VIEWS: 175 PAGES: 109 CATEGORY: Sales & Marketing POSTED ON: 11/20/2012
Insights 2013 offers research, observations and compelling points of view from subject matter experts to students of life, to help us all see the path we're on a bit clearer, so the next step feels a bit more confident.
There is nothing so terrible as activity without insight. –Johann Wolfgang von Goethe TABLE OF CONTENTS OE O.E. represents exclusive content which is only available in the online version. 5 WELCOME TO INSIGHTS 2013 47 HOW SENSORS ARE CONNECTING 91 GAMIFICATION AS A DIGITAL STRATEGY OE TREND 4 Alan Herrick THE WORLD AND THE IMpLICATIONS Mohammed Iqbal, Syed A. Suffiyan Globalization: The Global Marketer FOR ExpERIENCE DESIGN OE and the Rise of the Global Consumer 7 IN-STORE DIGITAL RETAIL: Benno Schmidt 96 MEDIA-SApIENS: USING SOCIAL INSTINCTS THE QUEST FOR OMNICHANNEL TO ExpLAIN, pREDICT AND INFLUENCE 165 UNDERSTANDING ECOMMERCE IN CHINA Hilding Anderson, Rachel Zinser 52 INVISIBLE BRAND INTERFACES OE DESIRABILITY IN THE DIGITAL AGE Robert Wang with Rebecca Prettyman, Lauren Egge Daniel Harvey Melissa Read 171 FUTURE OF COMMERCE: LIFESTYLE SOCIAL 21 2012 DIGITAL IQ ExCERpT 56 IS THERE A TERMINAL VELOCITY FOR 101 REBUILDING TRUST: HOW BANKS CAN COMMERCE GOES BEYOND pINNING OE L2 Think Tank YOUTH AND DIGITAL? OE RECONNECT WITH CONSUMERS Jeff Blais, Sushobhan Mukherjee Omaid Hiwaizi Chris Baker, James Buchanan, Omaid Hiwaizi 25 TRENDS: FOUR TRENDS SHApING 175 CHASING THE GLOBAL CHINESE LUxURY MARKETING pRIORITIES 61 RESpONSIVE DESIGN 101: TREND 3 CONSUMER: A CONNECTOLOGY AppROACH Hilding Anderson, Todd Cherkasky, OpTIMIZING FOR MULTIpLE SCREENS Continuous Experiences: How Companies David Thorpe, Jake Wheeler Donald Chestnut Dan Israel, Mayur Gupta Are Blurring the Online and Offline World 181 GLOCALISATION AND THE ANTHROpOLOGY TREND 1 TREND 2 109 STORYSCApING: BUILDING WORLDS, NOT ADS OF GLOBAL MARKETING OE Real-Time Control: New Consumer- predicting Desire: Building the Infrastructure Gaston Legorburu Megan Bannon Oriented Devices and Data to Anticipate Consumer Needs in Real Time 113 BRAND AS CHANNEL: 187 FIVE CHALLENGES TO TOMORROW’S 29 FUTURE OF TV 69 pREDICTING DESIRABILITY— TODAY’S “ALWAYS-ON” MESSAGING GLOBAL MARKETING LEADERS David Hewitt, Lucy Devassy LESSONS FROM A TEEN GENIUS Alan Schulman Hilding Anderson, Freddie Laker Sheldon Monteiro 35 CUSTOMER ExpERIENCE IS ON THE MOVE 119 ADApTING TO A FRAGMENTED 190 INTERNATIONAL ECOMMERCE ExpANSION Nigel Vaz 75 THE FUTURE OF BUSINESS INSIGHT MEDIA ENVIRONMENT Don Shields OE Lee Woodard, Chris Handley David D’Alleva, Peter Colapietro 39 MOBILE pAYMENTS: 194 INTERNATIONAL pERSpECTIVES THE FUTURE OF MONEY 81 THE “BIG DATA” ERA: 124 THE FUTURE OF CONTENT ExpERIENCE US Perry Chan LEARNING TO ACT IN REAL TIME AND HOW TO DESIGN FOR IT UK James Buchanan Kevin Nichols Germany 45 THE ECONOMY OF ONE: Russia THE CONSUMER AS pRODUCER, 86 DIGITAL LUxURY 101: HOW TO ENHANCE 130 I CAN SEE CLEARLY NOW ... India INFLUENCER AND pURCHASER OE THE CUSTOMER ExpERIENCE OE ACROSS THE ENTIRE ExpERIENCE: Singapore Dan Israel, Perry Chan Hazel Reed THE ANALYTICS MATURITY MODEL OE Japan Jennifer Patterson, Dave Kane China Australia 136 VALUING FANATICAL ENGAGEMENT Scott Petry 217 NOTE FROM THE EDITORS Hilding Anderson 142 MEASURING GERMAN MULTI-CHANNEL: Lauren Nguyen Cohen AppROACHES AND IMpLICATIONS OE Uwe Tueben 149 THE CMO TOOLKIT: WHAT EVERY MARKETER SHOULD KNOW OE Gary Shannon, Omaid Hiwaizi 156 RETAIL GOES ROGUE: HOW DIGITAL CONVERGENCE WILL REVITALIZE THE IN-STORE ExpERIENCE Charlie Sayers, Rob Milstead WELCOME TO “It is the function of creative INSIGHTS 2013 man to perceive and to connect the seemingly unconnected.” Written by Alan Herrick, President and CEO, Sapient Corporation –William Plomer When history looks back on this think about creativity and what can Or that a ski resort would be one Our thinking is stretched daily to season of robust innovation and happen to a compelling idea when it’s of the first to introduce RFID help bring brand stories to life in progress, I think it is likely to amplified by the scale of technology technology as a way to enhance their relevant ways across the consumer remember it as one of the most and personalized by the intimacy of guest experience on the slopes and ecosystem. As consumer, retail and significant paradigm shifts in, not human interaction. way beyond? We had the honor of communications landscapes continue only daily life, but in the business helping Vail Resorts innovate a way to stretch and evolve, we will continue of relevance in daily life. We are To that end, we believe that a brand’s to connect skiers to RFID tagging to to wake up in the morning propelled perpetually challenged to connect ability to innovate is not just about social media so that they can track by the challenge. technology. It’s about combining and share their Vail stories across technology with powerful ideas and their personal networks. The result In this edition of Insights, insightful perspectives on human was more than 100,000 social photos SapientNitro thought leaders offer Our thinking is stretched daily to moments to create highly relevant shared, yielding approximately 12 you approaches and tools that help help bring brand stories to life in ways to connect. million social impressions for photos navigate this completely digitized, alone, and that’s in just the first borderless world—to be used as a relevant ways across the consumer Who would have anticipated that one season. Vail Resorts empowered flashlight of sorts. It offers research, ecosystem. of the most esteemed luxury car 150,000 people living the Vail Resorts observations and compelling points brands in the world would create a story to tell the Vail Resorts story to of view from subject matter experts mobile app that allows consumers an audience of 12 million? What once to students of life, to help us all see to virtually build their entire car— might have begun as an ad for a ski the path we’re on a bit clearer, so the the dots between our brands and from the very first bolt to the last vacation has become a panorama of next step feels a bit more confident. the daily lives of our consumers in drop of paint? experience that lives in perpetuity. meaningful ways. Thank you for your interest and Or that a 125-year-old British sports It has been our privilege to support of SapientNitro, and with As stewards of brands and purveyors gaming company would be the one to participate in these and many continued resolve, we invite the of ideas, we are both humbled pioneer a combination of analytics, other breakthrough changes that challenges of our time, walking and exhilarated by the impact of social media and mobile technology reinvent the definition of “idea” and alongside partners connecting in new technological innovation on how we to drive a record surge in betting? unfetter the boundaries of creativity and creative ways to their consumers. for new pathways of connection. IN-STORE DIGITAL RETAIL: KEY THEMES THE QUEST FOR OMNICHANNEL The goal of this research was to Just as ecommerce spurred the evaluate the digitization of physical evolution of a new type of shopping spaces. Our hypothesis was that experience, in-store retail is poised to most retailers—particularly in their undergo the same type of disruptive marquee New York City Fifth Avenue evolution—transforming itself into Written by Hilding Anderson, Sr. Manager Research + Insights, Washington, DC & Rachel Zinser, Sr. Associate stores—would have made substantial something so different it requires Research + Insights, Chicago, with Rebecca Prettyman, Associate Research + Insights, Chicago investments, and the investments a new name: Connected Retail. A & Lauren Egge, Associate Government Services, Washington, DC would have been made here prior Connected Retail experience2 is a to other cities. fully integrated, digitally enhanced The Adidas store, not part of our formal Over the past decade, retailers of all exploring in-store self-checkout with experience that engages the customer evaluation, included a display obviously added onto the in-store experience. sizes have been driven by disruptive smartphones. We discovered that simply “adding in both the virtual and the physical “Of the 71 retailers, technologies and the changing digital” is not the answer for retailers— worlds. It enables stores to exploit only 4 emerged with consumer to make major investments To measure the degree to which yet that was an approach too often and extend their unique advantages in digital channels, particularly retailers are successfully building links taken. As you’ll note in the scores, into the digital realm. ‘baseline’ scores. ecommerce and mobile platforms. between their digital and physical stores, brands that simply bolted on a screen Effectively, in-store But now, more retailers are starting to SapientNitro independently conducted a or added a tablet did not score well. In To understand the implications of embed sophisticated interactive tools— four-month audit of specialty retailers. digital experiences from digital displays to interactive We evaluated the physical locations of 71 our view, the retail store must focus on tools that help sell in-store and extend the research, we focused on several questions we expect retailers to ask today are only weakly exhibits—into the store layout itself. retailers across 7 key criteria, gathering the visibility of both the customer and and developed six key findings based integrated with in-store over 500 points of data (See Methodology the sales associate into the digital space: on them. Ecommerce investments used to be & Approach). product reviews, near-infinite inventory goals and activities.” focused on simply complementing and a much broader product assortment. the traditional retail store footprint. In the end, what we found was In that world, shoppers would browse surprising. Of the 71 retailers, only online, compare prices through their 4 emerged with “baseline” scores. KEY FINDING 1: PC and ultimately end up in the store to Effectively, in-store digital experiences DIGITAL IN-STORE DISpLAYS ARE pOWERFUL purchase. It was a linear journey. today are only weakly integrated with TOOLS—BUT TOO OFTEN pOORLY ExECUTED in-store goals and activities: The But increasingly, new ecommerce tools content and functionality (if it exists at are able to directly influence the in-store all) of these experiences struggle to When done well, in-store digital can enhance the experience, it lacks shopping experience. This is reshaping support in-store goals and activities. branding added tremendous energy interactivity. We saw little content the traditional role of the store: What and engagement to the retail shopping focused on product information and One example of well-integrated digital used to be a key step on the path is now In most stores, digital has a limited experience. Unfortunately, most digital utility, and even fewer interactive merchandising was the Bloomingdale’s optional on the way to the purchase effect on the visit—mobile, kiosk or experiences suffered from major experiences designed around user in-store in-wall displays. Not interactive, they still were well-executed and supported through a digital platform. tablet-based ecommerce and digital shortcomings, if they existed at all— goals and actions. the brand goals in the store. display screens could be removed 40 of the 71 retailers evaluated had no Smartphones have reinforced this entirely from the shopping process visible digital displays. Interestingly, What worked: UNIQLO’s in-wall transient behavior. Now, search and and there would be little change. Yet many of the best in-store experiences— screens were tightly integrated with the price comparison is happening in the despite the sad state overall, there were Chanel’s sleek runway video and physical design of the store and visually store aisles, and a new behavior of interesting examples that were doing Clinique’s iPad skin evaluation— compelling. In larger stores, consistent test-and-buy-elsewhere are becoming one category very well. For example, appeared to be created in positive usage of digital display as part of much more common.1 Nordstrom, Coach and Crate & Barrel partnerships between vendors or the brand experience was essential earned high scores in inventory visibility suppliers and retailers. in creating the desired impact. For In response, retailers are increasingly and fulfillment, UNIQLO had fantastic in- example, Bloomingdale’s had screens embedding digital experiences into their store digital displays and merchandising More troubling is that few retailers throughout the store, which was physical locations, and applying connected and Bloomingdale’s had great digital embraced the interactive element in stark comparison to other large thinking to enable consumers throughout brand and merchandising examples in of digital. Screens are great, but our retailers that often had a single, and their journey with the brand. Examples the cosmetics section. JCPenney and expectation is that in-store digital must sometimes difficult-to-find, screen for include mobile apps with built-in scanners Macy’s also offered distinct Levi’s digital move beyond glorified wall hangings an entire floor. Digital entertainment LEGO’s in-store augmented reality experience The Nike Store, while not formally evaluated has received considerable buzz in the digital as part of the research, offered some of the to discourage showrooming, inventory touchpoints (the Denim Bar and Levi’s and deliver content and functionality for kids is an interesting concept; both space. But like many experiences in our audit, most immersive digital experiences. visibility and tools to enable cross-channel kiosk respectively) and sales associates that supports2 users in the shopping Abercrombie and PS from Aéropostale lack of support (in this case, the display was not shopping (e.g., wish list management). were enabled with iPads. process. Many of the screens focused featured digital displays at kids’ operating) hampers the use of these devices. Retailers such as Walmart are also solely on branded content; while this heights, which offered a distraction for The LEGO store was not part of our formally evaluated retailers. 1 59% of smartphone owners report having used their phone to find a better price while in-store. InsightExpress, Q1 2012, “Digital Consumer Portrait.” Jan 25, 2012 2 For more information on Connected Retail, see “Retail Goes Rogue: How Digital Convergence Will Revitalize the In-Store Experience” in the Trend 3 section of this report. To measure the degree to which retailers Retailers’ physical stores were evaluated weary parents and kept kids engrossed. video footage, but didn’t add to the visit. METHODOLOGY are successfully building links between their digital and physical stores, SapientNitro across seven criteria: Visibility, Content, Functionality, Brand Translation, Social The Levi’s Denim Bar at JCPenney was well designed and reasonably well Over and over, we saw stores that had clearly not thought through the & APPROACH independently conducted a four-month audit of Sharing Integration, Mobile Experience specialty retailers. In-Store and Cross-Channel Inventory integrated. Converse—not on our list— digital, omnichannel environment. We & Fulfillment (See Methodology Chart). offered digital tools to allow consumers encountered many examples of poor Our research approach consisted of And ultimately, each retailer received an to customize their shoes in-store and placement including a digital display in-person visits to the physical properties of Omnichannel Score based on its composite walk out with one of many designs tucked under stairs and another hidden 71 retailers, focusing on flagship and other score (See Omnichannel Scorecard). printed on their sneakers. This is a behind a rack of clothes. One store had prominent locations in New York City.3 Researchers assessed each store’s digital strong example of a tool that adds value seven-foot-high kiosks, which were offering(s) while equipped with Android and to the in-store shopping experience, is both broken and awkwardly placed at iOS smartphones. relevant to in-store purchasing and can’t an exit and in the middle of a crowded be replicated at home. clothes section. Another beauty and skincare store mounted a touchscreen DEFINITION OF CATEGORIES 60+ Excellent What didn’t: In smaller stores, such computer to the wall, but left the outlet 50-59 Good Visibility: To what degree are digital elements Social Sharing Integration: How well is as Lindt and Bath & Body Works, large and cables clearly exposed. 40-49 Average clearly visible in the store? Is digital integrated cross-channel or social sharing (e.g., email, screens behind the checkout displayed 30-39 Fair throughout the shopper’s path? Facebook, Twitter) enabled? 29 and Weak below Top Scores: UNIQLO received a five in this category—the highest possible rating—for its Top Scores: Sephora earned a four because many of its touchpoints supported easy email KEY FINDING 2: dynamic, visually stunning store experience. sharing, and there was some social integration pOORLY pLANNED DIGITAL IS WORSE though it was not seamless. Overall, a category THAN NO DIGITAL AT ALL Several retailers integrated scanning Methodology Content: Is the content relevant to the brand average of 1.4 out of 5—which excluded the and its products and services? How well is the 40 retailers that received a 0 score—indicates capabilities into their mobile apps, but content tailored to the in-store experience? significant room for improvement across our attempts to scan were mostly Store Experience 70% Digital is a key component of the What didn’t: JCPenney had great all retailers. unsuccessful. The scanning software Visibility 15% Top Scores: No brand received a five, but shopping journey, but retailers that experiences at the Levi’s Denim usually worked, but the mobile app was Content 20% Ethan Allen and Sephora secured a four by Mobile Experience In-Store: Does the retailer rush to extend digital to the physical Bar and had iPad-equipped sales unable to look up the barcode. Functionality 20% Brand Translation 15% offering product information and exploration have a native mobile app with functionality store experience won’t win the race. associates, but the overall experience to support the in-store shopping experience. relevant to the in-store experience (e.g., push Retailers must plan for the long-term; was hampered by broken price-check Social Sharing Integration 10% notifications, barcode scanner)? Functionality: Are digital tools interactive? this includes technology support and kiosks and two broken “findmore” Mobile Experience sales associate training in how to use the touchscreen kiosks. Display errors To what degree are the functions relevant to Top Scores: No mobile experience warranted In-Store Cross-Channel 10% shoppers’ goals and the in-store experience? a five. Most apps were singular in function if they worked at all. However, Bloomingdale’s tools and in the value they provide. Staff shouldn’t be surprised when shoppers on Guess’ touchscreen overshadowed any value the content could provide. Retailers’ Digital Inventory & Fulfillment 10% Top Scores: No experience garnered a five, but Sephora’s digital touchpoints, including did earn a four; in addition to the product scanner provided by its Big Brown Bag app, use smartphones to scan a barcode or Several retailers integrated scanning Assets (Content) Each retailer was scored in each category from 0 (not present) to 5 the Scentsa fragrance finder, netted the retailer a four. the “Bloomingdale’s @ 59th & Lex” app offered interactive floor maps for its flagship store. interact with a touchscreen. Floor plans have to be redesigned for digital displays capabilities into their mobile apps, but few worked seamlessly and Grow More Critical (best). The scores were weighted to and interactive elements. consistently. Guess’ sales associates create a composite index, and then Brand Translation: Is digital well integrated Cross-Channel Inventory & Fulfillment: Does intercepted us as we tried the style into the physical space? Do digital the retailer provide store inventory visibility in “The content owners that will multiplied by 15 to achieve an easy-to- What worked: UNIQLO is a prime selector, and in American Eagle read overall score from 0 to 75. See the touchpoints enhance the brand image other channels? How well does the retailer thrive in this digital ecosystem example of a store designed with digital Outfitters, the sales associate wasn’t Omnichannel Scorecard for the results. and store experience? support cross-channel shopping and fulfillment? in mind, but even stores like Saks Fifth aware of the mobile app’s barcode are the ones that understand Avenue and Ralph Lauren that had fewer scanner. Even several Sephora the need to deliver seamlessly Top Scores: Bloomingdale’s, especially its Top Scores: Coach, Crate & Barrel and cosmetics experience, and UNIQLO’s spaces Nordstrom allowed shoppers to easily check displays with little to no interaction employees provided misinformation across every possible platform.” were clearly designed with digital in mind, in-store availability via the website and mobile executed what they did have well— about the Beauty Studio tool. –eMarketer 80 earning each a five. site and offered an option for in-store pickup, displays were integrated and smooth. which plays up a physical retailer’s advantage of immediate fulfillment and no shipping costs. KEY FINDING 3: IT ISN’T JUST THE HARDWARE: CONTENT AND SOFTWARE MATTER % Great digital signage and interactive match the hardware. In our research, Companies that optimize their digital elements require great material. we found many examples of large-scale mobile web content outperform Nothing emphasized the gap between runway videos, but were left scratching those that don’t by 80% in the promise and the reality better than our heads about the lack of other year-over-year increases in the lack of software and content to stories. Where were the stories about web traffic.4 3 71 retailers were audited. Of those, we evaluated one or more locations in New York City for 68 retailers and locations in Chicago for three retailers with limited or no presence in New York City. 4 Aberdeen Group “The Business Value of Adapting Web Content For Mobile Devices,” 2011 how a great design came to life? Where several years, but is a solid tool, was the product information, or even promotional material? delivering personalized product recommendations based on users’ skin KEY FINDING 5: types and key concerns (e.g., acne, RETAILERS SHOULD FOCUS ON In fact, Sephora’s tools, Clinique’s redness). It is integrated with email— SUppORTING USER TASKS skin evaluation, Macy’s Levi’s kiosk, which worked—and usually a printer, JCPenney’s Levi’s Denim Bar and Ethan and was a popular tool at Macy’s, Well-designed, task-based tools Magic Mirror, which allows shoppers to Allen’s Express platform were some Bloomingdale’s, Nordstrom, Saks “Based on of the only software implementations Fifth Avenue and Lord & Taylor. While emerged as being few and far between quickly try on many new glasses styles in our research. We found that the while still being able to see the styles SapientNitro’s focused on in-store tasks. In-store tools most had the Clinique iPad propped leading examples included wedding properly wearing their own. need to offer more than something a up in a very basic (likely standardized) work in the space, shopper can do at home. freestanding base, Bloomingdale’s registry kiosks, mobile barcode scanners and product explorations like the skin What worked: Crate & Barrel included we have found a went a step further to integrate the evaluation and fragrance finder. both a wedding registry kiosk and a significant increase— There are hundreds of potential stories iPads into a custom counter. mobile app that allowed users to walk for strong brands, and digital in-store But much was left on the table. While the store and scan items to add to their on the order tools offer the opportunity to tell them. What didn’t: Barneys had over a dozen 43% of brands had some sort of registries. Clinique’s iPad tool delivered of 10% to 40% in The failure to highlight and feature these iPads placed consistently throughout functionality supporting in-store tasks, personalized product recommendations, stories is a key gap for many retailers. the multi-level store, but the content the majority were digital displays. Even helping shoppers narrow down the additional in-store Content needs to be integrated into was generic dot-com material (typically fewer (22%) brands had interactive options at the point of sale. Macy’s sales—relative the development of digital in-store linked to the blog “The Window”). ALDO tools, which support those user tasks. mobile app included a barcode scanner experiences, and content is a powerful was even worse—they mounted tablets And we saw none of the digital try-on that worked, although it returned a to other stores.” tactic within a larger omnichannel next to the shoes, offered no content technologies that various publications higher price online than in-store. strategy. Content must tell a story targeted at consumers and even had have lauded. Not only did we not see consistent with the brand. sales associates scold shoppers when virtual fitting rooms, but also some What didn’t: Bath & Body Works’ they attempted to scan the shoes of the experiences that the industry mobile app included a scanner, but What worked: Clinique’s iPad skin themselves. raves about, like iPad kiosks, failed every attempt to scan a product evaluation has been out for to deliver. We also failed to find any resulted in an error—this issue was future-thinking examples similar to common across retailer apps assessed. Marks & Spencer’s touchscreen co- Guess’ app also promised to look up KEY FINDING 4: browsing experience (see image to prices and customer reviews, but also threw an error. And we already noted THE RIGHT TOOLS GENERATE pOSITIVE ROI the left) recently rolled out in Paris, or examples such as LensCrafters’ ALDO’s “tablet trap.” New, Creative One of the key questions to consider unique advantages: immersion, direct Retailing Models prior to in-store digital investment is ROI. The cost of installing and support of sales associates, immediacy and focus, social elements and the KEY FINDING 6: Are proliferating supporting these tools is significant, opportunity for fun. It makes sense to THE OMNICHANNEL BATTLE HAS BEGUN but the question of a positive return invest in the channel that represents “ The highly targeted assortment is too often unknown. Based on more than 90% of most retailers’ and short-term leases are a We awarded three retailers a five in the channel purchasers. Across the seven low-risk way for Walmart to SapientNitro’s work in the space, we sales (even as ecommerce continues Cross-Channel Inventory & Fulfillment categories we evaluated, more retailers have found a significant increase—on to grow). reach new shoppers and capture category. This is the only category that were awarded top scores (4 and 5) in the order of 10% to 40% in additional shopping occasions it may not had more than two top-scoring retailer Cross-Channel Inventory & Fulfillment in-store sales—relative to other stores. What worked and what didn’t: and reflects, we believe, a growing than in any other. otherwise have access to.” These benefits are primarily due to Obviously, our audit of in-store interest in this area and increased –Instoretrends.com, referring to Walmart’s decreased lost sales, the ability to ship- experiences couldn’t determine retailer awareness of cross-channel We also examined the flexibility of 2011 Holiday Pop-Up Store Strategy 130 to-home, improved in-store shopping the direct impact of each digital behaviors. This is the first of a series of cross-channel shipping. The ability The Marks & Spencer Paris location by enabling co-browse with sales experience. What we’ve found in our to check store inventory in multiple offered co-browsing for associates and steps towards omnichannel thinking. associates, and brand contribution. work in the space is a significant ROI channels is highly relevant to the % is a move towards the “endless aisle,” particularly important in the most Retailers with a physical presence increase in well-designed convergent We assessed how well retailers are omnichannel shopper. Additionally, profitable high-traffic, small need to play up the benefit of in-store retail tools such as in-store kiosks facilitating cross-channel shopping three retailers pushed the bar higher footprint stores. experiences. Quite simply, sales connected to the right technology on behaviors, specifically from the web to support cross-channel fulfillment. conversion is much higher in the retail the back end. (and mobile web) to the physical Coach, Crate & Barrel and Nordstrom store than anywhere else. It also offers store. With the large number of gave shoppers the option to purchase consumers that research online and an item online and then pick it up at The increase in online sales buy in-store, retailers have a significant a nearby store that had the item in over 3 months after Tesco’s opportunity to support these cross- stock. Though it does not offer the South Korean commuter campaign was 130%. level of immediacy that in-store pickup usual specs like size or color, as well provides, some retailers also offered a ship-to-store service, which, when as “nearby” through which users can set a location and narrow products by CASE STUDY: MACY’S offered for free, might appeal to the store availability. large number of shipping fee-averse Across nine floors and over two million during our audit. Though the five- shoppers.5 What didn’t: Among the surprises were square feet of retail space, the Macy’s inch LCD screens were not a vision H&M and UNIQLO, which did not have flagship store in Herald Square had of beauty, the kiosks provided basic What worked: Crate & Barrel had ecommerce offerings in the U.S. and more in-store touchpoints than any product specifications along with price, clear inventory visibility as well as the provided no visibility into store inventory. other store evaluated. Yet it was clear in which shoppers clearly saw value. option to see if larger furniture pieces And while several large department it was optimized for an analog world; There was a missed opportunity to were on display at a nearby location. stores provided at least some level of digital displays had limited functionality further engage, cross-sell and delight They also provided in-store pickup inventory visibility—including Macy’s, and the visibility of the tools in such a customers at this already frequented services as well as an option of free JCPenney, Bloomingdale’s and large store held the retailer back from touchpoint. The Clinique skin evaluation in Macy’s shipping to a store. Nordstrom offered Saks—it was a surprise to see a few achieving a “Good” designation. offered clear instructions and a clean innovative functionality on its mobile exceptions, including Neiman Marcus Other areas of opportunity included the interface, but was also featured at most of site, allowing users to filter by the and Lord & Taylor. Top experiences included the Clinique digital branding and merchandising their competitors. skin evaluation iPads—Macy’s most displays throughout the store, which Scentsa’s design ubiquitous (available on three separate weren’t as integrated as, for example, invited shoppers to try it out. CASE STUDY: SEpHORA floors) and successful implementation, Bloomingdale’s. In addition, the single although not unique to Macy’s. The gift registry in the ninth floor luggage sleek display of the Levi’s touchscreen department worked, but seemed While no brands achieved the The location made the touchpoint less kiosk in the kids’ department, while oddly placed. Users could search for a “Excellent” status in this inaugural inviting to passersby if the station was tucked among the racks in the girls’ registry, but the output was a several- omnichannel index, Sephora did in use, but those that ventured to check denim section, drew attention. Users foot-long, receipt-style printout of emerge as a leader among its peers. it out found how-to videos and tips, an could browse very basic product products. Sephora had a seemingly well thought overview of available in-store services, information related to kids’ denim out strategy for digital in its physical social content from Sephora’s networks styles and snap a pic with the digital As a whole, the Macy’s digital in-store spaces, in addition to a relevant mobile and more. Shoppers could also share photo booth. Finally, the Macy’s mobile experience has established several key offering and cross-channel—both dot- content via email or social networks, app was a strong point with a scanner pieces of a complete offering: cross- com and mobile—inventory visibility. though some speed and system issues for price comparison (although it channel inventory visibility, a mobile were encountered when we attempted returned a higher price than the scanner and the beginnings of in-store Inside the store itself, the Scentsa to do the latter. physical tag) and its “find in-store” digital content. Developing tools that touchscreen kiosk served as a function. enhance the brand and truly support centerpiece in the fragrance space. Sephora’s mobile app also offered shoppers’ in-store activities remain a The best-in-class interactive display shoppers a scan feature, providing Price-check kiosks were easy to find significant opportunity. Beauty Studio iPads linked let visitors explore fragrances through easy access to additional product info and were used frequently by shoppers shoppers to tutorials, social multiple paths, such as by brand or and reviews, which could help with content and available services. by fragrance note. The touchscreen purchase decisions. The Macy’s Levi’s was responsive and easy to navigate, kiosk was visually striking. and offered shoppers helpful product Each touchpoint hit the mark across information. When a shopper found several criteria, but the overall The Macy’s The Levi’s kiosk something of interest they could email experience still fell shy of “Excellent.” mobile app was easy to it or scan the QR code to pull up the On reflection, we felt Sephora missed included a use, but product product on their phone. The screen making the final strong connection basic scanning information was also prominently displayed Facebook between shoppers’ in-store goals and capability, as limited. links, but didn’t follow through with experience. Scentsa helped shoppers well as the ability to scan and social sharing capabilities. wade through the overwhelming add items to a Sephora offered A second touchscreen kiosk, Sephora’s number of fragrances, but after finding registry. email through its Skincare IQ, offered a very similar the perfect scent on the screen, how tools (see email link in top-right experience catered to skincare needs. does it make its way to their cart? corner of image). There was no indication of whether In addition, Beauty Studio iPads were the fragrance was on the shelf at that positioned along the vanity mirrors at moment and no assistance locating it. In-store scanning Sephora’s makeover stations. with the Sephora app surfaced helpful reviews. 5 When asked the main reasons they don’t make online purchases, 36% of consumers cited the shipping costs. That made shipping costs the second-most common reason they balk at buying online, only slightly behind the 37% who prefer to see and touch an item in person before purchasing. (Internet Retailer 2012) NASCAR The blurring of lines across online and experience. The opportunity—to be offline are not just impacting retailers. We work with multiple industries that fair, as yet unrealized—is to surface great analysis and social conversation, CASE STUDY: JCpENNEY RACES are addressing the same challenges and to see aspects of the event they to their businesses. From travel and may have missed—without diluting the JCPenney has the opportunity to be was entirely unresponsive. The hospitality to telecom, most consumer- intensity of the real-world experience. TOWARDS among the leaders in relevant digital promotional material promised facing industries are, to some extent, For example, they are considering in-store experience, with several strong media-rich content and social sharing facing similar challenges. However, leveraging digital signage, Jumbotron experiences. But in practice not only options, but we saw little of note. few have pushed as hard or as fast integration, in-venue kiosks and did a majority of digital touchpoints fail OMNICHANNEL as NASCAR. NASCAR is one of the premium professional sports businesses, with even mobile ticketing to make the experience richer. Connecting Digitally at Home to impress, too many were inoperative or unsupported. The first touchpoint encountered was A more recent effort—the Levi’s Denim Bar—hit the mark across several criteria. Relative to the kiosks, visibility was improved, with in-store marketing massive reach—hosting 17 of the 20 Similarly, while watching at home, the price-check, a staple in many messages of “a new way to shop most attended sport events—while second screen viewing can extend and department stores. Similar to other for jeans” and a prominent location delivering significant results to increase the richness for consumers. retailers, the design did nothing to adjacent to an aisle. The Denim sponsors’ products and services. With Personalized experiences similar to boost the brand image, but the real Bar—which was only in the men’s over 70 million fans worldwide, it is the ecommerce platforms in retail can issue was that the price-check was department of the location visited—was second most-viewed broadcast sport, allow fans to connect with existing non-functioning. The kiosk display well designed, with the feel of a store- and has the longest sustained season media broadcasts (e.g., follow their indicated that the “Price check within-a-store. iPads were mounted on of any sport. favorite driver’s audio or watch pit system is unavailable. Please see an the Denim Bar, and the interface was row videos), live data feeds (e.g., tire associate.” This message appeared smooth and provided shoppers access iPads at the Levi’s Denim Bar were easy Yet their digital channels have state, fuel state, speed) and education at seven of the eight kiosks we visited to basic information such as available to navigate. traditionally been under-emphasized— and analysis (e.g., history of the track, throughout the store location. styles and washes, as well as video and with no YouTube channel (until live analysis), or even enable social images highlighting the fit. recently), substantial conversation conversation (e.g., Twitter, Facebook) JCPenney’s “findmore” kiosk offered drop-off in the off-season and a fifth on NASCAR’s own platform. a strong visual impression, although Beyond in-store offerings, JCPenney place in online conversation after the the content and functionality struggled. provided inventory visibility through NFL, NBA, NHL and MLB. Building the Brand The kiosk essentially brought shoppers both its dot-com and mobile site, which NASCAR fans are some of the most to the retailer’s website without supports the omnichannel shopper. In addition, their customer base passionate in the world. Part of the specifically tailoring the experience to And though the Levi’s experience is evolving. Their biggest fans are opportunity of digital is to deepen in-store goals. In terms of functionality, and inventory visibility resulted in increasingly connected consumers that connection by bringing great the touchscreen interface on the a slight lift in scoring, it was still who expect to be able to interact with content about the history of the teams, first kiosk was largely unusable—the overshadowed by inoperative kiosks their favorite brands, drivers and teams sponsors, cars and drivers. There is navigation would rarely respond to and price-checkers. through digital channels. incredible richness in the stories, which touch—and the second kiosk tested can be told through these platforms. The solution is to reinvent and And off-season, digital channels offer recognize the strategic opportunity the opportunity to flatten seasonality to evolve to a more connected fan and shape engagement. experience that extends before, during and after events. In summary, just as retail stores have started to consider in-store, Extending the In-Venue Experience NASCAR has started to think about Analogous to the in-store experience, in-stadium and at-home digital attending races used to be dominated experiences. Integration with live by the cars and a basic scoreboard television programming allows deeper with positions. Yet today, NASCAR is engagement—and more opportunities seeing fans arrive with smartphones for lifting the lifetime value of fans. The “findmore” kiosk had a fairly clean who expect a platform to extend their look but was not functioning correctly during our multiple visits. 60+ Excellent 50-59 Good 40-49 Average 30-39 Fair CONCLUSION OMNICHANNEL SCORECARD 29 and below Weak Our research teams visited over 70 We did find compelling experiences. Omnichannel retailers across New York City. What we From UNIQLO to the Bloomingdale’s Rank Retailer Category Score6 Class Descriptions found were major gaps in the in-store cosmetics section to Sephora’s 1 Sephora Beauty & Skincare 59 Good Our #1 for having a variety of useful interactive digital experience. Substantial pressure Scentsa, it was clear that some tools that enhance the store experience, but is on retailers to meet the connected retailers have made the necessary there’s still room to push the envelope consumer’s push for a seamless conceptual and material investment. 2 Bloomingdale’s Department Store 52 Good Exemplary use of video screens, delightful 59th @ omnichannel experience, and while it But too often, we also found major Lex app for use in the flagship store and seamless is inspiring retailers to consider new problems: broken devices, bolted-on execution of Clinique iPads ways to extend aisles, create adaptive displays and disconnected experiences. 3 Macy’s Department Store 46 Average On the right track with a diverse range of digital environments and deliver augmented touchpoints, but visibility and functionality packaging experiences, the reality is Achieving an omnichannel digital need a boost humbling. vision has challenges. Our study found 4 Crate & Barrel Home & Gift 44 Average Competent implementation of gift registry, but that much work remains for retailers only cross-channel inventory & fulfillment goes That only two stores—Sephora and to achieve their vision—but this also above and beyond Bloomingdale’s—achieved a “Good” means that we are even earlier in this 5 American Eagle Outfitters Apparel 43 Average Kids’ section features fun, digital entertainment, rating in SapientNitro’s Omnichannel process than in ecommerce or pure plus displays and mobile investment Index reflects the substantial digital experiences and that, as 6 Nordstrom Department Store 40 Average Cosmetics department screens, mobile app and challenges that remain in developing a result, more opportunities remain. inventory visibility shine but the rest fall flat a strategy for in-store experiences. In the end, no retailer received the top And the retailer who cracks this nut 6 Saks Fifth Avenue Department Store 40 Average A minimalist approach: branded video screens complement the fine-art feel of the store “Excellent” rating because too few have will receive a disproportionate share overcome the underlying challenges of of the reward. 8 UNIQLO Apparel 36 Fair Branded video screens around every corner enhance execution: organizational alignment, the store’s high-tech feel but none offer interactivity clear strategy and an actionable 9 Lord & Taylor Department Store 33 Fair A sleek cosmetics department bolsters roadmap with quick wins. an otherwise mediocre digital experience 10 Ethan Allen Home & Gift 32 Fair Touchscreen kiosk is a strong step in the right direction, but location and in-store role need attention 10 ZARA Apparel 32 Fair Handful of well-placed digital video screens and a smooth mobile scanner, but no visibility into store inventory 12 Guess Apparel 31 Fair Solid endeavor with its touchscreen denim finder, but system errors bring it down a notch 13 JCpenney Department Store 29 Weak Valiant effort, but maintaining tools is a must 13 Lacoste Apparel 29 Weak No mobile integration, but bonus points for good design and appealing digital video content 15 Barneys New York Apparel 27 Weak Mounted ipads look sleek, but deliver only website content that shoppers can browse at-home 15 Diesel Apparel 27 Weak iPads and video screens compliment the brand, but none blew us away 15 Tourneau Watches & Jewelry 27 Weak Unimpressive screens, but online shoppers can schedule in-store appointments for an item of interest 18 Steve Madden Accessories & Shoes 26 Weak Digital video experience is well-branded though underwhelming 18 Williams-Sonoma Home & Gift 26 Weak A basic gift registry kiosk with a print option sums up the digital offering 20 Aéropostale Apparel 25 Weak Digital photo booth in kids’ PS store is a fun diversion, but limited in functionality and offers no sharing capability 6 A retailer’s maximum score is 75. See Methodology & Approach for more detail. Omnichannel Rank Retailer Category Score Class Descriptions The following retailers received an overall score of 0 as all three components evaluated were absent: 20 Bath & Body Works Beauty & Skincare 25 Weak Digital falls flat: uninspired marketing video and a mobile scanner that returns only errors • No digital touchpoints were visible in the store location visited • No native mobile app with relevant in-store functionality 20 French Connection Apparel 25 Weak Single video screen behind the cashwrap is integrated and branded well • No store inventory visibility on the retailer’s website or mobile site 20 Ralph Lauren Apparel 25 Weak Classic but minimal: on-brand video and Retailer Category well-designed displays, just not many of them ALDO Accessories & Shoes 24 Ann Taylor Apparel 23 Weak One poorly mounted screen tucked away in the fitting room that serves up the Cole Haan Accessories & Shoes dot-com leaves much to be desired Nine West Accessories & Shoes 24 BCBG Apparel 23 Weak Room for growth: runway videos looped on a Tumi Accessories & Shoes couple of screens 7 For All Mankind Apparel 24 H&M Apparel 23 Weak Floor-to-ceiling projector screen makes a Abercrombie & Fitch Apparel statement, but still has no ecommerce in the U.S. Anthropologie Apparel Club Monaco Apparel 27 Brooks Brothers Apparel 20 Weak No digital to be had except for shoppers seeking a round of virtual golf practice Intermix Apparel J.Crew Apparel 27 Lindt Home & Gift 20 Weak Single screen mounted behind the cashwrap doesn’t grab shoppers’ attentions Juicy Couture Apparel Lucky Brand Apparel 27 Neiman Marcus Department Store 20 Weak Meager: Nothing beyond the Chanel runway video screen lululemon athletica Apparel Rugby Apparel 27 Stuart Weitzman Accessories & Shoes 20 Weak Branding video facing the street may catch the attention of passers-by, but not of the in-store L’OCCITANE en provence Beauty & Skincare shoppers LUSH Beauty & Skincare 31 Gymboree Apparel 14 Weak The small TV encapsulated in protective The Body Shop Beauty & Skincare plastic may keep the kids entertained, but fails to impress Bergdorf Goodman Department Store Dean & Deluca Home & Gift 32 bebe Apparel 9 Weak Mobile scanner and inventory check are the only pluses Godiva Chocolatier Home & Gift pottery Barn Home & Gift 33 Coach Accessories & Shoes 8 Weak Online shoppers can easily check nearby stores’ inventory, but won’t find any digital content when Restoration Hardware Home & Gift they arrive West Elm Home & Gift 34 Talbots Apparel 6 Weak The website and mobile site highlight Cartier Watches & Jewelry in-store availability, but the digital offering Swarovski Watches & Jewelry ends there Swatch Watches & Jewelry 35 A|x Armani Exchange Apparel 5 Weak Great dot-com inventory check for Tiffany & Co. Watches & Jewelry in-store pick up, but fails everywhere else Zales Watches & Jewelry 35 American Apparel Apparel 5 Weak Can check inventory via dot-com, but lacks digital in-store and mobile relevance 35 Banana Republic Apparel Weak Mobile scanner is the lone bright spot The following retailers were not evaluated due to limited locations in 5 the geographies visited or lack of physical retail presence: 35 Express Apparel 5 Weak Mobile app has a scanner, but it is disappointingly glitchy Harry & David Home & Gift 35 Urban Outfitters Apparel 5 Weak No in-store touchpoints and does only Blue Nile e-tailer dot-com inventory check well Bluefly e-tailer 40 Gap Apparel 3 Weak A frustrating mobile scanner is the extent of the Net-A-porter e-tailer in-store digital experience Shopbop e-tailer 40 Victoria’s Secret Apparel 3 Weak App with scanner claimed exclusive offers, videos and info, but never delivered 42 Chico’s Apparel 2 Weak The in-store experience is void of digital and the online offering to ‘find a store’ is riddled with errors 42 White House | Black Market Apparel 2 Weak Store inventory supposedly visible via mobile and dot-com, but worked not once when evaluated ExCERPT from the 2012 Digital IQ Index : Specialty Retail ® To access the full report, contact membership@L2ThinkTank.com KEY FINDINGS The Return of E-commerce WHAT’S OLD IS NEW AGAIN Brand sites continue to be the primary incremental traffic, is employed by investing more on their sites than revenue-generation engine online, only 65 percent of retailers. Most in mobile or social platforms.6 however significant low-hanging fruit notably, adoption of live chat fell to remains. Only 50 percent of brands 26 percent, bucking the nationwide Site investments appear to pay off— Written by Scott Galloway, Clinical professor of Marketing, NYU Stern, Founder, L2 incorporate conversion-enhancing trend5 and suggesting that prestige Genius brands keep users on their sites two and a half minutes longer The brave new world of social media has simmered as it appears that (thus Methodology user reviews. Similarly, the Facebook retail brands are not seeing ROI on “Like” API, a valuable source of the technology. However, brands are than Feeble brands do. far) hype has trumped impact. Meanwhile, 15+ years on, e-commerce has become the disruptive force first envisioned in the late 1990s. In the first L2 is a think tank for digital quarter of 2012, online retail spending in the United States reached $44.3 innovation. SapientNitro has Site Feature Adoption partnered with L2 to deliver the % of Sites with the Following Tools billion, up 17 percent YoY.1 E-commerce is expected to grow at a 13.3 percent highlights from their 2012 Digital IQ July 2010–2012 CAGR, reaching $361 billion in the U.S. by 2016.2 With brick and mortar retail Index®: Specialty Retail study. The 2010 n=84 2011 n=64 2012 n=76 flat or declining, the percentage of sales (and growth) traditional retailers Index measures brands against their peers on over 675 quantitative and register online could become the arbiter, sorting winners from losers. Many qualitative data points, diagnosing traditional retailers now register more than a quarter of their sales online. their strengths and weaknesses across four dimensions: Size Matters capital in a supply chain marching to 1. Site: effectiveness of brand site and Scale is beginning to translate online. same day delivery, it eats away at one e-commerce operations For the first time, there is a significant of the few remaining advantages of 26% 2. Digital Marketing: search, display, 28% 23% relationship between the size of a terrestrial retail—immediacy. Amazon and email marketing efforts 65% 31% 37% retailer’s business and Digital IQ. is the retail ocean’s lone Great White 3. Social Media: brand presence, 48% 56% 44% The relationship strengthens when Shark, broadening its prey from slow community size, content, and looking at the size of retailers’ fat seals to … everything that swims. engagement on leading platforms product Facebook “Like” User Reviews Live Chat online businesses. 