Poland Digital Trends 2013


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Poland Digital Trends 2013

  1. 1. In association with A wave of digital change: Trends in digital E-nnovation 2013 1
  2. 2. Keynote Keynote Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Just this year, Europe has experienced double digit growth rates, and expects to see sales reach over 300 billion euros by 2016. Electronic and apparel online shopping, particularly cross-border, have been on the rise, trending throughout the continent at rates that are predicted to double by 2015. In the past, Western and Central Europe have taken the lead in B2C markets, but Eastern Europe is quickly gaining speed to its neighbors. With Poland right in the middle of it all, we feel we have the best seat in the house. Our B2C market is more mature than Eastern Europe, though we’re still part “underdog” in comparison to the Scandinavian countries, UK, Germany, Netherlands and France. This autumn, between the 24th and 25th of October, the city of Poznan will become the special place, where the greatest companies, brands and business ventures touching e-commerce come together for the fourth edition of ‘e-nnovation’ confernce. ‘E-nnovation’ channels all parts of the world, bringing together top players of global e-commerce, in efforts to not only spread industry knowledge and exchange successful practices, but to jump start discussions on the future of the business market we’re all a part of. Global trends will be compared with current developments in the Central and Eastern European markets. The conference provides an ideal meeting place for people who have the greatest influence on the trade in the region, including CEOs and top management of the most important companies in the sector, experts and experienced practitioners of e-commerce, as well as young, creative entrepreneurs engaged in innovative projects. As part of the ‘e-nnovation’, Deloitte, Allegro and PayU have prepared this report – which outlines some of the important digital trends that are currently shaping e-commerce industry and society more broadly. We strongly believe that following the example of the previous editions, the e-nnovation 2013’ will create a space that will help your form new partnerships and cooperation, and will contribute to the rise of new international initiatives. Economic Impact Implications About us 2
  3. 3. Keynote Introduction Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us It’s been twenty years since Mosaic, the first web browser was released to the public in 1993. Since then, we’ve seen several waves of digital change shift how we live our day-to-day lives. First, we could suddenly access information from around the world, or send e-mail to friends on other continents in an instant. Then, we could download music, do our banking, or trade shares from our PCs. Each time customers changed their behaviour, businesses reacted, and there were both winners and losers. The next great wave of digital change is now with us – and business must take notice. The first waves of digital change have already hit business. In the beginning we saw the growth, and then the burst of the Dot Com bubble. Afterwards, digital business was more mature – here we saw digital firms disrupt, successfully compete with – and in some cases, outcompete traditional companies. The businesses that adapted to our changing digital habits survived. Those that didn’t struggled. Blockbuster succumbed to the rise of video-on-demand and Netflix: after first rejecting an offer to partner with their digital rival1. Borders did not adapt quickly enough to Amazon and customer desire for a convenient digital channel. And how many of us attended auctions before the advent of Ebay and Allegro? The next wave of change is now upon us Social media has come into the mainstream, while cloud computing and big data are doing the same. The shift in ways of doing business is perhaps reflected in the bankruptcy of Kodak and the rise of Instagram. The former once employed 62,000 people and filed for bankruptcy in 20122. The latter employed 13 staff and was bought by Facebook for $1 billion USD in the same year3. The changes we see are underlaid by broader shifts in technology and society. The adoption of mobile means that smartphone and tablet sales have overtaken PCs this year. In the US, the percentage of smartphone owners was 11% in 2007. It’s currently at 31% in Poland – and has grown to around 50% in the US4,5. Cheaper sensors and connectivity means that objects from trucks to handbags are gaining internet connectivity, as the ‘Internet of Things’ expands. The internet is becoming ubiquitous. Not only does the Internet surround us, it is changing the way we act, what we expect and potentially, how we think. We now check prices on our phones while at the shops, and sit on the couch with our tablet while watching TV. We don’t require physical bank branches (or ATMs) to carry out most of our transactions – and we expect the digital channel to work. Medical researchers have pointed to the “plasticity” of the human brain, and noted that even in adulthood, we’re constantly adapting, learning and changing – “neuroplasticity is not only possible, but [. . .] it is constantly in action”4. Consequently, arguments have been made that the Internet is changing how we think and reason. Negative perspectives argue that we’re becoming more superficial, and easily distracted. Others point out that we’re capable of both ‘skimming’ and ‘deep diving’ into information, and can now process and analyse information much better than before6. Whichever is the case, the Internet has changed our daily actions and expectations. The current changes in digital technologies constitute both threats, and significant opportunities for business. This report contains an analysis of how digital currently affects us and the economy, as well as practical examples of what is being done, and what is possible in the digital space. In writing this report, we hope that it will trigger ideas, inspire, and if necessary, spur to action. For the professionals who contributed, we thank you – and for our readers, we invite you to join the conversation. We’re also seeing the first generation of ‘digital natives’. This new generation is comprised of people who have grown up with the internet throughout their lives. Digital natives not only want, but expect a great experience in the digital channel, whether it’s in social media, banking, or shopping. Poland is not immune to this generational shift. We have one of the highest social media usage rates in the world – higher than Germany, France or Japan, but also one of the biggest gaps between young and old – and not all areas of business seem to have noticed. The combination of smartphone adoption, ubiquitous internet, and the rise digital natives and our own expectations mean businesses needs to respond, or risk being left behind by those that do. 3
  4. 4. Keynote Key take-aways from this report Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications 1 2 3 4 How we use the internet is changing We’ve reached a tipping point. There are now more smart phones and tablets being sold than there are personal computers – and we are no longer tethered to PCs when accessing the internet. The web comes with us when we’re browsing at a shore, paying for items, or watching TV. Companies can now design for phenomena that merge the physical and the digital, and weren’t commonplace a few years ago: showrooming, social commerce, and mobile payments to name just a few. Customers no longer just want digital, they expect it Customers are becoming used to digital options in their interactions with companies, and have come to expect it delivered with a sound user experience. Social media is now regularly used for tasks from customer service to recruitment, in addition to advertising and maintaining brand presence. A seamless mobile experience is also becoming ‘expected’ and the production and use of apps around the world has mushroomed, while the payments space in particular is being disrupted by mobile. Customers’ expectations in digital are changing, and business needs to respond. Business can adjust to current needs… Big data can help businesses refine their understanding of just what those customer needs are, and inform decision making. Data analytics is cheaper than ever, allowing even smaller businesses to benefit. User Experience and mobile payments are already on the radar for many businesses, while security should not be forgotten as an immediate concern. As the digital channel becomes more and more important, it also becomes a more lucrative target. … and prepare for new ones Analysts predict that the Internet of Things could contribute $14 trillion to the global economy by 2022. Though it’s still in its infancy, IoT it is creating a buzz, and is a space to watch. Not only can it help retailers track their logistics and internal processes, it can revolutionise how we interact with our physical space – from products and billboards, to each other. Finally, it’s likely that cloud, will give us access to technologies that aren’t even invented yet – without requiring us to invest in infrastructure. Consequently, businesses should have a sound understanding of cloud to prepare for the future, whatever it may be. About us 4
  5. 5. Keynote Our trends Introduction Our trends Big data Mobile Retailers have the opportunity to change mobile from a threat to an advantage. Cloud Big data Data and analytics are at the heart of developing customer insights. Social Cloud Is bringing us some futuristic technologies without the upfront cost – but integration is challenging. Social media has gone mainstream – but is business getting the most out of it? Mobile Cloud Social UX User Experience Payments “Sell and cell” – smartphones will be shaping the world of payments. Internet of Things Payments A focus on user experience is no longer an option – it’s a must have. Security The Internet is changing the way we live…again. Think you can’t be hacked? Think again. The Impact of e-commerce on the Polish economy Our analysis of the impact of e-commerce on the Polish economy. It also presents an analysis of the impact of e-commerce on the Polish economy. Overall implications for business A short summary of how businesses can respond. The internet of things Security The report covers eight digital trends and their implications for business. Economic Impact Implications About us 5
  6. 6. Keynote Big data Introduction Our trends Big data is getting bigger than it used to be We’re generating a huge amount of information And with big data easier to acess than ever, the market is growing... Big data 500M Mobile tweets sent per day Cloud Social Then Now UX Payments The internet of things 100TB 200TB Size of Amazon data warehouse in 1999 Avg. amount of stored data for each US company with over 1000 staff Security About us DATA 40% Projected year on year growth in Big Data $1B Invested in companies focusing on big data in 2012 Market size for Big Data Resulting in Economic Impact Implications BIG 12TB of data generated on Twitter daily $48B 2015 $10B 2012 Sources: 4,7,8,9,10 Data and analytics are at the heart of developing customer insights – and with Big Data becoming ever cheaper, it’s easier for the little guys to take part. The world’s data is growing at a pace and volume not seen before in the history of the world. In 2013, 500 million tweets are sent each day, and 30 billion pieces of content – including GPS, social interaction, or sentiment data – are shared monthly by Facebook’s 1.15B active users. Companies like Amazon and Wal-Mart have long used this ‘big data’ effectively to develop real customer insights. But there’s a twist. Big data and the analytics that can put it to work are now accessible to small and medium enterprises, not just market giants. 6
