Presentatie Jorij Abraham van Thuiswinkel.org tijdens B2B Summit | 10 september 2013

1. In samenwerking met:
USA STUDY TRIP – 9 KEY INSIGHTS
“Forget about the Future. The Future is Now.”
© Shopping 2020

2. Several “Winners” were visited
Conclusion: we know most trends but the development speed amazes
© Shopping 2020 2

3. The 9 Biggest Insights
1. The Super Consumer
2. Fail Faster
3. The War for Talent
4. Getting data out of the database
5. Mobile First, Second and Third, solomo
6. The Last Millisecond Challenge
7. Instant commerce
8. Online & offline are gone
9. And the winner is …
3© Shopping 2020

4. The Super Consumer
Consumers are the big winners of the digital age… for now.
© Shopping 2020 4
Consumers can:
• Access all information in the world (mainly thanks to Google).
• Reach everybody in the world (okay, 1.5 billion, Facebook & Google are working on the rest)
• Store, exchange and compute on an unlimited scale (thanks to Amazon Cloud)
Trends:
• Consumers adopt technology extremely fast change their behavior accordingly.
• Companies can (hardly) keep up due to
– The internal gap between business & ICT skills
– A skill set focused on optimization of existing processes
– A culture which hinders innovation and change.
Impact
• In general:
– Consumers will buy much more online.
– Consumers will buy more cross border online.
– Companies have to excel in price and service to survive in a fully transparent world.
• In store: The consumer will know more about the product, it’s inventory and competitor’s prices
than the sales employee. Sales reps need the same tools as consumers.
• Online: companies have to support all channels in order to not miss out on the consumer.
• In company: Bring Your Own Devise (BYOD) relieves companies to invest in infrastructure.

5. Fail Faster
Companies have to continuously innovate & change
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Trends:
• Products are no longer scarce. Prices shrink. Excellent customer service is becoming the norm.
• To survive companies have to continuously improve continuously and innovate new services:
– Facebook did not have a mobile proposition in 2012. Now it’s 50% of their traffic.
– Facebook does two software releases a day.
– Google Android has 70% market share in smart phones and did not exist XXX years ago.
Impact:
• Roadmaps are no longer linear. Improvements are done parallel.
– Why wait to improve. Do it now.
– Double work and inconstency is accepted for improvement in speed
• Failure must be accepted to allow employees to innovate:
– Apple tries 1.000 times before it is perfect.
– Google stopped 70 public projects in the last two years (a more which were not yet public)
• People are given more trust to do what is necessary.
– Facebook gives new developers access from the start to the entire codebase.
– Google informs its people on nearly all corporate developments. Break trust and get fired.

6. Fail Faster (continued)
Companies have to continuously innovate & change
© Shopping 2020 6
Impact:
• People are given more freedom:
– Google employees can have their own project (in their own time)
– They are supported with Google resources (CPU power, storage)
– When more employees start supporting the project, it may become forma.
• Structure becomes less important. Organizations are becoming fluid:
– People work in small (project) teams.
– Are continuously reassigned based on their skill set to new projects.
– The executive level maintains cohesion between specialized/functional silos.
• Winners prefer to keep the organization very close together:
– Get the brightest across the world and ship them to Silicon Valley
– Apple’s “Designed by Apple in California” is not a marketing trick but a philosophy that
people should be together to create the best products.
• Infrastructure supports open communication:
– Facebook is building an office which consists of one open room for 3.500 employees.
– Offices have flexible walls, and tables with wheels.
– Wall mounted TV’s give insight into available meeting rooms and where people are real time

7. Examples of Posters hanging at Facebook
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!

8. The War for Talent
Getting the best people together at one place
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Trends:
• The Winners are searching for the best & the brightest.
• The need for continuous change requires a different kind of people. Key competences are:
– Role related knowledge
– Leadership potential
– Cultural fit
– and the ability to handle change
Impact:
• Winners do everything to get the best & the brightest:
– They are extremely selective but hire without having vacancies.
– Perks are offered to keep people (chef cooks, dry cleaning serivces, daycare, …)
– But also to keep them productive (a bus with wifi, a vending machine for computer supplies)
– Employee satisfaction is a KPI for managers.
• To keep employees motivated and working together a strong culture is created where people feel
that they contribute to a better world
– Ebay: The World’s online Marketplace
– Google: Make all information universally accessible and useful (do the Googlely thing)
– Facebook: Connect the world

