smarter thinking for a smarter you
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02 CONTENTS PAGE
04 OUR OVERVIEW
Consumer Electronics Show (CES) in brief PAGE
07 8 THINGS TO LEARN FROM CES 2013 We’ve got it covered The ‘connected service’ is about partnerships Data is power Smartphone as hub Setting the standards I am the navigator Touch is spreading The rise and rise of video content China steps up PAGE
17 4 MAJOR TRENDS FOR 2013 The context Personalization at scale Reputation economy Loyalty and rewards The new transaction PAGE
27 OUR SUMMARY
A crowd of connected individuals
CONTENTS
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"The largest issue with search is that we learned about it when the web was young. When the universe was 'complete', the entire web was searchable. Now our digital lives are utterly fractured - in apps, in walled gardens such as Facebook, across clunky interfaces. Re-uniting our digital lives into one platform that is 'searchable' is, to me, the largest problem we face today." -John Batelle, entrepreneur, author and journalist / Wired Jan 2013
OUR OVERVIEW
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he Consumer Electronics Show (CES) is a showcase of products that are about to be launched and available in stores soon. And like the big car shows, it is a place where concept products are shown to gauge customer interest.
The body that organizes CES is the Consumer Electronics Association (CEA), it looks after the interests of gadget manufacturers from around the world as well as advising the US government on trends and markets. Two years ago it predicted that by 2015 all consumer electronics would be connectable to the internet. It is this prediction and the resulting consumer trends that we, at McCann Worldgroup, are most interested in. It is what consumers do with their shiny new electronics that most impacts how brands can communicate with them and add value to their lives. CES is a microcosm of the world that brands are working with as marketeers seek to communicate with potential customers. For instance, a growing number of exhibitors are disrupting the traditional route to market by using crowd-sourced funding models to bring a product to fruition This way they can create an instant market before committing to manufacturing. The process also acts as a barometer of public/market sentiment and intent to buy. This enables small companies to challenge even the largest multi-national, as Sony has found out as its Smartwatch faces its newest competitor, Kickstarter Project Pebble (read more in our trend: Personalization at scale). Additionally, many of the products that are already internet-connectable and available in stores have cloud services allowing social sharing and device updating - thus prolonging product lifecycle. Many of them are great case studies in how to provide added value and real-time CRM. If non-technology brands are to learn from this, they need to embrace the idea that their job is not complete when their product leaves the store. This learning will challenge the traditional ways brands talk to consumers. Our 2012 paper talked about the end of the PC era and we can be in no doubt now that 2012 was the year that mobile devices (in the form of e-readers, tablets, mobile phones or other portable internet-connected devices) overwhelmed desktop-based computing devices in terms of adoption and application.
OUR OVERVIEW
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OUR OVERVIEW
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or 2013, our focus for this paper and our tours at CES is on getting back to ‘You’: where connectivity finally reaches a tipping point and your digital self and physical self finally converge. Within this, we will look to identify the ways that we believe brands and businesses should approach structuring products and services to make the most of the dynamic changes ahead. Key areas for focus will be: • developing an open partnership ecosystem • building a data strategy around products • challenging tradition
We have therefore split our findings into two sections. The first is a summary of the tours, which we have curated into 8 things to learn from CES 2013. These are the key topics we believe are important for 2013, as demonstrated by the companies exhibiting at the show. The second is a more detailed look at the trends that underline these topics/themes and that we believe are part of the ‘connected you’ paradigm. As our gadgets add to the richness of data, it seems that our digital lives will become even more complex. It looks like Mr. Batelle’s declared challenge regarding data complexity is about to become even more complicated…
OUR OVERVIEW
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8 THINGS TO LEARN FROM CES 2013
8 THINGS TO LEARN WE’VE GOT IT COVERED...
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ompanies have a variety of reasons for attending CES and for many, the opportunity to spot emerging stories and trends is the greatest draw. Can anything be learned by evaluating the direction of all the new attention-grabbing innovations on show? By immersing yourself in the consumer electronics industry, can you determine how to improve your own products and services? With over 150,000 attendees and around 3,000 exhibitors at the 2013 show, the mere idea of walking through the exhibition floor and picking out what is important is overwhelming. Spotting where companies, big and small, are focusing their energies can seem like a mammoth task. Each year, we therefore prepare curated tours, which aim to create a palatable story for our clients and partners. We shortlist trends before CES and monitor which ones are gathering momentum at the show, and which ones are starting to fade. We then create a walk-through tour stopping at booths where we see examples that illustrate the story of the show and the wider industry.
