Ged Carroll

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  • CIC on China’s luxury market

    CIC who provide the IWOM set of reports and flakey tools (think Sysomos, Radian6 or Adobe SocialAnalytics for the mainland Chinese internet eco-system) have come up with an interesting report on online conversations around the Chinese luxury market. CIC is increasingly being integrated with GroupM. It will be interesting to see how CIC copes as China exerts increasing control over social and marketing data access.

    Key take-outs

    • They are motivated to buy luxury goods as a way to ‘show-off’ and most of the online conversations are around this subject. Status itself is a tool designed to engender trust in things like business interactions rather than self actualisation per se
    • The distribution system is complex with overseas purchasing and purchasing agents (presumably to avoid China’s luxury goods tax and for more choice) also a popular subject. For luxury brands it means that Chinese expansion needs to be tapped by also having presence in places like Hong Kong, Japan, Korea, Paris – France and the major cities of the US
    • Real-time reporting of runway shows initiated by the brands doing webcasts has been extended by netizens to their own platforms. Much of the commentary is similar to the social television interactions you used to see on early video platform Joost; and on Twitter during shows like The Apprentice or The Only Way is Essex (TOWIE)
    • Counterfeit – there was a significant group that own both counterfeit and authentic versions of a product because it is ‘interesting to mix and match usage between real and fake’. This is a really interesting brand interaction and raises the question: what if authentic isn’t authentic enough in terms of brand experience? This is something that I could see impacting the likes of Louis Vuitton. Gucci, Chanel and Hermes as they become over-exposed in the marketplace. One of the ways to approach this is to educate consumers on what luxury means: craftsmanship, heritage or being at the forefront of something (which may mean an intersection between streetwear and luxury)

    More related content here. More from CIC here.

  • Systeme D

    According to Foreign Policy, the D in Systeme D comes from the French word débrouillard which is used to describe people who are ingenious or resourceful. In the Francophone companies being resourceful means operating outside of proscribed government regulation and bootstrap entrepreneurship hence, systeme D. Back in France, this might have been applied to people smuggling in a new fangled personal computer into the workplace.

    Foreign Policy writer Robert Neuwirth argues that this grey economy exists across the developing world and has been driving economic activity from Chinese factories to African bazaars. Back when I was first visiting Hong Kong, there was a stream of west African business people travelling to Hong Kong. They would go to Chungkung Mansion. Buy a suitcase full of electronics (predominantly cellphones)  and then get a flight home. 

    There was then larger scale players based in Shenzhen and Guangzhou buying product. They then either supplied the merchants of Chungkung Mansions or shipped product home by the container load. Who knows what would happen with the customs in their destination country. Systeme D often relies on the kind of manufacturers relying on shanzhai style innovation. 

    Whilst this black economy would be seen as detrimental in developed countries due to it undermining a system that broadly works (look at the Greek government’s problems with non-payment of taxes). In developing countries where governments are less likely to be looking out for their citizens interests – so the black economy can be considered to be having partly a positive impact.

    The latest trend is that a lot of mainland Chinese people who have worked on infrastructure projects in Africa staying behind and becoming merchants, cutting African entrepreneurs out of the Systeme D model. There are well over a million of these Chinese entrepreneurs now doing business across sub Saharan Africa.

    More information

    The Shadow Superpower – By Robert Neuwirth | Foreign Policy

  • Dealer chic

    If the working class and the lower middle class are worried about financial security with trends like extreme couponing; the upper-middle classes are also interested in the thrill of a good deal with the changing economic environment a distant secondary motivator. With this in mind Trendwatching talked about dealer chic; reading their profile its almost as if they are thinking about their lifestyle in business terms. Looking for:

    • Increased efficiency – getting more for less – the buzz of a bargain
    • Value add – provided primarily through an improved experience

    Dealer chic is supposed to be caused by a move towards perfect markets – the use of reviews and comparative pricing facilitated by the web parallels the kind of techniques that procurement professionals would use. It also echoes the promise of disintermediation that web 1.0 was supposed to bring use with the first generation of shopping comparison sites in the late 1990s

    A more worrying by-product of the dealer chic trend is that brands are increasingly commoditised and access to mobile devices have accelerated the consumer buying process by providing them with the necessary research and the opportunity for instant gratification – potentially having a micro-chunking time effect on the timings and tweaking of pricing strategies.

    It means that luxury goods are seen as an asset class. This will mean an acceleration in price appreciation, but in order for luxury brands to benefit they will need to get involved in running pre-owned platforms. They can add value in validating each and every item, for a commission. 

