John Batistich, Westfield Group, Everything is Broken

http://www.creativeadawards.com/original/wrecking-ball/11338

EVERYTHING IS BROKENthe end of business as usual

john batistich

“we think that everything is broken & we

throw our computing power at it to fix it”patrick pichete global cfo google

“nearly all of the tools, processes &

philosophies around marketing were

developed more than 50 years ago”

26 May 2010

“we want a one to one relationship with

7 billion customers” bob mcdonald ceo p&g

http://garinkilpatrick.com/awesome-marketing-blogs/

“we are living through a

change in the way ideas

are created, spread &

implemented. there’s a new

model of leading &

connecting people with

ideas for change” seth godin

what we learnt is being disrupted

old models don’t work like they used to

new methods are being explored

http://www.flickr.com/photos/sameli/1898511953/

rules are being challenged

time to think different. think big!

what’s changing?

3 shifts

source: richard watson. picture: john homer

increasing life-spans

declining fertility

skills shortage

cotton wool kids

rise of the screenager

rise in sinks & dinks

increased immigration. higher ethnicity

urban-rural polarisation

smaller households

environmental change

resource shortages rising costs

resource nationalism

carbon economy

increased regulation

peak oil

water labeling

packaging/waste taxes

eco-cynicism

1 billion new mouths

market expansion

product sourcing into aus/nz

services outsourcing

asian values & aesthetics

resource competition

inbound tourism numbers

protectionist backlash?

demographic

power returns east

sustainability

1 accelerator of change

1. ubiquitous connectivity

2. democratisation of production tools

3. access to higher data speed/more storage

technology enabled connectivity1 billion pcs & 4 billion mobiles

location-based services

mobile & social payments

intelligent vending

3d screens

rising transparency & amplification

increasing collaboration

personalisation

acceleration of everything

hunger for real shared experiences

source: richard watson

26 May 2010

1. technology

2. behavioural change

3. business model

3 waves of change

“WE ARE LOSING SHARE OF RETAIL”

“soon…you won’t forget anything, you’ll

never be lost, never lonely, never bored &

never out of ideas” eric schmidt ceo google september 2010

1.SHOPPER BEHAVIOURAccelerated change in shopper behaviour challenging old norms

old wayscommand & clicks

text & 2d

single task

desk/laptop search & email

ecommerce

store trading hours

national

appointment to view

entertainment & retail

seasonal sales

quality relationships

private

new behaviourstouch & gesture

video & 3d

multi-task

social & mobile search

mcommerce & social commerce

shop anytime anywhere

service finds you

time shifting

merged in a closed loop

always on special

quantity relationships

public

source: psfk

2.THE LINEAR PATH

TO PURCHASEThe old linear model is being replaced by a network to advocacy

See an AdReceiveCatalogue

Mail or eDM

Visit

Store

Consult

Sales

Person

Buy

Sign Up

for

Loyalty

card

Contact

Customer

Service

old linear path to purchase

Awareness Consideration Trial Purchase Repeat

Product

Search

Compare

Online

Read

Reviews

Browse

Content

Call a 1800

number

Track

Purchase

See an Ad

ReceiveCatalogue

Mail or eDM

Visit

Store

Consult

Sales

Person

Sign Up for

Loyalty

card

Contact

Customer

Service

Read

FAQs

Sign Up

for eDM

add online & social web

Create

Tags

Link from

Friend’s

Facebook

Watch

YouTube

Video

Peruse

Blogger

Sites

Join

Fan Page

Peruse

Blogger

Sites

Create

A UserCommunity

Buy

Follow

Brand on

Twitter

Stream

PurchaseExperience

Get Geo

Targeted

Offer on

Mobile

Post

Review

Upload

Picture

Ask

questions

via live chat

Invite

Friends to

Co-Shop

Scan QR

Code for Information

Reorder

via

Phone

Join a

relevant

forum for

advice

Read a

Foursquare

or Yelp

Review

Get up to

the minute

Reviews

Use an

application

for offers

Review on

IPTV

3. LINEAR DISTRIBUTION

CHANNELSThe future or retail is customer centric & channel agnostic

customer chooses multi channels

50%

$255B

offline

only

44%

<1%5%

search

online

buy

offline

search

offline

buy

online

online

only

total

retail

sales

4. TRADITIONAL STOREWe crave social, physical and instant experiences. Online experiences are changing store expectations

the store needs re-invention. more

experiential, service, social & integrated

5. DIFFERENTIATION DELUSIONBeing different & better only matters if your customer believes & values it

your brand is not as

different as you think it is!

