Digital Trends
Q1 2014

Hilding Anderson
@hildinganderson
About your Speaker: Hilding Anderson
Director of SapientNitro’s Research Institute
15 years of experience
Editor of Insigh...
Focus of this session
Every six months, SapientNitro’s Research +
Insights team updates the company on the latest
emerging...
Preamble
1.
2.

Brands as Producers (in real-time & native)

3.

Nine Digital Trends

Shopping In Increments
Mobile Paymen...
We’ve entered our third internet decade – how are
we doing?

5
Source: BI Intelligence‐provided framework
Nearly 3 billion people online
Global Internet Population
3,000

2,500

(millions)

2,000

1,500

1,000

500

0

Source: I...
About half left to go…
Global Internet Population
8,000
7,000
6,000

(millions)

5,000
4,000
3,000

Global Population

2,0...
2014 will be the year that the internet goes mostly mobile
Smartphone + tablets > 60% of all connected devices today
Globa...
Mobile is the only media whose share is increasing
U.S. Consumer Media Consumption Share
50%
45%

45%

44%

43%

40%

42%
...
The continued roll-out of 4G and the increased authentication and
security in devices and operating systems will make mobi...
Mobile + blended traffic is > 50% for Amazon and eBay
Leading Retailers' Digital Audience Population
By Device
160
140

(M...
Our experiences in the physical and digital spaces have irreversibly
collapsed into one*

12
Trend 1: Shopping In Increments

13
Trend 1: We are seeing the development of new consumer behavior –
what we call Shopping In Increments
More than just snack...
This behavior is widespread
Shifting between devices (smartphone, tablet & laptop) 21 times per hour; Google: 90% of consu...
Tablet and smartphone activity – where most of the media consumption time
growth is located – has the shortest time per in...
Visualizing ‘shopping in increments:’ tracking a shopper
through her day

17
Shopping in increments applies throughout the customer
journey

18
Five Imperatives For CMOs to respond
1.

Insight: CMOs need to understand consumer
behavior much more intimately than they...
Trend 2: Brands as Producers

20
Brands are searching for effective online (web + mobile + tablet) advertising
Even as the definition of ‘Native Advertisin...
Defining a Native Ad: An ad which is native to the
platform on which it is run
The definition of a “native” ad is 
nonstan...
Who is using Native Advertising today?

23
Blogs are the most effective channel for native advertising, according
to publishers
Articles and videos are effective for...
Example: Toyota’s 20
Coolest Hybrids on
BuzzFeed

25
Time, Inc: People.com saw significant lift
A 10x lift in engagement vs. display ads

26
27
28
Case Studies: Edmunds

29
Native was much more effective than banner advertising for Edmunds
4x higher CTR on mobile vs. banner ads

30
Example: Edmunds

31
Some other examples: NYT and Facebook are live with these today

32
Brands are increasingly creating and adapting their
messaging in real time...

33
But the traditional brand marketing team organization structure –
and more importantly much of the management focus - is n...
Yum! Brands has built a ‘newsroom’ to make real-time
content creation possible

35
Conveniently, the idea of real-time brand content
dovetails nicely with our Storyscaping approach

36
Trend 3: Mobile Payments

37
Mobile Payments & Apple’s Trojan Horse
Latest from Apple: iBeacon and Touch ID, combined with Passbook; they have establis...
More about the iBeacon technology
‘Steering you around the store’ without a salesperson; reinforces SapientNitro research ...
MLB will be using iBeacon + Passbook in stadiums across the U.S. in 2014
Building on 2013 season Passbook execution; used ...
Implication: Mobile will become even more integrated into our daily lives
The ability to make payments instantly from anyw...
Trend 4: The Impermanent Internet

42
“In Silicon Valley, data is inviolable; it is close to a 
religious belief that you can never have too much data, 
and del...
Snapchat: A Leading Indicator
WSJ: “Snapchat was the most important technology of 2013.” Before Snapchat, the Eraseable
In...
The Impermanent Internet
Multiple companies are exploring the ‘Disappearing Internet:’ A new Twitter
service #15m
Confide:...
What this means for clients
• Consider the lifespan of the data we collect and interpret
for clients
• Be thoughtful about...
Trend 5: A product line of one

47
From mass customization to a product of one
Shifting from economies of scale to scaling one-off systems. It starts with ba...
49
Much of this ‘Mass Customization’ trend is driven by millennials
4 in 10 millennials are interested in co-creating product...
This trends is playing out across personalized digital tools…
And the collection and ‘sense-making’ of the latest digital ...
…. in the growth of 3D Printers
Two years away from the start of the rapid-growth phase. 5 to 10 years to widespread consu...
And in numerous one-off tools
CONSUMER AS CREATOR: Pop-up store offers instant t-shirt customization
Opened in London duri...
CONSUMER AS CREATOR: Motorola’s Moto X is a contender for the
most intuitive & personalized handheld