  7. 7. Keynote Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us Using big data can lead to big insights – for large and small business Over a decade ago, three characteristics were coined as making data ‘Big’: Volume, Velocity, and Variety. All three have grown since then. In the US, the average volume of data stored by a company of over 1000 employees in 2012 was 200TB – More than double Wal-Mart’s data store in 19999. The pace at which data is being generated, as well as the forms it has taken has also skyrocketed. The web of a decade ago did not feature Facebook or Twitter, while clickstreams and geo-tagging were in their infancy. But the point isn’t just that there’s now a lot more data being generated in the world – it’s what we can do with it. By combining multiple, seemingly unrelated data sources, businesses can draw business insights like never before – and the explosion of data sources available has allowed organisations to do just that. Retailers like Burberry combine their SAP data with social data to make timely adjustments to their supply chain. Wal-Mart uses transactional data, coupled with social media interactions, blog posts, and location information to help gauge business demand when launching new products4. Both Netflix and Amazon utilise ‘recommendation engines’ which can suggest a product that we’re more likely to buy – not just based on our past purchases, but on our online behaviour. The benefits of this are considerable. Some analysts claim retailers can improve their margins by up to 60% through better use of big data11. But supercomputers and number crunching have been around for a long time – so in relation to Big Data, what else is new? 60 000 data scientists offered by Kaggle to solve analytics problems For one, it’s likely big data will become a more integral part of our day-to-day work. Deloitte has predicted that it’s probable that “more users across the value chain will need to be able to consume insights as part of their daily workflow – or risk being left behind”4. Secondly, the speed at which we deal with data and analytics will need to increase – with so much data being generated so quickly, we need to extract insights and signals from data streams in near real-time, instead of storing “everything” for later consideration10. Day to day use, as well as speedy processing of data were evident at the London Olympic games. The Games’ Organising Committee (LOCOG) established a big data process that delivered a report (mostly from feedback via social media) to major Olympic games venues every morning to action aspects that could be improved for the next day12. This kind of data processing immediacy is just the beginning – and solutions such as real-time data visualisations, helping human experts gain insights with the aid of number crunching are also gaining use. But big data is not reserved for Industry giants. Small and medium businesses can benefit too. Importantly for them, big data has become cheap8 . Kaggle offers more than 60,000 data scientists4 across the world in a ‘bidding-style’ format that allows even small companies to access high end analytics. Services like Factual, Intuit, or Allegro.pl share location, industry, or sales volume data with customers, allowing them to derive customer insights. Small businesses are taking advantage, using big data to understand ‘who’ customers are, engage them through their preferred channels, and outcompete much larger rivals11. Big data is a powerful business tool, and now it’s for just about everyone. Retailers like Burberry combine their SAP data with social data to make timely adjustments to their supply chain. 7
  8. 8. Keynote Introduction Big data case studies Netflix – Selecting investment based on customer behaviour Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us In the US, Netflix uses big data not only to recommend products for its customers, but to inform decisions about which shows to invest in. In a well-publicised case, Netflix made an investment of around $100M to produce 26 episodes of ‘House of Cards’, directed by David Fincher and starring Kevin Spacey based in part on its analysis of big data. The decision has resulted in Nine Emmy nominations and according to Netflix – the most streamed show in the US and 40 other countries13,14. Netflix gathers viewing data from 30 million “plays” a day, including when customers pause, rewind and fast forward. This is blended with data from social media interactions, web searches, as well as comments generated by thousand of viewers (paid by Netflix) who make notes on genre, mood, and other elements in every moment of screened shows14,15. Looking at its customer data, Netflix knew that those who had streamed films by director David Fincher also tended to like films featuring Kevin Spacey. Likewise, a significant portion of their audience liked the original BBC “House of Cards” miniseries. Netflix judged a significant enough ‘intersection’ in these groups to determine that the show had a market and was worthy of investment. They then used their data driven confidence to outpace rival bidders by indicating the company would not even require a pilot to be developed before committing to the entire series. The use of big data went further. Even trailers for the show were delivered depending on data analysis. Kevin Spacey fans saw trailers featuring him, women watching ‘Thelma and Louise’ saw trailers featuring the show’s female characters and serious film buffs saw trailers that reflected [David] Fincher’s touch14. According to the company’s chief communications officer, the use of big data gave Netflix “confidence that [they] could find an audience”14 for the show. This kind of approach is spreading, and competitors like Amazon are also looking to use a datadriven method to select original content. In one case, Walmart launched a new range of spicy chips in California and the South West based on analysis of social media chatter and transactional data of various chip products across the country. Big data was successfully used to identify a market opportunity, and successfully launch a product for a specific geographic area. GE – Improving operations GE’s ‘Grid IQ Insight’ tool mines social data to help electrical utility companies identify and validate service outages in a timely manner, determine the resources needed to address them, and accelerate the repair process4. The tool mines social data – including tweets with mention of electrical outages, geo location data and attachments such as photos – to verify and gain more detail on incidents. Photos and videos of the environment, such as fires or downed trees, help personnel select appropriate tools for the task, while ‘clusters’ of social media data can help validate whether an incident has occurred. All of this assists in planning a faster, more effective response. Netflix made an investment of $100M to produce 26 episodes of ‘House of Cards’ based in part on its analysis of big data. Walmart – Launching products with big data As part of its ‘Social Genome Platform’ Walmart uses multiple types of data, including social media updates, blogs, transactional data, images and location data to help the business effectively predict demand and launch products86. 8
  9. 9. Keynote Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us My Perspective Big Data introduces a new generation of technologies and architectures for coping with the size, diversity, and change that characterize data sources in the modern business ecosystem. The possibilities presented by Big Data are numerous and together with advanced Analytics they offer exciting new capabilities for analysing highvolumes of rapidly evolving data streams, particularly unstructured data representing social media, geospatial data or click streams. However, Big Data is not a magical panacea for achieving business goals like better understanding of customers, enhancing service differentiation, reducing risk or improving performance. Big Data is still data and it should be approached it the same way as any other Enterprise Information Management challenge. Companies should start with asking the right business questions and then work to find the appropriate choices of data sources and technologies to address their needs. I believe the most important advantages of embracing Big Data today refer to getting to know customers better – where the customers are, what their needs and preferences are or how they want to be contacted. Furthermore, the answers to these questions change dynamically so businesses should work on understanding the drivers and learn to track the changes, so that they’re able to present customers with better tailored products and offers in a timely way. Very few companies embarking on Big Data programs understand that the strength and quality of Big Data analysis bear little relation to the tools that have been bought. Rather than capturing terabytes of data and rushing into large programs, organizations need to focus only on the data needed to deliver well defined and specific outcomes. In many cases it doesn’t immediately require looking at social media or other new external sources of data. According to big data research by the Economist Intelligence Unit, more than 75% of senior executives from over 500 companies say that they are wasting more than half the data they already hold. Companies need to learn how to make better use of what they already have. Over the last ten years, companies invested heavily in ERP, CRM or core systems, processing millions of customer transactions daily but are still unable to answer fundamental questions like which customers are most likely to buy specific products, or what is the acceptable price range for a product in a specific market or for a group of customers. Very few have started using the information in their systems to build models approximating customer lifetime value, or discovering events that make customers more interested in specific products. One example of such event from the financial services area might be a situation where a customer without credit card starts traveling abroad (e.g. the bank can infer it from debit card transactions) – It might be a good opportunity to call him or her with a credit card and insurance offer. Taking a lean approach, defining the right business questions, looking at the internal data available today – as well as opportunities to gradually supplement it with external data sources would allow firms to use data in a more efficient and intelligent way. This will allow them to listen, learn and engage better with their customers in the future. Dariusz Flisiak, Deloitte Dariusz Flisiak is a Director at Deloitte Poland specializing in Analytics, Big Data, Performance Management and Information Management solutions. He has thirteen years of experience in business and IT consulting, with an emphasis on enabling strategic information for clients. He has developed and implemented Analytics strategies and solutions for Financial, Consumer Goods, Telecommunication and Public Sector companies worldwide. Dariusz holds an Executive MBA from Warsaw School of Economics and the University of Minnesota, Carlson School of Management. 9
