The Evolution of Customer Experience: 10 Trends You Can’t ...people.stern.nyu.edu/aghose/msi_3.pdf · hWatchwords are collaboration, sharing, and community ... APIs, P2P, SOA

The Evolution of Customer Experience:

P f D L H ff

The Evolution of Customer Experience:10 Trends You Can’t Afford to Miss

Professor Donna L. HoffmanChancellor’s Chair and Co-Director, Sloan Center for Internet Retailing

A. Gary Anderson Graduate School of ManagementU i it f C lif i Ri idUniversity of California, Riverside

http://sloan.ucr.edu/

MSI Conference on “Leveraging Online Media and Online Marketing” Miramonte Resort and UCR Palm Desert Campus February 6-8, 2008

Overview

The Internet is Unique

The Evolution of Customer Experience

How to “Future-Proof” Against Change

Q&A

http://sloan.ucr.edu 2Customer Experience Trends | © Professor Donna L. Hoffman, Sloan Center for Internet Retailing, UC Riverside | http://sloan.ucr.eduCustomer Experience Trends | Professor Donna L. Hoffman, Sloan Center for Internet Retailing, UC Riverside | http://sloan.ucr.edu

Web 1.0, 2.0, 3.0

Web 1.0Web as a conduit for data. “Text and image.” Basic infrastructure built. Static sites, then some dynamic content and interactivityinteractivity.

Web as an operating system Facilitates sharing andWeb as an operating system. Facilitates sharing and participation. Seamless connection of applications (i.e. geographic mapping) and services (i.e. photo-sharing). The “mash-up”. “Lego phase,” with parts that connect.

Web 2.0

Semantic Web. Web can “understand itself.” Web less of a catalog and more of a guide. World Wide Database. Artificial i t lli T l f l d ti d tWeb 3 0 intelligence. Truly useful recommendations and answers to questions like: “I’m looking for a warm place to vacation and I have a budget of $3,000. Oh, and I have an 11-year-old child.”

Web 3.0


Source: http://www.nytimes.com/2006/11/12/business/12web.html?ex=1320987600&en=254d697964cedc62&ei=5088

Web 1.0 vs. 2.0

Web 1.0: AOL buys Time Warner.Web 2.0: Google buys YouTube.

Web 1 0: New media company buys old media companyWeb 1.0: New media company buys old media company.Web 2.0: New media company buys new media company.

Web 1.0: Users create the content (Slashdot).Web 2.0: Users create the content (Flickr).

Web 1.0: Crap sites on Geocities.Web 2.0: Crap sites on MySpace.

Web 1.0: Writing.gWeb 2.0: Rating.

Web 1.0: Cool Site of the Day.Web 2.0: Technorati.com.

Web 1.0: Bookmarking.Web 2.0: Bookmark sharing.

Web 1.0: Pointless Flash widgets.


Web 2.0: Pointless “Ajax” widgets.

Source: http://www.zeldman.com/2006/10/17/web-20-thinking-game/

Web 2.0 Puts Consumers in Control

Web 2.0 allows Web 2.0 allows consumers toconsumers toconsumers to consumers to CONTROL their CONTROL their experienceexperience

It gives them the It gives them the freedom to do freedom to do WHAT THEY WANTWHAT THEY WANT


Web 3.0 Augments That Control

del.icio.us

Web 3.0 integrates AI with human intervention


For Some, Web 2.0 is Not Pretty!

"When people say to me it's a Web 2.0 application, I want to puke."

Guy Kawasaki, in Newsweek, 4/3/06


Web 2.0 Embodies Some Important Ideas

Consumers are both the producers and consumers of their own t t d li icontent and online services

Enables markets as “conversations”Enables markets as conversations

Watchwords are collaboration, sharing, and community

What the Internet was meant to be

What does this mean for Online Marketers?


Focus on the Consumer Behaviors, Not the Buzz

An Alphabet Soup of Technologies

Social ApplicationsBlogs, Vlogs, Photo-blogs, Mob blogsWikisAjax (Asynchronous Javascript + XML), Flash

RSS, AtomSocial bookmarking & taggingSocial networksVideo sharing (photos, videos)Podcasting (aka audio blogging)Vidcasts vodcasts (video casting)

RSS, AtomJSON, XMLFeed readers/aggregatorsRIA (Rich Internet Applications)Web as platformREST, SOAP Vidcasts, vodcasts (video casting)

Content syndication (RSS)Mash-ups

APIs, P2P, SOA…

Why do consumers use these applications? What behaviors do the technologies enable?

M k d f hMarketers need to focus on the consumer behaviors – i.e. what people do with the applications; why they use them and how.