For those who were not able to join our tours or attend CES 2013, and also as a summary for those who did join us, we have prepared the following review - 8 things to learn from CES as well as providing you with a deeper dive into underlying ‘technology facilitated’ consumer trends. Last year our theme explored the ‘Post PC era’, where the emergent companies were moving from a desktop-first approach to the understanding that a person’s life is becoming very closely linked to his or her mobile devices. We noted that personal information is becoming more important, thus the device that carries that personal information (the virtual identity) becomes synonymous with the owner. Traditional boundaries between places and friends are changing or vanishing completely. This year as the paradigm goes from emergent to ubiquitous, our theme has evolved to really build on the concept of the ‘connected you’. We are exploring how devices and services are increasingly centered on the individual and the ways in which they connect together to enrich the individual’s life. With everyone and everything you need to know: here are our curated highlights summarized as eight standout topics.
WE’VE GOT IT COVERED
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8 THINGS TO LEARN THE CONNECTED SERVICE
IS ABOUT PARTNERSHIPS
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or brands looking to provide added value services to customers, partnerships are replacing internal development as the favored route. This is primarily due to time considerations. Time to market can be significantly reduced and companies don’t need to invest in skills and knowledge that may not be core to their offering. Ford announced, as part of its Sync AppLink platform, that it will open up its platform to the developer community, allowing them to build new and exciting services. One example is app developer Glympse: their service allows you to easily share your location continuously over short period of time. Ford’s MyEnergi Lifestyle collaboration looks to provide consumers with a way to manage their carbon footprint and benefit from ways to save on energy bills. The partners include Whirlpool, Eaton, Sunpower and Nest Labs (the smart thermostat), covering everything from smart meters to solar energy companies.
While these partnerships are massive for Roku, they also give second - mover advantage to challenger brands in the smart TV space. It could be said that Hisense has saved two years of smart TV platform development simply by partnering with Roku. The ‘connected fridge’ has finally become relevant as evidenced by Samsung’s partnership with Evernote, the cloud based note taking service. Millions of people leave family notes on the fridge but now they don’t even have to visit the fridge to pick them up. Another partnership in Samsung’s connected appliance platform is with Pandora, the internet radio portal. With these partnerships, Samsung leverages market-leading expertise and so avoids investing in it directly.
Roku, the streaming service provider, announced it would be partnering with 14 different TV manufacturers such as Coby, TCL and Hisense, as well as with major studios such as Time Warner. The plan will see over 800 channels (from Netflix, Hulu, Spotify etc.) offered through a new bundled device called the Streaming Stick, which uses the Mobile HiDef Link (MHL) port in smart TVs to deliver their services. As more people move from traditional broadcast TV to become ‘cable cutters’, services provided by Roku will become a de facto choice, not just because of the range of channels but also because they will be able to integrate other lifestyle content created by the Roku app developer community.
THE CONNECTED SERVICE
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8 THINGS TO LEARN DATA IS POWER
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ecommendation engines like Amazon or Netflix are well understood by consumers. As Samsung develops its smart TV software, it is now giving customers suggestions based on previous consumption data. In the past, a consumer advocate was able to convey his or her values all wrapped up in one brand name but recommendation engines now reduce the brand name to just one of many choice criteria. Netflix relies on this to encourage people to watch less famous, cheaper movies. Brands need to monitor the performance of their rivals in recommendation engines.
Fuelband in the always-monitoring wristband market. More and more people seek ways to measure their sleep patterns, quantify how much exercise they are getting in a given day and what their average heart rate is at any given time. Conceivably, this kind of data will start to come into brand messaging. It should also start to inspire added value offerings around this niche, but growing, area.
Auto tech was one of the standout stories at CES this year. Many of the manufacturers really started to address the idea of the ‘connected car’ as platform and how the car interacts with other cars on the same street, as well as with other road and pavement users. For example, knowing that there is a specific junction that suffers aggressive braking during rush hour may suggest a dangerous route. Non-auto brands should also follow the developments in this category to see what added value services or partnerships can be created. If a brand has retail locations then at the very least, efforts should be undertaken to ensure that online listings are up to date. Secondary data use, like knowing how safe roads are, understanding travel times or identifying school run driving shortcuts may all present opportunities for brands to add value to their customers’ lives. The ability to quantify wellness statistics is now well established as a trend with Fitbit joining Jawbone and Nike
DATA IS POWER
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8 THINGS TO LEARN SMARTPHONE AS HUB
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ithout a doubt the smart companies, like Hyundai with BlueLink, Fitbit, Belkin WeMo Baby, showed interesting and innovative products at CES that demonstrated that the best way of enabling a service is by leveraging the one thing that a person will always have with them: his or her smart phone. With this context and understanding of how technology and connectivity can be leveraged, there were some exceptional concepts on show. Hyundai chose to feature its concept for the connected car called BlueLink: a telematics solution for the car that looks to deliver all your services through one system - from car health checks and navigation to all sorts of other controls. It was the understanding that many of these services could be leveraged or derived from your mobile device that was most interesting. One feature using the app mirroring service was the voice search services on your device, like Apple’s Siri, to activate commands used in the car. The Belkin WeMo Baby monitor works with the free, downloadable WeMo Baby app to offer useful information about a baby’s status. With an optional upgrade, users can receive text and call notifications when their baby is crying. The upgrade also provides useful advice including analysis of sleeping and crying patterns, which help to plan the baby’s nap schedule. Fitbit’s new Flex does not have a screen or readout but instead relies on the user’s smart phone to get stats.