  10. 10. Keynote Implications of big data – and what you can do Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact 1 2 3 4 Define what you want Before you start, define your priorities and opportunities in big data. You can consider selecting a specific domain in which to begin (e.g. customer, product, pricing or risk). Asking yourself questions about ‘sticky’ business issues can help determine your focus – “Who are the next 1,000 customers we’ll lose – and why?”, “What factors most influence our customers’ loyalty?”, “Which facilities are using more energy than they should?”. Start small and deliver Don’t try to do too much at once. Instead, start small and aim to deliver a success quickly, while you have momentum. Focus on areas where your organisation has the most expertise, and focus on a tangible, bounded project. Run some experiments to test the data and deliver results. But once the scope is set, don’t limit your data to just one domain. Feel free to investigate seemingly ‘unrelated’ data sets – it’s at the intersection of different types of data that valuable insights often occur. Invest in talent Combining human expertise with machine learning, data visualisation and other tools can produce timely results with less investment in infrastructure – and gives a higher tolerance for error. Imperfections in data sources and the limitations of machine learning can be counteracted by human insights and domain knowledge. To make big data effective, you’ll first need people to help understand the information assets at your disposal and understand business priorities. Only then can you move to determining technology needs. Combining human expertise with machine learning, data visualisation and other tools can produce timely results with less investment in infrastructure. Keep your data disciplined If you’re investing in big data, you’ll need to invest in data discipline – Core data management, master data management, integration, and stewardship are important, even during your smallest pilot projects. Data discipline is one of the foundations on which your big data investment will be developed, so build it well. Implications About us 10
  11. 11. Keynote Mobile Introduction Companies are catching up Our trends Big data 62% 60% 52% Mobile Mobile is overtaking PC Cloud Future 100 companies have a publically available app Future 100 companies have mobile enabled websites WIG20 companies have a publically available app Social But the customer is already there... 70% 65% UX 50% 30% Payments 2009 The internet of things 20% 2013 Global market share PC/Laptop Mobile Security 13% 2017 80% 33% customers multiscreen customers showroom ...and habits in Poland are starting to reflect the latest trends Economic Impact Showrooming with a mobile Implications 31% UK About us Sources: 4,10,16, Deloitte 28% US 20% Finally, we’ve reached a tipping point – there are now more smart phones and tablets sold globally than there are PC’s. Mobile is changing the way customers purchase, from research, to browsing and payment. A large number of customers are ‘showrooming’ – checking product prices and reviews on mobile devices while in store, before making a purchasing decision. Near field communications have realised new possibilities in mobile payment, and taken location-based marketing possibilities to a new level. Mobile is here, and businesses that don’t take notice may lose out. 25% PL (avarage) Mobile access to the internet is shifting how customers shop – and retailers have the chance to change mobile from a threat to an advantage. PL (16-30 y.) 11
  12. 12. Keynote Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us A new way of shopping is already here For Lenovo, the milestone came in August 201317 – the company now sells more smartphones than it does PCs and laptops, and is rebranding itself as a ‘PC Plus’ company. This ascendancy of mobile device numbers is echoed in the strategies of other firms. Furthermore, some researchers claim that it’s not just the amount of devices sold, but the time spent on ‘non-voice’ mobile devices which now exceeds that of PCs18. The hundreds of millions of internet devices now in our hands are changing the way we act – and the way we shop. There are several key mobile trends of which retailers should take note: Multiscreening – using an internet connected device while watching TV is now a common activity, and it is offering new ways of interacting with brands. Heineken’s UCL “Star Player” and Coca Cola’s ‘Chok! Chok! Chok!’ campaign in Hong Kong provided mobile content matched to TV. The upcoming Zeebox platform goes further, and will allow viewers to buy items inspired by shows, while watching them live19. Multiscreening can be used to lead customers all the way from initial interactions up to purchase. Research online, purchase offline Mobile devices are even more likely to be used at an earlier stage, for initial product research. The practice of ‘Research Online, Purchase Offline’ (ROPO) has been around since the beginning of e-commerce – Research implies that around 50% of consumers actively research products online before purchase20. And now, we are becoming more likely to look for product information on an iPad or a smartphone than on a PC. Herein lies the difference – unlike the PC, mobile devices come shopping with us. Showrooming – Around one third of customers admit to showrooming – going to stores to browse and try out products – before purchasing them somewhere else. Mobile allows customers to search for information and compare prices during their visit – 28% of shoppers in Poland21 showroom with their mobile. Electronics and homewares20 are categories that are particularly affected. Showrooming constitutes a threat for retailers – In the US, Best Buy and Walmart suffered as customers browsed in their stores, only to complete the purchase elsewhere online. Early attempts to counteract this were unsuccessful – in one well publicised case, an Australian speciality food store attempted to charge customers $5 for ‘just looking’6. More mature retailers have responded by treating showrooming as a chance to finalise sales in store by targeting users of mobile devices. This turns showrooming into an opportunity. BestBuy, Target (US), as well as Media Markt and Saturn (Poland) allow customers to compare prices with the competition in store – and some employ aggressive price matching to convince the customer to make the purchasing decision there and then. Walmart goes further, with mobile apps that guide showroomers around their store – and successfully encourage them to use Walmart’s online channel while on the premises. One third of customers admit to showrooming. Mature retailers have responded by treating this as an opportunity to finalise sales in store. Smartphones in Poland 6M 8M Mobile is already here – and the businesses that embrace and adapt to new practices stand to gain ground. 2012 2013 12
  13. 13. Keynote Mobile case studies Best Buy – Working with showrooming played over 12 times for every teen in Hong Kong19. Introduction Silvercar – Mobile first In the US, Silvercar utilised the increasingly popular ‘mobile first’ approach in designing their online presence. Rather than designing a new website, followed by a mobile version as an ‘add on’, the company built the mobile version first. This allowed the company to start with a small investment and scale up. It also helped design a better user experience (what works on mobile usually works for web – but not the other way around) all while capturing more of the growing mobile channel25. Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us The electronics and appliance categories are amongst those most affected by showrooming. Recently, one of the biggest retailers in the game has responded with a model solution. Best Buy is using the mobile channel to bring customers into the store. The retailer has created an application that makes use of the company’s existing ‘ecosystem’ and works on a number of levels: 1) Using a geo-tagging, the app allows customers to ‘check-in’ at physical store locations to receive rewards points on their existing loyalty program – Customers are incentivised to come into the brick and mortar stores 2) The app also features ‘deal of the day’ discounts specific to in-store items, further driving foot traffic 3) The above are coupled with an aggressive pricing strategy. Best Buy will match the price of deals customers find online, lowering the relative benefits of leaving to purchase elsewhere. “If I’ve found the The showroomer is presented with a list of comparison prices... and can pay and check out directly from their phone. product I want cheaper on the web, and I can get it for that lower price right here, than why not?”. This way ‘showroomers’ can be directly converted into paying clients on the spot. These methods have both advantages and pitfalls, but some analysts are already pointing to this strategy helping halt last year’s 3% fall in sales23,24. Whatever the contributing factors, Best Buy’s 2013 sales have remained steady, and the share price has more than doubled in the 12 months from September last year. Coca Cola – Brand interaction In Hong Kong, Coca Cola launched what became the territory’s most successful branded app by combining mobile functionality with a TV ad – which featured a Coke bottle being opened and the cap falling off. Viewers could ‘scan’ the caps with their mobile phone as they fell, and capture instant prizes. The results were impressive – sales rose by 11%, and the game was 13
  14. 14. Keynote Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us My Perspective – The mobile revolution “Every once in a while a revolutionary product comes along that changes everything…”. That’s how Steve Jobs began his presentation of the very first iPhone, in January 2007. From today’s perspective it’s still hard to believe what kind of breakthrough this product has made in most of our lives. In the latest Mary Meeker’s Internet Trends presentation, we can see that mobile traffic as a percentage of total internet traffic is growing one-and a half fold per year. This will get faster. The latest Cisco research shows that by the end of 2013 there will be already more mobile connected devices than there are people in the world. From a different perspective, approximately 370 thousand babies are born per day, but in that same time, more than 500 thousand iPhones are sold and around 2.4 million Android devices activated. So, with the mobile revolution happening in front of our eyes, how do we achieve success? Who is playing this game and what are the rules? The difference between smartphones and other revolutionary devices (the likes of print, radio or TV) is that smartphones are really smart! They are permanently carried, are always on and already have built-in sensor mechanisms that can not only automate lots of our daily activities but also completely reinvent the way we interact with our environment. The way we should think about designing for those devices also needs to be revolutionary. If we journey back to the last twenty plus years for a few examples – Radio was not TV, the Web was not Print and it’s the same today, Mobile is not a PC. Using the Print vs Web example and referring to the Newspaper Association of America report, Newspapers have lost $40 Billion in advertising revenue since 2000. If you don’t want to lose the mobile game, make sure you are ready for a complete revolution in your product design, in your business orientation and most importantly in your customer behaviour. When we look at the statistics of daily mobile usage, we can see that we do in fact perform a very similar set of activities on a mobile as on a PC: we interact with friends, we play games, we watch videos and we shop. But on a 4-inch screen it’s just a very different experience. And our biggest job is to make all that new interactions effortless. Simple transfer of the big Web into a mobile device is a very common mistake, especially in eCommerce. The best example of the revolution, online (research) to offline (purchase) and vice versa (showrooming) is happening already. In the 2013 Future of Business Report, Brian Solis states that Millennials already trust strangers over family and friends. They lean on UserGenerated Experience to aid purchasing decisions. Look at this, and other similar examples, as an opportunity to reinvent the rules of your business. Przemysław Budkowski, SVP Marketplace, Allegro Group Responsible for managing transaction platforms, Comparison Search Engines and eShop solutions in CEE. He was previously managing director of Allegro – the largest Polish marketplace. Before joining Allegro Group he worked as CEE Product Marketing Manager Google in Ireland, US and in Poland as well for Orange Business Services (France Telecom Group) in Ireland. To win, drive all your decisions through one goal only: deliver an exceptional customer experience (and the rest will follow). In today’s world this means being able to adopt quickly and also, being able to question all your previous accomplishments. But take that risk, because winners will always be the ones that follow the consumer. 14