That is what counts.

What’s in Store for Customer Experience in Web 2.0+?

Examine the evolution of customer experience in the context of ten important trends

These follow from Web 2.0+ (going into Web 3.0).

We need some kind of analysis framework to organize ideas.

A reasonable framework starts with how the Internet is different.


Internet is different.

The Internet is Unique

1 Networked1. Networked2. Digital3. Interactive4. Measurable5. Limitless Content6. Addressable6. Addressable7. Consumers in Control8. Vulnerable9 Convergent9. Convergent10.Augmentable


Source: Hoffman and Novak (2004), A Conceptual Framework for Considering Web-Based Business Models and Potential Revenue Streams

The Internet is Changing Customer Experience

A typical home in 1975:


Source: http://www.pewinternet.org/ppt/2006%20-%205.9.06%20SOCAP.pdf


A typical home today in 2007:


Source: http://www.pewinternet.org/ppt/2006%20-%205.9.06%20SOCAP.pdf


More mobile

More multitasking

Active roles in content creation

The Internet is changing their expectations


These Changes Are Expected To Accelerate Over Time

The four laws of technology operate exponentially (“better, faster and cheaper”):

Moore’s Law – processing power doublesevery 24 months

Gilder’s Law – communications power doubles every 8 months

Kryder’s Law – storage power doubles every 13 months

Metcalfe’s Law – the value of a network is proportional to the square of the number of users


Think About the Impact of “Better, Faster, Cheaper”

Exponential growth in…• Computing power• Communications power• Storage power• Network usefulness

Affecting each of the following 10 years from now…• Search enginesSearch engines• Web browsers• Product merchandising• Online retail spacesOnline retail spaces• Online community and communication• Entertainment• Who and what consumers trust


Who and what consumers trust

Important Trends

1 Networked Social marketplaces1. Networked Social marketplaces2. Digital ABBA3. Interactive Consumer-generated media4 M bl S i l di ti i ti4. Measurable Social media optimization5. Limitless Content “Help me find it”6. Addressable “Do it for me”7. Control “I’ll do it myself”8. Vulnerable Brandjacking9 Convergent Digital convergence9. Convergent Digital convergence10.Augmentable Augmented reality


Source: Hoffman and Novak (2004), A Conceptual Framework for Considering Web-Based Business Models and Potential Revenue Streams

Social Networks Are the Web’s Fastest Growing Sites


1. Networked Social Marketplaces

Web 1.0 looked at social networking sites from the perspective of “eyeballs”

Web 2.0 will “monetize” the phenomenon by recognizing that social networks are the world’s largest (digital) marketplaces

Web 3.0 will integrate agent technology to help people find what they are looking for, possibly in virtual worlds


Web 2.0: Social Shopping

Social networking sites are rapidly morphing into social marketplaces thanks to widgets.

These social media applications let consumers create their own Web

i th th texperiences – the ones they want, not the ones you think they want!

Applications bring the store to the buyer –this kind of “distributed shopping” is one step on the path of the evolution into social marketplaces


marketplaces

2. Digital ABBA

Atoms to Bits and Back to Atoms


Product Merchandising: Olfactory and Haptic Interfaces

S t D C b T h

Input Translation – atoms to bits and back to atoms

Scent Dome CyberTouch


Source:http://www.trisenx.com/scent_dome.htmlhttp://www.immersion.com/3d/products/cyber_touch.php

3D Printing Will Soon Be in Reach for Consumers

Consumers will be able to “print” customized products in the privacy of their own homes


3. Interactive Consumer-Generated Media

User-generated content (video and photosharing blogging) has come aUser generated content (video and photosharing, blogging) has come a long way in a short period of time:• Unsolicited product reviews/commentary (text)• unsolicited video commentaryunsolicited video commentary• solicited media (“co-creation” or “participatory advertising”)

C t d di i i i i i t b f i lConsumer-generated media is gaining in importance because of social networks – word-of-mouth is elevated because consumers in the network have known reputations and are trusted.


Consumers Are Passionate About Their Favorite Brands


User-Created Content


The new bar at the Tramway needs furniture!


“Videopinions” Enhance Word of Mouth


Kimberly-Clark Encourages Consumers to “Let It Out”


Co-Creation Generates Consumer Insights


4. Measurable Social Media Optimization

Just when you thought you’d mastered SEO, here comes SMO

Turn consumers into “brand ambassadors” that share their brand experiences with the friends in their social networks and help spread the word about your brand

Some key aspects of SMO:

• Make it easier for consumers to link to you and tag your contenttag your content

• Encourage consumers to use your content

B th d k id


Beware the dark side.