"The idea behind the Flex is that it makes fitness a part of your everyday lifestyle...Because everyone always has their phone with them at all times, users can easily access stats on the go," - Lindsay Cook, Fitbit Marketing Manager
As technology advances and products and services mature, the ‘portable profile’ will be the most efficient way for people to feel in control of their various devices and the services on them.
SMARTPHONE AS HUB
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8 THINGS TO LEARN SETTING THE STANDARDS
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nless you buy all electronic devices from a single manufacturer, your devices need to find a way to communicate with each other. To do this they need a common language. This is where standards come in. One hardware standard, Miracast, allows connection between Wi-Fi enabled devices without the need for an actual Wi-Fi network. Many manufacturers are utilizing this to allow screen sharing between devices: for example the ability to watch a YouTube video on your smartphone then they seamlessly share it to a TV in the living room. Intel WiDi is Miracast certified.
AllJoyn is an open source development framework that allows multi-screen interaction as well as direct device-to-device sharing. This software solution was demonstrated on the Qualcomm booth where we saw a great interactive kids’ music education application developed jointly with Sesame Street, as well as a viewer stats and content dashboard that wraps around live Nascar broadcast coverage. ANT and ANT+ are software and hardware standards that are being jointly developed on behalf of an alliance of companies interested in connecting devices. Most of these companies have a special interest in the wellness, health-monitoring and sport arenas and now, with the ability to communicate directly with smartphone applications, this alliance continues to grow. When looking for hardware partners it is important to know how their products interconnect with other devices. Ask your hardware partners about their interconnectivity standards adoption.
SETTING THE STANDARDS
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8 THINGS TO LEARN I AM THE NAVIGATOR, NO SERIOUSLY I AM
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ince Xbox Kinect invited developers to hack on top of its platform, there have been numerous use cases, inspired and benchmarked by films such as Minority Report, that have looked to take gesture outside of gaming and into a broader context. It has now become almost expected that there would be some form of gesture control present on the big manufacturer booths as all look to try and find new ways for humans to interact with machines, or more commonly called creating a Human User Interface (HUI).
One company that has taken this to the extreme is Neurosky – they have developed a wearable headset called MindWave Mobile that can translate brain activity into a set of triggers that you can use to control objects. The clever people at Neurosky then allow developers to build apps that make use of the signals to control movement or tasks. Some of the products using Neurosky technology were on display including Necomimi, which is a set of wearable ears that wiggle or move based on whether you’re alert or distracted. Haier also chose to use the app and controller as a way of being able to control the TV as well as play games. Samsung have introduced voice control for their Smart TV navigation and content discovery service. Hyundai with their BlueLink telematics service also investigated using gesture and voice to control the car from turning the car on to navigating through options, which all allow the driver to remain focused on driving. Whilst it seems to be at the cutting edge of innovation right now, the wider context of HUI is well established in services such as Apple’s Siri and Google voice search. As we get used to letting our voice, hands or body do the talking instead of manually operating our devices, this will become a key way of enabling the next level of search and interaction.
I AM THE NAVIGATOR
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8 THINGS TO LEARN TOUCH IS SPREADING
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t seemed at CES that any self-respecting exhibitor needed at least one TV screen on their booth to show off their shiny new marketing video. Now that the flatscreen marketing device has become ubiquitous, we can expect to see those screens becoming touch enabled.
We may laugh as toddlers are baffled by magazines they think are broken iPads, and we’ve all seen pre-schoolers attempting to swipe a flatscreen - but more and more adults are now reaching out to touch displays too. No longer is it just Microsoft showing off its touch tables, Lenovo and Moneual had touch tables on the show floor. Touch is now enabled on almost all consumer electronics from fridges to routers, washing machines to laptops. Brands with retail or customer spaces should consider upgrading to touch screens over the next two years. Working that space will allow those brands to understand how customers interact with the brand information and marketing materials.
