tag:www.econsultancy.com,2008:/topics/digital-transformation Latest Digital Transformation content from Econsultancy 2018-02-12T14:55:00+00:00 tag:www.econsultancy.com,2008:BlogPost/69789 2018-02-12T14:55:00+00:00 2018-02-12T14:55:00+00:00 Goldman Sachs is taking a fintech approach to grow its consumer lending business Patricio Robles <p>Two of the biggest proofs of Goldman's transformation were its launch of GS Bank, a internet bank with a $1 deposit requirement, and Marcus, an online consumer lending platform through which well-qualified consumers could obtain personal loans of up to $30,000. GS Bank has since been merged into Marcus, which now serves as Goldman's consumer brand.</p> <p>That a Wall Street firm once known for serving the extremely well-heeled would create a new brand to target mainstream consumers at all would have been difficult to predict a couple of decades ago, but because of the changes in the market, it's a no-brainer today. As QZ <a href="https://qz.com/1077463/goldman-sachs-gs-thinks-its-fintech-lending-arm-marcus-can-make-as-much-extra-revenue-as-trading/">pointed out</a>, "Goldman thinks it can make $1 billion in extra revenue from its consumer lending business over the next three years, as much as it expects for its trading operations."</p> <p>The challenge for Goldman is that the competition in the consumer deposit and lending spaces is significant and Goldman's name, however storied, doesn't have the same cachet with consumers. So Goldman is taking a page from fintech upstarts to grow Marcus.</p> <p>As <a href="https://www.wsj.com/articles/goldman-sachs-in-talks-with-apple-to-finance-iphonesales-1517999521">detailed by</a> the Wall Street Journal, Goldman is reportedly in talks with Apple to offer buyers of Apple devices financing at point-of-sale. "Customers purchasing a $1,000 iPhone X could take out a loan from Goldman instead of charging it to credit cards that often carry high interest rates," the Journal explained.</p> <p>This type of financing is big business: by one estimate, $80bn of the $200bn consumers borrowed using retailer-affiliated credit cards or point-of-sale loans went towards big-ticket items including electronic gadgets. So if Goldman can position Marcus to offer loans for Apple device purchases, it could be a real shot in the arm for Goldman's consumer brand.</p> <p>Of course, if the model of the potential deals sounds familiar to you, that's because it is. A number of consumer lending upstarts have targeted point-of-sale to reach consumers. For example, Affirm, which was co-founded by former Paypal co-founder and CTO Max Levchin, has partnered with retailers to offer consumers loans for their purchases at point-of-sale.</p> <p><img src="https://assets.econsultancy.com/images/resized/0009/2229/affirm-screenshot-blog-flyer.jpg" alt="" width="470" height="352"></p> <p>Affirm, which bills itself as a "financial company for everyday people", <a href="https://www.racked.com/2017/11/29/16710502/affirm-loan-shopping">reportedly</a> has over 1,000 merchant partners and is said to have originated more than a million loans with an average order size of $750. The company uses its own underwriting model, which <a href="https://bankinnovation.net/2017/09/the-rise-of-alternative-data-in-the-lending-market/">is capable of looking at alternative data</a> and doesn't necessarily require a FICO score, or a good FICO score. On the customer experience side, Affirm is seamlessly integrated into the checkout experience of its merchant partners, making it far easier to convert shoppers into borrowers.</p> <h3>Goldman's advantages</h3> <p>By embracing a similar model to grow its consumer lending business, Goldman could find that it has some big advantages over smaller upstarts like Affirm.</p> <p>First, while the Goldman name might not be a deal-maker for consumers, it could help the firm woo merchants, especially those like Apple, which have worked with Goldman in the past. Second, Goldman's size means it has more capital to lend and it will likely be able to offer interest rates that are more competitive than upstarts.</p> <p>So if Goldman can ink the right deals and deliver customer experiences that are on par with successful fintechs, it's entirely possible that it could quickly become a dominant player in this space. That very real possibility is yet another reminder of why fintechs themselves <a href="https://www.econsultancy.com/blog/69749-fintechs-are-diversifying-so-is-the-unbundling-trend-over">are trying to get bigger and diversify</a>, which is reshaping the financial services landscape they disrupted.</p> tag:www.econsultancy.com,2008:BlogPost/69778 2018-02-08T11:15:00+00:00 2018-02-08T11:15:00+00:00 From growth to soft skills, where professional marketers should focus Jeff Rajeck <p>But most of the 2018 marketing trends only cover marketing tactics and, while important, tactics are just one part of what it means to be a professional marketer.</p> <p>So what else should marketers be looking for in 2018 marketing trends, specifically regarding their careers? What are the trends in 2018 for the professional marketers?</p> <p>To find out, Econsultancy recently invited Damien Cummings, former chief marketer of many top-tier firms and now CEO at Peoplewave and Principal Consultant at Econsultancy, to speak at our Digital Outlook 2018 in Singapore. To an audience of over 400 professional marketers, Mr. Cummings delivered a thought-provoking talk about what career-oriented marketers need to do in 2018.</p> <p>Before we start, we'd like to highlight two upcoming Singapore Econsultancy training courses for marketers who are interested in a strategic view of their practice. First, there is <a href="https://econsultancy.com/training/courses/mastering-customer-experience-cx-management/dates/3358/">Mastering Customer Experience (CX) Managemen</a>t on 8th March and then we are offering a <a href="https://econsultancy.com/training/courses/proving-digital-roi/dates/3397/">Proving Digital ROI Masterclass</a> on July 5th.  You can find out more and book your spot by clicking on the respective link.</p> <p>So, what are the 2018 marketing trends for those who work in marketing?