T H E P U R S U I T O F O P E N N E S S

NEW STRATEGIES AND SENSIBILITIES FOR ACHIEVING

GROWTH IN TOMORROW’S MARKETPLACE

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GROWTH IS ATTAINABLE, BUT TO SECURE IT, COMPANIES MUST GET COMFORTABLE DOING BUSINESS IN NEW WAYS.

3THE PURSUIT OF OPENNESS 3

New strategies for growth are essential in a marketplace where growth is harder to find and more competitive than ever.

Growth is attainable, but to secure it, companies must get comfortable doing business in new ways. This means delivering on consumer expectations—anytime, anywhere and on demand—by successfully networking and opening up, rather than by vertically integrating. It means designing and managing businesses with an emphasis on external partnerships and collaboration to drive mutually beneficial growth. It means embracing digital innovation to create new paths to purchase embedded in the digital environments in which consumers already spend time. In sum, it means being increasingly, systematically open.

Leading businesses already understand and are acting on these open strategies. Approaches inspired by the open-source software movement—which uses technology to decentralize development and encourage open collaboration—are allowing for more rapid innovation and responsiveness. The open-source sensibility isn’t new, but it is emerging in places that previously depended on closed ecosystems.

THE CASE FOR OPENNESS

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THE NEW LANDSCAPE OF DEMAND

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5THE PURSUIT OF OPENNESS

ALWAYS ON LIFESTYLES In the digital age, consumers face information overload. They are inundated with content from every screen, speaker and surface that it is possible for advertisers to monetize. The explosion in the quantity of content has captivated consumers. According to Mary Meeker’s 2018 Internet Trends Report, U.S. adults clock 5.9 hours per day on digital media, with 3.3 of these hours on mobile. This mobile-dominated trend is encompassing more of consumers’ daily tasks—from payments to home security to entertainment.

Always-on lifestyles have become big opportunities for brands. Mobile app interactions are up 50 percent last year on a year-over-year basis. It now takes consumers an average of six touchpoints to buy a product, up from only two 15 years ago. Consumers simply do more digital due-diligence before making a purchase. This means many more opportunities for brands to reach people throughout the decision journey.

Brands today should consider adopting an open approach to commerce by leveraging new technologies and new partnerships to capitalize on the new normal of the always-searching, always-on consumer.

THE ON-DEMAND ECONOMYThe increasing number of touchpoints has also led to more interest in on-demand options.

Since the introduction of on-demand media through platforms like iTunes, Roku and Kindle, people have become accustomed to instant access wherever and whenever they want it.

On-demand digital platforms like Spotify are growing by expanding their presence into more places. For example, Netflix services more than 5 billion daily requests for its public APIs – programs that provide streaming access to over 1,000 types of devices on which consumers can watch content anywhere and everywhere. As a result, consumers have come to expect an instant option from every brand on every device.

Luckily for consumers, brands are recognizing that as consumers move through their days, they want contextual solutions that provide value when and where it is appropriate. The most forward-thinking competitors in the on-demand economy recognize that providing instant access is more than just saving consumers time, it’s about adding flexibility and returning headspace to consumers who are at their cognitive capacity. According to Kantar Consulting’s 2018 U.S. MONITOR research, 65% of consumers believe that having the flexibility to do the things they want at any time or place is important—and this percentage is higher among Millennials. Companies like StitchFix and Birchbox that offer curated choices save consumers from the cognitive overload of wading through countless options. Services like Instacart save consumers time by bringing groceries right to the front door. These kinds of offerings provide consumers with the lifestyle

OF CONSUMERS

"having the flexibility to do the things they want at any time or place is important in their lives today."

65%

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flexibility they’re after. The need for more time, energy and headspace continues to grow in an always-on, on-demand marketplace. Companies like Uber, Jet.com and Netflix have pioneered the capability of delivering mobile-first, personalized, just-in-time experiences at top speed.

In the on-demand economy, an open approach ensures that consumers can find what they’re looking for when and where they’re looking for it.

THE RESULT: CONSUMER EMPOWERMENT The result of the always-on consumer living in the on-demand economy is a rewiring of consumers’ expectations. Mobile technologies have given consumers permission to insist upon what they want when they want it. Consumers now expect any type of digital purchase—whether a book or a ride—to require only a few moments and even fewer clicks. For always-on consumers, a digital on-demand world allows them to take more control of their daily lives. Purchasing goods and services online using mobile devices is easier than ever. This ease equals empowerment.

