Category: Why Pixies, Why Now?

Evil Bot or Personal Shopper? Consumer eCommerce is Broken

Chief Pixie

The idea that you must prove you are an individual human before entering an online store is a ludicrous relic of the past. Bots have become synonymous with evil when they should be seen as enablers that aren’t going away – for better or worse. Time for them to work for us, not against us.

On the one hand, consider a recent article in the Wall Street Journal:

Nike to Crack Down on Sneaker-Buying Bots, Dealing a Blow to Resale Market

https://www.wsj.com/articles/nike-moves-to-crimp-resellers-and-might-cancel-orders-made-using-bots-11665506775?st=wv2y4g08jyn7iqn&reflink=desktopwebshare_permalink
Wall Street Journal

On the other hand, every week, a new consumer business data breach brings about new knee-jerk reactions and pushes us further into a more frustrating online customer experience.

These are two symptoms of an increasingly broken digital engagement model for consumers.

B2B vs B2C

Business-to-business digital engagement practices evolved from a long history of distant geographic relationships. Delegations, contracts and financial intermediaries grew to scale business to incredible volumes and geographic breadth. This scale would never have been possible if the CEO had to personally sign into every supplier website, place every order and make every payment from their personal wallet.

During this time, business-to-consumer digital engagement practices have not evolved at all. An online store still assumes that a person ‘walks’ into that store as they’ve done for thousands of years. If the consumer isn’t using cash (difficult in an online store), they have to provide some ID – not to prove who they are – but to prove that they have access to the non-cash finance in their name – i.e. know your customer has the money.

Early in my lifetime, you needed to show a driver’s licence to pay with a cheque to see if the names were the same. Now you have to use an email/password/MFA combination to authenticate via a payment provider’s interface and return a token to the merchant to prove you have access to the non-cash finance.

Somewhere along the way, the need to prove that the non-cash finance is available became a ‘need’ to capture as much data as possible. This ‘allowed’ the business to ‘serve you better’ and market to you independent of any financial requirement – sometimes that includes the store keeping your driver’s license details too.

The idea that you must prove you are an individual human before entering an online store is a ludicrous relic of the past. 

Untapped Digital Consumer Opportunities

Digitisation should offer amazing opportunities for consumers to discover and acquire amazing products from anywhere in the world, whenever they want them.

The global digital marketplace is too large for any individual consumer ever to know and offers an extraordinary opportunity for intelligent search, ‘AI’ machine learning services etc. Your current Google search result is more like an old local phone book when compared to the vast size of today’s global digital marketplace.

While Amazon markets itself as the ‘everything store’ – it only covers the merest fraction of the online consumer market. Even then, I defy anyone to stroll through the Amazon aisles confident that they found the best supplier, product and price to meet their requirements in the marketplace.

To tap into the potential value of global digital commerce, consumers must delegate their shopping to ‘digital buyers’ – authorised agents that are always scanning the market for buried treasure and buying it ‘on the spot’.

Unfortunately, today, consumer-facing search APIs are restricted to discourage high-volume scanning. eCommerce website and app interfaces do their best to get you to prove that you are indeed the unique individual who has entered the store.

There’s an ongoing battle between the eCommerce developers, search platforms and the ‘bot’ developers to be able to discover and interact with services programmatically. To a large extent, this battle is being fought by businesses that still try to be your only store in the area (or at least in your attention span).

Bots have become synonymous with evil when they should be seen as enablers that aren’t going away – for better or worse.

I’m confident that this engagement model will evolve, but I hope it won’t take thousands of years.

What to do?

Developers should redirect some of the time fighting the bots to making it easier for customers to delegate to their authorised buying bot – leading to more sales for the retailer and better consumer experiences for the customer.

In the short term, you can help by lobbying your service providers to offer an option for you to formally delegate some of your account access to approved and secure programmatic buying services.

Things are getting real

Chief Pixie

It’s said that fish don’t know what water is. Our own sense of reality is changing as we immerse ourselves more deeply in a world that blends the physical and digital worlds. Some of us are happy to dive deeper while others are struggling like a fish out of water. Are you sinking or swimming?