Moto X’s “always lis...
Customize my life: Highly customized NikeID shoes
Nine areas of customization: from outsole to upper to selection of every...
Sephora’s Color IQ service scans a customer’s skin and pinpoints her
foundation match
Color IQ is a beauty service that sc...
Ray-Ban Remix enables customers to create personalized sunglasses
Launched online across four EU
countries in July 2013, R...
Trend 6: Rise of Experience-Led Brands

58
We conducted a study of ‘Real-World’ Customer Experience

Highlights included at iEX
London in 2013

59
It is common wisdom that
“experience” matters.
In fact…

95%
80%

of firms say they are
“customer focused”

say they deliver a
“superior experience”

“Closing the Delive...
But only…

of customers agree they deliver
a “superior experience”

“Closing the Delivery Gap” study of 362 firms by Bain ...
We started the research with a simple question

What makes a great customer experience great?
Goals of the research
In this study, we had three major research goals.
1. Identify leading examples of great customer exp...
We assessed 28 companies that are recognized as
customer experience leaders, and audited the experience…
• We started with...
…Using five proprietary Experience Dimensions
The top experience-led brands

Contact Hilding Anderson 
for full report

67
Our research suggests six imperatives for marketers
1.

The consumer is never entirely passive.

2.

Let the players tell ...
Imperative #1
1.

The Consumer is never entirely passive. Brands must engage consumers
by building worlds in which immersi...
Imperative #2
2. Let the players tell the story. The brand is the tool and world builder. But the
players have significant...
Imperative #3
3. We must redefine what it means to be the author. Authorship is no longer
about a one-way telling of story...
Imperative #4
4. Provide Immersive Experiences for All Skill Levels: The design of
the experience provided by the brand sh...
Imperative #5
5. Plan for a Lifetime: Expect a multiyear investment. These are longliving customer platforms, delivering l...
Imperative #6
6. To Build Powerful Experiences, Shape Stories around an
Organizing Idea: Our research found that experienc...
Summary: Six Imperatives

75
Trend 7: Innovations in Social Media

76
While Facebook and Twitter remain dominant…
1.1B monthly active users on FB, 200M MAU on Twitter
Monthly Active Users: Fac...
The last six months has shown a significant growth in new things
Total User Base
400,000,000
350,000,000

Total User Base ...
WhatsApp: A social sharing app grows carries more
messaging traffic than Facebook
20B messages per day, no advertising per...
2013 has been a remarkable year for WhatsApp
WhatsApp Growth
300

20

Active Users

20

300
250

17

200

200

15
12
10

1...
Video and photo sharing tools are expanding

81
And Snapchat has nearly half the photo sharing market
Top Photo Sharing Sites, August 2013
Share Of Average Daily Photo Up...
Vine
• Two-thirds of the world’s mobile data traffic
will be video by 2017.
• Five tweets per second contain a Vine link.
...
Instagram had 4x 
Vine’s traffic during 
December 2013

84
And Vine remains niche – below newcomer WhatsApp

85
Broadly, several other innovations in Social Media
The video opportunity: New video ad products
and partnerships with TV n...
Trend 8: Hardware is the new software

aka ‘Put Some Internet On It’

"The category of the smart watch, that's just a trai...
Trend 8: Hardware is the new software
Building on the 2013 CES, this year we expect a continued proliferation of screen
si...
And developers are ‘adding sexy’ and design to hardware

Pebble 2013

Pebble 2014: The Pebble Steel
89
VC firms are restructuring to provide more design skills
to startups
The program, dubbed KPCB ProductWorks, will 
offer th...
And searching for a killer app…
The $99 ‘June’ bracelet from Netatmo measures UV intensity; targeting women taking care of...
And searching…

92
And searching…

93
And it isn’t just screen size: resolution, colors and formfactors are proliferating
From Apple Retina display, to 4d Ultra...
Rise of the Android PC
PCs are now offered with hybrid Android and Windows 8 – or just Android

95
We’re still figuring out the right UI for wearables

96
Trend 9: Startups from 2013
(that marketers should care about)

97
SmartThings: The Connected Home
See the upcoming article “The Digital Home”

98
Scanadu: Check your health as easily as your email
A startup creating sensor that collects and sends your information to a...
Oculus VR

100
Leap Motion: Gesture control goes main stream
Leap Motion, the device that lets you control a
computer interface with hand...
Circa: Taking content and breaking it down into
snackable chunks
Long news articles and small screens just don't play well...
FLIR will offer a heat-sensitive sensor to your iPhone

103
Thank You!

104
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SapientNitro Q1 2014 Digital Trends

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Published on

Every six months, SapientNitro's Research & Insights team identifies a set of digital trends shaping the marketing landscape.

