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Strategy

The Internet Of Things For Retail

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The Internet Of Things For Retail


The Internet of Things (IoT) is the network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment. The topic was a key item on the agenda at the recent National Retail Federation (NRF) 2015 expo in New York and has the opportunity to be truly transformative. It’s an area of retail that is full of buzzwords, but is likely to have a significant influence on future customer retail interactions.

Gartner predicts that there will be 4.9 billion connected things in use during 2015 (up 30% from 2014) and 25 billion in use by 2020. The IoT will impact all facets of consumer’s lives including ‘connected’ cars, homes and offices.

There is a significant opportunity for brands to use the IoT for retail innovation and connected products to make their instore experience more immersive. One tangible example is customer checkout - imagine being able to walk into a store, grab what you want and simply leave. Through a range of sensor technologies placed strategically around stores, retailers will be able to recognise customers uniquely as they enter the store, stores will have customer payment preferences on file, customers will then be billed when they leave the store with the merchandise, essentially bypassing the checkout.

The Internet of Things has the opportunity to be unobtrusive, reduce customer fiction and provide efficiencies (particularly at peak times), however there are opportunities for more immersive experiences. For example, using connected products to allow customers to learn more or have personalised recommendations made for them instore. Retailers could present information in the physical store that the customer has already researched online via their laptop or mobile device. Meanwhile, credit card providers have already partnered with several retailers to offer real-time promotions based on a customer’s location and credit card activity.

The number of connected devices in the IoT will generate inconceivable volumes of data. To provide perspective of the scale of data involved, a new fleet of Boeing planes by Virgin Atlantic will reportedly generate half a terabyte of data per flight. Virgin Atlantic IT Director David Busman recently noted “Literally every piece of that plane has an Internet connection, from the engines to the flaps to the landing gear”.

Ultimately the IoT isn’t just a way to get people to spend more money - it’s an opportunity to help customers get exactly what they need and for retailers to gain a better understanding of each customer’s interests and habits.

Want to learn more?

  • IFTTT (If This Then That) is a service that lets you create powerful connections and a great starting point to understand the possibilities of connected services.
  • Harvard Business Review has a good synopsis of the complexity of managing privacy in the IoT.
  • Cisco has a good visual summary of how the IoT will help retailers and other businesses deliver information and offers to customers.
     

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Big Data Driving Insurance

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Big Data Driving Insurance

Auto insurers are already using telematics (vehicle tracking & diagnostics) including information such as distance driven and location to assess the likelihood of a driver having an accident. What if your insurer agreed to lower your insurance premiums in exchange for obtaining access to all of you car's data: speed, location, operating hours, distances driven, traffic conditions and mobile usage whilst driving?

Perhaps you’d be concerned with exchanging this significant private information and wouldn't take up the offer, but would you accept it for the teenage drivers in your family, hoping it would make them drive more safely?

AAMI's latest campaign is putting this premise to the test. They're attempting to prove who's the better driver via their AAMI Safe Drive App. The app records your journeys and analyses your driving behaviour. It then provides you with a driving score and feedback relating to your journeys. Factors taken into account include length of trips, speed, acceleration, braking and mobile phone usage. The higher score you achieve, the safer driver they consider you to be.

It's a brilliant strategy with a fundamentally noble cause of making roads safer for all users (whilst also providing AAMI with a richness of data for underwriting that they've never had access to before). The app includes gamificaiton elements such as badges allowing users to climb a leaderboard, rewards for safe drivers with free roadside assistance and a corresponding competition providing the possibility of winning the grand prize of $100,000.

Usage of telematics is commonplace in the UK car insurance market where driver behaviour scores can be used to demonstrate a driver's propensity to have an accident and also enhance insurer underwriting sophistication. The ultimate goal for insurers is to drastically cut claims.

AAMI are upfront in their Privacy Statement stating that they collect personal information via the app so that "we can… [provide] you with any benefits or rewards derived from the App and underwriting and pricing your policy or any of our products or services” as well as “assess and investigate any claims you make”. So effectively they will use the information that they gather as a factor in how your policy is calculated (either positively or negatively).

Are users fully aware of how their data is used? According to the Internet Society’s Global Internet User Survey, only 16% of internet users read privacy policies and of those, only 20% actually understand them. So it would seem that the majority customers wouldn’t have made the linkage of their chance to win $100,000 and the future impacts on their policy.

Could this data also become an asset that could be sold to help better understand driving behaviours and other driving data? Strava, a mobile fitness app that tracks tens of millions of cyclists and runners recently trialed selling aggregated usage data to town planners to help provide better planning and development outcomes for cyclists and pedestrians.

How will the abundance of customer usage data transform your industry? How would you improve your product if you had access to amazingly rich customer data? 

 

See AAMI's app in action here:


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Default To Open

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Default To Open

Your default mode should be to share everything...
— Eric Schmidt


I'm currently engrossed in one of the books from my Christmas holiday reading list - How Google Works by Eric Schmidt and Jonathan Rosenberg. Eric is Google's Executive Chairman and Jonathan previously managed the company's consumer, advertiser and partner products so they write with authority on Google’s inner workings.

