPal and Square have shown, even something as painful as paying can be pretty cool! FJORD SUGGESTS
Slide 22 Fjord 2012 | Confidential

#6

ACCESS IS THE NEW OWNERSHIP

What does it mean to own something in the digital age?
Slide 23 Fjord 2012 | Confidential

Weve seen seismic shifts in the area of digital distribution of music, movies and media in every form. Now, as individuals increasingly consume media across devices, they expect their purchases to be available on multiple platforms, no matter what. Likewise, in the past we used to project our status and success through the things we own the car in the driveway, the holiday home, our media collections. But increasingly status is now projected through our experiences and pursuits, and consequently access and flexibility rather than traditional ownership are growing central to what we crave.

#6 ACCESS IS THE NEW OWNERSHIP What does it mean to own something in the digital age?
Music was the first industry to feel the bite of P2P sharing from Napster onwards. Next came audiovisual content (TV and Film), which has been the topic of much legal action over the past few years. Timesharing property used to be seen as a slightly downmarket way for the less wealthy to access property in desirable areas. In Europe and a few American cities, short-term holiday lettings began in the early 00s but didn't begin to catch on until much later. Spotify has proved that consumers are willing to pay to rent music if they feel they're getting a valuable service. But this is a totally different model to the traditional CD distribution business, and record labels are still struggling to get to grips with it. Yet despite the fears of music industry executives, statistical evidence continues to show that people who download and share the most music also buy substantially more of it. Though DVD sales continue to dominate, rent and borrow services are on the rise. Services like Rent the Runway, Lending Luxury and others have extended this model to the fashion industry, and ValoBox and Total Boox are taking it into publishing. And of course, services like AirBnB, 9flats, Getaround and Lyft are making flat-sharing and carsharing mainstream. New entrant Jetsetter is helping to turn the concept of a luxury second home or family holiday on its head. These current shifts show how new forms of ownership are beginning to exert their influence on consumer behaviour. WHATS NEXT 2013 THE PAST THE NOW

2011
Megaupload, Megavideo & RapidShare receive over 21 billion visits/yr

2011
Hulu sees 60% growth from 2010, with 1.4m paid subscribers

2012
Spotify grows to more than 15m active users, of which 4m are paid subscribers

2012
AirBnB launches Wish Lists to let users curate their aspirations Slide 24 Fjord 2012 | Confidential

#6 ACCESS IS THE NEW OWNERSHIP What does it mean to own something in the digital age?
Users will continue to see value in portability. As they possess more devices with which to consume content, they increasingly expect to be able to consume that content whenever and however they want to. The rise of subscription and streaming services has also spawned the beginnings of a 'pay as you go' mentality among content consumers. Innovative new services will see content owners generate increased revenue based on usage. For example, Microsofts Kinect technology could be used to charge for movies based on the number of people in the room. Simultaneously, the growing trend of clothing and accessory rental, resale and swap platforms will see its peer-to-peer and professional aspects grow rapidly, as people band together to enable themselves to pay for what they want to wear, for only as long as they want to wear it. WHATS NEXT 2013

2010
Bag Borrow or Steal combines rental with private sales of designer luxury accessories

2012
Microsoft files a patent for Kinect to count the people in a room

2012
Total Boox announces pay-for-read model for books

2012
Several car sharing services in Europe are growing fast, and Whipcar is about to close a new round of funding Slide 25 Fjord 2012 | Confidential

#6 ACCESS IS THE NEW OWNERSHIP What does it mean to own something in the digital age?
Are you in the selling or the access business? Companies could design clear access models, like rental, trading, and leasing, and make ownership a standard upgrade across categories. What areas of peer-to-peer exchange could you have permission to mediate, facilitate or add value to? Include a variety of status-boosting elements in access services. For example one-click experience capture for outdoors adventurers, easy experience sharing through social media networks, and insight sharing for those who prefer to project their intellectual adventures. Create an API for commerce by atomizing your catalogue or offering. This could allow third parties to distribute your content. There are lots of opportunities for new business models in publishing. For example, if a customer buys a physical book, why shouldn't they be able to take a few chapters along on a smartphone or tablet when they travel? FJORD SUGGESTS
Slide 26 Fjord 2012 | Confidential

