The Shift of Traditional Shopping to Digital Shopping

The Shift of
Traditional
Shopping to
Digital Shopping
Case Study, Concepts, and
Debatable Ideas
Kenny Ong
Universal Music Group
Malaysia, Singapore & Indochina
http://totallyunrelatedrandomanddebatable.blogspot.com/

3
It is not about Technology
13th April 2009
•Two Domino’s employees
•YouTube
•Apology from Domino’s after
48 hours
•1 million hits
•Twitter: questions on silence
•LinkedIn: suggestions by users
in forum
BusinessWeek, May 4, 2009

6
Why the Business Model matters
Digital
Retail
Digital x
Retail
⧣

7
Winning in Digital Retail
• Variety/ Selection
• Discovery Through
Data
• Collaboration/ Social
• User Experience
• Discovery
• Laziness automation
• Pricing/ Fees
• Multiple SKUs
• AI
• Mobile/Device
optimized
• Personalization
• Search (internal)
• Product Descriptions
• Q&A
• Ratings & Reviews
• Images & Videos
• Availability
• Constant adjustments

LABELS ARTISTS
OVER 6,700 ESTABLISHED &
EMERGING ARTISTS
REPRESENTING ALL GENRES
PUBLISHING CATALOGUE
LEADING WORLDWIDE
PUBLISHING COMPANY
MUSIC ICONIC &
INFLUENTIAL LABELS &
MUSIC CO ACROSS 77
COUNTRIES
MOST LOVED ICONS
MERCHANDISE
#1 MERCHANDISING
COMPANY WORLDWIDE

9
UMG & BRANDS
A U N I V E R S A L M U S I C G R O U P & B R A N D S P R E S E N T A T I O N , 2 0 1 6
• LIVE EVENTS
• INFLUENCER
MARKETING
• CAMPAIGNS,
MARKETING &
PROMOTION
• PRODUCT
PLACEMENT
• ENDORSEMENT &
BRANDED CONTENT

RULE 1: REMEMBER THE COW
Our Ancestors understood marketing way before us

11
“Cow Don’t Drink
Water Cannot Keep
Cow Head Down”

12
1. Compliance
2. Influence
3. Attribution
obvious
not
obvious
self

13
1. credible expert (authority),
2. if we regard him or her as a trusted friend
(likeability),
3. if we feel we owe them one (reciprocity),
4. or if doing so will be consistent with our
beliefs or prior commitments (consistency).
5. we are also inclined to make choices that we
think are popular (consensus),
6. and that will net us a scarce commodity
(scarcity).
Social Influence

RULE 2: THE REAL GOAL OF
MARKETING AND BRANDING
Understanding our role in the whole scheme of things

15
What is the purpose of
Marketing & Branding?
Ultimate Objective of Marketing:
“Get more people, to buy more
things, more frequently, at higher
prices.”
Sergio Zyman
“Retention and Loyalty are useless if
No Conversion is happening.”

16
What is the Objective?
1.Comm = Relationship (something like
Dating)
2.Comm ≠ Media glitz
3.Comm ≠ ATL/BTL/BwTL/ArTL/FTL
4.Comm ≠ CSR
5.Comm ≠ Social Media
6.Comm = Get more people, to buy
more, more frequently, at higher prices

RULE 3: THE PRODUCT IS NOT
THE PRODUCT
How I spend my money is my business

18
What is the Product?
Core Buying Purpose/ Customer
Value Proposition/
Job To Be Done (JBTD)

19
“The Product is Not the Product”
• What is the customer really buying?
• What is the “Core Buying Purpose”?

21
What is the Business Model?
USP
Market
Discipline
Profit Model
•Google
•Tata Nano

22
Business Model: USP
• Unique Selling Proposition (USP)
• =
• Targeted Customer
• =
• Core Buying Purpose/ Customer Value
Proposition/ Job To Be Done (JBTD)

23
Business Model: USP
Obstacles to JBTD:
1. Insufficient WEALTH
2. Insufficient ACCESS
3. Insufficient SKILL
4. Insufficient TIME

24
Market Discipline
"They are the most innovative"
"Constantly renewing and creative"
"Always on the leading edge"
"A great deal!"
Excellent/attractive price
Minimal acquisition cost and
hassle
Lowest overall cost of
ownership
"A no-hassles firm"
Convenience and speed
Reliable product and
service
"Exactly what I need"
Customized products
Personalized communications
"They're very responsive"
Preferential service and
flexibility
Recommends what I need
"I'm very loyal to them"
Helps us to be a success
Product
Leadership
Operational
Excellence
Customer
Intimacy
• Cost
• Convenience
• TCO
• Features,
Benefits
• Limited
Range
• Solutions
• Customization
• Breadth &
Depth