80%

8%

ceo customersource: contagious

Is your brand different? % Agree

consumers & businesses differ on

why they interact on social sites

6. DISCOUNT DEVOTIONWe are increasingly dependent upon deep discounts training our customers to wait for specials

the amount of purchases at discount

is at a all time high & many can’t stop

http://cerisereve.deviantart.com/art/Used-Crayons-72200919

7. OVER CHOICEWe need simpler solutions & more involved experiences

http://michaelfaber.deviantart.com/art/not-thinking-straight-35033655

in 1997 there were 2 million brands

and now there are 8 million brands

more clutter. more confusion

in 2008 the average person’s daily intake of

information was 300% greater than in 1960 university of california san Diego study

Source: Sparksheet.com

8. LOYALTY PROGRAMSToo many complex reward programs with low value creating reward fatigue

the world doesn’t need another hard to

understand low value reward program

Spend $15.7K at Coles on FlyBuys or spend

$11K at Woolworths to get a $50 voucher

Source: impetuoussoftware.com

9. DATA DELUGEMaking sense of the increasingly available behavioural data is the new gold

most marketing departments are

not prepared to make sense of

the data that is rapidly becoming

available about their customers

http://arts.brighton.ac.uk/__data/assets/image/0016/6253/Problem-Based-Learning1a.jpg

10. LACK OF TESTINGThe world is forever in beta test

amazon conducts 200

tests a day to improve

the user experience

learn fast, cheap, well & first. place lots of

little bets and scale up the ones that pay off

11. RESEARCH REACH

http://www.qualtrics.com/blog/wp-content/uploads/2010/06/market-research.jpg

Majority of your audience are out of reach

“you only get to talk to about 10% of the population

via traditional online market research, so what about

the other 90%? Who wants their evening interrupted

with a phone call from a research agency” Peter Harris

12. CLAIM BASEDMARKET RESEARCH

http://corporate.bangthetable.com/2009/03/14/market-research-is-not-community-engagement/

You are what you do not what you say

we make

decisions on

claimed not actual

behaviour. who

can accurately say

how often they

have seen an ad or

purchased a

product in the last

4 weeks?

http://www.shutupitson.com/tag/mad-men/

13. MEDIA AGENCY DEALSChannel agnostic, complete transparency & total accountability

media agencies who commit to future

investments with media owners before

understanding their clients needs

media agencies that get rebates

from media owners & don’t

disclose them to their clients

14. THE AD AGENCY New models forming for social, digital, video & mobile channels

agency resources measured on inaccurate

time sheets vs value/outputs

Source: webzbranding.com

resourcing digital channels that are more

intensive, reiterative & measurable

the creative director role will evolve

from creator to curator because no one

person has a mortgage on creativity

http://steja007.deviantart.com/art/HD-wallpapers-part-2-104834273

agencies will collaborate more, shift to

projects over campaigns & create ideas

that are born to live in beta (social) not

built to die (media schedules)

15. EDM INVOLVEMENT

http://www.fullissue.com/index.php/email.html

Volumes are up but open rates & click through rates are declining

why do 79% of members don’t even open

your email? & it’s getting worse!

Source: Responsys

16. CPM FOR TV ADVERTISING

http://www.digitalproductionme.com/article-1135-middle_east_tv_ad_revenues_to_buck_downturn/

Your audience is not as high as you pay for!

