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

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

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

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

    • 1. Building Business Models Around E-Commerce and Augmented Reality
    • 2.
      • Snapshot: We’re an interactive marketing agency with a passion for emerging media and technologies
      • Services: Interactive Video, Social Media Marketing, Mobile Marketing, Website/Application Development
      • AR Products: Webcam Social Shopper / Fashionista, Cannonballz, ZugSTAR
      • Founded: 2001
      • Location: Los Angeles / New York
      • Web: www.zugara.com
      • Blog: www.weareorganizedchaos.com
      • Facebook: www.facebook.com/zugara
      • YouTube: www.youtube.com/zugara
      • Twitter: www.twitter.com/zugara
      PROFILE HELLO… WE’RE ZUGARA
    • 3. State of E-Commerce
    • 4.  
    • 5.  
    • 6. Online Retail Sales Continue to Rise…
    • 7. Web-Influenced Retail Sales Rise As Well…
    • 8. Peers Continue To Influence Purchase Decision
      • Eighty-three percent of online shoppers said they are interested in sharing information about their purchases with people they know
      • 74 percent are influenced by the opinions of others in their decision to buy the product in the first place.
      • (Manage Smarter, September 2009)
    • 9. But What’s Missing?
    • 10. Shopping Offline Is An Emotional and Social Experience
    • 11. Online…Not So Much
    • 12.
      • The “consumer experience” has made very little progress in the last 15 years
      Amazon 1990’s Amazon 2010
    • 13. Abandoned Carts 45% of U.S. online shoppers abandoned shopping carts multiple times over a span of three weeks. (Paypal & ComScore)
    • 14. Low Conversions Conversion rates are low, with the “gold standard” being between 2% and 3%
    • 15. High Return Rates The average return rate for online clothing retailers is about 20% but goes as high as 50% for some. (Forrester Research)
    • 16. What Are Brands Doing To Evolve The E-Commerce Experience?
    • 17. E-Commerce Innovations – Social Media
    • 18. <- Zappos Interactive Product Videos <- Sales increased from 6% to 30% when product had video associated with it E-Commerce Innovations – Interactive Video Samsung Live Video Customer / -> Product Support
    • 19. YouTube & Video Chat Generation
      • 36% of Skype-Skype calls included Video
      • Chatroulette had 960,000 unique U.S. visitors in February
      Sources: GigaOM – Skype By The Numbers. It’s Really Big Comscore – Chatroullette Takes The College Crowd By Storm
    • 20. Projected Webcam Growth
      • Markets for webcams at $1.8 billion in 2008 are anticipated to reach $3.2 billion by 2015 , growing in response to decreases in unit costs and increases.
      • (Wintergreen Research - Worldwide WebCam Market Shares, Strategies, and Forecasts, 2009-2015)
    • 21. This Changes Everything… Augmented Reality Experiences Through Standard Consumer Webcams
    • 22. E-Commerce & The Augmented “Product” Experience
    • 23. Augmented Reality Shopping – Ray-Ban
    • 24. Augmented Reality Shopping – Ray-Ban
    • 25. Augmented Reality Shopping - Tissot
    • 26. Augmented Reality Shopping - Tissot
    • 27. Augmented Reality Shopping - Fashionista
    • 28. Augmented Reality Shopping - Fashionista
    • 29. How Do We Use AR To Enhance The E-Commerce Experience For The Consumer?
    • 30. Focus On Utility
    • 31. Integrate Social Media
    • 32. No Software Downloads
    • 33. Building Business Models Around E-Commerce and Augmented Reality
    • 34.
      • Virtual Worlds
        • Second Life
      • Social Media
        • Facebook, Twitter
      • Mobile Marketing
        • Admob, iPhone Apps
      • Online Video
        • Brightcove, YouTube
      • Blog Networks / Advertising
        • Gawker, AOL
      Monetization of Prior Emerging Media & Technology
    • 35.
      • What’s the ROI?
      • Will Consumers Actually Use It?
      • What Other Brands Are Using AR?
      • What Analytics Can You Share?
      Questions and Challenges
    • 36. So Where Does That Leave AR?
    • 37.
      • CPM ads (“cost per thousand views”; banner ads online and regular ads in print, TV and radio)
      • CPC ads (“cost per click”; think Google ads)
      • CPA ads (“cost per action”; pay only if the customer performs a certain action)
      • CPT ads (“cost per transaction”; you pay only if the customer brought to you from a media sites becomes a paying customer.)
      • Lead generation (you pay for qualified names of potential customers)
      • Subscription revenues
      • Affiliate revenues (think: Amazon Associates)
      • Rental of subscriber lists
      • Sale of information (selling data about users–aggregate/statistical or individual–to third parties)
      • Licensing of brand (people pay to use a media brand as implied endorsement)
      • Licensing of content (syndication)
      • Getting the users to create something of value for free and applying any of the above to monetize it. (Like Digg or our own Reddit)
      • Upgraded service/content ( ed: aka “freemium”)
      AR Technology Has Ability To Work With Multiple Revenue Models
      • Alternate output (pdf; print/print-on-demand; customized Shared Book style; etc.)
      • Custom services/feeds
      • Live events
      • “ Souvenirs”/”Merchandise”
      • Co-branded spinoff
      • Cost Per Install (popular with top Facebook apps who can help others get installs)
      • Sponsorships (ads of some sort that are sold based on time, not on the number of impressions)
      • Listings (paying a time based amount to list something like a job or real estate on your website)
      • Paid Inclusion (a form of CPC advertising where an advertiser pays to be included in a search result)
      • Streaming Audio Advertising (like radio advertising delivered in the audio stream after a certain amount of audio content has been delivered)
      • Streaming Video Advertising (like streaming audio but in video)
      • API Fees (charging third parties to access your API)
      Source: Wired Magazine
    • 38. Most AR Companies Offer a Software Based Revenue Model
    • 39. How Do We Target Areas Like E-Commerce?
    • 40. “ Augmented Reality is a solution looking for a problem…”
    • 41. Problem : Bridge The Gap Between Offline and Online Shopping Offline Shopping Social but time consuming Online Shopping Convenient but not social
    • 42. Solution : Augmented Reality Webcam Social Shopper Demo At Booth #114
    • 43. Thank You! Matthew Szymczyk CEO, Zugara [email_address] twitter.com/kobrakai facebook.com/Mhszymczyk
    • 44. Market Data
      • In 2009, 154 million people in the U.S. bought something online, or 67% of the online population (4% more than in 2008). (Forrester Research)
        • 80% of Gen X and 71% of Gen Y internet users buy products online. (Pew Internet & American Life Project)
      • Amount people spent on clothing online: $13.6 Bil. (US Census)
        • Amount people spent on clothing in store: $7.0 Bil.
      • 83% of online shoppers said they are interested in sharing information about their purchases with people they know, while 74% are influenced by the opinions of others in their decision to buy the product in the first place. (Manage Smarter)
      • Online social network users were three times more likely to trust their peers' opinions over advertising when making purchase decisions. (Jupiter Research)
      • B2B interactive marketing spending will climb to nearly $4.8 billion in 2014. (Forrester Research)

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