#7

LEARNING GETS PERSONAL

How being online is transforming the way people learn
Slide 27 Fjord 2012 | Confidential

In recent years weve seen a shift away from learning as something that only happens through pairing teachers with students in traditional classrooms. Innovations such as learning via video instruction, or online courses from prestigious universities, are now available anytime and anywhere to anyone with an Internet connection. The next stage of transformation is already taking shape. Fjord believes this will involve highly personalised and adaptive learning materials. In addition, well see the methods of delivery move from one-to-many to many-to-one. Ultimately, this kind of real-time adaptive learning support will transition into the broader business context. Some of the radical changes weve seen in education and learning are set to become part of our working lives.

#7 LEARNING GETS PERSONAL How being online is transforming the way people learn

2010
The Aspen Institute in conjunction with the Knight commission publishes Digital and Media Literacy: A Plan of Action

Most classrooms are still like the classrooms of 100 years ago: a single teacher teaching many students with classroom props and textbooks. Learning involves reading as well as a lot of memorisation and practice sheets. While many schools gradually allow students to use online tools, emphasis continues to be placed on memorisation of facts. Some students find this easy; others are sometimes left behind. Students with different learning styles are difficult for instructors to address. The Khan Academy is a non-profit organisation that has been hugely successful with its website, supplying a free online collection of more than 3,600 micro lectures via video tutorials. Today there are many examples of this on demand approach to learning. Massive open online courses (MOOCs) that combine education, entertainment, and social networking are growing at an amazing pace. Universities around the world are opening their virtual doors to remote learning, and eventually online certificates may translate into some form of university credits. The Open University currently has over 250,000 students, more than 50,000 of which are overseas. McGraw-Hill and Coursera have launched huge initiatives to deliver fully digital course materials to tablet devices. Many experts predict these changes will lead to the disappearance of textbooks within the coming decade.

2011
Open University reports over 50,000 overseas students

2012
Khan Academy has delivered over 200 million lessons

2012
McGraw-Hill reports a 20+% increase in both attendance and retention with its Connect programme Slide 28 Fjord 2012 | Confidential

THE NOW

WHATS NEXT 2013 THE PAST

#7 LEARNING GETS PERSONAL How being online is transforming the way people learn
As the digital model continues to evolve, Fjord anticipates that students will have access to an everbroadening array of instructors, enabling them to personalise their learning and transforming the one to many model of teaching forever. MOOCs without person-to-person experiences that happen on campus will raise questions about the more social aspects of higher education, such as the process of collaborative learning, and individualized support. At the same time, data mining on student learning patterns enabling real-time adaptive curricula suited to individual learning styles and interests will become mainstream. The definition of digital literacy will expand from merely conducting effective searches and evaluating the results, to include reading and making meaning from individual data and new forms of writing or composition with mixed media. WHATS NEXT 2013

2012
Harvard University and the Massachusetts Institute of Technology found EdX

2012
Coursera reaches more than 1.7 million growing faster than Facebook

2012
Human Face of Big Data is published as a global snapshot of the world's transformation through data.

Slide 29 Fjord 2012 | Confidential

#7 LEARNING GETS PERSONAL How being online is transforming the way people learn
Big opportunities are emerging to deliver highly personalised instructional material to students. Recommendation engines will suggest individualized pathways for learning from the web. As the new learning technologies reach scale, all education service touchpoints will need to be reimagined as a part of the overall service delivery. Creating a productive physical, digital, and social environment will become a critical differentiator for prestigious institutions entering the space. Businesses can adopt adaptive learning practices in the workplace, making the work done by individuals a part of their personal equity and that of the organisation. Making this happen will require improved collaboration tools. FJORD SUGGESTS
Slide 30 Fjord 2012 | Confidential

#8

YOU TALKING TO ME?