80

viewership of ad breaks can be 10%-

35% lower than the program you buy

Source: ikon

SO THINK ABOUT…17. YEAR OF THE MOBILEIt’s not the year but the decade of mobile which makes everything local, social & personalised

“our coordinates, has the potential to

change all the outputs…where we shop,

who we talk to, what we read, what we

search for, where we go, they all change

once we merge location and the web” matthew honan wired magazine

access reviews, pricing, content,

community & buy anytime anywhere

mobile payment systems

change the pos & banking

18. ECOMMERCE

CONVERSIONValue, range & convenience driving online sales but conversion is extremely low

different conversion by channel

online

conversion

good store

conversion

92%

30%

2%

westfield

conversion

19. CHECKOUT

ABANDONMENT

why the high online cart abandonment?

online cart

abandonment

store cart

abandonment

<1%

65%

20. ACTIVE INVOLVEMENT IN

SOCIAL NETWORKSToo often, acquisition is the key focus but active involvement has real value

97.4%

2.6% active: like, post or comment

passive or do nothing at all

why acquisition over involvement & value?

how do you get your community active?

22. VALUING A LIKE

OR FOLLOWER

http://blog.zuupy.com/are-facebook-likes-useful-when-there-is-no-di

Apply a quality measure to all acquisition & stay agnostic

418% more likely to visit startbuck.com

spent 8% more. transacted 11% more frequently

are they pre-existing preferences?source: comscore

23. SOCIAL BUSINESS READYMost organisations were not designed for today’s networked world

http://themobius.deviantart.com/art/Depth-of-Night-71363751?

old modelcustomer outside

deliver a promise

interruption

sell & tell loudly

creative & media

communicate an image

one to many

strive for perfection

trust through authority

new worldcustomer inside

guided by purpose

interaction

actively involve

content & distribution

deliver an experience

one to one & many to many

forever beta testing

trust through transparency

http://www.noupe.com/inspiration/stunningly-creative-and-unforgettable-print-ads.html

24. CRISIS MANAGEMENTListen, shape & respond with speed & transparency

“Consumers have

something they

have never had

before, the power

to warn &

threaten, rather

than to punish

silently after the

fact” bruce philp consumer republic

25. MORE MEETINGSRunning productive meetings will free up capacity to think & create

we seek more

collaboration

why does the meeting

expands to the time allotted?

why not change the time allotted!

26. REFLECTIVE THINKING

http://my.greasy.com/cgi-bin/blogapp/img.cgi?image=32367767.jpg

We are losing the ability to think in a deep, creative ways, which is affecting our decision making

“teens were faster than adults at

reading online but their attention

spans were much shorter, so anything

difficult tended to be skipped” jacob nielsen

“always on, information overload, multiple-

tasking work environments are killing

productivity, attention fragmentation,

dampening creativity and making us unhappy” mckinsey report june 2011

source: psfk

KEY IMPLICATIONSAsking the right question is the first step for change

26 May 2010

1. understand the changes in your customer journey driven by connectivity

2. shift your digital gravity towards mobile

3. optimise your website for smartphones

4. track the engagement of your social communities & identify value

5. insist on media transparency & accountability

6. review your real tv audience

7. focus on activating of your edm databases

8. simplify your loyalty program

9. review your data analytic capability & tools

10. change the focus of your research towards behaviour

11. set aside 10% of your budget for testing

12. evolve towards a social business design

13. run productive meetings. cut meetings by 15 minutes to create 25% more time

14. don’t use meaningless words like engagement & activation

15. carve out time for reflection & learning

16. define what you need to stop, start & continue to free up capacity to think

SOURCESStanding on the shoulders of giants

westfield study tours

morgan stanley

ellie rogers of ikon

dr ken hudson

david whittle of m&c saatchi

anouk darling of moon

michael batistich of we are social

peter harris of vision critical

jon bird of ideaworks

best buy slideshare

richard watson

youtube

google & google images

flickr

techcrunch

mumbrella

emarketer

smart company

inside retail

psfk

mckinsey quarterly june 2011

contagious q2 2011

LIFE MOVES PRETTY FAST

IF YOU DON’T STOP & LOOK AROUND

ONCE IN A WHILE, YOU COULD MISS IT

http://www.creativeadawards.com/original/see-further/3298

SO, DON’T MISS THE OPPORTUNITY TO

FIX WHAT’S BROKEN IN YOUR WORLD?

http://www.creativeadawards.com/original/wrecking-ball/11338

EVERYTHING IS BROKENthe end of business as usual

john batistich