TOUCH IS SPREADING
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8 THINGS TO LEARN THE RISE AND RISE OF VIDEO CONTENT
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t is not often that you hear chanting at CES, but the GoPro stand managed to incite group after group of the CES faithful to chant itsbrand name in exchange for t-shirts. This three-year-old company has shown that a small device with limited controls can be used to create beautiful content. With recent GoPro videos getting 17 million or more views on YouTube, they are the new poster boys (and girls) of content marketing. Around the halls there were many ways to record and share video, from ski goggle embedded Apex HD+ to the Geonaute Life 360 degree camera. Content will not be in short supply.
At the time of final edit of this document CES 2013 had 20,400 search results on YouTube - one simple barometer of the rise of video content creation and sharing.
It would seem that Roku will be able to double the channels on their platform just with user generated content. It is in this world of smart TV that established channels get the same screen real estate as anyone else who chooses to provide streamable content including brands. Is this platform the place to start your content strategy?
Delivering video to most feature phones (as opposed to smartphones) is possible with search engines like Vuclip delivering content across mature and emerging mobile-centric markets. Video content is not just a mature market strategy: expect to see even greater growth in video marketing content in 2013.
A clear indicator that high quality video distribution is possible across mobile and landline networks, is the number of business models emerging that rely on it. The HealthSpot station, which will be fully deployed in 2013, is a private walk-in kiosk that provides patients with access to diagnosis and treatment by remote physicians via a video conference link or through interactive digital medical devices.
THE RISE AND RISE OF VIDEO CONTENT
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8 THINGS TO LEARN CHINA STEPS UP
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t CES it is not just the booths themselves that attract attention but also the interesting dynamic of which brand is where inside the hall. The central hall has traditionally been the place where the large consumer manufacturers book their booths. So with Microsoft leaving the show last year, there was great interest in who would step up to take the prime spot at the front of the central hall for 2013. It turned out to be none other than Hisense and their TV products looked great. You are forgiven if you do not recognize the brand. They are a Chinese company with a number of subsidiaries around the world. They rocketed onto the world stage at CES with a great range of products and a fantastic smart TV deal with Roku. Another Chinese brand, TCL, showed off its partnership with the Ironman 3 movie, as well as the 110 inch UltraHD television that appears in the movie. It exhibited on a stand much closer to the front of the hall than in previous years. Haier, Huawei and ZTE were among other companies with a strong presence at the show. Samsung and LG now need to ensure that they continue to innovate if they are to stay at the top of the consumer electronics tree. Chinese brands are no longer happy to make low-end and OEM products for others and are moving themselves up the value chain.
CHINA STEPS UP
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TRENDS THE CONTEXT
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ith the record-breaking crowds, huge number of exhibitors and the multitude of much-hyped announcements at CES this year, there is an overwhelming sense that the show has reached a tipping point for the first time. In previous years, the idea of devices being connected was ‘the story’ and the innovation and exploration of technology was only just beginning. Now, it is less about what is really ‘new’ and more about how the manufacturers make this connected ecosystem work in practice. In this paper, we have focused on four trends that will affect brands, as well as highlighting the potential of a well-connected consumer. And by understanding this paradigm shift, we can explore what opportunities are out there for brands. Are you ready?
PERSONALIZATION AT SCALE
The idea of mass consumerism is being challenged by many factors including: technology, the use of data, unprecedented access, as well as the infinite scheduling options now available with many services. How should brands change their products to be personal but still scalable?
REPUTATION ECONOMY
Investing time and effort online in building your reputation capital will no longer be derided and may, in time, become more valuable than improving your credit rating.
LOYALTY AND REWARDS
Remember that forgotten stack of loyalty cards in your sock drawer? Many of us are keen to build up points and be rewarded for our loyalty… but how to manage it all? Now, technology has the answer in the form of frictionless loyalty; which dispenses with the hassle, leaving only the benefits.
THE NEW TRANSACTION
Concerned with more than just financial transactions, this trend is about the exchange between things, data and people: it’s about an empowered and connected consumer who demands services in exchange for the wealth of personal data being recorded by their digital self. As a result, embracing the concept of value exchange becomes the key to success.