Exploring new challenges in human-machine communication

In many ways, its logical that the next frontier for interface disruption should be the voice. But prodding and poking objects is something weve always done, and talking to thin air has always been a sure sign of a crazy person. Voice services are still not taking off as rapidly as they should. What will it take to make voice interaction compelling enough to make people want to integrate it into their daily lives?

Slide 31 Fjord 2012 | Confidential

#8 YOU TALKING TO ME? Exploring new challenges in human-machine communication

Companies have been exploring voice input for decadesfrom the sultry Wildfire virtual secretary to Apples Knowledge Navigator, the promise of voice control has long overshadowed its reality. Over the past five years, touchscreen and mobile interactions have become the norm, leading to hugely heightened expectations around responsiveness and instant gratification. Apple and Google are learning through their experiments. Siri and Google Voice Search are battling it out in the smartphone marketplace, with Siri positioned as a helpful assistant with amusing faux-human traits, and Google Voice Search positioned as a lightning fast and somewhat geekier expert search-bot. The problem is that without a solid understanding of the immediate context and intent of the user, todays voice services still come across as either not contextually aware enough or simply not intelligent enough in the case of Siri. Google Now is a contextual dashboard that displays just-in time relevant information to you based on your activities across your Google services or accessible information on your device, such as your calendar. Some users consistently report that context awareness and hyper personalisation without explicit permission can feel creepy. WHATS NEXT 2013 THE NOW THE PAST

1990
Virtuosity Wildfire virtual assistant

2007
iPhone introduces mass market touch interaction

2010
Apple launches Siri

2011
Google Voice Search launches Slide 32 Fjord 2012 | Confidential

#8 YOU TALKING TO ME? Exploring new challenges in human-machine communication

The future will hold not only great voice recognition and interpretation, but as more people use these systems they will have more data, and thus be able to more effectively anticipate context and intent. Well begin to see new services that listen in the background with explicit permission and deliver genie-like wishes for everything - from a casually mentioned book to the address for a San Francisco restaurant that reminds us of a loved one in London - and prompts accordingly for orders or reservations. As systems gain their users trust, the next level of intelligence could come by integrating with the data from the apps that reside on an individuals device. 2013 will see voice services popping up more prominently in more contextstransportation, healthcare, financial services and education. Voice integration will become a must-have for smartphone and tablet applications, and voiceprints will emerge as a new kind of personal signature. This is a future where the service that wins will be the one that appears to be the most personal, responds the most quickly and appropriately, and simply feels the most human. WHATS NEXT 2013

2012
Chevrolet adds Siri to in-car systems

2012
Nuance announces Nina personal assistant with open SDK

2012
Haiku for iPhone enables medical professionals to voiceinput health data

2013
Microsoft to add Tellme Natural User Interface to its family of products Slide 33 Fjord 2012 | Confidential

#8 YOU TALKING TO ME? Exploring new challenges in human-machine communication

A large part of online customer self-service activities will be done with the help of virtual assistants soon. No business can afford to ignore the voice dimension for much longer. Designing for voice interactions is a key component of service design, starting now. There is a huge opportunity to create value by voiceenabling the day-to-day tasks of people who benefit from being hands-free. While gestural interfaces may come in time, these are more difficult to implement. Voice interactions are far more natural, particularly as many mobile devices are already voice-dominated channels for their users. FJORD SUGGESTS
Slide 34 Fjord 2012 | Confidential

#9

THE MOBILE GAP

Business plays catch-up with adoption
Slide 35 Fjord 2012 | Confidential

The speed of movement to mobile has amazed everyone. But it has not been matched by the speed with which most organisations are able to monetize it. Weve gone from analogue dollars to digital dimes and now to mobile cents. This is creating a commercial gulf that is going to put pressure on cash and funding for many new mobile ventures, simply because the average revenue per user has a clear tendency to drop when a product is wholly or primarily mobile. Into this volatile mix we can now add tablets and 4G in many markets next year. The search is on for business models and enablers, and its likely some will come from the developing world.

