Business Transformation: The Next 5 Years Through the Eyes of Brands and Consumers Richard Hartell Global President, Publicis Media Business Transformation
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Publicis Media Business Transformation A Global Consulting Practice to Unlock Our Clients’ Growth by Re-engineering their Consumer & Customer Experience
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Transformation requires a shift from siloed approaches
Media & Advertising
UX
Customer Experience •
All customer touch points
•
TV
•
OOH, Press
Digital customer experience, GUI
•
Digital
•
Web
•
Marketing
•
Promotions
•
Mobile
•
•
Shopper
•
Tablet
•
Events
•
IOT
•
Influencer (PR & Sponsorship)
Media & Advertising
Platform, data organisation and operations
Customer Experience
Platform & Operations •
Product
•
Technology
•
Regulation
•
Innovation
Retailers
•
Operations
•
Service excellence
•
People
•
Partners
•
Processes
•
Connected services
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To connecting consumer and customer experiences with business capability building
Media & Advertising
Media & Advertising •
TV
•
OOH, Press
•
Digital
•
Promotions
•
Shopper
•
Events
•
Influencer (PR & Sponsorship)
UX
Platform, data CCX organisation and operations
Digital customer experience, GUI
Customer Experience
Platform & operations
•
Web
•
•
Product
•
People
•
Mobile
All customer touch points
•
Services
•
Processes
•
Marketing
•
Pricing
•
Central v Local
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Retailers
•
Regulation
•
Technology
•
Service excellence
•
Operations
•
Innovation
•
Partners
•
Connected services
• •
Tablet IOT
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Invention Experience Design
Our Services Disruption Innovation Partnerships
Evolution Capability Building
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Uniquely placed to unleash the alchemy of intelligence, creativity and technology to transform our clients’ businesses
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Technical Capability
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Marketing Capability
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HOW DO CONSUMERS AND EXECUTIVES EXPECT BUSINESS TO TRANSFORM OVER THE NEXT 5 YEARS?
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The Purpose and Approach WHO & WHERE
WHAT
HOW
1799 consumers and 759 executives
12 categories Banking Beauty & Grooming Alcoholic Beverages Cars Airlines Supermarkets Media & Entertainment Everyday Groceries Fashion Retailers Consumer Electronics Telcos Fast Food
Survey and Prediction Markets
7 countries UK USA France Germany India China Australia
6 key trends AI & Personalized Data Democratized Innovation On-Demand Access New Payment Methods and Alternative Currencies Seamless Shopping Sharing Economy
Prediction Markets A “stockmarket-like� gamification technique that asks consumers and execs to bet on the future impact of a particular trend.
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Disruption is mainstream Around 2/3rds of us embrace the rate of change Little difference between execs and consumers
67%
I fully embrace the rate at which the world is changing
60% 57%
28%
I would be happy if the rate of change were even faster than it is now
I think the rate of change is too fast and I find it hard to keep up
Little difference between young and old I wish things would return to slower, simpler times
25% 23%
Executive 18-34
4% 10%
35+
13%
2% 4% 7%
Q: Over the last couple of decades, technology has had a profound impact on our world. The rate at which we find information, communicate with others, and access goods and services is unprecedented. With this in mind, how do you feel about the current rate of change? Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)
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Beauty & Grooming Products Alcoholic Beverages
93%
57%
Cars
There is an Expectation Gap 86% of execs feel they are meeting consumers expectations Only 61% of consumers think they are meeting them A wide variation in some categories versus others
95%
64%
Banking
91%
60%
Media & Entertainment
90%
71%
Telecommunication Companies
88%
62%
Airlines
87%
54%
Consumer Electronics
80%
Supermarkets
81%
61%
Fast Food
80%
56%
Everyday Groceries
64% Executives
85%
84%
68%
Fashion Retailers
74%
Consumers
Executive Question: To what extent do you feel that your business is currently meeting your customer’s expectations? % Agree Consumer Question:. To what extent do you feel that companies and brands are innovating to meet customer expectations in‌ % Agree
Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) : Executives (759) Average sample size by category: (51)
92%
69%
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The Dunning Kruger Effect
Execs Could Be Falling For The Dunning Kruger Bias – Mistakenly Assessing Their Ability As Much Higher Than It Is
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The Dunning-Kruger Effect Source: Unskilled and Unaware of it: how difficulties in recognizing one’s own incompetence lead to inflated self-assessments. J. Kruger & D. Dunning. (1999)
BT is on the Agenda but still a work in progress
76%
67%
Of execs have a BT agenda in place