25
Market Discipline
"They are the most innovative"
"Constantly renewing and creative"
"Always on the leading edge"
"A great deal!"
Excellent/attractive price
Minimal acquisition cost and
hassle
Lowest overall cost of
ownership
"A no-hassles firm"
Convenience and speed
Reliable product and
service
"Exactly what I need"
Customized products
Personalized communications
"They're very responsive"
Preferential service and
flexibility
Recommends what I need
"I'm very loyal to them"
Helps us to be a success
Product
Leadership
Operational
Excellence
Customer
Intimacy•Air Asia
•LV
•Ramly

26
Operational
Excellence
• Competitive price
• Error free, reliable
• Fast (on demand)
• Simple
• Responsive
• Consistent
information for all
• Transactional
• 'Once and Done'
Customer Intimacy
• Management by
Fact
• Easy to do
business with
• Have it your way
(customization)
• Market segments
of one
• Proactive, flexible
• Relationship and
consultative
selling
• Cross selling
Product Leadership
• New, state of the
art products or
services
• Risk takers
• Meet volatile
customer needs
• Fast concept-to-
counter
• Never satisfied -
obsolete own and
competitors'
products
• Learning
organization
Alignment & Consistency:
Disciplines, Priorities, and KPIs

27
Alignment: 4-Wheels Model
Business
Model
P
P
Customer
Growth
Strategy
P
P

28
Loyalty 1: Experience
Operational Excellence: Quality and selection in
key categories with unbeatable prices
* Treacy & Wiersema, The Discipline of Market Leaders, 1995
Quality
Product/Service Attributes
Price Time
Selection
√
√
Smart
Shopper
Relationship Image

29
Product Leadership: Unique products and services
that push the standards
√
Brand
Time
Function
√
√
Best
Product
Relationship Image

30
Customer Intimacy: Personal service tailored to
produce results for customer and build long-term
relationships
√
√ √
√
Trusted
Brand
Relationship
Service
Image
Relations

31
Each Market Discipline
Requires A Different Emphasis
Operational
Excellence
• Production,
Logistics,
Finance
• Order fulfillment,
Resource
Customer
Intimacy
• Marketing Sales,
Service
• Market
mgmt, Customer
satisfaction
Product Leadership
• R&D, Legal
(Licenses),
Engineering
• Product
development,
Concept-to-
Customer
Functional
emphasis
Process
Emphasis
.my
stewardship
• Transactions,
costs, time
• Costs, quality,
speed
• Trends (past),
Transactions
Employee
tools/tasks
• Customers,
analysis, linkages
• Satisfaction,
cust. success,
share, anecdotes
• Today, Relation-
ships, Employee
empowerment
• Linkages, insight,
comm, groupware
• Ideas-thru- funnel,
patents, etc.
• Tomorrow, Product
Portfolio, Ideas and
Risks
Information
emphasis
Key
metrics
Key
concerns

32
Growth Strategy
2.Share Gain5.New Business
“Double-Digit Growth”, Michael Treacy
1.Base Retention
3.Positioning4.Adjacent Market
GROWTH

33
Growth Strategy
1. Base Retention
5. New Business
“Double-Digit Growth”, Michael Treacy •Increase switching cost
•Customize products
•Preempt Defections
•Brand
GROWTH
2. Share Gain
•Neutralize Competitor
advantages
•Superior Value
•Buy market share
3. Positioning
•Spot growth opportunities
•Organized search
•Promising Market?
•Make or Buy?
4. Adjacent Market

34
How Markets determine
Growth Strategies (1)
m
• Growth Rate
Growth
Rate
Strategy Why?
Fast 1. Market
Positioning
2. Share Gain
3. Base
Retention
•Maintain market share in strategic
segments
•Prepare for market decline
•Competitors focus too much on
getting new customers
Flat 1. Base
Retention
2. Share Gain
(Acquisitions)
•Lose customers slower than
competitors
•Create scale economics, squeeze
costs

35
• Churn Rate
m
How Markets determine
Growth Strategies (2)
w
Churn
Rate
Strategy Why?
Low 1. Share Gain
(Acquisitions)
2. Adjacent
Markets
•Buying customer base is
cheaper than own efforts
•New products, old customers
strategy
High 1. Base
Retention
2. Share Gain
3. Adjacent
Market
•Lose customers slower than
competitors
•Customers are always open to the
best value and offer
•Desperate to gain revenue

36
How Markets determine Growth
Strategies (3)
•Example: XYZ Sector
Fast Growth, 1.Market Positioning
Low Churn 2.Share Gain
3.Base Retention
4.Adjacent Markets

