Building Business Models Around E-Commerce and Augmented Reality
 

Building Business Models Around E-Commerce and Augmented Reality

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This was a presentation I gave at ARE (Augmented Reality Event) on June 2, 2010 on building business models around e-commerce and augmented reality.

This was a presentation I gave at ARE (Augmented Reality Event) on June 2, 2010 on building business models around e-commerce and augmented reality.

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  • It’s utilitarian and provides no emotional satisfaction. Conversion rates are low, with the “gold standard” being between 2% and 3%. Cart abandon rates are high. 45% of U.S. online shoppers abandoned shopping carts multiple times over a span of three weeks. (Paypal & ComScore) The average return rate for online clothing retailers is about 20% but goes as high as 50% for some. (Forrester Research) "If I'd asked people what they wanted, they would have said a faster horse .“ – henry ford

Building Business Models Around E-Commerce and Augmented Reality Building Business Models Around E-Commerce and Augmented Reality Presentation Transcript

  • Building Business Models Around E-Commerce and Augmented Reality
    • Snapshot: We’re an interactive marketing agency with a passion for emerging media and technologies
    • Services: Interactive Video, Social Media Marketing, Mobile Marketing, Website/Application Development
    • AR Products: Webcam Social Shopper / Fashionista, Cannonballz, ZugSTAR
    • Founded: 2001
    • Location: Los Angeles / New York
    • Web: www.zugara.com
    • Blog: www.weareorganizedchaos.com
    • Facebook: www.facebook.com/zugara
    • YouTube: www.youtube.com/zugara
    • Twitter: www.twitter.com/zugara
    PROFILE HELLO… WE’RE ZUGARA
  • State of E-Commerce
  •  
  •  
  • Online Retail Sales Continue to Rise…
  • Web-Influenced Retail Sales Rise As Well…
  • Peers Continue To Influence Purchase Decision
    • Eighty-three percent of online shoppers said they are interested in sharing information about their purchases with people they know
    • 74 percent are influenced by the opinions of others in their decision to buy the product in the first place.
    • (Manage Smarter, September 2009)
  • But What’s Missing?
  • Shopping Offline Is An Emotional and Social Experience
  • Online…Not So Much
    • The “consumer experience” has made very little progress in the last 15 years
    Amazon 1990’s Amazon 2010
  • Abandoned Carts 45% of U.S. online shoppers abandoned shopping carts multiple times over a span of three weeks. (Paypal & ComScore)
  • Low Conversions Conversion rates are low, with the “gold standard” being between 2% and 3%
  • High Return Rates The average return rate for online clothing retailers is about 20% but goes as high as 50% for some. (Forrester Research)
  • What Are Brands Doing To Evolve The E-Commerce Experience?
  • E-Commerce Innovations – Social Media
  • <- Zappos Interactive Product Videos <- Sales increased from 6% to 30% when product had video associated with it E-Commerce Innovations – Interactive Video Samsung Live Video Customer / -> Product Support
  • YouTube & Video Chat Generation
    • 36% of Skype-Skype calls included Video
    • Chatroulette had 960,000 unique U.S. visitors in February
    Sources: GigaOM – Skype By The Numbers. It’s Really Big Comscore – Chatroullette Takes The College Crowd By Storm
  • Projected Webcam Growth
    • Markets for webcams at $1.8 billion in 2008 are anticipated to reach $3.2 billion by 2015 , growing in response to decreases in unit costs and increases.
    • (Wintergreen Research - Worldwide WebCam Market Shares, Strategies, and Forecasts, 2009-2015)
  • This Changes Everything… Augmented Reality Experiences Through Standard Consumer Webcams
  • E-Commerce & The Augmented “Product” Experience
  • Augmented Reality Shopping – Ray-Ban
  • Augmented Reality Shopping – Ray-Ban
  • Augmented Reality Shopping - Tissot
  • Augmented Reality Shopping - Tissot
  • Augmented Reality Shopping - Fashionista
