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#RIC15
True Retail Innovators & Disruptors:
Who Is Ahead Of The Times?
2
RESEARCH BENCHMARKING EDUCATION
Where are you today? What you need to do to get better? How to hold team/vendors accountable?
BUSINESS INTELLIGENCE FOR DIGITAL
3
Q2 – Q3: Digital IQ Index® Reports
UPCOMING DIGITAL IQ REPORTS
4
OTHER UPCOMING RESEARCH
SOCIAL PLATFORMS Intelligence Report:
AMAZON Intelligence Report:
VIDEO Intelligence Report:
PERSONALIZATION Intelligence Report:
OMNICHANNEL Intelligence Report:
PREVIEW VIDEO 2015
6
Study Methodology
OVERVIEW
L2 Intelligence Report: Video 2015 Overview of the digital video landscape and best practices across platforms Report covers Q4 2014 and Q1 2015 initiatives from 245 brands across 8 Verticals with a focus on Beauty & Hair Care !
ADVERTISING LOCALIZATION
PLATFORMS CONTENT
7
1998 - 2013 U.S. Cable Prices vs. Inflation
RIPE FOR DISRUPTION
Source: FCC, Bureau of Labor Statistics
8
Q1 2014- Q1 2015 VIACOM Viewership by Network
VIEWERSHIP, RATINGS IN DECLINE
-34% -34% -30%
-23%
Source: “Viacom Takes $785 Million Charge on Cable Woes,” The Wall Street Journal, April 6, 2015.
9
2015 Oscars Viewership, Ratings & Advertising Rates
…AND AD PRICES ON THE RISE
2015 YoY Change
Viewership 36.6 M -16%
Ratings 10.8 / 26 -17%
Average Ad Cost (30s) $1.9 M + 5.6%
Data Sources: Nielsen, iSpot.tv
10
2006
Cable Company Disruption 2005-2011
THE RESPONSE
2005 2007 2008 2011 2007 2010 YouTube
YouTube acquired
by Google
Apple TV
Amazon Instant Video
HBO GO
Roku
Netflix / Hulu
11
2014 – 2015 Video Launches Social Takes on Video
SOCIAL RAMPING UP
12
May 2015 Social Platforms Video Advertising Options
UNDERSTANDING ADVERTISING
Facebook Snapchat YouTube Instagram Twitter
Video Advertising Options
Promoted Video Posts
Live Stories, Discover
• Skippable & Non-Skippable In-stream
• Promoted videos in search and alongside YouTube videos
• Homepage Takeovers
Promoted Video Posts
Amplify Pre-Roll, Promoted Videos
Targeting Capabilities
Sophisticated • Location • Demographics • Interests • Behaviors • Education • Connections • Data Partner
Categories
No Targeting for Live Stories; Discover Ads are specific to Discover News Streams
Sophisticated • Demographics • Geography • Language • Interests • Remarketing • Data Partner
Categories • User Type
Limited • Age • Gender • Country
Sophisticated • TV Ad Targeting • TV Conversation
Targeting • Interests • Gender • Geography • Keyword And Hashtag
Usage
13
Q4 2014: Beauty & Hair Care Social Video
SOCIAL VIDEO: BRAND VIDEOS
Platform % Brands Posting Average Video Length (seconds)
Average Views per Video
77% 61 150,506
63% 12 N/A
30% 15 N/A
77% 112 219,744
14
Q1 2015: Average Video Posting Frequency (weekly)
POST FREQUENCY BY PLATFORM
15
March 2015 US Market Share of On-Demand TV Service Providers
ON-DEMAND TV MARKET SHARE
Source: Morgan Stanly Research *TV shows on free sites includes network sites (ABC.com, MTV.com, etc)
6%
8%
9%
16%
19%
25%
27%
38%
GoogleTV
AppleTV
iTunes
Netflix DVD Plan
Amazon Instant Video
TV shows (free sites)*
Hulu (free version and Plus)
Netflix Streaming
Offers Video Advertising
16
CHANGING THE MODEL
17
2011 - 2015 Hours Spent per Day with Video by US Adults
WHO WINS?