Consider airline tickets as an example. It wasn’t so long ago that a customer would have to go to an airline’s website, figure out the right itinerary, and then re-submit what felt like an inordinate amount of information each time a purchase was made. Today, searching for and booking an airline ticket takes no more than a few clicks thanks to ticket aggregators like Google Flights, Hipmunk or Kayak that use stored profiles from carriers to make the purchase quick and easy. Consumers are leveraging digital technologies to get exactly what they want, when and where they want it. Companies are finding creative ways to improve their offerings to compete in this marketplace.

Most product searches start in Amazon, not a search engine. In spite of this, Amazon continues to advertise on other platforms such as YouTube or Twitter to ensure potential buyers discover new offerings everywhere they go. People are likely to discover products they like across a growing variety of channels; hence the time people spend browsing content for purchases may be endless. The secret to success has become a matter of capitalizing on purchase intent with minimal effort on the part of the consumer. Ultimately, companies should aim to make the path to purchase from browsing to buying as frictionless as possible. Open approaches create frictionless paths to purchase across multiple digital channels, capturing a wider range of consumers than simply those who visit a particular website.

EMPOWERING NEW ECONOMIES

An open approach capitalizes on the always-on nature of consumers. It makes it easier for companies to sell more products in more places by opening up the path to purchase anywhere a consumer finds inspiration to buy.

Although consumers spend hours with technology and mobile devices every day, global smartphone users typically access just 26 apps regularly. This number has remained relatively constant despite the explosion of apps on the market. How are new entrants to compete in a user-restricted app ecosystem? One answer is opening up the ecosystem for more product inspiration, search and purchasing anywhere and everywhere. Facilitating a path to purchase in multiple digital locations makes the translation from inspiration to action easier and less restrictive for consumers. This sort of instant purchasing extends into areas like entertainment, tickets, sporting events and more, where the inspiration to buy is sparked by something a customer sees online.

7THE PURSUIT OF OPENNESS

The open ecosystem isn’t just catering to consumers seeking convenience. It significantly increases user engagement. The apps that prove their relevance in a consistent and compelling way become ingrained, even habitual, in consumers’ lives. It makes sense to get products and services into the environments that consumers frequent already rather than trying to push consumers into siloed brand environments.

To see this more clearly, it’s worth revisiting the travel industry. If consumers can find a great deal only on a hotel’s own website, they will miss out on the best possible experience, and hotels will lose this potential revenue. This is

why hotels don’t rely only on branded websites. Instead, consumers can find rooms across the internet on numerous travel and booking websites. Pricing and deals may differ across types of websites, but consumer availability is broader, and this is the critical element. The open approach to commerce not only exposes a hotel’s property to more potential guests, it also gives consumers additional options that they may not have been aware of otherwise.

The impact on the travel industry is just scratching the surface. Sports leagues are getting involved in open environments, too, with moves to an open-architecture ticketing structure that allows tickets to be sold across

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more digital spaces. Digital tickets fit in with on-demand consumer lifestyles because they are easier to find, buy, sell and exchange. Teams and venues benefit because more tickets can be discovered and sold. Additionally, more information about ticketholders will lead to improved fan experiences. Open-source business practices will be leveraged more and more across a variety of industries from financial services to logistics.

In a marketplace dominated by strict control of branded environments, open approaches are the very definition of growth in new places. It requires that companies cede control in a purchasing ecosystem that spans multiple

platforms in order to better reach always-on consumers living with an on-demand economy. An open ideology gives brands a leg up through the flexibility of working across a variety of platforms and partnerships that enable consumers to discover and purchase anytime, anywhere. For consumers, this means more access to the things they are interested in, with fewer disruptions in their digital experience. For brands, this means products and services available to consumers in the most contextually relevant places at just the right time, thereby maximizing the ROI of their digital spend. Open strategies are the winning way forward because they best fit the future of an always-on, on-demand marketplace.

9THE PURSUIT OF OPENNESS

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The Pursuit of Openness: New Strategies and Sensibilities for Achieving Growth in Tomorrow’s Marketplace by Kantar Consulting.

Editorial direction by J. Walker Smith. Copyediting by Simon Kaplan. Design and production by Kelley Zeller and John Catlett.

Kantar Consulting is driven to switch on growth. With over 1,000 analysts, thought leaders, software developers and expert consultants we help clients develop and execute brand, marketing, retail, sales and shopper strategies to get growth delivered. Kantar Consulting owns market leading assets including PoweRanking, GrowthFinder, Global Monitor, RetaiI IQ, RichMix, XTEL and Marketing, Insights and Purpose 2020. We track 1200 retailers globally, have purchase data on over 200 million shoppers and forecast social, cultural and consumer trends across the world.

Kantar Consulting is part of Kantar, the data investment management division of WPP.