  15. 15. Keynote Implications of mobile – and what you can do Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications 1 2 3 4 Provide a mobile option With the proliferation of mobile devices, the chances are that a lot of your customers will want to consume information about your organisation and products via mobile – Or more likely, they already are. Confirm this, and ensure that you’re effectively providing information and functionality through the mobile channel. This could take the form of apps, a mobile optimised website, or other solutions depending on your needs. Embrace showrooming If your brand is affected by showrooming, there are several things you can do. Consider if there are benefits to building a mobile application that rewards shoppers for purchasing in-store or within your own online channel. If your customers are already online while they shop, try to keep them within your own online ecosystem. In addition, make sure that you monitor review websites as well as competitor’s prices online to ensure that you’re aware of what your shoppers see when they are showrooming – and look for ways to differentiate. Be relevant Context is everything, so map a ‘customer journey’ for your client segments to understand where and how you could use mobile during the purchase process in a way that is relevant to them. Reviews, prices, and deals are currently what shoppers primarily look for on mobile devices – so check if you are providing this information through your mobile channel, and how it fits into your customers’ retail journey. Consider delivering content that is targeted to the customer’s geo-location. This ability is a key differentiator between mobile and PC, and adds relevance for the client. Go mobile first When considering your online presence or launching new digital services, think about going mobile first – before designing a traditional web solution. Not only are customers consuming more and more information through mobile devices, there may be substantial cost savings associated with first designing a mobile version of the site instead of building a traditional website and ‘tacking on’ a mobile solution at a later date. Mobile design forces you to focus on the elements that are most important to the customer, and if techniques like responsive web design are used, mobile web can be translated to a ‘full screen’ version relatively easily. Starting mobile first generally requires lower investment, is more user focused, scales, and allows you to capture both mobile, tablet and PC customers right away. Context is everything, so map a ‘customer journey’ for your client segments to understand how you could use mobile during the purchase process in a way that is relevant to them. About us 15
  16. 16. Keynote Cloud Introduction Our trends Business is well and truly in the cloud There are a wealth of benefits to be had Big data Increased ROI Security Faster deployment Mobile Greater scalabilty 70% Cloud One size fits all Control and compliance Lower up front investment Cons Focus core competencies Social Some of the initial concerns regarding cloud (security, remote location of your data) are being resolved, but new challenges are arising for early adopters and their followers. Pros UX of businesses globally already employ some form of cloud solution As a company forays into the cloud with its first cloud-based application for a single department, other business units may follow – each with a cloud solution. So how will you manage a hybrid of all those clouds? Payments And the global cloud market is growing The internet of things Implementation times are quicker Project completion times for a sample group of projects Global cloud market Business is certainly adopting the cloud – the next challenge may now be integration. On demand (cloud) On premise Security Economic Impact Implications $40,7B $241B 59% 56% 2011 32% 2020 About us Sources: 10, 27, 29 28% 11% <3 months 9% 3-7 months >7 months 16
  17. 17. Keynote Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us Business is in the cloud – integration is the next challenge Cloud computing has created a lot of buzz in recent years – and has caught attention with some advantageous characteristics. These include: • Flexibility and scalability – assigning computing as needed • Mobility – ubiquitous access and location independence • Resource pooling • Pay-per-use – predictable pricing. This in turn led to financial benefits such as: cost effectiveness (as one paid only for what was used) and lower upfront investment (as no expensive hardware was required to be purchased). On the other hand, cloud also triggered anxiety related to data security, availability and performance, data control, and provider maturity. Integrating cloud As cloud solutions become more mature and adoption becomes more widespread, corporations have become more willing to make use of IaaS, PaaS or SaaS. Launching non-business-critical applications (such as sales, services, marketing and human resources) into the cloud, can be relatively ‘nice and clean’. However, dealing with complex, applications with sophisticated multilevel user management, which need to be integrated not just with local master data management, but with other SaaS solutions can be a huge challenge. For this reason, business rules management for processes that depend on multiple cloud services will be an important trend. Hyper-hybrid clouds All sorts of organizations have been trending towards hyper-hybrid clouds. This is evident at start-ups, with their cloud-first mentality. As spending is prioritised towards marketfacing products, rather than infrastructure, these organizations are setting the standard for the hyper-hybrid environment, using it to guide new operating structures and IT delivery models. Meanwhile, larger enterprises can use cloud to enhance their large legacy system investments and ERP solutions. Core in-house systems can form the foundation upon which emerging technologies are deployed – without sacrificing business compliance and controls. Organizations that can bridge hyper-hybrid clouds with their core systems will be at the forefront of improving business performance with the next wave of digital innovation28. Security and data integrity Security and data integrity still remain a concern. Regulators have raised their awareness of cloud-computing and have been introducing regulations regarding data processing, supervision, and ownership. In particular, recent issues regarding “the possibility of the personal data being subject to intelligence gathering or surveillance by third-country authorities”29, provoked discussion of introducing the so-called “Schengen for data” – a law that allows citizens within the euro zone to cross borders without a passport, but does impose hurdles for others. Business may be ‘in’ cloud, but the space continues to evolve. Cloud computing is a model for delivering on-demand, self-service computing resources with ubiquitous network access, rapid elasticity, and a pay-per-use business model87. 17
  18. 18. Keynote Introduction Cloud case studies Pfizer – Reducing R&D costs by $600 million with cloud Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us When Pfizer was considering increasing the utilisation of cloud technologies in its organization it chose to focus on R&D, the core engine that drives success for pharmaceutical companies30. The R&D department was responsible for analysing, organising and computing large amounts of complex data to provide reliable results back to their scientists as fast as possible. However, Pfizer was not keeping up with the increasing demand for computing power required to process the information at a fast rate and a low cost. Both these factors were critical to Pfizer’s success in the marketplace. To solve the problem, Pfizer partnered with a provider to create a private cloud solution. Taking advantage of cloud computing compressed compute time from weeks to hours. This enabled the company to make quicker financial and strategic decisions, resulting in gains measured in millions of dollars. Furthermore, the solution freed up scientists’ time to focus on core tasks (rather than on data processing) decreasing Pfizer’s R&D costs by 7%, or $600 million, since the company implemented cloud in 2010. The deployment of cloud resulted in adoption and behavioural changes across the R&D group – and boosted Pfizer’s competitive advantage. It also opens possibilities for deploying cloud to other areas of the company – or even using it to collaborate with other areas of industry30. USA.gov – Savings due to cloud computing The US General Services Administration has migrated all of the core resources of the USA.gov Web portal to The Enterprise Cloud IaaS solution to enable scalable on-demand resources. The Cloud based solution provided number of benefits and savings: enabling higher transfer volumes and accommodating huge traffic spikes on one side, while avoiding paying for idle capacity on the other. The Office of Citizen Services, has indicated that that the move to Terremark’s cloud platform would “reduce costs by 90%, while improving capabilities”31. the implementation of a new cloud based system to deliver improved communication and collaboration services to employees. The rollout and uptake of the system has resulted in: • Savings of approximately 60% compared with previous IT solution • Saving approximately 100 hours a month in IT resources time • Better collaboration which helps to improve patient care32. Telefónica – Mobile operator goes cloud In 2011, the Spanish telecommunication provider Telefónica, decided to take advantage of hybrid private-public cloud and to consolidate 27 European data centres containing approximately 18,000 physical servers into extensively virtualized solution of around 6000 servers. Cloud-computing was expected to reduce IT costs by 15%, cut the delivery of server resources to the business from 20 to less than 1 week, and bolster data centre reliability33. Taking advantage of cloud computing compressed processing time from weeks to hours. Bambino Gesù Hospital – Improving patient care and lowering costs The Vatican hospital “Bambino Gesù Hospital” is one of Italy’s largest paediatric research and treatment centres. The hospital was receiving complaints from staff about the effectiveness of data sharing between doctors and nurses working in the operating rooms, the clinic, at the office and in their homes. The main issues were related to schedule sharing and management, patient data exchange and communication on treatment related issues. The old ways involved e-mail and other ‘legacy’ methods. In the end, the IT department supported 18