4:35 4:38 4:31 4:22 4:15
0:21 0:36 0:50 1:03 1:16
2011 2012 2013 2014 2015
TV Digital Video
Source: eMarketer, April 2015
18
Share of Internet Users, July 2014 Top 10: Digital Video Viewer Penetration by Country
GLOBAL AUDIENCE EVEN LARGER…
78% 80%
84% 84% 85%
90% 90% 91% 92%
96%
U.S. U.K. India
Argentina Canada
China Mexico
Italy Spain
South Korea
Source: eMarketer, August 2014
19
Q4 2014 Share of Total Online Adult Audience U.S. Monthly Online TV Program Viewers, by Age Group
ONLINE VIEWERS ARE YOUNG…
22%
29%
21%
15%
9% 5%
18-24 25-34 35-44 45-54 55-64 65+
Source: MarketingCharts analysis of Nielsen
20
2015 Next 12 Months Plans to Cut the Cord Across Income Groups
…AND WEALTHY
0% 5% 10% 15% 20% 25%
<$25k
$25k-$49k
$50k-$74k
$75k-$100k
$100k+
Source: Morgan Stanley, 5th Annual Streaming Video Survey, March 2015
21
2013 - 2016 Annual Growth of US Advertising Revenue by Format
ADVERTISING DOLLARS ARE UP
-2.8%
-13.9% -16.8%
8.6%
19.5%
2.9%
Source: Interactive Advertising Bureau, BI Intelligence Estimates, September 2014
TV Newspaper Radio Search Online Video Ads Display Ads
22
March 2014 Obstacles to Video Marketing
CONTENT QUALITY IS AN OBSTACLE
11%
20%
25%
28%
34%
36%
41%
46%
Lack of Management Buy-in
Distributing Video Content
Producing Studio-Quality Video
Lack of Effective Strategy
Lack of In-House Resources
Attributing a ROI to Video
Lack of Budget for Video
Creating Compelling Content
Source: Ascend2, "Social Media Strategy Research Summary Report," Dec 15, 2014
Related to Content Quality
23
April 2014 – April 2015, n=73 Beauty & Hair Care YouTube Brand Channels YouTube TrueView In-Stream Advertising Beauty & Hair Care YouTube Channels: Share of Organic and Paid Views
YOUTUBE VIDEO ADS
Paid Views 50%
Organic Views 50%
Data Source: Strike Social
24
0%
65% 81%
90%
Low Average High Outlier
April 2015, n=65 Beauty & Hair Care Brands, Top-5 Viewed Videos per Brand Uploaded in Q1 2015
Beauty & Hair Care Brand Videos, Classified by View Count Percent of Videos that Use TrueView In-Stream Advertising
YOUTUBE VIDEO AD IMPRESSIONS
Data Source: Strike Social View count ranges correspond to quartile classification of sample distribution
0% 14% 88% 84%
Average Share of Views from Advertising n=67 n=132 n=25 n=43
25
Q1 2015, n=267 Brand Videos Beauty & Hair Care Share of YouTube Video Views From TrueView In-Stream Ads vs. Total Views
SUCCESS = CONTENT QUALITY + SPEND
R² = 0.1442
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
YouT
ube
Vide
o Vi
ew C
ount
Share of Views from TrueView In-Stream Advertising
26
KEY FINDINGS GOLDEN AGE OF INNOVATION IN ONLINE VIDEO SPOILS ARE ENORMOUS WINNING = SKILLS VS. CAPITAL…FOR NOW. BLEEDING EDGE TO SALAD DAYS SHIFTING SUCCESS ALGORITHM
FORCES ON THE HORIZON CUSTOMER ENGAGEMENT:
