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- 1. CONFIDENTIAL AND PROPRIETARY This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other intended recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. From digital marketing to marketing in a digital world Marketing at real time “points of consumption”
- 2. 1 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Just when you thought is was safe to come out of the water… A new firehouse of information is adding to rising sea levels • Knowing how and why products are consumed creates opportunities • ..to enrich value propositions with product usage data • .. uncovering new business models
- 3. 2 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Key Questions #GartnerMktg What business are you in? How does product consumption blow up the sales funnel even more? How are marketers responding to revenue opportunities formed at points of consumption?
- 4. 3 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Consumption data is causing marketers to revisit their market position. Nike’s digital services got product marketers thinking about being in the advice business. What business are you (really) in? Nike-Plus Your Business?
- 5. 4 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. NAPA Auto Parts no longer “sells stuff” … rather • New digital services enrich its value proposition • NAPA Auto Parts both advisory and destination not just a storefront ..helps drivers get back on the road as quickly and safely as possible. Got advisory services ?
- 6. 5 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Spotify sees a future where music genres don’t really matter For example, California teenagers love Simon and Garfunkel. Technology has forever changed how music is consumed; illustrating that traditional segmentation techniques aren’t as relevant in a digital world. #GartnerMktg Is traditional segmentation archaic?
- 7. 6 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Usage data makes us relationship marketers … When you buy a watch, the watch maker never sees you again … • Until you need a new one, but by then it may be too late … • “Your blood sugar is low” …. • Here’s two restaurants within walking distance that serve what you need. Usage initiates dialogue …
- 8. 7 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Will products of the future exist at points of consumption ? ..because points of consumption are where needs are fulfilled? The distance between purchase and consumption is a market inefficiency resolved by technology. #GartnerMktg Collapse of time and space
- 9. 8 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Markets are forming at points of consumption … …separating the time from when we buy from when we use • leads to unfulfilled needs which economists call latent demand. • Now, marketers can collapse buying and using into the same context of time and space. Recover latent demand, on demand
- 10. 9 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. … which is shaping the ‘access economy’ What began as the sharing economy has evolved … • The sharing economy launched as a social phenomena • But what’s really at play is access-on- demand; not social relationships • Uber’s “a car when you need it” more successful than Lyft’s “a friend with a car.”
- 11. 10 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. By offering value at points of consumption By creating physical-digital mashups By recovering latent demand By offering benefits without ownership How is digitalization creating new sources of value? The Digitalization of Products Digital music and entertainment is social, informational and educational, to consume whenever and wherever you are – with whoever you are with. New markets emerge. Athletes have audio coaches. GPS gives you a guided tour of the city. Universities such as MIT, even Harvard, offer podcasts that potentially disrupt the education industry. The Collapse of Space and Time When a patient cancels a doctor appointment at the last minute, the time is typically lost forever New markets emerge. Digital awareness of one’s cancelled appointment fulfills another’s need for on demand care. The availability of previously invisible, Idle resources have already disrupted the taxi, automotive and hotel industries. Digitization Collapses Space and Time Creating New Sources of Value
Editor's Notes
- Right after we launched GML I became intrigued by how digital marketing changed this whole notion of time and space .. That through digital the space between realizing demand and fulfilling demand was collapsing leading to what we call real time marketing. Now over the past couple of years we’ve seen digital marketing start to make yet another shift. It is no longer about digital marketing … that is apply digital to traditional marketing technique s .. Rather we are marketing in a digital world as we move into what is commonly known as the connected economy.
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- NAPA Auto Parts picking up on the Nike Plus effect realizing they can be more than a provider of auto partns rather a provider to help you get back on the road as quickly and safely as possible. This migration of their market position from product provider to provider plus advisor, leverages the Nike Plus effect making NAPA a destintion for those seeking advice, even non-customers.
- The watch of today and the future goes well beyond telling time … but the point for marketers .. When the watchmaker knows how buyers use the watch it opens up dialogue. Communicating with customers has always involved listening as much as talkiong, but now we have opportunities to create dialogue which is how relatnishps are built. Listening and diaglogue is how proudcts are conceived, adapted and accepted. As all markets begin to look like niche markets the communication process becomes more and more direct and far more interactive. Moreover brand loyalty is dying. Consumers are open to trying anything new that gives them more information more advice more help.
- When buying and using are separated int ime, a large part of potential demand is unrealized. Say you hear a piece of classical music .. You wish to buy it. But the time passes and the need fades or you simply forget. This unfilled need is what we call the underserved market or what economics would call latent demand. This demand is Invisible. For example, does MacDonalds know how many people walk away when the queues are too long? Another impact … is the possibility of marketiong access rather than ownership, Since music is now digitized it is marketed as something you can listen to it without owning it. You still may have to buy it, but not as a phsyical product such as a CD. And of course, when music become liberated from CDs it become sharable .. It created communities of people sharing music tastes, conversations about music with each other, and sometimes even the musicians themselves. This sharing and social nature of music slipped into other models, for example sharing of one’s lidle assets through services like Uber or Airbnb.
- But the sharing economy's rapid evolution has shown that, as a business model, it functions more as an access economy versus one built on a true sharing relationship (which implies social exchange and social trust between two people who know each other). Zipcar customers aren't interested in socially interacting with those that have used the car before them. Consequently, the consumer's buying motives are driven by cost and convenience, versus the opportunity to develop a social relationship. Businesses that understand how the motives behind access differ from sharing will garner competitive advantage. For example, Uber's marketing stratregy "better, faster and cheaper than a taxi" has proven far more lucrative than Lyft's "we're your friend with a car."
- To summarize this convergence between buying and usage has created four market effects. Offering value , in real time, at the point of consumption The second impact of convergence and usage is the creative of new contexts. Where previously music was just for your own listening pleasure, its availability wherever and wshever you want has made it possible for musit to be shard, shown or showcased in different ways for different reaasons. Latent needs create what is often called the unserved market, or what economist call latent demand. The type of demand that was invisible but is now recoverable. A fourth impact is the possibility to gain use and benefits wityhout ownership but just through access. Since music is digitized you can listen to it wityhout owning it. You might still have to pay for it but through other models such as subscription services. You can also stream it for free but be subjected to ads as in the case of Spofify. Digitization of music gives you access without a long separation of time between buy and use. Of course, there will be those that prefer ownership but by giving people a choice of wonership and access the market expands. If access is cheaspter than ownership, the needs of those who originally could not afford to buy CDs and the rest of the unserved market is addressed.