4. Mobile: compatibility, optimization, Mobile: “I Can’t Believe and marketing on smartphones, Department Stores: Rumors of Their How Much You’ve Grown!” tablets, and other mobile devices Where Retailers Are Investing6 Deaths Are Greatly Exaggerated What was supposed to take ten % of Retail Executives Prioritizing Investments This year’s Index ranked the digital Department stores have found years took three. Everyone, including in the Following Media n=100 efforts of 76 retail brands. Based on sanctuary in the digital domain. Facebook, has been caught flat-footed their overall performance, brands Building on the successes from 2011 by the adoption rate of smartphones, were classified as either: Genius, 59% 35% 22% for the first time, the average Digital which has reached 165 million users Gifted, Average, Challenged, or IQ for the category outpaced children in the U.S. alone.4 M-commerce is Feeble. More information on the of the medium, the e-tailers. The top now the fastest growing retail channel ranking and methodology can be found in the full report. two spots in the 2012 Digital IQ Index®: in history, and mobile devices are Specialty Retail were (decisively) likely influencing more on- and offline Site Mobile Social Networks captured by Macy’s and Nordstrom, purchases than traditional broadcast, respectively. let alone an in-store salesperson. and weaknesses and help brands E-commerce is now m-commerce. achieve greater return on incremental “Straight e-commerce sites serve a purpose, but to compete in a digital Amazon.com: The Great Social media is now consumed via investment. We have modified our White Shark of Retail mobile app. Digital marketing is methodology, increasing the weighting space a brand’s web presence needs to be more than pictures and a A peerless e-commerce experience now centered on mobile search and of a brand’s site from 30 percent to 40 shopping cart. To compete in today’s retail world, the brand needs to create coupled with a 37 percent share of U.S. mobile-optimized email. percent and decreasing the weighting m-commerce3 make Amazon.com of social media from 20 percent to that personalized, one-of-a-kind, unique online experience, presenting consumers with the force reshaping retail. The most Digital IQ = Shareholder Value 10 percent. In addition, we measured options they didn’t know they had.” – BILL KANARICK, WORLDWIDE CMO, SAPIENTNITRO recent victims are other e-tailers who The L2 study attempts to quantify the each retailer’s order and return can’t compete. Amazon now has brick digital competence of 76 global retail fundamentals, and purchasing and 1 “comScore Reports $44.3 Billion in Q1 2012 U.S. Retail E-Commerce Spending, 4 “Smartphone Adoption Rate Fastest in Tech History,” Stephanie Miot, PC Magazine, August 27, 2012. and mortar peers squarely in its cross brands. Our aim is to provide a robust tracking from three distinct locations. Up 17 Percent vs. Year Ago,” comScore Press. Release, May 9, 2012. 5 “Live Chat Effectiveness- A Survey of Internet Shoppers 2012,” Bold Chat Research Report. 2 “Apparel Drives US Retail Ecommerce Sales Growth,” eMarketer Press Release, April 5, 2012. 6 “Website investment still key for online retailers despite the rise of social and mobile,” Maria Wasing, hairs. As Amazon reinvests cheap tool to diagnose digital strengths 3 “Amazon To Book $2 Billion In M-Commerce This Year,” Steve Smith, Media Post, September 29, 2011. Econsultancy, September 3, 2012. KEY FINDINGS Red Light, Green Light KEY FINDINGS Movin’ On Up While Facebook’s stock price may be emerged as a notable source of both to retailers. Last year, 14.5 percent of around mobile. Seventy-eight percent down, the platform is not necessarily upstream and downstream traffic. Amazon.com’s 22.3 million hits7 Smartphone penetration is almost of brands in the 2012 index have a their site on the tablet and likely losing importance. Once again, on Black Friday came from social 40 percent,9 and tablet adoption mobile-optimized site, up from a don’t want to obfuscate sales by Facebook is a key traffic driver of Analysis of traffic to and from sites, up from 9 percent in 2010 8— skyrocketed from zero to 25 percent quarter two years ago. having an app in the equation. users to retailer sites, representing Amazon.com and other third party a powerful force. Overall traffic to in only two years.10 Sixty-nine percent Nine brands removed their 2011 10 percent of upstream traffic. e-commerce sites reveals higher retailers fell 7.1 percent year over year Brands are building apps for iOS and of mobile users have used their device iPad applications: Abercrombie & Conversely, Twitter does not represent rates of downstream traffic than while Amazon.com’s already massive Android, however iPad app adoption to get product information, and 82 Fitch, Banana Republic, Bath & Body any reportable upstream traffic, upstream, reinforcing the threat of traffic rose 13 percent, suggesting dropped from 39 percent in 2011 to percent of smartphone owners use Works, bebe, Bergdorf Goodman, suggesting the medium is not a major the e-tailer. Facebook and Amazon it feasts on the traffic cookie while 29 percent this year. Many retailers devices to help with shopping in- Bluefly, Diesel, Tiffany & Co., e-commerce driver. Pinterest has together is an even bigger challenge everyone else fights over increasingly demonstrate higher conversion from store.11 All signs point to a future built & Williams-Sonoma. small crumbs. Referral and Destination Sites for Specialty Retail Sites Mobile Site Features Upstream and Downstream Traffic to and from the Following Sources % of Mobile Sites with the Following Features July 2012 July 2012, n=59 % of Upstream Traffic % of Downstream Traffic 44% 5% 41% 25% Average % of traffic to Average % of traffic from brand sites from the brand sites forwarding to following sources: the following destinations: 56% 59% 75% 95% 53% 49% Google Google Product Social Mobile Site Customer Service M-Commerce Sharing Search 10% 14% Facebook Facebook Mobile Application Platform Adoption Rates 2010 –2012 3% 3% 2010 (n=81) 2011 (n=64) 2012 (n=76) 60 Competitors Competitors 51% 50 2% BRAND SITE 3% 45% Percent of Retailers 39% 40 Amazon Amazon 28% 29% 30 1.6% 2% 20 21% Pinterest Pinterest 10 6% 3% 6% 0.8% 2% 0 Other E-commerce Other E-commerce 0% 0.05% iPhone iPad Android Twitter Twitter 9 “Smartphone penetration in the U.S. from 2010 to 2016,” Statista, 2012. 10 “Tablet Shopping Growing, but Retailers Must Keep Up,” eMarketer, June 15, 2012. Download the full ExCERpT of the 7 “Retail traffic on Black Friday up 2%,” Experian Hitwise Blog, November 26, 2011. 11 “The Retailers Definitive Guide to m-Commerce Success,” 8 “Social media helps big retailers drive traffic during the holidays,” internet Retailer, January 30, 2012. Cheryl Sansonetti, 5th Finger, May 2012. 2012 Digital IQ INDEx®: Specialty Retail Study http://www.l2thinktank.com/research/specialty-retail-2012/ OvERvIEW OF TRENDS We call this “experience-led business transformation.” Brands are increasingly defined by the experience—by the sum of the interactions and value exchanged. Today, experience is the brand. As we collected the materials for this section of the report, we identified four major trends that define our space today and shape the future. TRENDS The four trends are areas where experience is being re-conceptualized. From the consumer’s embrace of new devices and real-time control to the increasing global nature of marketing, these trends will be driving marketing priorities over the next three to five years. TREND 1: TREND 3: Real-Time Control: New Continuous Experiences: How Companies Consumer-Oriented Devices and Data Are Blurring the Online and Offline World As the world of experience evolves, one of the The third trend in the evolution of great most critical trends is consumer demand for experiences is the blurring of the online and real-time control of their data, their lives and offline worlds into one continuous spectrum. the world around them. Great brands are increasingly using all their While not always met, this expectation, and assets to reach their customers in the right how brands are striving to meet it, is driving time, place and with the right tools to shape FOUR TRENDS SHAPING MARKETING PRIORITIES some of the most interesting developments in marketing today. the purchase decision. A new conception of the story, the role of The future of television, the growth of brand, new strategies for content and new We are witnessing fundamental changes at the intersection of smartphones, the rise of alternative methods retail models are all topics our authors of payment and the development of new ways chose to address in this section. to deliver content: Our authors have explored technology, business and customer experience. The collective each of these ideas in detail. TREND 4: Globalization: The Global Marketer impact of “disruptive technologies” on the human experience TREND 2: and the Rise of the Global Consumer predicting Desire: Building The final trend in the future of experience the Infrastructure to Anticipate is the increasing globalization of the is causing chaos for companies. Old business models are Consumer Needs in Real Time marketing environment. The second major trend we’re seeing is that companies are predicting—and even shaping— No longer are marketing assets, brands and failing. Communication and commerce are converging—in desire among their target customers. messages restricted within a single country’s borders. Information travels farther and faster the home, on-the-go and at the store. A combination of new technology, customer changes today than in the past. and business viability is making this possible. To adapt to this world, marketers must Written by Hilding Anderson, Sr. Manager Research + Insights, Washington, DC, The rise of data warehouses and analytics, the rethink how they operate. Few regions Todd Cherkasky, VP Research + Insights, Chicago future of mobile data, real-time analysis, the represent the magnitude of the challenge & Donald Chestnut, Chief Experience Officer, New York use of social networks to monitor and influence —and the opportunity—as China. desirability, and ways banks can rebuild trust were all topics our authors chose to explore in In this section, we posit a new CMO mindset this category. necessary to operate in the new marketing environment. In addition, our authors focused on ecommerce and the luxury consumer in Southeast Asia. Future of TV TREND 29 1 Customer Experience REAl-TIME Is on the Move 35 CONTROl Mobile Payments: The Future of Money 39 OE The Economy of One: The Consumer as Producer, Influencer As the world of experience evolves, one of the most critical and Purchaser 45 trends is consumer demand for real-time control of their OE data, their lives and the world around them. OE Invisible Brand How Sensors Are While not always met, this expectation, and how brands are Interfaces Connecting the World 52 striving to meet it, is driving some of the most interesting and the Implications for developments in marketing today. Experience Design The future of television, the growth of smartphones, the rise of alternative methods of payment and the development of 47 OE Is There a Terminal Velocity for new ways to deliver content: Our authors have explored each Youth and Digital? 56 OE of these ideas in detail. Responsive Design 101: Optimizing for Multiple Screens 61 TREND 1 REAl-TIME CONTROl FUTURE OF TV American teenagers spend an Providing content across screens is average of 100 hours per month the new expectation—and consumers watching TV—and that doesn’t won’t have it any other way. Take include computers, phones or Netflix. In June of 2011, the company tablets—proving there is something announced price hikes on existing Written by David Hewitt, still special about the in-home TV subscriptions, followed by plans to Vice President, Mobile and Multi-Channel Experiences, Atlanta experience. But that archetype is split their streaming and mail order & Lucy Devassy, Sr. Manager, Global Shared Services, Atlanta about to undergo a massive change. services into separate brands just two months later. The customer backlash In the last few years, there has been was instantaneous and Netflix was a substantial wave of new products, forced to backtrack. Today streaming startups and ventures all circling and mail order still remain under the the TV ecosystem. Changes in social Netflix brand. TV, cable companies and satellite companies are a direct reflection of the crossover between the traditional big screen and the growing integration of We know that people long to watch and smart devices. However, the majority share TV experiences on their schedule of innovation has been relegated to individual silos with limited success, and in a social way. even though the technology is here and consumers are showing record engagement with emerging devices. We know that people long to watch So why is the living room taking so and share TV experiences on their ESPN media found that long to evolve? Let’s take a look at schedule and in a social way. And it’s the average consumer spent some underlying dynamics of both the clear that the one-to-one, on-demand, just 7 hours a week watching industry and consumer behavior and online environment will continue to TV, but when a second screen their implications. take over. was used, time spent rose to ThE TElEVisiOn is sET TO chAngE Evolving consumption 13 hours. With a third, time habits and industry Trends spent rose to 24 hours—just The new, in-control consumer Expect to see other big changes—very by bringing more content Consumer behavior has already soon. Some shifts that are affecting touchpoints to the experience. changed to a channel-agnostic, consumer consumption habits are: anywhere, anytime multi-channel mentality. No longer are consumers Product and purchasing lifecycles only watching programs on the TV, Prices for displays are down and tweeting on their iPhones or checking quality of content is up, hence scores on an iPad. The second screen consumers are replacing their TV sets needs to help blur the lines instead more often. This churn will allow the of relegating specific tasks to siloed latest technology to enter the market touchpoints. at a faster rate and opens up next generation experiences to a larger consumer base. The newer sets also 30 TREND 1 REAl-TIME CONTROl boast a higher resolution, giving in an improved experience. The and take polls. Critical to advertisers, Those investing in second screen way for a wider variety of content mobile application paradigm has the fanfare buzz and bragging that include TV networks, cable companies, and applications. already made its way onto the set via surrounds the content often hits social media players and media Samsung, Xbox and Apple TV. Even before and after the event; what brand publishers, just to name a few. how can brands and connected devices with mixed results, it’s clear that wouldn’t want to extend their name Web 2.0 giants like Google, cable industry players best In the past, the set-top box was king the simplicity and focus of the small in those conversations? And the company behemoths like Comcast prepare for second and “the web” was confined to a screen’s user interface is influencing second a fan posts a tweet about and electronics manufacturers from desktop PC or laptop. That notion is how big screen content gets traversed. their favorite show character, that Samsung to Sony are all making screen experiences? disappearing as broadband penetration Perhaps the greatest innovation device will ping the cloud and let the strides to bring interactive to digital. Ask yourself: has reached maturity and as emerging potential is already brewing on advertiser and producer know who devices are highlighting the power of a leading smartphones. When Apple or what type of consumer is watching And the more screens consumers • Does the experience drive “connected everything.” Even gaming transformed the phone into an intuitive their sponsored content. use, the more time they spend with participation? What we do often consoles are standing in as set-top communication device and handheld the content. According to Patrick stays with us longer than what boxes for the convenient pairing of computer, they solved more problems Format changes Stiegman of ESPN, 85 million we see. The most impactful on-demand and entertainment. In through detection and fuzzy logic (e.g., Bite-sized content continues to Americans consume TV and the web experiences will bring something addition, smartphones and tablets the proximity sensor that turns off the dominate the user-generated content simultaneously. ESPN media found more than passive content and continue to evolve as remotes, phone’s keyboard once next to an ear). universe. Those libraries contain both that the average consumer spent leave the consumer with a reason schedulers and social input Samsung has built upon this human premium and standard broadcast just 7 hours a week watching TV, but to share and come back. devices, while an ecosystem of pattern-based logic. Their new Galaxy content by way of streaming boxes when a second screen was used, time passive sensors will better predict III phone’s Direct Call feature allows a and services like Apple TV and smart spent rose to 13 hours. With a third, • Does the second screen our viewing desires and shape an user to initiate a call by just holding the TV sets. Amazon and Google are time spent rose to 24 hours—just by experience sync? While there are advertiser’s media spend. phone up to his ear and the Smart Stay investing in production capabilities bringing more content touchpoints to many hurdles, those that provide feature leverages its camera to ensure to drive longer-form engagement the experience. a differentiated and connected Measurement that the screen won’t turn off when media. Along with those on-demand real-time experience have a Smartphones can identify us by a being viewed. and streaming services, linear The traditional publisher is also big advantage. phone number, check-in or log-in. programming will continue to diminish going after the second screen to On a PC, visits are cookied and often Now put this construct in the living and primetime events will get a boost. expand media dollars and consumer • Does the experience gracefully bookmarked. At the end of the day, room. Instead of miniature predictive As engagement options continue engagement. Traditional players like adapt? The experience should be most digital channels know who is moments of a smartphone user to build, trusted, curated content The New York Times are starting to ready for the Android tablet market interacting with what content and interface, we now have a collection of from peers and providers will play position their staff writers to pick up and be optimized for leading brand. This is all in stark contrast input devices, sensors and displays a more important role. In addition, where passive TV is trailing off. During smartphone platforms. to the living room’s methods of that can work together. TVs could the mobile app store phenomenon is the last Oscars, the staff writers crafted measurement. Expect brands to switch to power-saving modes when a shaping a more purposeful mentality complementary stories on tablets • Does the experience support continue to look for ROI and relevant person leaves the room or falls asleep. to proactively dive directly into that shared supplemental information an ad model that brands can targeting with predictable outcomes. When a baby cries, the TV could let specialized content and features. where the program left off. In another participate in? Brands realize the broadcast network know to serve example, The Huffington Post expanded there is power in messaging Emerging interfaces diaper ads instead of dating ads. ThE EVOluTiOn OF ThE ExPEriEncE from being a news site to a streaming across multiple touchpoints, so ad Traditional IPTV access points are TV network. Soon, many content platforms and media buys need to failing the consumer against a bevy social media second screen Takes the stage producers and content-rich brands will support a connected, consistent of content options and consumer Social interaction and the viewing The businesses and brands that become networks themselves in an brand experience. behaviors. Clunky remote controls experience will be inseparable. Each best figure out how to dominate the attempt to capture the magic only the and program guides are not keeping user can decide how he or she will second screen experience will be big screen can deliver. up with our 130+ TV channels or on- socialize, and with whom. It will also the ones who capture the greater demand content. Voice and gesture offer the ability to share content around consumer mindshare. Second screen is perhaps most tools will replace the remote, resulting favorite shows, make predictions effective with real-time content like 31 32 TREND 1 REAl-TIME CONTROl sports or awards shows; there was quarterback who syncs with his team child for this challenge as so many of its are vulnerable to nascent customer a huge spike in second screen use and coordinates with coaches to users are migrating to mobile without a experiences. The future of TV will during the 2012 Olympic Games. NBC execute the best plays on field. complementary ad experience. reinvigorate the relationship between content in the cloud showed more than 3,600 hours of This new cloud-centered world will not So why talk about TV and mobile brands and consumers into an à la carte Olympic coverage—a stark contrast to model that caters to a viewer’s taste the 2008 Olympic Games when NBC only ensure the right content reaches advertising together? Each has In the past, we watched snail mail the right device at the right time and something to offer the other, especially was hesitant to live stream anything. turn into email. We all had one place, but will also provide the right as 41% of smartphone and tablet This gave viewers in the U.S. a more computer and email account. Now enjoyable viewing experience with analytics to allow brands to spend their owners are using their devices while 41% of smartphone and tablet owners we expect to read our email wherever and whenever. Traditional TV is on a front row seat through at least media dollars in an effective, more profitable way. watching TV. Through fingerprinting technologies, mobile can enhance are using their devices while watching TV. one channel. the same path—it has to be delivered TV’s measurement capabilities while to every device while being optimized Another example is the IntoNow app unDErlying FAcTOrs some of TV’s premium media dollars for device form factors and consumer from Yahoo!, which identifies what can start to bleed into mobile screens The TV Advertising Model instead of programming bundles that preferences. a consumer is watching, and then as advertisers look to drive more The advertising model for both TV substitute quantity for quality. Brands looks beyond that content, giving participation and extend before and will continue to increase their power and While Google has largely failed with her related information she may find and mobile is broken. While TV is well after the moment. Samsung’s newest influence while cable companies and conclusion Google TV thus far, it understands monetized, it isn’t well measured. interesting as well. Yahoo! has also sets have cameras built in and soon telcos struggle to maintain power. the importance of the cloud whereby Conversely, consumers are spending The future of TV remains difficult announced responsive design capability advertisers will be able to target based multiple channels, social tools, user significant time on mobile, but to cast. But the changing with upcoming advertising products, on age, sex and number of people in considerations and challenges accounts and viewing habits get advertisers haven’t figured out how to consumer, shifting technology ensuring optimization across multiple the room—all capabilities of today’s for Brand Advertisers aggregated into one universe—to best meet them there. This conundrum and the breakdown of traditional screens and form factors. facial recognition technology. Seem With all the promise the future of TV the benefit of both the consumer is reflective of an advertising model business models are all resulting invasive? Don’t forget the millions of has to offer, there are still some bugs. and advertiser. The shift From smart to Dumb that would need to work on a small in an environment where existing Facebook users who publically post Besides the fight for control, multiple As devices and screens become more screen for a time-conscious, place- players are threatened and their most personal information. screens increase the touchpoints that Microsoft, Apple and Amazon are intelligent, the cloud will mature— sensitive and task-driven consumer. new opportunities exist. The have to be managed. And, fragmentation all making heavy investments and unifying everything from storage to Quite simply, an effective model has not The Fight for control underlying themes of connectivity, between devices, platforms and realizing that the less the content streaming to personalization. And once yet emerged; Facebook is the poster Telcos and cable companies— participation, personalization and networks, as well as a broken model is tied to any one device, the more the cloud crosses a threshold among others—are vying to own for media planning, buying and prediction sit below many of the scalable it becomes. In addition, the of intelligence and ubiquity, TV the viewer experience as the analytics are adding to the complexity. emerging trends we see and are more the consumer personalizes the it will put pressure back on 42.5% business model changes. bound to change TV forever. 42.2% experience, the more it pays off and devices to become dumb again. For brands considering a new the less likely they are to move to a Internet Today, cable companies have more experience for multiple screens, competing provider. Why is this? When multiple 25.9% leverage over content companies there are additional risks. For one, 21.9% devices try too hard to than telcos because many own cable is the experience complementary, Radio “accomplish everything” for the stations (e.g., Comcast owns NBC) and redundant or cannibalizing? Also, how 14.6% consumer, the bigger benefits share of Average Time have been in the entertainment space 10.9% does a multitude of available second get lost through the limited spent Per Day With select decades longer. But telcos have more Mobile screen experiences (one from the perspective of any one device. Media by u.s. Adults vs. u.s. sophisticated IPTV and opportunities 10.1% cable company, network provider and However, when an orchestrated 0.9% Ad spending share, 2011 to dovetail with mobile devices. With content publisher) get reconciled for the set of devices feed a centralized Newspapers % of total emerging technology companies and consumer? How do broadcast rights brain, the devices can work 4.0% Time spent share complementary dispositions, don’t be apply to second screen experiences? 15.0% together to feed inputs and Ad spending share surprised to see more partnerships as What is the optimal staffing required to Magazines deliver on commands— players realize the power of combined support new experiences? And, when it 2.8% not much different than a 0.7% strength—even the love–hate kind. comes to measuring ROI, is it worth the Both cable companies and telcos investment? 33 34 TREND 1 REAl-TIME CONTROl Just a few years ago, the idea of While phone and text still dominate mobile taking the lead in customer usage, interactive usage has grown experience would have seemed significantly in two major areas of ridiculous. mobile—Internet and native apps. But in 2011, sales of smartphones People now spend on average 32 and tablets outpaced those of PCs for minutes a day using mobile Internet the first time ever; in the final quarter services, and more than 18 billion leading up to Christmas, Apple sold apps have been downloaded from the more iPads than any single computer iTunes App Store alone. Customers manufacturer sold PCs. Mobile is are also increasingly comfortable now significantly more important to transacting on mobile, which has led most brands, and has become an to impressive revenue figures. Online integral part of their multi-channel retailer ASOS brings in more than experiences. £1 million a month through mobile transactions, Amazon brought in Within three years, mobile web usage $1 billion from 2009 to 2010 and will outstrip desktop Internet use, eBay sold $2 billion worth of and brands must adapt accordingly. products last year. The brand is the experience and the experience is the brand. In the near future, mobile will be pivotal to the quality of that experience. Brands will have to create great customer To understand how far mobile can go, experiences, and with this comes it is important to understand how far challenges and questions that must be addressed. it has come. is Mobile Working? To understand how far mobile can go, it is important to understand how far The influence of mobile reaches far it has come. Mobile ownership is now beyond just direct sales. Brands are nearly ubiquitous. The phenomenal using mobile to build awareness uptake of tablets and smartphones through advertising and create is driving huge change, and the need affinity through customer care and CUsTOMER for change, in the ways brands meet loyalty programmes, and consumers consumers. are using mobile to research products both at home and in-store. Because ExpERIENCE Until recently, we were at a stage mobile devices are carried with the where technology was producing consumer constantly, they become new products and consumers were powerful tools for creating multi- playing catch-up. We’ve tipped over channel brand ecosystems that Is on the Move into a space where consumers are can deliver real value. familiar with the technology and now have a greater expectation than ever The enablement and freedom of what is, and should be, possible. of connection that tablets and smart- Written by Nigel Vaz, SVP and Managing Director, London 36 TREND 1 REAl-TIME CONTROl phones have afforded is changing the UK jumped 74 percent between Mobile behaviours should also be require access to back-end systems our expectations. Whether in a store, 2010 and 2011. Worldwide tablet sales considered. This includes filling such as product catalogues, airport or hotel, people are more in 2010 exceeded 17 million units, spare time, performing small jobs ecommerce systems and account used to having mobilised members of rising to a forecast 60 million-plus for that are ideally done on-the-go and information. Too often, companies The Takeaway staff engage with them to complete a 2011 and 99 million in 2012. offering a third screen at home. Then, do not consider their back-end transaction without having to queue the real value comes from detailed architecture sufficiently. As a result, at a fixed location. The ways in which Availability of cheap, fast data. The understanding of your audience and mobile experiences that rely on good people expect to be able to transact availability of cheap data bundles, the unveiling key insights. access to back-end systems are often online, without journeys being rollout of 3G across the UK and the delayed or never come to life at all. broken, on mobile or tablet devices, launch of LTE/4G in 2014 will mean craft the right experience. The range is far greater. We can see evidence greater mobile broadband speeds of front-end technology is broad and Think strategically. When creating of that in the 20 percent of online and even more mobile growth. is changing by the day. They include consistently great mobile experiences sales over Christmas that were Awareness of mobile services. Many native apps, hybrid apps, NFC, 3D and that deliver customer and business mobile-enabled. mobile solutions fall at the first good old SMS, to name a few. From value, strategy matters. The time for hurdle because firms fail to pay the business point of view, a deep one-off mobile experiments has On the other hand, some mobile understanding of the technology is now passed. services and experiences are far proper attention to launching their services. One example? There are not necessary. What is important is from perfect: 90 percent of apps are choosing the right technology. These The first step is to have a clearly over 500,000 apps in the Apple App could Mobile lead deleted after 30 days and 38 percent decisions have a direct impact on the defined mobile strategy in place that Store alone. To compete with the your customer Experience? of people are not satisfied with their consumer. For example, typing in a includes a roadmap. This needs to favourite brand’s app. The mobile web saturation, smart brands are looking at how to best tag apps, categorise URL is very different than downloading be supported by a conviction that The simple answer is yes. And even does not fare much better: 25 percent an app. The end solution may warrants the growing investment and drive participation. if it does not lead, it will without of people would not revisit a retailer’s accomplish the same goals, however required. Many analysts will suggest doubt play a critical role because mobile site after a bad experience and Better technology. In the past few the consumer expectations can be that there is no such thing as a “mobile mobile is the primary channel to 75 percent of the UK top 100 retailers years, a range of improved technologies wildly different. strategy”—only a multi-channel create and fulfill demand in real do not have mobile-optimised versions such as cloud-enabled, NFC-enabled strategy. While this is true, mobile time. There are a a series of of their website, even though people and location-based services have see what the customer doesn’t. often carries the load for innovation mountains to climb, but spend three-and-a-half times longer started to deliver more complex Richer mobile experiences frequently and business transformation. consumers are demanding it and look at three-and-a-half times experiences. Over the next few years, and the opportunities are huge, as many pages on optimised sites, technology will continue to improve. so the time to act in a serious compared with non-optimised. can you Meet the challenges? fashion is now. Will Mobile continue its rapid Ascent? Just because the screen is smaller Originally published in Figaro Digital The demand for mobile services doesn’t mean the obstacles are any and their commercial importance less. There are key challenges to will only increase—and quickly. keep in mind. SapientNitro has identified four areas that have influenced mobile growth, Match your offering with your and will continue to do so. audience. Understanding your audience is the first step. This rise of the smartphone and tablet. is particularly important in mobile Mobile has been propelled by the as audiences are fragmented by explosive sales of smartphones and form factor and usage, which are tablets that give people a far richer also heavily influenced by culture experience. Sales of smartphones in and geography. 37 TREND 1 REAl-TIME CONTROl There’s a major transformation implications of mPayment that will happening between people and reflect regional needs. Below are 10 their relationships to their money, implications to be aware of. a transformation enabled by the arrival of mobile payments 1. mPayment solutions will (mPayments). The magnitude of this fundamentally transform consumer change—and the disruption—will relationships with money. The notion greatly impact consumers, banks, of making a deposit at a branch bank retailers, merchants and wireless used to give people a sense that their carriers, among others, and will be money was being held in a physical felt across the globe. The mPayment place and a specific destination. landscape is rapidly evolving, with But with the advent of mPayments many different players, technologies and mobile wallets, as well as and alliances all fighting to assert their the emergence of unconventional relevance and control between the banks like PayPal and Amazon, the consumer and the future of money. perception of money, what it is and where it lives has changed from From entertainment and electronics money at a physical location to money to train tickets and travel services, that can live anywhere, anytime, there are virtually no limits to what and is received, delivered and consumers are using their phones to purchase. In fact, in Japan, it’s already a way of life: 7.6 million consumers have made a mobile purchase in a Today, there are approximately 30 million retail or convenience store, 3.2 million have made a purchase from a vending NFC-enabled phones. By 2016, this number is machine, 2.7 million have paid for expected to reach a staggering 700 million.2 public transport, 2.6 million have made a purchase in a grocery store and 1.5 million have paid a restaurant bill—all using their mobile phone transacted through multiple venues, instead of cash, card or check. And mechanisms and devices. 47 million Japanese have adopted tap-and-go phones in the last three There will be a paradigm shift in how years. East Asians will continue to money works, and how it’s perceived MOBIlE pAYMENTs: lead this market.1 and used, and that will lead to the end of physical currency as we know it. It’s becoming clear that mPayments the FUtURe oF MoneY will radically change the way Since the 1930s, the U.S. began a consumers spend. And in this new worldwide effort to end tying currency age of mPayments, retailers, financial to gold. At that point in time, the institutions, technology companies notion of money became abstract. and wireless providers will have the This shift continues today with the Written by Perry Chan, Creative Director, Experience Innovation, New York power to deliver it. Across the globe use of debit cards, credit cards, ATMs we will see different applications and and pre-paid mPayment services 1 IDtecheX (R&M), Feb 2011 2 Berg Insight (BGR) - http://www.bgr.com/2012/03/26/shipments-of-nfc-enabled-handsets-reached-30-million-units-in-2011/ 40 TREND 1 REAl-TIME CONTROl that let consumers access money from our mobile devices, will this home. As a result, mPayments element that satisfies a desire for anytime, anywhere. Peoples’ mean the end of credit cards? How will challenge, and redefine, long greater convenience and control. perception of money is directly will this impact card service brands? standing assumptions of how stores Additionally, it will give consumers connected to trust—and trust is How will they redefine themselves are designed with emphasis on unprecedented control of their fundamental to peoples’ relationships and their connection to consumers? product interaction. They will also finances, in relationship to their with money and with whom they Payment terms will be completely drive retailers to learn new ways purchases, through real-time choose to do business with. redefined as financial institutions to connect brands with consumers and integrated personal financial will have the power to personalize through connected experiences like management. Imagine a customer 2. The meaning of credit cards, individual terms for every single geo-fencing, mobile wayfinding, mobile purchasing a television set, and upon and the way they’re used, will be purchase, for every single customer, checkout, augmented reality, endless finalizing their payment method, redefined. As the model of credit in real time. And with the absence of aisle shopping and virtual try-on. sees a notification that says, “You’ve extension, acquisition and receiving credit cards, credit card marketing exceeded your vacation budget by changes, so does the role of credit will have to evolve. Breakthrough innovations in $400. You may want to consider card services. Consumers, in general, mPayment services (and the digital applying $200 towards loyalty points are sometimes ignorant on how to 3. The customer’s relationship to wallet) will exploit the unique and $200 towards Facebook Credits.” best use and manage credit. Credit money and commerce will move advantages of the retail store: Brands will also be able to individually cards, for many consumers, have just from singular moments to an become another form of payment. “always-on” relationship. Paying for • Environments that inspire, adapt, mPayments and smartphones have an item used to be simple: Add an curate and evolve in real time, the ability to educate customers on item to your cart and pay at checkout. • Associates supported with tablet “There is nothing more imaginary than a monetary method of payment choices at the It used be clear: The role of a store and mobile-based collaborative tools, point-of-sale to select the right way was to put product in the hands of the • Intuitive account information and system. The idea that we solemnly hand around to pay. consumer. It used to be easy: Drive expert product information, printed slips of paper in exchange for food and store traffic, stock the shelves and • Products with interactively enhanced For banks, mPayments and accept payment. merchandising, augmented water shows just how trusting and fond of patterned smartphones provide the ability to packaging and universal SKU and behavior we human beings are. So why not take influence payment method choice But digital experiences have inventory access, and at the point-of-sale versus trying to created a new age of connected • Customers who are seamlessly the next step? Of course we’ll move to even more create brand recognition, loyalty, consumerism. When does “shopping” connected with virtual and in-store data that can be mashed, abstract representations of value.” affinity, then “hope and pray” at happen? When does “purchasing” the moment of truth. Retailers and happen? Consumers are buying customized and shared through –Susan Crawford, Harvard Professor, from the Pew Report on the Future of Money, April 17, 2012 banks may have to compete for products online but picking them up personal, wired devices—while still customers’ payment options for at the store. Or purchasing an item shopping in the store. every individual purchase. A smart at a store but paying for it two days delivery mechanism with a screen at later with multiple payment methods, 5. The arrival of mPayments will deliver promotions, discounts and the point-of-sale changes the game and with unconventional modes like enable a new generation of real- incentives customized and contextual dramatically for both banks and PayPal credit or Bitcoin, or with time, insight-driven shopping and to each individual customer. customers. micro-lending or “layaway plans.” financial tools. mPayments will end the days of the uninformed and 6. There are a variety of hurdles The emergence of credit card models 4. mPayments will cause a passive shopper before, during and for mPayment success, with user will empower businesses and fundamental change in the after the point-of-sale, giving way adoption being paramount. The consumers more than ever before. retail store experience. Today to the “empowered” consumer. And ability to pay by phone will not With companies like Stripe and and tomorrow, they will enable a fundamental shift in consumer guarantee success. Overcoming Square leapfrogging credit cards by the “checkout” process to occur interaction will occur where each user adoption will require better making one-click payment available anywhere, whether in-aisle or at offering will be an experiential inter-operability of systems and 41 42 TREND 1 REAl-TIME CONTROl platforms, privacy and security, this emerging opportunity. Based According to a source from the Pew using the service and made more and government regulations. More on some formidable challenges, Report on the Future of Money on than 405 billion Kenyan shillings over, there are approximately 2.5 the mobile payment market is April 17, 2012, “The consumer cannot worth of person-to-person transfers billion un-banked adults globally, likely to evolve along four different drive the move to NFC payments. as of March 2010.3 It remains to 17 million alone in the U.S. Also, trajectories: The cost to build the infrastructure to be seen how the approximately 17 not everyone has a mobile phone support NFC is too large. Additionally, million un-banked adults in the U.S. or a credit card. Other concerns Wait and see: Experimenting with the security issues related to passing will be addressed and served.4 include the potential susceptibility of limited services in specific markets. data using NFC outweigh the benefit NFC (near field communication) to Fly solo: A visionary player with of adopting this new technology. If With opportunities abound, significant hackers and market fragmentation. significant market power makes NFC was able to be used by 85% of hurdles such as trust, security, Lastly, mPayments must be as—if not the required investment. the population, and could displace a ingrained behaviors, addressing more—convenient and secure than Joint venture: Various businesses more costly form of payment it may predator targeting and lending, and using cash and credit cards. come together to provide payment have a chance to succeed, but the creating great experience design will solutions, share risks and rewards reality is that cash will always be in be critical to success. And what about 7. mPayments will enable a whole and develop harmonized and the economy, and bank-issued cards the cash customers? The pre-payers? new class of merchants and defined business models. (debit and credit) provide too much The non-smartphone users? How will services. From a fisherwoman in Open federation: Players (financial profit from them to be displaced.” they be accounted for? Kenya to the kid selling lemonade services, carriers, merchants, from his lemonade stand to the handset makers, chip makers, 10. mPayments will open up access And without checkout counters, services industry, mPayments will application providers, trusted service to money transactions for the under- cashiers or tellers, what happens make it possible for more people to providers and others) come together served—those without bank accounts, to actual store and bank spaces? participate in the economy-of-one, to form one standardized, altruistic access to branches, smartphones With no need for cash, will ATMs empowered by increased access to platform to provide a portfolio of and financial institutions. Already, even exist? And what about your content, data and services anytime, mobile payment services. payment services are underway for the competitors? You may discover they anywhere and on their own terms. un-banked and under-served in Africa, are whom you least expect and where It’s likely that no one player will Afghanistan, Cambodia, the Middle you least expect them. The days of mass pricing, terms and emerge as the sole owner of the East and other regions. Services like M-Pesa, launched in 2007 in Kenya, Are you ready for the revolution? 3 2011 KPMG Mobile Payments outlook incentives are numbered. Increasingly, digital payment ecosystem. Instead, 4 FDIC national survey of Un-banked and payment terms and services will be there will be several players, some reports having 9.5 million subscribers Under-banked households, December 2009 driven and dictated by independent emerging from joint ventures, merchants and individuals, either technology companies, merchants, creating, delivering or demanding card services, remittance companies, personalized messaging, pricing and traditional FS, government, carriers other incentives. and others. 8. The mPayment landscape is 9. nFc technology will fuel diverse, and success may come mPayment growth, but mPayment from a wide variety of players. For success is not dependent on it. the moment, the players leading the mPayment adoption is not about any charge are from the supply side. specific technology. It’s about the Companies like Google, V.me from experience of frictionless, cloud- and Visa and PayPal, as well as joint consumer-empowered commerce, in ventures like ISIS, and the Merchant ways that make it more convenient, Customer Exchange (MCX), are all secure and productive than cash and trying to vie for the lion’s share of credit cards are today. 