takeaways from sxsw 2017—day 2 and retailloco highlights · today’s screen-based shopping. by...

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Takeaways from SXSW 2017—Day 2 and RetailLoco Highlights

1) TheFungGlobalRetail&TechnologyteamisattendingtheSXSWConferencein

Austin,Texas,thisweek.

2) Communitybuildingbothonlineandofflineiscriticalforbrandstodriveloyalty.Influencermarketinginthebeautyindustryisaprominentexampleofbuildingauthenticcontentandacommunityoffollowers.

3) Chinaistransitioningfromlow-value-addedmanufacturingtodesign-basedhardwareinnovation.TheChinainnovationdelegationatSXSWshowcasedsomeemergingChinesestartupsthathavecreatedstate-of-the-artsmarthardware,includingsmartwatches,selfiedrones,on-demandcitybikesandVRheadsets.

4) Wegeneratealongtrailoflocationdatathroughoutourdailyjourney,fromcheckingoursmartphonesinthemorningtowatchingTVatnight,whichprovidesawealthofdataforretailerstoanalyzetounderstandtheircustomersbetter.

5) Followingtheinitialhypephase,beaconshavefinallyhittheirstride,andretailerscanuseothertechnologiessuchasgamificationandthetargeteduseofchatbotstoboostsales.

6) TheFungGlobalRetail&Technologyteamwillcontinuetoreportonkeypointsandinformationduringtherestoftheconference.

DAY 2

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TakeawaysfromSXSWDay2

1.CommunityBuildingIsCriticalforBrandstoDriveLoyaltyConsumerloyaltyishighlycorrelatedwiththesenseofcommunitythatabrandbuildsarounditself,socreatingthatsense,bothonlineandoffline,hasbecomeapriorityforretailers.UnderArmoursharedanexampleofhowthebrandhelpedgetsnowclearedfromthesidewalksinChicagosorunnersinthecitycouldrunsafely.Theeffortsentatargetedmessagetothebrand’scustomersthatUnderArmouriscontributingtotheircommunity.Pinterestsharedhowthecompanyenablescommunitybuildingoversharedinterestsbasedonusers’postings

2.InfluencerMarketingIsDemocratizingMarketingintheBeautyIndustryTheriseofinfluencershastransformedhowbeautybrandsmarketthemselves.Beautyshoppersnowpreferauthenticcontentcreatedbypeersandinfluencersoverdirectcommercialappealsfrombrands.YouTubehasbecometheprimarychannelforbeautyshopperstoobtaininspiration,mostlythroughbeautyinfluencers.Consumersalsonowdemandmorepracticalcontentfrombeautybrands,suchasmakeuptutorials.Tomeetthesedemands,beautycompaniesareworkingwithinfluencerstotargetspecificaudiences.SwanSit,VPofGlobalDigitalatRevlon/ElizabethArden,sharedhercompany’seffortstoworkwithmicroinfluencers,orinfluencerswhohaveonlyafewthousandfollowersonsocialmediaplatforms,butwhosecontentisperceivedasbeinghighlyauthenticratherthancommercial.Microinfluencers’followerstendtohaveaveryspecificinterestincommon,sobrandscaneffectivelytargetnicheaudiencesthroughthem.

3.ChinaIsExperiencingaSmartHardwareStartupBoom

Source:FungGlobalRetail&Technology

Thecountryistransitioningfromlow-value-addedmanufacturingtodesign-basedhardwareinnovation.TheChinainnovationdelegationatSXSWshowcasedsomeemergingChinesestartupsthathavecreatedstate-of-the-artsmarthardware,includingsmartwatches,selfiedrones,on-demandcitybikesandVRheadsets.Thesestartups’proximitytomajormanufacturingbasessuchasShenzhenhasenabledthemtoquickly

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developgenerationsofproducts.Mobvoiisanartificialintelligence(AI)companythathasdevelopedChineselanguage–recognitiontechnologyandhasbuiltitsownsmartconsumerproductswithsmartassistants.ZeroZeroRoboticshasdevelopedasmartdronecamerathathelpscapturemeaningfulmomentsforconsumers.Mobike,theworld’slargestsmartbike-sharingcompany,hasdesignedbikesequippedwithGPSandsmart-locktechnology.

4.AI-BasedMarketingWillMakeAdvertising“Invisible”forConsumersintheFutureInthefuture,productmarketingwillhavetoseamlesslyintegratewithAIassistants’recommendations,whichwillbebasedonsearchesofcustomers’personallifestylebehaviorsandpreferences.Asaresult,advertisingwillappearlesscommercial,andwillsometimesevenbeinvisibletotheconsumer.AI-poweredpersonalassistantswillenablemoreconsumerstoshopviavoicecommand,andmanywillmoveawayfromtoday’sscreen-basedshopping.By2020,30%ofwebbrowsingwillbedonewithoutascreen,saidChristianWard,HeadofMediaandMarketingatresearchfirmStylus.

ThechallengeofAI-basedmarketingisthatmarketerswillhavetodemonstratethataproductoffersrealvaluetoconsumersintheirday-to-daylivesinordertoranknearthetopinsmartassistants’listsofrecommendations.Anotherpopularmarketingchannelwillbechatbots,whichbrandswillusetogenerateconversationswithcustomersandtelltheirbrandstories.Facebookhasbeenaleaderincreatingbrandstoriesviachatbots.

