top five digital consumer trends in...
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Top Five Digital Consumer Trends in 2018February 2018
Michelle Evans, Global Head of Digital Consumer Research
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Michelle EvansGlobal Head of Digital Consumer ResearchEuromonitor International
Industry ExpertiseAt Euromonitor, Michelle oversees the company’s digital consumer research to provide actionable insights into how technology is reshaping commerce. Recognized as a thought leader in digital commerce, she was named to Innotribe’s Power Women in Fintech in 2015, Asian Entrepreneur's Women on Top in Tech in 2016 and to Remodista’s Women2Watch in 2018. She regularly shares her expertise across industry events whether as a speaker, chairperson or juror and authors a biweekly column for Forbes.
About the speaker
INTRODUCTION
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3.6 billionGlobal internet users as of 2018, which equates to nearly half of
the population being online
53%Connected consumers reporting they would be lost without said
internet access
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The constant
innovation driven by
technology has inspired
a number of
megatrends
that are reshaping the
world.
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28%Connected consumers use a
phone to compare prices in store on at least a weekly basis
24%Connected consumers use a phone on a weekly basis for
buying a good or service
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1.Digital life converges in super apps
2.Data as the new currency
3.Keeping the tab open
4.Mobile wallets going global
5.Outlets will get their tech injection
The five most impactful tech-driven trends that will reshape commerce in 2018
INTRODUCTION
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Mobile apps were first developed around individual activities
DIGITAL LIFE CONVERGES IN SUPER APPS
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Control appliances
Order foodservice online
Buy an item or service
In-store mobile payment
Use health or fitness app
Compare prices in store
Read reviews
Stream music online
Watch a TV or video
Take a photo or video
Visit a social networking site
Use of a messaging app
Send a text message
Send and receive emails
Browse the internet
% of Online Respondents
Most Popular Mobile Phone Activities, 2017
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Opportunities for stakeholders across commerce ecosystem
DIGITAL LIFE CONVERGES IN SUPER APPS
ManufacturersConnect with consumers in more authentic ways to engage and serve
MerchantsTarget consumers in new ways to increase foot traffic and drive conversion
Payment NetworksReap benefits from an increase in digital payments due to cards being preloaded in platforms
ConsumerExperience a more convenient and enhanced commerce interaction
China shows the world where the internet is going
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Chinese super apps, such as WeChat, have expanded beyond the protection of the great firewall, giving others a glimpse of what seamless integration across channels and platforms looks like.
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WeChat is the posterchild for super app revolution
DIGITAL LIFE CONVERGES IN SUPER APPS
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000
Douban
MOMO
Meipai
Baidu Tieba
Youku/Tudou
Sina Weibo
Q Zone
Active Number of Monthly Users Mid-Year (‘000 Persons)
Top Social Media Websites in China
2017 2016
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Western tech titans are making strides toward the super app
DIGITAL LIFE CONVERGES IN SUPER APPS
Alphabet• Communication: Gmail, Google Plus• Financial: Google Pay• Lifestyle: YouTube• Retail: Google Search, Google Express, Google Shopping• Utility: Google Maps, Google Assistant, Google Drive, Google Translate
Apple• Communication: Mail• Financial: Apple Pay• Lifestyle: iTunes• Retail: Apple Pay• Utility: Apple Maps, AirDrop
Facebook• Communication: Facebook, Facebook Messenger, WhatsApp• Financial: Facebook Messenger (P2P payments)• Lifestyle: Facebook Timeline• Retail: Marketplace, Order Food, Facebook Messenger Chatbots• Utility: Facebook Events Calendar and Weather
China
US
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A Tale of Two Markets: US and China
Old habits die hard
Mobile-first mentality
S-commerce sophistication
New ways of saying “Hello”
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Implications of super apps on players across the commerce ecosystem
DIGITAL LIFE CONVERGES IN SUPER APPS
A new breed of competitors
Competitors may no longer come from
one’s core category or industry as new types
of players emerge
Who owns the consumer
relationship
Tech companies could become intermediaries
in more consumer transactions and thus control the end-user
relationship
Evolving consumer
expectations
Companies are being judged on the last
great experience the consumer had with a
brand
Acceleration of the digital
transformation
Growing app integration would likely
accelerate the shift toward digital channels for all steps in the path
to purchase
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Data has emerged as the world’s most valuable commodity
DATA AS THE NEW CURRENCY
1) IBM
2) AT&T
3) Eastman Kodak
4) General Motors
5) Standard Oil of NJ
6) Texaco
7) Sears, Roebuck
8) General Electric
9) Polaroid
10) Gulf Oil
1) Apple
2) Alphabet
3) Microsoft
4) Amazon
5) Facebook
6) Berkshire Hathaway
7) Johnson & Johnson
8) Exxon Mobil
9) JP Morgan Chase
10) Wells Fargo & Co.