This is the public version of these trends, which are shared with clients and our 11,000 employees.

From native advertising to shopping-in-increments, this presentation reveals key consumer behavior trends shaping the marketing landscape for Fortune 500 companies.

Similar to Mary Meeker, we attempt to highlight the current state, and point towards a vision of the future.

If you'd like to talk more about these and other insights, feel free to reach out to Hilding Anderson on twitter or LinkedIn.

Thank you.

Published in: Business, Technology

SapientNitro Q1 2014 Digital Trends

  1. 1. Digital Trends Q1 2014 Hilding Anderson @hildinganderson
  2. 2. About your Speaker: Hilding Anderson Director of SapientNitro’s Research Institute 15 years of experience Editor of Insights Published in Forbes, speaker at SXSWi Entrepreneur 2
  3. 3. Focus of this session Every six months, SapientNitro’s Research + Insights team updates the company on the latest emerging trends and statistics related to digital. This session will focus on the latest mobile, social and digital trends which we think are particularly relevant. 3
  4. 4. Preamble 1. 2. Brands as Producers (in real-time & native) 3. Nine Digital Trends Shopping In Increments Mobile Payments 4. The Impermanent Internet 5. A Product Line of One 6. Rise of Experience-Led Brands 7. Social Media Evolving: WhatsApp and Vine 8. Hardware is the new software 9. Six Interesting Startups 4
  5. 5. We’ve entered our third internet decade – how are we doing? 5 Source: BI Intelligence‐provided framework
  6. 6. Nearly 3 billion people online Global Internet Population 3,000 2,500 (millions) 2,000 1,500 1,000 500 0 Source: International Communication Union, Google 6
  7. 7. About half left to go… Global Internet Population 8,000 7,000 6,000 (millions) 5,000 4,000 3,000 Global Population 2,000 1,000 Internet Population 0 Source: International Communication Union, Google 7
  8. 8. 2014 will be the year that the internet goes mostly mobile Smartphone + tablets > 60% of all connected devices today Global Internet Device Installed Base 4,000,000 Number Of Devices In Use (In Thousands) 3,500,000 Wearables 3,000,000 Smart TVs Tablets 2,500,000 60% (~2 billion) 2,000,000 Smartphones 1,500,000 1,000,000 Personal Computers  (Desktop And  Notebook) 500,000 0 2004 2005 Source: BI Intelligence 2006 2007 2008 2009 2010 2011 2012 2013E 8
  9. 9. Mobile is the only media whose share is increasing U.S. Consumer Media Consumption Share 50% 45% 45% 44% 43% 40% 42% 38% 35% 30% 25% 25% 26% 26% 26% 20% 20% 20% 17% 16% 15% 15% 14% 12% 12% 9% 9% 10% 6% 8% 7% 6% 4% 5% 7% 4% 8% 7% 5% 5% 0% TV Source: eMarketer, August 2013 Online Radio 2009 2010 Mobile 2011 2012 Print Other 2013 9
  10. 10. The continued roll-out of 4G and the increased authentication and security in devices and operating systems will make mobility ever-more integrated into our lives People live complex lives on the their smartphone – and the device’s span of control is growing… (see Trend #3) Breakdown Of The Average Smartphone Owner's Daily Time‐Spend On Average, U.S. Smartphone Owners Spend 58 Minutes Daily On Their  Phones  Email 9% Other 8% Visit Websites 14% Text 20% Games 8% Talk 26% Source: Experian Marketing Services, May 2013 Social Networking 15% 10
  11. 11. Mobile + blended traffic is > 50% for Amazon and eBay Leading Retailers' Digital Audience Population By Device 160 140 (Millions) 120 100 80 60 40 20 0 Amazon eBay Wal‐Mart Apple Desktop Only Target Best Buy Desktop + Mobile The Home Depot Ticketmaster Etsy Lowes Mobile Only Source: comScore 11
  12. 12. Our experiences in the physical and digital spaces have irreversibly collapsed into one* 12
  13. 13. Trend 1: Shopping In Increments 13
  14. 14. Trend 1: We are seeing the development of new consumer behavior – what we call Shopping In Increments More than just snackable content, consumers are shopping across devices 14
  15. 15. This behavior is widespread Shifting between devices (smartphone, tablet & laptop) 21 times per hour; Google: 90% of consumer shift effortlessly between devices, +500% using multiple devices than 3 years ago Three Examples supporting snackable shopping: 1. OMD found that the average person shifted his attention between his smartphone, tablet, and laptop a staggering 21 times in one hour. 2. Google ad sales chief Neal Mohan, claimed that more than 90% of today's consumers switch effortlessly between devices to complete a task, with 500% more people simultaneously using multiple devices than were three years prior. 3. When consumers shop online, the average time between adding a product to their cart and checking out has grown 38 percent over the last five years, from 2 hours to 2.6 hours. 15
  16. 16. Tablet and smartphone activity – where most of the media consumption time growth is located – has the shortest time per interaction of any channel More evidence of shopping in increments behavior; people spend 1/3 of time per interaction on smartphone vs. TV Average Minutes Spent Per Interaction By Device 50 43 39 40 30 Minutes 30 20 17 10 0 TV PC/Laptop Tablet Smartphone Source: Google, August 2012 16