THE CONTEXT
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TRENDS PERSONALIZATION AT SCALE
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opular commentary suggests that 2013 will be the year when a number of trends that have been hyped for many years finally reach, in the words of Gartner: “their plateau of productivity”. Big Data, SoLoMo (Social, Local, Mobile) and SaaS (Software as a Service), have ridden the wave of excited commentary but mainstream adoption has been limited to a few high profile examples. Entertainment is an area witnessing an explosion of ‘over the top’ alternatives to traditional distribution models. Traditional models of purchase and ownership (Amazon, Netflix, Spotify) have been subverted and consumers are becoming increasingly comfortable with the datasharing that these services demand. Consumers now expect the level of personalization that comes from sharing your purchase history with the service provider. Over a period of some years, the concept of a personalized service or product - especially in premium sectors - has resulted in an expectation of tailored products. It may be an engraved personal music player or a unique sneaker design, or it might even be a trip to Stuttgart to pick up your new sports car. Amazon’s Jeff Bezos believes that it is possible to give each and every one of the millions of users of Amazon.com a unique experience. Brands should take note and at the very least they should be able to personalize their marketing. Take Adobe’s website content management system as an example; it allows a brand to show each user a unique home screen or product offering based on previous browsing, social graph or the user’s ‘signed in’ profile. The more data brands have about their customers, the easier it is to remove irrelevant products and provide pre-personalized offerings.
"For digital marketers this means the need, or rather mandate, to personalize each experience..." - Kevin Cochrane, Adobe VP of Product Strategy and Solution Marketing
PERSONALIZATION AT SCALE
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TRENDS Of course, it is not possible to personalize unless a brand knows its customer. It needs to ask questions directly or else interpret the data that has been generated through interactions with the brand’s services or products. This is what the press calls personal tracking. Our Truth About Privacy study gives four steps to maintaining customer trust when tracking their data. Our data says at least 72% of customers will share their data if you follow these steps and most will expect an added value service in return. An excellent example of how data tracking adds value to a product is Google Now, available on Android mobiles. Google Now takes your personal cloud of data and sifts through it to give you hyper-contextual and relevant information such as weather, traffic, exchange rates, time zones and location information - all available with a single swipe. The auto industry has taken a significant step forward in this area with many concepts shown at CES this year. The technologies being developed as driver aids are about personalizing the driver’s interaction with the roads and environment that they regularly experience, as well as understanding the
road conditions in real time. At the moment the aids are focused on safety but with open developer platforms, that same data could be used for any number of other services including personalized brand messaging. The sector that is predicted to see the impact of this change most profoundly is health and wellness. 2013 should be seen as a watershed year in the way personalization is
used and applied in everyday life. Consumer technology in health is not new, and has indeed been a feature of CES for a number of years, however, an evolution is now taking place and we are seeing products that go beyond single specific tasks and actually seek to influence behavior. A great example of this is GeoPalz ibitz pedometer product. With the kids’ version of this product, the child is incentivized to
PERSONALIZATION AT SCALE
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TRENDS exercise by using recorded steps to power up a Tamagotchi-style character or gain access to other mobile games. Additionally on certain platforms, access to television and social networking channels can be unlocked through exercise. Parents can also incentivize their children by offering rewards on an Amazon prize wall in exchange for completing agreed exercise goals. This approach is extremely important for brands. A large segment of a brand’s customer base expects a personalized service and soon it will simply become a hygiene factor in many categories. We know that personalization can be achieved in the end-product but it can also be achieved through involving the customer in the creation process. A clear example of this is the Kickstarter Project Pebble watch, which announced its scheduled distribution at CES. Despite the fact that Sony has a product with broadly the same offering, 68,929 people have chosen to back a previously unknown startup company to produce a product that can be customized for each individual. Kickstarting makes customers feel directly involved in the company that they are funding.
It is entirely conceivable that the self-publishing evolution, that has become the new norm for aspiring music producers and writers, could soon affect the manufacturing and marketing of toys, gadgets, household goods and ornaments in the same way. Commercially, organizations like i.materialise are allowing designers to design, while the products are made to order using 3D printing technology. 3DP, a ‘Best of Innovations’ award winner at CES, offers personalized 3D printed iPhone cases powered by Sculpteo the 3D printing service. Nokia has also announced the ability to create your own personalized shell cases for your device, replacing the actual case from them.
What does it all mean for you?
How can your brand offer the ultimate personalization of your product? Also what does this mean for your distribution and manufacturing processes? Could additive manufacturing be used as a new product development tool? It produces no waste and products can be made to order leaving no items unsold. How can you take advantage of this capability within your manufacturing and distribution processes?
Being a part of the production process becomes even more of a reality to some with 3D printing. Also known as additive printing, there has been a huge leap in the accessibility of this technology from its beginnings and first showing at CES. Makerbot is leading the charge in home-operated machines and showed a $2,200 machine on their booth at CES.
