tech statistics that drive consumer behavior€¦ · go mobile 1. responsive design responsive...

Tech Statistics That Drive Consumer Behavior Tuesday, September 29, 2015

Phillip Reynolds CEO and Founder BriteCore Springfield, Mo. Phillip Reynolds is the CEO and co-founder of Intuitive Web Solutions, the creator of the BriteCore insurance processing system. He holds a certificate in Leading Change in Complex Organizations from the Massachusetts Institute of Technology. Phil speaks frequently on organizational design and technological innovation for property/casualty carriers. Phil received the Governor's Missouri Entrepreneur of the Year award from Gov. Jay Nixon, and he led IWS to the No. 288 spot on the Inc. 500 list. He is a frequent presenter at state conventions, and he is currently serving as the committee chairman of the Pennsylvania Association of Mutual Insurance Company’s Information Technology Committee.

Three Session Ideas Tools or tips you learned from this session and can apply back at the office.

1. ______________________________________________________________________

2. _______________________________________________________________________

3. _______________________________________________________________________

Tech Statistics that Drive Consumer Behavior

Phil Reynolds

Phil ReynoldsCEO

BriteCore / IWS

Springfield, MO

2015 Connect Differently - Reynolds Page 1 of 73

Technology is MovingFaster Than Ever!

Moore’s Law

• Gordon Moore co-founder of Intel• 1965 prediction has held true for 50 years• Transistor density doubles every 2 years• Exponential gains in speed and cost efficiency

https://commons.wikimedia.org/wiki/File:Transistor_Count_and_Moore%27s_Law_‐

_2011.svg#/media/File:Transistor_Count_and_Moore%27s_Law_‐_2011.svg

Kurzweil’s Law of Accelerating Returns“In an evolutionary process, positive feedback increases order exponentially.”

The returns of an evolutionary increase exponentially over time — both for biology and technology.

Kurzweil’s Law of Accelerating Returns

Gen 1 Gen 2 Gen 3 Gen 4 Gen 5 Gen 6

Exponential

Kurzweil’s Law of Accelerating Returns

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Exponential

16,777,216 x

512 x524,288 x

1969 NASA Apollo Missions• IBM System/360 Model 75

• $3,500,000

• 200,000 FLOPS

• 64,000 bytes memory

• 43kHz processor

2015 Modern Smartphone• iPhone 6

• $750

• 115,000,000,000 FLOPS

• 1,000,000,000 bytes memory

• Dual Core 1.38 GHz processor

2015 Modern Smartphone• 576,000 Times Faster

• 8 Watts Power

• Super Computer, Internet Access, GPS, Camera, Communications, Sensors, etc.

Trends in Consumer Behavior

1. Mobile Device Adoption

2. Frictionless User Experience

3. Internet of Things

4. Pay Per Use

1. Mobile Device Adoption

Go Mobile

Mobile technology has risen FASTER than

ANY other technology in recorded history.

Go Mobile

Mobile device adoption is growing

8 TIMES FASTERThan internet adoption did in the

1990s and early 2000s.

Go Mobile

Smartphones have integrated into our lives faster

than any technology in history. Ownership has

grown by 71.1% year over year.

64% of Americans now own smartphones.

Go Mobile

61%64%

2011 2012 2013 2014 2015 2016 2017

Percentage of Population with Smart Phone

US Smart Phone Adoption

Mobile and Remote Access

Tablet ownership is currently exploding as the power of these devices grows. Ownership has grown by 78.9%year over year.

40% of adults now own tablets.

Go Mobile

40%43%

2011 2012 2013 2014 2015 2016 2017

Percentage of Population with Tablet

US Tablet Adoption

Go Mobile

At 7.5 billion units,

there are more active

mobile devices on Earth

than people.

Go Mobile

The average smartphone

user spends 4.7 hours a

day using their mobile

device.

Go Mobile

of all web traffic now

comes from mobile devices.

Go Mobile

of smartphone users will not recommend

a business with a poorly designed mobile

Go Mobile

of smartphone users view brands with

mobile apps more favorably.

Go Mobile

of all mobile handsets will be

smartphones by the end of 2015.

Go Mobile

Of mobile device users make direct

purchases or research purchases

regularly using their mobile device.

Go Mobile

Reported in June 2015 that mobile searches

have outpaced desktop searches.

Google

Go Mobile

Mobile is Big.

Go Mobile

“How do I engage mobile?”

Go Mobile

1. Responsive Design

Responsive Design

• Page layout adapts to the size of the screen.• Elements remain large and targeted• Frequently filter unneeded elements• Bootstrap is a popular framework.

Go Mobile

2. App vs Mobile Web

Definitions

• Mobile Web – Applications delivered over the internet that are viewed through a mobile web browser.