  19. 19. Keynote Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us My Perspective Cloud computing has been undergoing a rapid evolution in recent years. What started as a novelty quickly became mainstream and it’s hard to imagine a modern enterprise that is not using any cloud services. However, the term “cloud computing” has became very stretched due to the hype that surrounds the movement. Many quite distinct types of services are labeled “cloud” and sometimes it’s hard to understand why. It’s a little similar to ‘Big Data’ where even firms analyzing a company’s payroll data (hundreds of thousands records, trivial by any contemporary means) are claiming that they provide Big Data services. Types of cloud companies First, there is a large group of traditional Software as a Service web applications and application suites that have rebranded themselves as cloud applications. These offerings have matured significantly over time, especially given the fact that those types of applications have been present on the market since late nineties. While they offer a compelling replacement for the traditional on-premise applications they remain relatively closed and self-contained. A new breed of cloud applications The new breed of cloud applications that came later leveraged open protocols and provided the rich APIs that enabled unprecedented possibilities of constructing sophisticated cloud-based solutions based on multiple services provided by different vendors. An even more dramatic change is happening at the infrastructure level. The movement towards virtual cloud environments is completely changing the way we think about managing infrastructure. On one hand it enables a radical simplification and standardization of the underlying hardware as the capacity of the individual virtual machines are defined in software. On the other hand, for the first time, we can treat our infrastructure not as a hardware with some configuration but purely as software objects that can and should be managed as code. Therefore, an “infrastructure as a code” approach is emerging and it opens up possibilities to bring a rich array of techniques from the software development world to infrastructure. This will enable proper versioning, change management and testing of virtual infrastructure. The emerging software defined networking (SDN) solutions will nicely complement the mix, and ultimately enable the virtualization of the whole environment (data, application and networking). Challenges and possibilities Of course, the cloud is not without its challenges. On the application side, the usual data security and confidentiality issues arise. The recent PRISM scandal was a serious cold shower to the whole industry. Data management and integration is posing as big challenge as with traditional applications. Combined with the relatively slow throughput of an internet connection vs. high-speed internal networks, it creates an interesting challenge for the data intensive enterprises. On the infrastructure side, the cost equation is not always positive: if your computing power consumption is highly variable then public cloud will be a great way to handle it with the minimal cost. If it has a significant fixed part then you can most probably run it internally (using a private cloud) and it’ll be a financially better proposition. Looking at the current trends, it’s inevitable that companies will eventually adopt a hybrid private-public cloud model and it will enable mix-and-match usage and optimal spending for the services. The vast majority of applications running in today’s companies are not cloud-ready and it’s one of the stumbling blocks on the wide cloud adoption path. However, it’s inevitable that the next generation of apps will support cloud – and this will pave the way for cloud’s wider deployment. Krzysztof Dąbrowski, CTO, Allegro Group Management Board member responsible for IT development and IT operations in the Central and Eastern Europe. For the last two years, Krzysztof is busy transforming Allegro Group into a modern, agile software house. He initiated one of European largest groupwide Scrum transition and is a big proponent of Lean and Agile methods. Being a former programmer and engineer by calling he values clean, minimalistic designs and code craftsmanship. Being manager by choice, he tries to change the world for the better by nudging people around him. He previously built and led software development practice at Roche’s shared service center in Warsaw. 19
  20. 20. Keynote Implications of Cloud – and what you can do Introduction Our trends Big data Mobile Cloud Social UX 1 2 Payments The internet of things Security Economic Impact Implications 3 Consider if cloud is right for you If you’ve never considered applying a cloud solution in your firm, maybe it’s high time to think it over. The benefits can be considerable. Cloud does always present a risk associated with lessened control, but part of this can be mitigated by evaluating cloud based solutions for the non-core functions of your organisation, such as CRM, sales, HR, payroll or collaboration functions. These are points of entry that are often easier to introduce, and can be implemented in a way that makes them seem ‘familiar’ to your workforce, aiding uptake. However, always bear in mind the downsides and security implications – and weight them up with the advantages. Determine where cloud may be the best fit If you’ve decided you want to implement cloud solutions, you’ll need to evaluate where cloud services models are suited to solve your business problems – and whether they fit your technical environment. Cloud could be a fit if you require: • Predictable pricing: You want to be charged based on usage, rather than on perpetual licensing or allocation • Ubiquitous network access: The service offered is available wherever and whenever the network is available • Resource pooling and location independence: Multi-tenant, with shared resources that subscribers cannot explicitly specify or partition • Self-service: The service can be directly accessed by users, features on-demand provisioning, while services are readied in close to real-time • Elasticity of supply: Ability to scale up or down to meet resource demands28. You’ll need to evaluate where cloud service models are suited to solve your business problems. Effectively integrate clouds and local infrastructure If your organisation already has a sizeable cloud footprint and you’re looking to further integrate cloud systems into your business, you should evaluate them first, and see if they’re meeting your original business requirements. Integrating underperforming cloud solutions presents a risk – it will cost money, increase technology dependencies, and complicate future migration strategies. Consider creating common platforms for identity, access, data correlation and business rules. Separating these out from discrete cloud-based functions may help in the future. Consider cloud-based integration ‘platform-as-a-service’ solutions to complement enterprise integration layers or service buses. These platforms can manage the interactions between in-house enterprise applications and cloud services28. About us 20
  21. 21. Keynote Social Introduction Our trends Social media is becoming ubiquitous around the world: Poland has one of the highest rates of usage in the world: Facebook has Big data Mobile 1 billion 1 billion 503 million 503 million 359 m The internet of things 8,78M Sina Weibo Twitter and global business is starting to implement it internally: UX Payments 86% YouTube Cloud Social Polish companies on social media Facebook Google 70% 2011 active users in Poland ...and just overtook local service Nasza Klasa Rates of social media usage globaly 52% 50% 50% 40% 39% 38% 34% 30% 29% Implications About us 90% 38% 30% 23% 20% 18% 15% 10% 8% Facebook YouTube LinkedIn Google+ Goldenline Twitter Blogs Nasza Klasa Yammer UK US Russia but social media could still be used much more effectively: Poland France Italy Germany 62% Facebook use in Poland by age 35% 28% Social media is ubiquitous, and in business it’s being used for everything from brand promotion to customer service to social shopping. However, getting the most out of social media requires a lot more than using it as an advertising channel, or simply ‘being’ on Facebook and Twitter. Social can open up a wealth of possibilities if used properly. And if you’re not using it to your full advantage, your competition probably is. 11% Increasing sales With around half of the world’s internet users making use of Facebook alone, the power of social media in the digital space is beyond doubt. Recruitment 25% but one of the biggest gaps between young and old: Influencing brand image Better understand customers Greece 59% Keeping up with trends Japan Security Economic Impact Business in Poland is getting on board: Reducing customeracquisition costs 2013 Fortune 500 companies who have or are establishing a social network Sources: 4,10, 34, 35, 36, 37 29% 29% 20% 13% 9% 5% 2% 13-17 18-24 23-34 35-44 45-54 55-64 65+ 21
  22. 22. Keynote Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us Social media goes to work Most brands already realise the importance of social media in managing their image, both in terms of brand building and crisis control. Communication with the costumer is no longer unidirectional – a dialogue is possible – and the conversation takes place in the public sphere. Positive, as well as negative experiences can be seen, shared and amplified to a network of millions. In Poland, many companies have realised this – and more than 50% of Polish companies on social media are there to manage their image34. Social media has also changed the way we relate to brands and products, as consumers rely more and more on reviews and ‘social validation’ online. A Deloitte study found that while older generations were more likely to rely on “tried and tested” brands, younger consumers and are far more likely to engage through the Internet, looking for reviews and recommendations from peers in order to make a judgement on products4. Social validation is now critical for the credibility of products and services. Already, 33%36 of consumers view social media reviews before making a purchase – and ‘businesses like TripAdvisor, UrbanSpoon, Allegro, and eBay all rely on social reviews as a cornerstone of their service. But social is not just an image tool – it can also be used to drive e-commerce more directly. ‘Social shopping’ services such as Feyt and Pose use social media and sharing to ‘curate’ clothing and accessories specifically to a customer’s needs through a “find out what to wear, then buy it” business model. ‘Social network commerce’ allows Social is not just an image tool – its a diverse toolkit from which organisations can select the best tool for the job at hand. users to buy products while within a social network like Facebook or China’s Qzone36, and firms like Shopify and Soldsie are offering services to facilitate the process. Social media content can even become currency – Services like paywithatweet.com allow companies to ‘sell’ reports and electronic media in return for a user ‘tweeting’ or posting a Facebook message about a product. Customer service is another area in which social media use is growing, as it provides a relatively low-cost channel through which customer service teams can offer support and triage customer issues. With around 1/3 of customers preferring to contact brands through social media than by phone, it is especially important to offer this channel option. In Poland, ING Bank Sląski, mBank and Dbaj o Zdrowie all offer support through their Facebook sites. Social can even be used to crowdsource customer service. Australian telecommunications firm Telstra and Commonwealth Bank have both created platforms where employees and members of the online community can respond to customer queries and help solve problems. Finally, organisations can use social to improve their own processes and functions. LinkedIn is regularly used for recruitment. Tools like Yammer (a cross between Facebook and Twitter) have been widely adopted by corporatations. Tasks like standing up and saying “Has anyone ever done…” are no longer limited to the local team sitting in your room – they can be asked across offices, cities, and countries. Deloitte has suggested that companies can transform how they do business by harnessing social media internally. This is affected not just by ‘bolting on’ social media tools to improve collaboration, but by reengineering whole business processes to overcome constraints like limited context for decision and action, or “same-time, same-place” requirements for employee productivity10. In this area, business has not sat still – By the end of 2013, more than 90% of Fortune 500 will have at least partially Enterprise Social Networks (ESN)4, and while the US is ahead in this regards, the rest of the world will likely follow. Clearly, social media is a diverse toolkit from which organisations can select the best instrument for the job at hand – and there’s more to choose from than just the hammer of ‘being’ on Facebook. 22
