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How tech brands are growing up…gradually

What challenges face tech companies over the next decade?

The dominance of the technology sector in the Most Connected Brands index is remarkable. Tech brands occupy a whopping seven of the top 10 places, with Amazon and Google sitting top of the pile.

But taking a step back, this is hardly a great surprise. If we were to create an index of the brands that had most changed consumer lives over the past decade, the fallout would surely be similar.

While some – e.g. Microsoft (1975), Apple (1976), and Samsung (1938) – are relatively old players, many of the online giants have only come into consumer consciousness since the start of the millennium.

It is the combination of novelty and salience that makes them quite so prominent in the minds of consumers in 2019.

While brands have undoubtedly transformed the way we live throughout history, traditionally we have relied on companies that are well established and most likely based in the same country.

But technology brands from the other side of the world are increasingly winning us over in every aspect of our lives, and within a short time frame. Our very development and progress as a society and economy has become increasingly synonymous with the latest innovations emergng from Silicon Valley.

Meanwhile, the culture and philosophy that the industry promotes and the technology available enables us to adapt the way we behave. Employers promote agile working; teenagers build their personal brands; and companies gamify their services - new ideas need to be disruptive of traditional practices.

Ultimately, the ubiquity of technology in our lives means that modern tech brands can and do position themselves as far more than the cutting-edge yet practical innovators of the 1980s – IBM, Casio, Kodak. They pride themselves on being the most customer-centric companies, capable of organising global information, helping people and businesses realise their full potential and ultimately bringing the world closer together.

Yet, it would be foolish to predict that brands whose growth has been so vertiginous could continue ad infinitum. Obviously, Amazon and Google aren’t going away any time soon; they're finding even more ways to integrate themselves into our lives.

But there are plenty of potential threats to the everything stores they provide.

Certainly, Facebook’s relatively underwhelming 25th position, adrift from its peers with one of the worst scores for social responsibility, is testament to how suddenly fortunes, government regulation, user sentiment and potentially consumer behaviour can change.

In general, the challenges faced by all tech companies over the next decade can be broadly classified under three Rs:

Regulation: Governments on all continents are becoming concerned at both the dominance and behaviour of technology firms. As the only regulator with the clout to face them down, the European Union in particular, could be a thorn in the side of many companies. This threat was well demonstrated by the multi-billion-dollar fines imposed by the EU on Google over the past two years in a row.

Reputation: Whether it is the spread of fake news, the selling of personal data, or the unethical exploitation of contractors, even the most prestigious brands and useful services can only withstand so much public doubt. While the scale of tech firms may be unprecedented, so too is the ease with which consumers can shift to alternatives. No brand can overcome a systemic lack of trust, no matter how great the user experience.

Rebellion: As the recent IPO filing by Lyft showed, the PR disasters suffered by Uber in the last year led not to a short blip but a potentially more serious shift in consumer behaviour. Users are increasingly asking more probing questions about the conduct and operations of the technology platforms. As companies make the shift from disruptive outsiders to lumbering incumbents, customers can more easily pit themselves against them.

Ultimately, having lost both the innocence and exuberance of youth, tech brands are going to have to readjust their strategies in the years to come.

To read the full report click here.

Josh Glendinning is senior research manager at Opinium

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