Disruptive innovation in media and ecommerce landscape -what are the agents of change. Detailed examples of new digital business models for media and retail. Business model generation secret formulas.

1. E-commerce
Disruptive Trends and New Business Models
Advertising Sales Summit, Burda International
Michał Kreczmar
E-commerce Director
Hypermedia, Dentsu Aegis Network
20.04.2015

2. First, disruptive products are simpler and
cheaper; they generally promise lower
margins, not greater profits.
Second, disruptive technologies typically
are first commercialized in emerging or
insignificant markets.
And third, leading firms’ most profitable
customers generally don’t want, and
indeed initially can’t use, products based
on disruptive technologies
Clayton Christensen
The Innovator’s Dilemma

3. Time to market: MVP, lean/agile, cost of technology, quick & dirty
Financing: crowdfunding, crowdsourcing, VC, angels, IPO
Startup ecosystem: knowledge networks, hackatons, SV everywhere
Production: 3D printing, customization, personalisation
Hypercompetition: infinite shelf, price, convinience, frictionless
Agents of change: Start up

4. Promotion: adv platforms, programmatic/biddable media, hipertargeting, remarketing,
real id vs cookie, no dead ends (AdTech, MarTech)
Omnichannel: webrooming, showrooming, channel blend, single customer view
Content: UGC, viral, short form, visual media, product presentation (EdiTech)
Media access: smartphones, phablets, tablets, interactive windows, VR, wearables, IoT
Agents of change: Media

5. Technology: real time, on
demand, API, channeling,
clienteling, orchestration,
conversion optimisation
(EcomTech)
Tools: big data/data science,
communication/messaging,
predictive modeling, algorithms,
deep learning/AI
Mechanics: social, curation,
voting, like, follow, share, visit,
view, comment, subscribe, push
Security: ad frauds, cracks, DDoS,
privacy, organized crime
Agents of change: Technology

6. Customers: millenials, digital natives, silver surfers, global reach, always on,
ADHD, instant gratification
Customer experience: Google Now/Siri/Cortana/IBM Watson/Amazon Echo,
WeChat + personal touch
Product love: tribes, funbase, social curation, MLM, attention to detail, new
accesible luxury
Agents of change: People

7. Offline shops: mPOS, beacons, facial
scanning, wearables
Fullfilment: packaging, robo-warehouse
Logistics, delivery: drive through collect
& return, same day/1 hour everywhere
delivery, Click/Reserve and collect,
delivery lockers, Collect+ lounge, Volvo
Roam, eBay now, Instacart, Google
Express, Amazon, Shoprunner,
Postmates, Deliv, Curbside, Shyp, Zoomin,
Uber, Drons
Payments: in app payments, ApplePay,
GWallet, Facebook, Amazon, PayPal,
Square, Visa, mPesa, BLIK,
cryptocurrencies (FinTech)
Agents of change: Last mile

8. Shop or Marketplace?
Traditional business models:
• Business 2 Business, Business 2 Consumer
• Consumer 2 Business, Consumer 2 Consumer
• Business 2 Government, Consumer 2 Government
• Shops, Exchanges, Marketplaces
• Brick & Mortar, Clicks & Bricks
• Pure players, Omnichannel, Total Retail

9. Flash & Private sales
• Vente-Privee – luxury fashion
• Zulily – child fashion, accessories (IPO 2,7 bln $)
• Gilt Group – fashion(IPO 2015)
• Hautelook – fashion (bought by Nordstrom)
• Ideel – fashion (bought by Groupon)
• RueLaLa – fashion (bought by GSI, eBay)
• One Kings Lane – accessories
• Fab – design (bankrupted)
Subscription commerce
• Birchbox - cosmetics
• JustFab - shoes
• Manpacks - lingerie
• Stitchfix – fashion
• BarkBox – dog food
• NatureBox – eco food
• Walgreen - refils – prescription drugs
Deals & Group buying
• Groupon – services, all (cap 5 bln $)
• LivingSocial – services(bought by Amazon)
• Woot – electronics, all (bought by Amazon)
Last waves of disruption

10. The illiterate of the
21st century will not be
those who cannot read
and write, but those
who cannot learn,
unlearn, and relearn.
Alvin Toffler
Future Shock

11. New marketplaces
Example
Zaarly, Serviz, GigWalk, Fiverr, Taskrabbit, HelloAlfred…
• Horizontal marketplaces
• People services
• End 2 end, On demand, Transactional

12. New marketplaces
Example
Grubhub, OpenTable, DogVacacy, Housekeep, Homejoy, Instacart, Handy, Thread up,
Storefront, Vacatia, Seamless, beepi, washio, Glamsquad…
• Vertical marketplaces
• People services,
• End 2 end, On demand, Transactional