Have a consultant working on it
Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Executives (759)
81%
54%
But the majority are not Think their agenda is yet half way through gaining strong momentum
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The focus is around IT infrastructure, digital expertise and marketing. The challenges are talent, organization and agility. Q: Execs: Where do you feel your business transformation activity is having the most impact? Infrastructure & IT
82%
Q: Execs: What are the greatest challenges in pursuing a business transformation agenda? Talent pool challenges
41%
Digital Expertise
80%
Keeping up with latest technology
Marketing
80%
Organizational barriers
36%
Lack of data and data skills
36%
Customer Services
79%
Production
78%
Data Management Talent & Recruitment Company Culture
77% 74% 73%
Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Executives (759)
38%
Insufficient resources
34%
Lack of digital capabilities
33%
Unforgiving competitive landscape
32%
Outdated or unavailable systems and processes
32%
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Q: Which Companies Will Play The Biggest Role In Shaping Future Products, Services, & Customer Experience? 84% 82% 78%
Big tech companies of today (e.g. Google, Facebook, Tencent etc.) 36%
Peer-to-peer networks where individuals interact directly
Most agree that big tech companies will shape future products, services and customer experience
49% 47% 38%
The same companies and brands that have existed for generations
59% 36% 43%
Communities, networks, or organizations that don't yet exist
30% 56% 48% 44% 42%
Start-ups and entrepreneurs
43%
Government agencies and organizations Executive Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)
33% 39% 18-34
35+ 13
Consumers and Executives were asked to predict the disruptive impact of six trends across 12 categories Banking Auto
New Payment Methods
On Demand Access
Sharing Economy
Seamless Shopping
Artificial Intelligence
Democratized Innovation
Consumer Electronics Supermarkets
Categories
Media & Ent Telco Fashion Everyday Groceries Fast Food Beauty & Grooming Airlines Alcohol
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Expectation around disruption tends to sit where people’s money (and data) matters most Over 50% PLI significant
200
Banking
180
Average Betting Index
160
Auto
140
Consumer Electronics Supermarkets
120
Fashion
100
Everyday Groceries
80
Beauty & Grooming
60 40
Alcohol
Telco
Media & Entertainment
Fast Food Airlines
20 0
30
40
50
60
70
Average PLI (Prediction Likelihood %) Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)
*PLI = The calculated probability of this statement being true. Predictions are relative to 12 other categories tested. PLI scores over 50% are significant.
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Banking: New Payments, Democratized Innovation and AI are the trends seen as most likely to disrupt Consumer 18-34
Executives
NEW PAYMENT
D. INNOVATION
AI
85% PLI 561 BI
61% PLI 163 BI
59% PLI 141 BI
DRIVER
DRIVER
DRIVER
Disruption in progress
Disruption in progress
Everyday relevance
New Entrants e.g. Venmo
Automated Customer service
Security concern
On Demand Access (56% PLI / 133 BI) / Seamless Shopping (52% PLI / 97 BI / Sharing Economy (49% PLI / 77 BI)
Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)
NEW PAYMENT
AI
D. INNOVATION
85% PLI 354 BI
65% PLI 172 BI
64% PLI 151 BI
DRIVER
DRIVER
DRIVER
Disruption in progress
Role of banking & branches
Outsource decision making / efficiency
Robots replacing humans
New Entrants e.g. Fintech Start Ups Question ability to keep up
On Demand Access (60% PLI / 136 BI) / Sharing Economy (52% PLI / 94 BI) / Seamless Shopping (42% PLI / 69 BI)
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Auto: Sharing Economy, On-Demand and AI are the trends seen as most likely to disrupt Consumer 18-34 SHARING ECON
ON DEMAND
Executives AI
SHARING ECON
ON DEMAND
NEW PAYMENT
80% PLI 287 BI
58% PLI 136 BI
54% PLI 107 BI
DRIVER
DRIVER
DRIVER
81% PLI 395 BI
55% PLI 110 BI
55% PLI 138 BI
DRIVER
DRIVER
DRIVER
Disruption in progress
Disruption in progress
Instant access & ride sharing e.g. Zipcar/Uber
Mobile tech driving services like Uber
Onset of selfdriving cars
Seamless Shopping (46% PLI / 76 BI) / New Payment Methods (43% PLI / 56 BI) / Democratized Innovation (41% PLI / 59 BI)
Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)
Disruption in progress New players force biz definition shift from selling cars to mobility services
Connected cars to deliver new experiences for customers And data streams for marketers
Driverless cars reducing need for insurance
New paths to purchase e.g.
virtual showrooming
D. Innovation (53% PLI / 115 BI) / Artificial Intelligence (51% PLI / 114 BI) / Seamless Shopping (44% PLI / 71 BI)
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Consumer Electronics: Democratic Innovation, AI and Sharing Economy are the trends seen as most likely to disrupt Consumer 18-34 D. INNOVATION
AI
Executives SHARING ECON
ON DEMAND
SHARING ECON
NEW PAYMENT
76% PLI 240 BI
74% PLI 268 BI
56% PLI 96 BI
62% PLI 143 BI
62% PLI 141BI
57% PLI 115 BI
DRIVER
DRIVER
DRIVER
DRIVER
DRIVER
DRIVER
People primed & excited for CE innovation.