PERSONALIZATION AT SCALE
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TRENDS REPUTATION ECONOMY
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ith around 2.5 billion of our 7 billion-strong population (just over 30%) now having access to the internet, and with the typical internet user spending an average of 16 hours online per month, what if that time spent online could somehow cumulatively deliver value back to the user? This is the context of the reputation economy. As our digital lives continue to expand to include ever more entertainment consumption, product discovery, purchase transaction and customer service, the concept of quantifying these interactions and using them as an asset is what is being termed your ‘reputation capital’. The principle is that an aggregate of your interactions could be a better reflection and evaluation of your trustworthiness than more traditional measures such as credit history. Evidence of its growing importance is shown in one notable example, the new banking startup, Movenbank. The company was built on the premise that a credit history only tells part of a story and that your activity through your online network is a reliable way of evaluating your trustworthiness. Additionally your activities could lead to the development of personalized products and services. Based on what they call a CREDscore which, as well as being used to assess you for opening an account, will also change based on your ongoing account activity. For example, if you were to share a great new deal on a Movenbank product with your network, this would add points to your CREDscore and would, over time, entitle you to benefits such as reduced fees for various banking services. On the CES exhibition floor and in the keynotes, connectedness is a strong theme. Standards like the WiFi Alliance’s Miracast also support Intel’s WiDi and has been adopted by Qualcomm, LG, Samsung and Sony. Qualcomm also featured their open source connectivity framework AllJoyn, which allows media sharing and peerto-peer connectivity. It seems then that the hardware will become less of an inhibitor to cross-device access to content. So the next challenge is ensuring the retention and transfer of data across devices.
REPUTATION ECONOMY
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TRENDS With this, personal profiles will become much more than something used and displayed within a social context like Facebook or the Google environment, they will become an identifying asset to be transferred or accessed across devices and contexts. Consumers will expect this regardless of operating system, product or service. With connectedness comes refinement and, where the connected ecosystem becomes more attuned to the individual’s preferences, personalization will occur. The consumer’s likes and dislikes will essentially become a digital blueprint and will, in turn, develop the individual’s reputation capital. We can see this in action with the Roku platform. It’s free to use once you have bought the device but they require a payment profile – either credit card or PayPal – so that you can easily access content should you click on a paywall-protected provider. Thus they have created a portable personal profile which can be used to subscribe to discrete, sometimes competitive, services such as Netflix and Hulu. Roku are currently non-committal about multichannel pricing but if the user base grows they would surely have to consider negotiating discounts with the content providers on their platform thus taking on a role similar to the cable or satellite TV networks do now. In our previous papers we have talked about the increasing importance of Google, Apple, Facebook and Amazon. These companies understand the concept of a transferrable profile acutely and are building ecosystems to provide you with a profile that works across their product range - whether that’s search, maps, shopping or access to entertainment. The end of 2012 saw challenger Samsung rise
to join the ranks of these four giants and the brand is now edging closer to real dominance due to both its range of products and services, and its constant innovation. Whether they consider each other to be competitors or not, it will be fascinating to see how the dynamics between these companies evolve. Partnerships could be key. We saw at CES how partnerships with Roku catapulted 14 emerging TV brands (including Hisense, TCL and Coby) into a very competitive position in the smart TV race for customer adoption.
What does it all mean for you?
Being present where people spend their time is one of the foundations of marketing and advertising. As online destinations take up more of people’s time, an individual’s interactions will become a barometer of hir or her preferences. One of the benefits that working in digital has long promised is being able to leverage the direct response capabilities of the communication, using a portable personal profile will help in understanding consumers as more complete individuals. Whilst this is something that will take time to mature, we are very close to seeing this in the marketplace. To get ahead, smart brands should be looking at ways to invest in partnerships with companies and service providers now.
REPUTATION ECONOMY
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TRENDS LOYALTY AND REWARDS
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he much-quoted law for storage capacity doubling in performance (and halving in cost) every two years – as well as Gordon Moore’s law of computing power – has been holding true now for almost half a century. What this means for marketers is that if you have the information about your customers, then storing it is a no-brainer due to the negligible cost involved. The caveat here is that privacy legislation must, of course, be strictly adhered to. Customer Relationship Marketing – the direct one-to-one marketing through direct mail, SMS, email or telephone never went away, it has now been augmented by a massive new database – social communities. The data created is exploding in size augmenting the big data sources already available to companies. Coca Cola now has over 57 million fans on its social network community and the top hundred brand pages have over one billion fans collectively. If you were to ask a traditional CRM agency to build a customer database of 57 million names, the likely cost would run to many millions of dollars: asking them to find out what other brands their customers liked would probably seem like an impossible request. Hastening this increase in customer data is people’s propensity to carry out customer service transactions through social channels, many of which may be accessed through mobile devices that provide additional meta data such as location. So as customer databases grow, harvested through whatever means, what can marketers do to maintain communication with those customers? Actually placing a value on this data is the first step to success. Customer communities can be nurtured through education, entertainment and utility. Advocacy and engagement encouraged through rewards. Rewards can no longer just be a ‘thank you’ for a previous purchase. Viggle, the TV loyalty program, rewards its community members as they check into TV shows; watch the whole season and you may be rewarded with a burger meal, a coupon for a department store or a dollar value to give to charity. Nestlé in the Philippines rewards their community members for interacting with its social community. Sharing content or commenting on discussion threads is incentivized, thus encouraging others to interact with the brand community and so making that community richer in the process.
