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Less Human Contact, but Better Service: "Untact" Economy on the Rise

기사승인 [346호] 2020.06.01  

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Today, people often do not realize how much the rapid development of technology contributes to daily human life. One of the most familiar forms of technology can be found in mobile phones. From grocery shopping to booking flights, the little devices both minimize cost and save time for consumers. The operation of Artificial Intelligence (AI) is just another example of technology doing work for humans. AI serves its purpose in various fields such as retail, shopping, security, analytics, and manufacturing. Surprisingly enough, it even outsmarts humans sometimes as many people fail to realize that they are receiving assistance from AI, not a fellow human being. The outbreak of the Coronavirus disease 2019 (COVID 19) resulted in a more urgent need for this high technology. In efforts to prevent further spread of the virus, the idea of “social distancing” was widely introduced, which encouraged people to maintain a physical distance from one another and avoid any unnecessary contact. People are now attempting to perform as many daily tasks online as possible. As a result, the already prospering “untact economy” has gained momentum. Following the trend, more and more businesses are using “untact” marketing to promote and sell their products. Researchers are expecting to see a continuation of this trend even after COVID-19 ends.

What Is the Untact Economy?

The “untact” economy refers to a system in which consumers purchase products and services without having direct contact with the providers. The term “untact” is a combination of the prefix “un-” which means “not” and the word “contact,” which means “the state or condition of physical touching.” The word refers to the avoidance of any unnecessary physical contact between people. Even though this marketing strategy gained momentum after the recent outbreak of COVID-19, it had already been integrated into the economy ever since the technology became suitable for the retail industry. One example is the installation of kiosks at restaurants and some cafes. Instead of having to call over a waiter, customers can choose and order their menu on a kiosk as soon as they walk into the establishment. Considering that customers can save time and business owners can provide more efficient service, the system is truly beneficial to both parties. Other forms of untact marketing include Virtual Reality (VR) shopping and chatbots, all of which are designed to enhance the shopping experience for consumers as well as to reduce physical contact between service providers and receivers. In fact, a more recent example would be the use of social platforms for online classes and telecommuting during the COVID-19 pandemic. According to Lee Hyang-eun, Assistant Professor in the Department of Service Design Engineering at Sungshin University, there are three main motives behind the rise of the untact economy. Ironically, the first is the development of technology that promises connectivity. “The consumers want their needs to be interconnected and perfectly laid out for them even without physical contact,” Lee explained. The second motive is the powerful smartphone culture.“Smartphones are the easiest method of communicating, obtaining information, shopping, and doing business.” Lee added, “The need for these multifunctional devices on a daily basis indicates a maturing of the untact industry.” Lastly, the third is the introverted nature of young Millennials (1980~1994) and Generation Z (1995~2010). These two groups tend to feel uncomfortable when contacting other people, a quality that makes them the perfect consumers for the untact economy.

Where Does the Untact Economy Stand Today?

Untact services have emerged in a variety of industries, including retail, financial, food and beverage, education, and media content. Even more frequently used are food delivery applications such as Baemin or Yogiyo. These apps allow consumers to request food delivery using their phones, track the order, and make payment without coming in contact with the delivery person. Another major example can be found in schools holding online classes using education platforms such as Blackboard or Zoom. The media content industry is one that has been on a noticeable rise recently. Due to the sudden increase of time spent at home, more people are using platforms such as Netflix or YouTube to watch media contents. Kim Deok-su, a faculty member at the Hanyang University’s (HYU) Media Strategy Center suggested that, “There has been a change in the way media content is utilized. The Fourth Industrial Revolution revealed that the former system’s information storage was not sufficient. Consequently, people started gaining interest in streaming services, which allowed for sufficient content storage, sharing, and connection.” Kim further pointed out that the rise of streaming media and the COVID-19 lockdown together were additional reasons for the trending media content industry.

Impact on Society: Positive or Negative?

The marketing tactics of the untact economy are undoubtedly benefitting both business owners and consumers. On one hand, businesses can save costs spent on labor, rent, and product supply. In South Korea, even traditional markets, which have long been characterized by face-to-face transactions between sellers and buyers, are turning to untact marketing. For example, Bangi Traditional Market, located in Songpa-gu, Seoul, is planning on implementing a delivery system as well as an easy payment system. This change is expected to completely transform how traditional markets operate and attract a larger group of consumers from all around the country. As for consumers, the untact economy provides a safe, convenient, and efficient shopping environment. “Ever since the COVID-19 breakout, many people feel unsafe making physical contact with others,” stated Park Hye-young, a Media Communication student at HYU, “Unlike before, the fast delivery system lets consumers order different products without having to worry about their freshness. There is increased efficiency and really no concern at all about the quality of products even if they are being sold online.” On the other hand, the untact economy also brings some negative outcomes within society. Since the untact economy is based upon Information Technology (IT), older generations, who are not familiar with the latest technology or devices, often have a hard time using the services provided. Considering that the elderly usually prefers face-to-face transactions, untact marketing has created a division between young and old. Untact technology raises threats in the job market as well. It serves numerous purposes, including taking orders, providing information, and doing mathematical calculations, replacing many jobs in the service industry. Also, untact services are exclusive to different parts of the world. While many developed countries have a wide distribution of advanced technology, a full untact economy is unavailable in most developing countries due to a lack of strong technological infrastructure, which creates further imbalances between countries.

Will the Untact Economy Last?

Despite varying opinions about its impact on today’s society, the future looks bright for the untact economy. As previously mentioned, young Millennials and Generation Z often prefer to avoid physical contact between people. This sort of nature makes them the perfect fit for untact economy. Following the COVID-19 outbreak, the untact culture has even spread partly to older generations. Whereas it was mainly used by younger consumers, untact services are now also being used by people in their 40s and 50s as well. Given that people tend to settle into their spending habits, chances are very high that the untact economy will last even after the COVID-19 pandemic comes to an end. Untact culture can be found in various forms in people’s daily lives. Taking into consideration the rapid advancement of technology and the qualities of modern-day consumers, this trend will most likely continue. Nevertheless, along with the benefits of the untact economy will follow some negative outcomes as well. Because untact services are strictly technological, they may result in a great digital divide between people of different ages, income levels, and even nations. With aid from international businesses and governments to bridge the digital division, the untact economy will most certainly contribute to a more convenient and enjoyable way of life. It is hoped that with greater effort digital divide can be traversed, and the untact economy will continue to find ways to benefit society.

Yoon Hee-jae heejaeyoon@hanyang.ac.kr

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