</p> <h3>1) Marketers should become growth agents</h3> <p>Mr. Cummings opened with some sobering statistics. According to <a href="https://www.marketingweek.com/2017/02/16/cmos-shortest-tenure-c-suite/">recent reports</a>, the CMO has the lowest average tenure of the C-suite, 3.5 years, which is around half of that of the average CEO.</p> <p>But why is this? Well, one reason Mr. Cummings offered was that CMOs typically do not speak the language of the business. While CMOs can talk at length about "brand", "awareness", and "engagement', other C-suite members really only care about more practical metrics such as sales, margin, and market share.</p> <p>Having a different agenda than the rest of the business often causes friction between upper management - and can lead to an untimely exit of the chief marketer.</p> <p>And such a change is not unnoticed by marketers on the ground. As leadership changes, strategies change and day-to-day work lacks direction which leads to frustration and slow career growth for marketers.</p> <p>So, what should marketers do to avoid this situation? First off, marketers should think more about business metrics and become agents of growth. Instead of only aiming for clicks, likes, and shares think about how the work you do affects your company's top and bottom line.</p> <p>Additionally, marketers should look for opportunities to be a part of their company's growth team, and if they don't have one find a company which does. <a href="https://www.marketingweek.com/2017/03/23/coca-cola-leadership-shake/">Coca-Cola</a>, <a href="http://ir.mondelezinternational.com/releasedetail.cfm?releaseid=863375">Mondelez</a>, and <a href="http://adage.com/article/cmo-strategy/kimberly-clark-cmo-sirkin-named-kellogg-chief-growth-officer/301595/">Kellogg's</a> have all recently promoted chief marketers to chief growth officers (CGOs) and <a href="http://www.adweek.com/brand-marketing/forrester-predicts-more-companies-will-replace-cmos-with-chief-growth-officers-in-2018/">Forrester research predicts</a> that many more companies will do the same in 2018.</p> <p>This trend has become so widespread that Marketing Week <a href="https://www.marketingweek.com/2017/03/27/cmos-stand-for-growth/">recently opined</a> that "if CMOs don’t stand for growth, they stand for nothing".</p> <p><img src="https://assets.econsultancy.com/images/0009/2062/2018-marketing-trends-2.jpg" alt="" width="800" height="533"></p> <h3>2) Marketers need to shift their focus to soft skills</h3> <p>Next, Mr. Cummings asserted that marketers need to stop focusing so much on technical skills and instead focus on the 'soft' skills necessary for leadership positions. </p> <p>Recently, we covered this trend by summarizing Mr. Cummings' previous talk about how <a href="https://econsultancy.com/blog/69565-from-zero-to-cmo-five-essential-steps">marketers can improve the likelihood of reaching CMO</a> by understanding the 'five essential steps to CMO'.</p> <p>This time, however, Cummings noted that underlying these steps are a shift in skills from 'doing' marketing to being able to manage change in a company.</p> <p>Specifically, he noted that the skills required are: </p> <ol> <li>Vision</li> <li>Leadership</li> <li>Transformation</li> <li>Change management </li> </ol> <p> <img src="https://assets.econsultancy.com/images/0009/2064/2018-marketing-trends-1.png" alt="" width="800" height="452"></p> <p>Detailed in the infographic above, professional marketers need to develop each of these skills in order to progress in their career. This trend is particularly relevant for those in organisations going through the changes described in point 1, above.</p> <h3>3) Marketing departments need a digital strategy</h3> <p>Another trend highlighted by Mr. Cummings is that marketing departments now need direction for their digital efforts.</p> <p>This trend first came to light in January of 2017 when P&amp;G's Chief Brand Officer Mark Pritchard <a href="http://adage.com/article/media/p-g-s-pritchard-calls-digital-grow-up-new-rules/307742/">told an audience</a>, "the days of giving digital a pass are over...It's time to grow up."</p> <p>While Mr. Pritchard was specifically referring to his company's agency relationships, the words should now resonate with marketing departments as well.</p> <p>One way marketers can adjust to this change is by thinking deeply about what they are trying to achieve and committing to a detailed strategy in writing.</p> <p>As an example, Mr. Cummings explained that while he was at Standard Chartered, content marketing was not just another communication channel, it had a detailed strategic direction. Its purpose was described using six categories: </p> <ol> <li>Who we are as a company</li> <li>Who are our stakeholders</li> <li>What our stakeholders want</li> <li>What content themes reflect who we are and what we want</li> <li>Our chief distribution channels</li> <li>How we will amplify our message</li> </ol> <p>Admittedly, these categories are often thought about and even discussed by content marketers. Few organisations, though, have had the discipline to put pen to paper and say what it is they are trying to accomplish with digital and why.</p> <p>Doing so will clarify thinking, improve the effectiveness of digital and help marketers explain how the work they do contributes to the business.</p> <p><img src="https://assets.econsultancy.com/images/0009/2065/2018-marketing-trends-4.jpg" alt="" width="800" height="600"></p> <h3>4) Marketers must understand digital transformation - beyond the buzzwords</h3> <p>The final trend which Mr. Cummings discussed was the need for marketers to understand digital transformation beyond just being able to speak about it using buzzwords.</p> <p>The reason for this is that digital transformation is not a foregone conclusion; it has to be carefully engineered by its proponents, and its proponents are typically the marketing department.</p> <p>To highlight the peril digital transformation efforts face, Mr. Cummings quoted a <a href="https://www.ibm.com/blogs/insights-on-business/oracle-consulting/84-of-companies-fail-at-digital-transformation/">2017 IBM report</a> which concluded that more than four in five (84%) of companies fail at digital transformation.