LOYALTY AND REWARDS
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TRENDS Paid-for web service providers such as e-retailers, online photo storage etc. reward friend introductions most effectively as they see that a customer introduced by friends, rather than through a direct sales channel, is more likely to stay with the service and subscribe.
hit their carbon footprint reduction goals.
In an effort to boost loyalty and reputation capital Engadget had a “tweet for a tee” vending machine at CES, which assumed that thousands of geeks tweeting an update from CES in exchange for a t-shirt would help the brand. It certainly attracted the crowds and there was a queue at the machine for the duration of the show.
One of the CES ‘Best of Innovations’ award winners in the central gallery at CES was the Belkin WeMoBaby, a baby monitor that connected to a free smartphone app. The added value paid-for service allows parents access to their child’s cry history log. Instead of asking the customer to pay, maybe a diaper brand could fund the added value service in exchange for customer loyalty?
Loyalty programs will grow to the point that any interaction with the brand can be rewarded at some level, and the brand can reward actions in third party environments with offers. This will all become easier with a portable personal profile. Rewarding customer interactions such as visiting a store, submitting a new product idea, sharing a promotion with a social community or trialing a brand partner’s product will all be achievable. The rewards company, Kiip works with application developers to facilitate these branded rewards to mobile app users. Users can be rewarded with a coupon when they reach a new level of their favorite game, or as in their new fitness section, when they reach a personal fitness goal. On the Ford stand at CES we saw its ecosystem of brands, which centered on their electric vehicles, enabling you to evaluate your carbon footprint. Should a company wish to emphasize its green credentials, then it would be appropriate to reward consumers as they
In Singapore, commuters who usually travel during peak times but who elect to travel at nonpeak times are rewarded on the government program InSinc. So far the program has given out a total of over US$270,000.
Starbucks have been quick to learn this lesson and have added location-based third party store and service discovery through their mobile app. By looking at which partners their customers are most interested in they are able to develop mutual loyalty incentives or simple joint promotions.
What does it all mean for you?
This type of program can only be effective if you have the right data. So brands need to identify the behavior they want to reward and either build their own program, or partner with other companies who are already tracking behavior in that area. The more we learn about consumers and the way they use products and services, the more brands can incentivize them with added-value rewards.
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TRENDS THE NEW TRANSACTION
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ith the major shopping season just over, it is clear that online shopping is as important as shopping on the high street. In the USA, the post - Thanksgiving shopping day known as Black Friday even has an established online brother: Cyber Monday. Shopping online is a growing part of the retail experience with increasing numbers moving towards the convenience of buying certain goods online. Published data suggests that in retail sales, $1 in every $10 is spent online. A study for inMobi, by OnDevice Research and DecisionFuel looked at the mobile device’s role in media consumption, transaction, general activity/usage and also influence on purchase. Collectively measuring what they called ‘mobile centricity’ they found an inverse correlation between wealth and mobile centricity. Many advanced economies such as the UK, US, Japan etc. have learned to use the internet and web-based services through a PC and so are less comfortable completing transactions on a mobile device. Interestingly, emerging economies such as Brazil, the Philippines, India and China, who have not gone through the same PC learning ground, are perfectly happy completing web-based activities using a mobile device. Different devices are now finding specific roles and consumers are experiencing this in their everyday lives. As people become used to shopping online they have found that different devices can be used to enhance the shopping experience. On the high street, a practice known as ‘showrooming’ is becoming increasingly common. The consumer scans barcodes in store to get information about products - including price - but they then buy the product elsewhere. This effectively turns the store into little more than a glorified showroom.
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TRENDS When it comes to purchase, perhaps surprisingly, the desktop has now taken second place behind the tablet. As it finds its niche as a recreational device, the tablet is now the preferred way to order online with the average order size increasing to $123, compared to the $102 average for desktops/ laptops.
What does it all mean for you?
All this is important because brands and companies need to gain a deeper understanding of this evolution in order to ‘fish where the fish are’. Think about developing products and services that sit over the top of this evolving change in behavior of consumers. Understanding this as a connected seamless experience that links digital and physical spaces will reduce the ‘friction’ in the consumer’s experience and can then be used to add value. The key to the new transaction, is moving beyond a payment definition and becoming about this exchange of frictionless products and services, thus cutting out the manual work. Done correctly, consumers will reward you with their loyalty, as there is still a desire for an ongoing brand experience.