  17. 17. Visualizing ‘shopping in increments:’ tracking a shopper through her day 17
  18. 18. Shopping in increments applies throughout the customer journey 18
  19. 19. Five Imperatives For CMOs to respond 1. Insight: CMOs need to understand consumer behavior much more intimately than they do today. New data is available to us in the form of the “digital exhaust” must be leveraged. 4. Technology: You need the right technology platform that can deliver the right bite-sized content and experiences at the right time, in the right format. 2. Storyscaping: A CMO needs to build a Storyscape of communications and experiences around a central organising idea. The Storyscape delivers bite-sized interactions and responds in real time to the snacking consumer. 5. 3. Digitising the Shopping Environment: We can no longer distinguish between online and offline behavior. People are comparing prices, checking reviews and even ordering while in-store. They are just as likely to do research, try demos and ask friends for advice at home as they are to go to the store. People: A different approach to marketing requires new skill sets – publishing, technology, curation, social, data, experimentation, and invention. Leading companies are rethinking marketing global structures and skill sets to allow them to succeed in this changing world. 19
  20. 20. Trend 2: Brands as Producers 20
  21. 21. Brands are searching for effective online (web + mobile + tablet) advertising Even as the definition of ‘Native Advertising’ remains in flux, this approach is winning favor in the digital arena; replacing the display ad? Native spending anticipated to rise 20.5% this year in the US • Premium publishers increasingly selling customized, “native” digital executions • Responding to automated, programmatic display-ad buying • Newspapers and magazines will see digital ad revenue growth increase 5.6% and 13.3%, respectively, in 2013 • Digital-only publications lead the growth: Vice Media, Buzzfeed, Mashable and others who are willing to experiment with the customized, so-called “native” executions heavily integrated with editorial. 21
  22. 22. Defining a Native Ad: An ad which is native to the platform on which it is run The definition of a “native” ad is  nonstandard, and eMarketer considers  placements such as Facebook’s Sponsored  Stories or Twitter’s Promoted Tweets,  which some have characterized as native,  as display advertising but not as  sponsorships.) Why ‘Native:’ Native ads are ads in a  format that is native to the platform  on which they are run, bought or  sold. Native advertising is the activity  of producing, buying and selling  native ads."[ 22
  23. 23. Who is using Native Advertising today? 23
  24. 24. Blogs are the most effective channel for native advertising, according to publishers Articles and videos are effective for over half of respondents as well 24
  25. 25. Example: Toyota’s 20 Coolest Hybrids on BuzzFeed 25
  26. 26. Time, Inc: People.com saw significant lift A 10x lift in engagement vs. display ads 26
  27. 27. 27
  28. 28. 28
  29. 29. Case Studies: Edmunds 29
  30. 30. Native was much more effective than banner advertising for Edmunds 4x higher CTR on mobile vs. banner ads 30
  31. 31. Example: Edmunds 31
  32. 32. Some other examples: NYT and Facebook are live with these today 32
  33. 33. Brands are increasingly creating and adapting their messaging in real time... 33
  34. 34. But the traditional brand marketing team organization structure – and more importantly much of the management focus - is not aligned with the customer behavior 34
  35. 35. Yum! Brands has built a ‘newsroom’ to make real-time content creation possible 35
  36. 36. Conveniently, the idea of real-time brand content dovetails nicely with our Storyscaping approach 36
  37. 37. Trend 3: Mobile Payments 37
  38. 38. Mobile Payments & Apple’s Trojan Horse Latest from Apple: iBeacon and Touch ID, combined with Passbook; they have established the core parts of a mobile payments landscape. No NFC. Potential to be larger than Amex + Paypal in transaction volume Biometric Authentication In-Store Wireless Platform Apple ID linked to Payments Recent activity around NFC and iWallet patents, coupled with the  acquisitions of AuthenTec and WiFiSLAM, suggests that Apple may  be close to outlining a more concrete strategy around local (or proximity‐ based) payments. ‐ AuthenTec’s fingerprint sensor technology  ‐ WiFiSLAM acquisition enables Apple to leverage technology that uses  WiFi signals to calculate precise locations of phones indoors (i.e.  38 where GPS often fails). 