Already feeling impact of SIRI/Cortana/Echo
Witnessed flurry of innovation & entrepreneurs e.g.
Smart phones/homes immediate application
start ups/kickstarters
Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)
Connected devices ushered in sharing economy
IOT pushing connectedness and utility of devices
Making higher priced CE goods more affordable
Continued shift to mobile wallets
Quantified self trend pushing functionality
New trial/revenue opportunities
Checkout anytime anywhere
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Beauty & Grooming: AI, Seamless Shopping & The Sharing Economy are the trends seen as most likely to disrupt Consumer 18-34
Executives
AI
S. SHOPPING
D. INNOVATION
53% PLI 92 BI
46% PLI 66 BI
38% PLI 39 BI
DRIVER
DRIVER
DRIVER
Increased personalisation of skincare products
Improved and personalised customer service
New entrants e.g. home-grown natural trend
Better data to understand performance of products On Demand Access (35% PLI/ 41 BI) / Sharing Economy (35% PLI/ 24 BI) / New Payment Methods (33% PLI/ 31)
Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)
S. SHOPPING
62% PLI 155 BI DRIVER Role of facial recognition sensors and related tech in retail environments Opportunity to speed up consumer decision making
SHARING ECON
AI
47% PLI 75 BI DRIVER
46% PLI 73 BI DRIVER
New trial/revenue opportunities e.g. Subscription services Birch Box, Dollar Shave Club
Impact of improved performance data on consumer product selection New paths to purchase
On Demand Access (43% PLI/ 82 BI) / D. Innovation (42% PLI/ 61 BI) / New Payment Innovation (40% PLI/ 59 BI)
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Alcohol: Seamless Shopping, Democratic Innovation and On Demand are the trends most likely to disrupt Consumer 18-34
Executives
S. SHOPPING
D. INNOVATION
SHARING ECON
46% PLI 55 BI
45% PLI 56 BI
40% PLI 40 BI
DRIVER
DRIVER
DRIVER
Off-licence very trad. transaction environment New delivery apps like drizly changing retail expectations
Rise of home brewing and craft beer trend and grass roots innovation
Intersection of ride sharing and responsible drinking
Greater visibility of heath and wellbeing in daily lives
New Payment Methods (40% PLI/ 39 BI) / Artificial Intelligence (36% PLI/ 41 BI) / On Demand Access (34% PLI/ 34 BI)
Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)
S. SHOPPING
46% PLI 86 BI DRIVER New delivery apps like drizly adds a premium service model to existing channels
D. INNOVATION
ON DEMAND
44% PLI 73 BI DRIVER
41% PLI 63 BI DRIVER
Crowdfunding reduces need for access and support from establish companies
Concern about competition Amazon could bring
Sharing Economy (39% PLI/ 51 BI) / Artificial Intelligence (37% PLI/ 47 BI) / New Payment Methods (34% PLI/ 40 BI)
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A tension between personalized experiences and ’traditional’ brand marketing approaches 90
Q: Beyond good quality and value, what attributes will consumers demand the most from companies over the next 5 years?
80 70 60 50 40 30 20 10 0
Make life easier for consumers
Provide a Are trustworthy Provide Provide Make personalized entertainment something to consumers and individual and excitement believe in smarter by service providing good information
Executive Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)
Provide a sense of belonging
35+
Provide a feeling of prestige
Do the right Inspire Challenge thing as consumers and conventional corporate communities wisdom and citizens behavior
Provide a sense of discovery
Unite or connect consumers and communities
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9 Learnings
1. Disruption is mainstream 2. There is a surplus of confidence 3. The gap between companies confidence and consumers expectations is wide 4. Transformation is on your competitors agenda 5. You are likely less than halfway through your transformation (and likely always will be) 6. Tech is the focus but talent and agility is the challenge 7. Follow the money (and data) 8. Big tech is the force but how it disrupts can come from anywhere and anyone 9. Transformation has to cater to individuals but not lose the universal appeal of brands
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Please get in touch‌ richard.hartell@publicismedia.com www.linkedin.com/in/richardhartell @richhartell
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