Most Valuable Companies in the US, 1967 Most Valuable Companies in the US, 2017
Source: ForbesNote: 2017 rankings as of November. 1967 rankings were adjusted for inflation.
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Consumers expect brands to craft individually tailored stories
DATA AS THE NEW CURRENCY
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Generation Z
Millennials
Generation X
Baby Boomers
Desires to be Distinct from Others, 2017
Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree
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Tech plays a key role in enabling brands to craft the story of one
DATA AS THE NEW CURRENCY
Machine learning
• About: Teaches itself with minimal programming• Example: Marketers can use it to determine the best time to send emails to customers
Image recognition
• About: Recognises patterns in images• Example: Enable brands and retailers to curate search results for individual consumers
Cluster analysis
• About: Organises mounds of data into insights• Example: Marketers could leverage for more effective customer segmentations
Natural language processing
• About: Interpret what people are saying in words or text• Example: Companies could automate the customer service experience of the future
Empower store associates
Providing the personal touch
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Improving recommendations
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Beauty giant L’Oréal sells a connected hairbrush that analyses the user’s hair, including the force used when brushing, as well as the number of strokes taken.
The high-tech brush transmits this data to a mobile app, which provides the user with a quality score and ranking as well as offers hair tips and personalised product suggestions.
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Dynamic Yield’s technology leverages machine learning to build customer personas based on data points like geo-specific events, on-site interactions and purchasing behaviour.
Brands could leverage these segments to better match customers to the products they are most likely to use or to prevent limited stock from being promoted to shoppers who frequently return items.
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Concerns regarding data privacy continue to plague digital uptake
DATA AS THE NEW CURRENCY
0 20 40 60 80 100
Using the internet adds a great deal to my daily stress
I freely share personal information online
I prefer to communicate online rather than face to face
It is important to cultivate my personal brand online
Targeted ads are an invasion of privacy
I would be lost without internet access
% Online Respondents
Attitudes Towards the Internet Among Global Consumers, 2017
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The European Union’s sweeping privacy laws have global implications
DATA AS THE NEW CURRENCY
Tougher requirements for obtaining consent for collecting personal data
Requires a company to delete data if it is no longer used for the purpose it was collected
Requires a company to delete data if the individual revokes consent
Requires companies to notify the EU government of data breaches within 72 hours of learning about the breach
Firms handling significant amounts of sensitive data will be required to appoint a data protection officer
Fines of up to EUR20m or 4% of a company’s global revenue for non-compliance
Key Aspects of the European Union’s General Data Protection Regulation
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Digital boosts old-time subscription models
KEEPING THE TAB OPEN
Surprise subscription
boxes
Regular supplies
Short-term access
Long-term leasing
Many subscription services were born in the last decade
29
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0% 50% 100%
Baby Boomers
Generation X
Generation Z
Millennials
% Online Respondents
Subscription Service Use by Generation, 2017
Currently use a subscription serviceHave used a subscription service in the pastHave never used a subscription service
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How the subscription business model benefits both sides
KEEPING THE TAB OPEN
What’s in it for the
consumer?
Convenience
Value
CommunityPremium offers
Experiential consumption
What’s in it for the
business?