  39. 39. More about the iBeacon technology ‘Steering you around the store’ without a salesperson; reinforces SapientNitro research (see Insights 2014) on retail mobile wayfinding At the NYC store, Apple has installed about 20 iBeacon transmitters, some of which are simply iPhones and iPads, which  come with the capability as part of the iOS 7 mobile software  released in September. The transmitters use Bluetooth wireless  technology to sense your exact location. That's not possible with  GPS, which don't work well indoors and aren't good at  distinguishing between locations that are just a few feet apart.  The beacons can be adjusted to specific distances, so you may get  some notifications regardless of where you are inside. Others will  come only when you are standing at a particular aisle, wall or  product demo table. The store can also send out notifications  about deals or upcoming events.  39
  40. 40. MLB will be using iBeacon + Passbook in stadiums across the U.S. in 2014 Building on 2013 season Passbook execution; used by 12% of all e-ticket buyers in 2013. At bat, the in-stadium mobile app, offered as a $20 in-app upgrade • As the user approaches the ballpark's gates, ticketing information would be pulled up by the app and instantly displayed. In addition, once a user was within the stadium the app would display directions to their seats. • Teams can also adjust the app to react to stadium-specific landmarks and points of interest. For instance, if a user were to use the app near the New York Mets' Citi Field's iconic apple statue the app would play a video detailing the history of the stadium or the apple. • User experiences won't be the same for each visit, notes Mashable. The app will include a loyalty card-like program where teams can choose to reward multiple visits with coupons for merchandise, food or beverages. It can also direct users to parts of the stadium they haven't yet activated, • At Bat, the $20 in-app upgrade, brings added features like live game coverage and tie-ins with MLB.TV subscriptions, is largely dominated by IOS users in 2013. 40
  41. 41. Implication: Mobile will become even more integrated into our daily lives The ability to make payments instantly from anywhere will drive further changes in consumer behavior and how retailers, financial services and travel & hospitality sell • Biometrics could be a major driver of remote mobile payments growth • A challenge to NFC. NFC is facing a major challenge at this point, even as the installed base reaches a significant level. • The technology at least – but neither the consumers nor retailers - is ready for in-store payments PayPal Beacon uses BLE, but isn’t in Apple’s iBeacon ecosystem. Instead, it links existing POS devices to enable customers to use Paypal on their mobile to make payments 41
  42. 42. Trend 4: The Impermanent Internet 42
  43. 43. “In Silicon Valley, data is inviolable; it is close to a  religious belief that you can never have too much data,  and deleting is often an afterthought.” – WSJ 2013 43
  44. 44. Snapchat: A Leading Indicator WSJ: “Snapchat was the most important technology of 2013.” Before Snapchat, the Eraseable Internet wasn’t broadly considered, everything was a ‘Forever Internet’. Three reasons: • A new way to think about data: Snapchat is one of the first mainstream services to show us that our photos and texts don't need to stick around forever: that erasing all the digital effluvia generated by our phones and computers can be just as popular a concept as saving it. • Erasability as a competitive feature —the Internet would look very different from the Internet of today. It would be a more private network, one without the constant worry of every ill-considered picture or thought being held up for ridicule by the whole world, forever. • Our vision: A Balanced Future: Forever Internet and an Erasable Internet living side by side? 44
  45. 45. The Impermanent Internet Multiple companies are exploring the ‘Disappearing Internet:’ A new Twitter service #15m Confide: An off‐the‐recorder  messenger for professionals: HR  issues to media requests to "deal  making." Blink‐link: a link which disappears after a  certain number of clicks Twitter’s Spirit makes  messages disappear after  a certain period of time Whisper (a sort of anonymous Instagram) Tor: a secure web traffic anonymizer 45
  46. 46. What this means for clients • Consider the lifespan of the data we collect and interpret for clients • Be thoughtful about what data is collected and how long we need it • Be open and transparent with users about how that data is being used and stored 46
  47. 47. Trend 5: A product line of one 47
  48. 48. From mass customization to a product of one Shifting from economies of scale to scaling one-off systems. It starts with basic customization… 48
  49. 49. 49
  50. 50. Much of this ‘Mass Customization’ trend is driven by millennials 4 in 10 millennials are interested in co-creating products with brands • 4 in 10 Millennials from around the world want brands to allow them to influence their products (co-creation). • 8 in 10 Millennials want to be ‘entertained by brands’ such as:  By creating online content such as videos, photos, games, and blogs (31%)  Millennials are alpha-influencers: Seven in 10 believe it is their responsibility to share feedback with brands when they have a good or bad experience.  74% of Millennials think they influence the purchase decisions of peers and those in other generations 50
