L2 have some interesting ideas for how online business will develop in 2016, more in this video
L2 have some interesting ideas for how online business will develop in 2016, more in this video
L2 have some interesting ideas for how online business will develop in 2016, more in this video
I decided to write this post to reflect on the very different visions of digital retailing that consumers are currently experiencing.
The Mobile OS
I went to Wagamama with some colleagues from Racepoint where we were encouraged to all download Qkr!. Qkr! is an application that was developed by MasterCard rather than the restaurant, it isn’t exclusive to Wagamama either. MasterCard has built the application with a view to building a wide eco-system merchants. It is notable that the application is actually card issuer agnostic, so I was able to set up an account with a Visa card. Wagamama bribed us with free desserts to download the application, so they clearly have some skin in the game. We downloaded it, set up our account with at least one mode of payment, our email address and a password. One of us became the host and gave us all a number which was our common bill. We could order straight from the app and food was supposed to arrive. When we wanted to pay we selected our items and paid our share of the bill. A couple of us only had cash, so they paid a friend and the friend paid on the app. If I am absolutely honest with you, it was a lot of work for casual dining and but for everyone around the table working in technology marketing (and so having a modicum of curiosity about things app-related) – it probably wouldn’t have had us all on board. Now that we have the app on our phone, I could see Qkr! hoping that we use it regularly and likely try and steer us to its merchant network though notifications and special offers. From Wagamama’s point-of-view it saves them from building, testing and maintaining a bespoke application. There are also presumably productivity benefits from reducing the order taking staff required. Qkr! didn’t prevent Wagamama from making mistakes with our order and we ended up one chocolate cake down. Contrast this with the approach that McDonalds have rolled out in their new (to me) Cambridge Circus branch. The area between the counter and the entrance is dominated by a series of vertical kiosks.
These kiosks contain an identical touch screen interface
With a basic card reader on the bottom, there is no Apple Pay or NFC facilities, just a chip and PIN reader. The touch screen menu takes you through a smartphone app like experience, if smartphones came with 27 inch screens. Once payment was successfully received, you then received a deli counter style receipt
And collected from a counter when your number appeared on the screen
This is all designed to reduce consumer interaction and improve efficiency in the restaurant, if there was any way to cheapen the McDonalds’ experience making you queue like an Argos seems like the ideal way to go. The logical progression for this would be to move back to the Automat format (presumably this time using some sort of algorithm to optimise production.
The irony of it all is that the rise of fast food restaurants like McDonalds killed off the Automat as a trend in North America and many Automats were converted into Burger King franchises.
Both Wagamama and McDonalds may have had some efficiency gains but lost out in terms of brand experience, they moved a bit further towards commoditised casual dining and fast food respectively – which goes against the brand equity that they have striven hard to build over decades.
Shop OS offers some advantages over Mobile OS, you can standardise on the hardware to reduce coding and testing requirements. It is ideal for tourists who may not want to roam on foreign mobile networks, nor be able to navigate free wi-fi offerings. The flip side is that there isn’t the same opportunity to capture customer data and behaviour, the notification screen on the smartphone is a key place for brands to intercept the customer using geofencing.
At the beginning of this month Amazon launched an addition to their Dash ordering hardware with Dash buttons. There was a lot of incredulity amongst the media heightened by the unfortunate timing which overlapped with April’s Fool Day.
Why the incredulity?
I would break the cynicism down into two broad buckets:
Rather than ripping into this into too much depth I thought I would share Benedict Evans’ interesting hypothesis about the Amazon Dash button:
Amazon is trying to eliminate both vendor and brand decisions, and turning itself into a utility company – get your house connected to power, water, gas and Amazon. And choosing which commodity product you need is just another piece of friction to be removed by Amazon’s kaizen
There are some interesting directions that come out of this view point. Let’s break Benedict’s analysis down chunk-by-chunk:
There is no reason why the likes of Tesco, Ocado or Iceland couldn’t have done this. The wider Dash technology would make it easier for consumers to do grocery shopping and reduce the friction of online purchases. Instead they seem to have wanted to reduce cashier numbers inshore and focused on self-service tills. Time will tell if they made the right technological choice.
