marketing: what is your technology strategy?

Cisco Confidential Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group 1

Marketing: What Is Your Technology Strategy?

Jožek Gruškovnjak Director, Emerging Markets Practice Internet Business Solutions Group (IBSG)


Why the Transistor is to Blame for Elvis, The Beatles, and Justin Bieber…

Source: Cisco IBSG, 2011; Wikipedia, 2011; YouTube, May 27, 2011

First Apple iPod: 1,000 songs “in your pocket” for

$400

Mobility Leads to Personal Independence

Teens listen to music almost anywhere

Moore’s Law Drives Down Prices

Regency TR-1 4 transistors

1954 Teens can afford their own radios

Rock’ n’ roll explosion

First transistor

The most downloaded

human on earth

741.3M: views of “Baby”* 5,289 years spent watching


Source: The Economist, 2010

Time to Reach an Audience of 50 Million

0 10 20 50 Years 30 40

38 years

1 year

2 years

What’s next?

15 years

4 years

The Ever Increasing Pace of Innovation


Inflection Points and Market Transitions 1


Evolutions. Revolutions. Inflection Intersections.

Social Media

§  687,000 Facebook members in Slovenia – 34% of the population (May 2011)

§  Average time per month spent on Facebook è 8 hours as per October 2011 1.42M internet users, Slovenia

71% of the total population 66% use internet at lease once a week

Source: Digital Strategy Consulting, January 2010; Socialbaker, May 2012; Nielsen, 2009; Internet World Statistics, April 2012

Ubiquitous Internet


Evolutions. Revolutions. Inflection Intersections.

§  27.6% of online Slovenians own a smart phone

The Smart Phone

Source: GfK, 2011; Digital Marketing Lab, Oct 2010; Online Marketing Trends, March 2011; InSites Consulting. (eMarketer, May 2010)

§  47.8% of online population have bought products or services over internet

≈ 75% in the U.S., Germany, France

§  ≈ 5% of the total retail sales §  Steady growth in EU at ≈ 8% p.a.

E-Commerce


The Internet Is Invading Stores: Showrooms for Amazon?

iPhone users do… §  4.3 times more web search §  4.1 times more social

networking §  3.2 times more instant

messaging …than average mobile users

Morgan Stanley estimate:

§  By 2014, there will be more mobile Internet users than desktop Internet users

Location-Based

Desktop Internet Barcode + Camera + Web Access + GPS = Lowest price, closest location

§  ShopSavvy: 7 million users, 20 million SKUs

Invasion by Internet

48% of smartphone owners have shopped using a mobile device

§  40% compare pricing in stores

§  28% have purchased

Sources: Morgan Stanley, April 2010; ShopSavvy, January 2011; comScore, February 2011; In-Stat, November 2010

Smartphones: 30% of all phones 2011 46% of all phones 2015

Mobile Internet


Online Touchpoints Have Already Had a Major Impact on the Shopping Journey

Source: Cisco IBSG, 2010

The Shopping Journey for Buying a Camera…

Touchpoints before, during, and after the transaction


Print in digital format. Text. Photos. Audio. Video. Together. Movable type.

Johannes Gutenberg

1439 2007 2010

Inflection Point: A Rule-Breaking Gutenberg Moment.

Inflection Point Incremental Improvement Inflection Point



IPTV: The iPad for Your Wall


Late 1920s

Broadcast TV Satellite / Cable TV Internet TV

1970s 2010


Augmented Reality: A New Way to See

Ikea’s Augmented

Reality Mobile Phone

Application

DIESEL Magic Mirror

L’Oreal Virtual Mirror

Sources: IKEA 2009; L’Oreal, 2010; Encyclopedia.com, 2011

Mashing Up the Physical and Virtual Worlds

Microvision & Nokia:

see-through color

eyewear & mobile phone


Mobile Payments: The Digital Wallet Becomes a Reality

§  Mobile cashless payment system §  Supports Nokia, Samsung, LG,

Motorola, Android, iPhone §  Current trials in 32 countries

including Europe, North America, China, India, South Asia, Japan, Latin America, and Middle East

Tap and Go § Range: 1.5 inches or less § No Bluetooth “pairing” § Connects in 1/10th of a second Now § Card emulation (like a contactless card) § RFID reads § Device-to-device Tomorrow § Mobile payments § Mobile ticketing § Smart posters § Electronics

Example: ePort Connect

Source: USA Technologies, 2011


What It All Means 2


Implication 1: Exceed New Consumer Expectations Stores of the Future Must Exceed the Experience Expectations of Internet-Shaped Consumers

§ Finding: Thousands of

responses

§ Control: Time-shifted

§ Abundance: Endless availability / selection

§ Speed: In a broadband

instant

§ Transparency: All relevant

knowledge accessible

§ Community: Peer advice

most important

§ Interaction: Equal parts

consumer / creator

Source: Grownup Digital, 2008; Cisco IBSG, 2011


The Six-Screen Life: High-Value Square Footage Now Measured in Centimeters

1. Mobile 2. Home 3. Computing

6. Dashboard 5. Public 4. Media

§ SMS § M-commerce § Social media § Location

§ IPTV § Home TelePresence

§ E-commerce § Chat / blogs § Social media

§ Rich media communication

§  E-commerce §  Social media

§ Rich media communication

§ Location-based

§ Recommenda-tions


Implication 2: Utilize the Most Valuable Real Estate in Retail


Implication 3: Create the Omni-Channel Future

Source: Retail Systems Research, 2011

Disparate Channels

Stor

e E-

Com

mer

ce

M-C

omm

erce

§ Single source of customer “truth” § Data anytime, anywhere, any device § Any SKU, any site