One of the key take ways for me was with respect to business communication. Their view is that when it comes to communication, businesses should default to being open and they should maximize the velocity and volume of the flow of their information.

Two great examples stood out for me:

The Google Board Report
Every quarter, Google executives create an in depth report on the state of the business providing data and insights on the business and products (nothing particularly unusual so far). What is surprising is that this detailed report is shared with every Google employee, along with a video from Eric presenting the slides that were delivered to the board. There are some elements that are redacted for legal reasons, but the default is to provide open communication and share. Google has shared every board presentation in this manner since they listed on the NASDAQ in 2004 and they have not had issues with respect to leaking of confidential information.

The key result is that nobody complains that they aren't aware of what's going on within the company. It's all there for their consumption.
 

Google OKRs
Another example of transparency at Google is their OKR process. OKRs are the Objectives (strategic goals to achieve) and Key Results (the way which progress towards the goal is measured) that every Google employee defines and publishes each quarter. It's a first person account of the things that they are working on and care about. The open nature of this information allows anyone in the business to understand anyone else's business priorities.

The OKR process starts at the top with Larry Page (Google’s CEO) posting his OKRs and communicating them at a company-wide meeting. The various business and product leads will then join in to define what each OKR means for their team and to review how they performed for the last quarter. Following on from this each staff member documents their own OKRs without any doubt of what the company's priorities are for the next quarter.

Google’s OKR process helps to maintain alignment across teams even as their organisation scales rapidly (they currently have over 50,000 employees).

I've been fortunate to work in a number of fantastic organisations, and I can only see an upside for staff engagement with increased organisational transparency. 

A good summary of the book follows, it's a worthwhile read!


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Streamlining Charity Donations

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Streamlining Charity Donations

We love to support charities and good causes with Australians donating over $2.5 billion every year. The latest figures from the Australian Tax Office show that Australians each give an average of $461 to charities annually.

There are several converging trends making the activity of raising donations more difficult including customers transitioning to cashless transactions and overall donation fatigue. Personally, I despair when I see the effort and cost that a number of charities incur in printing and distributing marketing collateral with debatable effectiveness. 

There is a real opportunity to streamline charity donations and make donating frictionless for consumers. Two of my favourite recent examples follow:


Common Pence - Donating Leftover STORED Value

Developed by a UK designer, Common Pence enables commuters to put their excess subway credit to good use by sending it to charity rather than it expiring or being returned to transport companies. The system is simple - commuters hold up their Oyster travel pass, contactless bank card or NFC enabled smartphone and make a small donation of GBP 0.50. Holding a travel card against the panel for an extended time will drain it of all leftover credit. Funds are delivered to a charity which is rotated every month. The Common Pence panels can be wall hung or even handheld to allow effective face to face fundraising.

SnapDonate - Donate By Scanning A Logo

SnapDonate wants to keep impulse giving alive in an increasingly cashless society and is making it easier to give by letting people donate to any charity by simply scanning the charity's logo whenever they see it. Using image recognition technology and a database of over 13,000 UK charity organisations, users can just point their smartphone camera at a charity logo, confirm the correct charity and pick a donation amount between GBP 2 and GBP 50 to automatically send the money. The service leverages their relationship with JustGiving to enable the donations and the app works even when offline.

Donating to a good cause is something that everyone feels good about. What other ways are there to make it easier for consumers to give their leftover change to good causes? What other industries could frictionless transactions be applied to?


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Cats Are The New Classifieds

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Cats Are The New Classifieds


As first noted by media pundit and journalism professor Jeff Jarvis, it seems that just as classifieds once provided the baseline revenue for print newspapers, cat memes are now providing the eyeballs funding modern news sites.

Printed classified ads of course have since been disintermediated by Craigslist, Gumtree, Realestate.com.au and Carsales. Research indicates that Cragislist alone cost newspapers in the US $5.4 Billion from 2000-2007. This, combined with broader changes in the digital advertising landscape have been linked to increased newspaper subscription prices, decreased display advertising rates and required changes in how newspapers have executed their digital strategies.

The latest estimates suggest that Buzzfeed currently has around 150 million unique visitors per month and is tracking towards $120 Million in annual revenue. Buzzfeed derives three quarters of their traffic from social sites (which requires lots of fresh content to stay at the top of news feeds). They have approximately 200 editorial staff publishing 400 articles per day. Whilst they are well known for their cat memes and 'Top x' articles, they also generate meaningful longform content such as www.buzzfeed.com/bigstories.

So previously, the listing for your garage sale or used car funded investigative journalism and now the advertising revenue from cat memes and native advertising is funding the creation of quality articles.

This trend towards popular content supporting more meaningful work isn't unique to Buzzfeed as highlighted by The Chaser team on their Media Circus program with consumer insights on the most read articles on news.com.au.  See their take on it below:

So is this a new funding model that we should all accept for quality content to be created or is it a sign of the continued decline in quality journalism? 

Time will tell...


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