43 NE iV E TREND ThE ECONOMY OF ONE: LI us NT ON xcl TE E ON 1 C Introducing the Economy of One the ConsUMeR as PRoDUCeR, InFlUenCeR anD PURChaseR characteristics of the Economy of One: Written by Dan Israel, Strategy Lead, Mobile Center of Excellence, Atlanta • It refers to the consumer who is empowered as a producer, influencer and a purchaser. & Perry Chan, Creative Director, Experience Innovation, New York • Customers operate in a multi-touchpoint world, often beginning with the smartphone. The consumer has a greater impact on a in the past, businesses centrally controlled the platforms. These result in, we believe, a new type of brand than just the initial action of buying a product or service. brand message and the customer experience. economy: The Economy of One. This new economy • Never before have consumers been able to generate a “network effect” as they can today - now, consumers can reach a huge But a transformation is now taking place in the operates by very different rules — an increasingly active, audience with lightening-like speed and impact brands, either positively or negatively. marketplace driven by four major trends: transparency, enabled consumer, and a higher level of expectation in • Consumer behavior has shifted to “bite-sized” engagements on multiple touchpoints. These touchpoints often become the synchronization, optimization and the rise of digital the role of brands and the tools they provide. primary mechanism of interaction in the long-term relationship with the brand.. cOnTriBuTE DiscOVEr let me contribute more than just reviews Radical Transparency of Data Real-time Synchronization Responsive Optimization Digital Make my life easier, better and simpler and comments Platforms • Anticipate what I want • Let me analyze, organize and manipulate Radical • Provide tools to let other people discover my content Real-time Responsive Digital information about me, your brand, your Transparency product, your service and more • Enable me to (re)combine existing products Synchronization Optimization Platforms of Data • Help me understand who is my most • Let me share my content to accelerate discovery important customer cOnsiDEr shArE shape the experience around me, not you Enhance our networks together The • Acknowledge and act on the feedback of Trend 1: Trend 2: Trend 3: Trend 4: • Make me look smart and make Economy me and my network me look relevant to my networks • Let me influence those considering my products radical Transparency of Data real-time synchronization responsive Optimization Digital Platforms • Make me feel included of One • Deliver a relevant experience and information at The ability for consumers Consumer behavior has Along with real-time Digital platforms are customer the right time in the right context to discover, combine changed. Customers synchronization comes an everywhere. And with ExTEnD Journey • Empower associates so they can better assist me and recombine data with now conduct “bite-sized” nurture our relationship beyond expectation for data to be social tools, analytics, low selling to me PurchAsE or without the brand’s engagements that start on rendered appropriately on cost and a high degree • Let me engage on my terms Offer me everything i am entitled to—the best consent has resulted in one touchpoint, continue any and every touchpoint of scalability, these prices, terms and points transparent access to on another and may end • Let me pick up the experience where where interaction platforms now drive new I left off, be it on a PC, mobile device, • Make it easy for me to buy, re-order and ship data. This is leading to somewhere else. Implicit occurs. But delivering consumer behavior— tablet or other emerging device • Integrate my financial life and be cognizant of my disruptive innovation across in this customer journey is this experience is quite competition through social • Enable me to communicate with my purchasing ability industries; entire value the need for all data to be challenging; thousands reputation, disruption best customers • Let me sell my stuff without massive fees chains are being revealed synchronized in real time. of content elements must and disintermediation • Help me connect with other influencers and expenses and rearranged. Brands that create cloud- be optimized for context, of traditional players, • Let me optimize the purchase through any device based solutions for these screen size and device type. and simple tools to find, for my customers Example: The music industry new customer journeys evaluate and sell products. struggles as consumers Example: Many media firms discover and share music will have an advantage over leverage responsive design Example: eBay’s storefront, socially and in “bite-sized,” others. techniques and built-in apps Etsy and Airbnb are all Implications single tracks. Transparency to deliver richer experiences Example: The Amazon leading this trend. Airbnb is • Consider rolling out products and services that provide • Consider partnering and amplifying the voices of is enabling bands and venues on different touchpoints. Kindle uses cloud-based particularly strong, based your best customers (e.g., Vail’s EpicMix) to set pricing and availability ABC News, The Wall Street on their passionate user new transparency and access between customers, data, allowing users to switch directly. Journal, The New York Times as well as to customers between mobile, tablet and base and quality of the user • Leverage responsive design or other techniques to PC platforms, while being and many others optimize experience. Their platform • Implement cloud-based storage and synchronization offer your products through all your customers’ updated in real time to the their tablet experiences to offers a breadth of services: a include video, while their personalized calendar, social of data across touchpoints preferred touchpoints current page or author highlights. smartphone experiences platform, massive scale and remain more text focused. full financial integration. • Reshape your product or services to accommodate “bite-sized” engagements through multiple touchpoints 45 46 NE iV LI us NT E TREND ON xcl TE E ON 1 REAl-TIME CONTROl C here’s the thing. We are context of a familiar device that they surrounded by sensors. become invisible, silently collecting information. Your car knows if the car behind it is too close and warns you. Your office There are a variety of sensors knows when you have walked in, available to designers: audio, heat, and turns on the lights. Your phone input button, light, motion, pressure, knows where you are and tells your proximity and image. friends. With the explosive sales of smartphones, we are all carrying sensors with us everyday. More importantly, we are acclimating ourselves to sharing personal With the explosive sales of smartphones, information with these devices. we are all carrying sensors with us everyday. We use geofencing to trigger iOS reminders that we get when we arrive at the office, or return home. We use geolocation to check in on Obviously, smartphones are the Foursquare, or geotagging to add most common consumer device: location data to a photo on Instagram. camera, accelerometer, GPS, As end users, we are at the center of proximity and magnetometer (digital sensors Are Proliferating our digital lives, and every day we are compass) are typical. The Android Motion Sensors attaching sensors to ourselves. platform supports three sensor Accelerometers categories. Motion sensors include Gravity Sensors For experience designers, accelerometers, gravity sensors, Gyroscopes incorporating sensors into a digital gyroscopes and rotational vector Rotational Vector Sensors product or online service can give sensors. Environmental sensors end users the ability to measure include barometers, photometers Environmental Sensors and analyze themselves in ways and thermometers. Position sensors Barometers that were previously impossible. include orientation sensors and Photometers The intersection of earlier trends magnetometers. The diversity of the Thermometers in data collection—ubiquitous Android ecosystem is mirrored in the Position Sensors computing, pervasive computing types of sensors it offers, which are Orientation Sensors and the quantified self—has given included on the phones. Most handset Magnetometers everyday consumers new, inexpensive devices and tablets include an ways of capturing information about accelerometer and a magnetometer, Medical Sensors themselves. We are increasingly while fewer devices (e.g., the Galaxy Blood Pressure wrapped in data—our own Nexus) include a barometer or, more hOw sENsORs ARE Glucose Measurement information about ourselves. rarely, an external thermometer. Heart Rate Monitors Scales sensors But increasingly, however, CONNECTINg ThE wORlD Worn on a belt or embedded non-smartphone sensors are Network Sensors inside a phone, compact, powerful, proliferating. Activity monitors like Bluetooth personal sensors are more and more the Fitbit, NikeFuel and Jawbone Up Wi-Fi commonplace. These sensors are so provide another source of personal Cellular anD the IMPlICatIons FoR eXPeRIenCe DesIGn small, or so deeply implanted in the Benno Schmidt, Manager of Experience Design, Washington, DC 48 TREND 1 REAl-TIME CONTROl data collection, often available biometric signals sent to a device The new opportunities also face healthcare and in other industries— through an API to third parties. at the front of the shirt. Breathing challenges, most notably the these sensors represent major Even more powerful, medical rate, heart rate, horsepower and regulation and legislation of new challenges in the storage, devices (frequently connected to g-force generated by an athlete are personally identifiable information manipulation and consumption smartphones) include blood pressure, all tracked. (PII) and personal medical of data. glucose measurement, heart rate information (PMI). While designing monitors and Bluetooth-enabled Another example, Riddell’s Head with sensors in HCXD may seem like Tracking time-series data scales that allow the collection of Impact Telemetry System (HITS) and a casual, even trivial, data collection HCXD teams are creating new sensitive and personal information at Sideline Response System (SRS) problem (e.g., number of steps interaction patterns for users to home. Most also permit the data to allow sideline monitoring of on-field climbed), this data can very quickly review, understand and share this be uploaded to the cloud. head impacts. Sensors built into the cross over into personal information data. Great design, information helmet automatically record impacts (e.g., weight loss, mood changes) dashboards and graphics, data feed and this data can be downloaded that must follow a very different set processing and validation become wirelessly to a computer or collected of, often legal, constraints. As these important elements in allowing in real time. designs begin to collect PII and PMI, big data to be easily interpreted by design teams must be aware of the consumers. implications legal and regulatory restrictions that These technologies raise major impact their work. Multiple vendors and ecosystems challenges for experience designers Carriers, device manufacturers and head impact telemetry was used by the nFl to and product designers as they A weight-loss coaching app that software developers all are factors in monitor head impacts during the 2011 season. attempt to take advantage of prompts the end user to add their the design opportunities, while name, age, height, weight and acknowledging the significant location, for instance, could be privacy implications. considered collecting PII. As the Major new healthcare applications for these weight loss app is enhanced and a feature to collect blood sugar levels sensors include tailored reminders for medications, Healthcare is leading the charge. Few industries have more experience with is added, the design team for this real-time appointment management and personal information, or have moved app is now responsible for meeting the requirements of HIPAA, the notification and prescription conflict resolution. so deeply into digital collection, as Bluetooth itself is actually adapting healthcare. The ubiquity of these Health Insurance Portability and to the needs of these new devices. sensors is a new opportunity for Accountability Act of 1996. If the app The Bluetooth 4.0 standard is healthcare experience design (HCXD) connects to a glucose meter, then choosing the best delivery platform gradually rolling out specifications to help patients and caregivers the design team may find themselves for your customers. Designers and for a new generation of health- collect information about themselves, subject to the recently announced product developers must decide monitoring wireless devices based or the people they care for, and then FDA oversight for mobile medical which smartphones or stand-alone on its low-energy capabilities. share it with clinical care teams. applications. devices to support, and need to understand the technical implications Even more interesting, this These applications, coming out of But the success of initiatives like of those choices. technology is being integrated directly a focus on user-centered design, the U.S. government’s Blue Button into our daily lives. Smart clothing, point to both opportunities and risks implementation show that patients cognitive overload with sensors knitted into the fabric, in device design using these new and caregivers want more control Designers must simplify. The more is already available; for example, UA sensors. over their personal data. data end users capture about E39, a compression shirt fitted with themselves, the greater the risk electronic sensors made by Under new Design challenges that they will be overwhelmed. Is the Armour, tracks the body motion and For experience designers—both in user’s connection to their data 49 50 TREND ON cl TE Ex ON 1 LI us NT C NE iV E clear and immediate? Can the end user see themselves in the data and all contribute to the narrative of the design. INVIsIBlE BRAND INTERFACEs how the collected data helps them with their needs and goals? Or are Task they overwhelmed to the point where Design solutions that target specific they simply abandon the process healthcare tasks must be ruthlessly of collecting data, like a digital simple and surprisingly pleasant. shopping cart full of purchases gets Designers can take advantage of the Written by Daniel Harvey, Experience Design Director, London abandoned? End users will reward way games have introduced patients designs that prioritize the most to sensor data. Understandably, important functions and eliminate or game consoles like the Nintendo Wii simplify the rest. or the Microsoft Kinect use sensors to enhance or create new forms of network management game play that can serve as models Connection to the network becomes for healthcare tasks. critical as sensors have very little data storage, or depend on conclusion centralized data shared with a Increasingly, we are connected by community. Don’t assume robust a network of sensors that have the access to the network. An application potential to track our health, location, that mines the data collected by a behavior and preferences. sensor, and guides the end user to relevant video information on Yet this enormous breadth of YouTube will fail if the videos data and connectivity raises real cannot load. challenges—both in terms of regulatory issues and in terms of Data management design challenges, not least of which Looking closely at the lessons is making the enormous quantity of learned in developing applications information available and meaningful and services in the financial sector, for consumers. Hundreds of different product and service providers must smartphones—each with their own be able to show their customers sensor suite—and consumers with a data accuracy, data security, data wide range of technical ability result availability and data portability if they in demands on designers to make want to build a trusted relationship simple, yet powerful, interfaces to with them. allow access to these systems. narrative Experience design with sensors offers The end user’s story must be an opportunity to build personal reflected in the design. With so relationships with customers and much information being captured, end users, assisting them with their it’s critical that end users see short-term needs and their long- themselves in the design. Device term goals, both in healthcare and context, content placement and other industries. how personal information is imaged 51 TREND 1 REAl-TIME CONTROl Brands are more important than ever. Keeping Television relevant understand and measure new insights Mercedes, GM and Chrysler will be But the traditional brand interface is One successful example is IntoNow (a into engagement and are providing big, releasing models with “Eyes Free” Siri changing as products and services are free iOS and Android app from Yahoo!) old, slow TV with a real-time feedback integration. evolving to take advantage of touch, that, with a tap of a button, takes a loop for the first time in its existence. voice and gestural inputs. “sound print” of what a consumer How will it work? Simple. Mount your is watching on TV and then provides Marketing as a service iPhone, tap the voice control button Advertising and marketing have complementary information such as Outside of the second screen and social on your steering wheel and voila—Siri historically been invested in the expanded stats for sports broadcasts TV space are other examples of this works for you, answering phone calls, 30-second spot because it dominated or articles from other news sources. phenomenon. Nike+ GPS is a great posting tweets, sending texts, getting your primary attention. But now we The app also affords quick in-app social example of an app that follows that sports scores and more—without even encounter brands increasingly as chatter so the consumer doesn’t have pattern in a number of ways. After triggering the iPhone’s screen, which interfaces. to worry about toggling over to Twitter announcing a run via Facebook, stays dormant out of obvious necessity. or Facebook to get into the conversation whenever someone replies to your Your primary attention and your eyes The ever-increasing presence of with friends and peers. status, you’re awarded with cheers and screens in our lives—in our hands, applause. When you break a personal strapped to our wrists, resting on our TalkingTV by Starling is another audio record, you receive props from a laps, against our living room walls and app that lets users talk to people who celebrity in Nike’s stable. Turning social “It’s not the nature of the screen that’s gently glowing on our coffee tables— have turned primary attention into a are watching the same TV show. The creators refer to it as “a one earpiece data into sensory encouragement that important, it’s the nature of the attention.” further motivates you to go harder, battlefield. experience,” allowing consumers to go faster and “just do it” is exactly the –Russell Davies keep one ear primed for the show sort of behaviour that makes sense As a result, there is a new focus on and the other for friends. They can for a brand that is all about providing secondary attention. Savvy creative also record audio messages for the “inspiration and innovation to every types of all stripes have realised that rest of the audience. It seeks to athlete in the world.” and hands get to stay focused on the this demands tailored experiences to replicate watercooler conversations road and the wheel where they belong. reach consumers who are only half- amongst friends in real time while the Engagement is the thing. Your secondary attention, however, can watching and half-listening, when the show is airing. Think of it as a social Staying plugged in even when it doesn’t leverage your hearing and speech to glance is worth more than gaze and the version of the long-lost laugh track, feel like it. Habituating on the help you resolve all those last minute morsel is worth more than the meal. an important comparison since the experience thanks in no small part to details you need to address before you laugh track was initially created to these intangible, seductive hooks. And get to where you’re going. When we’re multi-tasking and splitting make viewers at home feel as if they it works. Nike+ athletes use various our focus, designers are forced to were part of something more. experiences in the ecosystem an This interaction model has more to do deliver surprise and delight in the average of three times a week. with call and response music than the corner of our eyes, just out of earshot. Both experiences are designed to typical app experience. The experience They’re trying to make things that are keep the audience engaged with Designing for secondary Attention isn’t reliant on launching the application ephemeral and useful—experiences programming, even when the When you move beyond current from a screen tap (rather, a button that reward attention, not demand it. programming is away for a commercial experiences, and start to look at press in the case of Siri) or clicking or break. That helps defeat the impulse new or upcoming products that are swiping through menus and sequences The leaders in this field of ephemeral to switch channels, check email or designed with secondary attention in as you do in most other applications. and invisible brand interfaces include become distracted, thereby losing mind, things get really interesting. Siri It’s not about all the choices inherent so-called second-screen experiences. valuable eyeballs. Networks like is obviously the tip of the iceberg with in those kinds of paradigms. Instead, Some forerunners are striking a MTV, USA and IFC have entered into this phenomenon, its evolution in the delicate balance between these more relationships with pioneers in the space coming year even more so. Within the active and passive experiences. and have created their own stand-alone next few months, several automotive experiences. They are trying to better manufacturers including BMW, 53 54 TREND ON cl TE Ex ON LI us NT 1 C NE iV E turn Siri on, put the right sounds in, These broad considerations aren’t and the right sounds come out. It’s just just the domain of big tech or media that simple. companies, but retailers as well. Walmart’s iPhone app lets you add While the Siri microphone is a clear items to your shopping cart by voice, piece of brand visual identity, the real ETRONIKA allows you to use Xbox substantive brand element is the voice Kinect to bank online and Pillsbury behind the app (which, in the case of recently launched an interactive TV UK Siri, is also the voice of GPS service campaign with Shazam that allows for TomTom) itself. second screen integration. The voice controls for the Kinect for Earphone Bully is another example of a the Xbox work in a similar pattern: campaign-oriented experience, wholly You address the product (“Xbox”), tell designed for secondary attention to deal it what you want (“Apps”) and then with an important social issue. By using what to do (“Play Netflix”). The brand 3D sound technology and roleplay, it Is ThERE A TERMINAl experience in the Xbox is even more prepares kids and parents for bullies scaled back and reduced. With it, there and gives them ways to speak up about is no obvious persona, gender or voice the issue. All you need is the URL and VElOCITY FOR for the device. Rather, your actions are speakers or headphones. After clicking simply acknowledged by a pleasing play, the experience is totally aural. “ping.” Here, Microsoft missed an YOUTh AND DIgITAl? opportunity to reinforce an invisible conclusion brand interface. Creating these kinds of experiences requires clients, technologists, strategists, animators, writers and musicians, as well as visual, “ You might as well pay attention because interaction and experience designers, Written by Omaid Hiwaizi, Planning Director, London to think about brands in a way that you can’t afford free speech.” –George Clinton isn’t locked into the same default thinking that has plagued more traditional branding agencies for the As APIs open and other applications last few decades. become more integrated, a host of questions about brand hierarchy will A brand is more than just your logo, need to be addressed. Imagine the colour palette or tagline lockup. opportunities and challenges when Those elements were critical in an Foursquare or Facebook are given era when the visual spectacle was access to tools like Siri within their what you had to stand out in, and the own experiences. Will you be asking gaze was your goal. In an era when Foursquare for help or will Siri still the glance or echo is every bit as be the preferable choice? What is the important, you need to consider other experience when brands are layered triggers and interfaces and stimuli to into one another? Which brand provide a robust brand experience. dominates? 55 TREND 1 REAl-TIME CONTROl social media’s impact on the young Technology has Always shaped society Therefore, it appears that our brains Betsy Sparrow at Columbia University. has long been a cause for discussion. Technology in the broadest sense has are like a muscle—the more we use a On the face of it, this is an example of For example, at a recent talk about caused societal change throughout particular part of the brain, the more our profound adaptability, outsourcing the effects of social media on children history—from soot markings on cave neural pathways are developed and a skill we’re not brilliant at (e.g., at a steiner Waldorf school, a teacher walls to motorised transport to the the better we become at a skill. We remembering lots of facts). But are remarked that he believed the printing press to television. Naysayers can therefore rewire how our brains we in danger of creating a society of onslaught of digital was creating a theorised about how and when this operate by practicing particular actions amnesiacs? And given that what we burnt-out generation—strung out, world would end. throughout our lives, though the effects know forms our framework for thinking, dead-eyed kids without a real sense of are most profound before the age of 30. could this have a negative impact on our themselves or the world. In every case, the culture and the pace ability to conceptualise? of life adapted and life carried on. MRI scans of the brain ranging from The school has a very limited approach those ages 4 to 21 show clearly how the What Are the impacts? towards exposing youth to technology. The Brain is a “Muscle” —use it or frontal lobes, responsible for reasoning Oxford Neuroscientist Baroness Susan It teaches a system where reading and lose it and problem solving, are established. Greenfield repeated expressions of writing are not taught until age 7 and Various studies have shown that The process appears to follow the concern about the effect of technology computers are not introduced until medical students, mathematicians, principle of “use it or lose it”—neural on youth, in particular the immersive age 14. The curriculum emphasises jugglers, multi-linguists and musicians connections that get exercised are experience of gaming leading to a “yuck emotional development and claims to all increase the volumes of specific retained, while those that don’t are lost.1 and wow” mentality: result in more well-rounded individuals. parts of their brains as they practice their particular skills. A famous The Effect of Digital on youth “… the environment in which that brain University College London (UCL) study Don Tapscott, the author of “Grown is developing will be very much also showed this is true for London taxi Up Digital,” asserts that by their 20s, influenced by the kind of features of What if the continuing increase of speed and drivers, whose posterior hippocampi, today’s youth will have spent more that environment. And if, for the first intensity of modern life, driven by technology, the part of the brain they use to recall a mental map and calculate the shortest than 20,000 hours online or playing video games. This coincides with the time—and this is my reasoning— was somehow hitting a physiological or route from A to B, grow in proportion period when their brains are developing psychological barrier? to the time they spend on “The Knowledge”—the 2 to 4 year process most, and has the effect of changing mental reflexes, habits and the way they Brain Development in Our youth where they learn 320 routes and 25,000 learn and absorb information. Playing London streets. action video games, for example, helps While this may seem extreme, we people process visual information more should consider how ubiquitous Interestingly, the same brain change quickly.2 And Internet users develop digital technology has influenced the does not take place amongst London new skills in scanning content faster, development of the young, and what bus drivers, who learn a handful as well as the ability to read in different digital agencies can do to create of routes and repeat them turn for directions and an increased sensitivity enriching and rewarding digital turn. There is also evidence that taxi to visual information. This is particularly experiences. drivers who have taken The Knowledge profound, given Malcolm Gladwell’s struggle more than others to adapt to hypothesis that it takes 10,000 hours of But what if there is a terminal velocity changes in the road network or drive in practice to be exceptional at something. where youth and digital can go no unfamiliar cities. Dr. Katherine Woollett, faster, instead heating up and burning co-author of one study from UCL, said, The powerful influence of digital is also neuroscientists have postulated that the out? Are there ways we can keep pace “The posterior hippocampus is at its full demonstrated by “The Google Effect,” changing environment of youth in the developed world - with our changing environment? Or capacity; it cannot incorporate any more the shift away from retaining primary an environment with connections, gaming, and ubiquitous access could there be an evolutionary leap in of this same type of knowledge because facts towards a skill for knowing how to data - must be having an impact on brain development. From “the Google effect” response? it is full.” to search for them, documented by (the shift away from primary fact recollection) to the impact of 20,000 hours of videos games, we may be approaching the limits of our adaptability. 1 the national Institute of Mental health and University of California los angeles 2 nature, 2003 57 58 TREND 1 REAl-TIME CONTROl that environment has changed in an face communication, a third desired Our hypothesis We have already seen some brands unprecedented way, if it’s bombarding time off from the Internet and around Research has shown that different begin to realise opportunities you with boom bang and bang images, 36% said they wished they “could go parts of the brain develop in response to reconnect with customers in what I call the “yuck and wow” scenario back to a time when there to practicing specific skills, and young meaningful ways. For example, in a where every moment you’re having was no Facebook.” brains become hard-wired towards world where there is less physical What We can Do something flash up in your face and the age of 20. So, while youth become human contact, Unilever developed Some will try to wind back the clock bombard your ears. All I’m suggesting is Research does indeed show that heavy expert at outsourcing memory (“The the Share Happy iVend, an interactive, and pull the young out of the digital that that might drive brain connections use of digital communications also Google Effect”), they also lose an aspect smile-activated vending machine. torrent by limiting access, a solution and drive the configuration of your brain has a measurably negative impact of human identity and connection, the In a world where there’s more bad that the Steiner Waldorf teacher cell circuitry into the kind of mindset on a tween’s social cognition: Their symptoms of which include an increase news than good, Coca-Cola’s Longest would recommend. that mandates a short attention span.” ability to read subtle communication in depressive illnesses. Celebration campaign extended clues gained from face-to-face moments of the 2010 World Cup into We disagree, and think the data She also highlighted that the contact is diminished.3 Also, Robin We have reached a terminal velocity— a global dance party. And in a world also gives us a few clues about how lack of consequence in visceral Dunbar (famous for having defined many young brains cannot keep up where most people don’t venture off to productively move forwards, gaming environments could mean Dunbar’s number) has measured with the way that technology has sped the beaten track, Mammut used online ways to make the work we produce a generation losing valuable increased satisfaction from face-to- up life. Historically, as technology has communities to create 150 teams, and for brands fulfilling and healthy evaluation skills in real life. face communication over other forms. evolved, so too has the rate of human inspired them to scale 150 mountains, experiences for youth: Interestingly, Skype conversation cognition. But we may now be at a point all over the world. Recent research on U.S. teenagers scored higher than the telephone, of inflexion where human limitations • Normal behaviour has moved by Common Sense Media adds some which scored higher than email, texting can result in real challenges for These brands are starting to use digital online, so digital should always detail to the picture: While 90% of teens and social networking. Even text-based people, like a loss of connection with to overcome these limitations through be part of the mix. are online, and 75% have social media communication that used emoticons friends, with the real world and with experiences that solve these emerging • People desire human and social profiles that they believe positively affect scored higher than texts without. The themselves. challenges at the intersection between connection through channels their social and mental well being, the more human the communication is, life and technology, creating real and that are nuanced and create deep majority said they preferred face-to- the more it makes us feel good. This isn’t to say that no youth can keep enduring value. ties with others—ideally real-world up; not everyone is the same and some friendships. under or Over use of internet have similar negative Effects However, getting the right balance are better suited to today’s technology- • People want valuable utility—useful is key, as has been evidenced by a driven life. We also know that crises 2 experiences embedded into the University of Lausanne study. It shows often precede huge shifts—we might be world around them. 1.9 that teens who are heavy users of the on the cusp of an evolutionary leap, in 1.8 Internet (those who are online over response to our changing environment, Depressive 1.7 two hours per day) have considerably where we develop a different scale 1.6 more incidences of depressive consciousness, one fully equipped to Girls illnesses—perhaps due to a lack of deal with the new digital world. 1.5 1.4 real-world experiences and deep friendships. The study also indicates The Digital Experience connection 1.3 Boys that non-Internet users show a similar The research indicates that technology 1.2 is indeed outpacing the abilities of increase—perhaps because of feelings 1.1 of exclusion, as social conversation, human physiology. However, as much 1 content and experiences have as technology presents a challenge, None Occasional Heavy increasingly moved online. Moderate it also presents an opportunity—an Internet use appears to correlate with opportunity for clever brands to use better mental health. This is the new digital to help overcome the chasm u-shaped association—none or heavy use of internet model behaviour. between technological possibilities and correlates with depressive illness. human capabilities. source: university of lausanne 3 the Dana Foundation 59 60 TREND 1 REAl-TIME CONTROl For most people in north America, important for content-heavy sites. REspONsIVE DEsIgN 101: Western Europe and vast portions Also, if no needs exist for certain of the Asia-Pacific, when they first mobile phone elements (such as tried the internet, they didn’t know access to the camera), content can oPtIMIzInG FoR MUltIPle sCReens what to do with it. But just as previous easily be ported to a variety of mobile technologies before it—from the devices. Additionally, Responsive telephone to the automobile— Design lets a brand maximize SEO. the more it was used, the more indispensable and intertwined it Mobile Web Will Written by Dan Israel, Strategy Lead, Mobile Center of Excellence, Atlanta became in their lives. surpass Desktop Web & Mayur Gupta, Director, Technology and Marketing Services, Miami A third of all people on Earth— The benchmark experience—the 2.3 billion—access the Internet “large”-screened UNIX, Mac or and roughly 1.2 billion do so via Windows workstation, PC or laptop— a mobile device. defined the Internet since its inception for most people in North America, Europe and, debatably, the Asia-Pacific. Responsive Design is an emerging design But that is no longer the case. With the rapid growth of mobile, touchscreen philosophy that will enable businesses interfaces and the rise of the global to design a fantastic, optimized Internet web, brands see a proliferation of screen sizes, devices and user contexts. experience regardless of the size of the As a result, massive new challenges screen or the nature of the device. are being created for businesses. How do you develop the best possible experience for the widest possible set of customers—particularly if those As smartphones replace feature customers are as diverse as a middle- phones, Internet access through class Indian technology worker with a mobile device will dramatically a smartphone, and a rural Eastern- increase. According to GO-Globe.com, European farmer with a tablet? of the 5 billion mobile phones in the world in 2012, about 1.08 billion are One new tool is Responsive Design— smartphones. Owners of a smartphone an emerging design philosophy that consume the Internet at a vastly will enable businesses to design higher amount than feature phone a fantastic, optimized Internet consumers—according to Nielsen, experience regardless of the size of 82% of smartphone owners access the screen or the nature of the device. mobile browsers, compared to only With this method, one platform can 19% of feature phone owners. Sales deliver the design and content to of mobile devices already eclipsed smartphones, TVs, tablets or laptops. sales of PCs in Q4 of 2010, and Responsive Design lets you stretch Morgan Stanley projects that by the content effectively and easily 2014, mobile web surfing will across platforms, which is especially eclipse that of desktop web surfing. 62 TREND 1 REAl-TIME CONTROl Marketers can now engage consumers “sacrifice” for the mobile web. Lastly, When responsive Design The “Whys” on their most intimate piece of how do you ensure that changes to May Make sense scalable adaptation. In an ever- technology: their mobile device. But your “regular” Internet experience do Brands must ensure that Responsive evolving digital device landscape, what can be done to preserve the not negatively impact the mobile web Design truly fits business needs and which is hugely fragmented by varying reliability and consistency of the experience? provides clear benefits. To help make screen sizes, view ports, resolutions this determination, we will examine the and capabilities, it is almost impossible What is responsive Design “Whens” (business considerations) and to build an isolated experience for Ethan Marcotte first coined the term “Whys” (benefits) for Responsive Design. each combination. Responsive Design Responsive Design is a fundamentally “Responsive Design” in May 2010. offers a scalable solution that can Simply put, Responsive Design enables The “WhEns” different way of envisioning user experience you to design your “regular” Internet Traffic distribution and targeted adapt to these variations to create a connected user experience; it is a and web design—a mental shift from thinking experience to fit into practically any devices. If you want customers to have design approach based on proportions device with a full browser, be it a consistent web experiences no matter as opposed to pixels. pixels to proportions that requires connecting smartphone, a tablet or a TV. where they come from, and more than strategic, creative and technology disciplines. At its core, Responsive Design “snaps” 10% of your web traffic comes from single source of content and code. non-PC devices, then Responsive Responsive Design relies on a unique the regular website into the shape of Design may make sense. feature of HTML5 called “media the browser on any device. Using a mix queries,” which can apply selective of flexible grids, layouts, images and content and marketing sites. If your style-sheets to a page based on Internet experience on devices that intelligence built into the CSS media web experience and design objectives the screen size and resolution. In aren’t the standard bearer? And then queries, the website presented will lean toward content and marketing essence, only one set of code (e.g., there are other challenges companies change “on the fly” to accommodate and less on ecommerce or business HTML templates, HTML5/CSS3) is have to master. 320px 768px for the resolution, image size and transactions, Responsive Design required for all touchpoints, so there’s other factors on the detected device. may make sense. “Content” includes no need to create and manage a product information, news, blogs and separate codebase for different web Considered more a design philosophy marketing materials. Good examples experiences. desktop than a hard-and-fast set of rules, include Boston Globe, Sony and even the beauty of this system is that the Starbucks. Device-agnostic url. By having creator does not need to create a one URL for mobile, tablet and different design for each medium. This phone tablet consistent behaviors. Consider desktop, Responsive Design provides represents a fundamentally different Responsive Design if your customers simplified access and marketing way of envisioning user experience —whether they access your site on strategies, with efficiency gains and web design—a mental shift from a PC, a mobile device or some other in development, QA and launch 1024px thinking pixels to proportions that touchpoint—consistently carry out management processes. In addition, requires connecting strategic, creative How do you avoid creating multiple the same behavior and activities. In it removes the risks associated with and technology disciplines. versions of the same webpage for other words, they do not expect to do relying on a user agent to detect the different devices? Even if iPhone and Let’s take a closer look at what different things on different devices. device and send the customer to the Android devices are all a brand cares Responsive Design really looks like. right template on a server. about, how do you prepare for new In the illustration on the left we see a skill matrix. This refers to human devices that will sport Internet access, prototypical website on a smartphone, resources. How easy is it for you to Traffic lift through improved sEO. such as readers, TVs and a host of PC and tablet. The orange, yellow and find people with the relevant strategy, Responsive Design allows incoming emerging products? Also, since screen red boxes represent the same content, creative and technology skills to traffic across all touchpoints to space is at a premium on a mobile but are displayed or hidden depending execute Responsive Design solutions? be directed to a single URL. This device, a company has to triage what on where the content is being accessed consolidation enables higher link capabilities and experiences they will and how it impacts the user experience. equity that subsequently leads to better ranking than separate desktop, tablet and mobile webpages. 63 64 TREND 1 REAl-TIME CONTROl reduced maintenance risks and mobile device to scan a 2D bar code, but web methodology that relies on conclusion release cycle times. The more devices not on a PC. A travel website for a desktop mobile browsers, while a native app Responsive Design offers much and templates you have to support, the and tablet may focus on search, pricing, leverages native capabilities of a promise, and it is being used by higher the cost of regression testing competitive analysis and bookings, while a smartphone device. several brands with great success. 10 considerations with each release. With Responsive mobile interface may cater to completely We end with two thoughts. for responsive Design, the code base is identical different user behaviors like check-ins Browser compatibility. Older browsers Design Execution across all devices, making it easier for and status updates. sometimes do not support HTML5 When considering Responsive Design, developers to pinpoint what changes code. In turn, designers may have to brands should avoid the temptation to 1. Identify all viewports and breakpoints, they made and where a problem may higher cost, effort, time and risk. spend development effort to create “design to respond.” In this scenario, and select a progressive (mobile be lurking. Responsive Design is still in its infancy. workarounds for these situations. a team decides to adopt Responsive first) versus downward (desktop The design philosophy lacks advanced Design even before the idea is first) approach. Experience optimization across frameworks, libraries, patterns and Approach to responsive Design conceptualized or desired customer resolutions. Responsive Design also standards, which forces some teams As mentioned, Responsive Design journeys are created. The decision 2. Define the navigation approach, enhances experiences for desktop to go through a steep learning curve. represents a relatively new design factor here tends to be based purely and decide what the overall navigation users with large or high-resolution As an approach, it requires a far more philosophy. No industry standard on the number of devices, ignoring the structure should be for the different screens and eliminates the collaborative and cohesive effort blueprint exists. To help you in your design and functional gulf that may breakpoints, which are typically driven conventional challenge of white space across design, IA, strategy, content and assessment of Responsive Design, we exist between the desktop and mobile by functional and content relevance. and manual resolution adjustments. technology teams. have developed a possible approach versions of a site. A better approach is (See 10 Considerations for Responsive to “respond to a design.” This scenario 3. Define the approach for content Performance impact. Design Execution). considers Responsive Design as one choreography—what content will be Responsive Design relies on option for consideration to create an hidden or displayed on mobile, tablets content manipulation using Keep in mind that Responsive Design optimized and relevant user experience. and PCs. media queries and selective represents a truly collaborative plan, style-sheets on the client and an agile methodology to design. One thing is for certain—Responsive 4. Set guidelines and standards for side. This is different from As such, establish a team composed Design is here to stay. And as more media queries. web proxy solutions used by of an information architect, creative standards and more devices emerge, other design approaches, designer, content strategist and the need for Responsive Design will 5. Use fluid grids—think proportions whereby the experience is site developer to define the overall only continue to grow. instead of pixels. optimized on the server side. approach and methodology. 6. Come up with an image and video What this means is that the Separate Responsive handling strategy. When responsive Design same amount of content, images, HTML Which solution is better for your mobile site? Mobile Site Design May not Make sense and CSS code delivered across desktops rEsPOnsiVE DEsign cOnsiDErATiOns 7. Account for display and banner ads. unique mobile experiences are (higher memory and processing power) Lower cost, effort and complexity 3 2 preferred. Consistency is at the must be sent to a mobile device (limited 8. Optimize for touch versus cursor Scalable and seamless adaptation across devices and screen sizes 2 4 heart of the Responsive Design value bandwidth capacity), leading to potential effects; design should be optimized proposition, but this doesn’t always performance bottlenecks. Consistent experience across digital touchpoints and devices 2 3 for both cursor-based (desktops) and work for all brands. The more functions Suited for ecommerce, transactional and highly interactive sites 4 2 touchscreen usage (mobile, tablets). and capabilities envisioned in a user native or hybrid apps. Responsive Optimized for content driven and marketing sites 2 4 journey, the less adaptable and flexible Design is not meant to replace the need Higher search engine optimization 2 3 9. Define a creative and performance Responsive Design can be for the brand. or capability of a native or hybrid app Low performance risks 3 2 testing strategy. For instance, a brand may want installed on a device. It is a mobile Easier site maintenance and future release management 2 4 customers to access a camera on a 10. Validate SEO. Availability of existing design patterns, frameworks and platforms 3 2 Skill and knowledge level required 3 1 KEy 1 POOR 2 FAIR 3 GOOD 4 BEST 65 66 TREND Predicting Desirability—Lessons 2 From a Teen Genius The “Big Data” Era: 69 Learning to Act in pREDICTINg Real Time 81 DEsIRE The Future of Business Insight OE Gamification as a Digital Strategy The second major trend we’re seeing is that companies are 75 91 predicting—and even shaping—desire among their target customers. A combination of new technology, customer changes and business OE viability is making this possible. Digital Luxury 101: How to Enhance the The rise of data warehouses and analytics, the future of mobile Customer Experience 86 data, real-time analysis, the use of social networks to monitor and influence desirability, and ways banks can rebuild trust were all topics our authors chose to explore in this category. Media-Sapiens: Using Social Instincts to Explain, Predict and Influence Desirability rebuilding Trust: in the Digital Age how Banks can reconnect With consumers 96 101 TREND 2 pREDICTINg DEsIRE On July 23, 2012, a Florida teenager testing and sophisticated response won the google science Fair grand modeling using regression analysis prize1 for creating an app that helps and discrete choice algorithms, doctors diagnose breast cancer among others. However, prediction with a 99.11% success rate. Brittany science must advance from segment Wenger, 17, observed that the least understanding and marketing invasive diagnostic test for the mix models to provide real-time disease, called fine-needle aspirate, intelligence to inform unique is also the least certain one. Often, if experiences for segments of one. In results aren’t clear, doctors order a a world of radical price transparency, second biopsy with a bigger needle showrooming and consumer or even surgery. Brittany wanted empowerment fueled by mobility, to boost the less-invasive test’s search and social media, customers diagnostic accuracy rate. demand a relevant, engaging and coherent experience within and She developed a computer program across channels. called a “neural network,” which mimics the human brain, and “trained” Brittany’s inspiring achievement the program with public data from 7.6 applies principles applicable across a million trials. Leveraging mathematics multitude of “predictive” problems: and statistics, she created program code to convert inputs from the trial’s 1. centralizing intelligence. pREDICTINg data to binary 1s and 0s to simulate the Learning systems build intelligence on and off firing of the brain’s neurons. as relevant data available to them She deployed her program in the cloud increases. Brittany encouraged DEsIRABIlITY and made it freely accessible to any physician usage by deploying a doctor, anywhere in the world. Perhaps central, scalable database in the the most powerful quality of her cloud and making her application —lessons FRoM program is that its prediction accuracy available from any browser or trends towards 100% as more doctors smartphone. use it. Like the human brain, it gets a teen GenIUs smarter as it learns new facts. 