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OUR SUMMARY A CROWD OF CONNECTED INDIVIDUALS
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ocial mobility – the ability to ensure your own destiny is determined by your own actions and not circumstances beyond your control – is a fundamental ideal of the American dream. Now as we enter a global age of social mobility, brought on by a tipping point of technology and service, it means that we are only restricted by our ability to dream and make a video about that dream. As individuals, we are probably at the most commercially empowered stage since the end of the 19th century. Some of this empowerment is active and some of it is passive; all of it requires a rethink about the norms that we have been working with since Sylvan Goldman invented the shopping cart in 1937. “My shopping data is not me” is an insight from our Truth Central research, which has shown that people do not consider their shopping data to be too personal to share. Indeed the personalization of the shopping and discovery experience is reaching a level of maturity so sophisticated that there are many people who, when they spend any time away from their own personal technology, can feel alienated. A segment of our customers are savvy enough to share their data. Those customers can help improve service and personalization for everyone else. Anyone who uses Amazon or Netflix and buys a movie for a friend or relative will no doubt see how suggestions are then driven by a choice you have not made for yourself. The mere fact that one finds this irksome is due to our reliance on a personalized suggestion service. The data that builds a more personalized service is being generated through activity on our mobile devices. The more experimental brands are already working with ways to harvest and act on this data. Could 2013 be the year to increase investment in this area? Hopefully you’ve just read something that will spark your own ideas about how you can help your brand to innovate…
OUR SUMMARY
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00 ABOUT THE AUTHORS GREG ARMSHAW - Chief Technology Catalyst, McCann Worldgroup Asia Pacific
Greg has always worked at the leading edge of technology implementation and design. As part of the McCann Worldgroup Technology Catalyst Team, he is focused on identifying best in class solutions and technologies that enable clients to deliver utility, education and entertainment to their customer communities. Working with startups and established companies especially in the areas of Social Utility, Location based Services and Mobile solutions to deliver innovative client solutions. As Media Systems Manager for Universal McCann EMEA, which he joined in 2001, he project-managed the development and deployment of media and consumer research analysis software to clients in over 30 countries, pulling data from multiple sources before campaign performance dashboards were commonplace. In 2006, he moved to Hong Kong as Senior VP, Regional Technology Director for McCann Worldgroup Asia Pacific. In these posts, he has delivered solutions to such clients as GM, Microsoft, Motorola, SC Johnson and NestlÊ, among others. Earlier, he was Commercial Manager at WPP Company KMR Software where he was instrumental to the successful transfer of analysis from the desktop systems to the web, for both TV and mixed-media planning. During his time here Greg was instrumental in projects to merge and segment major customer and market research databases for clients such as Barclaycard and Centrica. An engineer by training, he transferred his talents into the communications sphere once he realised that technology was not only a tool for improving the efficiency of operations but a game-changer for how consumers would interact with brands, products and corporations – as consumers, employees and partners.
Contact me:
Gregory.Armshaw@mccannwg.com @innovasian
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00 ABOUT THE AUTHORS MARK JACKSON - Chief Technology Catalyst, McCann Worldgroup EMEA
In November 2010 Mark joined McCann Worldgroup in Europe as Chief Technology Catalyst, focusing on delivering innovation and technology enablement for global clients including L’Oreal, MasterCard, Coke, Nestle and Nespresso. This has involved understanding the future vision for each organization and working with the agency and clients on defining the role that technology can play across new and emerging platforms and how to build a roadmap that can redefine business models. Mark, along with the Technology Catalyst team worldwide, is also involved with working on defining and setting core trends with clients. This includes writing specific white papers on future forecasting around new technologies and also doing specific workshops and tours at key events such as the Consumer Electronics Show and Mobile World Congress. He began his professional career as a designer/developer then moved to Project management working for a small specialist digital agency providing outsourced create and development services to some of the larger agencies in the UK, working on brands as diverse as Carlsberg, Nike, HSBC, BskyB and Formula One. After 7 years and with a brief stint working client side with bespoke tailoring brand Hardy Amies, he moved on to develop his own consultancy and was eventually headhunted to lead the digital offering of a new start up agency. This involved developing key strategic partnerships in the UK and UAE, building core infrastructure applications and digital marketing strategies for governments organizations and major construction companies in both countries. From 2008 Mark was digital client service director for McCann Manchester - applying digital strategic thinking across all key accounts acting as digital lead and managing strategic aspects of large engagements.
Contact me:
Mark.Jackson@mccannwg.com @sparkyj
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