</p> <p>To learn more about the fundamentals of digital transformation, we encourage you to read our <a href="https://econsultancy.com/blog/69356-the-essential-first-step-toward-digital-transformation">previous</a> <a href="https://econsultancy.com/blog/69598-four-steps-to-successful-digital-transformation">posts </a>on the topic, but, as a quick reminder, here are the five essential components of a sustainable digital transformation programme: </p> <ol> <li>Strategy</li> <li>Engagement</li> <li>Innovation</li> <li>Technology</li> <li>Data &amp; Analytics </li> </ol> <p>Again, do read our <a href="https://econsultancy.com/blog/69356-the-essential-first-step-toward-digital-transformation">previous </a><a href="https://econsultancy.com/blog/69598-four-steps-to-successful-digital-transformation">posts </a>on the topic for more detail on each of these, but the main takeaway is that marketers should understand the components of digital transformation in order to improve their chances of leading a successful programme.</p> <h3>A word of thanks</h3> <p>Econsultancy would like to thank <strong>Damien Cummings, CEO at </strong>Peoplewave<strong> and Principal Consultant at Econsultancy</strong>, for his insightful talk about the 2018 marketing trends which professional marketers should be following. </p> <p>We'd also like to thank all of the professional marketers for joining us for Digital Outlook 2018 - and we hope to see you all at upcoming Econsultancy events!</p> <p><img src="https://assets.econsultancy.com/images/0009/2066/2018-marketing-trends-5.jpg" alt="" width="800" height="600"></p> tag:www.econsultancy.com,2008:BlogPost/69782 2018-02-07T15:00:00+00:00 2018-02-07T15:00:00+00:00 Fintech propels Quicken Loans above Wells Fargo in mortgage originations Patricio Robles <p>The company that surpassed Wells Fargo last quarter was not, as one might expect, another major bank. Instead, <a href="http://www.crainsdetroit.com/article/20180201/news/651886/quicken-loans-overtakes-wells-fargo-as-largest-mortgage-lender-in-q4">it was Quicken Loans</a>, a privately-held company that, unlike Wells Fargo, doesn't operate any branches.</p> <p>Quicken Loans is no upstart. For years, it has been one of the largest mortgage originators in the country, and the largest online mortgage lender.</p> <p>But a changing mortgage market combined with the fintech boom has allowed Quicken Loans to capitalize in a big way.</p> <p>The changes in the market are dramatic. Consider that in Q4 2015, Wells Fargo originated $47bn in home loans. Quicken Loans originated $19bn, less than half of Wells Fargo's total but still enough to make it the third largest mortgage originator in the country at the time.</p> <p>But change was already afoot. While Wells Fargo was still top dog in Q4 2015, <a href="https://www.realtytrac.com/news/mortgage-and-finance/q4-2015-u-s-residential-property-loan-origination-report/">according to RealtyTrac</a>, its share of originations dropped 8% year-over-year. The same was true for other large banks, including JP Morgan Chase, Bank of America and US Bank, which saw their share of originations drop by 30%, 27% and 13%, respectively.</p> <p>Quicken Loans, on the other hand, saw its share grow by 10%.</p> <p><img src="https://assets.econsultancy.com/images/0009/2133/top_originators_Q4_2015.png" alt="" width="468" height="339"></p> <p>And those gains continued as Quicken Loans doubled down on technology. In 2016, it launched Rocket Mortgage, one of the first mortgage lending offerings to give customers the ability to complete the entire loan application process online. Every year since, Quicken Loans has used a Super Bowl spot to promote Rocket Mortgage to the masses.</p> <p><iframe src="https://www.youtube.com/embed/IX3_Aqji4yE?wmode=transparent" width="560" height="315"></iframe></p> <p>Rocket Mortgage's value proposition is simple: “get an approval to buy a home or refinance your mortgage in minutes.” To make this possible, Rocket Mortgage reduces or eliminates the need for paperwork by allowing applicants to retrieve their financial information from their accounts at their financial institutions <a href="https://www.econsultancy.com/blog/69779-how-will-open-banking-affect-ux">Open Banking</a>-style.</p> <p>While prospective homebuyers using Rocket Mortgage have the option of talking to a human being about their options and application, they're not forced to. Contrast that with Wells Fargo, which offers homebuyers a form through which they can request a “personal consultation” by phone or at a local bank branch.</p> <p>In today's market, for many consumers, a fully online no-touch or low-touch process beats a process that requires human interaction, especially if the human interaction isn't seen to be critical. For example, if a company can use technology to determine what loans and loan terms a prospective homebuyer can qualify for in a matter of minutes, a company that requires them to have a “consultation” to obtain the same information is increasingly going to be at a disadvantage.</p> <p>So while Wells Fargo still originated the highest dollar value of mortgage loans for the full year of 2017, Quicken Loans' big fourth quarter is no fluke and the writing is on the wall: fintech has and continues to change consumer expectations. If big players don't take action to meet them, they will continue to be surpassed by once-smaller companies that do.</p> tag:www.econsultancy.com,2008:BlogPost/69764 2018-02-02T10:00:00+00:00 2018-02-02T10:00:00+00:00 Kodak demonstrates why brands should tread carefully with blockchain initiatives Patricio Robles <p>Many of these applications are in the world of finance but the blockchain's potential extends beyond financial services. For instance, there <a href="https://econsultancy.com/blog/69712-four-ways-the-blockchain-could-be-applied-to-digital-advertising">are ways it could be used in the digital advertising market</a> to address pressing issues like fraud.</p> <p>But established brands would be wise to tread carefully when it comes to blockchain initiatives.