Data § Product § Inventory § Customer

Function § Merch. § Operations § Fulfillment







Retailer Brand

Omni-channel Shoppers


§  Consumers using more technology to help shop

§  Tested hypotheses about the future of shopping

§  Survey goals:

– Understand how / why consumers use technology

– Learn how technology is shaping consumers’ behavior / expectations

– Test delivery of technology-enabled shopping experiences that empower customers

Why Cisco Conducted the “My Shopping, My Way” Shopper Survey



Common top reasons for using technology in shopping

Top Reasons Consumers Use Technology for Shopping

1.  Find lowest price: 63%

2.  Save time: 47%

3.  Find best selection: 26% Find best-quality product: 25%

Source: Cisco IBSG Research & Economics Practice, 2010. Note: U.S. respondents.


Sample Size = 1,000 U.S. consumers

Which of the following are the three most important sources of information that you use to help make buying decisions?

Friends / Family

40%

50%

60%

0

Technology Is Reshaping How Shoppers Make Buying Decisions…

30%

20%

10%

60%

29% 29% 27% 24% 23%

Online reviews more important than in-store employees,

traditional media, and social networking

21% 19% 14%

11% 10%

Online professional

reviews

Data on mfg. sites

In-store product displays

Online reviews (store-based retailer sites)

In-store employees

Print Customer reviews

on blogs, message

boards

Customer reviews on

social networks

TV Customer reviews (online-

only retailer sites)

Source: Cisco IBSG Research & Economics Practice, 2010


What is your experience with using each of the following technologies to look for product or pricing information before you purchase?

Sample Size = 1,000 U.S. consumers

50%

70%

90%

0

30%

20%

10%

85% 80% 76%

45%

35% 27%

43%

23%

12%

80%

40%

60%

…And How They Access Information

36%

20%

9%

Percent of U.S. respondents who “regularly use” or “have tried it”

PC at home Kiosk / touch screen in store

Mobile device in store Mobile device at home Gen Y (18–29) Gen X (30–49) Boomers / Silvers

(50+) Source: Cisco IBSG Research & Economics Practice, 2010


+ = “Mashop” Physical (stores) Virtual (web)

§ Physical availability

§ See, touch, smell

§ Try it, use it

§ Human interaction

§ Peer reviews / ratings

§ Feature and functionality comparisons

§ Price comparisons

§ Detailed product information, specifications, videos

§ Recommendations

Combined physical /

virtual experience


“Mashops” Combine Physical and Virtual Retailing


Personalized product offers

Shelf-edge access to deep, net-like knowledge

Virtual expert adviser

Multi-touchpoint social media customer care

One-click mobile payments

Sources: Cisco IBSG, 2011

Best Buy Connected Store

John Lewis (UK)

Home Improvement Retailer

Sources: Best Buy, 2010; John Lewis, 2010; Cisco IBSG, 2011

Leading Retailers Testing Mashops Ideas in Test or Development

Mashop Experiences Empower Shoppers in Your Store


All This Is Not Limited to Retail…

Example: Financial Services

§  Remote service assistance (high end video)

§  Remote purchase and payment


The Internet Invades the

Store

Shopping Comes to the

Internet

Source: Cisco IBSG, January 2011

E-Commerce

Mobile & Social Amazon, b. 1994 → eBay, b. 1994 →

Facebook, b. 2004 → YouTube, b. 2005 → iPhone, b. 2007 →

Mashops Now →

1

2

Best of Both, Together: Store and

Internet

3

Implication 4: “Mashops” Around the Corner


Summary Thoughts 3


The Number of Retail Touchpoints has Multiplied Significantly



Marketing (& Sales): The Critical Interface Between The Customers And The Company

Research & Development

Design (products, services,

processes)

Production Marketing & Sales Distribution Customer

Service

Customers

Needs, requirements,

value perception, …

Sources: Value Chain Reference Model, Value Chain Group; Competitive Advantage, Michael Porter


Implications as We Look Ahead: Strategies for Success

Technology Is Retailer’s Problem. 1 Technology Essential. Technology a Differentiator.

Multi-Channel. Separate channels, prices, product delivery, and internal compensation.

2 Omni Channel Anywhere, Anytime shopping, driven by the consumer.

Differentiate on Price-Product-Location. The recipe for past success 3 Differentiate via Customer Experience

Unique to your brand promise, regardless of price point

Smartphone Apps. 4 Technology Strategy. Multi-screen, interactive, integrated with retail..

Traffic. Invest to boost traffic. 5 Conversion and attach.

Invest to win traffic, boost baskets.

P A S T S U C C E S S T O M M O R O W ‘ S S T R A T E G Y

Sources: Cisco IBSG, 2011 The Economist, 2009.

Print Ads, Sunday Circulars Go where the eyeballs are. 6 Internet, Mobility, Social Networking, Video

Go where the eyeballs are.


So, What IS Your Technology Strategy for Marketing (and Sales)?

Social Networks E-Commerce M-Commerce

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marketing: what is your technology strategy?

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