28 Source: Deloitte Digital, “The New Digital Divide,” 2014.
Digital Influence Projection +/- 10% Sensitivity Range
Percent of Retail Sales Influenced by Digital Digital Influence Projections
DIGITAL INFLUENCE
29
CONTENT IS EXPLODING
30
75%
Source: Nielsen, “The Role of Content in the Consumer Decision Making Process,” March 2014
March 2014 Percent Lift Purchases $50-$350 Impact of Content on Purchase Intent
…AND CAN DRIVE CONVERSION
31
CUSTOMER IS OMNICHANNEL
24%
43%
47%
50%
51%
57%
82%
Usage of social media for access
Sophisticated mobile site
Consistently personalized shopping
Easy access to profile data across
Option to receive in-store receipt via
Buy online/via mobile, pick up in-store
Check in-store availability online
Important Omnichannel Retail Capabilities for US Digital Shoppers September 2014
Source: the e-tailing group, "Holiday 2014 Omni-Channel Gift Behavior" sponsored by MarketLive, Oct 9, 2014
Best in class omnichannel solutions provide convenience, transparency, and personalization
32
ATTITUDES ARE CHANGING….
Prefer that retailers respect my privacy rather than receive
relevant offers
53%
Prefer receiving relevant offers and
am not as concerned about
privacy
47%
Source: IDC, "Business Strategy: Green Lights and Bright Red Lines - Relevancy and Privacy Challenges for 2014," May 5, 2014
Attitudes of U.S. Consumers Regarding Personalized Retail Offers December 2013
Nearly half of consumers prefer relevancy to privacy
33
FIGHTING PERCEPTION PROBLEM
26%
24%
16%
11%
7%
6%
1%
10%
Share or sell information with a third party
Target ads towards me
Send me brand catalogs or email newsletters
Send me personalized offers specific to my
Assist me with my next purchase
Follow-up with me after my purchase
Won't do anything
I don't know
Perceptions of U.S. Affluents on How Brands Use Their Data March 2013
Source: Luxury Institute “Luxury Brand Wealth Survey: Privacy Trends,” March 13, 2013
Half perceive negative use of
their data
Only 1-in-5 perceive
customer service benefits
CUSTOMER ENGAGEMENT:
DATA CAPTURE & PERSONALIZATION
35
2012: HORRIFIED… AND INSPIRED
36
January 2015 Client-Side Marketers, Worldwide Primary Area of Focus for Improving Customer Experience
TOP OF MIND
4%
5%
7%
10%
12%
29%
33%
Mobile-friendly
Expedited process
Fun and fulfilling experience
Security and reliability
Consistency across channels
Consumer value
Personalization and relevance
Source: “Quarterly Digital Intelligence Briefing: Digital Trends 2015,” January 2015
37
Data Sources Used by Client-Side Marketers to Understand the Customer Journey
UNDERSTAND WITH DATA
76% 66%
55% 54%
37% 29%
20% 16% 4%
Online Analytics
Email Data Customer Survey Data
CRM Data Call Center Data
Social CRM Data
Mobile App Analytics
Electronic POS
None of these
% of Respondents, March 2015
38
67%
47%
43%
34%
30%
27%
24%
16%
11%
Human Capital / Resources
Ability to Dynamically Create Content
Other Site Priorities
Capital
Data Limitations
UX and Design Workload
Not Convinced of ROI
Management Buy-In
Concerns About Data Privacy
February 2015 Top-3 Challenges to Implementing a Personalization Strategy
…BUT CHALLENGES ABOUND
Source: FitForCommerce, “Let’s Get Personal: Omnichannel Personalization in a Hyper-Connected World,” February 2015
RESOURCES
CAPABILITIES
DATA ISSUES
BUY-IN
39
February 2015 Availability and Usability of Data for Personalization
A THIRD, A THIRD, A THIRD
35%
33%
32%
Source: FitForCommerce, “Let’s Get Personal: Omnichannel Personalization in a Hyper-Connected World,” February 2015
We have data, it’s not usable, and we don’t know how to use it
We don’t have enough data
We have data, it’s usable and we know
how to use it
40
February 2015 Level of Satisfaction with Personalization ROI
ROI POINTS POSITIVE
45%
24%
21%
6% 4% Too Soon to Tell
No Formal ROI Tracking in Place Yet
Seeing Some Early Success
Expensive, But Necessary
Very Satisfied
Source: FitForCommerce, “Let’s Get Personal: Omnichannel Personalization in a Hyper-Connected World,” February 2015
41
PERSONALIZED NAVIGATION
Very.co.uk uses algorithms based on browsing behavior and purchase history to predict customer behavior and optimize individual homepages with targeted products and offers.