  23. 23. Keynote Social media case studies KLM – Social care Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us KLM began using Twitter in 2009 and Facebook in early 2010 – But truly saw the value of social media as a customer service channel following the eruption of the Icelandic volcano Eyjafjallajökull later that year. With call centres jammed, Twitter and Facebook were used to respond to customer service requests and provide regular updates on services. This allowed KLM to maintain high levels of customer service at a potentially damaging time, and resulted in a lot of positive press – leading the airline’s CEO to declare an added focus on investment in social media capabilities38. KLM has indicated three key factors about their social media strategy38: • KLM strives to deliver excellent customer support via social media. KLM provides a 24/7 service and aims to respond to every user comment or question within 60 minutes. Each issue must be resolved within 24 hours. • KLM recognizes that Social is a space where brand is affected Consumers converse about brands on social media, meaning that brand reputation can be affected in a very public manner. KLM choses to engage in that conversation. • Social media is a great acquisition channel. Given that customers are more likely to be influenced by peers than by ‘traditional’ marketing messages39, KLM sees that by proactively monitoring and influencing the conversation around the brand, they are carrying out valuable marketing work. In pursuing these benefits, KLM has expanded its social media team to over 100 people serving customers in 9 languages on a variety of platforms20, and is recognised as a global leader in social customer care. Danone Poland – Brand promotion with Mały Głód In Poland, Danone effectively used a ‘brand hero’ (a promotional character) in conjunction with social media to directly increase sales and improve brand recognition. The company launched a brand promotion which revolved around an “invasion” of the country by millions of “Little Hungers”. ‘Little Hunger’ toys were bundled with Danone’s dairy products and physically delivered to stores, with the campaign then being driven primarily through Facebook, where consumers were encouraged to interact with the ‘Little Hunger’ invasion narrative, both on the web, and in ‘real life’ locales. The campaign resulted in 57,000 Facebook fans, extending to 170,000 fans after a follow-up campaign. More importantly, sales to the target group rose by 7% – and brand reputation improved by 15% after the campaign, in what was one of Poland’s most social media campaigns at the time41,12. GE – Collaborating through social In order to dismantle organisational siloes and improve collaboration, GE has implemented Colba – an internal, ‘Facebook-like’ platform for staff. Beyond standard functions such as displaying profiles and messaging, the system also allows users to file-share in the cloud, as well recall the context in which the files were used through recorded conservations, attached meeting notes, and collaboration history. The platform has been a success, with subscription growing from 0 to over 120,000 users in a year, and with strong support from the CEO, more features are being planned10. KLM has expanded its social media team to over 100 people serving customers in 9 languages. Deloitte Australia – Engaging for recruitment Deloitte Australia has long used people networks for recruitment, and has taken to social media as a natural extension. Graduate recruitment efforts are aided by an active “Your Future at Deloitte Australia” Facebook site, where graduates can ask questions about Deloitte, its people, career opportunities, and the application process. This is further backed by Deloitte’s “Join Us’ iPhone app which streams video and photo content from Deloitte YouTube and Facebook accounts, as well as other relevant information. The approach has seen Deloitte named the ‘top graduate recruiter’ in Australia for 2011, as well as a series of other recruitment awards37. 23
  24. 24. Keynote Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us My Perspective – Social media in business As far as social media in business, we’ve come a long way, and have a long way to go. The below is just a sample of my social ‘journey’ in the workplace. Years ago, when I had started at Deloitte in Australia, the entire practice was expected to check their voice messages each morning. Our CEO and other senior staff would leave us firm-wide voicemail to share news – we jokingly called it the weather report, as every message would begin with something like “It’s a cloudy day in Sydney, and I’m calling to tell you about…”. The communication was unidirectional, and cumbersome. There was no real way to engage. Fortunately, the winds of change blew. After staff took up Facebook and Twitter, the firm didn’t look up in alarm, but tried to realise some benefits. We introduced Yammer – an internal social network. Its use was led by none other than the CEO himself – a social media skeptic turned true evangelist. The Australian firm established what was one of the biggest active Yammer networks in the world – and now Deloitte has a much wider, global network. In practice, the effects are amazing. In a 20-person firm, I could stand up and say: “Has anyone ever…?” and mention a topic – and whoever was in the room could drop me a helpful hint. Now I can do this online across buildings, offices, or countries, targeted to the groups I need to reach. Engaging staff from Warsaw to Melbourne, or London in conversation – and getting results – is simple. It’s not unusual to see a post from the CEO saying “I’m off to see client X tomorrow to talk about social media – what are the top three things I should tell them?”, and see a flood of responses, including case studies, statistics, and customer quotes social works. Deloitte now also uses social media for recruitment, even building an iPhone app for graduates to disseminate relevant information. A lot of businesses have been making a similar transition with regards to social media. First resistance, then acceptance, then a growing realisation of what could be done – though we’re still a little lacking on the latter. We need to understand that using social media effectively is a lot more than ‘being’ on Facebook. Need to lower the cost of customer support? Why not consider a Facebook or Twitter support channel? Replies to problems you solve are shareable, and can be seen by many – which can mean less load on your support staff – and customers will appreciate a channel they can access anytime. In Australia, I’ve observed Australia Post make a real effort in ‘social’ customer care this way. Poland is quite a ‘social’ country, and I see organisations like Poczta Polska, Generali or mBank are realising the benefits and getting on board. Of course, social care is the tip of the iceberg. There are other prospects too – from better targeting and the use of big data, to direct sales, brand monitoring, or improving internal processes by utilising systems like Yammer. The opportunities in social are substantial. But the landscape is always changing, so regularly check to how you could leverage social media to improve the way you do business. Remember – even I was using a landline to check my business communications six years ago. Marcin Łaszkiewicz, Deloitte Marcin is a manager at our Warsaw practice. Prior to his transfer from our Melbourne office, he worked with our Deloitte Digital team in Australia, and helped define digital strategies for some of Australia and New Zealand’s most significant organisations. Marcin focuses on the intersection between business and IT, but has almost a decade of experience across a broad spectrum of technology projects. Prior to Deloitte, he worked in positions involving network and system administration, IT security, coding, and even cultural studies research into the impact of computer games on society. 24
  25. 25. Keynote Implications of social media – and what you can do Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications 1 2 3 4 Don’t wait – and do not ignore the cost of inaction Don’t be an ostrich and bury your head in the sand. If you’re not already using social media, examine what your competition could be (or already is) doing, and what you may be set to lose out on. If you’re already on Facebook or Twitter, make sure you re-examine your social strategy on a regular basis. It’s a rapidly changing field, so regularly check up to see if how you’re using the medium is still appropriate - and whether new opportunities to improve how you do business have arisen. Define your social media goals One thing we consistently hear from social media leaders is ‘don’t act without a plan’. To start, select an area of the business which could be disrupted if viewed through a social media lens. Are there any customer areas where a natural community exists, but has not yet been tapped? Are there any customer pain points that could be solved through better communication – or connections to experts and peers? What are you trying to ‘solve’ in your business? Think through your business objectives and then act. Look at both customers and yourself In investigating how you could use social media, look inside and outside the organisation. Would your customers benefit from an online customer service channel, and does it make sense for them to engage with your brand online? Perhaps they’d like to engage with others about your brand? Likewise, don’t forget your internal processes – Can you break down silos, simplify decision making, or speed up internal processes by connecting your people differently? It’s a rapidly changing field, so regulary check up to see whether new opportunities to improve how you do business have arisen. Pick your tools Once you understand your goals and needs, it’s time to pick the right tools. Twitter for running social care? Instagram to promote a visual identity? What about some social monitoring tools to keep tabs on what the Internet is saying about your brand? How about integrating it all with a CRM that will allow you to track your customer interactions? Ensure that you select your system methodically, and consider support and staffing needs - not just the acquisition costs. About us 25
  26. 26. Keynote User experience Introduction Our trends User experience is important for custormers And the benefits to business are real 68% Big data Mobile of users leave a website of poorly designed UX A major internet retailer – saw gains of $300M Cloud through improved UX Social User experience is also important for developers UX Payments The internet of things 44% of shoppers will tell friends about a bad online experience 85% Wells Fargo reported a Security Economic Impact Implications About us $ of UX problems can be solved by testing with 62% of customers based future purchases on past experience 5 users 50% increase in online loan applicationss after UX improvements to the home page Good user experience is ceasing to be just an option and is becoming a requirement. User experience (UX) is the sum of a user’s experience with a company, including its services, products, and customer facing interactions. In the digital context, it dictates how a customer perceives the experience of using an application or device, based not just on ‘look and feel’, but on the customer’s perception of ease of use12, efficiency, and whether they can accomplish the tasks they want to. In the digital space, UX has become a battleground for competing brands. Ease of use, appeal, and functionality play key roles in determining success15. Thanks to leading organisations such as Apple or Google, customers have come to expect a clean and elegant customer experience regardless of what platform they’re using. Moreover, customers don’t just expect a great user experience from industry giants, they expect it from whoever they’re dealing with13 – and organisations need to be ready. Sources: 43, 44, 45, 46, 47 26