RETAIL & DIGITAL
Leveraging technology to create growth

38
Digital Trends, Retail Trends
Digital Trends
• Smart Speakers
• Gamification
• Mobile
• Digital Currency
• QR, NFC
• VR, 360, AR
• AI, Bots
• Geotagging
• Multi Device
• Community, Social
Retail Trends
• D2C
• Mobile
• Omnifunction
• Omnichannel
• Personalization, Customization
• Digital commerce
• Fans & Community
• Experience
• Cross-branding

39
Possibilities
Digital Trends Retail Trends

40
Possibilities
Digital
Currency
PersonalizationE-
Wallet

41
Practical Possibilities
Feasibility

Music
MusicTV
TV
Games
Games
Politics
Politics
Books
Books
Exercising
Exercising
Sports Sports
Cinema
Cinema
Fashion
Fashion
Religion
ReligionTravelling
TravellingInternet
Internet
Tech
Tech
Antiques
Antiques
Photography
Photography
13 to 15 16 to 20 21 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65+
Theentertainmentthatconsumersare
leastandmostpassionateabout
Music is almost always the entertainment that people are most passionate aboutUK PASSIONS
A U N I V E R S A L M U S I C G R O U P & B R A N D S P R E S E N T A T I O N , 2 0 1 6Global Insight Study, Havas & UMGB, 20015

45
Gamification – basic elements

46
Gamification – best practices

50
Agenda
Business
ChannelTarget
PLAN

BACK TO BASICS
Do the right things, then do the right things efficiently

52
Philosophy
www.myCNI.com.my www.OOBEY.com
Loyalty is misleading…
• Virtual Consumption vs.
Real Consumption

53
Philosophy
Loyalty is misleading…
• Heavy Consumption ≠ Loyalty
• Loyalty ≠ Heavy Consumption

54
Digital x Retail
Retail Basics
Feasibility
Digital Tools

55
Target: Customer Types
Buy From you
Value Swing Former
Opposition

56
Loyalty 2: Swing
Loyalty = Best alternative at the current
moment until I find another alternative
Solution Strategy: Base Retention

57
Loyalty 2: Swing
Swing Customers are “loyal” because:
• Individual Relationships
• Convenience (at that point in time)
• Tied-up
• Product Uniqueness
• Promotions
• No better alternative
• Downlines
• No known alternative
• Psychologically lazy

58
Sample Strategies for ‘Swing’
• Increase switching
costs
• Mega packages
• Community
• Reward programs
(Points)
• Membership
Subscription
• Email communication
• Newsletters
• Personalized alerts
• Survey
• Suggestion Box
• Switching Techniques
(e.g. Balance
Transfer of credit
cards)

59
Downturn: Customer Types vs. Branding
Customer
Types Your Products/Services
Hand brake
Surviving
Well Off
Don’t Care
Essentials
Treats
Postponables
Expandables

60
Your Products/Services
Essentials Treats Post-
ponable
s
Expa
n-
dable
s
•Necessary
•Survival
•Well-being
•Indulgences
•Justifiable
• Needed
or
desired
• Can be
put off
•Unnecessary
•Unjustifiable

61
Hand brake
Customer
Types •Price
•Smaller Pack
Essentials
Surviving
Well Off
Don’t Care
•Private Labels
•Low-cost ‘Value’ products
•Fighter Brands
•Less Variety/Customization
•Immediate cash back

62
Hand brake
Customer
Types
•Shrink sizes
•Hold down prices
Treats
Surviving
Well Off
Don’t Care
•“You Deserve It”
•Less Variety/Customization

63
Hand brake
Customer
Types
Postponables
Surviving
Well Off
Don’t Care
•Low-cost Financing
•Exceptional Deals
•“Danger of Postponing”

64
Hand brake
Customer
Types
Expandables
Surviving
Well Off
Don’t Care
•Offer D.I.Y. versions
•Awareness

65
Hand brake
Customer
Types
•Lower Price options
Essentials
Surviving
Well Off
Don’t Care
•Bonus Packs (Stockpile)
•“Dependability”
•“Good enough”

66
Hand brake
Customer
Types
•Reward Loyalty
Treats
Surviving
Well Off
Don’t Care
•“Improve Morale”
•Affordable vs. Luxury

67
Hand brake
Customer
Types
Postponables
Surviving
Well Off
Don’t Care
•Simpler Models, Lower
Prices
•Lower TCO models
•Repair services