2. connected thinking. She applied mathematics, statistics, On the scale of large problems facing medicine and computer science, humanity, predictive targeting hardly surpassing results that the individual compares with cancer diagnosis disciplines had achieved to that point. Written by Sheldon Monteiro, Chief Technology Officer, Chicago and treatment, but within marketing science, few problems are tougher hOW cAn WE APPly hEr than understanding and predicting PrinciPlEs TO PrEDicTiVE customer behavior. Marketers MArKETing? have leveraged many techniques— statistical surveys, opinion polls, centralizing intelligence focus groups, ethnographic research, Digital businesses like Amazon analysis of transaction, demographic have demonstrated that customer and psychographic data, knowledge is foundational to shaping experimental design, multivariate personalized experiences that help 1 Google science Fair Project summary: Global neural network Cloud service for Breast Cancer http://goo.gl/z4gB1 70 TREND 2 pREDICTINg DEsIRE each customer achieve her goals while engagement, diversion or interaction cannot keep pace with changing broadcast media have exacerbated promoting the firm’s commerce goals. with other people while watching customer behavior or fast marketing the DRIP problem. With channel TV. Like showrooming, multi-screen campaigns. proliferation, marketers commonly However, a concept as basic as a experiences enable the evolution hire specialist agencies to focus single view of the customer has from one-way, mass segment reach Leading organizations are assembling on each channel. It’s not unusual been well described, but has been to immersive interactions where the people, technology and processes to see direct marketing campaigns elusive to achieve. For instance, individual customer behavior can be to prepare their organizations for the tracked in outsourced promotion basic contact information forms studied and enriched in real time. onslaught of big data. For example, in databases, web analytics in isolated the foundation for any customer an aggressive capability play, Walmart cloud databases, purchases in line profiling strategy, but a recent Today, leading organizations are has invested more than $500 million to of business transaction databases, Experian survey reports that 92% of adopting two sets of capabilities that create WalmartLabs—an independent, social analytics in their own tools and businesses feel their contact data build the foundation for centralized agile organization with big data skills so on. Firms may pull some of these is inaccurate in some way, and 66% intelligence: that combines store data with social of respondents who have customer media data. Walmart understands that loyalty programs believe their a. Agile data. For decades, firms like an agile data capability will enable leadership in the next decade of programs were negatively affected in American Express and Target have aggregated customer information retail innovation. What’s changed from the last decade is the last year due to inaccurate data. Against this backdrop, McKinsey into data warehouses to out-market the rate at which new data sources are their competitors with targeting. But An agile data capability requires estimates that firms with more than 1,000 employees across nearly all dig deeper and what most of these a strong partnership between emerging, which drives the variety, volume marketers and technologists. sectors in the U.S. economy have at leaders built their customer insight on was past transaction information Data architects, technologists and and velocity of data. least 200 terabytes of stored data (twice the size of Walmart’s data combined with some external data marketers embrace agile processes, warehouse in 1999). Many sectors such as geo-demographics. with short, time-bound delivery had more than 1 petabyte in mean cycles, high communication, low stored data per company. With so Today, we know more about our documentation and superb talent— information sources into a central much data, and such poor data customers. If we choose to look, with the ultimate proof being the warehouse to seek insights, but quality, being “data rich and insights we can view social, reputational, early delivery of working software aggregation can seldom address the poor” is significant enough to behavioral, transactional and local yielding actionable customer insights. data marketer’s Holy Grail: linking warrant its own acronym—DRIP. information, among others. The each customer touch to a single sources of this data, whether mobile b. integrated platforms. Existing customer record in real-time. Centralizing intelligence is easier in or online experiences, in-store structures for siloed brands and theory than in practice, particularly RFID, sensors and kiosks, Facebook for non-digital customer touchpoints. and Twitter, Klout and others, are That’s changing quickly—nearly half increasing daily. of all consumers in a retail store carry around a portable computer What’s changed from the last decade equipped with a host of sensors, is the rate at which new data sources and will use the said computer if it are emerging, which drives the helps them achieve their goals, as variety, volume and velocity of data. the “showrooming” phenomenon has This trifecta, known as the 3Vs, is demonstrated. That computer—those commonly referred to as “the big smartphones and tablets—make each data challenge.” Existing enterprise consumer addressable. Beyond retail, databases have room to scale and Pew Research found that television’s address some of these changes, but solitary screen is being supplemented they are managed with elaborate by multi-screen interactivity—half policy and rigid change controls. of all adult cell owners (52%) have Commonly, the speed with which used their phones recently for new data sources may be integrated 71 TREND 2 pREDICTINg DEsIRE Key Technology hadoop: Hadoop is a platform for data storage and processing that would be hard-pressed to buy a new laptop without one. Combined with A global, multi-brand CPG firm with dozens of brands has implemented Connected thinking, in theory, sounds easy. But many firms struggle with Building BlocKs is scalable, fault-tolerant and open falling memory prices and multiple SapientNitro’s managed brand it, because the sub-disciplines source. Every click, every friend core processors, it is now feasible to platform. Deployed entirely in the of marketing strategy, creative, for an agile daTa request on Facebook or action on store entire databases in the main cloud, different brands and their technology and analytics have agencies create digital campaigns— typically resided in organizational Yahoo! will land in a Hadoop cluster. memory of powerful servers. Accessing compeTency microsites, social, sweepstakes and silos. Marketers may lean towards If you book travel online, there’s a data from main memory is orders of mobile—and deploy these to the big ideas, or creative excellence, high probability that a Hadoop cluster magnitude faster than physical disk managed platform. The customer and technology or analytics may helped determine your flight or hotel drives. In-memory databases are not database is centralized and captures be viewed as commodity enablers. options. Hadoop is economical, scales new, but have been expensive at scale. all data, behavioral and transactional, Implicit or explicit favor of some almost infinitely as volumes grow, Today, the economics are viable for and associates it with unique visitors. disciplines over others impedes deals with a tremendous variety of data larger deployments. Correlation with broadcast media activity collaboration. After overcoming and complements existing enterprise and search metrics are also integrated discipline bias, two additional database investments. Agile development: Agile into this database. Insight enables ingredients—common language and encompasses a group of software targeted content and customization physical and virtual spaces for cross across brands. Content processes, discipline collaboration—must be in graph databases: Compared with development methods based on shared brand assets, security and place and widely adopted. For example, traditional databases, graph databases iterative and incremental development. scale are managed centrally, delivering SapientNitro’s social collaboration are often faster for associative Requirements and solutions evolve reliability and trimming costs. The platform—Vox—is so widely adopted data sets, such as storing complex through structured collaboration platform is more than technology—it and used across the firm that the relationships in a social network. They between cross-functional teams. is supported by a customer-centric technology has become invisible. scale well and can be better suited for Agile promotes just-in-time planning, insights team and account managers Like Google, Vox is more a verb than managing ad-hoc and changing data evolutionary development and who work with the brands, their a platform when a group of our Idea with evolving schemas. Graph-like encourages rapid and flexible response agencies and the development team to Engineers works on anything. questions, such as how many degrees to change. Agile is sometimes criticized maximize platform value. you are from another LinkedIn member for only being applicable to projects In his popular book, Web Analytics Agile data and integrated platforms 2.0, Avinash Kaushik, Analytics are answered with simple queries like with a small number of developers and together provide the centralized Evangelist for Google says, “When the shortest path between two nodes in low external dependencies, but leading intelligence foundation for delivering I walk into a supermarket, I don’t the graph. organizations have overcome these relevant, engaging customer expect the employees to recognize challenges and scaled Agile to large experiences. me or rearrange the store for me. Yet Fast data: About a decade ago, Intel enterprise programs. when I visit an online supermarket, introduced their first 64-bit processor, connected Thinking I am annoyed that on my third visit doubling the bus width, which can (in Brittany’s other ingredient builds on, they still don’t know I live in California theory, though not yet in practice, for and complements, the centralized and they are not presenting me with memory and architecture cost reasons) intelligence foundation. Connected items for sale at my local store.” address about a trillion times more thinking is looking around corners, Avinash observes that when people memory than a 32-bit processor. across silos and asking how techniques shop online, they have a different set of and tools from one discipline can be expectations. It’s taken a decade, but today, you applied and multiplied by those in another discipline. As more consumer touchpoints become digitally enabled, consumer For instance, Apple is exemplary expectations will evolve, but the key to at using physics in the design of its rich contextual experiences will remain user interfaces. The fluid motion consumer insight and the power characteristics of the iPhone interface of prediction, built on centralizing are inspired by the laws of inertia intelligence and connected thinking. and momentum. Thanks, Brittany. You inspire us. 73 74 TREND 2 pREDICTINg DEsIRE ThE FUTURE As mobile phones continue to Big Digital + Big Telco = grow in sophistication and power, Big Opportunities marketers are taking note. yet many Digital and telco services offer OF BUsINEss are overlooking one of the most substantial opportunities for today’s significant implications of these new businesses. Through their very mobile devices: the fundamental existence, mobile phone companies INsIghT shift that mobile data intelligence have data that is tremendously deep will enable for businesses. Mobile and rich. It is a side effect of the Analytics has the potential to change network that is the backbone of the business intelligence landscape their business. as fundamentally as ecommerce has Written by Lee Woodard, Director, Client Services, SapientNitro London for retail. and Chris Handley, Group Head of Mobile Analytics, Vodafone In this paper, we identify three Between the dawn of civilization and 2003, examples of how rich Mobile Analytics can enable businesses the human race created 5 exabytes of data. to make better decisions about Now, we generate that every 2 days. By 2020, investments, and also discuss the privacy and fraud challenges. some reports say nearly 20 billion devices will be connected to the Internet. Our understanding of the Internet and mobile is undergoing a transformation that is nearly as important as the invention of the Telcos have multiple sources of data Internet itself. Digital is causing that, when combined and cross- fundamental shifts everywhere, matched, become new assets. Through from marketing and advertising to a phone’s billing relationship with a business models and organisation consumer, they know who she is, where structures. Through digital she lives, how fast she moves between transformation, brands have the points and how long she lingers at those opportunity to redefine the way they places. They also have the ability to interact with their customers. know what she does on her phone: what she browses, what kind of apps she “Big data” has become a sub-set buys and more. And network operators of this transformation (and a handy have large population samples, device buzzword) in recent years—with data and M2M (machine to machine) good reason. But the opportunity sources, all generating huge amounts of is to extract meaning from these raw data. technologies and extract the layers of data to create products and insights But it’s what is done with all that data for different industries. The power that is most interesting. The enormous is how this data reveals new ways to opportunity is the ability to look at the meet consumers’ needs. same layers of data and interpret them to create products and insights for different industries and outcomes. 76 TREND 2 pREDICTINg DEsIRE The real power is how each specific It’s a crowded marketplace, and uploaded the campaign parameters, or promotion data, to help establish use of that data reveals the base a competitive one where every including locations, dates active and a price elasticity curve that is specific foundation and therefore reveals new advantage counts. You are reviewing the target audience. By mapping to a time, a day or in relation to ways to use the data at hand. your retail properties. As usual, network cells to points of interest, other external events. It is highly you have top-performing shops you know if specific locations will be valuable for a business to know how Taking Business to the next level and ones at the bottom in need of better for specific communications. they are benchmarking against their Vodafone, a long-standing client of improvement. There are some new competition. SapientNitro in the UK, is bringing locations you’ve got your eye on, but The data tells you how fast people this vision to reality. Because they which locations will yield the highest walked past your ads, what they Other Applications have a greater than 20% share of profits? Is one part of the street did on their phones immediately Mobile Analytics will offer the the market, they have a statistically better than another? afterwards and if they visited a opportunity to have a fundamentally representative sample, one that can competitor. You can then tell the be extrapolated to give an overview To find out, open up the web version CEO you are changing the campaign of the entire population, and we of Vodafone Mobile Analytics, choose at four digital locations and switching are working to create a customer your location, upload any specific spend to three different locations To paraphrase Nicholas Negroponte from experience and roadmap that will data you want to cross-reference that have better demographics and form the basis of their Mobile (e.g., revenue per square foot of your dwell times. 1995, “Everything that can be connected will be Analytics offer. best-performing location) and choose connected,” and mostly, that means wireless. a timeframe. Market share analytics. What if Imagine the way today’s consumers you upped your prices 5% in a given are thinking as a nuclear-powered Over the map of that location, the location? Would you gain revenues steam train. If they’re given roads glow red with the footfall of or lose customers? Your bank might different interaction with customers, something too revolutionary, they will customers. You know that dwell tell you the former. The Vodafone not just more targeted mobile ads. not be able to match their current times are different for customers Mobile Analytics app can tell you if In fact, as soon as the customer experience to the sophisticated in different places. You know how those customers decided to go to the gets something that is irrelevant or experience being described. But far customers have travelled, and coffee shop down the road instead unwanted, they will have the power to if they can relate their current when the area is most popular. You or whether you attracted a customer manage the permission that enabled experience to improved, evolved ones, instantly compare three locations demographic happy to pay a bit it to happen. They will have the ability they can see how their lives can be and see one is influenced by a new more. Mobile Analytics allows you to take advantage of the data made better. major office block. And you’ve got to measure multiple locations at the value exchange. your answer. same time—near real-time market To that end, Vodafone and share data. This isn’t just mAdvertising; it’s SapientNitro have chosen three Outdoor media measurement. As fundamentally more valuable than that. immediate opportunities that will a busy CMO, you may love your new More importantly, market share These two applications can illustrate interest marketers and retailers. outdoor campaign. It may even be analytics allow you to see what the benefit to both society and the All three are areas businesses digital or up for a few awards. But share of the daily footfall traffic individual in very powerful ways. wrestle with. And though some data Mobile Analytics has the ability, for you are receiving in comparison sources are available, much of it is the first time, to tell marketers how to the competition. Vodafone can 1. civil planning analytics. When old, inaccurate or just plain unusable, their outdoor campaign is really simultaneously measure the footfall your local hospital wants to assess and the real work is in taking those performing. levels for all the businesses within coverage in a given area to make sources and trying to decipher the same vertical, and can then break sure it’s the right size and shape, the answer. Imagine you are on your way to a them down to expose the relative and that expertise is on hand, Mobile meeting with the CEO. You grab your performance levels each market Analytics can help decide where the retail footfall analytics. Imagine iPad and open the Vodafone Mobile player is receiving. This can be hospital should extend its services for you own a chain of coffee shops. Analytics app. You had previously combined with other data, like pricing maximum coverage and efficiency. 77 78 TREND 2 pREDICTINg DEsIRE their permissions and preferences It won’t be long before customers will easily, encouraging customers expect and demand a value exchange; to understand and interact with the network operators will welcome Vodafone about their data. this. Those who do it well and are transparent about the value exchange Vodafone and all telcos will not will attract customers from networks be able to give customers better where that isn’t happening. experiences, or create wider value, unless they respect customer Excited yet? permissions to use data. Your mind is probably racing with ideas about how Mobile Analytics can The ability for customers to control help your business. This isn’t some their personal data, and understand future innovation. It exists today. Go that it has value, is becoming back to your office, tell your colleagues more common. As the Millennial about how to transform the company’s Generation continue to get older, business model, create revenue and their attitudes about sharing personal create success. information will change the business landscape. 2. Fraud prevention. Banks already revenues, which then fund services have systems in place for a person and products that consumers use for not in the same location as his or her free. Meanwhile, a network operator credit card; if the card is swiped, the has millions of customers that pay card will be frozen and the purchase it regularly. Verizon in the U.S. has will be cancelled. Mobile Analytics approximately 100 million customers helps with the “false positives.” You get and Vodafone has over 400 million declined, but you are where your card customers worldwide. No CEO wants is—Mobile Analytics can ensure this to upset that revenue by making doesn’t happen. mistakes. Ultimately, this can be a real benefit for customers and, therefore, a Privacy concerns very effective acquisition strategy. For all the potential new business benefits, privacy concerns remain part Vodafone is very serious about of the mix. While governments and protecting data; they realise that regulators are increasingly wary of it is the customer’s data. They are violations of privacy, network operators leading the industry in their approach realise that if they scare customers to this new data-led relationship. away, they’ll also increase They have created a clear and customer churn. transparent charter that lays out the fundamental importance of The one thing that differentiates the customer’s permissions and telcos from the digital giants is direct preferences. Even more importantly, revenue. Unlike telcos, companies like they are rolling out ways for Google use data to earn advertising customers to access 79 62 TREND 2 pREDICTINg DEsIRE The amount of customer data 2. Think flexibly, and think about ThE “BIg DATA” ERA: available to marketers is exploding. the way you think. Balance different We have already seen data-smart perspectives and continually reflect businesses disrupt the video rental, on any biases in the way you think. leaRnInG to aCt In Real tIMe newspaper and retail industries. Marketers need to get on board now switch From Analysis to Action or fall behind. The simplest way to think about data is as feedback from customers. Ironically, the huge potential of data They click on what they like and Written by James Buchanan, Senior Experience Strategist, London may actually be holding marketers ignore what they don’t. A smart back. The opportunity is so big and so business acts on that data, just like fundamental that they want to get it a smart person stops telling a joke if right, but legacy systems and internal no one laughs. politics make that almost impossible. Every year, we hear from clients that Businesses have one huge advantage data is put in the “important” but “too though. Instead of only trying out hard” box. one joke at a time, a large business can have thousands of interactions This is a mistake. Data does not in one hour. This speed of learning become valuable by being well is important because it allows structured. It becomes valuable when businesses to adapt and respond it is used to answer questions that within a time scale that can make a improve the business. The task for difference. marketers is to spot these questions and work out how to answer them Examples: before competitors do. A. The huffington Post is one of many online newspapers using real-time To step up, marketers need to stop data to test story headlines. For the worrying about technology and big first hour of a story’s life, they run analysis, and focus their attention two headlines. After one hour, they on softer skills like problem solving, check the figures and switch to the analysis and application, curiosity headline that has received the most and rigour: the human side of data attention. If the newspaper had to if you like. wait a week for the report, the data would be interesting but useless. Rather than being scary, we actually By getting real-time feedback, they think this makes big data the perfect make a change while it still matters. opportunity for businesses to sharpen up the way they think. To do so, we B. Dunkin Donuts shows that suggest making two big changes: real-time data can be used to sell products in physical stores. Digital 1. switch from analysis to action. screens display offers that vary Instead of producing reports, run minute-to-minute depending on the experiments and find out what works. 82 TREND 2 pREDICTINg DEsIRE time of day and stock availability. Till If, for example, salacious headlines the results have been disappointing. As an example, most people place receipts are used to run experiments are more popular with readers, then It turns out that predictions, even far higher value on things they own on offers and messaging to find in just a few cycles what once was educated predictions, are little better than things they do not. A person who out what generates the strongest carefully curated content can end than guesswork. wants to re-purchase an item she response. Revenue is up and stock up like dailymail.co.uk. The instant once owned will typically only offer wastage is down. response is tempting, but it will often However, Philip Tetlock and Dan half the price she originally paid.1 need to be resisted. Gardner noted, “...what separated People also tend to put a high value c. The pace and excitement of betting those with modest but significant on things they are certain to get but makes ladbrokes the perfect brand Marketers are increasingly considering predictive ability from the utterly dramatically undervalue things they to act in real time. Last year they how to design experiments and then hopeless was their style of thinking. might get in the future, even if they became the first betting brand to how to respond to the results, while Experts who had one big idea they are likely to get them. include live odds in their TV ads. simultaneously thinking about how were certain would reveal what was While this does not make use of each small step contributes to the to come were handily beaten by those data as feedback, the increase in overall goal. They need to be short- who used diverse information and web and mobile traffic, as well as and long-term at once. analytical models, were comfortable Marketers need to stop worrying about in recall and attribution, shows that with complexity and uncertainty and real time is engaging in itself. Real- The question is: How do you find kept their confidence in check.” technology and big analysis, and focus their time data is also used to engage people who can accomplish that? To make good predictions, marketers attention on softer skills like problem solving, customers in social. TV and press ads And is it a skill that can be taught? have encouraged customers to use need to avoid those who keep trying analysis and application, curiosity and rigour: #GameOn in tweets about sports. This Think Flexibly, and Think to explain everything with one over- arching model. They’re not just going the human side of data if you like. has given Ladbrokes a Twitter stream About the Way you Think into which they can drop provocative The accepted view is that businesses to be impractically perfectionist about tweets and odds at just the right time. need to focus on one simple strategy data—they’re also a lot less likely to As the results show, it’s working. above all else. Indeed, in “Good be right. This suggests that uncertainty itself to Great,” Jim Collins argues that will make marketers value short- These examples all use the speed businesses need to cultivate the We also want marketers to be term gains even more highly—a worry of digital communication. It simply single-minded focus and simplicity humble. Ideally, they need to for any brand trying to pursue a long- wouldn’t be possible to make of the hedgehog rather than the practice what Jonah Lehrer calls term plan at the moment. adaptations as fast in printed media. flexibility of the fox. “metacognition.” That is, reflecting on And unless data is used quickly, its the way they think, and understanding Alternatively, people are also much value is gone. In addition, none of them While this may be true in periods any in-built biases that might affect more likely to believe something involve complex analysis. Yes, analysis of stability, in periods of disruption, their judgement. when they hear others express that has a role later in understanding the when consumer behaviour is opinion. As marketers spend more activity and improving it, but, at the changing, it’s suicidal. Instead, Most marketers know a bit about time reading social media posts and time, analysis is quick and directly businesses need to embrace their cognitive biases, as, under the comments, they need to make sure drives an action. foxy characteristics and look at the heading of behavioural economics, that they maintain some distance and world from multiple perspectives. they’ve been a major topic of don’t unconsciously adopt the views The approach borrows significantly discussion in the last five years. they read. from direct marketing. The difference, Support for this view comes from The difference is that now, instead though, is that the findings are being Philip Tetlock, a psychologist who of using the thinking to change applied to the core brand experience, has conducted research into peoples’ consumer behaviour, they should try not mail packs or emails. The brand abilities to predict the future. Not turning the spotlight on themselves cannot afford for the tactics to degrade a bad proxy for the development of to see if they can improve the way the brand. successful strategy. On average, they think. 1 Dan ariely: Predictably Irrational: the hidden Forces that shape our Decisions, Chapter 7 83 84 TREND ON cl TE Ex ON LI us NT 2 C NE iV E These are just two examples among Get these things right and the details many. The human mind is not and nuances will work themselves perfectly “rational” and struggles to out in the future. value outcomes. Any marketer who wants to improve the quality of the This buck stops with the CMO. They judgement should start by reflecting need to incentivise action and, if the on that. climate is too risk-averse, positively encourage people to be comfortable Putting it into Practice: creating failing (sometimes). In terms of a culture of smart Thinking practical steps this means: Perfect data is a distraction; it’s what businesses think about and • Have a formal objective to run a do with it that counts. This should test that generates empirical be tremendously liberating. No one results. Marketers should not get has to fit the company’s strategy through the year without learning into a top-down programme. something empirical about Instead, strategy is devolved to their customers. front-line marketers who know their • Discuss and share data-driven businesses and can use data to make improvements alongside monthly a difference. Everyone has a mandate sales figures. After all, the results and everyone will be rewarded if they of these experiments drive the get it right. sales figures of the future. • Allocate a percentage of time to But change won’t happen overnight, data innovation. It can be in groups and some businesses may struggle or individually, but everyone must to make the change at all. The show progress on their own reason is that bottom-up change is, left-field projects. by definition, difficult to organise. • Invest in regular training sessions. If businesses want people to think Run war games to test the ability and act independently, they can’t of key people to make the right call tell them what to do; they need in real time. to learn how to recognise good thinking themselves. At the same These are not aspirations—they time, independence must not lead are rules. Each one requires a big to anarchy, but for people to think commitment and a real behaviour DIgITAl lUxURY 101: independently in a similar way by change from everyone on the team. fostering a culture. It is hard to implement and it should be. The question marketers have to How to EnHancE tHE To do that, just like any society or ask themselves is whether they want culture, businesses need to reward to develop the culture first—or leave behaviour they value and punish it up to their competitors. customEr ExpEriEncE behaviour they reject, while leaving a grey area for opportunity in between. Strong cultures are founded on things that everyone can agree on. Written by Hazel Reed, Brand Strategist, London 85 TREND 2 pREDICTINg DEsIRABIlITY There has been a noticeable growth about an item’s provenance or design short film L’Odyssee de Cartier is a and lifestyle associations—reinforcing in luxury brands’ usage of digital. ethos has become as much a part of notable example. The richness of the its aspirational value, rather than laying After many years of watching from the value of luxury as the item itself. film reinforces Cartier’s history, using bare its transactional value. the sidelines while other brands In the offline world, luxury brands cutting-edge special effects to create explored and reaped the benefits of are able to curate their customers’ a cinematic masterpiece and intense Exclusivity digital media and technologies, 2010 experiences. However, three of the emotive responses from viewers. Exclusivity has significant implications was the year when luxury marketers most important values are potentially Luxury is all about emotion—there for the adoption of digital among appeared to wake up. The arrival compromised by digital—quality, is little rational about it—and luxury luxury professionals. In fact, the word of the iPad, and its rapid adoption exclusivity and personal touch. brands can achieve a more powerful “luxury” derives from the Latin luxatio, among affluent individuals, was a impact by taking a cinematic, rather meaning distance. The democratic significant factor in convincing luxury Quality than a print-inspired, approach—not nature of the Internet is often cited marketers that their customers were In the early evolution of digital, the just to their video content, but also to as one of its defining features, and also digital consumers. quality required by a luxury brand was their fixed-web and app offerings. seems at odds with the concept of was difficult to deliver. The potential exclusivity and luxury. Indeed, luxury for attention to detail and aesthetic Maintaining the illusion brands have stayed away from TV preeminence was insufficient to It might be said that Cartier could advertising because it is too populist Cartier’s l’odyssee short film delivers capture the dream of the brand in have made L’Odyssee an even a medium, and risks making the the richness of Cartier’s history. Luxury brands have always understood that, digital format. Furthermore, the more compelling digital experience brand too ubiquitous. Luxury brands more than just the product, their customers standardisation and utilitarian nature by incorporating an element of were equally as nervous about digital. of websites did not offer luxury brands interactivity. However, this is a case in Luxury brands feared that digital are buying service, membership of an the scope they needed to distinguish point for where luxury should remain would not allow them to curate exclusive club and a shared philosophy. themselves from the ordinary. Quality of delivery was also a problem, with cautious about following the popular conventions of digital. Luxury brands access to their brand in a way that is necessary to maintain exclusivity. luxury brands unwilling to let the need to be very careful to preserve success of their brand experience the spell when creating interactive Luxury brands are beginning to be dependent on factors such as experiences. realise that digital does not mean lost For all their early digital connection speeds over which they exclusivity. Luxury brands need to shortcomings, luxury marketers were powerless to control. Gucci’s recent “shoppable” video is maintain levels of access, and digital have been more advanced than their a cautionary tale in this respect. It can help them achieve this in a way non-luxury counterparts in terms As digital quality has improved, and is the perfect example of how new that no other media can. While luxury of understanding the importance of connectivity and devices have taken technologies and digital functionalities customers and fans may be equally customer experience. Luxury brands quantum leaps forward, luxury need intelligent application by luxury passionate about a brand, digital Gucci’s “shoppable” video is a cautionary tale that have always understood that, more brands are now able to create digital brands. The execution of the interaction experiences need to discriminate many interactive tools still have some way to go to than just the product, their customers experiences that match the fidelity of is visually poor, with crude, over- between those few who can attain be seamless and smoothly executed. are buying service, membership their products, retail environments bearing logo hotspots. To compound the brand, and a much larger group of an exclusive club and a shared and customer communications. this, pop-up boxes fracture the who desire it. philosophy. Luxury digital experiences need to be experience, disappointingly showing rich and immersive, conjuring up the only the item and its price. The main When it comes to these audiences, Indeed, the focus on experience has dream of the brand and not allowing issue here is that luxury should brands need to make sure that become even more crucial as Western the spell to be broken. never “sell.” A more sophisticated their customers and prospects feel luxury consumers have moved away use of interactivity would have been closest to the brand, and should be from conspicuous consumption, Brand films are a perfect showcase to enhance the experience by taking reflected in the customer experience. and their purchase motivations have for the exceptional quality of content the customer on a seamless journey Customers are part of the brand’s become more inner-directed. For and experience that luxury brands can of enticement, exploring the item’s exclusive world, and they enjoy the example, the process of learning now deliver through digital. Cartier’s materials, design, styling inspiration unique privileges that come with this 87 88 TREND 2 pREDICTINg DEsIRABIlITY status. They get to hear news before customers feel closer to the brand. brand. Oscar de la Renta recently of the brand to customers, without anyone else, they have insider access As part of a series of installations turned to his fans to help inspire them needing to come into the store. to the people behind the brand and enacted for a select local audience in his creativity, asking them to create It may be that, as luxury buyers are they get to attend special events. Fan Shanghai, the brand created a live CGI Pinterest boards. This is an excellent decreasingly the traditional leisured support needs to be maintained and 4D spectacular, which brought to life example of how luxury brands can classes, and increasingly becoming encouraged, but maintaining some London’s Trafalgar Square, featuring create different levels of experience infinitely ambitious entrepreneurs, mystique is vital, too; when things a simulation of all four seasons over for fans and customers: While that time, or lack of it, becomes a seem unattainable, they become even the course of one day. The result was fans are given the opportunity to more important factor in the luxury more attractive. a unique, multi-sensory experience, indirectly influence the brand’s vision, experience than genuine human which immersed customers literally customers might get a call from a interaction. Audiences and access but lyrically in the brand culture. person on Oscar’s team, telling them Digital channels have an important about next season’s influential trends. conclusion Burberry invited customers to 25 flagship stores to watch role to play in curating access to Whereas customers and prospects The evolution of digital has reached live streaming of london Fashion Week. they recently luxury brands for different audiences. should be nurtured with personal A Personal Touch a stage where previous limitations revamped their stores to make this type of experience This allows the brand to create a and invitation-only event experiences, Personal touch, perhaps more no longer constrain luxury brands even more immersive. personal experience for prospects social media is the perfect media accurately expressed as the seeking to build digital experiences. and customers with exclusive, tailored for engaging non-buyers. But luxury “human touch,” continues to Digital now offers exceptional fidelity brands shouldn’t feel they have to cause the biggest headache for for luxury brands to convey their mirror the more casual register of luxury in its increased adoption of prestige and quality. It enables such language that their fans might use, digital channels and technologies. brands to create powerful, emotional Whereas customers and prospects should or feel intimidated by the real-time The importance to luxury of the connections with admirers and nature of social interaction. In the case human aspect is most immediately customers alike. be nurtured with personal and invitation-only of brands such as Rolls-Royce and evident in luxury products. “Made event experiences, social media is the perfect Chanel, a handful of timeless stories by hand” and craftsmanship are However, luxury brands should and myths have sustained brand quintessential luxury attributes. The continue to approach new digital media for engaging non-buyers. engagement over many decades. value of an object increases when we innovation thoughtfully. They should Luxury brands should be reassured perceive that human skill, effort and consider carefully how new digital that just because social engagement imagination have been invested in the technologies correspond to their may seem instant and reactive, much work. The same human quality should brand values and the principles of content. Digital can also enhance the of the engagement can be planned in also lie at the heart of the service and luxury. Luxury brands, and indeed in-store experience, perhaps using advance. Furthermore, luxury brands’ experience that luxury brands offer all brands, should think about how tablets to facilitate access to exclusive heritage and archive content provides their clients. they can apply digital intelligently, information and content, and to create a fantastic source of fresh inspiration and adapt it in a way that reinforces memorable event experiences. for social fans. It does seem here that an the essential integrity of the brand insurmountable divide separates experience. British luxury brand Burberry In particular, Pinterest has real luxury and digital, but it is impossible famously invited customers to 25 of potential for luxury brands, by to say what the future of digital may their flagship stores to watch a live allowing them to connect their unique hold in terms of answers to this streaming of London Fashion Week, lifestyle, aesthetic vision and values apparent impasse. Virtual meeting where guests were able to purchase with fans in a way that goes beyond technologies are developing at a rapid selected garments via a bespoke their manifestation in products. The pace, so perhaps there will come a companion iPad app. Another British opportunity is there to invite fans time when digital can facilitate a one- brand, Dunhill, took a different to create their own content that to-one experience that brings the approach to using digital to make its represents their appreciation of the brand representative and the world 89 90 NE iV LI us NT E TREND ON xcl TE E ON 2 pREDICTINg DEsIRABIlITY C it was not until early 2010 that This raises questions on the quality of gAMIFICATION As gamification started catching up as a user data that often underpins huge mainstream digital strategy. in 2010, valuation figures. It also raises the corporations spent $100 million on question of whether brands should A DIgITAl sTRATEgY gamification, and this number is invest everything in Facebook pages. expected to rise to $2.8 billion by the To counteract this, marketers need end of 2016. to diversify their digital marketing activities. Tracking the trends in shifting digital Written by Mohammed Iqbal, Manager—Information Architect, Bangalore strategies will help to understand Marketers now realize the need to & Syed A. Suffiyan, Information Architect, Bangalore the importance of gamification and transform passive behavior into a its relevance going forward. Between dynamic high-end user engagement 1990 and 2004, marketers relied and involvement activity. Gamification heavily on one-way communication; it and its essential dynamics, coupled was about making claims and telling with social networks, is a very a story. Understanding markets powerful tool to enable multiple and audiences gained importance levels of engagement. while demographics started driving marketing strategy. Acquisitions But why games? Games have and success metrics were taken always been an integral part of our more seriously. There was too much community, culture and human reliance on hard selling, resulting in experience, be it dice, role-play or an overdose of online promotions and board games. In fact, 1 out of 10 banner blindness. artifacts discovered in the ancient city of Mohenjo-daro is related to games. Today, digital marketing strategies Board games have been discovered are based more on engagement and in Iran, Iraq, Egypt and parts of Africa connections. Customer experience dating back to 3000 BC. and persuasion have taken the dominant position and social is now gamification = a crucial part of marketing. Reviews, (Mastery + De-stress + Fun) x social “likes,” ratings and comments Human behavior studies indicate have become an integral part of that people need to play. We love information online and marketers the feeling of achieving mastery in can now view trends in social a game by overcoming obstacles, forums to identify user needs and learning, gaining skills and earning expectations. This has led to several rewards for our achievements. Games downsides, as social maturity has also cater to our need to de-stress by caused information overload and indulging in something pleasant and network fatigue, resulting in a passive engaging, and help in esteem-building consumer audience. Between July activities. Playing a game also has 2009 and June 2011, there has been aspects of entertainment and escape; a large level of decline in contribution it allows us to role-play and be a part and active participation on Facebook. 