  51. 51. This trends is playing out across personalized digital tools… And the collection and ‘sense-making’ of the latest digital sensors and life tools Withings Pulse Monitor $99 Fitbit Force iOS blood pressure monitor. $129 51
  52. 52. …. in the growth of 3D Printers Two years away from the start of the rapid-growth phase. 5 to 10 years to widespread consumer usage. 1.2M Printers anticipated to be sold in 2017; compare with 40M TVs sold in the U.S. in 2013 Global Unit Shipments of 3D Printers < $50k • Still a nascent market, with hype outpacing the technical realities, • Combined or even driving the Maker Movement • Today, consumers are using 3DP to make truly personalized and unique toys and gifts, jewelry and avatars, school projects and hobby items. CAGR = 95.4% • Today, no compelling item that a consumer can acquire only by producing it on a 3DP at home Gartner September 2013 52
  53. 53. And in numerous one-off tools CONSUMER AS CREATOR: Pop-up store offers instant t-shirt customization Opened in London during July 2013, YrStore is a pop-up store where customers can print their own t-shirts. Via a touchscreen system, shoppers can design apparel with either stock images or their own artwork, and add photographic filters and text. Finalized designs can be printed immediately in-store, priced from GBP 20. 53
  54. 54. CONSUMER AS CREATOR: Motorola’s Moto X is a contender for the most intuitive & personalized handheld Moto X’s “always listening” mode means that it's on constant alert for its owner’s voice commands. Motorola Assist knows when its owner has gone into a meeting or started driving a car, and automatically changes its behavior for the situation: It quiets itself or reads messages aloud so that eyes stay on the road. It can even sync incoming text messages and voice caller ID to Google’s Chrome browser on a computer. The personalization doesn’t end with the phone’s software. Consumers can design the aesthetics, too. Moto X is available in 252 possible color combinations, including teal, plum, four shades of white and even several varieties of real hardwood. 54
  55. 55. Customize my life: Highly customized NikeID shoes Nine areas of customization: from outsole to upper to selection of every fabric section color 55
  56. 56. Sephora’s Color IQ service scans a customer’s skin and pinpoints her foundation match Color IQ is a beauty service that scans the surface of the customer’s skin, assigns it a Color IQ numer, and finds the scientifically precise foundation math from over 1,500 options. The Pantone Color Institute researched and mapped out 110 skintones to build the Color IQ Library created exclusively for Sephora. Customers can visit their local Sephora to receive a free Color IQ consultation. 56
  57. 57. Ray-Ban Remix enables customers to create personalized sunglasses Launched online across four EU countries in July 2013, Ray-Ban Remix enables customers to create their own customized pair of sunglasses. The Italian eyewear brand's project allows shoppers to personalize four different models of sunglasses (including Aviator and Wayfarer styles), by choosing colors, lenses, materials and adding up to five characters. Once customers have created their sunglasses on the Ray-Ban Remix website, their model is shipped in around three to five days. 57
  58. 58. Trend 6: Rise of Experience-Led Brands 58
  59. 59. We conducted a study of ‘Real-World’ Customer Experience Highlights included at iEX London in 2013 59
  60. 60. It is common wisdom that “experience” matters.
  61. 61. In fact… 95% 80% of firms say they are “customer focused” say they deliver a “superior experience” “Closing the Delivery Gap” study of 362 firms by Bain & Co
  62. 62. But only… of customers agree they deliver a “superior experience” “Closing the Delivery Gap” study of 362 firms by Bain & Co
  63. 63. We started the research with a simple question What makes a great customer experience great?
  64. 64. Goals of the research In this study, we had three major research goals. 1. Identify leading examples of great customer experiences in the digital age. 2. Research the constituent elements of those experiences: What are the essential elements, what work do they do for customers? 3. Research the “back story”: What are the organizational, leadership, technology, and business components which make the experience possible?
  65. 65. We assessed 28 companies that are recognized as customer experience leaders, and audited the experience… • We started with the list of companies featured in Forrester Research’s Customer Experience Online Survey (from the fourth quarter of 2012). We selected only those brands that received the top customer experience score in their industry. • We then added 10 fast-growing startups from Fast Company’s 2013 Most Innovative Companies. • Finally, we conducted more than 30 expert reviews to determine which companies to evaluate and explore their back story. We then conducted visits across various digital and many physical touchpoints for the brands assessed, including Red Bull’s Meadowland Field, Walt Disney World, NASCAR’s Richmond International Raceway, and Marshalls Chicago store. We audited their various online, tablet, mobile, and physical properties and scored them in each of five experience dimensions.