  • Augmented Reality Shopping - Fashionista
  • How Do We Use AR To Enhance The E-Commerce Experience For The Consumer?
  • Focus On Utility
  • Integrate Social Media
  • No Software Downloads
  • Building Business Models Around E-Commerce and Augmented Reality
    • Virtual Worlds
      • Second Life
    • Social Media
      • Facebook, Twitter
    • Mobile Marketing
      • Admob, iPhone Apps
    • Online Video
      • Brightcove, YouTube
    • Blog Networks / Advertising
      • Gawker, AOL
    Monetization of Prior Emerging Media & Technology
    • What’s the ROI?
    • Will Consumers Actually Use It?
    • What Other Brands Are Using AR?
    • What Analytics Can You Share?
    Questions and Challenges
  • So Where Does That Leave AR?
    • CPM ads (“cost per thousand views”; banner ads online and regular ads in print, TV and radio)
    • CPC ads (“cost per click”; think Google ads)
    • CPA ads (“cost per action”; pay only if the customer performs a certain action)
    • CPT ads (“cost per transaction”; you pay only if the customer brought to you from a media sites becomes a paying customer.)
    • Lead generation (you pay for qualified names of potential customers)
    • Subscription revenues
    • Affiliate revenues (think: Amazon Associates)
    • Rental of subscriber lists
    • Sale of information (selling data about users–aggregate/statistical or individual–to third parties)
    • Licensing of brand (people pay to use a media brand as implied endorsement)
    • Licensing of content (syndication)
    • Getting the users to create something of value for free and applying any of the above to monetize it. (Like Digg or our own Reddit)
    • Upgraded service/content ( ed: aka “freemium”)
    AR Technology Has Ability To Work With Multiple Revenue Models
    • Alternate output (pdf; print/print-on-demand; customized Shared Book style; etc.)
    • Custom services/feeds
    • Live events
    • “ Souvenirs”/”Merchandise”
    • Co-branded spinoff
    • Cost Per Install (popular with top Facebook apps who can help others get installs)
    • Sponsorships (ads of some sort that are sold based on time, not on the number of impressions)
    • Listings (paying a time based amount to list something like a job or real estate on your website)
    • Paid Inclusion (a form of CPC advertising where an advertiser pays to be included in a search result)
    • Streaming Audio Advertising (like radio advertising delivered in the audio stream after a certain amount of audio content has been delivered)
    • Streaming Video Advertising (like streaming audio but in video)
    • API Fees (charging third parties to access your API)
    Source: Wired Magazine
  • Most AR Companies Offer a Software Based Revenue Model
  • How Do We Target Areas Like E-Commerce?
  • “ Augmented Reality is a solution looking for a problem…”
  • Problem : Bridge The Gap Between Offline and Online Shopping Offline Shopping Social but time consuming Online Shopping Convenient but not social
  • Solution : Augmented Reality Webcam Social Shopper Demo At Booth #114
  • Thank You! Matthew Szymczyk CEO, Zugara [email_address] twitter.com/kobrakai facebook.com/Mhszymczyk
  • Market Data
    • In 2009, 154 million people in the U.S. bought something online, or 67% of the online population (4% more than in 2008). (Forrester Research)
      • 80% of Gen X and 71% of Gen Y internet users buy products online. (Pew Internet & American Life Project)
    • Amount people spent on clothing online: $13.6 Bil. (US Census)
      • Amount people spent on clothing in store: $7.0 Bil.
    • 83% of online shoppers said they are interested in sharing information about their purchases with people they know, while 74% are influenced by the opinions of others in their decision to buy the product in the first place. (Manage Smarter)
    • Online social network users were three times more likely to trust their peers' opinions over advertising when making purchase decisions. (Jupiter Research)
    • B2B interactive marketing spending will climb to nearly $4.8 billion in 2014. (Forrester Research)