</p> <p>That's because the blockchain hype has led to a flood of <a href="https://www.wired.com/story/cryptocurrency-scams-ico-trolling/">obvious scams</a> as well as questionable behavior that some suggest is not exactly on the up-and-up.</p> <p>For example, a number of publicly-traded companies, most of them small and previously unheard of, <a href="https://www.theregister.co.uk/2018/01/22/blockchain_rebrand_sends_stapleton_capitals_shares_soaring/">have pivoted to the blockchain</a>, sending the prices of their shares soaring. Perhaps one of the most amusing examples of this phenomenon: a company called the Long Island Iced Tea Corp., which, as the name suggests, was in the business of making iced tea, changed its name to Long Blockchain Corp. and saw its stock more than triple on the news.</p> <p>Regulators, including officials at the Securities and Exchange Commission (SEC), have been warning investors about the risks of investing in these companies. And they have signaled that they are going to scrutinize companies that engage in this behavior. Even so, enforcement action has been limited.</p> <p>That, however, appears to be changing. This month, the SEC halted trading of shares in a Hong Kong-based blockchain company that had seen its stock price increase by 900% last year. </p> <p>And in what is its biggest enforcement action in the space to date, the SEC this week <a href="https://www.coindesk.com/sec-files-fraud-suit-against-crypto-bank-ico/">filed a lawsuit</a> against AriseBank, a Texas-based company that said it was building a cryptocurrency bank. AriseBank claims it raised over $1bn through an Initial Coin Offering (ICO) that the SEC says was fraudulent and represented an unregistered offering of securities.</p> <h3>The case of Kodak</h3> <p>Of course, the presence of bad actors in the nascent cryptocurrency and blockchain technology market doesn't mean that the entire market is full of bad apples.</p> <p>Case in point: Kodak <a href="https://www.businesswire.com/news/home/20180109006183/en/KODAK-WENN-Digital-Partner-Launch-Major-Blockchain">recently announced</a> a blockchain initiative called KodakCoin, “a photo-centric cryptocurrency to empower photographers and agencies to take greater control in image rights management.”</p> <p>Kodak, of course, is the once-powerful imaging technology company. It filed for bankruptcy in 2012 and is today a shell of what it once was.</p> <p>But its brand, which was at one point synonymous with photography, is perhaps its most valuable remaining asset and by slapping it on a blockchain venture, Kodak's stock price rose more than 200% in the span of two days.</p> <p>Kodak's blockchain venture itself is real. The company wants to use the blockchain as the underpinning of KodakOne, an image rights management platform. That seems like a legitimate application for the technology. And Kodak has registered its ICO for KodakCoin, which could raise up to $20m, with the SEC, although <a href="https://www.usatoday.com/story/money/nation-now/2018/01/31/kodak-delays-kodakcoin-cryptocurrency/1082443001/">it is being delayed by several weeks</a> due to concerns over the vetting of investors.</p> <p>But while KodakCoin appears to be a legitimate blockchain effort, the meteoric rise of Kodak's stock price has caused the company to face considerable scrutiny. The New York Times <a href="https://www.nytimes.com/2018/01/30/technology/kodak-blockchain-bitcoin.html">called Kodak's move</a> a "dubious cryptocurrency gamble" and pointed out that Kodak is really only lending its name to the blockchain venture. Its partner and the real brains behind the operation, a company named WENN Digital, is “a California-based affiliate of a British photo agency that specializes in paparazzi photo licensing.”</p> <p>The New York Times has noted that a lead adviser to KodakCoin “has a troubled track record” that includes being banned from the Alberta Stock Exchange for five years, and Marketwatch <a href="https://www.marketwatch.com/story/key-kodakcoin-exec-barred-from-serving-as-officer-in-german-companies-2018-02-01">yesterday reported</a> that the CTO of WENN Digital is banned from serving as an officer of a publicly-traded company in Germany.</p> <p>Throw in <a href="https://www.marketwatch.com/story/kodak-stock-pulls-back-directors-disclose-acquisitions-prior-to-blockchain-rally-2018-01-11">some interesting stock purchases and sales</a> by Kodak directors in the days leading up to and on the day of Kodak's KodakCoin announcement and you have fuel for a narrative that doesn't help Kodak's brand.</p> <p>But on substance, even if the blockchain skeptics and critics are ultimately wrong about how meaningful the impact the technology will have on the world, it's not at all clear that KodakCoin specifically has what it takes to succeed. While the problems the venture aims to solve are real ones, nothing presented by the company to date suggests that photographers and those wanting to license photos will embrace the KodakCoin model over the many existing approaches and platforms that are already in use.</p> <p>In fact, the New York Times has detailed what appear to be serious flaws in the KodakCoin model, such as the fact that only accredited investors will be able to buy and use KodakCoin.</p> <h3>Experiment before embracing</h3> <p>Kodak's experience highlights the primary reason that brands need to be careful about their blockchain initiatives: while blockchain tech is very promising, it's too early to tell which applications are going to be commercially viable and most brands are unlikely to have all the answers.</p> <p>They should by all means be willing to experiment with blockchain technology, but embracing it totally and using it to launch major offerings positioned as viable solutions to big problems looks incredibly premature.</p> <p>Put simply, the risk that such offerings won't be viable high and when you add on the risk of scrutiny from the public and powerful government agencies like the SEC, even brands that are trying to recapture their glory days, like Kodak, potentially have a lot to lose.