  27. 27. Keynote Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us A focus on user experience is no longer an option – it’s a must have A brief introduction to UX The practice of user experience design typically involves tasks like ethnographic research to understand customer needs, visual design to define the look and feel of the interface, information architecture design to define how information is organised on an interface, and elements such as interaction design and usability disciplines. Retailers in particular have become increasingly adept at designing user experiences that take customers on an efficient journey through the sales process. Good UX ensures relevant product information is provided at appropriate points, with customers being helped through critical steps in the process - particularly around payment and delivery. Mature retailers have also become adept at providing useful and engaging search options, with products returned in search results displayed graphically and often accompanied by contextually relevant filtering options. But in addition to these practices, several other items have been ‘trending’ in UX recently. Trends in UX techniques There are several techniques currently impacting on UX practice. Mapping the customer journey – The use of ‘customer journey maps’ to show how customers interact with a brand across channels and through their customer lifecycle is becoming more and more universal. Journey maps help visualise a customer’s experience – and the pathways they may take through the content and functionality of a digital service or product. They focus on users’ experiences including how they feel, what they’re thinking and any issues or concerns they may have. Responsive, adaptive and predictive design – are also competing for ‘attention’ in the UX world. Responsive design allows websites and apps to scale and change depending on the device they’re displayed on (allowing design once for multiple devices), while adaptive design couples the aforementioned with user needs – so that websites look and feel ‘similar’ across various platforms. Predictive design goes further, and is aimed at discovering or understanding a user’s needs and patterns, then modifying the user experience accordingly. Organisations need to understand which of the above fits their capabilities and users’ needs best. Gesturing - is also being increasingly explored. This involves interacting with devices not just by ‘pressing’ buttons on a touch screen, but by using broader range of interactions with the device48. Users can already ‘shake’ an iPhone to undo typing, or gesture with their body to control the Xbox Kinect. Google’s Gesture Search, replaces typing with simple hand gestures. our immediate attention – both in Gmail and its Google Glass prototype. In addition to these individual trends, organisations are finally considering Digital as part of a broader ‘multichannel’, or ‘ominchannel’ experience, where users can seamlessly switch between channels to perform an action. A customer may research a product on their mobile, and order online from their PC, before picking up and paying at a physical store. All this means that companies must design increasingly complex but consistent experiences that extend beyond just the physical space. UX comes to the heart of the enterprise More broadly, UX as a discipline is being given more and more weight by organisations around the world. Companies in the private sector are putting increased focus on UX skills, and banks from Ceskomoravska Sporitelna, in the Czech Republic to Commonwealth in Australia are boosting their UX teams. Elements of the private sector are following suit, and the UK government’s reorganisation of their web presence has seen strong internal user experience capabilities built at Gov.uk. Customer journey maps help visualise a customer’s experience – and the pathways they may take through the content and functionality of a digital service. Calm technology – As we are bombarded with more and more information, the use of ‘calm technology’ is also becoming more prominent. The technique focuses on cutting down the “digital noise” and reducing distractions to users without losing functionality49. Google uses this to filter emails, displaying only the most urgent for 27
  28. 28. Keynote User Experience case studies Major Internet retailer – The $300M button? Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us Even the biggest internet retailer in the world can benefit from better UX – In the case of one, the benefit of a few simple changes was estimated to have delivered the company up to $300M46. Analysis found that users were abandoning purchases. Subsequent UX research found that a major reason for this was that the users resented having to ‘sign up’ before completing the purchase. Repeat customers often couldn’t remember their user ID and password combination, and requested password resets – of these, only a small portion continued shopping. In the meantime, new users didn’t want to sign up at all. During testing, one customer captured this attitude in the phrase “I’m here to buy something, not to enter into a relationship”. The UX team responded by shifting the registration option to after the user had checked out. This allowed customers to complete the core task of buying the product, while still allowing those who wanted to sign up afterwards. went up by 45%. Revenues increased by about $6 million in the first week, which remained roughly constant, while password reset requests dropped by about 80%. The investment in UX testing most certainly paid off44,46,47. Time magazine – responsive design With increasing number of readers using mobile devices like smartphones, iPad, and other tablets to visit its website, Time magazine utilised responsive design in order to better reach its readers. The redesign team utilised responsive design, which allowed content to scale and change depending on what device readers were using. Furthermore, they paid particular attention to performance, search engine optimisation, and the use of photography (so critical to the TIME brand). As a result, the bank decided to employ a highly simplified homepage, with a straightfoward search interface that allowed their customers to bypass navigation and get their answers quickly, whether they were looking for products information or support. The approach paid off. Since launching, Bankwest saw a 25% increase in new visitors in the first 3 months since launch, and the website won the Interactive Media Awards for the ‘Banking’ category in 201151. Since then, other banks have also adopted a more graphical, user centric approach – examples include UBank Australia, and mBank in Poland. After the redesign, mobile and tablet went up from 15% of total traffic to 25%. After the redesign, mobile and tablet traffic went up from 15% of total traffic to 25%, but more importantly, the engagement with users improved. Readers view more pages per visit than before, across PC, tablet and mobile (a 23% improvement on the latter) and time spent on the homepage has also increased by almost 10%50. Bankwest – UX inspiration from retail In redesigning its website in line with its “Happy Banking” initiative, Bankwest chose to break with its industry peers. The site would not look like that of other banks – instead, interactions would be based on internet shopping experience. The UX change saw an immediate jump in sales. The number of customers purchasing 28
  29. 29. Keynote Introduction Our trends Big data Mobile Cloud Social UX My Perspective – Design thinking pays off When we are looking for something, today we have grown accustomed to simply googling it and a world of information is at our fingertips. In essence, we now simply expect information on everything to be instantly and readily available, on any device, wherever we are. This immediacy results in significant challenges for product and service organisations. Consumers have increasingly high expectations of intuitiveness, richness and engagement in the products and services they use. Today it is no longer enough to be functional or feature rich. In addition, we also expect everything to be easy to use, integrated, and personalised to our needs. We expect this in all contexts, even as employees using internal systems of large corporations. Design Thinking Process Payments The internet of things Security Economic Impact Implications About us Inspiration • Immersion • Empathy • Understanding Ideation • Brainstorm • Create ideas Prototyping • Low-Fi prototypes • Hi-Fi prototypes Deployment • Create • Deploy Expedia, an online travel portal, suffered from a lack of customer focus, costing them $12 million dollars a year. The culprit for this loss was a single form field, which confused customers when trying to pay for a holiday they had selected online. Once they removed it, the booking numbers rose almost overnight. UX pays. Investing in user experience design for your products and services is not optional, but essential if your organisation is to be competitive and have a differentiated offering in the marketplace. Focused user experience design facilitates the creation of solutions and products that are tailored to your specific target audience and meet or exceed their expectations. The side effects of applying user experience design often lead to your organisation also becoming more effective, efficient and crucially – innovative. In our experience of working with organisations large and small, we frequently encounter the following common challenges: • Inefficient internal systems – every minute that an employee spends trying to use a non user-friendly internal system costs the business money • Inability to innovate – large organisations in particular sometimes find it hard to think ‘out of the box’ due to long standing practices. • Undesirable user interfaces – are also less likely to generate demand for third party licensing or ‘white labeling’ of the system – thus cutting off a potential revenue stream • Costly workarounds – Undesirable user interfaces are not used as much as they should be – users find workarounds which are often costly to the business, e.g. calling support helplines or deliberately mis-entering information • Design is seen as a nice to have – instead of a must-have. An engineering driven design process results in products for engineers in the same way that a marketing driven process results in products customers need to be convinced to use. These challenges can be overcome by investing in UX, applying design thinking and a user centred design approach. Design thinking means taking the time to immerse yourself in client problems and brainstorm – rather than trying to retro-fit a ready made solution. The three key benefits of applying Design Thinking are: 1. Improved Efficiency of Use 2. Increased Desirability and Adoption 3. Innovation on Demand Efficiency is a simple measure– it is essentially how easy is it for your users to do what they want / need to do. Desirability is especially important for consumer products – it drives whether your customers want to use your products and in future will remain loyal to it. Innovation on demand becomes a part of the organisational culture – once accustomed to having the right tools to create, the freedom to experiment and fail, employees are more likely to think outside the box even for day to day challenges. All of this leads to happier customers and employees, and ultimately generates profit and saves costs. Philip Bonhard & Amanda Salter, Newt Idea Philip and Amanda are directors and co-founders at Newt Idea, a design consultancy based in London. Philip Driven by curiosity about how people and technology interact, Philip has been designing people friendly tech for more than 10 years. He loves rapid prototyping. Amanda Amanda is passionate about taming complex problems through good design. She is an agile UX coach and advocate of lean UX. Design thinking means taking the time to immerse yourself in client problems. 29