9. © Shopping 2020 9
The Google – Apple – Facebook food War
Apple’s Café Macs
Google’s 6 restaurants in one…
Facebook Food Everywhere

10. The last millisecond challenge
Companies have to be able to compress their offering
© Shopping 2020 10
Trends:
• Products and media are no longer scare. Customer attention is scarce.
• People on average only view 2 pages on a webshop.
• Consumers do not want a “long tail” but the right product at the right time at the right price:
– Zalando is are shrinking their inventory (7 black T-shirts is enough)
– Dell adapts all its prices three times a day while Amazon prices on a personal level
• Mobile (smaller screens) forces further compression of the offering as less products can be shown.
• Smartware will push personalization to the limit.
Impact:
• More data will be collected and used to offer the right message:
– current time, local weather, geo-position
– local inventory, competitive prices
– Personal situation (birthday’s of friends, start of school son, barmitwa friend)
• Curation is also used to compress offering.
– Cafepress compresses 500 million products a.o. by stating which designers are most desirable.
• Technically companies have to be able to 1) collect all available data about a visitor (inside, public
(Facebook, Twitter, etc.) and from third parties 2) Determine the best proposition (inspiration,
content, service) 3) Present the right content (content, products recommendations, promotions, 4)
Collect and analyze the response to dermine the next offering.
• Privacy laws will stop 1 on 1 (for now) but companies must be able to manage not 10 segments but
thousands (Facebook creates customer segments up to a minimum of 500).

11. Getting the data out of the database
Companies who can predict what their customer want win
© Shopping 2020 11
Trends:
• The winners are all collecting data massively:
– from their users
– from their clients
– and from external sources.
• The winners all focus on customers. Customer insights are essential to serve customers better.
• The winners all have a culture where management decisions are increasingly data driven:
– Google: Calculated the ideal cafeteria waiting period so employees can build relationships.
– Facebook: Having applicants talk to more than 5 employees does not add any more value.
Impact:
• The hardware is no longer a bottleneck for big data (CPU power, network, storage).
– Google , Amazon & RichRelevance offer Cloud services for hosting and (predictive) analysis.
• However there is a huge shortage in skills to analyze data (there are no good tools yet available to
identify relationships without human guidance) and visualize data (War for Talent)
• Companies are following two strategies regarding data ownership:
– Work closely together with Winners to serve customers better.
– Create their own communities to gather and own data (e.g. Nike).
• Google, Facebook are profiting strongly from big data:
– They collect an increasing amount of data from their customers
– And are selling its analysis to retailers (Amazon $1 billion last year).
Source: developers.google.com/prediction/
https://developers.google.com/bigquery/what-is-bigquery

12. Data Visualization allows new insights
© Shopping 2020 12

13. Mobile first, second & third
The second ecommerce wave
© Shopping 2020 13
Trends:
• Mobile is adapted much faster and stronger than expected:
– People now spend more time on their mobile than laptop/PC (only TV is twice as big)
– 43% of Apple.com’s traffic is mobile, growing to 50% (1/3 mobile web, 1/3 app, 1/3 tablet).
– Mobile is becoming the preferred orientation shopping channel but is also used for buying.
– Ebay now realized 20 billion turnover on mobile (from 0% 3 years ago to 25% now)
– 10.000 cars are bought via eBays mobile app.
– In 2015 21% of all purchases will be done on mobile.
• Mobile will have more functions like payment and identification/authorization
• Next to already existing functions like geo-code/navigation, camera/scan products.
• Nobody knows if Google glass will become a success, but smartware is expected to rise quickly
• With the rise of smartware, people will truly be online 24/7.
• And they will often continuously share what they see, where and when they do it.
Impact:
• Consumers will demand:
– 24/7 service not only online and social media but also by voice and in store
– based on their behavior during the day
– and get delivered at their GEO code (not their address).
• Companies are develop, test en launch new features first on mobile.
Source: www.themobileplaybook.com/en-us/