</p> <p><em><strong>Want to learn more about the blockchain and marketing? Subscribers can download Econsultancy's <a href="https://econsultancy.com/reports/opportunities-and-challenges-for-marketers-in-2018/">Opportunities and Challenges for Marketers in 2018</a>.</strong></em></p> tag:www.econsultancy.com,2008:BlogPost/69761 2018-02-01T15:00:00+00:00 2018-02-01T15:00:00+00:00 Three huge employers are going to try to disrupt healthcare Patricio Robles <p>On Tuesday, Amazon and two other corporate giants, Berkshire Hathaway and JPMorgan Chase, <a href="https://www.businesswire.com/news/home/20180130005676/en/Amazon-Berkshire-Hathaway-JPMorgan-Chase-partner-U.S.">announced</a> that they are creating an independent company to provide healthcare for their employees.</p> <p>A press release issued jointly by the three companies stated that the two primary goals of the venture, which will notably be "free from profit-making incentives and constraints", are to improve employee satisfaction and reduce costs. </p> <p>Jamie Dimon, the CEO of JPMorgan Chase, explained, "Our people want transparency, knowledge and control when it comes to managing their healthcare. The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans."</p> <p>Warren Buffett, Berkshire Hathaway's CEO, was more blunt. "The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes," he stated.</p> <p>Little is known about how the three companies, which combined employ more than 1m people, plan to go about achieving their goals, but <a href="https://www.nytimes.com/2018/01/30/technology/amazon-berkshire-hathaway-jpmorgan-health-care.html">according to</a> the New York Times, technology will be at the center of whatever they do. Interestingly, a New York Times source indicated that the new company won't replace existing insurers or hospitals. The New York Times thus speculated:</p> <blockquote> <p>One potential avenue for the partnership might be an online health care dashboard that connects employees with the closest and best doctor specializing in whatever ailment they select from a drop-down menu. Perhaps the companies would strike deals to offer employee discounts with service providers like medical testing facilities.</p> </blockquote> <h3>What it means for healthcare players</h3> <p>While the success of the company Amazon, Berkshire Hathaway and JPMorgan Chase are launching is certainly not guaranteed, many observers believe that given the size of the three companies, it will have <em>some</em> impact and quite possibly a big impact on the American healthcare market.</p> <p>That, obviously, means that players in the healthcare market will need to keep a close eye on this venture as it could spell disruption down the road.</p> <p>Take, for instance, pharma companies. They are often implicated in discussions of healthcare costs and in recent years have come under fire from multiple angles. If Amazon, Berkshire Hathaway and JPMorgan Chase are serious about tackling healthcare costs, whatever they do will almost certainly touch upon prescription drugs. Pharma companies will need to respond strategically.</p> <p>But while some of the new company's efforts might present challenges to entrenched healthcare players, there are also bound to be opportunities. Many healthcare organizations have been investing heavily in digital transformation and to the extent that the Amazon, Berkshire Hathaway and JPMorgan Chase-led venture leans heavily on technology, it could offer these organizations the ability to take advantage of their investments and influence the direction the new venture takes.</p> <p><em><strong>Related reading:</strong></em></p> <ul> <li><a href="https://econsultancy.com/blog/69501-pharma-must-use-digital-to-meet-the-needs-of-decision-makers-report">Pharma must use digital to meet the needs of decision makers: report</a></li> <li><a href="https://econsultancy.com/blog/69746-which-pharma-companies-are-winning-at-social-survey-says">Which pharma companies are winning at social? Survey says...</a></li> </ul> tag:www.econsultancy.com,2008:BlogPost/69744 2018-01-22T12:30:00+00:00 2018-01-22T12:30:00+00:00 Is the new Amazon Go the future of brick-and-mortar retail? Patricio Robles <p>Amazon Go, which Recode <a href="https://www.recode.net/2018/1/21/16914188/amazon-go-grocery-convenience-store-opening-seattle-dilip-kumar">calls</a> a high-tech version of a 7-Eleven, a large convenience store chain in the U.S., has been under development for five years and started with a simple question, “What can we do to improve on convenience?”</p> <p>Amazon's answer, in large part: get rid of checkout.</p> <p>Thanks to a mobile app, cameras, sensors, computer vision and deep learning, shoppers at Amazon Go are able pick items off the shelf and leave the store without having to wait in line and pay. Instead, Amazon simply tracks what they've taken and automatically charges them accordingly.</p> <p>Amazon refers to this as a Just Walk Out Shopping experience and calls the technology behind it “the most advanced shopping technology.”</p> <p><iframe src="https://www.youtube.com/embed/NrmMk1Myrxc?wmode=transparent" width="560" height="315"></iframe></p> <h3>Will it work?</h3> <p>The big question: will it work? From a technical perspective, Amazon had to overcome significant challenges to bring Amazon Go to market. Implementing a system by which an individual can pick items off the shelf, or put them back, and have a virtual cart that tracks what they've taken or returned, was obviously no easy feat.</p> <p>And this gets even more complicated in a real-world environment. As Recode explained, Amazon is launching Amazon Go a year later than it had hoped to after a beta test open to Amazon employees encountered hiccups. A crowded store creates room for error. For example, if two people who look similar are shopping in proximity to each other, Amazon's technology needs to be able to tell them apart. It also needs to deal with scenarios such as an item being taken off of one shelf and being returned to another shelf.</p> <p>There's every reason to believe that Amazon is capable of sorting out technical issues that might arise with its Just Walk Out Shopping experience but at the same time, it's clear that Amazon isn't infallible, especially when it comes to brick and mortar commerce.