92 TREND 2 pREDICTINg DEsIRABIlITY of a story. The social aspect of playing • Avatars. Avatars allow gamers to success like accomplishments, through avatars. The target audience increases this fulfillment; social become immersed into the game completion, winners, choices is generally someone trying to achieve provides competition, bonding and storyline by embodying themselves made and rewards gained. health goals or suffering from an multiplies the fun quotient by making it into a game character. They allow illness or injury. The game helps these much more real and engaging. users to assume a different gamification in Action users by allowing them to motivate identity, even through personas Now that we have seen the essential themselves by setting up tasks and What is it that makes playing games like super heroes or super villains. mechanics that make a game, lets goals to achieve things that make so engaging? Every game includes An alter ego who can face look at some companies that are them truly happy. In order to do this, gaming dynamics, some of which are challenges and take risks is already putting them to use in some users have to embody themselves described below. limited only by imagination. of their products. into avatars, write down the things that make them happy and start doing • Positive reinforcements. A reward It is important to ask ourselves what health and fitness. One of the most those things over a period of time. is a form of positive reinforcement behaviors we want people enacting, recent and best-known examples given or received in recompense and choose and apply those dynamics of how gamification is being used Education. Khan Academy has for actions performed or time to make the gamification effective. invested in the game. Rewards in the health and fitness industry is revolutionized the education The gamification Process the example of the Nike+ FuelBand. industry by allowing students to take A behavioral engineering process can The FuelBand is strapped onto a self-paced classes and evaluate be applied through three phases of user’s wrist and uses LED lights themselves by the number of “Gamification” is defined as “the use of game implementation: to form a progress meter—an rewards they earn from each class. indicator of how active the user A reward in the Khan Academy design techniques, game thinking and game The strategy phase focuses on has been throughout the day. This is a token of achievement for mechanics to enhance non-game contexts.” understanding business and visual representation of daily activity completing the given assignments brand requirements, as well as hits the conscience of the user regularly and correctly. Teachers critical success factors. Detailed and innately pushes him or her to can also monitor how students user research enables a business achieve a more active day, in turn have been performing—whether the for users come in the form of to understand its audience and allowing the user the satisfaction student is grasping the concepts by points, badges and power-ups. determine the behavior we want to of having achieved the goal of “an focusing rewards on specific topics Some points can also be used to affect. Ethnographic and behavioral active and healthy day.” or assignments. buy merchandise and other game- research techniques are used to related items. identify audience behaviors, pain Financial planning. Mint.com can social spaces. Foursquare is a • risk mitigation. Risk mitigation points and motivators. This phase empower its users to take charge popular social app that allows is any reinforcement that requires results in identifying the founding rules of their financial lives and better users to virtually own a place. The a minimum activity to avoid of the game, and defines the game manage their money. It does this by app allows users to check into the negative occurrences (e.g., experience and underlying concepts. allowing its users to see their bank places they regularly visit and post Farmville crops that die when a accounts all in one place by culling it amidst their social contacts. When user neglects to water them). In the design phase, the operational and organizing the information from a user checks in often enough, that • The power of “free.” This dynamic rules are defined—the specific all those accounts. The goal of the user becomes the location’s mayor. shows users that they can get gaming dynamics that define the product is to help its users choose If one of the user’s social contacts something free from someone experience like onboarding and positive how much they want to spend or is also a frequent visitor of the else’s actions (e.g., Groupon). reinforcements. • goals. A goal is a result or save for the future by allowing place, that person can look at the achievement towards which effort The implementation phase is an agile the user to set definitive financial leaderboard to try and compete for is directed. For gamers, goals process, which includes continuous spending rules. the position of mayor. provide a reason to play and a way testing, analysis and iterations. to feel progression with a sense Gamification also offers many feedback lifestyle. SuperBetter is one of Food and beverage. Unilever’s of accomplishment. points from which to measure the best examples of gamification Share Happy iVend, the world’s 93 94 TREND 2 MEDIA-sApIENs: first smile-activated vending implications for gamification machine, offers a unique brand Gamification is great if done experience. The vending machine correctly; otherwise, it has its own UsInG soCIal InstInCts makes the experience of eating pitfalls. For example, it’s motivational ice cream immersive by using an and interesting to get a badge for attractor screen and an interface completing the user profile, but when to eXPlaIn, PReDICt anD that challenges the user to smile. the whole point of the experience The smile-o-meter encourages is framed around the positive users to smile more and then allows reinforcement of earning badges, it them to select a free ice cream as a reward. Ultimately, it encourages people to share life’s small moments can get boring. Gamification should be an added layer as a meaningful motivator around existing content. InFlUenCe DesIRaBIlItY In the DIGItal aGe of happiness. A game can become shallow when there’s not good content to bolster it. In addition, Sprite’s #crickwit campaign brought a unique game of Using gamification as a quick and “tweet cricket” to the Indian Premiere tactile solution can lead to poor Written by Melissa Read, Ph.D. League (IPL) in 2011, where every engagement and can result in low Director of Marketing Strategy and Analysis, Atlanta re-tweet counted as a run and was ROI. When positive reinforcements rewarded with a weekly cash prize or like badges and rewards are used, the ultimate award of an LED TV. It when and how they happen are extended Sprite’s philosophy of fresh elements that need to be carefully thinking to people and rewarded considered and well integrated consumers who had a novel take into the site. Gamification solutions on cricket. should be tested continuously with end users, feedback should be analyzed and designs should be iterated. It is also important to innovate new techniques; solutions that lack originality will have a difficult time. conclusion Gamification, when coupled with social, has tremendous potential in dynamically engaging users, and is a strategy marketers can use to diversify their offerings in the future. However, it is very important to understand the process of gamification and behavioral engineering to make this endeavor a success. 95 TREND 2 pREDICTINg DEsIRE “sometimes it pays to stay in bed on When marketers come to understand helpful receiving primitive versions though, they demonstrate something Monday, rather than spend the rest the basic instincts that have guided of “likes.” Some drawings were so critical about human instinct: Over of the week debugging Monday’s human social behavior for thousands desirable that they “went mobile” as thousands of years, we have been Ancient Walls code.”1 That’s not something we of years, they see that today’s strange they were chiseled off the rocks and using social media for the same basic Other heard a lot growing up, but digital digital interactions are not really new. incorporated into ancient tools, like fitness consequences—survival and Examples changed things. life is interactive They can anticipate the shape of things knife handles. reproduction. These guide what we say from the time we are born. to come and pull the levers in our digital and do. Deconstructing the seemingly include: world to drive desirability and influence Thousands of years ago, cave walls pointless social communications we Status update: Our first computers are our toys and change. It’s the knowledge of human and rocks were a powerful kind of see in social networks can help us “ Facebook allows me to see what we usually get them before we can instincts that inspires the most media. With them, we could say understand this. Here are a few my life would look like if I had talk. Technology is an extension of successful brands to act as catalysts for something about our status to those examples of status updates we’ve seen married my college girlfriend. ourselves. When we forget our cell communities, drive social commerce who weren’t there at the time. We online and what they really mean: Dodged a bullet there.” phones, we feel lost—sometimes and amplify the consumer voice. could check in to say we were OK, Meaning: scared, too. And our focus has shifted. share intelligence that made our “sitting in a sketchy cab.” This is how I feel. Just because we’re in the same room Ancient Walls community smarter, learn to avoid This sounds like someone with a little with another person doesn’t mean The first wall dates back long before danger, find food and even gain too much time, but it may serve as Status update: we’ll talk to them. We are often so Facebook, MySpace and Friendster. inspiration. Thousands of years ago, an alarm signal made in the presence “ You need only two tools. WD-40 digitally immersed that we don’t even The oldest known wall is El Castillo we used rocks and walls to share of a potential threat. It tells us the and duct tape. If it doesn’t move notice they are there. We engage in cave. Over 40,000 years ago, people culture across time and space. We approximate location of this person and it should, use WD-40. If it Neanderthal crimson hand stencils “media snacking”—consuming drew crimson stencils of their hands on read “timelines” that connected us to as well as their comfort level. This moves and shouldn’t, use in El Castillo cave2 around 38,000 bite-sized pieces of media throughout it. There has been great debate about our ancestors and built upon them to status is like a white-tailed deer the tape.” BC, perhaps representing some of the day. We engage in “media the meaning of these stencils and connect with generations to come. flicking up its tail. It increases the Meaning: the earliest “check-ins” ever. multitasking”—consuming several many theories. Perhaps the simplest chances of getting help and of I have important insights to share. bites of media at once. is that these paintings are ancient Walls and rocks were just one of many survival. From this message, we also check-ins that say, “I was here.” forms of social media that allowed know that we should avoid joining this Status update: Some marketers think their targets humans to connect over time and person for our own wellbeing. Here, “ I’m surprised people still ask me look so different from anything they’ve Our first drawings were simplistic, across distances. Telecommunication— the fitness consequence for both the if I want to hold their baby given seen before that they gave them a new but over time we drew bison, reindeer, like fires, beacons and smoke signals communicator and recipient is survival. the number of times I’ve dropped name—“media-sapiens.” They don’t elk and people chasing them. The —came next, and were followed by my phone.” recognize us. We’re like nothing their simplest interpretation of these scenes drums, horns and pigeon post. “if you drink enough, your brain Meaning: textbooks have described under the is, “Here’s me on my big hunt.” starts photoshopping people.” Here’s something you should previous name homo-sapiens. We’re Modern cave Walls This sounds like someone who’s just know about me. in our own category—unfamiliar, The most fascinating ancient social Today, digital has brought a drastic being cute, but this may serve as a strange, frightening. network is perhaps the Nämforsen change in media inputs and outputs mating signal to attract a partner. Here, Status update: rock art in Sweden, showing animals, —but past, present and future the person uses humor, something “ If they made a movie about We are a threat to the bottom people, rivers and hunting. Many communication drivers have stayed others may find attractive. While this Morgan Freeman, who would line—a risk to their targets, to their saw these drawings, adding layers the same. Be it on a cave or Facebook comment alone may not be enough narrate it?” budgets, to their livelihoods. But are of information to them while gaining wall, we use communication for the to win a mate, the culmination of Meaning: we unpredictable? Perhaps not. Our intelligence from the original authors. same reasons. comments like these over time may I want to know about what behavior has drastically changed with There are repeated acts of carving, be enough to attract a partner one you think. the evolution of digital media, but our showing interaction and revisions At first glance, Facebook status day. This is similar to a peacock instincts have remained the same. We between authors—not unlike updates might seem like pointless fanning its tail. There’s nothing thrive in communities. We have a tribal comments on Facebook statuses or communications that are much evolutionarily advantageous about it, culture. We are collaborative decision- the collaboration of a “Wiki” article. different from the hand paintings we but it does attract attention. Here, the makers. We are expressive and enjoy Some of these drawings were more see on cave walls. Looking closer fitness consequence is reproduction. sharing our unique points of view. helpful than others, with the most 1 http://naich.soup.io/post/223460989/top-50-Programming-Quotes-of-all-time50 2 http://news.nationalgeographic.com/news/2012/06/120614-neanderthal-cave-paintings-spain-science-pike/ 97 98 TREND 2 pREDICTINg DEsIRE “All girls are DEVil but my wife these media forms—with strong Because of the vast variability of as well as a host of other things like is QuEEn ……… Of all of them :)” influencers, basic communicators influence across media, someone can purchase choice. Marketers who This sounds like someone who’s and a higher volume of message be an influencer in one media form foster a collaborative environment being sarcastic, but it may serve as recipients. The digital age is only but not another. This means that understand that people need social an ownership signal used to claim different because new media drives even if you’re soft spoken and not commerce to spend, because or defend a mate. This is similar to a difference in who plays each of influential offline, you may live a antisocial commerce is not natural. the low grunts of an elephant, which these roles and who has the totally different life online. The cool travel for miles to lure mates and greatest influence. kids look a lot different these days, establish dominance. While the because looks matter less. fitness consequence is reproduction, On cave walls, an influencer was this status also serves as an anti- likely the one who had the best cave Actionable instincts mating signal for every other woman, access, could paint the best and had Marketing media will only continue the best painting materials. In the to evolve with technology. As skies, the best smoke signals likely this happens, our targets will look and feel different. Despite these Despite these changes, marketers can came from the one who had the best understanding of wind direction and changes, marketers can continue to continue to drive relevance if they ground the best control of fire. Through drive relevance if they ground their spoken media, the one with the strategies in connecting people. their strategies in connecting people. greatest influence is typically the Knowing that survival and reproductive most eloquent and educated speaker, instincts drive human behavior today, the most visually appealing, tallest, just as they did thousands of years which could threaten reproduction. loudest and most senior. Through ago, gives us tremendous leverage This kind of social Darwinism shows digital, the influencers are often the because these things determine what that people can weed themselves out of most knowledgeable about the topic, people say, think, feel, do and buy. • Amplify consumer voices. Basic the gene pool for what they do and say. the most socially adept in writing, the Being relevant in digital marketing social expression can feel deeply fastest typers and best spellers. In means amplifying and extending the fulfilling. When people share, they Dorks unite digital, your physical characteristics natural instincts that drive people and contribute to the intelligence of the The social instincts that drive us have little impact on your influence— not creating obstacles that stand in the community and experience strong have persisted for thousands of as long as they don’t limit your way. Here’s how: human connection. They protect years, across multiple media forms. typing speed. themselves from predators and We have lived in networks through • Be a catalyst for communities. connect with potential partners Communities and their connections too. When marketers foster self- are critical to human survival and expression, they not only fulfill a reproduction, online and off. In ancient basic human need in their targets times, people who chose to stay with but also gain critical insight about their tribes survived. Those who didn’t where their targets are coming from. perished. Community behavior is so This intelligence can be used to ingrained in us that it is critical for drive relevance. marketers to drive and sustain it. Past, present and future marketers • Drive social commerce. Humans who understand human instinct are collaborative decision-makers. will be able to explain, predict and They have long relied on the wisdom influence digital desirability and of crowds. Medieval villagers used deeply connect with their targets to crowdsourcing to learn about drive action. The best marketers will treatments for the plague. Today, never define themselves as B2B or we continue to use crowdsourcing to B2C. They will understand that we are solve medical problems online, all just B2P—Business to People. 100 TREND 2 pREDICTINg DEsIRE Who’d Be a Bank? Time For a Fresh start On top of their daily kicking from The time has come for banks and newspapers and government, it their customers to start afresh; seems that their customers don’t surely the “anti-consumer” economic like them either. Banks are, rightly model of retail banking that makes or wrongly,1 repeatedly and widely money by punishing customers for blamed for the economic situation making mistakes, charging them that much of the world finds itself in for basic access to their money and are constantly bearing the brunt and getting them to spend above of protest movements. their means, is on borrowed time in today’s world. Instead, banks REBUIlDINg TRUsT: It is fair to say that banks are far from need to offer services that their popular, despite delivering services customers genuinely value. In return, that their customers really could not customers are going to pay for what hoW BanKs Can ReConneCt live without, and would be paying they get and they will even go as far for in any other industry. as to recommend their bank to their friends. This may seem a world away Trust is at an All-Time low, from where we are now and its not WIth ConsUMeRs and Apathy is lifting going to be an easy journey, but by Trust in banks is in free-fall; two- making some significant changes thirds of UK consumers say their it is possible. trust in banks has fallen2 and six Written by Chris Baker, Senior Marketing Strategist, London, out of ten people in the UK fear that However, now is not the time for James Buchanan, Senior Experience Strategist, London their bank or building society could banks to feel sorry for themselves— & Omaid Hiwaizi, Planning Director, London collapse in the next year.3 The same they will be hard pressed to find any is true across the Atlantic; while 65% sympathy in the current climate. of Americans trusted their banks in 2007, now only 35% do.4 It’s also not the time to continuously look to cross-sell and up-sell As a result of this lack of trust every customer they come into and transparency, any mistake or contact with. This sort of behaviour scandal, such as those suffered by is only going to antagonize the NatWest, HSBC and Barclays recently customer even further and sour the in the UK, is leapt on enthusiastically relationship. And now is absolutely by all and sundry. It has gotten so bad not the time to invest millions in ill- that the apathy that banks have relied founded advertising campaigns that on for so long to keep customers attempt to sell the idea of service is showing signs of lifting; 52% of and a relationship that has long U.S. bank customers would leave since expired. their current financial institution for one that offered better money- Actions speak louder Than Words 1 thankfully, apportioning blame is not the purpose of this article. management capabilities5 and the Now is the time to “do,” not “say.” 2 YouGov – July 2012 number of people who have actually Banks won’t regain trust by standing 3 harris Interactive – July 2012 4 Ft.com – January 2012 switched banks in the past 12 months up and shouting from the rooftops 5 Intuit.com – June 2012 has leapt by 25% since 2010.6 that they’ve changed. This will, at 6 ConsumerReports.org – February 2012 102 TREND 2 pREDICTINg DEsIRE best, fall on deaf ears or, at worst, 1. Easy peer-to-peer lending By investing in this service, a bank a voice and the opportunity to gain the further irritate a disillusioned Alternative lending models are would ensure a cut of a growing pie investment required to get projects off audience. gathering steam as consumers look and it would go some way to bringing the ground, creating jobs and value. to avoid the murky dealings of the big customers back on its side. banks. Zopa is long established in the 3. use data for good UK, and France’s first P2P lending 2. crowdfunding Banks find themselves in an extremely site, Pret d’Union was launched by If banks are being blamed for the privileged position in a customer’s two former bank employees who downfall of the world economy, then life; they can see absolutely everything were shocked at the rates charged the best way to turn around public that a customer is spending their by banks for short-term loans. The opinion is to do something to right hard-earned cash on. But even though site attracted 20,000 borrowers and those perceived wrongs. they sit in this lofty seat, they use this 1,000 lenders in its first 12 weeks of information to facilitate cross-sell operation.7 Taking P2P a step further, and up-sell rather than to improve the crowdfunding via sites such as overall financial position of each of A colourful example is Burnley Kickstarter have taken off and are their customers. Savings and Loans, the independent financing creative and business small bank founded by David projects that have the potential to It’s time to put those insights to work Fishwick, which trades as “Bank on get the economy moving again. for the greater good. Are they spending Dave!” They act as a channel between more than average on utilities in the savers and borrowers and take a If a bank took the lead on this, both area? Is their mobile bill more than Trust is rebuilt from the bottom up, commission, with Dave personally in terms of an initial investment and double the average monthly spend? one customer at a time, by doing the underwriting all loans because they building the platform, they would add Are they spending more than 50% don’t have a banking license. structure and credibility to the process. of their income on restaurants and right thing and genuinely being a In addition, it would give entrepreneurs booze? If so, they could benefit from positive force in someone’s life. With this model gaining traction, it is clear that it’s here to stay. P2P Now is the time for action, to go lending should not be seen as the back to basics and look at the new enemy as there is an opportunity to tools that are at a bank’s disposal. bring them into the conversation. The world and the banking industry Ultra-cautious consumers are has changed fundamentally and by increasingly taking the advice of actively embracing these changes, banks with a pinch of salt, looking it is possible for banks to help elsewhere for the best plan customers navigate through their of attack. lives, even in tough economic times. Existing P2P models are a hassle; By becoming useful again, banks can instead of a one-stop shop, rediscover relevance and actually add consumers must manage a number value to a relationship that has been of relationships—and there is the one-way for too long. Let’s explore inherent uncertainty of the model to five ways banks can become useful contend with. A traditional bank can and trustworthy to their customers bring weight to the table and simplify again: the process. 7 Capital.fr – May 2012 103 TREND 2 pREDICTINg DEsIRE receiving information on utility 5. Butler banking The Lloyds TSB Money Manager and refocusing on their reason for being switching, better deals on mobile Life is complicated and is getting Standard Chartered’s Breeze Wishlist and putting customer needs at the phones and insurance and advice more so. As a result of hours at are merely scratching the surface core of how they reconnect with their about vouchers and promotions that work, childcare and increasingly when it comes to the potential of customers. they could be taking advantage of to ambitious leisure time, more and these tools. While there are internal bring down their spend. more consumers are outsourcing challenges in implementation, by While not an easy journey, it is some of the practical tasks in delivering a truly useful service to achievable and potentially very All of this, if done sensitively, would their lives. their customers, banks can go a long profitable for whichever bank succeeds be well received as an attempt to help way to rebuilding the trust that has in reinventing itself with trust at its the modern household manage costs At the same time, thanks to books ebbed away. core. As we have seen, trust has moved (and could allow the bank to set up a like Nudge, consumers are learning beyond being simply a hygiene factor handy affiliate revenue stream). Bank that it’s very difficult to balance their The road Ahead to being the ultimate differentiator of America recently conducted a trial day-to-day financial decisions with We have shared five examples of how to address the cautious and cynical of a Groupon-like service based on the need to save and contribute to banks can go about rebuilding trust mindset that is all too common today. their previous spending activity and a pension. through actions rather than words, it will be interesting to see what further developments we will see These two trends are combining to in this space. create a group of consumers who will pay a small amount to be encouraged 4. international relations to do the right thing. If it works over As the world has become more the long term, they know it will be connected, banking has not kept worth it. up. More customers than ever before need to manage financial The butler bank acts as your transactions across borders. This financial conscience. Based on your includes students studying abroad circumstances, it thinks ahead, works (the number of international out a budget for you and sets those students increased from 2.1 million decisions as defaults. Every time you in 2002 to 3.4 million in 2009)8 and try to change the defaults, or spend relatives sending money back home more than you planned, it offers up (international remittances doubled better suggestions. You’re still in between 2004 and 2008). control, but you’re being persuaded to do the right thing. The costs of using bank accounts for international transfers drive This is a service that’s picking up many customers to use alternative steam outside of banks. Mint.com providers, such as Western Union has over 8 million users and Money and TransferWise. This is a lose- Dashboard has launched a similar lose situation: Consumers get product in the UK. Consumers are frustrated and banks encourage their increasingly looking elsewhere for customers to shop around for other help with their finances when, in products in the future. reality, banks should be the first port of call. 8 http://www.wes.org/ewenr/12feb/feature.htm 105 80 Storyscaping: Building Worlds, Brand as Channel: Not Ads Today’s “Always-On” TREND 109 Messaging 3 113 CONTINUOUs Adapting to a ExpERIENCEs Fragmented Media The Future of Content Environment Experience and How to Design For It 119 124 OE I Can See Clearly Now ... Across the The third trend in the evolution of great experiences is the blurring of Entire Experience: The Analytics the online and offline worlds into one continuous spectrum. Maturity Model Valuing Great brands are increasingly using all their assets to reach their customers at the right time, place and with the right tools to shape 130 OE Measuring German Fanatical Engagement the purchase decision. Multi-Channel: Approaches and Implications 136 142 A new conception of the story, the role of brand, new strategies for content and new retail models are all topics our authors chose to address in this section. OE The CMO Toolkit: OE What Every Marketer Should Know Retail Goes Rogue: 149 How Digital Convergence Will Revitalize the In-Store Experience 156 TREND 3 CONTINUOUs ExpERIENCEs Once upon a time, there was a story. Stories are patterns we use to make That story was read to a child before sense of the world. And these patterns bed, sent through an email, told help us make connections with through a movie or spoken over the each other and develop a common Ten Emotional Desires phone. it’s no surprise that stories are understanding. sTORYsCApINg: all around us and are a meaningful, The desire to be taken seriously critical part of our lives. There’s a real discipline and craft The desire for “my place” around storytelling, which often starts BUIlDInG WoRlDs, However, it can be a struggle to with the seven basic plots: comedy, The desire for something to believe in create stories in the digital space. tragedy, overcoming the monster, Next-generation storytelling has the voyage and return, the quest, The desire to connect evolved. Today, “storyscaping” rags to riches and rebirth. But if you not aDs The desire to be useful takes the foundation of the tradition think about storytelling today, part of storytelling to the next level by of the storytelling solution involves The desire to belong focusing on the experiences, patterns making decisions about what plot The desire for more and structures behind them. type will best serve the medium. For example, “overcoming the monster” The desire for control Written by Gaston Legorburu, Worldwide Chief Creative Officer, Miami But storyscaping isn’t just a or “the quest” may be best served in philosophy—it’s an approach. We are a video game while the “tragedy” role The desire for something to happen the authors of story experiences, and may have a social element to it. Start The desire to find love by leveraging stories as catalysts, with one basic plot type that everyone we can ultimately drive and shape recognizes and relates to, and then consumer behaviors. find the place that story belongs to in the new consumer ecoysystem. The same story The definition of storytelling has it’s All in the Mind remained the same for centuries. Stories are hard-wired into the human Webster defines it as the sharing of brain. Because of this, stories can events with words, images, sounds create a bond and then drive the and experiences, sometimes with behaviors we want. We can use stories improvisation or embellishment. Even to convince consumers to purchase in its earliest definitions, “experience” things they weren’t previously thinking has always been a part of the about buying, and then tell their Sometimes, stories are built on description. While the words and the friends to buy them too. Stories can fill top of other stories, such as this pictures are what make up a physical that role, using emotions as the pivot Volkswagen ad, which first ran aspect of a story, in reality it’s a bigger point to do so. during the 2011 Super Bowl.1 idea—and always has been. To create a story, we sometimes ride But regardless of the story being told, on the backs of others. Remember the it’s often the same story—one that viral Volkswagen commercial during connects on an emotional level with a the 2011 Super Bowl? That ad would plot, characters and a narrative point not have been possible if Star Wars of view, just as songs always have a didn’t already exist in peoples’ heads chorus and a melody. or if those patterns hadn’t already been cemented in our culture. 1 http://www.youtube.com/watch?v=R55e-uhQna0 110 TREND 3 CONTINUOUs ExpERIENCEs But more often, we are the creators of The experience space is not about easy to make sense of the storyscape framework—or a foundation—to arrive the story. And it’s crucial to do more of today’s “new and improved” app, you’ve created. at the best possible solution. this as we move forward in the industry. website or company. Next week, Ask yourself: What is the purpose- everything will be new once again. But 3. Think outside the storyline. When a construction company builds in the past, driven story for this brand and how the story, when done right, will always It’s impossible to design a workable a home, a school or a retail store, marketers have should it best manifest itself? remain the same. At the end of the linear experience anymore. Today, the foundation is arguably the most consumers can drop into any portion crucial part—and the same applies used five experience The Five new Experience Dimensions day, brands shouldn’t have a digital of a brand’s experience at any time to storyscapes. Without a strong strategy and a traditional strategy or dimensions, or lenses, Consumers already have patterns of or level of engagement, so it can’t be foundation, a story’s architecture has any other strategy contingency. There’s to create stories: behavior, and that’s not something we just one plan, one experience—a scripted from point A to point Z. nothing solid to stand on. Storyscapes The language can become part of the story, should try to change. The smartest communication strategy—that can take the foundational concept of such as in John G. Rives’ TED talk. In it, he used 1. Access. companies recognize this and look for An example of this is the Bible. Very storytelling to the next level. typography to tell a fairy tale which is “short and transcend any campaign. few people read it cover to cover. But bittersweet.”2 The ability to reach other people, the missing pieces that consumers activities, services, information or don’t yet have—and may not even 2. Find an “organizing idea,” a person can open it to any page and Another way to think about good places. know they’re missing. The new story not just a big idea. get value from what they read. Even systems thinking is a spider’s web. It’s experiences should be based on that. Today, real is virtual and online though the Bible contains many pages, imperative to weave a web in order to with multiple sections, authors, writing connect every good story’s individual 2. control. To create a storyscape, you need to is offline. The consumer sees no conclusion The degree to which a user can distinction and the lines are merging styles and time periods, it still serves pieces into a cohesive, immersive manipulate their experiences. consider five new experience dimensions: and blurring. While this can sound the bigger story—the story system—and experience. To create successful We have the opportunity to be confusing, it’s really an opportunity all works together. marketing and advertising solutions, the new storytellers—the new 1. understand the experience space. 3. Fit. to give brands and businesses a businesses must think in a very storyscapers—of our products and The experience space is that vast space Harry Potter is another example of a The match between a person and framework for an approach for how we real way about how to best use services, which can propel brands between the brand and consumer—it’s great non-linear brand experience that their surroundings. arrive at a solution—one that takes a their dollars to give consumers the into another dimension. what ultimately connects them to each is working. It’s clear that this company philosophy and develops an approach to experiences they crave. other whether that’s word of mouth, a that has been incredibly successful 4. Vitality. viral video or a call center. drive it in a real way. at building worlds, not just ads. This 5. never use a period, always a comma. Storyscaping is an evolution, not The tapping of human powers like billion-dollar franchise has created an Remember to close the loop. With a a revolution. Instead of thinking functions and emotions. All too often, storytelling in advertising An organizing idea transcends a immersive environment that consists storyscape experience, everything’s in entirely new ways, by using the is just story yelling—brands are just campaign. It can be as large as of books, movies, merchandise and connected. familiar patterns and emotions of 5. sense. trying to break through. But those a superstore or as small as 140 games—even a theme park. Because stories, we can truly embrace and The ability to know identity and place, brands are missing a critical lesson that characters, but it will always provide There should be no loose threads, no Harry Potter uses a well-thought-out appreciate today’s craft of marketing, and where or when one occurs. the experience space can teach them: a consumer the same experience, dead ends and no pieces that don’t fit storyscape, it doesn’t matter where a advertising and storytelling. Consumers will learn much more from and that experience must serve the the puzzle. If a consumer begins their overarching story. consumer enters the brand; it’s still experiences than they will from a story. experience with a brand on Facebook The bottom line is that storyscaping that core story. And no matter the level An organizing idea offers consistency. of immersion, whether it’s bite- or or on a website or via a digital display, will solve any business or brand It’s the difference between watching As the experiences we create today super-size, the consumer will always it should always lead back into the need, and it will do so by building a story and being immersed in that become more and more complex, the experience the brand as it was meant experience as a whole. By thinking in on the foundations of storytelling to story. It’s the strength of engagement story experience we provide should to be experienced, over an entire a circular, cyclical way, the consumer develop an approach that will create through interaction. The story becomes become proportionately simple. This spectrum of engagement possibilities. will become “lost” in a brand’s story an experience that will appeal to its much more powerful if done right, will allow for a message that is truly and experience so much more than consumers. Storyscaping allows and once you recognize that, you can purpose driven, one that doesn’t need 4. Apply “systems thinking” words and images. businesses and brands to turn a build worlds, not just ads. For instance, to be diluted to fit into the constraints to connect the story. philosophy into a plan—to take the telling a story about your first kiss is not of social media, in-store advertising, Systems thinking has the ability to resources they have and focus their as powerful as that kiss itself. If you can ecommerce or mobile experiences. help us understand how individual energy on the right choices for a feel an experience, and find yourself When you have a great organizing idea, items influence each other within the connected consumer experience. caught up in it, it’s an entirely different everything falls into place, making it whole structure, and is an approach to level of interaction. problem solving that uses a 2 http://www.ted.com/talks/rives_tells_a_story_of_mixed_emoticons.html 111 112 TREND 3 CONTINUOUs ExpERIENCEs BRAND As ChANNEl: Quick. There goes your brand From the technology side, it’s the message. Did anyone notice? if they same as what we call an API or “Today’s environment noticed, did they remember it? Did Application Programming they remember the story, but not your Interface—a back-end mechanism requires persistent and toDaY’s “alWaYs-on” MessaGInG brand? Was it compelling enough to for distributing content persistently powerful brand messaging go viral? Will it have enough cultural through an application. —sometimes referred to as currency to be passed on, remixed, “Brand as Channel”—a big, personalized and picked up by the Think of it as “always-on” messaging broad, long-lasting, idea- Written by Alan Schulman, Vice President, Regional Chief Creative Officer, New York City press? And if so, what do you do like a news network. based platform or interface.” for an encore? can you sustain the momentum? Think Programming, not Publishing If you’re like most marketers, you’ve Welcome to brand communication probably already become a pro at at the speed of culture—where optimizing your web destinations— the criteria and key performance starting with your brand website and indicators (KPIs) for brands in today’s bolting on additional presences on connected and time-constrained world Facebook, YouTube and Twitter, have increased exponentially. ROI all linked with the myriad Web 2.0 may remain the ultimate metric, but sharing applications. Perhaps you’ve the task of preparing for sustainable, even optimized the pursuit of the memorable brand communications publishing model of the 3 Cs— requires much more than a joke at Content, Community and Commerce— the end of your TV spot or a traditional across your sites and partner sites. All “campaign pool” of annual television of this is essential to the table stakes and print executions driving to your of a digital ecosystem in today’s user- Facebook page—with some centric world. But to take the next step incremental digital media spending towards “Brand as Channel” requires to support it. the need to back up your brand platform and umbrella-selling proposition with a Today’s most progressive brand fundamental question: marketers have realized that to remain top-of-mind in this Which does your brand have? A environment requires brand campaign tagline written to synopsize messaging from a much more the proposition of an ad campaign? Or, persistent and powerful platform is it a Big Brand Platform idea? One than a traditional ad campaign— that’s wide enough and big enough to without interruption. This messaging connect with consumers, understand is sometimes referred to as “Brand their human behaviors and adapt to all as Channel,” a big, broad, idea-based the devices and channels they use over platform or interface through the long term. which brand content, services and multi-channel digital and physical how do you know? experiences are continually Stress test it. Is the idea big enough programmed and served. that you could iterate or expand on it in 114 TREND 3 CONTINUOUs ExpERIENCEs any channel, to multiple segments, permission to reveal, in very human packaged goods, adopting the “Brand the outset of the effort, GE appears with any kind of content? In the world stories, the many ways one can, as Channel” approach is even more to have committed tremendous of paid, earned and owned media should and does do the responsible challenging as low-traffic, owned resources, both human and capital, opportunities, can it be remixed, thing. It features numerous additional brand sites have given way to to storytelling through this Big Brand crowdsourced, socialized, mashed categories of persistently provided Facebook pages, applications and a Platform. At the organizational level, up and made whole again? Or is it and refreshed multi-channel content paid-media propensity to push price GE staff includes a Head of Content just a slogan? across all things text, audio and video— promotions to drive case shipments. Programming whose remit transcends including everything from relationships Digital ecosystems here take on a Unfortunately, these are questions and ethics to pets and animals, sports, different shape as functional benefits and product utility often overwhelm that many traditional, above-the-line agency partners fail to address when education and many others. brand platform possibilities. Creating, curating and programming this distracted by the largesse and allure Creating, curating and programming Brand Channel is no small task and no But this needn’t be the case if of the traditional television campaign. It’s often left downstream for the this Brand Channel is no small task and no small investment. Yet, the marketers and their agencies are small investment. Yet, the opportunity for digital agency partner to try to make opportunity for continuous cultural able to pivot toward a more service- continuous cultural currency that connects back oriented content creation mindset as expansive as possible within the context of a campaign, rather than currency that connects back to the brand is both resonant and evergreen. around the brand’s functional to the brand is both resonant and evergreen. originating it as a content platform. It’s not a campaign that begins and category, rather than relying on ends, but a regularly scheduled impression-based campaigns that The general rule is: You know you persistent platform that is discovered in focus too heavily on traditional brand mere website-based content. In have a Big Idea when it writes itself. progress. awareness, recall and health measures. categories ranging from Innovation What to look for is the opportunity and Ecomagination to Data to go beyond the written word and Multiple Products require connected Thinking Visualization and Healthy answer the question, “If this idea a Moving Platform With corporate Messaging Imagination, literally dozens of hours were a cable television channel, could For marketers with portfolio products At a corporate marketing level, the of content are ready to connect to a we program it 24/7/365?” To go even in multiple categories, this approach “Brand as Channel” approach has variety of audience segments from further, do the brand’s core values becomes even more essential. become an imperative in the digital the investor, the enterprise, the and permissions truly resonate with The alternative ad campaign-based age. No one seems to know it or customer and the consumer in the GE Above, SONY illustrates the action execute it as well as General Electric Imagination at Work storyscape. This this idea? Or is it an inelegant stretch approach often yields different brand and spirit of its brand platform and and their “Imagination at Work” content is made available through just to accommodate your desire to campaigns from different divisions, all defines it as “uniting imagination content channel platform. From multi-channel distribution—not just draft off of high-traffic consumer with different selling propositions and reality, designers and engineers, content categories like music, movies competing for the consumer’s attention. hardware and software, electronics and games? and entertainment, Sony and its For a global brand like SONY, whose consumers. The dot that links make Building a big idea: you know you Take the Liberty Mutual Insurance business units and brand architecture and believe is the place where have a big idea when it writes itself platform: “Responsibility. What’s your span multiple categories and imagination and reality collide. It’s Policy?” (Shown on next page.) This is consumer target audiences this point of ignition that transcends anything but an advertising campaign. (consumer electronics, gaming, filmed reality. The dot is the role of Sony.” It’s a great big idea-based content entertainment and music), divisions platform that features dozens of iterate around one big entertainment- Given the power of a platform this consumer, cause and community- centric content platform: “Make. broad and extensible, imagine centric ideals and ethics built around Believe.” Consider how this SONY the channel-programming doing the responsible thing. brand platform idea makes itself so opportunities to iterate around it. The beauty is that the product— extensible for content creation. insurance—offers the central brand In certain verticals, like consumer- 115 TREND 3 CONTINUOUs ExpERIENCEs the corporate site—and provides First, “paid” media has a critical role And “earned” media within social The combination of these offerings deep dives into the diversity of GE’s to play—right along with tactical social platforms is actively partnering, is “storyscaping”—the deliberate divisional engagements. Importantly, platforms like YouTube. Marketers curating and crowdsourcing variations and measured effort to move from the content isn’t presented like who leverage their paid media to focus on a theme by the consumer—while traditional fixed-term, campaign-based commercial messaging, but rather as on intriguing the target audience by being mindful of adequate backend thinking to a big brand, content-centric unique news and documentaries that pulling them into the story in a filtering and appropriate age criteria for platform idea that serves as a multi- function as edutainment. disruptive yet alluring manner will consumer-generated content. These channel value proposition for your brand. out-clickthrough impression-based “create, customize, share” interactive banners that try to tell the whole content offerings and applications are For “now showing,” persistent brand brand story and typically support as essential to provide as your library of communications at the speed of traditional mass reach media “owned and commissioned” storytelling culture and evergreen extensibility, (consider how successfully Hollywood content. They should reside in places there’s only one question that remains: studios do this in their teaser trailers). other than your brand website (e.g., Facebook, Twitter, Pinterest)—where Can your ad campaign do this? The secret is to employ both teaser the social conversations and creations tactics and unbranded headlines that are actually happening. pull the target in without giving away the brand. This takes courage for marketers who live by effective frequency measures that ladder purely to brand awareness KPIs. For business case proof, one need only look to the pre-launch programming efforts of HBO to discover the power of pure intrigue as a message focus to drive interest. On the “owned” side of the equation, the goal becomes more about consumer involvement and persuasion. This means providing The GE Show The “Brand as channel” Media plenty of brand-centric short- and Approach: intrigue, involve, Persuade long-form storytelling content In the “Brand as Channel” approach, opportunities that will populate your once the Big Brand Platform idea is site, and native application-based stress-tested to accommodate both channels that you commission and real-time relevance and evergreen program. When appropriately linked extensibility, the challenge turns to to click-to-download PDF, RFI, overlaying this content-centric coupon, sample or even purchase ecosystem for success around functionality, the continuum between pre-determined and defined KPIs brand communications, data capture in the paid, owned and earned and commerce is closed. channel media. 