5. Limitless Content “Help Me Find It”

The Internet is an “endless frontier,” but those billions and billions of web pages come with a costof web pages come with a cost.

It i t b i b th i d h d t fi d thiIt is at once becoming both easier and harder to find things

W k h d d h h ff hWe know that consumers do not expend that much effort when searching and that they get very frustrated very quickly when they can’t find what they are looking for.


Human-Filtered Search

Web 1.0 Directories and Guides

(remember the original Yahoo?)

June 30, 1998

Web 2.0

Web 2.0+

Browse the Yahoo! Shoposphere

Web 3.0 AI integrated with human intervention to improve search


6. Addressable “Do It For Me” (Personalization)

Google’s personalized search based upon your history

Note – is this a good thing? It limits you. Eliminates the serendipity factor. What if you want something unexpected?What if you want something unexpected?

But you can engineer serendipity.

You want personalized search to be practical (relevant to you) but you also don’t want to rule out serendipitous findings.p g

Nothing really puts these together, yet…


7. Control “I’ll Do It Myself” (Customization)

Two visions• Company controlled 1:1 individually tailor or personalize the

Web site to meet the customer’s needsWeb site to meet the customer s needs.• Customer controlled 1:1 hijack a Web site and customize it to

make it your own!

• The Web was designed to be hackable – a company’s Web site isn’t static.

• Why shouldn’t consumers be able to modify it to suit their own tastes?

QEDWiki


Greasemonkey: Froogalize Amazon

BEFORE AFTER


How will Customization and Personalization Trends Play Out?

Customization has the advantage of being easier to implement and benefits consumer control motives.

But personalization may play a strong role in the future asBut personalization may play a strong role in the future as information increasingly taxes consumers’ abilities to process and integrate it in meaningful ways.

Long run, the four technology laws suggest strongly that personalization will play a dominant role in the futurepersonalization will play a dominant role in the future.


8. Vulnerable Brandjacking

Consumers are not very good at determining when they are being scammed

Online scammers are using

increasingly sophisticated direct

and online marketing techniques

to execute their crimes.

Online retailers need to stay

informed and keep vigilant!


9. Convergence Digital Convergence

Digital convergence is a key characteristic of Web 2 0 – itDigital convergence is a key characteristic of Web 2.0 – it provides for the (hopefully) smooth integration among various content sources and technologies into one seamless customer experience.p

Some of the trends we’ve already looked at provide examples of thisof this.

Online retailers need to expand their view of what constitutes the best “channel” to reach customersthe best channel to reach customers.


Apple: Convergence of Computing, Communications, and Digital Content


10. Augmentable Convergent Augmentation

Augmented reality

Augmented products

Augmentedconsumers


productsconsumers

Digital Environments: Augmented Reality

Current Applications: Possible Future Applications:

• Insert additional information into field of view (for example, mechanic

l b l d i t ti )

• Expand a PC screen into the real environment as a virtual image that

b i t t d ith ( i lsees labels and instructions).

• Wearable maps for military and emergency applications.

can be interacted with (special glasses or holograms).

• Virtual holographic plants, artwork, g y pp

• Virtual objects in museums and theme parks (Disney’s Haunted Mansion an early example)

g p pwallpaper and pets.

• Replace car navigation systems with guiding lines and directionsMansion an early example). with guiding lines and directions shown direction on the road.


Google Maps Street View


“Window Shopping”


Social Retailing


Web Browser Evolution

Mosaic 3.0 (1993) Internet Explorer 6 (2001) Internet Explorer 7 (2006)

Netscape 1.22 (1994)

SphereXplorer 3D Browser (2007)


Internet Explorer 4 (1997)

Future Web Browsers?

Not so far to get from here (today) …. … to here (in the future).


Source: http://www.donnarosenartists.com/index.php?navarea=Artist+Gallery&artist=25

How to “Future Proof” Against Exponential Effects

Stay on top of trends and developments. They’re your window into what the future might look like.

Always assume the digital environment will change. (And fast!)

Focus on fundamental aspects of online consumer behavior, not just current best tipractice.

Customers can create and are in control. They aren’t going back to the farm (or passive TV viewing…)

Customers now interact with machines in addition to salespeople and products. Do managers understand these machines?

C t ti f th t ’ d M k t b l dCustomers can satisfy other customers’ needs. Marketers can be replaced.

The online experience is a consumption event in itself. It may be much more interesting than anything a company has on the Web.


Documents

The Evolution of Customer Experience: 10 Trends You Can’t ...people.stern.nyu.edu/aghose/msi_3.pdf · hWatchwords are collaboration, sharing, and community ... APIs, P2P, SOA