What about the user?
This is designed to make the consumers life easier and I can see how it makes purchase of otherwise annoying to shop for items frictionless, but it only works within reason. You can’t have a wall of buttons on the front door of your fridge freezer and just when do you press the button in the bathroom to order up more razor blades or toilet roll? What happens during the run up to Christmas when Amazon has had sub-optimal performance with regards deliveries on occasion? What is the buying frequency required to make the button habit forming, used without thinking about it, without consideration. When does the opportunity cost for the consumer tip in their favour regarding button usage?
What I don’t have yet is a clear understanding on depth and breadth of the customer problem being solved by the Dash button.
The original Dash device was interesting because it represented a rejection of the broader theme of convergence where functionality is subsumed from dedicated hardware into a software layer running on a computer, via a web browser, tablet or smartphone. Instead Dash is a shopping appliance and wouldn’t look out of place in a cupboard full of Braun kit.
The Dash button represents a further evolution of specialist hardware, a brand-specific, tactile hardware interface. It mirrors software like IFTTT’s ‘Do’ application, the Yo! messenger app and the Dimple smartphone button project.
For non-food products like toilet rolls that come in a plastic bale that is quickly discarded, there may not be a barcode to scan in on your Dash device. Instead you would have to ask for a new pack of Charmin’ or more Mach3 razors. Processing each voice message is expensive, which makes the opportunity cost around creating dedicated buttons for certain classes of product much more attractive. Amazon first and foremost is a data-driven company, they will know which product categories that they want to have buttons for. However, what makes on an Excel spreadsheet doesn’t always make sense to the consumer…
Amazon Dash button
Benedict Evans newsletter edition 106
Investing in smart logistics | Fidelity Worldwide Investments
Amazon, in Threat to UPS, Tries Its Own Deliveries | WSJ (paywall)
Supply Chain News: A 360-Degree View of E-Fulfillment Part 1 | Supply Chain Digest
Amazon joins numerous startups in building delivery networks to disrupt Fedex and UPS. | DataFox
The Amazon Dash post
Dimple smartphone button project | Indiegogo
SpinVox: the shocking allegations in full | The Kernel
My friend Sam Sun used to flag up O2O as the most important trend he saw when we worked together on mainland Chinese campaigns. O2O means online-to-offline. An integration of digital marketing tactics with marketing to drive retail footfall.
In China, there is real consumer demand for this type of marketing. Tencent surveyed WeChat users and found out that 13 per cent of them would prefer to have O2O adverts in their moments (think a stream of friends Tumblr accounts or Facebook’s news feed).
There is a whole eco-system that the Chinese can tap into.
QRcodes have greater customer acceptance in Asia than in Europe, where despite the efforts of Pepsi and other brands to encourage consumer adoption, it has been tepid at best. QRcodes are often confused for barcodes and take-up is a fraction of that in other countries like Japan. By comparison here is the picture of a real estate advert on the table of a Chinese fast food restaurant in Shenzhen.
In-store wi-fi in the UK is often clunky, poorly run by a major carrier like EE or a specialist provider like The Cloud. By comparison, in China, Tencent’s WeChat provides a turnkey solution for retailers, restaurants and bars to provide wi-fi and build their social following in a relatively painless manner for the consumer. (Though the software used by the retailer needs regular updating to keep up with Tencent’s ambitious development of the platform).
On the face of it however China isn’t the most promising market for O2O. It is a vast, diverse country, which makes it hard to build a truly national network of retail outlets. It has a dominant e-commerce platform this is more like eBay than an Amazon in that it doesn’t compete directly with its merchants. Secondly, the cost of labour and the huge funds available to internet companies mean that building a logistics network is more likely to succeed than it would do in a more expensive country like the UK or US.