117 TREND 3 CONTINUOUs ExpERIENCEs Over the past few years, a digitally It has to do with the particular driven revolution has permeated audiences being targeted, and the ADApTINg TO A everything we connect with, methods used to connect with those resulting in many changes. And audiences. As these audiences while the media allocation pie continue to mature technologically— FRAgMENTED MEDIA itself continues to shift—from one as has been the case with the growth dominated by traditional to one and expansion of Millennials—the more balanced by digital—so does shifting is not so much just about ENVIRONMENT consumer consumption. This digital “time shifting” but rather “platform era of connected and continuous shifting,” particularly as it relates to experiences is evolving humans into video consumption. a race of “digital social beings.” For businesses and brands that want Written by David D’Alleva, Media Director, Boston Shifting consumer habits, powered to explore the digital channel further & Peter Colapietro, Sr. Manager, Media, New York by technology, has helped shape a and attract the Millennial customer, a new digital landscape across four two-prong approach is often the best screens—computers, smartphones, tablets and televisions. Whether it’s sharing, commenting, submitting response videos or creating original “The only constant is change, continuing content, the ability for frequent change, inevitable change, that is the interaction on multiple devices is fueling organic experiences, and dominant factor in society today. No sensible brands are trying to tap into them to decision can be made any longer without meet their goals. And as the old phrase “the only constant is change” continues taking into account not only the world as it is, to ring true, humans continue to be but the world as it will be.” –Isaac Asimov both enablers and contributors in this digitally driven media revolution evoking one key question: way to accomplish that: Build a plan Does the ability to weave content and with an adaptive media mix measured experiences across newer platforms against goals and use both brand and generate new ways to think about direct response messages to create connecting brands and customers? a continuous, trackable experience from the top down. The rise of “Platform shifting” Today, the digital space often applies For example, TV and radio spots often an approach to solving problems that have trackable URLs that connect to is irrespective of medium or channel. a central landing page. Conversely, But finding the perfect media mix is digital video can be used as a mass- still a question that needs answering— reach vehicle in markets that can’t and one size doesn’t fit all. afford TV. These digital videos can then lead to the same central It has nothing to do with merely landing page. shifting traditional to digital dollars. 120 TREND 3 CONTINUOUs ExpERIENCEs It’s fairly common to pair brand specialists. Both, in essence, need cohesive creative brief for the “super- Video, for one, is exploding in a big awareness with traditional media, to become well acquainted with user” during production and editing. way with evolving technology and while digital media gets aligned the limitations and capabilities faster Internet speeds, enabling a with direct response because of its of the other. For instance, media The video episodes that were wide array of video-based placements inherent interactivity and trackability. strategists need to become familiar created were pushed out through and inventory. Much of it doesn’t However, these lines can and should with the level of effort and production paid YouTube video placements in have the time constraints (i.e., 15- or be blurred to prevent any medium timelines required for different types conjunction with a significant amount 30-second limits) used exclusively from ever being pigeonholed. of assets in order to prevent building of earned views coming from the in pre-roll. The sweet spot now Regardless, businesses must build an impossible plan. And creatives subscribers of the two “super-users” hovers around 1 to 2 minutes, multiple entry points to a single should be aware of the target chosen. The video content was giving advertisers the opening to trackable sales funnel while giving audience, the sites and content that connected to other paid placements become content creators in a more customers reasons to purchase audience will see and the context of outside of YouTube and released over substantial way and then capitalize on along the way no matter where they the environment in order to closely the duration of the campaign. the response. enter the conversation. This takes match message and call-to-action. the emphasis off the need for a The resulting cost-per-view Building out a launch plan, which conventional “media mix” and shifts Whether the cross-over of skill sets on YouTube was very low and considers teasers on television that it to building communications that is deep or not, creative directors and complemented Foot Locker’s drive to long-form installments connect from start to finish. media strategists should be involved television impressions in a big or continuations of video online, at the onset of the planning cycle to way. Through paid YouTube video creates a strong interest platform not “creative and Media,” but trade knowledge while brainstorming placements, embedded YouTube for retargeting. By using a “creative Through Media” plan design. This may not sound videos and earned views, the co-op continuous message through The complexity of communication like a new concept, but with the video content netted over 1.5 million mediums, marketers can steer tactics available (whether digital or rapid fragmentation of the media views, over 42,000 comments and potential consumers to connect traditional) requires a purposeful and landscape, it becomes even clearer nearly 6,000 participants in a six- digitally in order to pull them in and diverse set of creative assets to drive to the end user when this process is week campaign flight. Through close then retarget them with another the conversation to the next logical undervalued. collaboration between media and message. Mass-reach vehicles such checkpoint. Repurposing creative creative from the beginning, the as television, radio and print should from one channel into another The benefits to this process are brand’s TV spots were augmented always have a primary call-to-action just doesn’t work. It’s wasteful to seen with Foot Locker’s back-to- with significant views and exposure that entices customers to connect deliver an out-of-place message to a school campaign that employed their within digital video online at efficient digitally. Whether it’s visiting a potential customer that doesn’t tap overarching campaign message used costs. Seeing a positive effect on “pixeled” website or signing up for into their current state-of-mind or in television spots within a co-op sales during this campaign period an email, all media should drive to match the environment it’s displayed content creation sponsorship with proved that produced, branded TV a connected retargeting platform. within. Always match the creative YouTube “super-users”—those with spots mixed with guided, partner- Done properly, a pool of potential content and message to the context a YouTube channel and significant produced digital content can be a customers are acquired, primed and it’s delivered within and the content following. The “super-users” formula for success. ready to be exposed to discounts, it’s surrounded by. were selected using inputs from exclusive offers or other relevant SapientNitro’s media and creative 2. Pull customers in with strong messaging. There are three pillars of practice to teams based on their ability to hit the content, then retarget them. The consider in order to mature at the target audience and how well their Internet enables instant, widespread 3. create balance between rate of digital change: channel content matched the creative sharing of an enormous quantity advertising and experience. Whether tone of the campaign itself. The of content, so a good amount of it’s the publisher or advertiser, 1. cross skill sets. This requires media team provided the guardrails ammo is needed to make a lasting balancing advertising and experience a fundamental change in how for the program, giving the creative impression. should be a required consideration for creative specialists work with media team the ability to construct a any launch strategy. With cost-per- 121 122 TREND 3 engagement and cost-per-view information has always been there. becoming more prevalent and The Pony Express riders began their scalable, its use should be the center “speedy” delivery service in 1860, only of any media spend. Not only does it to be rendered obsolete a year later mean you are paying for the people by the telegraph. who want to see your ad or content, but it also means you’re not inhibiting In the end, it is vital that businesses or tarnishing the experience either. and brands place less focus on the channels themselves and YouTube’s TrueView product is one more on the pathway of content very good example of how this is communication tied to desired done right. Advertisers can purchase outcomes. For many advertisers, inventory against a desired audience agencies and publishers, these types geographically and will only pay of changes might require a bit of for a video view if the user doesn’t restructuring—not only in how teams choose to skip their ad in the first 29 are set up, but also how business seconds. If they do skip it, that free problems are approached to begin partial impression didn’t impede their with. Content is the new frontier experience. It’s all about creating that’s already here. Harnessing valuable content and then letting the its potential and connecting all user self-select the content they want the way through the funnel is a to see. fundamental requirement for any ThE FUTURE OF strategy built alongside a media mix harness the new Frontier that is designed to adapt to change. The strategy of weaving content and Whatever the medium or message, CONTENT ExpERIENCE: sponsorship experiences across the matrix of communications video platforms to generate new ways should be simple and specific. If it’s to connect brands with customers not tracked, retargeted or saying anD hoW to DesIGn FoR It works, but it isn’t a new consumer something of value then get back in DNA—the need for speed and the room and finish road-mapping. Written by Kevin Nichols, Director and Practice Lead, Content Strategy, Boston 26 TREND 3 CONTINUOUs ExpERIENCEs someday very soon, shopping for website or mobile site, and via any Businesses will encounter even greater For instance, a search engine will your daughter’s birthday present will type of physical communication challenges to get consumers relevant, automatically filter through 10,000 look like this: (internal or external to your business) meaningful and timely content. search results to give you what it Defining content within your brand, company or knows you want to see. Are businesses getting the right You are at an electronics store communication ecosystem. This Consumer expectations will drive looking for a tablet. You see one model includes communication at every content experiences to their First, let’s be specific about what intelligent content solutions; they More and more regulations over the you like, pick up the box and scan customer touchpoint, as well as the customers? A Havas Media report we mean by “content.” want real-time information delivered use, collection and sale of consumer its bar code with your phone. Your data captured about those customers. surveyed 14 countries and 50,000 at a variety of different moments and data will unfold. Last year, the phone immediately retrieves product In many ways, content is the consumers in November 2011 and Ask 10 different people to define events. Personalization will be a Privacy, Technology and the Law information based on what it knows manifestation of a brand that isn’t found that “70% of people would content, and you’ll end up with 10 critical component—like automatic Senate Judiciary Committee was you prefer to see; in this case, that brand’s actual products or not care if brands ceased to exist.”1 different perspectives. Usually the traffic alerts as a customer drives formed, which monitors data mining, comparative products and prices. services. Think about that for a minute: Though many variables contribute definitions involve the many types into a city. For example, a woman ensures consumer information In addition to its products and services, to consumers’ perceptions of of content—audio, text, video and researches a product at home, then transparency and suggests new You quickly compare other tablets a brand is actually its content. brands, content experience images—what is read to a customer goes to the store and swipes her phone laws to protect consumer privacy. by swiping your phone against other plays a large role. And consumer from a support call center at a kiosk. She’s greeted by name and Issues like cyber-bullying and models—never touching the screen— Content creates a customer’s cynicism presents a huge representative or what a car the customer representative has all of increases in plagiarism and misuse and decide one model and brand is experience with brand. As such, opportunity for businesses dealer picks up from their auto her relevant information. So her of intellectual property will further perfect. You take a picture of the you need that experience to be to differentiate themselves manufacturer to share with in-store experience is personally focus on questions of technology and tablet with your glasses, send it to your successful—it’s a brand asset that through honest, constructive and customers (or mechanics). But connected to her needs, regardless ethics. All of these factors will impact phone with a simple voice command requires much effort to grow, evolve consequential content. this approach merely defines of platform. Later, on her birthday, what businesses can and cannot content by format; it is much more and text the image to your daughter and produce value. When used she receives an offer and, after that, do with consumer information and than that. So let’s try a broader, with a “happy birthday” message. properly, content can become a updates about the product warranty. will create new companies in social more useful definition that can major part of a brand’s life force. And media, search and other venues that encompass them all: While you scan your phone over it makes a customer’s connection to In the next few years, many types of promise “mining-free” and “cookie- a checkout counter to finalize the your brand seamless and engaging. advancements will evolve the format, free” experiences. Content Experience In the digital landscape, content is: purchase, you ask your cell whether medium and consumption of content. as a Brand Asset you left the lights on at home—some- The Future of content Wearable technology (eyewear that New players in social media will • created by someone to thing you just remembered. Your phone With over 10 billion indexed captures video, for example), mobile emerge as “degrees of separation” communicate an idea, assures you that the lights are off. webpages, 1 million mobile apps as a universal remote and wallet, technology increases. Already and seemingly endless amounts and voice command technology will companies such as Hachi are helping Customer • recorded and stored Most people assume that incredible of user-generated content, we’re all be integrated into our everyday introduce folks to people they think electronically, and technologies work together in this drowning in information. Many lives. As the virtual reality of gaming they should know. Social media will birthday-shopping scene, but it’s organizations have little insight into goes mainstream, consumer demand leverage semantic technology to Trust actually content that connects all how much content they possess, what for immersive content (like 3D and create even more sophisticated With • consumed by or shared the elements to create the overall to do with it or, most importantly, 360-degree video) will spill into other networking opportunities. Brand with others. experience. Several different business how to meet their customers’ content parts of their lives and continue to Knowledge-sharing sites will units in several different companies consumption needs. advance. 3D printing will be just continue to emerge, such as Quora, have, somewhere along the line, another feature on a printer. Semantic which allows users to ask any Product or Content decided to invest in robust and compel- Over the next five years, we can technology will evolve given the sheer question and receive accurate, clear Service ling content processes and strategies. expect these challenges to grow amount of data businesses have on answers from authoritative sources. significantly. People will be over- consumers’ behaviors, creating a Social shopping will become a so… What is This loaded with content and, although whole new market around technology reality for mainstream consumers “content Experience”? their consumption patterns may that can predict specific consumer as customers automatically share Content includes any material that evolve, their need to get what they behavior and respond to it. purchases with friends and solicit you publish on your organization’s want when they want it won’t change. their feedback. Finally, peer-to-peer, 1 www.havasmedia.com/2011/11/meaningful-brands-havas-media-launches-global-results/ 125 126 TREND 3 CONTINUOUs ExpERIENCEs user-generated content sites for tangibly measured value; an effective Just as brands make significant future success. This model, pictured brand and product evaluation will content experience translates into investments in marketing collateral on the following page, drives create more ways to authenticate higher conversion rates, stronger and campaigns, they should sustainability. As a business creates customer reviews and increase the customer loyalty and a more reprioritize content that serves content, it continuously evaluates its integrity of responses. consistent brand experience across customer needs: support content, efficacy and then optimizes or all brand channels, from a product white papers, thought leadership and archives it. This process is repeatable, success in the Future package to a customer call center, decision tools to assist the customer extensible and agile. These steps These present and future challenges from Facebook to a mobile app to in finding the right product, just to are predicated on a solid metrics offer unique opportunities. the company website. This reality name a few. If Forrester’s annual strategy, defining success criteria for Understanding holistic content may seem like a no-brainer, but even today after all of the “content is king” talk, many businesses don’t put their money behind this concept. Though many variables contribute to consumers’ Timely, meaningful and relevant perception of brands, content experience plays content creates a successful customer experience and as such, a large role. And consumer cynicism presents a requires investment to empower huge opportunity for businesses to differentiate its full potential. To engender this practice, a business must measure themselves through honest, constructive and evaluate all areas where content and consequential content. lives—internally and externally— extending well beyond just web analytics. A strong metrics and measurement strategy will help strategy—connecting timely, relevant future evolution. It also facilitates content to the right user at the right another important principle: Just as an time—will only get businesses so organization cares for its institutional far. Content strategists understand financial portfolio, content requires the types of content experiences constant “seeding and feeding.” consumers need, and then determine reports on customer experience make content, creating KPIs to measure it, operational and governance processes The second rule of thumb is that one point clear, it’s that customer rolling results up into dashboards to create and maintain those businesses must understand that experience embodies the entire and reviewing it semi-annually— experiences. Businesses must act investing in content strategy is only customer engagement with a brand. on a program level—to set future upon what content strategy requires useful if they also invest in creating High quality content at each point of priorities. and make an investment of time, the content itself. Why develop a exchange has a direct impact on the money and resources in what we beautiful website or mobile experience customer’s brand perception. An The fourth rule of thumb is that outline below. sans a robust new content experience investment in the continuous creation transparency about what customer to support it and a publication model to and renewal of meaningful content will data is collected yields customer The first rule of thumb is that ensure continued relevance? Content competitively differentiate a business trust. This practice will not only businesses that deliver successful is not inexpensive, so figuring out the and position it as a superior brand. increase customer loyalty to the brand, content experiences in the future type of content experiences you should but will also position businesses to will do so because they recognize create must be directed by a long-term The third rule of thumb is that the respond to future regulations and content as a strategic brand and roadmap and strategy. development of a closed-loop content prevent potential litigation. business asset. Content has a strategy will position a business for 127 128 TREND ON cl TE Ex ON LI us NT 3 C NE iV E closed-loop content Step 2: strategy Model Step 1: Plan closed-loop content Assess strategy Model step 1: Assess • Audit content • Conduct shareholder interviews/surveys Define as needed Governance Step 3: • Analyze and validate content ecosystems Step 5: Model Design (sites, channels, social, partners) Maintain & • Analyze competitors’ content experiences Optimize step 2: Plan Step 4: Set objectives with global stakeholders • Create • Define measurement plan • Determine accountability • Create content recommendations • Define governance strategy A/B testing and multivariate testing, articles on a mobile device, but that consumer surveys and the like are all does not mean that a man on his step 3: Design proven mechanisms to measure the way to work doesn’t want to consume • Plan experience and content • Define new workflows including loop efficacy of content solutions and a white paper on his mobile phone. • Prepare staffing recommendations can help businesses glean much Content should be agile so that it • Prepare metadata strategy information on consumer behavior can be shared, repurposed and • Develop taxonomies to guide future content decisions in easily consumed in many • Develop editiorial guidelines a non-invasive manner. different environments. • Develop content model • Develop content production/migration The final two rules of thumb are conclusion • Draft editorial calendar interconnected: Content experience To quote punk rock goddess Nina step 4: create is no longer a one-way conversation, Hagen, “the future is now,” and • Create assets and copy and customers weigh in on a brand businesses should appreciate this • Input into CMS through their own content and fact. No matter where the future I CAN sEE ClEARlY NOw… • Localize as necessary word-of-mouth experiences. Obviously, takes us, we have the tools to meet • Review and test consumers are your most important its demands. Customer needs should • Implement governance model mouthpieces. Simultaneously, drive content experience, investment ACROss ThE ENTIRE ExpERIENCE: and workflows consumers want more control over the in respective content and the • Finalize editorial calendar content with which they interact. Make operational model to support its step 5: Maintain & Optimize content as portable as possible, so creation, delivery and governance. tHE analytics maturity modEl • Deploy content and application changes that users can consume, share and This will keep any business at the • Use analytics to determine areas post information on a variety of forefront of modernized content, of success and failure different formats. Always think about regardless of how technology may • Plan periodic audits the channels on which content will evolve, and will enable businesses to • Adhere to editorial calendar be consumed and create content for meet the future without overreaction Written by Jennifer Patterson, Sr. Manager Marketing Strategy and Analysis, Birmingham, MI • Optimize as necessary • Archive unnecessary content those experiences, but don’t limit it or afterthought, thereby positioning & Dave Kane, Manager Interactive Strategy and Analytics, Chrysler Group LLC, Auburn Hills, MI to that—provide options. You may not them for differentiated success. want to immediately serve up long 129 TREND 3 CONTINUOUs ExpERIENCEs imagine being the cEO, cMO or head work together via analytics across the important to understand that there organization. The champion roots for of sales of a major manufacturing entire experience is a is no cookie cutter checklist to analytics and takes the initiative to company with these insights: if must in order to optimize and follow that will get you from Phase share insights and recommendations your daily website conversion rate positively impact the bottom line. I to Phase V (see page 133); rather, for improvements with all the teams. The benefits of declined even half a percentage it is an organizational change to be Finding a champion can be tricky; point, you could accurately predict There are many common challenges embraced by your teams and this individual may cause the most cross-channel marketing millions in revenue would be at risk. along the path to becoming an disruption at first. In many cases, analysis include: conversely, if it increased, there organization that uses data to drive embedded in your projects. Once this the person that embraces and • Faster decision-making, could be a corresponding increase in meaningful cross-channel experiences. happens, there will be benefits that evangelizes analytics is one of the benchmarks and goals utilizing your monthly sales. This data-driven approach can begin to pay off quickly. savviest because they know the power consistent success metrics per definitely be disruptive. It changes the of data and how to use it. channel or campaign Imagine if you could predict the way we do business, and it does not The Analytics Maturity Model number of key marketing activities happen overnight. By expanding the This all sounds great, but how do you You may recognize your champion • Flexible implementation with needed to drive marketing campaigns view of data to span across multiple really begin to use data and insights because when you interact with reduced time to shift media spend to meet your sales goals, or channels and brands, agencies can to change how your organization them—when you talk about data, dollars and tweak marketing knowing which strategies, channels understand how marketing initiatives executes marketing strategies and insights and testing—their eyes initiatives mid-campaign—with 360˚ and tactics should be tweaked are working together, and that move towards the next level of cross- light up. You’ll notice the champion views of consumers and insights mid-campaign to meet success information can be used to improve channel continuous experiences? leaning forward and you can see them throughout each stage of the targets. Do you understand those the consumer’s continual experience. Start out by gaining acceptance and thinking about how to use the insights customer journey exact marketing initiatives that This is achievable with stakeholder striving towards advanced usage of provided. The champion should have are impacting your sales, whether commitment, a champion to drive the Analytics Maturity Model. This influence in the organization and • Organizational alignment around offline, online or across multiple it and by following the Analytics requires three things: others should gravitate toward him or the power of analytics, ensuring channels? Do you know what is and Maturity Model roadmap. It is her for expert opinions. Sometimes, best practices lay the foundation is not working, and where the user 1. understand that this is going this person is already charged with for future marketing initiatives experience must be optimized? We Analytics Must Pull in Data From to cause disruption. Disruption owning analytics; other times, this have the honor of working with many Across the Entire Experience sounds scary. No one really wants person might be part of a different • Focus on continual improvement organizations that have analytic to be disruptive. Be transparent team. To be most effective, this person of return on optimization (ROO) insight and use it to make key and let your teams know what you must knock down walls and influence and return on investment (ROI) marketing decisions. Website social are going to start doing. Give them changes in marketing strategies and some time to hear about it, digest it tactics driven by data and insights. The Data-Driven Approach and understand that this can benefit Many organizations claim that Online sales them. There may be some chaos 3. leverage the Analytics Maturity Advertising they are data driven, but to what starting down this path; accept it, Model. Now that the teams have been extent are they really using data embrace it and plan for it. You are forewarned that their world is about to make decisions to improve changing the accountability of a team. to be disrupted and that an analytics the cross-channel continuous TV search You must emphasize that by working champion has been identified, the experience? Usually, when we hear together with the same strategies, organization must figure out where it an organization claim that they the results will be markedly more stands within the Analytics Maturity are “data driven,” it means they beneficial for the consumer and the Model so that the right tools can be determine success by looking at a organization. utilized to progress through all of the few metrics for a specific marketing consolidated stages. Our Analytics Maturity Model channel or even just straight up View/ 2. Partner with a champion to take is a phased approach for building the sales. With the rise of cross-channel campaign ownership. The “analytics champion” foundation and putting into practice a Analysis experiences, the ability to understand is one of the most important people best-in-class marketing optimization user behavior and how channels needed to create change within an organization, based on data-driven 131 132 TREND 3 CONTINUOUs ExpERIENCEs decisions. The following phases are People may still be a little resistant In this phase, we also start up an A/B Another phase IV stand-out some of the milestones that are key in this stage, but they will also be and multi-variate testing program. experience was participating turning points. curious. We have gotten past this We use the term program because in a SWAT team for a cross- hurdle across many clients by when fully launched, the experience channel marketing campaign. The Phase i—reporting simply gathering stakeholders and will be continually optimizing via campaign kicked off via television This stage is critical. It sets the internal team members regularly testing across channels by developing commercial during a major sporting foundation for the rest of the to talk about data and insights. a testing queue, building tests right event. Imagine, from an analytics model and roadmap. Here, we The outcome of these discussions into projects from the brief and perspective, being brought into the generate simple reports to show includes getting the teams engaged launching major changes via testing. conversations when tactics, across that data can be leveraged to make with the analytics teams and Only 26% of organizations use testing the many channels from television, decisions rather than just being identifying areas for improvement on their websites1 and the number is newspaper, social, search, banner used to interject numbers into a and additional investigation. much smaller for those companies ads, email, website, store and sales, Powerpoint. The champion must testing across channels. This is a were still being developed. Because set the groundwork. Progress can Phase iii—Execution great opportunity to be a leader Chrysler was advanced within the be made by getting relevant data This is one of the most exciting to anticipate user behavior, tweak Analytics Maturity Model, we were to each audience by identifying phases and is usually a turning point. experiences based on test results and able to bring in best practices from and reporting on a few basic key Execution is where the teams get to identify quick wins. previous and similar campaigns. performance indicators. We typically start experimenting and testing across start this phase by building out a channels to identify how they work Phase iV—strategic We described how each channel regular weekly or monthly report to together. The champion and your The fourth phase is strategic data impacted another, and pulled in data be monitored in order to understand marketing teams (especially creative) use. We can start tapping into the big around specific channel interactions baselines and look for areas to dive can use this data to drive experiences data space by compiling data across to help shape the execution of the into deeper. The first report can be and design. Best practices on how channels and looking at trends and tactics. We also had the ability to extremely eye opening. to execute tactics are identified and correlations to see what activities develop objectives and baselines for shared. Analytics start to be invited influence each other. Data modeling each channel individually and as a As an example, SapientNitro to the table as objectives are being and predictive analysis are leveraged whole, as well as targets for success. implemented a monthly report for devised. Recently, SapientNitro to start creating ROI models and Chrysler and immediately identified redesigned websites for Chrysler. targets. Marketing initiatives are During the campaign, if we were that the landing pages for the banner Since analytics was starting to be identified that can be tweaked not meeting targets, we could dial ads driving traffic to the website accepted within the organization, to deliver successful outcomes. channels up or down to stay on track needed to be optimized to increase the we were able to join the project at SapientNitro conducted an analysis and perpetuate a positive consumer rate at which users ventured deeper the beginning and pull many ad-hoc for Chrysler that identified the “mid- experience throughout the multiple into the site for more information. reports aimed to answer questions level content” that people utilized, channels for the duration of the about users’ current website which was directly correlated to campaign. Teams involved rallied Phase ii—Analysis behaviors and interactions. buying indicators for demand. Once around the initiative—they were In this phase, we begin to analyze we identified those metrics, via aligned from the beginning and were reports and encourage recipients The results were analyzed and statistical correlation, we were able dedicated to the user experience as to ask questions. We look at leveraged by the creative teams as an to recommend that those pieces of well as measuring success across all recent launches and campaigns to input into their designs, hence data- content be served up in online ad the channels. review performance. We dive into driven insights. The success of the units and surfaced to users on the user behavior to see if there are project was not solely based on the website in the proper context during Phase V—Analytics competitor opportunities for improvement. We analytics by any means, but this data the information-gathering steps of This is where analytics are embraced introduce analysis to the marketers was a contributing factor towards the their journeys. and utilized throughout the and the creative teams to discuss objective success of the redesigned organization. Once an organization opportunities found in the data. websites. reaches this phase, key executives 1 Forrester. “organizing For site optimization,” august 2012 1 Forrester. “organizing For site optimization,” august 2012 133 134 TREND 3 invite analytics to the table beyond marketing initiatives. This maturity level means that case studies and Take this quiz: ROI stories are shared outside of the marketing organization. Very few Ask yourself the following questions. organizations are truly at this level. If the answer is unclear, you may be further behind in data-driven user ex- conclusion periences than you thought: The five phases of the Analytics Maturity Model may sound • What is each group’s goal? overwhelming. Accepting the power of analytics and leveraging the model • Where do these goals overlap? requires organizational support, executive visibility and commitment • Are you setting objectives and across all teams. But ultimately, this key performance measures that approach allows us to understand extend beyond the original ask? consumers across channels so that we can better shape and optimize • Do you understand how your online their experiences throughout media is driving sales? their journeys with tactics such as anticipating demand or creating • Do you understand how your paid personalized experiences. It will search and natural search are help change the way we market to working together? consumers across the experience, setting the stage for breakthrough • Do you understand how your local performance, as well as improved store event is driving an increase in ROI and an improved consumer your social media buzz? experience. So who is going to be the champion driving this change within • Do you know how all of your your organization? channels are working together to impact the bottom line? VAlUINg FANATICAl ENgAgEMENT Written by Scott Petry, Vice President, Technology, Atlanta 135 TREND 3 CONTINUOUs ExpERIENCEs The fan experience is changing. explaining the rules of the game and centralized Experiences Seed the places Socially enabled no longer is it sufficient to focus on advocating for the sport or team in Microsite(s), Social where our fans play Aggregation & Enablement activities and tools discrete in-venue, broadcast and social media. And, most importantly Extend event to local and digital experiences, with separate to the industry, the engaged fan out of market fans revenue streams in each channel. spends time and money consuming Disrupted by the connectedness content and experiences by buying Onsite Onsite of fans, sports franchises from tickets and filling seats in-venue, experiences experiences nAscAr to the Football league (uK) driving TV ratings and broadcast 3-hours pre 3-hours post PrE-Event POsT-Event are taking a hard look at how they license revenue and generating ad Online activation and Event Online activation and engagement prior to event engagement post event engage fans, and how they value that impressions across every socially Enabled socially Enabled engagement. advertising medium. Activities & Tools Activities & Tools To respond, these organizations The experience of the fan has become Connect with the passionate, Reconnect with fans, enable engage the “regulars,” seed sharing, extend communication, are rebuilding their engagement continuous. Throughout the year, excitement and buzz Beyond the venue grow fan base model with digital at the core as a fans show support for their team or way to remain connected with fans their favorite athlete. The fan wants Distributed Experiences Seed the places Social Network, Mobile, Seed the places continuously, and allow fans to information throughout the offseason where our fans play where our fans play Geo-Social, Media engage more deeply. leading up to the next season—about trades and changes, new rules and It all starts with the fans. Fans news and points of view. The fan by definition are fanatical. They wants full coverage during each week The Fan Engagement lifecycle wear jerseys, paint their faces, buy of the season—the build up to the equipment, watch every game and next event, the event itself from every sports revenue Models brag about their team when they win. perspective and the recap and replay The Value of a Fan The sports industry has to evolve Fans have made sports into a $120 of the event. They also want the mid- to engage this connected fan to billion industry around the world. Yet week stories about the preparation Attributable Value of deliver experiences when and where the opportunity is even greater for for the next event and information Attracting New Fans the fan is ready to engage. Today’s sports, teams and athletes who can about the personal lives of their Broadcast Ad Revenue sports revenue models rely heavily connect with fans in deeper, more favorite players. The fan wants a Subscription Content on advertising, sponsorships and engaging experiences. breakdown of the season at the end— Revenue broadcast licensing rights. The next analysis, human-interest stories and Admissions Revenue biggest revenue source is from direct The Engaged Fan coaching changes. And then the cycle Fantasy & attendance at events through ticket The engaged fan is not just a fan. starts all over again. Second Screen sales, concessions and merchandise. Revenue The engaged fan watches broadcasts, A third, and significant, source goes to events, buys better During an event, the fan might of revenue is advertising and Digital Ad seats, subscribes to content and be engaged while in-venue, while Revenue sponsorships in-venue and on digital participates in special promotions. watching the broadcast on TV or while properties such as websites. The engaged fan shows off that he out and about on a mobile device or she is a fan by wearing branded or tablet. The fan may be engaged The most engaging experiences are Non-Fan Casual Fan Avid Fan Time merchandise, bragging about a socially with other fans at an event or often in-venue, but they reach only a team and emulating favorite stars at a party or on Twitter or Facebook. small percentage of fans. Broadcast by using sponsors’ products. The The fan both consumes content and reaches more fans, but doesn’t engaged fan teaches other people creates content. There is no moment engage them on the same level as live to be a fan by inviting them to watch when an avid fan is not engaged. experiences, and tends to blanket the the broadcast, taking them to events, audience with generic advertising. 137 138 TREND 3 CONTINUOUs ExpERIENCEs understanding Fans help us truly understand our fans. A consider where and how they are We know from research that creating We’ve found that the best North American motorsports client is engaging. If a fan is researching fan engagement, and making opportunity to balance engagement building a fan intelligence database in tickets or parking information, they fans avid, involves certain specific and monetization is actually in their platform to help integrate data may be planning to go to an event. behaviors. Attendance at an event We may be able to identify if they are has a significant influence, as does Three categories of Fans digital channels, where the fan from many sources with digital fan can be immersed in an interactive behavior. The database will be used already at an event, and even if they selection of a favorite team or athlete. experience. Advertising can be to segment fans and drive marketing are hungry or looking for a meeting With that in mind, the experiences targeted to the interests of the and advertising rules. point. Or they may want to buy a we create need to emulate the best fan, and the channel is always souvenir. We may be able to identify aspects of in-venue experiences for on, creating an opportunity for The more we understand the fan, if they are watching the event on the fan, and they also need to drive continuous engagement. the better we can engage them. In TV and get them to participate on a attendance and affinity to a team or addition to understanding whether a second screen. They may be blogging athlete, or a “favorite.” The first step to engaging fans is fan is avid or casual, we also need to or tweeting, or just listening. They to understand them. Fans of the learn whether they live near a venue, could be tracking their fantasy team. rule number 4: Encourage the fan largest sports brands cut across most whether they go to live events and We also need to determine what type to attend events, not only through demographic segments: gender, whether they have a favorite team or of device they are using—whether advertising tickets, but also through ethnicity, age, socio-economic status, athlete. In their digital behaviors, we phone, tablet, PC or other. their sense of nostalgia and their proximity to major metropolitan areas need to figure out if they are more desire to experience the sport at and others. interested in live content, news, rule number 3: Engage the fan where “game speed.” We think about fans in the fan plays, and make sure the blogs, technical content or video three categories: experiences align to the fan’s needs. Let fans feel the competition at every Best Practices for replays, and whether they are willing cross-channel Engagement to produce content. point of engagement. Encourage 1. Avid fans love the sport outright. In one solution, for instance, we them to love one team or player. The Observing fans is key to understanding They want detailed statistics and designed a social smack talk energy around favorites drives deeper how different fans want to engage. rule number 2: Create personalized technical information about teams, second-screen application for a engagement and long-term love for We need to figure out when and experiences for fans. athletes and events. sports entertainment client to allow the sport. where they are engaging, and what they do. We need to understand what Personalized experiences built on fans to support their favorite athlete 2. casual fans enjoy the sport but during events. The ability to support For example, allow fans to declare content they are consuming and what what we have learned about fan only engage when it’s convenient. athletes and engage in a social and share their passion points around experiences they are engaging in. And behavior need to be incorporated into They need educational content conversation about them drives one team, and their dislike for others. we need to understand what content the engagement strategy. The same and community support to build deeper engagement with the sport. A visit to any digital experience they create. We need to figure out motorsports client will offer more their knowledge and help them should provide an experience that is which fans are avid and which are detailed technical data to avid fans understand the sport. In another solution, we leveraged designed to extend that “fanaticism” casual, and how their interests vary. without making them click through links, but on the same pages they will Responsive Design (a technical through content and design. 3. non-fans don’t engage at all. solution that allows the same rule number 1: Build a single, provide simplified information with They need a reason, a personal content to easily be delivered to Once the fan is hooked, benefits cross-channel view of fan behavior. helpful explanations for casual fans. connection to the sport, to engage different devices) to support multiple include more increased fan In the same way, if they can identify in the first place. channels with the primary digital activations of sponsorships, and Leverage research and expertise in the the fan’s favorite athlete, they will sport to build a deep understanding offer more content and information experience, but also offered a second improved targeting of advertising of relevant behavioral segments, and related to that athlete. They will also screen and social TV application to impressions. Ultimately, a much establish the critical components of leverage these attributes in the on- enhance broadcast viewing and drive fuller understanding of each fan behavior. However, we also need site advertising the fans see as they appointment viewing. segment—regardless of the channel to build a measurement framework engage in the experience, creating a they prefer to engage with—is in our digital experiences to observe more relevant, tailored experience. revealed. and track fan behavior. This data will To truly engage fans, we also must 139 140 TREND ON cl TE Ex ON LI us NT 3 C NE iV E MEAsURINg gERMAN rule number 5: Leverage fan As the distribution model in intelligence data to highly target broadcast is disrupted, sports on-site advertising and sponsorships. management teams will need to be MUlTI-ChANNEl: able to distribute content digitally, By using fan data to target advertising in addition to working with multiple and sponsorships, it’s possible broadcast partners—both traditional to drive the highest value for and non-traditional. Monetization impressions, rather than blanketing the experience with less targeted billboard advertising that reduces of sports content is changing, and it seems clear that an owned or licensed digital platform may have a aPPRoaChes anD IMPlICatIons fan engagement. For example, a role to play. European sports league client is Written by Uwe Tueben, Head of Digital Commerce Continental Europe, Dusseldorf leveraging an advertising engine Fans are amazing consumers. designed specifically to monetize Their passion can be amplified and sponsorships and content in a way broadcasted through digital channels, that enhances fan engagement by stretching fan engagement far delivering highly targeted advertising beyond the venue and the broadcast. content in a visually appealing way. Reaching the fan throughout the lifecycle of the sport—before, during conclusion and after the event, and across Digital fan engagement represents multiple stages of “fandom”—is an the early stages of a massive shift in enormous opportunity. Improving content ownership, distribution and fan engagement will deliver deeper consumption—perhaps the biggest in engagement and also dramatically 50 years. increase the opportunity to derive revenue from the same. Viewing Following Playing learning Advocating Web social Mobile second screen Broadcast in-Venue As the customer journeys through the viewing, following, playing, learning and advocating stages, each channel should be leveraged to engage, educate and enrich the experience and their love of the brand. 