5.TinyHousesPresentOneSolutiontoIncreasingHousingCostsintheUS


Tinyhouses,thoseunder400squarefeet,couldprovideasolutiontoincreasinghousingcostsintheUS,allowingyoungpeopletoliveinawell-designedhousethattheycanafford.Only60%ofAmericanscanaffordtopurchaseahouseover$250,000,andmosthousesinurbanareasfarexceedthatprice.Tinyhousestypicallycost$15,000–$90,000,andlivinginonelowersahomeowner’scarbonfootprint—whichisimportanttomanymillennials,whotendtobeenvironmentallyconscious.DavisRichardson,agraduatestudentattheUniversityofTexasatAustinSchoolofArchitecture,showcasedhisowntinyhouseatSXSW.Hesaidthehousecostabout$25,000andtookhimabout12weekstobuild.

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TakeawaysfromRetailLoco2017

6.RetailersCanGreatlyBenefitfromWeatherandLocationDataMalloperatorshaveshowninterestinlinkingdatasuchasweatherinformationandtimestampstoconsumerpurchases.Forexample,ifconsumersaremorelikelytoshopwhentheweatherisbad,thenretailerswouldbewisetoofferpromotionsbasedonanegativeweatherforecast.Inoneexample,aconveniencestoreoperatorwasabletoanalyzelocationdatatofindoutwhereitscustomersatelunch.Theconveniencestorethentargetedthoselunchlocations,resultinginan83%increaseinvisitstotheconveniencestore.

7.DatafromtheGlobalPositioningSystem(GPS)HasitsLimitations


Therearelimitationstoourglobalpositioningsystem(GPS),whichisunabletotrackactivitywithinastoreaswellastoresolveverticalheight,i.e.,whichfloorofabuildingapersonison.Brandsarenotyetsavvyaboutthetechnicalissuessurroundingtheplacementoflocationdevices.

8.RetailersFaceaComplexArenaofMedia,TechnologyPlatformsandFormatsThedifficultyofreachingconsumersisamplifiedbythefactthattheyviewadvertisingonavarietyofdevices,suchasphonesandtablets,TVsandbillboards.Theyviewavarietyofmedia,too,suchastextandvideo,anddifferentmediaofferavarietyofformats,furthercomplicatingbothadvertisinganddatacollection.

9.LoyaltyProgramsNeedtoOfferMorethanJustDiscountsRetailultimatelydealswithhumans,soretailersseektobuildconsumerprofiles.Historically,retailershavenotbeengoodaboutcollectingdata,onepanelistsaid,citingthefollowingstatistics:50%ofpeopleleavealoyaltyprogrambecauseitistoohardtoparticipate;80%willpickaloyaltyprogramthattheythinkbenefitsthem;and65%saythemostimportanttimetoofferaloyaltyprogramiswhenacustomermakeshisorherfirstpurchase.Justofferingdiscountsaspartofaloyaltyprogramisnotenough,asmillennials,inparticular,valueuniqueexperiences.

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10.WalmartIsUsingGamificationtoKeepitsCustomersHealthyWalmartispartneringwithinsuranceproviderHumanatoofferpromotionsforWalmartcustomerswhoundergobiometrictesting(suchasblood-pressuremeasurement)anddiscountsatcheckoutforcustomerswhopurchasehealthyfoods.Inanefforttoincreaseloyaltyandlockcustomersintotheirprograms,bothWalmartandAmazonhavealsobeenincreasingthenumberofservicesofferedtocustomers,especiallyAmazonPrimecustomers.

11.BeaconsHavePassedtheHypePhaseandBecomeUseful


AlthoughbeaconshavehitatroughfollowingthehypephaseonGartner’shypecycle,nearly500newbeaconsarestillbeingturnedoneveryday.Therehavebeenrecentadvancesinbeaconsandsensors,though.Beaconscannowbehiddeninlightbulbsandsensorscanmonitortemperatureandairquality,whichareusefulindocumentingquality-controlfactors.Forexample,sensordatacanhelpensurethatcertaincoldfoodshavebeenmaintainedatspecifictemperaturesthroughouttheirjourneytothestoreshelf.

12.ChatbotsCanDriveTrafficWhenUsedProperlyInoneexamplecitedbyapanelist,BudLightjudiciouslyusedchatbotsinthetimeleadingtoabigsportseventandachieveda76%conversionrate.Althoughchatbotshaveseensuccessinapplicationssuchasinthecreditapplicationprocess,theyarestillunabletoconversefreelywithhumans.Themostsuccessfulonesstructurequestionswithmultiplechoiceanswers,ratherthanrequiringconsumerstotypeintextanswers.

13.OurAppsAreConstantlyLeakingValuableLocationDataTheconceptof“dataexhaust”reflectsthatmanyofoursmartphoneappshavethelocationfunctionsturnedonallthetimeandarethusconstantlyleakingdatatotheappservers.Itistechnicallypossibleforanappmakertoaddsoftwarethatdrainsofflocationdata—andthensellthatdatatoareseller.Datais“thenewoil,”however,althougheveryretaileriscollectingdata,notallofthemknowwhattodowithit.

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DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:[email protected],CFASeniorAnalyst

JingWangResearchAssociate

HongKong:8thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223004406London:242–246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NewYork:1359Broadway,9thFloorNewYork,NY10018Tel:6468397017

FungGlobalRetailTech.com

takeaways from sxsw 2017—day 2 and retailloco highlights · today’s screen-based shopping. by...

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