  66. 66. …Using five proprietary Experience Dimensions
  67. 67. The top experience-led brands Contact Hilding Anderson  for full report 67
  68. 68. Our research suggests six imperatives for marketers 1. The consumer is never entirely passive. 2. Let the players tell the story. 3. We must redefine what it means to be the author. 4. Provide immersive experiences for all skill levels. 5. Plan for a lifetime. 6. To build powerful experiences, shape stories around an organizing idea. 68
  69. 69. Imperative #1 1. The Consumer is never entirely passive. Brands must engage consumers by building worlds in which immersive experiences enable them to explore and interact with the brand. Doing so creates a wildly different outcome as compared to focusing on passive ads, which consumers tend to skip. Examples include: 69
  70. 70. Imperative #2 2. Let the players tell the story. The brand is the tool and world builder. But the players have significant power in determining how the story unfolds and often co-create with the brand. Examples include: * * Disney is a mixed case – they significantly limit storytelling 70
  71. 71. Imperative #3 3. We must redefine what it means to be the author. Authorship is no longer about a one-way telling of story; rather, the brand’s role is evolving to providing the components for a story that is authored by customers. Components can be mobile apps, digital platforms, sensors that collect consumer data, social media and more. Examples include: 71
  72. 72. Imperative #4 4. Provide Immersive Experiences for All Skill Levels: The design of the experience provided by the brand should be easy enough for a beginner but also challenging enough for an expert. This balance can be achieved by building a flexible “on-ramp” to the experience, whether it is a personal financial management platform (e.g., USAA) or a digitally enhanced family ski experience (e.g., Vail Resorts). Examples include: 72
  73. 73. Imperative #5 5. Plan for a Lifetime: Expect a multiyear investment. These are longliving customer platforms, delivering long-term value. They’re not campaigns. Examples include: 73
  74. 74. Imperative #6 6. To Build Powerful Experiences, Shape Stories around an Organizing Idea: Our research found that experience-led brands use themes to design, develop and maintain their experience space. Unifying and resonant themes make experiences much stronger. Examples Include: 74
  75. 75. Summary: Six Imperatives 75
  76. 76. Trend 7: Innovations in Social Media 76
  77. 77. While Facebook and Twitter remain dominant… 1.1B monthly active users on FB, 200M MAU on Twitter Monthly Active Users: Facebook vs. Twitter 1,400 1,200 Facebook (Millions) 1,000 800 600 400 Twitter 200 0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q09 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Source: Company Filings 77
  78. 78. The last six months has shown a significant growth in new things Total User Base 400,000,000 350,000,000 Total User Base Size 300,000,000 250,000,000 200,000,000 WhatsApp 150,000,000 100,000,000 Instagram 50,000,000 Snapchat 0 Source: News Reports, Company Listings, ComScore, BII Estimates 78
  79. 79. WhatsApp: A social sharing app grows carries more messaging traffic than Facebook 20B messages per day, no advertising permitted • 44% use WhatsApp at least once a week,  whereas just 35 per cent use Facebook  messenger. (1) • The research by On Device also found that  Snapchat’s largest source of users are 16 to 24‐ year‐olds in the US; the same group which  research has suggested is leaving Facebook. • In April, WhatsApp’s chief executive Jan Koum claimed that the service now has more users  than Twitter and carries more messages than  Facebook.  • He said WhatsApp carries as many as 20 billion  messages per day, double Facebook’s daily  message traffic.  • No advertising (0.99 annual fee)  79
  80. 80. 2013 has been a remarkable year for WhatsApp WhatsApp Growth 300 20 Active Users 20 300 250 17 200 200 15 12 10 11 10 8 150 100 5 50 Number Of Active Users (Millions) Number Of Daily Messages (Billions) 25 0 0 Apr‐13 Jun‐13 Messages Sent Source: WhatsApp, News Reports Aug‐13 Messages Received 80
  81. 81. Video and photo sharing tools are expanding 81
  82. 82. And Snapchat has nearly half the photo sharing market Top Photo Sharing Sites, August 2013 Share Of Average Daily Photo Uploads Among Top 4 Sites (544 Million Daily Uploads  Total) Instagram 7% Flickr 1% Facebook 46% Snapchat 46% Source: BI Intelligence 82
  83. 83. Vine • Two-thirds of the world’s mobile data traffic will be video by 2017. • Five tweets per second contain a Vine link. • Instagram has about 130 million users, compared to Vine’s 13 million users. • Instagram videos are creating two-times more engagement than Instagram photos. 83