13. New marketplaces
Example
Jet.com
• Minimal price beter than Amazon
• Comision, logistics boundling & long delivery
• Shopping club - paid membership

14. New marketplaces
Example
Chrono
• Vertical – watches
• End 2 end, Transactional
• Global

15. New marketplaces
Example
Shout
• Places e.g. queue for tickets, restaurants
• End 2 end, transactional

16. New marketplaces
Example
Sears, Staples, La Redoute…
• Traditional retailers open their own marketplaces
• Fullfilment, supply, advertising etc. for third party

17. New marketplaces
Example
La’Zooz
• Privacy, cryptocurrencies, security
Next - deep web marketplaces?

18. Sharing/Collaborative economy
Uber – transportation (IPO 2015)
Airbnb – accomodation (IPO 2015)
HomeAway - accomodation
Lending Club – lending (IPO – 7,6 bln$)
WeWork - creators
Lyft – rides
BlaBlaCar – transportation
Rent the Runway – fashion
Instacart – food delivery
GrabTaxi - taxi
Chegg – education
Prosper - credits

19. Renting economy
Nobody is sharing anything. People
are making money, plain and simple.
Technology has made renting things
(even in real time) as simple as it
made buying things a decade ago.
Fred Wilson
Union Square Ventures
Uber, the world’s largest taxi company,
owns no vehicles. Facebook, the world’s
most popular media owner, creates no
content. Alibaba, the most valuable
retailer, has no inventory. And Airbnb,
the world’s largest accommodation
provider, owns no real estate.
Tom Goodwin,
Havas Media

20. Mobile First
Example
Poshmark
• second hand fashion
• shopping and selling on the go
• everything on smartphone, tablet

21. Mobile First
Wanelo
• Fashion mall/marketplace
• Want, need, love - curated by people just like you
• everything on smartphone, tablet
Example

22. Mobile First
Curbside
• Find products that are available for pickup today from local stores.
• Your order will be waiting for you. Just head inside to the designated area.
• At stores you don't even need to park - we hand your order to you as you pull up.
Example

23. Mobile First
The Hunt
• Community powered mobile app
• Posting a photo of an item that they’re looking for, along with specific requirements such as
budget and size. The Hunt community uses their shopping prowess to suggest products that
meet the Hunt criteria
Example

24. Mobile First
Vint
• Find fitness instructor, schedule a session with them, and to manage both bookings and
payments via app
• Fitness Concierge Curated spots in neighborhood, instructor guidance between workouts
• Subscription based
Example

25. Mobile First or Only?
Fetch, GoButler, Magic…
• All you have to do is describe what you
need with a text or a photo, and your
personal buying assistant will handle the
rest.
• Anything you want. As long as it's not
illegal. Seriously. Just try it.
• Not another automated shopping app. It’s a
buying app, powered by real people who
will not only find you the best price,
organize groceries, take care of
reservations, arrange travel bookings, order
food, make appointments and search for
coupon codes, they’ll even place the order
for you using the billing and shipping
information from your profile.
Example

26. Mobile First or Only?
Modiface: Beautiful me, Eye color, Hair
color studio, Virtual Dentist, Nail Salon
• Artificially Intelligent photo processing
system analyzes your social photos in
seconds.
• Find out your true skin tone and
undertone, and what foundations are
best for you.
• Find out what makeup products you
wear most often, and how that has
changed over time
• Get your exact hair shade measured
based on your social photos.
• Get personalized product
recommendations based on your skin
profile and makeup usage history.
Example

27. Mobile China Innovation
WeChat
•From mobile messanger, news, blogging,
•Through games, payments, banking/wallet, taxi, food delivery, tickets,
•To interactive e-commerce (service accounts - CRM/loyality/consierge) + API
Source: Liang Wu (Hillhouse Captial).
Example

28. Mobile Transforming Business
Example

29. SF Food Delivery Wars
Postmates
• On-demand delivery service partnering with
participating restaurants
Sprig
• Order lunch and dinner off a limited, chef-
driven menu that's made in house (all its food
also happens to be organic). Delivery under 20
minutes.
SpoonRocket
• Healthy meal service that offers users a choice
of 4 rotating menu items per day. Delivery is
promised in 10 minutes or less.
Caviar
• „Premium" delivery service partners with top-
tier restaurants that normally don't offer their
food to-go.
Munchery
• Meals are cooked by in-house chefs, delivered
chilled, for re-heating and eating later.

