Just about every industry and sector is being disrupted by the rapid adoption of new behaviors driven by mobile. But one prominent canary in the coal mine is retail. It’s no longer smart to pay retail and the proliferation of coupons, discount shopping stores – and having Amazon reviews and prices just a click away – have meant some retailers have been very focused on testing and learning what can be done with mobile.
These innovations, and the battle for delivery, mean people embrace an omini channel approach – and the challenges of attribution are all too familiar to retailers. But it’s clear that the mobile element will continue to grow; an interesting McKinsey study on Mobile retail in Korea shows CAGR of 165% over the last few years. The study also shows that some groups gravitate to mobile rather than desktop and the consumer decision journey is considerably faster on mobile. On many measures Korea is a more developed mobile market and as the West get better at delivering effective mobile shopping experiences we can expect to follow some of these trends.
You could argue that it is easier for a smart retailer to learn how to use modern digital than it is for a tech firm to learn the art of retail. That would be supported by the fact Apple paid ex Burberry Angela Ahrendts $73m in her first year running their retail operation.
This piece suggests department stores like Macys are better positioned than Amazon etc as they have solved the last mile issue that plague delivery – pointing out that Amazon spent $6.6bn on delivery and made less than half of that back in shipping fees. (Not sure whether Amazon Prime is factored in here). The study is worth downloading. And there is some more information on one of the Macy apps that give users instore offers.
One of the stores that does well in the study is Nordstrom who we feature often in our Digital Transformation workshops. They are testing a simple straightforward service – curbside collection . The customer simply texts or calls as they arrive outside and someone comes out with their purchase. It could be done with Beacons but sometimes simple tech is better than complicated.
And Target has released a corporate video showing how they use mobile tech to make shopping easier.
If you want to dig deeper this Boston Consulting Group article is a good read – and their data shows being a digital leader correlates with better EBITDA.
Video & NewTV
The Mayweather Pacquiao fight this week was a great demonstration of the power of TV – although it also showed how business models other than advertising can be powerful alternatives. PayPerView is one end of the arc that extends to watching on Netflix and buying box sets – the user is paying directly fro the content and there is little or no room for advertising. Although the Burger King being part of the Mayweather entourage was interesting product placement. But was it really worth a $1m?
The evening also demonstrated some of the potential for Periscope – with lots of streams of the fight being shared. But Twitter CEO invited some criticism when he tweeted that Periscope was the winner on the night. Messing with the money that flows from pay per view isn’t going to sit well with traditional media companies and rights owners. And with Twitter owning Periscope their good relationship with some of the best media brands might come under pressure as live streaming grows. It took YouTube a long time to come up with tools that combat piracy and doing the same with a live stream is going to be hard.
The old adage that my enemies enemy is my friend plays out a lot in tech, so its not too surprising that Meerkat is getting closer to Facebook with their latest update. Given the potential for upsetting media brands we don’t anticipate Facebook rushing to embrace Meerkat though some suggest an acquisition. An older more established live streaming service called YouNow is getting now some publicity
The tools to make the most of video are improving quickly; Ferris is interesting and we love TouchCast which is essentially a full TV studio on your iPad. Take a look at this interactive FT video made with TouchCast.
In a world of algorithms we still see a place for human judgement and taste, as curation is one of the best ways to drive discovery. Essentially great retailers curate what they sell – whether that’s one of the 3 excellent bookshops on Broadway Market or a concept store like Collette, Dover Street Market or CorsaComo. Because they know that good curation drives sales – as people discover something they didn’t know they wanted.
Apple get this – that’s why Apple chose to launch the watch in this sort of store (with help from Angela Ahrendts) – and they are going to apply it to Beats too; as well as Zane Low they are hiring other Radio1 people. We think that music and Beats will be a big topic at next months Developer Conference even though it is rumoured Apple are having trouble sorting the deals with the music industry. Our money is still on some sort of partnership with Tidal.
Instagram also recognize the power of human taste and have launched @music – an account “dedicated to exploring music around the globe, from those who create it to the community around it,”
Our own RCKSCK project is paused whilst we think through how we balance the human element with the algorithm.
Evolution of online advertising
A new study suggests that online ads are no more likely to irritate than ads in traditional media even when seen many times. As we always say; People don’t dislike ads, they just dislike bad ads and irrelevant ones. We have the opportunity to make better ads and ensure they are only seen by people they are relevant to. But as an industry we still seem to take the easy option and pump out rubbish ads to everyone.
Following our piece last week on ads being just for the poor, as everyone else avoids them, we had a fascinating conversation with PageFair. These guys have found a way to unblock the adblockers and serve up ‘good’ ads – restoring revenues for the publishers and getting good response rates from people who see very few ads.
The PageFair team have a good view on what’s happening with adblocking and there are some frightening developments. A Chinese mobile browser that strips out ads in order to reduce the data used – thus saving the user money – is growing really quickly in India and China. And new techniques are stripping out in app ads too.
We need to get better at delivering ads or we risk killing the digital ad model. A short piece on Marissa Mayer is notable for this great quote;
“’Native’ advertising is the fancy word that the digital world has chosen to put on the fact that the banner ad is not going to last long-term,”
We sort of agree – but it’s not all doom and gloom. Rich experiences still have a place across devices and this new Infiniti brand experience from our friends at ResponsiveAds shows what’s possible. We are looking for partners across Europe; Publishers, Brands and Agencies. Who is going to be first?
The data that enables smart digital advertising keeps getting better – IBM and Facebook have anew partnership with great potential. And the TrueView model we talked about last week is now available on programmatic buys.
But to get the most from these opportunities you need to take digital advertising seriously. The mirage of organic reach in social causing people to talk about your brand with their friends has – surprise surprise – melted away. And clever people know that we are back to an old fashioned model where you have to pay to reach the people who may buy your product.
But with the rich palette of tools and techniques now available – and the huge reach – it’s a medium that rewards smart thinking whether you are chasing immediate response or brand metrics
During our keynote at the recent Google Conversion event in Dublin we talked of the 4 pillars of modern digital, Data, Design, Measurement & Testing. This video from Android demonstrates how design and testing made a big difference to Style community app the Hunt.
We spent some time this week talking about the News industry and this provocative piece sums up the challenge and the opportunity.
A series of articles in the FT looks at the ad business. This considers the changes in the industry wrought by digital. This one looks at how the various social platforms offer advertising – best viewed on desktop.
This is an interesting look at how WeChat is changing Chinese media. Lots to be learnt from China.
Benedict Evans was in town last week, presenting at the Rutberg summit we spoke at and at the FT conference. The video of his FT talk is here – for some reason I can’t link direct so scroll down to Video 20. If you have some time lots of the other videos are worth watching too. One tip – you can watch YouTube videos at a faster pace – we find 1.5 works well for conference talks – although Benedict talks almost as fact as me, so normal speed is best for his
Finally – a friend shared a new project he is developing and we have had a lot of fun with it so thought we should share. SoundClash lets you challenge your friends with a music track (delivered via YouTube video) and they then respond. If you like your chooons this is great way to lose an afternoon.
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