The digital production era has delivered high (extraordinarily high) volumes of uniform, interchangeable ‘things’ with identical quality and appearance. Your digital representation of the Mona Lisa is indistinguishable from mine.

The first generation of digital things lacked irrefutable identity and existence. They were merely easily copied and modified (ie fungible) representations of things defined by zeros and ones instead of pen and ink. Although you could detect different underlying zero and one formats of the same representation (e.g. jpg, png, mov, mp4…), there was no digital equivalent of a unique configuration of atoms existing physically at a place in time.

New methods like block chains have arisen to support verifiably unique, non-fungible instances of digital things. However, rather than each instance being in a unique place in time, the tokens on these chains are in everyplace on the network at the same time. If you accept the environmental ‘physics’ behind this it’s possible to make a credible claim that digital things can now ‘exist’ uniquely in a universe that observes those laws.

People tend to firstly apply new technologies as updated tools for old work. It takes time for the transformative impacts to emerge as society internalises the opportunities afforded in unforeseen ways (adoption, exaptation and evolution).

The first era of Web 3.0 has been a pretty clumsy crawl out of the primordial digital swamp toward the real benefits and long term impacts of accepting the existence of digital ‘things’. It’s been laughable to watch the move from one extreme where people thought of digital things being free and infinitely reproducible to thinking that they could be ‘scarce’ and highly valuable like rare gems.

Software as we (as I) know it has been evolving slowly for more than 75 years. Web 3.0 introduced ‘smart contracts’ which are essentially pieces of code that should (environment permitting) execute reliably, can be viewed by many, but cannot be changed (but can be replaced). Nothing there is that ‘smart’. Parties who enter these contracts are kind of anonymous and agree to be bound by the performance of the software with no court of appeal. Is that smart? I don’t know, some people think so.

In theory, you don’t have to trust the other parties to a smart contract because they cannot influence the performance, you just have to trust the software and the execution environment. In practice, real people have in fact gone to real courts to overrule these contracts because the ‘real world’ of people and contracts has yet to evolve into a blended digital and physical context.

Beyond smart contracts, we already trust software in more tangible things like ‘smart’ cars and doorbells which extend functionality and extend the trust we place in their manufacturers. This trust is personal and even though the software may be the same, we rely on that software working with our specific personal instance of a physical thing.

Specific physical things need specific unique identifiers. Cars have VIN plates and electronic keys and doorbells have unique identifiers held in the chips inside. The digital and physical context is getting closer, but until material science evolves much further, there will continue to be an ‘air gap’ between the physical and digital.

On the physical side, sensors, communication and augmented visualisations can give things new capabilities and characteristics that redefine the scope of our experience and change our sense of what something is and can be.

Over time, the genuine practical benefits (and risks) of non-fungible digital things will emerge more fully as we start to delegate responsibility and trust those digital things to perform functions we depend upon in our ‘real’ world. The gap between the digital and physical will close in our minds through changes in our sense of what’s real long before the real air-gap closes.

Not So Smart Devices

Chief Pixie

Smart devices are maturing and provide useful, reliable remote sensing and control services. Devices extend the reach of their owners but remain ignorant of their own existence and add to our digital noise. Unless we adopt them wisely, these products may not be so smart after all.

The Internet of Things, Smart Devices, Connected Home etc. classes of consumer technologies are reaching the ‘plateau of productivity. Today’s so-called ‘smart’ devices offer convenient sense and control functionality. However, they lack any product lifecycle awareness and aren’t smart enough to ‘look after’ themselves. Like other digital interfaces, smart devices can be very helpful in isolation but they also add to the noise and distractions in our increasingly congested personal digital environment.

My home security camera does a great job identifying and alerting me about pets and humans (and leaves, possums, birds, spiders, rain…) but can’t recharge itself, arrange a repair if broken or replacement if stolen. It doesn’t have a record of where it’s been since it was made, it doesn’t know if it’s under warranty, or insured, it doesn’t know how much it’s worth, and it doesn’t know if it’s been hacked. Despite being ‘smart’ it remains a fungible mass-produced commodity product – easily substituted with another camera from the same product category.