</p> <p>Case in point: last week saw headlines suggesting that Whole Foods, the supermarket chain Amazon acquired for more than $13bn last year, <a href="http://www.businessinsider.com/whole-foods-employees-reveal-why-stores-are-facing-a-crisis-of-food-shortages-2018-1">has experienced problems</a> under Amazon's umbrella. According to those reports, some Whole Foods stores have seen “a crisis of food shortages” that have infuriated some customers. An inventory management system called order-to-shelf, or OTS for short, is said to be the culprit. Not surprisingly, some are questioning whether this is related to Amazon's ownership and control of the company.</p> <h3>An uncertain future</h3> <p>As far as Amazon is willing to state publicly, Amazon Go isn't the future of its brick-and-mortar operations. The company's official position is that it has no plans to put Amazon Go's technology to use in Whole Foods or its Amazon Books stores.</p> <p>But that could obviously change if Amazon Go works and customers embrace it and for that reason, brick-and-mortar retailers, some of which are working on their own automation technologies, would be wise to pay close attention to Amazon Go. Some, like the New York Times' Nick Wingfield, even <a href="https://www.nytimes.com/2018/01/21/technology/inside-amazon-go-a-store-of-the-future.html">suggest</a> that Amazon might one day license the Amazon Go technology much the same way it licenses its cloud computing services through Amazon Web Services (AWS).</p> <p>Of course, even if Amazon Go becomes the latest Amazon effort to disrupt the industry, it doesn't mean that it's the Future with a capital 'f'. As the backlash against startups like Bodega, which wanted to replace the corner convenience store with a modern-looking vending machine, has demonstrated, many consumers still value a human-based customer experience and the relationships that can come with it.</p> <p>This is particularly true in retail markets like luxury, so if and as experiences like Amazon Go become more common, there will almost certainly be an opportunity for retailers to differentiate themselves by going in the opposite direction.</p> tag:www.econsultancy.com,2008:BlogPost/69732 2018-01-17T14:39:32+00:00 2018-01-17T14:39:32+00:00 TD Bank's acquisition of an AI firm highlights the growing importance of AI in banking Patricio Robles <p>While Layer 6's AI tech is used by clients in a number of industries, TD Bank ultimately decided that the company's technology was critical enough to its business that it made sense to buy its vendor out.</p> <p><a href="https://td.mediaroom.com/2018-01-09-TD-Bank-Group-acquires-artificial-intelligence-innovator-Layer-6">According to</a> TD Bank Group CEO Bharat Masrani, “Anticipating and meeting customer needs are at the heart of our promise, and we are excited to further accelerate our innovation agenda to deliver well into the future.”</p> <p>Masrani's comment refers to TD Bank's use of Layer 6's AI tech to create “predictive and personalized” customer experiences, which it says are at the heart of its digital transformation strategy. Layer 6's platform can be used to generate product recommendations, deliver personalized pricing, predict customer complaints and attrition and identify next best actions.</p> <p>All of those can be integral to creating user experiences that keep customers happy and strengthen TD Bank's relationship with them. Increasingly, some of these user experiences are taking place in a variety of new channels, such as <a href="https://econsultancy.com/blog/68934-how-chatbots-and-ai-might-impact-the-b2c-financial-services-industry">chatbots</a> and voice assistants, that will realistically require good AI to function well.</p> <p>Case in point: TD Bank was the first bank in Canada to launch a Twitter chatbot and it recently launched an Alexa skill that allows customers to bank by voice using one of Amazon's Echo speaker devices.</p> <p>While TD Bank is trying to position itself as an innovator and is clearly ahead of many banks, the reality for the industry is that AI is likely to be a necessity, not a differentiator, in the very near future. </p> <p>Accenture's Banking Technology Vision 2017 report found that four in five bankers believe that AI will “revolutionize” the way they gather customer data and interact with customers, and Accenture believes that AI-based applications <a href="https://www.cnbc.com/2017/03/28/ai-to-become-main-way-banks-interact-with-customers.html">will become</a> the primary channels through which they interact with them within a few years.</p> <p>The reason: according to Accenture's banking practice chief, Alan McIntyre, AI-powered applications “will give people the impression that the bank knows them a lot better, and in many ways it will take banking back to the feeling that people had when there were more human interactions.”</p> <p>He added, “The big paradox here is that people think technology will lead to banking becoming more and more automated and less and less personalized, but what we've seen coming through here is the view that technology will actually help banking become a lot more personalized.”</p> <h3>Banks need an AI strategy, and soon</h3> <p>If AI is key to the customer experiences that banks need to deliver to win, 2018 will be a critical year for banks to incorporate AI into their digital strategies. This not only involves determining where and how to adopt AI but who should develop or provide it.</p> <p>There are numerous challenges, including the widespread use of legacy systems within banks and the more stringent compliance requirements they must adhere to.</p> <p>Additionally, <a href="https://econsultancy.com/blog/69151-a-day-in-the-life-of-senior-data-scientist-at-asos">AI talent</a> has never been more in demand, creating a challenge for banks hoping to build in-house AI capabilities. And while the number of companies offering AI platforms is growing, not all AI platforms are created equal. </p> <p>TD Bank's acquisition also highlights the risk that large players in financial services or other industries that are embracing AI could acquire a platform outright, making outsourcing AI capabilities to a third-party somewhat risky. After all, the wisdom of relying on an AI platform owned by a competitor is questionable.