30. On Demand
Example

31. Predictive retailing
Example
Stylitics
• Monitor what you buy, with the hope of making suggestions around this
• Free organizational tools, style toolkit, connected to the retailers, apps, and services
• Daily recommendations, expert advice, looks from professional stylists and fashion bloggers

32. Crowdsourcing & Crowdfounding
Example
Betabrands
• Fashion production and sales
• Submit, vote, fund, promote, group discounts
• Turn prototypes into products via crowdfounding

33. Crowdsourcing & Crowdfounding
Example
Made.com
• Furniture marketplace, curation & voting
• Direct from makers. No warehouses. No physical stores. No middlemen.
• Every 7 days, combine all the orders for a piece and put them into production.

34. Crowdsourcing & Crowdfounding
Etsy - IPO 04.2015 - 4 bln$ valuation
• Handmade unique marketplace, vintage goods and craft supplies
• Curated recommendations tailored to your taste
• Open an Etsy shop—with just $0.20 USD and your imagination
Example

35. Crowdsourcing & Crowdfounding
Kickstarter, Indiegogo, GoFoundMe, AngelList…
• From films, games, and music to art, design and technology
• Project creators set a funding goal and deadline. If people like a project, they can
pledge money to make it happen.
Example

36. Customization
Example
Nike, Prada, adidas, Converse, New Balance, Oakley, Puma, Quicksilver,
Hurley, Reebok, Timberland…
• From 1 to 452 models of shoes for customization & personalisation
• On demand production, offline shoes printing solutions

37. Customization
Example
J. Hillburn, Trumaker, Indochino, Proper Cloth, Blank Label, Taylor Stitch, Seregnetee…
• From shirts & suits, outwear, to bags & accessories - all
• Design, fabric, style, size, details, embroidery – online customization & personalisation
• On demand production

38. Customization
Example
Gemvara, Allurez
• Jevelry: rings, earrings, pendants, necklaces - all
• Design, metal, style, stones, size, details – online customization & personalisation
• On demand production

39. Makers, 3D Print, Materialization
Goldieblox, Makies, Kiwi Crate…
• Toys building kits, doll creation & customisation, creative project sets
• Production by 3D print, ready made components, inspire creativity

40. Makers, 3D Print, Materialization
Mink
• Desktop printer that prints makeup
• It can take any image and instantly transform it into a wearable color cosmetic,
turning any camera, phone or laptop into an endless beauty aisle.
Example

41. Makers, 3D Print, Materialization
Feetz
• Custom fit, 3D printed shoes
• Take 3 photos of each shoes using Feets App
• Desing and personalize shoes
Example

42. Makers, 3D Print, Materialization
Shapeways, Cgtrader, Sketchfab…
• 3D Printing Service & Marketplace
• Upload Your 3D design to order instantly
• Buy 3D models, sell 3D models
Example

43. Digital Assets & Intellectual Property
Vessel
• Pay subscription fee for access to video… before it appears on YouTube
• Exclusive deals with video content producers
Example

44. Digital Assets & Intellectual Property
Netflix, Amazon, YouTube, Hulu, HBO Go, Spotify, Rdio, MOG, Pandora, SoundCloud, AppStore,
Google Play, Udemy, New York Times…
• Digital assets: production, distribution, management, curation, sales
Disney, Angry Birds, Marvel, LucasArts, Harry Potter, James Bond…
• Intellectual Property creation, curation, licensing
IBM, Samsung, Canon, Sony, LG, Microsoft, Google…
• Patents

45. Hollywood meet e-commerce
The Honest Company
• Baby accessories - production and online sales
• By Jessica Alba
• Subscription based
Example

46. Hollywood meet e-commerce
Example
22daysnutrition.com
• Vegan meals - production and online sales
• By Beyonce
• Subscription based

47. Hollywood meet e-commerce
Example
Shoedazzle
• Shoes - online shop
• By Kim Kardashian
• Online style quizz + stylists + subscription (membership) or shop by item

48. Multi Level Marketing
Stella & Dot, Chloe & Isabel
• Jevelry, accessories - production and online sales
• Purchased exclusively at home jewelry parties or online
• Become a Stylist and have your own jewelry party selling Our jewelry
Example

49. Consumer Merchandised Shops
ModCloth, Moda Operandi, FashionStake
• E-retailers of indie clothing, accessories, and decor
• Using real buyers community as merchandisers (photos, recomendations)
• Voting for production, follow, like, share etc.
Example

50. Media & Commerce
Example
Under Armour
• 80% focus on storytelling, experience and only 20% commerce
• Restaurant, cafeteria, Instagram photos printing on site, bike repair…

51. Media & Commerce
Example
Net-a-porter, Guilt…
• From online shop, through shopping e-zine to print?
• Net-a-porter + Yoox: „Global fashion destination for content and commerce. Shoppable
magazine in print and digital, distributed in 60 countries with worldwide circulation of
152,500”

