Digitise or Die?

Way back in 1998 when Zuckerberg still had a bedtime and you had to decide whether you wanted to use your landline or access the internet, an American economist named Paul Krugman made the prediction “By 2005 or so, it will become clear that the internet's impact on the economy has been no greater than the fax machine’s”. 

Interestingly, it wasn’t just Paul who felt that the internet had little to offer, another American, Robert Metcalfe predicted it would collapse under the weight of data overload, security issues and stagnation. Robert promised to eat his words if his prediction didn’t come true, and did just that in 1999 at the WWW Conference by blending his own article and eating the inky stuff with a spoon. 

By the turn of the millennium broadband was being plugged into homes across the world. Amazon was raking in millions (still early days for them, but thriving) and despite some setbacks like the Y2K bug and the Dotcom bubble, the digital revolution had truly begun to reshape culture, politics and the economy. And whilst I’d like to give some praise to the fax machine in its heyday (it certainly made life easier for those in the office), compared to the internet, it never even made it to the races.

Since high-speed internet became a ‘thing’, businesses have truly thrived by having an online presence, from humble beginnings with basic websites and maybe the odd email newsletter, to fully fledged digital behemoths. Whilst it was a time of trial and error for those trying to turn a profit on the internet, the businesses that embraced the digital revolution early (think Google, Youtube and Ebay) gained a head start, while those that ignored it struggled to make any viable gains. As the pace of the internet sped up, technology advanced and the ignorers of digital were left playing catch-up. Remember BlockBuster? Exactly. 

What really gets driven home nowadays is the fact that every business should strive to be ‘fully digital’. The economists will tell you that it’s far more cost efficient, the analysts will highlight the power of data and the software engineers will tell you that you’ll be at the forefront of new trends and automation. Amazon jumped on all of the above and became the revolutionary retailer by combining customer satisfaction, fast delivery and user friendly interfaces all through digital means, not to mention the incredible ease of finding just about anything. Undeniably however, in recent years consumers have observed a shift where Amazon’s strategic focus on revenue trump's their once well-renowned customer centric approach. 

Much of this shift is, of course, enabled by digitisation. The human customer support now replaced with an Ai chatbot can answer any question I want, as long as that question has been asked by enough people for it to become a FAQ, and trying to get a refund from a bot trained to protect margins requires NATO-level negotiation skills. The algorithm behind search results and recommendations favours sponsored listings and buries the real gems, Where once customers could effortlessly find what they needed, now have to wade through questionable third party offerings.

The above is hardly surprising, and I’m not saying Amazon has abandoned the customer for profit. They’re just playing a new game after spending billions on consumer convenience and growing their customer base. From an economic point of view, this makes perfect sense, many people would say that to make a business grow you need to cut your costs down to a minimum, and one way to do that is to go fully digital and automate your operations. 

Whilst the convenience of digitisation can attract customers initially, just wait until an issue arises that the technology hasn’t been programmed to deal with. By design, digital machines are very rational things, they go from A to B to C and god forbid you throw them a curveball. One such curveball is a sentence in the English language that is possibly the most exasperating and has reduced even the toughest to tears. 

“Unexpected item in bagging area”.

We try to scan it differently, we sigh, and we begin searching hopelessly for someone in a uniform to come and save the day. When we’ve finally given up and accepted that we will just stand there like a lemon, the cavalry eventually arrives, pokes and prods the screen until normality is back on track before disappearing off into the crowd of other irritated shoppers. 

Scanning the next item and we hear “unexpected item in bagging area” and so it goes on, in an endless loop, ad infinitum. 

The installation of self-service check-outs was meant to have clear benefits for both purveyors and consumers, the retailer saving money on staffing - requiring only one or two workers to oversee multiple checkouts, and shoppers would save time, with shorter queues and speedier transactions, however this is rarely the case. Whilst the retailers have indeed saved money (although not as significantly as hoped) it is at the expense of the consumer experience. In 2022, over 240,000 shoppers signed a petition calling for Tesco to ‘stop replacing people with machines’. A year later supermarket chain Booths axed almost all of its self service tills, and more recently both Asda and Morrisons have been reviewing the number of self scan terminals with a view to putting people back behind the register. 

Back in the early noughties we were promised a new age where digitalisation and automation would be a cost cutting saviour for businesses and a life made easier for consumers. What the digital revolution has actually achieved, in many cases, is a life made demonstrably worse for the people it’s supposed to serve. Perhaps the greatest irony here is that digitalisation with all its offerings of hyper-personalisation has instead made everything seem strangely impersonal, As businesses obsess over data driven insights, some fail to recognise that customers are not just another set of data, resulting in a consumer experience of soulless efficiency. 

Now before you start writing me off as some stubborn luddite, (an ironic stance for someone in digital marketing), I am not saying that digitisation is inherently bad. When used to eliminate real inefficiencies it can be a true hero but when wielded as a purely cost-cutting tool, customers always end up as collateral damage.

We have an absolute treasure trove of digital ‘stuff’ at our disposal, but just because it’s digital doesn’t mean it’s better. The smartest businesses will realise that technology should enhance the human experience, not replace it. Perhaps the real challenge for businesses isn’t going fully digital; it’s striking the right balance between people and machines.