</p> <p>Given just how critical AI could be to banks' ability to deliver the kinds of experiences their customers will demand, each bank's AI decisions could determine whether it thrives or falters in the coming years.</p> tag:www.econsultancy.com,2008:TrainingDate/3396 2018-01-15T04:56:52+00:00 2018-01-15T04:56:52+00:00 Fast Track Digital Marketing - Singapore <p>This intensive 3-day course is a great place to start your digital marketing training. The course gives you a complete overview of the exciting areas of digital marketing, knowledge on how to effectively leverage the new media and integrate them into your overall marketing strategy.</p> tag:www.econsultancy.com,2008:BlogPost/69715 2018-01-11T11:24:00+00:00 2018-01-11T11:24:00+00:00 How Disney is approaching its digital transformation and fighting disruption Bola Awoniyi <p>In order to stave off the type of disruption that Netflix inflicted on Blockbuster, Disney has had to execute a multi year plan, that is now beginning to take shape.</p> <p>The result is an approach that at the very least provides a template for how to execute a digital transformation strategy in the face of competition.</p> <h3>Investing in the tech through acquisition</h3> <p>Through the success of Netflix, it has long been acknowledged that digital streaming will have a profound impact on how consumers find and watch video content.</p> <p>However, when Netflix started investing in buying and producing its own content, rather than just distributing content, it turned its content suppliers, including Disney and Fox, into competitors.</p> <p>Therefore in order to prevent Disney from becoming obsolete, or at the very least, a heavily commoditised part of the value chain, Disney invested in technology that allowed it integrate vertically, just as Netflix laddered up by producing its own content.</p> <p>This is something that Disney theoretically could have done by building the technology in-house. However, it opted to invest in BAM-tech, a sports video streaming technology on a multiyear basis, ultimately <a href="https://thewaltdisneycompany.com/walt-disney-company-acquire-majority-ownership-bamtech/">becoming majority owner in August 2017</a>.</p> <p>Not only did this approach allow Disney to save time, but it also enabled the business to acquire significant domain expertise, as BAMtech arguably has the best streaming technology of any organisation not named Netflix.</p> <p>However, while it gave Disney the technical backbone needed to create a Netflix competitor, there is more to a streaming service than just the technology.</p> <h3>Understand the new value proposition</h3> <p>While the end result of consumers watching content is the same, doing this via a streaming platform, instead of through a cable operator means a necessary change in how Disney views its value proposition.</p> <p>Rather than just creating differentiated video content that can be bundled into channels and sold to cable distributors and advertisers, a streaming service means a direct relationship with the consumer, ultimately cutting out the cable operators entirely.</p> <p>This is relatively similar to the experiences of commerce brands needing to consider their own direct to consumer channels, to the potential determent of sales through distributors and retailers.</p> <p>However, with the barrier to entry much higher for a streaming platform, it was important for Disney to test some assumptions first. This led to the company creating a subscription platform called "Disney Life" in 2015 as a place to experiment in a restricted numer of markets.</p> <p>Not only were there valuable lessons and experiences acquired in creating appropriate customer experiences and journeys, it provided core insights on what consumers were looking for. As early as March 2016, Disney CEO Bob Iger <a href="http://www.homemediamagazine.com/disney/bob-iger-we-ve-learned-lot-disneylife-37720">can be quoted saying</a> that the service has shown them that consumers are drawn to the television and film content, over the books and video games.</p> <h3>Improving the “product”</h3> <p>Despite this insight, the Disney Life experiment has not gone well from a commerical standpoint - and this was in large part due to the insight above.</p> <p>The key differentator for a streaming platform is providing access to content that isn't available anywhere else. However for the most part, most of the television and film content on the Disney platform still available through its cable and distribution partners.</p> <p>This realisation is what caused the media brand to decide that <a href="https://www.cnbc.com/2017/09/07/disney-ceo-iger-marvel-star-wars-to-go-to-disneys-streaming-service.html">Marvel and Star Wars titles will be streamed exclusively on the new Disney streaming platform</a> when it launches, after initially being on the fence regarding the distribution of the marquee franchises.</p> <p><img src="https://assets.econsultancy.com/images/0009/1581/black-panther-quad-poster.jpg" alt="" width="600"></p> <p>This is also the context in which the Fox properties were acquired - Disney now has (exclusive) access to an extremely large content library full of premium content, not only making their offering stronger, but also making Netflix weaker, as they remove most Disney and Fox programming from Netflix over the coming years.</p> <h3>Is Disney in the clear?</h3> <p>To be clear, the degree to which Disney was in any real trouble was small. However, this transformation is about more than just surviving the Netflix; this is Disney's play to maintain and solidify its position as the worldwide leader in media and entertainment.</p> <p>That said, despite Disney’s impressive execution of it’s strategy in such a short space of time, there is still more to go. Not only do they need to wait for the Fox acquisition to be approved, but they still need to create a streaming experience that works and scales, even at the expense of its cable oriented businesses.