Contrast this with the west, where Scott Galloway predicts Amazon’s demise because of the unsustainable cost of its product delivery system. Galloway hypothesises that ad-hoc logistics networks based on the sharing economy a la Uber and clicks and mortar businesses like Tesco offer a better alternative. Apparently doing the warehousing towards the edge is more cost beneficial than the Amazon model.
In the west, we seem to be on the cusp of a range of technologies that could make indoor location, identity and marketing a whole lot easier.
Hong Kong developers Green Tomato, have used ultrasonic signals and low power Bluetooth to allow applications to interact with their surroundings from sports check-ins to shopping mall navigation.
Low power Bluetooth beacons have been experimented with by retailers for encourage mobile augmented shopping and by organisations including Japanese Railways to aid indoor navigation. CSR and other companies have talked about using wi-fi as an indoor navigation aid. Further out quantum technology offers highly accurate GPS type location finding within buildings. All of this technology has the potential to further move O2O further forwards, if the user experience is made sufficiently simple and seamless. In the meantime the humble QRcode soldiers on connecting consumers and retailers in Asia.
WeChat Adds Wi-Fi Solution to Public Accounts | Technode
China consumers voice their preferences for WeChat Moments ads | Resonance China
Proposes new indoor requirements and revisions to existing E911 rules | FCC
New indoor positioning system lets you do Batman-like echolocation on your phone | ExtremeTech
CSR claims it will be able to fix your indoor location accurately | VentureBeat
UK military creates quantum compass that could be the successor to GPS | ExtremeTech
JR Rolls Beacon Navi for Tokyo Station | Wireless Watch Japan – interesting internal navigation application of beacon (low power Bluetooth technology)
WiFi Chip Tracks Indoor Location | EE Times
Five examples of how marketers are using iBeacons | Econsultancy
Mapping Our Interiors – NYTimes.com – interesting business model by IndoorAtlas
Grindr – Lisa Page – HyperIsland – really interesting insights on LBS design
Green Tomato Limited
Green Tomato are a Hong Kong mobile agency that I have a lot of time for. They were responsible for TalkBox a proto-OTT voice messenger solution. TalkBox moved way from being a consumer product to become an enterprise push-to-talk competitor. More recently Green Tomato have done a lot of work on the integration of mobile apps, with ‘other screen content’. They have done great work on digital retailing experiences in Hong Kong. Unfortunately their work has been ahead of its time and risks eclipsed by other people building on the likes of iBeacon.
I particularly like the demo below. It works with a Coca-Cola video advert to increase engagement. It could be applied just as easily with with traditional media like cinema or TV advertising or new video advertising formats on YouTube or YouKu. It makes the advertising spend work harder which is one of the key reasons why Mondelez are so excited by mobile marketing.
The challenge with this technology is that it makes the job of creative directors harder. Interaction becomes a key part of the experience rather than just a story amplifier. The technology is less amenable than social media to be bolted on to the side of a campaign like a rocket motor.
Earlier in the month I saw numbers that indicated that the savings of UK consumers dipped to their lowest level in forty years.
So I found this information about smaller e-commerce sales in the UK during December. The smaller volume but better basket value could be indicative of a professional e-tailing marketers. What if, those savings weren’t spent on material goods but instead Christmas groceries? It indicates things are worse than the economic figures make out.
I must be one of the very few people who didn’t pay much attention to this year’s John Lewis advert until I had a chat with my friend Ian Wood. Ian pointed out that lack of overt consumerism in terms of the number of presents shown in the advert and considered it to be in-tune with a more austere consumer environment, the underlying form being you’re only going to get one present this year, make it a decent one. I had a look at economic indicators versus consumerism in John Lewis adverts pretty soon after I had that discussion with Ian.
Food and family appeared in spade in the adverts, but presents not so much. The closest you had to it was Cadbury’s who wrapped an entire street and the people who lived there then enjoyed each others company and the joy of tearing the wrapping off. When Christmas does come it seems that it will be at a high cost to the economic health of the British consumer; disconcertingly there were reports that savings had hit their lowest point in 40 years for the UK in November as consumers dipped in to fund Christmas.