• Mobile Apps – Applications downloaded to a mobile device that install and run natively on the device

Mobile Web

(Pro) Distribution – Universal Through Browser

(Pro) Cost – 25% to 50% of Native App Cost

(Con) Features – Limited Access to Device

(Con) Internet – Online Required

(Con) Exposure – Competing for 20% of Users Time

Mobile Apps

(Con) Distribution – App Store

(Con) Cost – 200% to 400% of Mobile Web Cost

(Pro) Features – Full Access to Device

(Pro) Internet – Offline Usage with Background Sync

(Pro) Exposure – Competing for 80% of Users Time

Which is for you?

• Mobile App – If you want to deliver a rich user experience and can afford it.

• Mobile Web – If you want to offer mobile access on a budget.

• The best companies offer BOTH.

Go Mobile

3. Target Mobile Moments

Mobile Moments

When a user is on the go

and wants to know or accomplish

something in the moment

there is an opportunity to build trust, and loyalty.

Example Mobile MomentsWhose Moment? What’s their Motivation? Example

Insured Learn about a product What does it cost to add an ATV to my insurance policy?

Insured Receive service assistance A tree fell on my house. I need to file a claim with my insurance company.

Agent Check on Policy Status Is that policy issued or do I need to give the insured feedback?

Agent Review Income What was my commission payment last month?

Staff - Underwriter Efficiency What policies do I need to review tomorrow?

Staff - Claims Adjuster Serve Customer Better Submit authority override request in the field.

Opportunities• Build mobile interactions specifically targeted at device

capabilities.

• Keep aps simple and focused on user needs.

• Target functionality to create mobile moments for insureds, agents, and employees.

2. Frictionless User Experience

Consumers want interactions

to feel quick and effortless.

Frictionless UI• 47% of people expect a web page to load in 2 seconds

or less.

• 40% will abandon a web page if it takes more than 3 seconds to load.

• 23% will stop utilizing the internet all together or even walk away from their computer if a page loads slowly.

Frictionless UI• 48% of people cited a website or app’s design as the

number one factor in deciding the credibility of a business

• 52% of online shoppers claim that quick page loads are important for their loyalty to a site.

• 88% of online consumers are less likely to return to a site after a bad experience.

Frictionless UI

Conway’s Law“Any organization that designs a system will produce a design whose structure is a copy of the organization's communication structure.”

-- Melvyn Conway, 1967

Conway’s Law

User needs come first.

Organizational design is secondary.

Frictionless User Experience

User Experience

“How it Works”

• Layout

• Interaction

• Information Architecture

• Wireframing

• Prototyping

• Research

• Testing

Mozilla UX Redesign

70% Reduction in Support

Frictionless User Experience

User Interface

“How it Looks”

• Typography

• Color

• Form

• Illustration

• Photography

• Detail

7 Principles of Usability• Simple – Don’t make me think!

• Minimal – What you need, only what you need

• Clean – Margins, white space, typography

• Focused – Primary actions should be big and easy to find

• Familiar – Use and recycle familiar patterns

• Responsive – Offer feedback for every action

Example: UBER

1,000,000 rides per day

API Economy• API stands for Application Program Interface.

• Allows services to communicate with each other programmatically.

• Runs over standard and universally accessibly https.

API Economyhttp://www.myapp.com/v1/getUser?userId=1a554ddf2

“id”: “1a554ddf2”,

“firstname”: “Phil”,

“lastname”: “Reynolds”

API Economy• Public APIs - 5,000 in mid 2013 to 10,000 in 2015.

• Netflix API receives over 5 billion requests per day

• Over 1,000,000 sites and apps use the Google Maps API.

• Since 2002, Amazon Web Services. $6.2 billion in revenue and 5x the capacity of next 14 competitors combined.

• 2013 - 1.5 billion API calls. Up from 500 million in 2012. 350 million endpoints globally.

API Economy• APIs are emerging and maturing at an incredible pace.

• There are tremendous business opportunities for businesses that connect services via API to deliver a seamless User Experience.

New UX Connecting Services

Workflow If This Then That Zapier

APIs you can leverage today• Location Services

• Property Valuation

• Payment Gateways

• Credit Scoring

• Tax Records

• Protection Class

• VIN and DMV lookups

• Mortgagee Notification

• File Storage

• Telecommunications

• Screen Share and Video

• Help Desk

• Social Media

• Hundreds More……

Opportunities• Offer a great User Experience that addresses customer

needs intuitively.

• Build beautiful, clear User Interfaces.

• Offer an API that allows other services to connect to you.

• Connect APIs to add value to your services.

• Automate and bridge everything you can to offer a smooth, intuitive experience for insureds, agents, and employees.

3. Internet of Things

Internet of Things• Devices connected to the internet

• Sensors everywhere on everything

• Connected devices can access information

• Connected devices can publish information

• Convert information into action

Internet of Things• 2 Billion Embedded Systems – 2012

• 4.9 Billion Embedded Systems – 2015

• 25 Billion Embedded Systems – 2020

Internet of Things

2013 2014 2015 2020

Connected Devices (Billions)

Automotive Consumer Generic Business Vertical Business

*Source: http://www.gartner.com/newsroom/id/2905717

*Source: https://www.ncta.com/platform/industry‐news/infographic‐the‐growth‐of‐the‐internet‐of‐things/

Many Companies Built on IoT

Categories• Commercial Buildings• Energy Management• Consumer and Home Automation• Industrial Equipment• Transportation• Retail• Security and Safety• IT & Networks

Smart Devices arecoming to your home.