141 TREND 3 CONTINUOUs ExpERIENCEs What defines success in multi- For some, such as established mail- with high management attention and from 0 to 1,000. In terms of good channel retailing and how can it be order companies, this has been a logical significant marketing spend. Vertical customer experience, there is clearly measured? and natural step as they shifted their retailers like IKEA and H&M are still a lot of potential left to be addressed. business from catalog, postcard and doing well, while the brick and mortar Even for a very mature multi-channel call center to the Internet. For others, generalists tend to struggle to attract retailer, this question is difficult to the shift was less clear. online visitors. answer. Yet for much of Europe, the conversion: Where the rubber We found that there was a direct commitment to digital channels— For example, traditional brick and much less multi-channel—remains a mortar retailers have made major hits the road correlation between customer work in progress. online expansion happen only recently. And our list of the 25 retail One of the most significant findings from this survey is an accurate, experience and sales probability. In order to assess the importance stores covers almost every category survey-based estimate of the sales of an effective online customer from consumer electronics to apparel probability for major retailers. Most experience, SapientNitro partnered to furniture to health and beauty. retailers keep conversion rates a with OC&C Strategy Consultants secret, and even publications, such Advocacy: True fans are hard to find to take a closer look at the leading We believe these retail businesses as Internet Retailer, make their own Two retailers that focus on customer multi-channel retailers in Germany and brands have to be leaders in estimates. We wanted to do better satisfaction and emotional shopping, and evaluate their multi-channel four areas to be true multi-channel than that. Through our consumer Ernsting’s Family and Douglas, lead performance. forerunners: survey, we calculated the “sales the pack in this category. The main probability” for all our retailers’ drivers for customers to recommend First, we found that there was a • The attraction of visitors digital shopping destinations. a retailer’s online shopping site to lot of untapped potential amid • The conversion of visitors friends are data security and stock German multi-channel retailers. into customers It was also interesting to see that availability. It surprised us to see that In our customer experience score, • The ability to convince customers OTTO, the retailer that scored best in the ability to return goods that have the highest brand—OTTO—scored to recommend the shop to others terms of customer experience, only been purchased online or in a store just 640 points out of 1,000. We • The ability to motivate customers achieved a score of 640 on a scale was the least important factor. believe this finding is true across to buy on different channels much of Europe, as older retailers The Top 25 german Multi-channel retailers grapple with the changing business In other words, they not only have to BAsic ADVAncED innOVATiOn POTEnTiAl landscape. connect with their customers, but they 65 Weltbild have to inspire customers to connect 60 Bonprix Second, we found that there was a in multiple ways, and, where possible, 55 OTTO sales probability (%) direct correlation between customer encourage social sharing as well. Neckermann Conrad Electronic 50 QVC experience and clickthough or sales 45 Schlecker Thalia probability. We established that there Attraction: A home run for 40 H&M Ernsting’s Family Douglas were direct financial benefits of mail-order giants 35 C&A Rossmann higher quality experiences.1 Based on our survey, we found that 30 SportScheck s.Oliver Gortz Zara mail-order giants—a group that 25 Strauss A challenging Time included OTTO, Neckermann and ProMarkt Innovation Hagebau 20 Karstadt Euronics In our search, we noted that online Conrad—scored well at attracting 15 GALERIA IKEA stores represented the largest piece of and driving visitors to their online Kaufhof 10 OBI the pie for most of the leading 25 multi- and offline properties. We believe 5 channel retailers in Germany. Yet these that this is a natural consequence 0 companies varied broadly in their use of of their business shift from offline multi-channel marketing. to online, and goes hand-in-hand Higher customer experience scores correlate with a higher conversion/sales probability, yet even the strongest retailers have room for improvement. 1 We evaluated experience across 152 criteria. 143 144 TREND 3 CONTINUOUs ExpERIENCEs Multi-channel: Many roads can lead evaluated retailers, at least 50% of (similar to Home Depot). Thalia is a This profile received high scores in to a purchase surveyed online shoppers said they fairly traditional bookstore. All have attraction, conversion and multi- An average of 87% of all online also shop offline at that respective an online shop, but one that is not channel, yet advocacy scores— customers also use other sales retailer. sufficiently supported. based on their lack of differentiated channels operated by the evaluated Few of these organizations have product—tend to be lower. They need retailers. But we do not think this is Wrapping up: Four Areas, One a robust multi-channel strategy. to strengthen their relationships on necessarily good news: We believe Profile For example, GALERIA Kaufhof a social level, perhaps by becoming that such high percentages of multi- Finally, we wanted to compare the 25 launched a Hybris implementation more active on social platforms, channel customers can be indicative leading multi-channel retailers on of their online store, but chose not to connect more deeply with the of the retailer’s lacking ability to the basis of the four success areas: to support click-and-reserve to consumers. There is nothing special attract new, pure online customers. attraction, conversion, advocacy and pick up the ordered goods in the about the offering—their products Such online shops serve more as an multi-channel capabilities. We tried store. These organizations need to tend to be commodities, and not additional offer to existing customers. to find a comprehensive formula strategically determine the role of particularly distinctive. With online’s share of the wallet to compute an overall score and their digital channels, and then act ranking, but quickly realized that on the strategy. These retailers satisfy their such a one-dimensional comparison customers through a broad would not have been appropriate Low scores in attraction, conversion assortment of merchandise and Multi-channel opponents claim that each dollar given the very diverse nature of the and advocacy characterize this fair prices, but must find a way (or euro) can only be spent once, regardless of competitive landscape. profile. Only the multi-channel score is average, leading to the conclusion to strengthen the emotional link between themselves and their sales channel. But our evaluation has shown We found that each organization that these retailers mainly address customers to improve customer that for many multi-channel retailers, frequent could be grouped into one of four major strategic “profiles” (see page their existing customer base with their online shop. We believe that loyalty. Two of the evaluated retailers didn’t address this challenge online shoppers often also shop offline. 147), each with a set of strengths these retailers have yet to find out fast enough: Schlecker went out and weaknesses that represent their how to adapt their business model to of business in June 2012 and strategic position in the the digital revolution. Neckermann filed for bankruptcy. multi-channel marketplace. increasing in many categories, we implication: The retailers have a implication: Low advocacy companies believe that it is not enough for multi- Each profile has four success areas. limited extension of the traditional with an unfocused product selection channel retailers to defend their market On each success area axis, we mark retail model online; the results are will struggle in a multi-channel shares against Internet pure plays. the retailer’s relative score in the lower customer experience scores environment. The basic weaknesses Established retailers should not be respective area. The four coordinates and poor conversion rates. lie in the recommendation and satisfied if their online shops are just enclose a figure—the retailer’s loyalty aspects. The opportunity for there to serve their customer base. profile. Each leading multi-channel Profile 2: Demand fulfillers. In ecommerce is in maximizing loyalty retailer can be described with one this profile, relatively low-price and product recommendations for Channel cannibalization is another of these profiles: fashion retailers such as Bonprix their customers. interesting phenomenon. Multi- and OTTO have traditionally fought channel opponents claim that each Profile 1: Basic multi-channel it out. They target consumers who Profile 3: Fan clubs. Similar to dollar (or euro) can only be spent retailers. This profile includes desire something fashionable but not “passion brands,” these profiles tend once, regardless of sales channel. traditional brick and mortar expensive. Some are online only, such to deliver a differentiated shopping But our evaluation has shown that department stores, which have as OTTO, while others are traditional and customer experience, and are for many multi-channel retailers, typically made only small moves mail-order giants. challenged in bringing that shopping frequent online shoppers often also into the multi-channel space. OBI experience online—but they have to shop offline: For 11 out of the 25 and Hagebau are DIY hardware do even more. They need to reach 145 146 TREND 3 CONTINUOUs ExpERIENCEs not only people who like the brick Consistent high scores in attraction, Final customer Experience scores scoring Methodology: companies “BASIC MULTI-CHANNEL RETAILERS” and mortar shopping experience, conversion and advocacy, but below 700 The model evaluated the customer c&A ATTRACTION but also people who don’t currently experience in eight main categories: average scores in multi-channel, Euronics gAlEriA Kaufhof shop online. We saw examples of characterize this profile. We don’t 600 MULTICHANNEL-USAGE navigation SALES PROBABILITY gortz firms who struggled to bring their interpret the comparatively low multi- 20% hagebau 500 Main navigation Karstadt experiences online. For example, channel scores as a sign of weakness Filters and sorting OBi QVC has struggled to transport their because we believe that these 400 Search ProMarkt emotions from TV shopping into the retailers have learned to compete Site map s.Oliver 300 Specific functions sportscheck online world. with the digital pure players in their strauss innovation 200 respective categories. Still, retailers Products Thalia RECOMMENDATION Zara Top advocacy scores but only average with this profile need to find ways to 100 20% Text “DEMAND FULFILLERS” scores in attraction, conversion and motivate their customers to better Product details 0 ATTRACTION multi-channel categorize this profile. leverage the different existing sales Pictures and images Cross-selling Bonprix c&A conrad Electronic Douglas Ernsting’s Family Euronics gortz h&M hagebau iKEA Karstadt gAlEriA Kaufhof neckermann OBi OTTO ProMarkt QVc rossmann s.Oliver schlecker sportscheck strauss innovation Thalia Weltbild Zara The customer base is devoted to this channels. MULTICHANNEL-USAGE Bonprix respective retailer, though they’re SALES PROBABILITY OTTO Ordering neckermann often restricted in size. We believe implication: Outperformed by their 15% Consumer basket schlecker these online shops are often used attraction, conversion and advocacy Checkout as digital display windows for the scores, these organizations need Shipment brick and mortar channel. It’s not to invest more in multi-channel to Permissions Payments surprising to find brands like H&M complete their offer to customers. RECOMMENDATION and IKEA in this category. Merchandising “FAN CLUBS” conclusion 15% and campaigns implication: High-loyalty retailers We evaluated 25 leading German Top-scoring, high-performing Home page ATTRACTION need to find ways to extend their multi-channel retailers and evaluated organizations such as OTTO and Themes customer base online, among other their performance across four Sales and specials MULTICHANNEL-USAGE Ernsting’s Family Bonprix operate across all four SALES PROBABILITY Newsletters Douglas things, through superior customer categories: attraction, conversion, categories: attraction, conversion, Social commerce h&M experience. advocacy and multi-channel. We also advocacy and multi-channel, and Miscellaneous marketing iKEA QVc evaluated their customer experience offer an interesting path for slower- rossmann Profile 4: Digital champions. score on a scale from 0 to 1,000 and moving retailers in other European or Personalization These firms have made considerable mapped it to our own estimates of international markets. 10% Closed loop investments in digital and online Activities RECOMMENDATION conversion rates. Loyalty program elements. Attraction, conversion rate Methodology: “Customer experience” is “DIGITAL CHAMPIONS” and advocacy are strong, and the only We also grouped these retailers into the sum of all experiences a consumer contact ATTRACTION aspect that is not digital is multi- four main groups, based on affinity gathers when he or she interacts with 10% Country information channel usage. But they struggle— and in order to understand what a multi-channel retailer. Among other Contact MULTICHANNEL-USAGE relative to the other dimensions—in made each type of retailer effective. FAQ SALES PROBABILITY things, we included the completeness of conrad Electronic Weltbild the linking of other channels to payment and shipping options as well as layout and Design digital. These companies are What we found was that higher the availability of customer support over 5% Structure learning to compete with pure-play quality online customer experiences phone or chat in our evaluation. Design electronic retailers. For example, correlate to higher conversion rates. Creative expression Conrad has competed effectively We also identified four distinct Emotion RECOMMENDATION with online pure-play electronic profiles, which reflect different Technical Source: OC&C/SapientNitro Online-Survey; retailers, but struggles in integrating strategic modes of retailers. 5% Screen layout OC&C/SapientNitro-Analysis online and offline profiles. Browser support Load and wait time 147 148 TREND E NE iV LI us NT ON xcl TE E ON C 3 CONTINUOUs ExpERIENCEs compared to a few years ago, a marketing. These changes present cMO’s world doesn’t just look two broad challenges to CMOs: different—it’s barely recognisable. commerce and communications 1. complexity. With a growing number are coming together, data is driving of channels, consumer behaviour is the multi-channel brand experience more fragmented. And processes, and the opportunity for connected organisational structures and required experiences is growing. Marketers skill sets are more complicated. must become more sophisticated to be a driving force behind the 2. rate of change. What is right today operations of a business and the is wrong tomorrow, making it difficult products it creates. The cMO is in to know which investment decisions a better position than ever to take are future proof and which will be a more central role in driving a redundant next year. company’s revenue and success. Underpinning this are some Marketing has changed fundamental shifts in the focus of The once familiar linear path from effective marketing. Communications awareness to purchase to loyalty is a are changing from broadcast of thing of the past. It has evolved into a message to an always-on, two- multiple touchpoint journey. Potential way approach. But even more consumers can enter this ecosystem significant is the shift from creating at any point and take any route—from communications to creating selecting a product in a store and then holistic experiences—a landscape using a mobile device to price-check of experiences that encompass and buy it, to learning about a product communications, content, services and immediately purchasing it after and products. chatting with friends on Facebook. There’s a great comparison between It’s difficult to know how to create the evolution of marketing and the and manage the huge range of entertainment business. Marketing experiences required for these used to be like a Hollywood movie “ The changing marketing multiple consumer touchpoints. It’s production. It started with a pitch and lifecycle: what used to be also difficult to isolate and measure ended in an awards show, and this cycle a monthly cycle is now a the effect of an individual piece of was repeated every 12 to 18 months. daily one.” ThE CMO TOOlkIT: wHat EvEry markEtEr sHould know Written by Gary Shannon, Group Account Director, London & Omaid Hiwaizi, Planning Director, London TREND 3 CONTINUOUs ExpERIENCEs Today, it’s more like making a TV talk Paddle Pop: Engagement visited a retail store and 41% visited massive effect on processes, skills show, starting with a show creation through entertainment an ecommerce website due to requirement, organisational shape and and ending in ratings and viewer Ice cream is an impulse product that Sneakerpedia, of which 39% bought from budget allocation. More marketers mail—a process that is repeated daily. competes with all snack foods, so Foot Locker. are trying to use marketing budgets gaining loyalty is difficult. Paddle Pop to fund innovation. Unfortunately, the ThE hOly TriniTy OF MArKETing has developed a new entertainment annual and quarterly marketing budget franchise built around the brand planning cycle is often out of sync with So how does this change the focus mascot: Max, the Paddle Pop Lion. the development cycle of products and of CMOs? In the past, CMOs had a At the core of the entertainment operations, and ROI often has to be fairly singular focus; they knew what package is an eight-episode film, measured over a much longer period marketing would look like from one an online gaming portal, a TV show, than marketing budgets can justify. year to the next. a movie road show and traditional media support. Vail resorts: Digitising the mountains Today, we are seeing a requirement The experience at the luxury ski for CMOs to maintain multiple On Cartoon Network India, the Max destination Vail Resorts is even communications, focuses. There are three keys silos movie received higher ratings than more exciting through the use of Experience to consider separately and optimise Harry Potter and an increase of RF-enabled technology to track runs, and commerce reward points and produce league together. Let’s take a look at those 24.4% value growth in the Indian silos and some businesses and market. Across Asian markets, Products and services tables. On-mountain photographers brands that are doing it right. there was an increase of 14% in the Consumers have more and more capture special moments, and add “Brand Consumed Most Often” choice over what they see, hear, them to visitors’ digital profiles, so Products and Marketing communications, rating category. read and experience. Brands have they can re-live their day through services Technology Experience and commerce to become useful or entertaining (or photos and stats, and share them with Brands need to create consistency both) and deliver real value to be an friends. This is as much a part of the of message and experience across important part of anyone’s life. This is service as building a new ski lift. every touchpoint. Instead of creating especially important if consumers are CMos must maintain multiple areas of focus, a story, marketers must create a expected to share their personal data and optimise them together. in a more meaningful way than just “storyscape” that allows people to join the conversation at any point and entering a prize draw. And this is the facilitates their engagement in any only way we can create storyscapes. direction they choose. When data is endless and portable across channels Brands that follow this principle to its and platforms, the experiences and natural conclusion make marketing actions taken at one touchpoint will sneakerpedia: collision of that goes beyond content and affect and change the experience at the community and commerce functionality and becomes part of the next. Not only will the brand recognise Sneakerpedia, a global community core product. In effect, we are going a consumer, it will acknowledge his of “Sneakerheads” powered by Foot back to basic principles where the part in changing that story. Locker, provides an online meeting marketer is creating products that sell place and drives offline connection. themselves to engaged audiences. The Telling stories and creating connected It enables passionate Sneakerheads principles of product development and experiences in this way requires to gain the social capital they thrive design are now skills no marketer can AutoTrader: searching the way people distinct skills to come together. on, generate insights for Foot do without. think Storytelling, experience design, Locker and drive consideration and We developed a playful yet effective commerce, data and technology retail sales: In the first year, 42% Product development and marketing method for searching for used cars need to work as one team. of the Sneakerpedia community need to work in parallel. This has a whilst on the go, a way of “searching 151 152 TREND 3 CONTINUOUs ExpERIENCEs for a car the way you think about the business (not just marketing) and Common principles that guide the a car”—effectively giving potential report on them accurately is what vast majority of marketing platforms customers the ability to buy a car allows CMOs to speak the language include, but are not limited to: when they see one they like on the of business. street. The app leverages a phone’s • Common views of data and CRM camera to capture an image of a car, Whether a digital marketing across brands and territories send this information to the DVLA platform is licensed or bespoke, • Consistent process and security (Driver and Vehicle Licensing Agency), different organisations have different at scale determine its make and model, then requirements and the platform needs • Creative and technical partners process a search through Endeca for to be configured accordingly. to develop brand experiences matching cars in AutoTrader. • Focus on customer experience Examples of different brand • Reduced cost and time to market network of considerable scale and An Organising idea Enables scenarios that drive different platform for each experience monetisation opportunity. convergent Thinking set-ups are: • Reuse that saves time and money and reduces technical risk chrysler: Multiple brands, 1. single identical global presence. • Support of multiple experiences, experiences and partners Identical messages, actions and brands, geographies, languages Chrysler’s powerful platform houses communications, and devices Experience processes apply worldwide. multiple brands, experiences, regional & commerce 2. globally identical presence variations, time-based promotions with localised content. Identical Football league interactive: and the experience across the dealer messages, actions and processes 90 websites produced and network. It also drives Uconnect, the Organising apply worldwide but local governed from one platform in-car media experience. idea Marketing Technology differences such as currencies One platform hosts the websites There are a plethora of brand and stock lists are needed. for 90 Football League clubs, all This has enabled Chrysler to expand Products & Process & with unique content across three rapidly into new international services Technology experiences that need to be delivered 3. Presence with common across multiple channels and driven experience, common components core templates. This includes pre-, markets with high growth potential. by data. This can’t be done at scale and localised elements. during- and post-match content, and with any consistency without Consumers recognise the second screen experiences during how to Deliver in a converged World an organising idea centers and defines three a digital marketing platform that brand but it does different things Organising ideas—not big key focus areas for CMos, and (below) connects integrates with internal systems (e.g., in different places. ideas—define the approach to the corporate vision with the brand idea. CRM, supply chain) and third parties 4. Presence with shared components, brand experiences, product (e.g., social platforms, retailers). different local experiences. development and technology. At a basic level, these are things The same building blocks drive An effective organising idea bridges business vision and corporate like infrastructure and security, different experiences. Vision but also include analytics, content 5. single geography, single brand brand ideas. management, asset management One that’s tailored to unique and data management driving requirements of brand, audience The CMO is uniquely placed multi-channel experience. and geography. to deliver the organising Organising idea and therefore has the idea A digital marketing platform delivers opportunity to drive real multiple benefits to the business, change at a business strategy not least of which is an enhanced live games and other unique content. level, not just marketing strategy. ability to measure the effectiveness Aggregating the smaller pools of Traditionally, a CEO and CFO have set Brand traffic from multiple sites on a the strategy that is then rolled idea of marketing activity in real time. The ability to set KPIs that are relevant to single platform has enabled an ad 153 154 TREND 3 out to marketing and IT through the An effective CMO needs to do three COO. The changes in the marketing things to be successful in this landscape allow the CMO to become changing world: RETAIl gOEs ROgUE: part of the team setting corporate strategy, but to do so requires much 1. Use organising ideas to align more operational and technology multi-channel brand experiences, knowledge than has ever been hoW DIGItal ConveRGenCe data strategy, organisational change required before. and technology. WIll RevItalIze the ladbrokes: game On! 2. View marketing as part of the Looking at the drivers for gambling company’s product—not just as shows a key opportunity in the space a way of talking about the products. 3. And finally, learn to embrace operations and technology. Today’s CMO is just as responsible for them In-stoRe eXPeRIenCe as for a television commercial or Written by Charlie Sayers, Director, Atlanta print ad. & Rob Milstead, Vice President, Atlanta With thanks to: Dan Barnicle, Scott Petry, Tony Terranova, Alyssa Altman, Anil Garapati, Jillian Moore of excitement. The Game On! ad campaign is the organising idea that now drives their approach to retail, communications and the betting experiences across all platforms— and the technology platform that delivers live odds in real time. conclusion As we have shown, inspired CMOs in innovative companies have embraced the opportunities presented by the convergence of commerce and communications and data-driven, multi-channel experiences. These CMOs have taken a central role in shaping not only the marketing of their brands but also the strategy and ultimate success of their businesses. 155 TREND 3 CONTINUOUs ExpERIENCEs Before the big boom in online retail, compare prices and head out to the Yet despite the continuing success Most successful ecommerce there was a place around the corner store to examine the product and and growth of ecommerce, experiences enable shoppers to we’d all visit to get the latest and make their purchase. mCommerce and social shopping, gain greater control over acquiring a greatest products we’d heard and the physical in-store retail experience product. In contrast, shoppers expect read about. We called it a store. But as ecommerce technologies continues to command a significant an in-store experience that is more Well, despite all the attention and advanced and new capabilities to amount of a shopper’s interactive interactive and relational. excitement around the meteoric directly influence and control the attention. In fact, Forrester predicts and seemingly limitless rise of shopping experience emerged, brick- that brick-and-mortar stores will still These shoppers are crossing store ecommerce, stores are poised to and-mortar stores saw their role and command more than 90% of all retail thresholds with a new and evolving make a comeback in a huge, digitally relevance shift from “the place to buy” purchases by 2016. set of immersive technologies at their convergent way. to “a stop along the purchase path.” With an expected growth rate of about 3% per year for the next four 2012 Retail Sales Distribution 2016 Retail Sales Distribution The connected consumer’s push for The rise of the smartphone and years, this means that in-store (Projected) seamlessly integrated omnichannel ecommerce mobility further sales will expand by more than $88 experiences is inspiring retailers to compounded the challenge for billion in the U.S. alone—significantly go rogue by introducing new ways retailers. They began to watch a to extend aisles, create adaptive new “see and search” approach to outpacing the $13 billion ecommerce 7% 9% will generate. 93 91 environments and deliver augmented shopping happen before their very packaging experiences—all at the aisles—where showrooming and retailers Must Do More Than point where digital and physical test-and-buy-elsewhere became % % use innovative Technology in converge. the norm. Traditional Ways Responding to the demand and It wasn’t that long ago when shopping habits have shifted growing success of ecommerce, an ecommerce site simply Shoppers no longer have to physically brick-and-mortar stores have begun complemented a retailer’s physical visit a store for product information, fighting to regain relevance by adding Online In-store Online In-store While not at the same pace, store presence. Shoppers would pricing or purchase. They can create technology-enhanced touches to their $16 Billion $210 Billion $29 Billion $298 Billion both online and in-store browse at their leisure, manually shopping lists on-the-fly, access physical footprints. They are replacing sales are growing. expert reviews and consumer reports print signage with traditional displays, soURCe: Forrester Research online Retail Forecast, 2012 to 2016 (Us) from any location, generate custom installing self-service checkout, price comparisons or snap a quick incorporating in-aisle price and coupon retail sales growth from 2000 to 2010 (Base: 2000) product picture and share it with their scanning and introducing touchscreen disposal (and in their pockets). For social community for collaborative way-finding from everything from them, there is no store. There is no 500% Ecommerce evaluation and opinion. kiosks to store windows. online. There is no mobile. There is only that short distance between the 400% Today’s shopper has fully evolved The same underlying expectations things they want and all the tools and 300% into an empowered “omnichanneler” around access, convenience and technologies they use every day to with the ability to access and combine control remain the same whether connect to them—with the blended 200% a wide variety of information— online or off. But the purpose and expectation for a greater level of Total retail from product-specific to socially relevant methods to achieve that digitally enhanced immersion within 100% Excluding influenced—through any device, control are profoundly different. the physical space. Ecommerce anywhere, any time of the day 0% But what works online doesn’t carry or night. retail’s greatest Opportunity for the same level of relevant value to the growth lies in connected retail 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 physical store where consumers expect Just as ecommerce spurred the completely different experiences. source: Retail Indicators Branch, U.s. Census Bureau evolution of a new type of shopping 157 158 TREND 3 CONTINUOUs ExpERIENCEs g TEchnO A Blin lO 2. Drive pricing and inventory Opt-ins in-store, online and mobile can En g y management consistency easily create redundant information. Being able to present a single face to In order to move to a world where the A connected retail the customer across your channels is customer’s data can improve how Experience Must Take environment an important capability that has almost we market, we’ll need accurate and become table-stakes in the mind of complete data. into Account Four the customer. She doesn’t think in required Aspects: channels and it’s next to impossible to In-store associate product experience try and guess her ever-changing needs • Environments that inspire, adapt, and expectations. She uses multiple curate and evolve in real time devices in multiple ways at home, customer online and in-store and she needs • Associates who are brand experts, the same information in all of those equipped with mobile-based, places. Ultimately, this is easier said collaborative tools and access to than done, but it’s important to plan BE s consumer and inventory information h AV hT iOrAl insig properly to drive towards enterprise- level views of your inventory as well • Products that do more than simply as consistent pricing regardless sit on a shelf, but feature experience, in-store retail is poised to of channel. tested, modified and retested—is a augmented packaging and digitally undergo the same level of disruptive strong one, but it’s very easy to end up enhanced merchandising that can evolution—transforming itself into 3. consolidate sources with lots of fragmented ideas without be activated and viewed through something so different it requires a for product information the right infrastructure and business mobile devices new name: Connected Retail. Typically retailers find themselves processes to support the new way of thinking about omnichannel. in a situation where multiple points • Customers who are given free reign Connected Retail goes beyond of entry for product data have arisen to connect to virtual and in-store the introduction of cool in-store either through vendor systems and Foundational investments in four data that can be mashed, customized technologies. It involves creating spreadsheets or simply through connected retail requires a shift in core areas can make the difference and socially shared while still fully integrated, digitally enhanced operating at the place of business Both Perspective and Organization in building a platform that can ideally shopping in-store experiences that engage the and ending up supporting multiple Change can be challenging, but support how retail is evolving. customer at the intersection between systems and processes. It’s easy to see Connected Retail offers huge the virtual and physical worlds— 1. integrate your ecommerce engine how this can spiral out of control with rewards to retailers. Success will where breakthroughs in in-store and order management product set-up, merchandising and hinge on overcoming the following innovation will exploit its unique What may have originally started marketing across numerous channels. obstacles—and taking full advantage advantages. as just your website’s engine to Having slightly different systems of in-store’s unique opportunities—to drive online transactions has now and tools to support store, online, better connect to an enterprise-wide Building the Foundation for fully evolved into being capable to mobile assortments and others is all experience strategy. connected retail act as the hub of your connection too common. Developing a roadmap So, how do you approach getting to to your customers through order towards consolidation is a critical step Establish P&l ownership that the promised land of retail nirvana? management that can likely extend that most brands never take. can be operationally shared, but beyond your existing POS. Supporting departmentally managed. Budgetary Certainly it’s obvious that retailers are sales-assisted remote checkout and 4. Develop a single view ownership is typically divided between experimenting with lots of ideas. That even self-checkout are more critical of your customer multiple stakeholders, by channel rapid iteration—built on ideas that are than ever as customer expectations As your customer engages with your or by departmental divisions without are shifting. brand through numerous channels, accurate sales allocation systems. how do you capture their information? 159 160 TREND 3 CONTINUOUs ExpERIENCEs A core set of metrics needs to be close gaps between relevant selection and messaging thinking and adopt a rogue mentality acquired, shared and maintained implementation partners. and an immersive environment to redefine—not simply enhance—what so that everyone throughout the Multiplication of highly specialized that is less task-based and more meets and greets shoppers. What organization is working from the in-store activation companies, of an event. happens in the store no longer stays same pool of data. local advertising and in-store in the store—nor did it necessarily merchandising partners without It’s not a matter of online versus begin there. Build consensus on win-win a holistic view of a seamlessly offline, ecommerce versus in-store. approaches to track measurable return. connected, omnichannel experience Consumers have made the leap to Connected Retail offers a unique and Demonstrating ROI across investment creates inconsistencies in branding omnichannel. And that leap has a powerful advantage to design and costs that are shared across and operational management. place and evolved expectation for that deliver connecting in-store experiences If it affects the store, it affects quaint store of old. Regardless of the that will revitalize and redefine the the customer. phenomenal growth of online and role of the store in the omnichannel mobile retail, stores are here to stay. shopping behavior today, and well into In-store retail is poised to undergo a Enterprise collaboration is the future. disruptive evolution—transforming itself demanding so give it time. Even if there is consensus for change Retailers will need to push beyond traditional in-store environmental into something so different it requires a throughout the organization, the new name: Connected Retail. change itself can be time-consuming and difficult to govern. It will take time and a mash-up of perspectives. Your in-store retail team will have a multiple channels and managerial completely different set of logistical stakeholders is complicated. There’s challenges than those facing your no silver bullet solution. But by online retail team. Find the points of leveraging the collective insights and consensus. Build bridges to connect expertise of your current leadership not only their experiences, but their to define a consistent approach, a operational objectives as well. manageable, efficient and profitable system that supports the business Digital is the Opportunity, and the customer can be designed not the Threat and implemented. Customers want everything. They genuinely believe everything create a behaviorally aware customer they can do online can be done interaction and analysis system. in-store, whether that’s rich product Designing and implementing information, immediate access to an innovative in-store experiences in a entire, global inventory, comparative rapidly evolving world of traditional pricing or social shopping. retail, ecommerce, social, mobile and other channels is a constant battle. But when they’re in the store, they The same technologies you use to want even more. They want the connect customers to your in-store advantages of digitally enhanced experiences should feed your analytic physical experiences—dynamic engine to enable rapid innovation at environments, endless aisles, the point of convergence. personal service, augmented packaging and displays, locally 161 OE TREND Future of Commerce: 4 Lifestyle Social Commerce Goes Beyond Pinning 171 Understanding glOBAlIZATION Ecommerce in China 165 The final trend in the future of experience is the increasing globalization OE of the marketing environment. Glocalisation and the No longer are marketing assets, brands and messages restricted within Chasing the Global Chinese Anthropology of Global a single country’s borders. Information travels farther and faster today Luxury Consumer: Marketing than in the past. A Connectology Approach To adapt to this world, marketers must rethink how they operate. Few 175 181 regions represent the magnitude of the challenge—and the opportunity— as China. In this section, we posit a new CMO mindset necessary to operate in OE the new marketing environment. In addition, our authors focused on Five Challenges to International ecommerce and the luxury consumer in Southeast Asia. Tomorrow’s Global Ecommerce Marketing Leaders Expansion 187 190 TREND 4 glOBAlIZATION china’s ecommerce industry has all online retail sales through 2015. continued to grow at a torrid pace, Given the option between Taobao and reshaping traditional businesses Tmall, most big brand owners choose UNDERsTANDINg and changing the digital market Tmall as their first ecommerce choice. landscape. Prior to 2010, annual growth of chinese ecommerce was What’s Different? Understanding Chinese ecommerce ECOMMERCE IN ChINA higher than 100% for several years, which lead to a 4.3% online penetration is crucial in understanding how they rate in 2011, out of the total retail sales conduct business. There are four big of consumer goods. And, in 2014, it differences that distinguish Chinese is estimated that ecommerce in ecommerce from any other country: china will reach the same 7 to 8% Written by Robert Wang, Business Consulting Manager, Planning Department, China penetration level as the u.s., France and germany. In 2011, only 4 of the top 20 online But not only is China’s ecommerce growing exponentially, it also employs retailers had offline businesses in China. unique business strategies due to their major ecommerce players, their B2C growth and the way their consumers shop and make purchases. 1. More online-only retailers In 2011, only 4 of the top 20 online Who’s Playing? retailers had offline businesses in In 2011, 76.8% of online retail sales were China, which is just the opposite consumer-to-consumer (compared of the U.S.; among the top 20 online with roughly 20% in North America).1 retailers in the U.S., only Amazon, Taobao Marketplace is by far the most Newegg, Netflix and CDW don’t have dominant, with a 90.4% share. With offline retail. In addition, few Chinese more than 800 million product listings, retailers are providing online and offline and over 500 million registered users combined services, such as Zbird.com, as of June 2012, Taobao Marketplace is Shopin.net and Walmart. similar in some ways to eBay, although the vast majority of products are new, 2. customer behavior: and sold at a fixed price.2 Dominance of online chat Most customers in China do their Much lower than global practice, the online shopping during working hours remaining 23.2% of online retail sales and most tend to use online chat to are business-to-consumer. Of this solve pre- and post-sale problems, 23.2%, half is from Tmall (Tian Mao). only using call center services Next is 360buy with 17.2%. Mecox when absolutely necessary. This Lane and Dangdang, the first two phenomenon is especially typical with China B2Cs that went public in the Taobao. In addition, most Chinese U.S. stock market, only take 0.7% and like to open a new product page in a 1.9% respectively. different tab or window, meaning they Although B2C is growing faster than use the “go back” button much less C2C, Taobao is still estimated to than their Western counterparts. represent more than 60 to 70% of 1 Forrester Research, 2005 2 alibaba Company Website. http://news.alibaba.com/specials/aboutalibaba/aligroup/index.html accessed august 7, 2012 166 TREND 4 glOBAlIZATION 3. Different payment options effort to integrate with the existing Online to offline (O2O) options are limited. However, with and checkout paths systems, where language proficiency The store locator function is weak an independent website you can Debit cards are the dominant payment and business understanding are huge in China, but physical stores can customize the marketing and branding method in China. The credit system is obstacles to overcome. enhance the customer user options. In addition, retail function is not mature enough and credit cards experience, help sales and offer not a must with an independent are not yet widely used or accepted in Consider Tmall.com. Formerly Taobao stronger connections with customers. B2C website. second- and third-tier cities. Cash on Mall, Tmall was first introduced by In addition, offline opportunities are delivery (COD) is widely used by most Taobao in April of 2008. It is a site for huge in certain categories, like The B2c Plan B2C companies except Taobao. B2C online retail and a platform for furniture, where store experience If the former all point to yes, there local Chinese and international is very important. are four recommended phases Alipay, a payment processing businesses to sell quality goods to in order to open and sustain a company, is dominating the online consumers in China. special supply chain profitable, successful B2C: payment business; PayPal has little management (scM) influence. But this online payment There is no doubt that most brands For some categories like food, process often leads to problems: In are suitable for Tmall, but should logistical services are not always China, the order is generated before these retailers open flagship stores professional in China, and Tmall can’t satisfy that demand due to constraints. Prior to 2010, annual growth of Chinese personal payment information is on the site? Due to finance problems supplied whereas, in the U.S., people in 2011, many retailers did just that, However, some big retailers already ecommerce was higher than 100% for fill in the payment information before since new customers were relatively have in-house supply chain teams for offline business, so expanding that several years, which lead to a 4.3% online submitting an order. The average cheaper to capture in this space. successful payment rate in China is These retailers covered almost every advantage online would be a unique penetration rate in 2011. 