6 Ways Industries Are Disrupted Using Algorithms
Algorithms make our lives easier, but they’re also here to disrupt traditional business.
Algorithms are used in every industry worldwide in some capacity. Whether it is to improve marketing campaigns, develop new products or provide new services to society, algorithms control much of the way businesses operate in today's world. Within the next decade or so, nearly every industry is going to be disrupted or impacted in some way due to algorithms.
Much of society's behaviors are now controlled digitally. The Internet, mobile devices, and the need to stay wirelessly connected drives industries to be more innovative. Using specifically structured analytical tests an industry can determine exactly which demographic groups are purchasing products and what regions the products are purchased in. An industry can use this information to automate services catering to specific demographic groups.
More automated or self-service websites are popping up every day. Society has become more self-serve than reliant on others for information. Automated services, such as search engines on vehicle location websites or technology product websites allow consumers to search for what they want based upon contributing factors such as price, material type, features and quality. Some industries, with limited automation will soon face disruption. Those in jeopardy the most include the real-estate industry, education and agriculture.
The digital world seems to be taking over what businesses used to know about their client bases. Everything has changed about marketing, providing quality products, and structuring businesses in one set industry. Digital technology and accessing information through digital means is how the world operates now, leaving 23-percent of the biggest 300 businesses worldwide creating a new position--the Digital Director, to manage data, analytical breakdowns, and industry-related algorithms. The Internet allows society to pick and choose which businesses, people, trends and products they wish to support or follow.
Digital advertising and analyzing algorithmic data determines how, when, and to who a business is more likely to connect with. The benefit here is that businesses can use this data to create content, marketing campaigns or online interactive content that resonates with one specific group.
Smaller companies can easily enter an industry with a more cost-effective method for providing a service. It can also construct products for a lesser cost. This is appealing to consumers as the cost of living steadily rises and saving money has become a priority. These cost-effective disruptors change the way that an industry operates. The larger companies within an industry must work fast and hard to develop a strategy to maintain dominance and sales to stay afloat.
Businesses can use algorithms to customize services for patrons. One example is a premium dog food company, TopDogDinners.com, that uses algorithmic data to create a customized dog food blend specifically for your dog using 16 pieces of data. Being able to customize services for clients makes a business more appealing to that client. It also triggers more mentions on social media and face-to-face interactions.
Increased B2C Disruption
Business to customer (B2C) disruptions are increasing because of the increased use and modifications of algorithms. Market complacency is a big concern among industry leaders. Complacency essentially means that a market is just cruising along, almost stagnant. This may not seem like a bad thing, but in terms of innovation, advancements and convenience to customers, it is negative.
Customers need to see that businesses change with the times--which they can adapt to the changing world around them with improved advertising techniques, products/services that add convenience to busy lifestyles and provide value in some way.
This is where the use of algorithms in industry-specific positions is crucial. New employees with fresh educations can disrupt workplaces and industries quite easily. These catalysts come in with leadership on their minds, innovative ways to improve a product/service/company and ready to show a potential employer better ways of operation.
An example here is the eHarmony company, known for pairing couples using algorithmic data analysis processes. It uses a series of pieces of data from resumes to determine if a potential new hire fits the company's culture and if their skills show them to be a strong leader. Other factors include personality traits, values and culture.
Improved Artificial Intelligence
Advancements in artificial intelligence are happening faster than technology itself can advance. One industry facing a bit of disruption is the digital content creation industry; writers that create what is read online. Algorithms suggest that artificial intelligence can be used to create web-copy and intelligent content.
Algorithms change the way businesses operate, technology develops, and how society lives. This data tells industries how society wants to live, what they expect, and how to deliver it. In some cases, the conveniences backfire negatively into laziness in society rather than increased interaction, sales and innovation.