Other posts in this series
Observations from the UK: Pay-day loans, pay-day backlash
Great presentation by Thoughtful China about the online advertising market in China, the discussion comes from the perspective of ‘big data’ but points out the challenge of data quality and transparency in online advertising.
The presentation is on YouKu so you need to be patient with it.
So I have managed to get my parents using technology, my Dad is most au fait with the touch screen interface of his TomTom sat navigation device, they also use an iPad (Facetime is preferred over Skype because of the easier interface design), but they draw the line at technology outside of the home.
We went to Birkenhead Park which has been transformed from a run down Victorian folly to something approaching the designers original vision for the space, but they couldn’t get enough money to resurrect the original hot house on the site which used to house plants from around the world. It has been restocked with geese and ducks in the lakes and modern adult exercise equipment that seems to be unvandalised at the time of writing. Whilst we there we took some pictures, we also took some pictures when we went to the cinema and having dug up some homegrown potatoes. My Mum and Dad wanted these pictures printed which meant going to the supermarket and using Fujifilm’s touch-based kiosks to get the photos printed out. They were resistant to having the pictures in an electronic format on their iPad, the memories didn’t seem shareable and real by comparison in their eyes. Even my Dad was leery of using the touch screen of the Fujifilm kiosk, despite the fact that it talks you through on screen each process it wants the user to do. The interface was Flash-based and runs slowly, my Dad was anxious that he somehow managed to crash the console. So that fell to me to complete the process.. We also decided to do a little shopping there and I decided to brave the automated tills. This when things got really interesting. The tills are voice activated with a passive aggressive woman’s voice, and like the aggression shown towards the female sat nav persona on a previous visit home this did not go unchallenged by my Mum. A mix of coughing and ‘Are you sure that’s the right price, I didn’t think it was that on the shelf’ drowned out the audio instructions from the machine, so I had to takeover the buying process from them halfway through.
So what does this all mean? It made me more aware (yet again) that interface designers are probably using voice in the wrong way. Devices like tills and kiosks don’t take account of how a machine talking to you exists in a social hierarchy and how they could make people more comfortable with it. I suspect that the way forward maybe to give the machine a distinctive voice of its own (think Stephen Hawking, rather than Siri).
Secondly, digital retail is inevitable, but again user experience and interface design needs to improve in terms of accessibility and performance.
On the road 2
Shawn Stussy has put together a new collection under his S/Double label. My favourite item is the Ramble baseball cap which mirrors the old time style of signwriters in it’s script.
Mobile may not be the panacea for retailing that people seem to think. Ad Age highlighted research that showed mobile touting consumers were doing actions that tended to indicate price sensitivity.
Would network jamming equipment make more sense than free wi-fi? Mobile devices turn real-world shops into showrooms for online purchases. The image is hosted on Pinterest so may not be visible to all readers.
The first in a series of posts of observations and thoughts from my recent trip to Korea. Korea is known for being advanced in social networks and search. Twitter has a vibrant community there, Me2Day gives it a good run for its money. Kakao Talk is like a multi-platform version of BBM that brands are using to engage with fans and mature platforms like Cafe Daum, Naver and CyWorld can still school Silicon Valley on things social.
The country also has a diverse and vibrant eco-system of television stations with a lot of content based around K-pop stars and celebrity participation.
Given these two vibrant media eco-systems; advertisers and television commerce operations seek to do multichannel marketing. Here are some examples I took pictures of during a five-minute period during a mid-morning commercial break.
Daum Mobile search is suggested as Daum is known as a site that provides content of interest for women. Encouraging mobile use allows for an immediate call to action.
Han Hea Youn is a Korean fashion designer who sells her range of clothing via TV shopping channel. The QRcode at the top of the screen allows for the audience to get more information online and make a purchase.
Where the product isn’t specifically aimed at a female audience the commercials recommended a search term for Naver Mobile.
These commercial sections were not best-practice but indicated how multichannel has become a hygiene factor in Korean advertising campaigns.