52. Media & Commerce
Example
HSN, QVC
• Shopping TV online
• Usage of ready made broad product presetiation video assets
• New, online prime time

53. Curation & Personalization
Outfittery, Trunk Club…
• Online questionnaire, style consultation, try outfits at home
• Free shipping and returns, subscription or combined outfits
• Expert product curation, self production or close relation with producers
Example

54. Social curation & lookbooks
Polyvore, Lyst, Tapiture, Dailylook, Stylefruits
• Discover, shop and express your style
• Customer or stylist arranged sets of complementary products
• Follow, like, rate & review social mechanics or machine learning
Example

55. Ecosystems/Platforms: CCCC
Houzz
• Content: user stories, photos
• Community: advices, rating & reviews, SWYN, Q&A
• Commerce: product info, shop online
• Communication: find professionals/services
Example

56. D2C, vertically integrated
Warby Parker
• Glasses e-retailer - online & offline
• Total consumer centric (2nd place in revenue per sq m after Apple)
• Free delivery & return 5 days 5 pairs
• Own production supply chain
Example

57. D2C, vertically integrated
Dolar Shave Club, Harry’s
• Shaving gear & accessories, online & offline shops
• Own production supply chain
• Harry’s: „10 month startup buys 93 Year Old Business for $100 mln”
• Subscription based
Example

58. D2C, vertically integrated
• Bonobos, Everlane, Frank
& Oak – fashion
• Crane & Canopy – beds
and bedclothes
• Julep - cosmetics
• Greats – sneakers
• Meundies - underwear
Desigual, Zara, H&M,
Reserved, P&G, Nestle,
L’oreal, adidas, Nike, Apple,
Dell…
• Brand manufacturers

59. Online 2 Offline/Offline 2 Online
Warby Parker, Zappos, Amazon, Bonobos, Birchbox
• Offline shops, showrooms, pop up shops, some work like online - 24 hr
Desigual, Zara, Reserved, P&G… – producers offline > online
Tesco, Walmart, Auchan… – retailers offline > online

60. Packaging
Casper
• Vertically packing, super easy delivery
• Own production supply chain
• 100 nights trial
Example

61. Access to unique inventory
• Fanatics – sport club fashion
• Not Just A Label, Of A Kind - design
• Solecollector - marketplace for
unique sneackers
• Disney, Warner, Mattel… - licensing
• Taylor Swift, Florence and the
Machine & Apple Beats Music, Tidal
• Alibaba, Etsy… – marketplaces
• Sephora – exclusive distribution deals

62. Auctions
• Auctionata, TopHatter, Invaluable
Live auctions, every item checked,
valued and verified to be of high
quality by experts, shipping &
delivery, secure processing and
transfer of payment.
• Auction - properties
• EBTH – art
• Christie’s – buy it now (a la eBay)

63. Data
Target, Walmart, Amazon, Alibaba…
• From salles support, through selling advertising space for FMCG, to their own
data adexchanges
Brand wearables, IoT - Disney Magic Band, Philips Hue, Nike+, Apple Watch…

64. Distributed commerce
•Okanjo, Fuiszmedia, Cinematique, Clicktivated, Atosh – shoppable content
•Discoversophia, Stackcommerce, TripleLift & Bazaarvoice – native
advertising e-commerce
•Constant Commerce, Mashery, ecwid, Santu… - distributed commerce
•Browsy, Soldsie, Pixbie, buy button Facebook, Twitter – e-commerce via
social media

65. Mission
Zady, Serengetee, Stylesaint, Toms, Patagonia, H&M…
• Sustainable production, usage & repair,
• Charity, buy 1 get 1 for needy
• Exchange - more joy less stuff
Example

66. Mission
Soylent, Munchery, Luvo, AgLocal, Hampton creek, Urban Remedy…
• Food 2.0, heavy R&D
• Sustainable production & distribution
• Supplemental diets to traditionally produced food
Example

67. Business model secret formulas:
Hollywood star + Subscription + Mission = Honest
Community + Crowdfunding + Voting + Production = Betabrands
Online 2 offline + direct 2 consumer + Production + drop of Mission = Warby Parker
Real Time + Experts + Second hand art = Auctionata
Marketplace + Services + No inventory = Uber
Expert curation + subscription + relationship with production = Trunk Club
Will it blend?

68. Michał Kreczmar
E-commerce Director
Hypermedia, Dentsu Aegis Network
M.Kreczmar@hypermedia.pl
facebook.com/krecz
pl.linkedin.com/in/michalkreczmar
slideshare.net/krecz
Questions, comments,
suggestions?
Thank You for Your time