Nest Thermostat

Samsung Smart TV

Amazon Dash Button

Awair: Air Monitor

Netatmo Welcome (Face Recognition)

Roost Smart Batteries

Nest Cam

Insteon Hub Pro (Siri)

Kinsa Smart Thermometer

Deeper Portable Fish Finder

Rachio Home Watering

Click & Grow Indoor Planter

Withings Blood Pressure Monitor

Fitbit Surge Fitness Tracker

Tagg Plus Pet Tracker

August Door Lock

Nest Protect Smoke Alarm

PeebleBee Tracker

Apple Watch

LeakSmart Water Shutoff

Wally Moisture Sensor

LG Washer / Dryer

Samsung Refrigerator

Kohler OnCue Generator

AgaMatrix Blood Glucose Monitor

Withings Body Scale

Nuvant ECG

Smart Concrete

Roomie

Microsoft Hololens

Amazon Echo Gateway (Alexa)

Using APIs to Connect Devices• IF moisture is detected THEN shutoff water main

• IF motion is detected THEN send message and alarm

• IF Carbon Monoxide detected THEN turn off fireplace

• IF I leave the house THEN lock the doors

• IF temperature drops THEN send message and shutoff water

Opportunities• Rating Discounts / Surcharges

• Segment Risks Better

• Exclusions Based on Conditions

• Loss Prevention via Sensors

• Correlations in Data

• Develop Entirely New Products and Services

4. Usage Based Pricing

& Membership Culture

Usage Based Pricing & Membership Culture• The Traditional American Dream isn’t the Millennial

Dream.

• Ownership, retirement, stability are not valued like they were by previous generation.

• Community, experiences, sharing, and sustainability are much more important.

• Value experiences over things.

• Frequently prefer membership over ownership.

Entertainment

Netflix Subscribers

Hulu Plus Subscribers

Pandora Users

Spotify Users

Vacation Rentals

Vacation Rentals• 32% of travelers have stayed in a vacation rental in 2012

• 59% of travelers plan to stay at a vacation rental in 2016

• Online travel climbed from $99 billion in 2010 to $144.7 billion in 2015 fueled by vacation rental growth

AirBNB

SaaS Software

SaaS Market

$43.00

$56.00

$72.00

$87.00

$106.00

2012 2013 2014 2015 2016

Billions

SaaS Revenue By Year

SaaS Softaware Revenue

SaaS Software • Global SaaS revenue projected to be $106b in 2016

• By 2018, 59% of the total cloud workloads will be SaaS workloads, up from 41% in 2013

• SaaS is replacing most traditional software models

Transportation

Zipcar Members

673,000

777,000 818,000

860,000

930,000

500,000

600,000

700,000

800,000

900,000

1,000,000

2011 2012 2013 2014 2015

Members

SaaS Softaware Revenue

Lyft passed 100,000 drivers in 2015.

Spinlister

Spinlister anticipates 1,000,000

bike listings by end of 2015.

•Over 8,000,000 users

•1,000,000 rides a day

•160,000 Drivers

•290 Cities

IT Infrastructure

IaaS Statistics• 93 percent of organizations are running applications or

with infrastructure-as-a-service.

• 82 percent of enterprises have a hybrid cloud strategy, up from 74 percent in 2014.

• 88 percent of organizations are using public cloud while 63 percent use private cloud.

• 22 percent of organizations run more than 1000 VMs in private cloud.

Microsoft Azure• $15B spent on Cloud infrastructure

• 1,000 new Azure customers per day

• 400B authentications on Azure AD

• 10 Trillion objects stored on Azure

• 1 Million servers in Data Centers

• 50% of Fortune 500 Companies use Azure

Amazon Web Services• AWS adds enough new server capacity daily to support

all of Amazon’s global infrastructure n 2004. ($7b revenue)

• AWS offers 5x the compute capacity of the other 14 cloud providers combined.

• AWS revenue is now $6b a year. More than the next 4 providers combined.

• AWS 5 million servers spread across 87 data centers.

Auto Insurance

Snapshot

DrivewiseIn-Drive

Onboard Advisor

Telematics Statistics• Telematics study at ISO reveals the riskiest 20% of

operators’ claim costs were 10x higher least risky 20%.

• 36% of auto insurance carriers expected to utilize telematics by 2020.

http://dupress.com/articles/telematics‐in‐auto‐insurance/

Opportunities• Point of Sale at the Moment of Decision (Mobile Moment!)

• Charge Per Mile, Day, Rental Hour, etc.• Use Connected Devices to Measure and Track• Adversely Select Against Competitors Using Data• Offer Entirely New Products

Questions?phil@britecore.com

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