  84. 84. Instagram had 4x  Vine’s traffic during  December 2013 84
  85. 85. And Vine remains niche – below newcomer WhatsApp 85
  86. 86. Broadly, several other innovations in Social Media The video opportunity: New video ad products and partnerships with TV networks will provide branding opportunities and may help social media platforms gain access to coveted TV ad budgets. Social = mobile: Facebook has become a powerhouse in mobile, while Twitter gets twothirds of its ad revenues from the medium. For many marketers, the easiest way into mobile advertising will be via social media. Native expansion: With the success of feedbased ads in 2013, social companies will increase the number of ads users see—and the chances of backlash will rise. programmatically as technology improves to support real-time content initiatives. Moving beyond the walled garden: Via MoPub, Twitter will start selling ads outside of its own service. Facebook has also restarted its own tests of a mobile ad network. Location makes a comeback: After a few years on the back burner, geotargeted social media advertising will come back into the spotlight. New venues, new ad opportunities: Instagram and Pinterest are starting to sell ads, providing fresh opportunities to reach consumers. Social ads get more programmatic: More social media ads will be bought 86
  87. 87. Trend 8: Hardware is the new software aka ‘Put Some Internet On It’ "The category of the smart watch, that's just a train wreck right  now. People are trying to basically pack all of the stuff in the  phone on a watch. We're talking about keyboards that are one‐ inch wide…No one's going to adopt that," said Zachary Jean  Paradis, director of innovation strategy at SapientNitro. 87
  88. 88. Trend 8: Hardware is the new software Building on the 2013 CES, this year we expect a continued proliferation of screen sizes and display 88
  89. 89. And developers are ‘adding sexy’ and design to hardware Pebble 2013 Pebble 2014: The Pebble Steel 89
  90. 90. VC firms are restructuring to provide more design skills to startups The program, dubbed KPCB ProductWorks, will  offer the usual mentoring, recruiting and  technical help that the firm’s startups have  come to expect, but the new program sets up a  formal process for working on product  development.  Key Hire:  • John Maeda (RISD) who is leaving his post as  the president of the Rhode Island School of  Design to start work with the venture capital  firm in January. • “while design isn’t a new idea in technology  development, it’s often not given the same  weight as, say, engineering, because not  enough consideration is given to creating a  great experience for those who will actually  buy and use the product.” 90
  91. 91. And searching for a killer app… The $99 ‘June’ bracelet from Netatmo measures UV intensity; targeting women taking care of their skin 91
  92. 92. And searching… 92
  93. 93. And searching… 93
  94. 94. And it isn’t just screen size: resolution, colors and formfactors are proliferating From Apple Retina display, to 4d UltraHD, to curved displays 94
  95. 95. Rise of the Android PC PCs are now offered with hybrid Android and Windows 8 – or just Android 95
  96. 96. We’re still figuring out the right UI for wearables 96
  97. 97. Trend 9: Startups from 2013 (that marketers should care about) 97
  98. 98. SmartThings: The Connected Home See the upcoming article “The Digital Home” 98
  99. 99. Scanadu: Check your health as easily as your email A startup creating sensor that collects and sends your information to a doctor: 3 clinics - the ER (hooked up)/electromagnetic, Labs, Imaging (CT/MRI/Ultrasound) 99
  100. 100. Oculus VR 100
  101. 101. Leap Motion: Gesture control goes main stream Leap Motion, the device that lets you control a computer interface with hand gestures, is ideal for gaming and design and also lets you explore cities or the environment via Google Earth and other apps. The gadget is three inches long and plugs into your computer through its USB port. The Leap Motion Controller tracks your hands and fingers, and is hypersensitive to movements including pinching, grasping and swiping. This year, the company partnered with HP and plans on embedding the motion-control technology on future HP devices. Leap Motion retails for $79.99, so it’s an inexpensive way to begin experimenting with gesture-controlled technologies. 101
  102. 102. Circa: Taking content and breaking it down into snackable chunks Long news articles and small screens just don't play well together. Circa solves that problem by condensing the news and making it much easier to read while on-the-go. Tediously reading long articles just to stay up to date is a thing of the past with Circa’s factual and comprehensive, but to-the-point news coverage. 102
  103. 103. FLIR will offer a heat-sensitive sensor to your iPhone 103
  104. 104. Thank You! 104

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