This Is the Moment to Humanize Digital

July 31, 2023

Frances Yu, partner and global lead for digital strategy for Deloitte took the stage at the D2 Summit: Retail Edition in Chicago this past June to talk about how to humanize digital. In her position, Yu has worked with clients in a range of industries. “I have had the privilege of working with companies who are truly driving the frontier of innovation, launching new businesses, engaging customers in different ways, forging new ecosystems. I’ve also had my fair share of working with businesses who are experiencing their core business model being disrupted by all of the generations of convergence of technologies. So through that process of seeing the hopes and fears, working with the side of disruptors and those being disrupted taught me a tremendous amount,” she says.

Today’s Retail is Changing

Yu says today’s retail environment is going through the ecosystem of change. “We’re seeing a tremendous amount of change in terms of the face of our consumer, in terms of the nature of the business of retailing, and also in terms of the nature of digital.” Deloitte, she notes has been studying consumers through decades-long global consumer tracking studies, and they are finding that today’s consumers—particularly what she calls “generation reality-plus” or Generation Z plus millennials—are much more diverse than consumers in the past.

And it’s interesting, if you’re looking at their spending power today, they account for about a third of the population. Their spending power is about 30% or so. But the really interesting thing is by 2025, Gen Z and millennials’ spending power is going to be overtaking the [Baby] Boomers.” She says that Deloitte research has found that generation reality-plus spends more than eight and a half hours each day consuming digital media. Studies also found that 79% of consumers shop online at least once a month and 50% of Gen Z and millennial consumers buy directly from social media.

“So, they really live in this whole virtual world and physical world. They traverse between the physical and digital,” she says. Fifty percent of these consumers, she notes, say that their virtual experience is just as impactful and meaningful as in-person connections, so brands need to engage this generation differently than previous generations and approach retailing differently than previous consumption patterns.

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Understanding the move to Humanize Digital

Yu says the three major things that are shifting in the business of retail is point of purchase—moving from physical to e-commerce to social commerce to now metaverse commerce, which she says is still a work in progress. The second major shift is what people buy. “We learned that consumers today spend 3% of their wallet on digital goods and services, pure digital goods and services that don’t have a physical [component]….Three percent doesn’t feel like a lot, but for context, people spend 3.8% on clothing.” The third major shift in retail is industry convergence. “I’m seeing today many non-traditional companies entering this business of retail. So that’s kind of a lot of change all at once, everything everywhere, all at once.”

In Web 1, she says, we digitized information. In Web 2 we digitized payments and social interaction. “But today, something magical is happening. We’re actually digitizing reality,” she says. Through eye projection, voice, and gestures, “Our consumers today could interact with this virtual world almost the same way as they interact with the physical world. That opens up a whole new way of thinking about business. And that to me, may signal a real pivot from an industrial era, which lasted over 260 years to a new era. You can give a meaning, give a name to the new era. Some folks call this the era of spatial computing, the era of Metaverse or Web 3, or you can fill in the blank. But to me, this is an era where we get the freedom to rethink how industries, how work gets done, how life is lived. And to me, that’s why it’s the most beautiful thing.”

To hear more and see examples of Deloitte’s work with clients, view Yu’s presentation here.


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