Guarantee revenue stream
Build direct relationships
Encourage consumer
loyalty
Build data on consumers
Attract new consumers
WHAT’S IN IT FOR THE CONSUMER?
Subscriptions reinvent areas of consumptionlike entertainment
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0 20 40 60 80 100
China
Germany
Canada
South Korea
Japan
Australia
France
UK
United Arab Emirates
US
Digital streaming services, USD
Per Capita Spend on Digital Streaming Services, 2017 / 2022
2017 2022
Internet of Things is expected to further boost subscription business models
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0 20 40 60 80 100
Smartwatch
Smart appliance
Wearable fitness tracking
Wireless speakers
Console gaming system
Tablet
Desktop computer
Digital flatscreen TV
Laptop computer
Smartphone
% of Online Global Respondents
Device Ownership, 2016 / 2017
2017 2016
Case study: Amazon
One company with a strategy that most illustrates an intent to capture on this shift is Amazon with its Amazon Dash programme, which has evolved from purchases that a consumer can make at a tap of a button to automation.
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Home care likely to be impacted by shift toward passive consumption
KEEPING THE TAB OPEN
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28
Home Care Internet Retailing 2017-2022 CAGR %
0
10
20
30
40
50
60
70
80
90
100
Digital
China
US
UK
Russia
JapanItaly
Germany
Australia
Indonesia
Argentina
Thailand
Saudi Arabia
Switzerland
Ukraine
Malaysia
Israel
Poland
Mexico
Slovakia
Brazil
Hong Kong, China
Egypt
Morocco
South Korea
Canada
Austria
Belgium
Vietnam
Greece
Philippines
Norway
Czech Republic
Sweden
HungaryTurkey
Romania
Promising Markets for Internet-Based Home Care Purchases
2017-2022 Absolute Value0
200400600800
1,0001,169
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Machine-aided commerce will re-define what brand loyalty means
KEEPING THE TAB OPEN
Traditional Marketing Funnel
Awareness
Interest
Consideration
Intent
Evaluation
Purchase
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Consumers in motion propel the expansion of payment networks
MOBILE WALLETS GOING GLOBAL
-6
-4
-2
0
2
4
6
8
10
2007 -2008
2008 -2009
2009 -2010
2010 -2011
2011 -2012
2012 -2013
2013 -2014
2014 -2015
2015 -2016
2016 -2017
Y-o-
Y G
row
th
Growth in the Number of Trips Taken Worldwide, 2007-2017
Number of Domestic Trips Number of International Trips
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China is the biggest market for outbound tourism spend since 2012
MOBILE WALLETS GOING GLOBAL
Others
Macau
USA
Hong Kong
Japan
Thailand
0
100,000
200,000
300,000
'17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30
Outbound Tourism Expenditure from China, 2017-2030
USD
mn
Chinese travellers play a key role in mobile wallet globalisation
Chinese wallets like Alipay are moving West, as the spending power of the country’s residents grows and the government improves international cooperation, allowing consumers to travel to more nations.
He (Steve Jobs) wanted to create something that was so instrumental and integrated in peoples' lives that you'd rather leave your wallet at home than your iPhone.