68
Hand brake
Customer
Types
Expandables
Surviving
Well Off
Don’t Care
•Awareness
•R&D of Core Products

69
Hand brake
Customer
Types
Essentials
Surviving
Well Off
Don’t Care
•Awareness

70
Hand brake
Customer
Types
Treats
Surviving
Well Off
Don’t Care
•“Outstanding Quality”
•“You deserve it”

71
Hand brake
Customer
Types
Postponables
Surviving
Well Off
Don’t Care
•“Save from Buying Now”
•“You are missing out”

72
Hand brake
Customer
Types
Expandables
Surviving
Well Off
Don’t Care
•Discreet purchase (avoid
flaunting)
•“Impress Your friends”

73
Hand brake
Customer
Types
Essentials
Surviving
Well Off
Don’t Care
•Awareness
•“You can’t live without it”

74
Hand brake
Customer
Types
Treats
Surviving
Well Off
Don’t Care
•A.R.O.
•“Seize the moment”

75
Hand brake
Customer
Types
Postponables
Surviving
Well Off
Don’t Care
•Monthly Payment Plans
•“Quality of Life”

76
Hand brake
Customer
Types
Expandables
Surviving
Well Off
Don’t Care
•New products
•“Must Have”
•“For exclusive people…”

86
Tactical
PROMOTIONS & INCENTIVES

87
Concrete vs Abstract Mindset
Kelly Goldsmith, Jing Xu, Ravi Dhar,
MIT Sloan Review, Fall 2010
Concrete
Abstract
Broad
and
general
Over-
arching
Purpose
Shared
Product
Attributes

88
Concrete vs Abstract Mindset
Abstract
Shared
Product
Attributes
Execution
or Usage
purpose
Lower
level
details
Concrete
Kelly Goldsmith, Jing Xu, Ravi Dhar,
MIT Sloan Review, Fall 2010

89
Mindset vs Basket Size
• Variety of Related but Different Product
Categories, Distant Future
Abstract

90
Mindset vs Basket Size
• Products Similar enough to Substitute
one another, Immediate Use
Concrete

91
Manipulating Mindset to

Basket Size
• Promotions
“Overarching Purpose”
: Oral Care
Abstract
• “Simple Purpose”:
Clean Teeth
Conditioning the Consumer

92
tConditioning the Consumerig
• Promotions: Individual
and Unique benefits
• “Overall Purpose”:
Quench Thirst
Concrete

93
What do Shoppers LIKE about Promotions?

94
What do Shoppers DISLIKE about Promotions?

95
In the eyes of the shopper
www.myCNI.com.my www.OOBEY.comSource: IGD Consumer Unit, 2009

96

97

98
Dangers of Direct Incentives
1. lessen internal motivation,
2. switch to mercenary mode,
3. do something and do not do something else,
4. easier for competitors to poach,
5. less and less impact for same value,
6. mockery of base pricing
7. rebellion from non-incentivised
products/groups,
8. end up incentivizing everyone for everything?,

102
Venue: Koh Pich - ‘Diamond Island’
Attendees - approx. 25,000 people
Earned Media (Traditional)
•12 online sites announced the show
•9 TV stations broadcasted about the show
•2 phone interviews broadcasted on radio
•9 main stream newspapers announced the show
•7 magazines covered the event
•2 international newspapers covered the show
Earned Media (Social)
•30,019 likes for Demi Lovato Fan Page
•Average reach per post - 5000
•+340,000 Facebook fans since the launch of the Artist of the Month
program
•+401,000 Facebook fans since the launch of the Partnership
•1st Facebook fanbase for a brand in Cambodia

104
Which Company?
American Customer Satisfaction Index (ACSI)
• 64 out of100-point scale: lower than IRS (Tax)
• 2nd last among 30 companies surveyed
• Lowest 5% among 223 companies surveyed
• Bottom 5% of all measured private sector
companies
• 500 million customers
2010 American Customer Satisfaction Index
(ACSI) E-Business Report

105
Which Company?
American Customer Satisfaction Index (ACSI)
• 64 out of100-point scale: lower than IRS (Tax)
• 2nd last among 30 companies surveyed
• Lowest 5% among 223 companies surveyed
• Bottom 5% of all measured private sector
companies
• 500 million customers
2010 American Customer Satisfaction Index
(ACSI) E-Business Report
Between 2011 and 2014, Facebook either held last place alone or tied with
LinkedIn for the worst user satisfaction in this already low-scoring category.
https://acsimatters.com/2015/09/08/big-user-satisfaction-turnaround-for-facebook/

106
Popularly Unpopular
Popularity
≠
Affection

Thank You.
soft copy of slides:
http://totallyunrelatedrandomanddebatable.
blogspot.com/

The Shift of Traditional Shopping to Digital Shopping

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