#9 THE MOBILE GAP

Business plays catch-up with adoption

PRE-2005
WAP info services

2010
Eric Schmidt announces Google's "Mobile First" strategy at MWC 2010

2012
PayPal transactions up 195% on Cyber Monday 2012

2012
Facebook stock loses over 30% of its IPO value in 6 months

2012
Citibank puts iPad service at the heart of its advertising story Slide 36 Fjord 2012 | Confidential

As the web went mainstream in the 1990s, some commercial success stories emerged quickly (Amazon, eBay) and some evolved a little later (such as Google). When mobile data emerged, it was seen as a subset of the connected desktop. But as smartphones have developed, we have shifted to an increasingly mobilefirst perspective and the minimal engagement of the early WAP services seems like ancient history. With rising global smartphone adoption, many businesses are looking at mobile as the primary channel for customer acquisition and relationship building, with desktop services as secondary. However, in the developed world, Fjord believes that many of us still think of these mobile services as extensions of the desktop service. This limits us to the business models that already exist. Some iconic mobile start-ups like Foursquare, Twitter and Instagram still do not have a viable business model. Facebook has famously seen a decline in value due to its perceived inability to get to grips with mobile. Zyngas average revenue per mobile user is only a fifth of a desktop users. And tablets are mixing things up further. By the end of 2013, one in four US adults will own a tablet it took the mobile phone 16 years to reach that. Some companies are getting it right. For example, PayPal will process $12bn in mobile transactions in 2012. Some of the most successful players in mobile are banks or transaction-oriented players, who have reported that mobile users are among their most profitable customers.

THE NOW

WHATS NEXT 2013 THE PAST

#9 THE MOBILE GAP

Business plays catch-up with adoption

2013
Hardware innovation slows: new phones fail to excite

2013
Households in US and Europe reach an average of 7+ connected devices

In 2013 we are likely to see an intense focus on how to make mobile devices pay for most service companies. Wallet initiatives will be at the centre of this, but expect also innovation in mobile discovery both from the major platform owners (Apple Store and Google Play) and independents like Flurry. We will see an increase in entirely new services and business models driven by mobile-first or mobile-only engagement. At the same time, developing countries (notably Kenya, Brazil and India) have seen massive innovation in business models that leverage mobile technology. 50% of Kenya's GDP moves through mobile, and most Africans experience the Internet first on a mobile phone. In Kenya, Sudan and Gabon, more than half of adults use mobile money.

2013
Opera acquired for HTML 5 skills by OTT giant

2013
Mobile TV companion apps go mainstream (GetGlue, Zeebox), revenues uncertain

Slide 37 Fjord 2012 | Confidential

WHATS NEXT 2013

#9 THE MOBILE GAP

Business plays catch-up with adoption

Successful mobile-optimised services must be focused and elegant. Prioritization and strategic choices have to be made. This will help you clarify your offering, focus and strategy. Think about new customer contexts that might emerge on mobile this will expose new business models and customer acquisition opportunities Learn from the developing world and apply the lessons to our higher-tech ecosystems in the West. Internal organisation must be aligned around the multi-channel world in order to seize opportunity and smooth the transition to a new model of customer interaction. But its likely that a lot of money will be wasted before most companies get there. Mobile is forcing an atomization of services to fit into daily life and tasks. The personal and lush mobile medium demands firstclass design, and if you aspire to have a leadership position in mobile you will have to focus on design.

Slide 38 Fjord 2012 | Confidential

FJORD SUGGESTS

#10
and act like one, too
Slide 39 Fjord 2012 | Confidential

THINK LIKE A STARTUP

As the pace of change in digital continues to accelerate, people working inside businesses are under increased pressure to swim in unfamiliar waters. At the same time, a generation is emerging that has grown up with digital their entire working lives and are demanding dramatic changes in the way people work together in traditional organisations. And startups, the most dangerous competitors of large organisations, are unhampered by legacy thinking and processes. While this is undoubtedly a technology-driven trend, it is perhaps more difficult to detect than any of our other Trends for 2013, as there are no services or devices resulting directly from it.