Former iPhone product marketing engineer
Bob Borchers said of Steve Jobs’ vision for the iPhone
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Apple Pay global expansion follows US traveller to wealthy markets
MOBILE WALLETS GOING GLOBAL
0 10,000 20,000 30,000 40,000
China
Spain
Dominican Republic
Germany
Puerto Rico
Italy
UK
France
Canada
Mexico
Number of Trips in 2017
Outbound Departures from the US, 2017
0 5,000 10,000 15,000 20,000
Puerto Rico
Australia
Spain
UK
Germany
Italy
India
China
Canada
Mexico
Retail Value RSP, USD
Outbound Tourism Expenditure from the US, 2017
Apple Pay supportedApple Pay not supported
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Samsung Pay followed the South Korean traveller more closely
MOBILE WALLETS GOING GLOBAL
0 2,000 4,000 6,000 8,000
Indonesia
Macau
Taiwan
Hong Kong
Vietnam
Thailand
Philippines
US
China
Japan
Number of Trips in 2017
Outbound Departures from the South Korea, 2017
0 5,000 10,000 15,000 20,000
Macau
Singapore
Vietnam
Australia
Taiwan
Phillippines
Thailand
China
Japan
US
Retail Value RSP, USD
Outbound Tourism Expenditure from South Korea, 2017
Samsung Pay supportedSamsung Pay not supported
$3 trillionPayments expected to be made
on a mobile device in 2022 across the 47 countries where
Euromonitor International conducts this research
75%China and the US will contribute to the overall size of the mobile
payments market in 2022
47%Connected consumers
globally who want to “see or try before buying”
83%Goods expected to be
purchased in-store globally in 2022
92%Foodservice expected to be
purchased in outlets globally in 2021
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Digital shifts are changing competitive realities
OUTLETS WILL GET THEIR TECH INJECTION
0% 5% 10% 15% 20% 25% 30%
Canada
Germany
United Arab Emirates
France
Japan
South Korea
Poland
UK
US
Australia
Digital Purchases as a Percentage of Consumer Payments
Consumer Payments Made By Digital Device, 2017 / 2022
2017 2022
Consumers motivated to shop in person to “see” or “try” before buying an item
47
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0 20 40 60
Stores are more trustworthy
No delivery-related hassles
Experience of shopping in store
To avoid paying for shipping
Convenient location / access
Better warranty / easier to returnif defective
Immediate purchase
See or try before buying
% Online Respondents
In-Store Shopping Motivations, 2017
Consumers demonstrate an increased need to “experience more”
48
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0% 20% 40% 60%
60+
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
% of Online Respondents
Attitudes Toward Experiences, 2017
I prefer to spend money on experiences, rather than things
In an era in which fans can easily stream games online, the Tottenham Hotspur football club is deploying the most advanced technology to create the ultimate “game day” experience at its new stadium when it opens in 2018.
The club’s state-of-the-art venue will offer LED signage, mobile points of sale, electronic turnstiles with mobile phone ticket entry and click-and-collect food and drink systems to capacity crowds of 61,559 football fans.
Since unmanned checkouts like Tao Café from Alibaba first made headlines, retailers have been knocking on the doors of technology firms wanting to replicate. The rise of more affordable item-level tagging and machine learning have made this possible.
In its simplest form, consumers scan their smartphone for entry. Sensor technology then tracks the consumer in store and adds items they have removed from the shelf to a virtual shopping cart. Others like JD.com in China and Amazon in the US are working on similar initiatives.
Restaurants are utilising technology to improve operational efficiencies and to provide diners with a more seamless consumer experience.
Red Arrow Tap Room in suburban Chicago has 48 self-serve taps featuring craft beer and cider, and tabletop tablets for placing food orders.
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Leveraging the avalanche of available data to cultivate the
“story of one” will be what distinguishes the winners from the losers in the next decade.
Data as the new currency
Super apps could enable a new breed of competitors, change
who owns the customer relationship, force an evolution of consumer expectations and
most importantly accelerate the overall digital transformation.
Digital life converges in super apps
The old-school subscription model received a digital boost in
the last decade. In the forthcoming Internet of Things era, the idea of keeping the tab
open will take on a new meaning.
Keeping the tab open
The battle for mobile wallet supremacy will come down to the ability of US companies to export their offerings abroad
against the expanding influence of China’s growing middle class.
Mobile wallets going global
Commerce is in the midst of a head-to-toe makeover both in
and outside the physical outlet. As such, players are leveraging a
plethora of technologies to re-imagine physical spaces.
Outlets will get their tech injection
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Thank youMichelle Evans, Global Head of Digital Consumer Research
Facebook.com/euromonitor/
@mevans14
Linkedin.com/in/michelleevansmaclachlan
Forbes: https://www.forbes.com/sites/michelleevans1/#