14. © Shopping 2020 14
Google Glass Demo

15. Instant Commerce
© Shopping 2020 15
Trends:
• All big players (Amazon, Google, Ebay) are offering one click buy.
• One click buy is especially important for mobile as typing in payment details is troublesome.
• With the rise of Smartware voice and compression will become increasingly important.
• Real time, online product recognition is already offered (e.g. Amazon Flow). QR or bar codes will
no longer be needed.
Impact:
• Combining these developments one click buy will become to “one command buy”.
• People will see a product and will just say “buy it”.
• Get it delivered in one hour (by Google Delivery, Amazon Prime or eBay Now)

16. Case - Ebay Now
Get any product within 60 minutes, anywhere
© Shopping 2020 16

17. Online and offline are gone
The real world wide web
© Shopping 2020 17
Trends:
• Smartware will integrate the physical and digital world allowing retailers to sell based on where
we are, what we see and what we do, real time.
• Millennials prefer to buy online above offline: the experience is better: there is more choice,
lower prices and less effort.
• The online shopping experience is improving
– due to richer media like video, gaming and social media.
– Ebay is moving towards a data driven online magazine (e.g. PinInterest).
– Delivery will be faster (eBay Now, Google Delivery, Amazon Prime)
• Physical stores can offer comparable services as known online:
– Recognize customers using technology like Apple iBeacon, facial recognition, etc.
– Try-on visualization, long tail delivery at home service, etc.
Impact
• In the USA 57% is sold in stores, 6% online and 37% is hybrid. Tomorrow it will just be commerce.
• Physical stores need to integrate new technology to serve customers better:
– Caramel cafe uses tables to upsell on wine and allow customers to order without a waiter
– Lowes gives employees insight into inventory availability but also uses tablets for training
– PepsiCo: follows its on the road merchandisers real time and reroutes them if needed.
• Physical stores will have to upon up local inventory in order to sell online.
• Online stores will have to become more data driven experiences if they do not want to fight on
price and delivery speed alone.

18. And the winner is…
Amazon’s app is used more than all other retail apps combined
© Shopping 2020 18
And the winner is….The scary five:
• The Winners will keep on growing because:
– They have the buying power to offer the lowest prices
– They have the most customer data to offer the best experience
– They can offer the best service because the have the capital
• Each winner has it’s own strategy:
– Apple: the perfect user experience
– Amazon: full control over the customer journey
– Google: better answers, personalized across all channels
– Ebay: use the power of retail to delivery
– Facebook: the marketing platform
• What they all have in common is a relentless focus on the user
– They do not focus on selling but on delivering the best user experience
– They are all expanding rapidly: internationally, in assortment, in services
• However, things may change:
– Apple: owns 14% of the smartphone market (80% Android, 6% Microsoft)
– Facebook: seems to focus on harvesting its platform. It cannot get commerce to work.
– Keep an eye on the retail giants (Wal-Mart grew with $60 billion in the same as Amazon did)
– Keep an eye on the East (Rakunten, Baidu)

19. And the winner is…
Amazon’s app is used more than all other retail apps combined
© Shopping 2020 19
And the winner is…the vertical retailer
• Retailers will be diminished to local inventory and shipping centers without a clear proposition.
• Brands selling directly are profiting:
– They have a unique product/proposition which cannot be compared on price
– They often have great service as part of their DNA
– And have the margin’s to invest in new media
• Branding will become important again:
– consumers want to buy emotion and authenticity
– They are continuously looking for the “WOW” effect
– Brands can merge commerce into entertainment (which the generalists cannot).
• Gap closers: Modcloth, Fab.com
– focus on unique (design) products
– emotional (social) commerce
And the winner is… consumer?
• For now consumers have lower prices, more service and a better experience
• But what will happen if a few players control 80% of the retail market?

20. © Shopping 2020 20
Want more? Feel free to contact us!
Jorij Abraham
Director Research & Advise
E: JorijAbraham@thuiswinkel.org
M: +31 6 52 84 00 39