</p> <p>This is particularly key for a legacy organisation like Disney, as it will always have it’s golden era of television dominance as a benchmark - a dominance that still contributes a significant amount towards its profits.</p> <p>While it certainly has a responsibility to create as much value as possible, becoming a full stack streaming business is very different to being a content production house.</p> <p>However, what Disney seems to have recognised and what every other company that goes through its own transformation should appreciate, is that it should be judged not on its ability to replicate or surpass the profits of its glory days, but on its ability to effectively compete today and beyond.</p> tag:www.econsultancy.com,2008:BlogPost/69687 2018-01-05T14:46:59+00:00 2018-01-05T14:46:59+00:00 Four digital transformation secrets, revealed Jeff Rajeck <p>So what have practitioners learned about digital transformation that most of us don't already know? What are the secrets to <a href="https://econsultancy.com/training/digital-transformation/">digital transformation</a> success?</p> <p>To find out, Econsultancy recently invited dozens of client-side marketers to discuss their digital transformation experiences. At a roundtable hosted by Damien Cummings, CEO of Peoplewave and Principal Consultant at Econsultancy, participants provided insights about how digital transformation really works, with the main points summarized below.</p> <h3>1) Digital transformation is really about survival</h3> <p>The first secret revealed by attendees is that digital transformation is not about getting ahead of the competition.  Instead, for most firms, digital transformation is started to head off bankruptcy.</p> <p>As one participant said, 'with our digital transformation programme, we are trying to disrupt ourselves before being disrupted by others'.</p> <p>The reason that struggling firms are more likely to adopt digital transformation is that transformation is not high on the priority list of profitable businesses. Instead, successful firms are under pressure to deliver short-term results, not long-term transformation strategies.</p> <p>Marketers attempting to start digital transformation at their companies were encouraged, therefore, to highlight negative metrics in their reports and point out weaknesses in the current business strategy.</p> <p>'Fear is a great motivator' quipped one participant.</p> <p><img src="https://assets.econsultancy.com/images/0009/1271/digital-transformation-1.jpg" alt="" width="600"></p> <h3>2) There is more than one way to get buy-in</h3> <p>We've often heard that top-level buy-in is required for any serious digital transformation effort, but those who have digital transformation programmes underway offered some tips on how to get it.</p> <p>First off, if you are petitioning the management, they said, then you need to go beyond presenting the benefits and showing profit projections. Instead, marketers need to talk about end-to-end processing and the key decisions that the CEO and his team have to make in order to make digital transformation happen. Spell it out for them, said one delegate.</p> <p>Furthermore, appealing to the c-suite was not the only way that marketers were able to get support for digital transformation. Another popular technique for getting buy-in was the 'bottom-up' approach. Here, marketers simply enabled customer-facing staff with new digital tools and data and let them initiate the changes in processes. This created an environment where management had to either go along with the changes or appear as if they were dragging their heels.  And these days, few people want to appear to be technology laggards.</p> <p><img src="https://assets.econsultancy.com/images/0009/1272/digital-transformation-3.jpg" alt="" width="600"></p> <h3>3) Agencies are not typically used for digital transformation</h3> <p>Veterans of digital transformation also revealed that agencies, while great enablers, struggle to drive change at organisations.  Because of this, they advised that agencies should not be relied on for digital transformation projects.</p> <p>Instead, management needs to review the skills and competencies they have internally and hire the people they need to complement the team.</p> <p>Agencies, according to participants, should continue to be used for outsourcing marketing functions. They can even be used to a greater extent once transformation is underway, freeing up resources.</p> <p><img src="https://assets.econsultancy.com/images/0009/1273/digital-transformation-2.jpg" alt="" width="600"></p> <h3>4) No one has figured out the best organisational structure yet</h3> <p>Attendees who were currently working on transformation could not agree on the ideal structure for a new, digital organisation.</p> <p>Some had implemented a 2-speed model where transformation was taking place in 'labs' outside of the reporting structure and slowly implementing changes in the main business. Others said that it was necessary to integrate innovation teams into the organisation straight away so that everyone was on the same journey.</p> <p>While no consensus on the ideal structure was reached, most agreed that the best overall approach was to train up internal staff, empower them to make changes, and trust them to figure out how best to transform the organisation.</p> <h3>A word of thanks</h3> <p>Econsultancy would like to thank our table host Damien Cummings, CEO of Peoplewave and Principal Consultant at Econsultancy for guiding the discussion and eliciting the secrets of digital transformation from our many delegates.</p> <p>We'd also like to thank all of the marketers who attended Digital Cream Singapore 2017 and shared their valuable insights. We hope to see you all at future Econsultancy events!</p> <p><img src="https://assets.econsultancy.com/images/0009/1274/digital-transformation-4.jpg" alt="" width="600"></p> <p><em><strong>Based in London and want face-to-face digital transformation training? Explore <a href="https://econsultancy.com/training/courses/digital-transformation-in-practice">our Fast Track course</a>.</strong></em></p>