#10 THINK LIKE A STARTUP and act like one, too

This trend begins with a legacy from the 1990s: once businesses understood that the web represented a critical new channel, they began to align their ways of working around the new technology. Over the years, a cumbersome and lengthy systems integration process was embedded in many online units. This is a blocker to the 'digital first' approach that many wish to adopt. It has also become commonplace for widely distributed teams to work together on an overarching set of goals. As the pace of change has accelerated, coordinating across these boundaries has grown more and more difficult. Meanwhile ultra lean start-ups use small teams where designers, developers and marketing experts sit tightly together and iterate to rapidly create shareholder value. One example is WhatsApp, which at the time of writing is delivering 10 billion messages per day, making it a very appealing acquisition target for 2013. Innovation is still being blocked by structure. Companies that are trying to do something new often have to fight their own organisations. Teams have reshaped and clustered geographically, with product, design and engineering people all working together to innovate more quickly to execute strategy. This is a massive shift from the platform-focussed teams of the past. Learning by osmosis is becoming the norm: conversations and events move so fast now that you need to be there on the floor alongside the people you're working with. Although not new, Agile and Lean UX Methods are now changing the way organisations structure in order to accommodate design-led thinking. WHATS NEXT 2013 THE PAST THE NOW

2012
Instagram: a team of 13, valued at $1 billion.

2012
Whatsapp delivers 10 billion messages/ day

2012
BBC merges its broadcast and digital newsrooms into one

Slide 40 Fjord 2012 | Confidential

#10 THINK LIKE A STARTUP and act like one, too

In 2013 we will see many more teams restructure and re-organise to adapt to digital change, and a growing demand for engagements that go beyond the traditional agency or design remit mentorship and training for on-site teams; participation in multi-disciplinary think tanks. Organisations divided by channel will start to look very old-fashioned. We expects to see an acceleration of product cycles and a close correlation of success and share price to companies that embrace structures and processes that allow them to act more like startups. In addition, Digital Natives will start to drive the world in corporations, education, health and government. In each of these areas people who have grown up with Google (if they entered the workforce as graduates in 1998) are now in their mid thirties and approaching positions of influence. Agencies and consulting companies will need to rethink their models too and be prepared to lead clients on what part of their work is best done on site, and what part remotely. Consultants and designers who can master this balance will be the best able to build successful services with their clients. WHATS NEXT 2013

2013
Digital Natives are starting to drive company and service evolution

Slide 41 Fjord 2012 | Confidential

#10 THINK LIKE A STARTUP and act like one, too

While businesses struggle to catch up organisationally to the demands of the digital world, teaching people new working methods to help them perform is a hugely useful activity. Striking the right balance between physical closeness and cognitive distance is vital to continuing a healthy relationship. Closer working relationships help everyone to spot opportunity spaces more quickly, and multidisciplinary teams are far better equipped to act on those opportunities. Startups never stop improving their design. Agencies and clients need to find new modes of working together that extend beyond launch to enable the service to evolve based on real world feedback and response. FJORD SUGGESTS
Slide 42 Fjord 2012 | Confidential

Thank you, and Thank you. enjoy the year 2013 !

More from Fjord here: www.fjordnet.com Follow us on Twitter: @fjord

Slide 43 Fjord 2012 | Confidential

IMAGE SOURCES
http://www.therealtai.com/ http://www.mydigitalfootprint.com/google-doesnt-want-your-identity-it-wants-the http://junocristi.blogspot.co.uk/2012/04/charles-bukowski-11-quotes.html http://www.springwise.com/transportation/munich-car-sharing-scheme-rewards-journeys-bike/ http://www.freedomsphoenix.com/Uploads/Graphics/102/02/ http://www.audiencescapes.org/sharing-development-information-hiva-aids-refugees-sms-texting-crops-priceshumanitarian-ushahidi http://www.news4you.gr/2012/09/04/mcdonnell-douglas-fa-18-hornet-launch-rocket/

This document is not for commercial use

Slide 44 Fjord 2012 | Confidential