    The space won’t be uncontested. You have established players from eBay and Yahoo! Auctions to Japanese retail brands like Brand-Off are already in this space. The Japanese have built up a formidable opportunity

    More information

    Trendwatching | dealer chic – find out more about dealer chic and sign up for Trendwatching’s free email newsletters

  • Video futures

    Peter Jackson has been shooting a really interesting video diary for the forthcoming Hobbit two-part film. Whilst all the Tolkien geeks are pouring over it salivating at what they are going to spend their next ten year’s disposable income on, I was curious to know what it was likely to tell us about the future of video. Jackson heads up Weta Workshop and Weta Digital, constantly innovating in video production. Below is the first entry, it is worthwhile working through all of them

    • Technology still hasn’t addressed the need to shoot 3D in an elegant way. Much of this is down to the fact that the economics and scale that has driven semiconductor innovation hasn’t been replicated in other aspects of technology such as camera optics, so they use Heath Robinson-esque mirrored set ups to get around the interocular (replicate the distance between your eyes) distance issue
    • The amount of dedicated cameras that Jackson is having to use suggests that 3D product isn’t likely to come down in cost anytime soon; so we are still likely to have shoddy post-production versions plied on cinema audiences for a good while yet. I could see the demand for 3D dying out, at least until VR starts to make a serious impact on lean back experiences.
    • Higher frame rates make a difference. I hadn’t realised that the human eye can distinguish at up to the equivalent of 60 frames per second. Shooting at this speed makes imagery more believable. So we are more likely to go to 60fps 4K video than 24fps at 8K resolution.
    • Digital doesn’t mean perfect reproduction. If you’ve listened to an iPod versus a decent CD player; or a decent CD player versus a decent record player – it would be easy to understand this point; despite the historic branding as digital having a higher fidelity to the original. However it was still interesting to hear how the high quality digital cameras de-saturate the video and the make-up artists and set designers have to work hard to compensate for the colour loss on screen

    More related content, alongside other aspects of technology can be found here.

  • Optimising for platforms

    Optimising for platforms rather than clients and audiences. Three years ago I taught an interactive marketing module at the business school of a private university in Barcelona. It was a great experience presenting to a number of senior executives and up-and-coming talent from various parts of Spanish industry including advertising and interactive agencies. I ended up learning from them as much as they learned from me.

    One of the attendees talked about listening to what his clients wanted, but that he really focused on building sites that Google wanted him to build; when the client wishes and Google were in conflict, Google won out. At the time the phrase struck me as it illustrated the pinnacle of Google’s power on the internet.

    The internet maybe open, it may be based on standards which means that you can see broadly the same experience across different platforms and browser software; but that’s no good if no one ever sees you site, modern-day equivalent of the classic philosophical question:

    If a tree falls in a forest and no one is around to hear it, does it make a sound?

    However even if you don’t rank highly in Google, it can still be promoted in other ways. The other week I was at a conference when I heard one of the audience as a question about the wisdom of:

    Buiding a business in Mark’s house

    That is building a business on the Facebook eco-system. I was reminded of the earlier discussions I had in Barcelona around the power of Google.

    Facebook wasn’t a new idea, there have been social networks for as long as there has been the commercial internet.

    • The Well
    • AOL in some of its earliest incarnations as a BBS (bulletin board system) for Macintosh computers provided some of the functionality that Facebook pages and groups do now. AOL gave users 2MB to create their own personal presence on the web through a tool called Personal Publisher (it could be found with the keyword PP2 – it wasn’t called search back then) a kind of pre-Geocities.com page that does what your profile on Facebook does now
    • And if you enjoy Zynga’s Farmville or Cityville, these owe a huge debt to Lucasfilm’s Habitat developed by former Yahoo Randy Farmer and sat on the AOL platform some 25 years ago

    Many of the innovations that Facebook has since come out with like email and instant messaging, are features that AOL and others had since the internet first became popular. The contrast between the two is more about scale, whilst AOL was phenomenally popular with 30 million subscribers at its peak (who also paid for line access), and still reaches 112 million unique users on a monthly basis; but it was never omnipotent in the way that Facebook became.

    Facebook has an unsurpassed reach, kind of like a telephone directory for large swathes of the world – a de-facto real identity check. This powerful position is one that Clay Shirky says won’t be changed for the foreseeable future.

    You have to be on Facebook, even if you don’t engage with it (and engagement is something that Facebook seems having issues with for a good while).

    So businesses have gone to the logical step of building their web presence on a platform that they think is most consumers online homebase (as I read it described in Larry Weber’s Everywhere).

    So whilst Facebook may not control as much advertising budget as it likes; it wields a huge amount of consumer power and power over businesses that decide to use the social network as a platform – and that’s not likely to change any time soon.

    There are a number of factors to consider around Facebook:

    • Facebook abuses its position with consumers and I don’t need to discuss it here as it’s been well documented elsewhere already
    • Then there is the impermanence of web APIs, Nick Bradbury wrote a great post about this where he name-checked Facebook’s depreciated FBML, but to be fair, Google and Yahoo! have either changed the terms of APIs to make them less viable or got rid of them completely. So your platform may be here today gone tomorrow. From my experience, at the very least you are subject to browser compatibility problems and relatively high unpredictable down-times
    • It has become a crutch for marketing agencies in the way that the the answer to all consumer marketing used to be the 90-second television advertisement – I am surprised that so many brands are surrendering their reputation to Facebook given the concerns that had been voiced by marketers about Google’s power in recent times

    Marketers would be well advised to take a more pragmatic approach, think about where they are sending their traffic – who ‘owns’ the customer experience and take a portfolio or multi-channel approach to a campaign. More related content here.

    More information:

    Is it possible to replace Facebook? – interesting article by the research and development team at Norwegian state broadcaster NRK

    How Ford Blew It On Facebook | Advertising Age – why drive people via advertising to your Facebook page when you can drive them to your own property?

    The long-term failure of web APIs | Nick Bradbury