  30. 30. Keynote Implications of UX – and what you can do Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact 1 2 3 4 Start with the user Take a user-centric approach to your products and to your organisation. Before starting projects, take time to understand who the stakeholders are, how they live and work, what their needs are, and what problems you’re trying to help them solve. Investing in ethnographic research can help achieve this, and the use of a ‘persona based’ approach can help embed user centricity in your project, from design, through to development, and service. Test early, and test often Leaders in the UX space have a real commitment to trialling and testing. Winning designs are rarely found by accident – they are the result of a methodical testing process, employed from the earliest phases of the project. Techniques like using low-fi prototypes will help solicit feedback from users before coding has even begun. A/B and multivariate testing can be used to choose whether one variation of a design is more effective than another – and can be carried out on a live system, with the results coming directly from real customers. Winning designs are rarely found by accident – they are the result of a methodical testing process. Ensure consistency Consistency is a key element of successful UX. Investing in UX standards, guidelines and tools like content libraries will help organisations deliver a consistent experience across digital touch points and beyond. Remember that ‘consistent’ does not mean ‘identical’, so adjust user interactions where required. User needs may be different when they use a PC compared to when they use a smartphone – and the difference may be more substantial than just clicks and scrolls becoming taps and swipes. Continue to invest in User Experience If you are serious about providing outstanding customer service, you need to invest in building and maintaining a user experience capability. This can take the form of bringing in UX experts or building a UX capability internally. If you do build this capability, embed it in the heart of the business, so that it can shape concepts through the lifecycle of a project, from initial concepts, right through to implementation and improvement. Implications About us 30
  31. 31. Keynote Payments Introduction Our trends The mobile payments market is growing Young consumers are leading the trend Global mobile payment user base Who is using mobile payments? (source BBVA) 384M Big data Mobile 212M Young boomers (40-50) Gen Y / millenials (18-26) Cloud Social 18% 39% 70M 9% Old boomers (51-61) 31% Gen X (27-39) UX Payments The internet of things 2009 Value of global mobile payments Security Economic Impact 2012 2015 $472B And industry is getting on board Mobile carriers $171B Deployed / ready to deploy $26B 32% Fraud Institutions Merchants 30% 17% Trialling or planing Implications About us 3% Seniors (62+) 2009 2012 2015 64% 66% No interest so far 5% 3% 64% 9% Smartphones are shaping a new world of payments. While there’s a lot happening in the world of payments at the moment, the key trend in the area is Mobile. Mobile payments are attracting attention throughout the world due to their capacity to improve user experience for customers and provide new opportunities for financial institutions, mobile operators, third-party processors providers, merchants and application developers. Driven by a growing customer demand for rapid payments and the growth of e-commerce, mobile internet and smartphone usage, mobile payments are attracting more attention from new players other than „traditional” financial institutions. According to Gartner, the number of mobile payment users globally will reach 384 million by the end of 2015 – that’s more than four times more than it was in 2009 and almost 80% more than in 2012. A global battle for market share is being fought out in mobile payments. The market is growing, and a tremendous range of mobile payments innovations have sprung up around the globe. Only time will show which of them will come to dominate. Sources: 52, 53 31
  32. 32. Keynote Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us “Sell and cell” – smartphones will shape new business models for payments Over the past few years, consumers have made smartphones their preferred mobile devices. Like POS, ATMs and online banking services before them, smartphones are giving consumers greater convenience and more options than older technologies. Customers are now able to bank wherever and whenever they want, carry out transactions and access account information without physical access to bank branches, ATMs, or even computers. What is more, they’re now starting to expect this convenience54. Users driving the change While members of Generation Y (Millennials) are the frontrunners in adopting all things mobile, Deloitte expects baby boomers and older consumers to increase their usage of mobile banking as it becomes an established and familiar channel. In fact, it’s likely that mobile banking will surpass online banking as the most widely used banking channel by 2020 – if not sooner. Most large banks around the world have already gone mobile or are just about to invest there. Smaller financial institutions aren’t far behind, and on top of that mobile network carriers, credit card processors and third-party payment processors offering web-based and mobile solutions are also fighting for their market share. Smartphone applications (leveraging NFC, Bluetooth Low Energy (BLE) and geo-location capabilities) enable the provision of innovative real-time payment solutions to end users. Apps currently on the market support transferring money to individuals (P2P) and to retailers (B2C), regardless of whether the transaction is conducted in close proximity or remotely. This moves the focus from premium SMS based transactional payments and direct mobile billing models to mobile web payments, mobile app payments, and contactless payments. Opportunities for local firms exist Mobile payment offerings around the world vary in terms of solution maturity and market penetration. While global players are pushing to build their own standards, the diversity in local markets is still huge. Local market players are taking different business and technological approaches with their offerings – and must often develop various alliances to build business models that are suited to their specifics of their own markets. With the rapid increase in smartphone penetration, the marketplace is crowded with competition from a variety of sources. As is the case with many emerging markets, the speed of change is rapid, and firms must be prepared to adapt accordingly. A window of opportunity may exist for early adopters to establish a leadership position in the market, but they will need to act quickly54. iKO by PKO BP or PeoPay by Pekao S.A.), as are third-party payment processors. Global leaders have introduced Google Wallet, Amazon Payments, and Apple’s Passbook. Local players have responded with their own solutions – sQuid in UK, Beam in Dubai, mPay or skycash in Poland. Local mobile carriers are also building their own mobilewallet solutions (eT-Mobile in Slovakia; O2 wallet and EE in UK; ISIS by T&T Mobility, T-Mobile USA and Verizon Wireless; mBank MasterCard Orange Cash in Poland and T-Mobile MyWallet in Poland). Mobile POS solutions like ANZ’s Fastpay are proliferating, and some vendors are offering services that involve appending hardware devices to smartphones to enhance proximity P2P and C2B transactions without traditional POS – like PayPal Here, Square, GoPayment, ROAMpay. It’s clearly a busy time in mobile payments and with so much innovation occurring, consumers are sure to benefit. The payments ecosystem may require different industries to work together to bring mobile payments services to the market. However, many of the key players…do not share the same interest. A crowded marketplace – and whole lot of innovation The payments space has already seen several ‘waves’ of payment innovations. The NFC technology first widely used in credit cards was recently adopted on smartphones, and may now be succeeded by BLE and location-based solutions which focus on enhancing proximity payment experience (e.g. PayPal beacon or Placecast). Banks are introducing mobile-wallets (in Poland: 32
  33. 33. Keynote Payments case studies PayPal Beacon – hands free payments Introduction Our trends Big data Mobile Cloud Social UX Payments The internet of things Security Economic Impact Implications About us In September this year, PayPal introduced PayPal Beacon – a Bluetooth Low Energy device allowing merchants with PayPal compatible POS to connect with customers using their mobile phones. The device works across multiple platforms, doesn’t require internet connectivity, uses little battery power and claims secure operations for users and merchants. By using Bluetooth LE, the device detects when a customer with a PayPal app is nearby and allows them to start their own personalized experience. For instance, it can: • Initiate an interaction with the customer by displaying a targeted offer, • Identify and display the customer on POS so the seller may greet them by name and access information about their preferences and purchase history (CRM-like experience), • Support a proximity payment of up to 50 m removing the need of to wait in queue • Conduct a hands-free payment – using just verbal and visual confirmation is enough for payments from identified customers, for POS payments to go through. Moreover the platform is open for developers – and could accept other methods of payments than PayPal55,56. iKO Plus – A unified standard for Polish Banks? After first introducing its own ‘IKO’ payment application in March 2013, PKO BPO (Poland’s largest bank) teamed up with five of it’s other major competitosbanks: BRE Bank, Bank Zachodni WBK, ING Bank, Millennium and Alior Bank (while Pekao S.A., the second largest, deployed its own solution – PeoPay) to deliver iKO Plus – a unified platform supporting all of the partner banks, and serving around 70% of bank customers in Poland57. The solution provides customers with a mobile payment option. All that’s required is a smartphone app and an internet connection – integration with local carriers or NFC is not required. In addition to user adoption, overall success of mobile payments depends on degree of merchant support, which may be impacted by the planned decrease in the interchange fee charged for payment cards transaction. processor Square. Starbucks’ mobile wallet allows customers to pay in their coffeeshops and collect points – customers receive benefits, while Starbucks collects loyalty data. In the meantime, Square provides payment solutions and its own mobile wallet, allowing customers to pay using QR code scanning, credit card payment, or an NFC enabled mobile pack that can be used appended to most smartphones and tablets. Square is to become a payment option in around 7000 Starbucks stores – expanding its already significant footprint in US mobile payments52,59,60. The device permits hands free payment – using verbal and visual confirmation is enough for payments from identified customers. ISIS – unified platform from mobile operators ISIS, is a joint venture between AT&T, Verizon, and T-Mobile. It provides several payment related features through a smartphone app. NFC payments, mobile wallet and payment cards support for major issuers. Visa, MasterCard, American Express and Discover, as well as merchants loyalty cards are supported. The ISIS pilot commenced in October 2012 and is accessible in the USA58. Starbucks goes into mobile step by step Not only has Starbucks developed their own mobile wallet application but it has also signed a partnership with the third-party 33
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