Early versions of these consumer devices were unreliable and required the technical support of enthusiastic home hobbyists. Quality and reliability have improved and costs have reduced to the point where many reasonably tech-savvy users are adopting ‘smart’ security and pet monitoring, audio, power management and connected appliance systems.

These systems are affordable but not exactly cheap. By adding more personal assets, we take on more ownership responsibility. On top of that, all of these systems provide new digital interfaces for us to manage through new dedicated apps or added complexity to existing apps. If they were truly ‘smart’, these devices wouldn’t demand our attention like the guests at a 5 year old’s birthday party.

While digital noise can be distracting, smart devices also introduce a much more serious risk – personal security. Cyber security vulnerabilities can allow some very unwelcome uninvited guests to your party. Several countries have introduced legislation that requires manufacturers of consumer devices to provide ongoing security software upgrades and keep a record of devices that are no longer supported. This is a good start but will also create a new trail of digital breadcrumbs for each device and a new set of records and responsibilities for owners to manage.

Of course the vast majority of physical things today do not have ‘smart’ connected technology and it will be a long time before most things are part of a universal internet of everything.

In the meantime, physical items will continue to depend upon human providers for physical services and through-life care. In the case of consumer products, each owner serves as a responsible custodian who supports the product through their share of its life, managing the administration and record keeping, finding and employing the service providers as required.

In this respect, smart devices are just as dumb as the rest of the physical things that don’t have the technology. They do however offer new capabilities and additional demands on our time and attention. Time will tell how wise the current smart path is.

Are You a Responsible Owner?

Chief Pixie

A transition has begun in many parts of the world from mass production and consumption to responsible ownership. Interest in sustainability is raising awareness of the life story of individual products from sourcing to disposal. In this story, ours is just one of the hundreds of chapters throughout the life of the things we own.

(This is one of a series of Why Pixies, Why Now posts)

Mass production and distribution have enabled generations of consumers to experience an ever wider choice of higher quality less expensive products. Economies of scale across globally extended and integrated supply chains have dramatically lowered individual unit production and transportation costs.

In this environment, little attention is given to individual product units – we focus on categories and models because each individual unit within these sets is the same. It’s hard to feel attached to something that lacks identity and so we don’t care as much about throwing it away; particularly if you can replace it with a new model which does a better job and costs less.

Products in this category are ‘fungible’ – they can be substituted with a similar product without impacting the utility for the owner. I don’t care if you replace my can of beans with another of the same type and brand.

Recently, people have become increasingly concerned about the social and environmental impact of their mass consumption. More people care about their role as responsible consumers in areas such as ethical & geographical sourcing and production, the provenance of their food, brand (and in theory quality) authenticity, product safety, support for circular supply chains, and a product’s net cost to the environment – not just the cost of buying it.

The good news is that because mass production and distribution utilise digital channels, and the cost of data processing is close to zero, individual product item data is now being generated as a by-product of integrated supply and service chains without compromising economies of scale. The more people care about their responsibility, the more this data will be sought as an assurance of the history and qualities of the goods and services they consume. Brands that serve this need will benefit through greater loyalty and trust.

Of course, there are some kinds of products that people have always cared about. Art, antiques, collectables and bespoke hand-crafted items are examples of things with unique qualities that make them ‘non-fungible’ – i.e. difficult or impossible to substitute or exchange with something equivalent or identical.

Today, like mass-produced products, even these unique items have acquired a digital footprint as a byproduct of the digital communication and documentation generated by the people who care about them.

Uniqueness arises through a combination of identifying features, characteristics and history. As it becomes easier to establish context through a blend of physical and digital evidence, it will be more common to think about all the ‘things’ we care about as having unique ‘non-fungible’ identities. The more we see something as unique, the more likely we are to look after it.

To blend physical and digital evidence, there needs to be a common point of reference. Being self-centred consumers, we like to think that the common reference is us. But in fact, the life of a product extends over hundreds of stakeholders and our relationship with that product is just one of many in a product’s lifetime. To see the whole story, we need a through-life view with the product – not the consumer – at the centre.

The data for mass-produced items are scattered across supply, distribution, retail and service chains. Non-mass-produced item data is scattered across retail records, current and past owners, historical studies and informal interest groups. The common thread in both cases is the custody-oriented view of the data – who owns & services the item rather than the unique journey of the item through the hands of many interested stakeholders across many events.