70 to 80%. major category for online retail: business opportunity. computers, electronics, apparel, baby 4. Mobile commerce products and more. However, the helping customer relationship Mobile commerce is less developed strategy was considered temporary management (crM) Phase 1: strategy in China than in other commerce and many retailers provided a limited O2O businesses can help improve At the onset, it’s important to consider counterparts. The few good practices inventory. For example, the Hong the CRM greatly, especially for the the Tmall market size overview, are not from foreign big brands, but Kong-based cosmetics retailer retail industry where CRM is not yet competitor analysis, Tmall strategy from local online players such as Watsons, which has both retail and available (e.g., apparel). In addition, and Tmall product and pricing strategy. Taobao, 360buy and VANCL. The private label brands, choose to sell ROI on CRM is excellent. UNIQLO is a good example. Its products, mobile apps for B2C are still mainly only the private label on Tmall. pricing and promotions are consistent for retail function. Some more Digital marketing and branding for online and offline channels. Very few innovative functions like QR codes Another obstacle for businesses has On Tmall, function and design players have such discipline in China. and pricing comparisons were first been money and ROI. The Chinese copied by 360buy. ecommerce market has been hot since 2010, which has lead to huge is B2c the right choice? expenses in marketing and hiring. So Since Taobao is dominating the online large investments and bad returns in shopping environment, independent sales have left the independent B2C B2C websites are having trouble retailer with a question mark. To staying afloat, partly because the answer this question, businesses building phase of both front-end and back-end systems are expensive, must think about what a B2C can requiring extensive customization. provide that sites like Taobao can’t: The local solutions require a great 167 TREND 4 Phase 2: Building commercials and offline billboards Once the strategy is sorted out, Tmall are not as worthwhile. retailers should select vendors (many large brands choose to outsource Phase 4: Daily operation daily operations) and hire a team, Once you’ve set up the foundation for from customer service to operations a B2C, these operations and decisions to marketing to warehouses. Next, the should be top considerations as well: shop can be designed and integrated with systems like ERP, WMS or CRM to • Manage your vendor(s) closely manage and coordinate all resources. • Decide if you want to support COD In addition, thought must be given to • Choose a form of online payment inventory planning, warehouse setup (e.g., Alipay, Tenpay, 99Bill) and financial and legal planning • Establish brand awareness among other aspects. with SNS tools • Consider opening more stores on other platforms • The damage and theft rate is much for an ICP (Internet Content Provider) (e.g., 360buy.com, Amazon.cn) higher than Western countries. license, which allows them to • Consider opening more stores on • The on-time rate of delivery is operate an online retail business, and group-buying or flash-sale channels around 80% for a normal courier. common practice is to have at least • Only foreign logistic companies two companies: one for the license The Warehouse and Delivery like FedEx or UPS and local and one for retail. Bottleneck in china company ShunFeng, can provide The logistics industry takes 18% of solid service, but are much However, policies are changing. We China’s GDP, which is twice as high more costly. see some foreign brands conducting as Western countries. For online • For first- and second-tier cities, retail online without a license, though retail businesses, every order is punctuality is better (1–2 days). technically they are still illegal. considered a parcel and can be In remote areas, 4–5 days Unlike Amazon’s better tax treatment Phase 3: Marketing quite expensive, eating up a budget. are required. in the U.S., B2C merchants in China Tmall is famous for its discounts, so Average costs for a parcel are: • Only state-owned company China have many taxes similar to offline marketing and promotions are critical Post (EMS) can cover all rural retailers. Only C2C merchants can to success. Discounts are even more • 5-10 RMB: Normal, low-service areas, but they have the avoid taxes. Invoice issues are quite important than marketing expenses, local courier worst service. complicated in China as well. There which can be a problem for pricing • 5-15 RMB: Warehouse cost • For some festivals, most third- are no e-invoices and merchants strategy. According to a top partner • 12-20 RMB: Good delivery partner party logistic companies do not often don’t give an invoice to a of Taobao, the average ROI of market work. And in promotion season customer if not specifically asked. expense is around 10 to 15% of Even if you can control the expense (e.g., Double 11), the orders revenue. The refund rate of Tmall is well, don’t expect too much on the back up and it takes a week for conclusion lower than the Western standard (the logistic service level. Most foreign warehouse and delivery companies Ecommerce in China is complex, average refund rate of apparel is less brands in Tmall perform around to operate. unlike any other country and than 10%), and accounts receivable is industry average. Today, there are still in a constant state of flux. But longer, at an average of seven days. many issues with delivery services: government Policy and Tax issues understanding Chinese business It is illegal for foreign companies to practices can improve your Chinese Among all the marketing tools, CRM, conduct retail online in China. Only ecommerce strategy—and even your SEO and SEM have relatively better 100% domestic companies can apply business strategy at home—immensely. ROI, while online display ads, TV 169 170 NE iV LI us NT E TREND ON xcl TE E ON 4 C glOBAlIZATION FUTURE OF COMMERCE: social commerce is commonly seen as a loop from curation to inspiration have is 388 million users who go online from mobile and wireless devices. lIFestYle soCIal CoMMeRCe to shopping. A slew of properties like Pinterest and Fancy, which help When one looks around Asia, online consumers create inspirational looks distinctly mobile. What does pinboards for action, seem to define social commerce mean in this Goes BeYonD PInnInG the territory. mobile world? We sought to redefine the arena, understanding the Mobile continent creating a device-agnostic, cloud-based Asia accounts for more than half of Written by Jeff Blais, Creative Director, Multi-Channel User Experience, Singapore proof of concept that upends current the world’s mobile subscribers. That & Sushobhan Mukherjee, Vice President, Strategy, APAC, Singapore beliefs and has disruptive potential in means three out of four have a mobile how brands, retailers and consumers phone. Now, imagine almost two create profitable connections. billion people for whom the mobile phone is the first phone, the first Pinterest: Making commerce social The juxtaposition of “social,” “commerce” and “lifestyle” almost immediately suggests Pinterest. “No one knows for sure what social Crowned the fastest-growing independent site in history by comScore commerce will be in the future, but and touted as driving more online retail it’s starting to look a lot like Pinterest.” traffic than Google+, LinkedIn, Reddit and YouTube combined, Pinterest –Tricia Duryee, Technology Writer for AllThingsD (The Wall Street Journal) dominates mindshare in the arena of social commerce. It is not difficult to see why Pinterest computer and the first private space does seem like the future of social they have had. And with smartphone commerce, at least in the U.S. and prices dropping below 100 USD, half UK (the source of most of its early the phones are already smartphones adopters). With the site doing away with of some hue or the other. This invites, one expects its distribution of phenomenon of entire generations users to quickly mimic the distribution of technologies being skipped is and penetration of the larger social described as leapfrogging. networks, Facebook and Twitter. For decades, Asia lagged the This brings us to Asia. The third and developed world. Recovering from fourth largest nations on Facebook are the ravages of colonialism, multiple India and Indonesia. The second and military conflicts and fledgling third largest nations on Twitter are economies, most of Asia endured India and Indonesia. And China, with slow economic growth. Japan drew 538 million people online, the largest away first, quickly transforming population on the net, doesn’t have itself into the second most Facebook or Twitter. But, what they do powerful economy. 172 TREND 4 glOBAlIZATION Sometime in the 70s, the Asian tigers sTylEBOOK: rE-iMAgining Social sharing happens after the Stylebook connects people, and their of Taiwan, Thailand, Singapore and liFEsTylE cOMMErcE FOr ThE inspiration, both to affirm one’s choice inspirations and styles, to retailers Korea broke out. Then it was the turn MOBilE-FirsT AgE and include others. and brands that created them in the of China, followed by India, Vietnam first place. What a consumer chooses and Indonesia. insight implementation is a reflection of who he or she is, Mobile devices—whether phones, A working prototype for this mobile and this makes it a powerful lifestyle This rapid economic development tablets or the intriguing phablet social commerce experience has been statement. coincided with the consumer adoption (phone+tablet)—are ubiquitous created using Netbiscuits technology, of computers. Then, the Internet companions. Consumers use them which is the leading cloud platform for A working prototype can be seen at exploded around the same time as the to view and share content, create the development and delivery of web sapientpoc.com/stylebook. telecommunications infrastructure content, socialize, compare, shop and experiences for multiple screens and moved to mobility. Technology products purchase. operating systems. A Future Beyond Pinning? were embraced quickly by a population This is a demonstration of a “lifestyle that was young, hungry for aspirational Ubiquity enables consumers to collect and capture. People use their social commerce” experience that products and driven by a need to flaunt be spontaneous. Spontaneity lets phones to capture things they like (e.g., enables consumers to discover, their newfound prosperity through consumers seize the moment. the design of furniture, the styling of collect and purchase products status symbols. Leapfrogging was the a bar or the design of a showroom). based on trends, lifestyles and social result. It still continues. Inspiration exists everywhere and They might capture a bag or dress connections. strikes unexpectedly. A dress one they see on the street or capture a Interestingly, leapfrogging makes likes on another or a display in a shop page in a magazine of certain products It is built to help brands and retailers consumers embrace innovation faster, window or a set in a film—each can be they want to buy or are interested in participate in the multi-device, because they don’t need to unlearn. an inspiration to enhance oneself and looking up on the web. They “like” multi-channel reality of consumers, The rapid adoption of SMS or MMS one’s life. products their friends have posted on especially rapidly evolving mobile-first in Asia was perhaps aided by not other social sites such as Pinterest or consumers, as seen across Asia. having landlines or voicemail. Mobile Ubiquity + Spontaneity + Inspiration = Facebook. Given a multi-device world, payments, for example, are aided by low A strong platform for ideation. ability to aggregate across a spectrum It does seem like the future. Until the penetration of banking and credit cards, of sources is essential. All these next innovative idea, that is. and calalyzed by the inherent need to ideation collected items are stored in the cloud, repatriate cross-border earning—and, Social commerce, currently, is all so that they may be accessed from of course, mobile phone penetration. about reacting to collections that anywhere. others have created. For example, On Device Research found recently that one creates a pinboard after recognize and purchase. Image 38% of Chinese Internet users were re-pinning images from other recognition engines such as Google mobile only. That number rises to about pinboards, which were Goggles are able to match products 60% in Indonesia. As these numbers discovered passively. in the cloud to merchants selling grow, it is increasingly apparent that the them. At the same time, while the future of digital is mobile. The new and novel idea is to cloud items shape a user profile, transform passive discovery into active merchants are able to push matching Which begs the question: Just how identification, by collecting whatever items the user might like. At the end valuable are desktop, web-based ideas inspires oneself. Inspiration lies in the of the process is the connection to for commerce? eye of the beholder. Capturing these the merchant, and the mobile social inspirations and enabling them to be commerce experience allows the user stored, shared and purchased is the to buy the items online. core of the promise. 173 174 TREND 4 glOBAlIZATION ChAsINg ThE glOBAl in the throes of a persistent global economic downturn, the chinese expectations and evolving notions of luxury. The field remains open for ChINEsE lUxURY CONsUMER: luxury consumer has proven extremely those with an insightful strategy to resilient. in 2005, Ernst and young capture the ultimate prize in the luxury predicted china would spend more game—the Chinese luxury consumer. than $11.5 billion on luxury goods by a ConneCtoloGY aPPRoaCh 2015. last year, china spent more than A luxurious Problem $15.6 billion. china’s “middle” class of Since the 1980s, European artisans, 160 million people—currently 12% of traditionally low-volume, high-margin the population—is expected to surge producers noted for timeless style, Written by David Thorpe, Vice President, Strategy, Miami to 74% of the population by 2030, and quality and craftsmanship, used hi- & Jake Wheeler, Creative Director, Global Projects, Shanghai/Miami $15 billion could be pocket change in a gloss branding to leverage their status decade or so. and introduce “diffusion” lines in the shape of handbags, lipsticks and So what’s the problem? The belief perfumes as on-ramps to mass luxury that China today would be to luxury what Japan was in the 1980s and 1990s is one assumption Western companies have made in their haste “Fashion is an odd jumble of contradictions, to see China as the answer to slowing markets back home. The speed of of sympathies and antipathies. It exists China’s growth is impressive, but it’s only by its being participated among a also a complication. In 2012, many established luxury brands reported certain number of persons, and its essence declining sales, slowed growth or a is destroyed by being communicated to desire to pull out of mainland China. These figures offer fog as much as a greater number.” light; business is booming on the –William Hazlitt, Table Talk: Essays on Men and Manners (1818) mainland for niche brands such as Roger Vivier and major brands are enjoying uninterrupted success to their global profits.1 consumption. This “democratization of luxury” was meteorically successful; It seems the appetite is growing but enormous fortunes were won and the the diet and location are changing. expectations of the consumer forever A significant part of the Chinese changed. An array of innovation seeks luxury market2 is not in mainland to address demand; traditional retail China. This poses a novel challenge: seasons of spring, summer and winter The traditional luxury model of are now augmented with pre-season conspicuous consumption relies on lines. And today, even supermarkets the relatively static socio-economic have lines with luxury branding and progression of a culture. It’s not higher pricing. geared to map a hyper-dynamic “glocal” market or manage diversity Success comes at a price as high across aspirations, contexts, as an Alta Sutura De Morgan Isaac 1 Richemont expects its half-year profits to be up to 40% higher than last year, despite concerns a slowdown in asia could crimp its earnings. Prada said that in 6 months to July 31, sales rose 36.5%. Financial times, august 7, 2012 2 according to the hurun Wealth Report 2012, China’s millionaires continue to spend heavily despite slower growth in the broader economy. 176 TREND 4 glOBAlIZATION gown: Democratization has created ambiguous relationship to luxury itself: in a concerted effort to reposition itself The relational nature of Chinese a world where luxury is fast losing its Mao, Confucius and Louis Vuitton in as a premium brand in China. society creates a paradox of tighter meaning. Traditional luxury brands Tiananmen Square is a conversation collective binding but also a low-trust face competition with high-volume, held in a strange gravity. Ways of seeing environment, which explains the minuscule margin brands at one end The West, like every culture, has a importance of rituals and principles and high-margin, fashionized brands A Different consumer problem: It assumes the way it sees like “guanxi” and “shai.”7 “Guanxi” at the other, not to mention the rising The typical Bentley owner in China is the “right” way. A culture’s mode of describes the basic dynamic in ranks of newcomers including Chinese is a 30-something Internet-savvy thinking forms the backbone of how personalized networks of influence. luxury brands such as Shanghai Tang. entrepreneur—hardly the image of individuals relate to one another; it It closes the distance of network ties a Bentley owner to Westerners.3 informs how we reason and how we to reduce risk, a form of insurance in To contend with such fierce Why Bentley over a Rolls-Royce? A construct meaning. But it also limits a low-trust environment. In turn, the competition, big holding companies Rolls-Royce is too showy, too obviously the ability to see beyond context. principles of “guanxi” are bound by acquire forgotten names to luxury for the Chinese sensibility, face (“mianzi”) and reciprocity (“bao”), reinvigorate their pipeline and push where modesty is valued but held in Western thought is geared to causality. subtle acknowledgements of the their lucrative ones to create new balance with face and respect. It rests on a belief that things can heights of ultra-luxury (products exist in isolation and are subject to made largely inaccessible through Another feature of Chinese growth governing rules; break something price and planned scarcity), which to confound Western observers is down to its component parts and you The West, like every culture, has a problem: sets the context for a mass market of “affordable luxury” diffusion lines. the “failure” of the middle class to materialize in the way expected. While can find the truth. In stark contrast, the Chinese view this type of thinking It assumes the way it sees is the “right” way. relatively easy to bundle Chinese as inviting extreme and mistaken Upping the stakes is a well-trodden consumers into a middle class socio- conclusions. Chinese thought sees any path, but it avoids larger existential economic group, they simply do not event as embedded in a meaningful power dynamic within the network. questions: What is luxury in a market exhibit the same aspirations and whole in which all the elements are Position in relation to others is loaded of a billion people? What must luxury shopping habits of the middle class constantly changing and rearranging with meaning, which explains why do to meet the promise of China? Can in the West; rather, the Chinese see themselves. some luxury brands become essential it meet the demands of the new global “middle” as a phase on the path to utilities in belonging to the crowd market, its scale and diversity, with a riches. In order to accelerate that This fundamental difference in (e.g., Bentley). model born in the 1960s and 1990s? journey, people will save for months organizing concepts is apparent in our to purchase a luxury good, whose cultural storytelling modes. Western A new phenomena emerging in Speed is not only confined to the symbolic power imbues social status stories describe actions whereas social networking sites is “shai”— cycle of fashionized product lines. and garners respect. To do so, they’ll the Chinese equivalent describes bragging about possessions is a Chinese consumer taste is evolving trade down to discount brands relationships between people. hyperbolic embrace of consumerism fast; especially in larger, cosmopolitan elsewhere. Feast and famine live When given a series of images, an and individualism, and it flies in cities, the craving for highly as bedmates. Asian child is more likely to group the face of traditional structures, recognizable luxury products appears relationally, pairing a cow with grass yet it also deeply mimics its rules. to be shifting to niche and under-the- Companies that position themselves because a cow eats grass. A Western According to the China Youth Daily, radar products that will distinguish in the middle place themselves in child tends to place the cow with a most brag about “connections” their owners from the masses. no-man’s land.4 When venerable chicken because they fit into the same (65.4%), followed by “income” (64.7%) This doesn’t fit with notions about British retailer Marks & Spencer took “taxonomical” category.6 Balancing and “consumption” (62.1%). Many collectivist cultures. Speed of growth its middle message to China, the differences in the construction attribute the explosion of “shai” to and dynamism pose an interesting market and target weren’t interested. of meaning is crucial when a decline in social morality. Hard quandary for the traditional model Ralph Lauren5 hit the same void and “storyscaping” global brand narratives, to ignore and harness, “shai” is the of spectacle and diffusion, further is now buying back its licenses and from the use of imagery and language double-edged sword of Chinese mass complicated when a culture has an concentrating on select theater retail to choices in celebrity endorsement. exposure. The fantasy component 3 http://www.forbes.com/2008/11/21/car-buyer-types-identity08-forbeslife-cx_jm_1121cars_slide_11.html?thisspeed=25000 6 Richard nisbett, “the Geography of thought” 4 http://www.businessweek.com/articles/2012-04-16/for-u-dot-s-dot-brands-theres-no-middle-in-chinas-middle-class/ 7 Fei Xiaotong, “From the soil” 5 http://www.forbes.com/sites/greatspeculations/2012/06/21/if-ralph-lauren-acts-like-coach-in-china-its-stock-will-take-off/ 177 178 TREND 4 glOBAlIZATION of “shai” makes it tricky territory for luxury experience. In a country where a quarterly journal filled with high- connecting With the luxury brands that want to promote food safety and food sourcing are end content, and partially authored chinese luxury consumer timeless quality. hot button topics, this kind of quality by key opinion leaders, their strategy For all its vast potential and assurance conveys meaning beyond aims to build trust within network opportunity, China is equally complex For luxury brands, understanding 1,000 thread count sheets. Fairmont’s influencers while giving end readers and idiosyncratic. Perhaps fittingly, the relational society offers insights strategy is a manifestation of a a native-language brand experience to a Chinese perspective, there are necessary to tread through the broader shift to enhance its in situ with global themes and quality mixed answers but there isn’t one answer. contradictions. Luxury retailers experience and seamlessly meld with local interests. must remember that the exceptional place and space, the physical and the An optimal solution for a brand is meaning of a luxury good cannot be digital into a unified value experience. China’s low-trust environment where connected thinking drives construed in and of itself; rather, is iterated by a state-controlled meaning, trust and service for the new its value is created in terms of its Evolution of luxury mediascape. Service addresses the Chinese luxury consumer. A brand influence on and for a person in Marketing as service pervasive trust issue as does brand must understand how its unique respect to their network. It’s not Despite talk for decades about editorial over pure advertising. It service proposition plays out within enough to say, “This car is the best,” customer-centricity, brand marketing took Net-a-Porter’s melding of the mechanics of a relational society. because of external criteria. In a hasn’t really caught up with oratory. editorial perspectives with service For the Chinese luxury consumer, network society, the standard by When perceived as a service, the to successfully usher premium any meaningful solution should be which something imparts prestige in realm of marketing activities is fashion into ecommerce. Editorial’s native-language, globally portable and their inner and outer networks is the liberated from the constraints of role is to provide a trusted shortcut connected. dictum of value for a luxury product. a bought channel world; it offers through the maze of choice. But The engagement of a brand is not just take-with-you interactive utility. In when editorial is melded into a In the end, while messaging will take in producing spectacle but in adding a networked society, the traditional commerce vehicle, there must be many forms on many devices in many value to its context; the relationship it media cascade doesn’t have staying new assurances to ensure content languages, and while our target is has with place is vital. power. A shift to service addresses honors its allegiance to fast-moving, rapidly-evolving and this deficit. There’s always a role the customer. transnational, the plan to capture them Making it Work for what happens at home, but in a starts in a deceptively simple place—by For luxury brands, success begins and digital world you have to be able to let thinking more like the Chinese. ends with meaning. Resuscitating the value you created “there” pay off luxury and sustaining its value “here”—and to know what’s working requires pushing a label’s meaning requires connecting the two. beyond the label itself. Most often this occurs as a service or status When you can buy anything from to the buyer that has a deeper the comfort of your own home, the resonance. To create resonance, physical and personal experience brand strategies must evolve to be has to step up. Department stores in service of their audience and the like Harrods blaze the trail on social, relational context of that audience. local and mobile integration of their institution into the cultural fabric of Take the organic farm at the the environment, and Barneys New Fairmont Yangcheng Lake Hotel. York has long integrated cultural Having an on-premise organic farm events into its store experience. isn’t a harbinger of a local slow-food In China, TAG Heuer recently movement in China like it might launched an effort to better its be in the U.S. Rather, it cleverly penetration and reputation with a positions hotelier Fairmont as a digital editorial approach. Employing 179 180 NE iV LI us NT E TREND ON xcl TE E ON 4 glOBAlIZATION C A client asks you to employ a global social scientists in the world have a marketing campaign in china, Brazil grasp on a fraction of these cultures, and the u.s. Oh, and they need it in so how are we expected to design six weeks. What do you do? products and campaigns that are globally consistent, yet locally It’s often a mixed reaction. The first relevant? feeling is excitement, but a controlled freak-out quickly follows. How do While we can’t expect to become you connect with people in multiple experts in every market we operate countries on a real and relevant level in, through a “glocalised” approach, that will be successful? How do you we can design successfully on a do this under such time constraints? global scale. How many times have brands and their agencies failed at this? What is glocalisation? The term “glocalisation” was first On a global scale, it’s not good coined in the 1990s by British enough to simply have a great sociologist Roland Robertson product or campaign. Just because (following a long history of discussions it works in one region doesn’t mean on global forces in the marketplace). it will work in another. Success for The term was fanatically discussed global brands comes when they in social science, economics and figure out how their product or service culturally fits into peoples’ lives. In order to form authentic connections and breakthrough Glocalisation is the act of taking something ideas, we have to have a deep understanding of people. It takes a global and adapting it on a local level. truly anthropological approach. As globalisation has continued to be business circles, both practicing and fueled by advancing technologies and academic. It disappeared from the glOCAlIsATION the opening of political boundaries, mainstream scene for a number of marketers are forging into territories years, and now the term’s relevance they’ve never gone before. In some seems to have made a resurgence in and tHE ANThROpOlOgY senses the world is getting smaller, the business world. but our jobs as marketers are getting much, much larger. More and more, As the name suggests, glocalisation of glOBAl MARkETINg our clients are global in nature, and, is the act of taking something on a increasingly, so is our work. global level and adapting it on a local level. McDonald’s is often cited as There are approximately 198 one of the most successful examples, countries, roughly 6,500 languages as they have created local formats Written by Megan Bannon, Cultural Anthropologist—Manager Experience Strategy, London and countless cultures and sub- for their restaurants. While globally, cultures in the world. So how you can get the same Big Mac in as marketers do we cope with Shanghai that you get in New York, globalisation? Not even the best locally, McDonald’s has 182 TREND 4 glOBAlIZATION adjusted their menus and restaurant research findings into successful seeing the hotel and the inside of the have real experience in the region you layouts to meet the local tastes and marketing campaigns on a global office. Go see where your product or are working. Ask how they will ensure dietary needs in each of their scale. service is sold. Observe people. Get and guarantee quality control. 100-plus countries. a sense for the context and culture So how do we cope with these you will be designing for. 3. use locals as your seers. As you are Conversely, we’ve seen brands like challenges, and make authentic gathering data and insights in multiple Best Buy fail. Recently, they had to connections with people around 2. choose your gatekeepers wisely. regions, you are going to want to close their UK operation because the globe? While anthropology is Consolidate the number of third-party make the most of your time. Schedule their U.S. model just didn’t fit. It at the heart of the approach, an vendors you work with. The fewer regular debriefs and rest that will allow seems they fell into the trap of interdisciplinary team, distributed moving parts that need to be managed you to think about your conversations overlooking the major differences in across geographies, provides the the better. For research in particular, and observations. Conduct debriefs culture between the two markets. global perspective tempered with key a single vendor managing recruiting, with a current local native. As you are local expertise. It’s part methodology, translation, moderation and facilities reporting your observations, they will So how do we make it work and part tried-and-true experience and a is ideal. This will reduce the number help guide your interpretations and call increase global success? lot of detail management. of dependencies and possible out nuances that you perhaps didn’t mistakes that can be made. pick up on. Making global Work One of the biggest challenges Make sure you have fully qualified go Virtual Go see where your product or service is of working globally is logistics. partners—they are your gatekeepers The past few years have seen the rise Managing people, vendors, and can hold the keys to your success of virtual techniques for gathering sold. Observe people. Get a sense for the translation, interpretation, or failure. Just because they are great human insights across the globe. Often context and culture you will be designing for. moderation resources, travel in one region does not mean that they called virtual ethnography, these tools and time zones can’t be will be in another. Wherever possible and vendors use a series of video underestimated or undervalued. get references, and make sure they To maintain your sanity: SapientNitro’s Research and Insights department is often at the forefront 1. go native. Plan for time to of experiencing and coping with the acclimate to new time zones and challenges of working on a global contexts. Anthropologists spend one level. We are often the first to be to two years studying a particular deployed to various corners of the culture. You will likely spend a few world, both physically and virtually, days to a few weeks. Make sure you to test the waters and report back on build in time to acclimate to the the hearts and minds of people. Even places you are travelling. It’s quite though we can, through technology, a shock to the body and the mind to be in the living rooms of people in skip ahead or back a number of time Brazil, China and the U.S. all within zones. You will not do your best work the same day, the freedom and ability the moment you step off the plane. that this has granted us does not come without its challenges. Employ a key tenet of ethnography and conduct participant observation. We are faced with complex issues There is a lot to be gained of linguistics, customs, symbols, contextually from experiencing meanings, rites, rituals and laws. your surroundings. Don’t make the The ultimate challenge is turning business traveler mistake of only 183 TREND 4 cameras combined with moderated have the time or ability to do this on and un-moderated techniques to get the spot because the scripts we use into the homes and hearts of people are static and often translated once. around the world. That’s not to say that virtual There can be some great time and techniques are not valuable. They budget benefits to doing research are—but they should be chosen this way. It can often be ramped up wisely and with the benefits and fairly quickly and it allows a dispersed drawbacks in mind. team to participate in the research without having to travel. With some Bringing it All Together platforms, you may get searchable In the end, you are tasked with transcripts with accompanying creating something that is glocal— videos, which can be great for globally consistent and locally analysis and client presentations. relevant. You have reams of data gathered locally to analyse and turn into a global view. How do you identify those global truths and local One of the biggest challenges [of remote nuances? ethnography] is evolving discussions as we 1. Maintain cultural relevance. learn more and begin to develop and test Simple translation of data from a Typically, we spend at least a week debriefing all of our sessions avoid major marketing gaffs such as linguistic or cultural no-nos. foreign language to English is not hypotheses. This is much more difficult enough. Often, straight translations and getting the data back out of The native perspective can be remotely than in person. lack context, and much can get lost. our heads. This is best done in a war room—a room dedicated to found through global colleagues, moderators and consultants in It’s important that what is gathered is not just translated, but interpreted. immersing the team in the worlds the local market, or research This means making sure that and people being studied. It often participants. As things progress from However, it’s not without its information is not just linguistically starts in pure chaos, as individual idea to product, continually check in limitations. The cost for good translated, but also culturally pieces of data get unloaded from our with these natives to make sure that solutions on the market can be quite translated, which needs to be done brains and notes. Over the course of products and campaigns are still high, and contextually, it can leave by someone who has local context. the week, this data becomes more culturally relevant. something to be desired. While you organised, until finally we walk away are talking to people who are sitting 2. Keep the tribe together. Once with key insights that will help us Global marketing is not an easy in their living rooms, you are not you are finished doing fieldwork, make design decisions. feat. While borders are seemingly actually there with them. it’s essential to bring everything disappearing, the need for local together—and this means bringing 3. include the native perspective relevance is not. Through an One of the biggest challenges is all of the team members together. throughout the process. Whenever anthropological approach that is evolving the conversation. One of the Each person holds different pieces possible, include the native perspective. carefully guided, we can understand most powerful elements of contextual of context and perspectives that are By working with people who are how products and services can be research is being able to evolve the going to be key inputs into determining from—and live in—the markets we both globally consistent and locally discussions as we learn more and the right glocal approach. are studying, we can cross-check relevant. This is a step that agencies begin to develop and test hypotheses. our analysis and make sure that our and brands alike cannot afford to skip When doing remote research, we don’t interpretations truly resonate from the in their global expeditions. native perspective. This will also help 185 186 TREND 4 glOBAlIZATION cMOs are struggling to adapt to a flexibility to adapt to and world that has fundamentally changed embrace disruptive technologies glOBAl MArKETing is MOrE over the course of their careers. and social media-driven, iMPOrTAnT ThAn 5 yEArs AgO Disruptive digital technologies and personalized marketing. the new expectations of the global % of respondents who agreed consumer are forcing global firms to or strongly agreed 2. globally connected consumers adjust and innovate. A new class of consumers, adept 43% 45% 88% with and empowered by affordable SapientNitro has made a significant ubiquitous technology, has changed The importance of managing global campaigns is greater than it was 5 years ago. effort to understand how these the marketing rules. Our research changes are impacting large global shows that 82% of senior marketers 50% 32% 82% organizations. What we found was feel that interconnected consumers surprising: Just 15% of senior have broken down the barriers The interconnectedness of today’s consumer is breaking down the barriers between global marketers feel prepared to deal between global and local marketing. and local marketing. with the rapidly changing consumer, Global marketing’s core challenge and just 8% believe agencies are has been to deliver relevant messages The core challenge for today’s global succeeding in their support of to the local market, but in an age marketer: global marketing is recognized as more important than 5 years ago, even global brands. where assets designed for one as global and local marketing distinctions country are rapidly shared around the break down. Our CMO Global Marketing Readiness world, the challenge is to give global Study, a 6-month research study of consumers a delicate balance of local, 114 CMO-level marketers, identified 5 regional and global campaigns— significant challenges that should act simultaneously. cOMPAniEs ArE sTruggling as a wake-up call to global marketers: TO ADAPT 3. localization revisited 1. Disruptive technologies Coping with the diversity of “global % of respondents who strongly agreed The proliferation of new consumers” who also have strong 15% technologies—from social media regional subcultures is regarded and mobile apps to in-store digital as a challenge by 75% of senior Our global marketing organization is prepared experiences and mobile payments— marketers. A recent Millward Brown to deal with rapidly changing consumer trends around digitalization and globalization. represents a set of obstacles study found that, of ads that tested for which senior marketers are exceptionally well in one country, just 9% ill-prepared. Just 20% consider over 1 in 10 did equally well in another themselves “very knowledgeable” country—raising real questions Our marketing activities are fully integrated 5 ChAllENgEs to and working together (e.g., digial activities are about technology, yet by 2017 about the cost efficiencies of cross- in sync with traditional media campaigns). these CMOs will purchase more border campaigns. Add to this the technology than their CIOs, growing tensions between local and toMoRRoW’s GloBal according to Gartner. The scale global roles and authority within the To survive in the new marketing world, marketers must be flexible. yet a minority of these investments must be at a organization—challenging for 82% of of marketers feel prepared to deal with global level within the organization, senior marketers—and what becomes integrating their marketing activities to reach MaRKetInG leaDeRs yet be mindful of local market clear is the need for organizational these consumers. requirements. The challenge points design and digital platforms that allow to a need for a technology-savvy for a multi-channel, multi-disciplinary global CMO with a sensitivity for mindset across the organization. source: sapientnitro Q2 2012 online survey to 114 senior marketers with global responsibilities local-global relationships and the Written by Hilding Anderson, Sr. Manager Research + Insights, Washington, DC & Freddie Laker, VP Global Marketing, Miami 188 TREND ON xcl TE E ON LI us NT C 4 NE iV E INTERNATIONAl 4. Multi-channel misses to organize efficiently for the new A full 37% of senior marketers don’t global marketing environment. Our believe that their marketing activities research shows that 56% of marketers ECOMMERCE are fully integrated across digital and agree coordination between digital traditional channels. The opportunity and traditional marketing teams is to grow revenues from multi-channel more challenging than five years consumers require investments in ago—silos and a lack of coordination ExpANsION digital experiences that are too large are getting worse just as the need for for a single market, but which must collaboration is becoming greater. provide flexibility for localization. The bottom line is that senior marketers These trends lead us to believe in the need to adopt the “global mindset” rise of a new breed of marketer with that will let them displace strong a global marketing mindset. This new Written by Don Shields, Multi-Channel Strategy Director, London organizational silos, specialized global CMO should build strategies partners and a reliance on traditional that cross silos and approaches and single-channel campaigns in order to combine the characteristics of a traditional marketer with the skills sOciAl MEDiA risEs TO BE A TOP cOncErn—glOBAlly traditionally associated with a CTO— and even with the recently created CXO offices. A decade ago the ecommerce Q: What are the most important global or digital function would have reported trends in marketing that will impact your to the CIO, but today we’re seeing business in the next 3–5 years? about 50% report to the CMO—the Explosion of social media 66% #1 single largest bucket of C-level oversight for digital. growing importance of emerging markets 44% #2 Mastering this evolved global marketing mindset could be what defines the most Blending of offline/online experiences 41% #3 successful brands of the next decade. But having a global mindset isn’t just for global brands; as businesses look to Managing global campaigns in the new digital world was underlined as a key challenge. in particular, social media and blending offline/online export their success into other markets, experiences were key global marketing challenges. brands must increasingly defend against new global competition. realize the benefits of cross-channel Top performing firms and their agency experiences. partners are already addressing the obstacles and adopting the new global 5. Organizational structures mindset to successfully build their Too often, the three executive brands with a worldwide audience. branches of CMO, CEO and CTO claim Only the best-prepared organizations an overlapping interest in the area of and CMOs who embrace this mentality digital experience, leading to a failure will thrive. This article is an excerpt of the Global Marketing Series. For more information and the full research findings, go to bit.ly/Q0RnB8 189 TREND 4 glOBAlIZATION Many retailers in both the usA and overseas, ASOS simply worked with constrained by the locations where invest Wisely in your Website uK are now realising that, with weak their shipping partners and changed they had stores, but now they can fulfill This does not require a major IT economies at home, their only real their checkout to accept addresses orders anywhere in the UK. effort in most cases, though it may What do these hope for substantial sales growth is in other countries. As sales in a well lead to a major IT effort after different stories say from international expansion. But, country start to grow, they add Clas Ohlson is not new to international the international revenue stream this is not an easy path to tread; there additional languages to the product expansion, having shops and websites has been proven. Marks & Spencer about successful are many tales of failure to be found descriptions. How does such a young in both Norway and Finland, but the UK choose to go with the Software as a expansion today? next to the success stories. What can company with only a website grow was a big jump, both geographically Service (SaaS) provider Demandware we learn from these stories and what and expand so quickly? What is their and culturally. This jump is the only to launch their French website. I found five themes in common do they tell us about international secret? website where product is picked, Their current website is running amongst the successful expansions: expansion in the digital age? packed and shipped from a warehouse on the Amazon platform. They These two examples represent two in the UK. They had to do this to were not ready to undergo a multi- • Do and don’t overthink International expansion, in the past, dramatically different approaches to accommodate the demand for next- million pound re-platforming just would entail lengthy meetings to expanding retail internationally. In day deliveries from UK customers. for the French website. The key • Invest wisely in your website plan strategy and investigate the best between these two extremes you find They have partnered with a third-party was less is more. The end goal of a markets for expansion, with multiple other retail stories. logistics provider (3PL) in a shared French website was not a glorious • Keep your early costs low studies done and endless hours warehouse facility to keep down costs technological achievement but of plotting and planning. A recent One of our largest clients, Marks as the website builds in popularity. resulted in a French ecommerce site • Have the capacity to keep example being the much-planned & Spencer, has reinvigorated their that could ship products from existing customers happy and strategised opening of Best Buy international expansion efforts. Do and Don’t Overthink UK fulfillment centers. stores in the UK, including years of They have reentered France a The key lesson here is from both ASOS • Let the customers lead you preparation and meticulous planning decade after their exit, with a new and Marks & Spencer: When they with thousands of hours of new store shop on the Champs-Elysées and started their ecommerce international staff training. They opened beautiful a new website. This gives them the expansion, it was by getting an “Bolland would not be drawn on further shops the size of small aircraft advantages of a physical location for international shipping partner and hangars across the UK, along with PR and psychological use with press modifying checkout to accept foreign European expansion plans but said the French a brand new website. We look back and customers, but allows them to addresses and credit cards. This does strategy of targeting a major city with stores now as Best Buy leaves the shores of deliver products to anyone in France not require three years of planning the UK and retreats to the Americas via the website. This strategy of and preparation. Reliable shipping and covering the rest of the country with a where it is also suffering a loss of targeting shops in major cities with an partners are available in the UK and website could be replicated elsewhere.” market share and sales. This is a very ecommerce website to cover demand USA that can explain the complexities cautionary tale. How does a company in the rest of the country is a very of international custom laws and other –guardian.co.uk, Friday, 1 April, 2011 so well known for customer service interesting approach. logistical hurdles. Multiple payment and attention to detail end up having to gateways are available that cover give up and go home? Clas Ohlson, a SapientNitro client in most major countries for credit card Keep your Early costs low Sweden, has recently launched their transactions and offer fraud protection This is a recurring theme in all the Then we turn our gaze to a small UK website. They have expanded their services. A simple selection of successful stories. The key is to online clothing retailer, originally stores to 12 in major metropolitan shipping partner and global payment limit up-front investment until the named As Seen on Screen (ASOS). areas around the UK. They have also can be done with changes to checkout new international revenue stream is This company has grown from adopted a strategy of placing stores on a website, and can be up and proven. ASOS does not translate their nothing to expected sales of £1 in strategic locations and allowing the running in less than four months. The website into a native language until billion by 2015. They started selling website to fulfill demand outside of sooner you decide to act, the sooner sales from that country indicate a aggressively overseas two years ago, those areas. This approach will also you can start collecting revenue from strong interest in their products. They and now have more sales overseas allow them to pursue more national international customers. currently only offer six languages and than within the UK. In order to sell advertising. They were previously three of those are different versions 191 192 TREND 4 of English (American, British and ordering to help fine-tune their store Australian). They continue to grow ranges. revenue and keep costs low. Those retailers who successfully Have the Capacity to Keep expand their brand internationally are US Customers Happy seeing significant sales gains. In July 195 GERMANY 201 This is crucial as it is the flip side of 2012, The Financial Times reported keeping costs low. You have to invest that, “Shares in ASOS rose more than INDIA 205 enough so if the offer is a success, 10 percent after the online fashion you can meet the demand. Marks & group posted a solid increase in UK UK RUSSIA 203 Spencer and ASOS deal with this the sales, bucking the trend of dismal same way—by having a giant pick, pack and ship capacity for the UK that trading figures from the British high street. Although ASOS’s year-on-year 198 also serves international customers. UK sales growth of 8 percent was the This works well for clothing retailers smallest among its four divisions, the INTERNATIONAL PERSPECTIVES where parcel sizes are often small figures cheered City investors who and light. It is the heavier goods, like have become accustomed to gloomy tools, electronics and homewares news from retailers. ... The figures that present the real problems. Clas