As we gain a better appreciation of our role as responsible consumers, service providers, distributors and manufacturers, we’ll see the emergence of a new, product-centric perspective. That is, from the product’s point of view – events and contexts through its life, recorded in a verifiable, authoritative digital trail of history and stakeholder interactions.

The Great Digital Engagement Pandemic

Chief Pixie

Current approaches for business-to-consumer digital engagement are doomed. Self-service is great for businesses but doesn’t scale for consumers.

The advent of Covid led to unprecedented acceleration and adoption of digital business-to-consumer interfaces. There’s not much better ‘burning bridge’ than the prospect of your existing customer service model being fatal to your customers and staff. And just in case even this wasn’t enough of a change catalyst, some governments actually made it illegal to offer human customer service contact.

‘Contactless’ service is just that – service delivered to a human via a digital intermediary. While this model came of age during the pandemic, it had been growing from an immature, clumsy adolescent struggling for acceptance for over 15 years. The early drivers for digital transformation were, and to some extent remain, service delivery and business process efficiency. It isn’t usually about giving people a remarkably higher quality service for less – it’s about giving people the tools to access a consistent, reliable, reasonable quality service at a competitive price.

While digitally enabled services may appear less expensive, they come at the rapidly increasing cost of our attention and time – our most precious, scarce resources.

Over the last twenty years, digitisation and systems integration within and across business and government has delivered productivity gains and enabled new, sophisticated service offerings. Most of this has been achieved by automating tasks and making it easier for different computer systems to work together. Digital interfaces are designed to facilitate and optimise integration between digital things – not humans. Not surprisingly, most of today’s consumer-facing service delivery channels treat people as if they are a system on the other side of a digital interface.

By introducing a digital intermediary, service providers remove their side of the empathetic, messy unstructured human-to-human interface of traditional customer service. As more customer interaction occurs through digital engagement channels, organisations have found that they can ‘serve’ more customers at a lower cost with less staff by getting consumers to deal directly with the organisation’s computer systems rather than their people.

Human-to-human customer service isn’t going away – it will however continue to gravitate to more exclusive premium value interactions where the high cost and ‘inefficiency’ can be adequately rewarded. For the rest of us, our fate is clear – we are doomed to serve ourselves.

We have become self-service ‘Mechanical Turks’; poorly paid, gig-working data entry clerks, operating hundreds of different computers every week. Usernames, passwords, apps, electronic forms, automated SMS messages, chatbots, OCR codes, interactive voice response phone systems, biometric checks, and auto-generated emails are some of the computer interfaces we use every day to access the services we need and/or want to help look after the things we care about.

In the early days of the digital engagement model, there were clearly times when we could do things more easily and quickly ourselves than have to navigate through our supplier’s maze-like customer service bureaucracy. Digital transformation efforts could be seen as a win/win for providers and consumers.

The problem is that this model stops being viable for the consumer as the number of services and providers increases – and in today’s service economy they are increasing exponentially. Our ability as individuals to operate more and more computers every week just doesn’t scale. There’s a limit to the number of apps you can use – more for some, less for others, but still a limit.

Maybe you can already hear the early warning bells – more apps lead to more notifications – some of which share the same alarm tone… is my bank balance low, has my food left the restaurant, is someone breaking into my car, has a bid been made on my eBay item, or is dog food on special this week? Maybe all of the above! This design fails basic human factors alarm management 101. It wouldn’t be allowed in a control room – why accept it when you are trying to control your life?

Why Pixies, Why Now?

Chief Pixie

The Pixie Network is emerging at the intersection of four recent trends:

  • the accelerated adoption of digital channels as the primary interface for businesses to consumer services
  • the move from a disposable consumption culture to a greater appreciation of individual products and product lifecycles driven by provenance, value, authenticity and sustainability
  • more widespread adoption of so-called ‘smart’ devices in our homes and life
  • a growing perception of digital representations as ‘real things’ either in their own right or as proxies or ‘twins’ for physical things

This series of posts will discuss these trends in more detail and outline how we think they will shape our lives through fundamental changes in the blending of the digital and physical worlds.