42
ADAPTIVE SEARCH
Edgecase technology provides personalized, adaptive navigation with filters that align to unique language and preferences. Early adopter Crate and Barrel increased conversation rate by 44%
43
HYPER-PERSONALIZATION
Abandoned Cart Personalized promotional email Browsing behavior
44
April 2015, n=25 brands With Average Number of Available Options per Data Field Percent of Beauty Brands Adopting Account Customization Fields
BEAUTY: ACCOUNT CUSTOMIZATION
32% 28% 20% 20% 16%
4% 4%
9
5
8
5
8
10
6
0
2
4
6
8
10
12
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Skin Concerns
Skin Type Skin Tone Eye Color Hair Color Hair Concerns
Hair Type
Percent of Brands Adopting Average Number of Options
45
INCENTIVIZING DATA CAPTURE
46
L’OREAL PARIS GETS PERSONAL Data Fields # of Options Possible Personas
Skin Type, Skin Concerns, Target Areas, Skin Condition, Age, Skin Care Goals, Time and Effort 29 12,096
Skin Tone, Skin Undertone, Skin Shade, Skin Type, Skin Concerns, Foundation Benefits, Foundation Formula 32 1,580,554
Eye Color, Beauty Style, Lash Look, Eyeliner 24 825
Hair Texture, Hair Thickness, Hair Condition, Hair Concerns, Chemical Treatments, Salon Visits 21 8,748
Hair Goals, Natural Color, Natural Shade, Grey Level, Color Treatment, Current Color, Current Shade, Current Tone, Chemical Treatment, Desired Permanency, Desired Tone
42 151,795,445,760
Total Possible Personas 20,944,492,105,217,700,000,000,000,000
(“2.1 octillion”)
47
FROM DATA TO DOLLARS Personalized Email Targeted Content Product Recommendations
48
IMPLICIT VS. EXPLICIT DATA CAPTURE
49
IMPLICIT VS. EXPLICIT DATA CAPTURE
50
UNDERARMOUR ACQUI-DATA MapMyFitness November 2013, $150M 20M registered users at purchase $7.50 / user MyFitnessPal February 2015, $475M 80M registered users $5.94 / user Endomondo February 2015, $85M 20M registered users $4.25 / user
Source: DC Rainmaker
$5.94 / user $7.50 / user
$4.25 / user
MyFitnessPal MapMyFitness Endomondo
51
DATA + TALENT
SERVICE CUSTOMER ENGAGEMENT:
53
Customer Service Channel Satisfaction
MOST SATISFIED WHEN…
64%
66%
71%
73%
75%
76%
78%
81%
Site
Social media
Retail
Mobile app
Online chat
Mobile site
Phone
% of Respondents, Feb 2015 % of Respondents, Feb 2015
13%
19%
20%
22%
27%
50%
67%
73%
Effective online research
Proactive notifications
Good mobile experience
Ability to move between
Personalization
Simple navigation
Quick, effortless resolution
Clear information
Source: eMarketer
Important Attributes of Positive Digital Experience
54
GUIDE CUSTOMERS TO A TOPIC
55
SOPHISTICATED BEAUTY RETAILERS
Estée Lauder tailors the live chat experience to the specific page
An Aveda live chat agent offers an online discount for a product recommended during the chat session
56
FACEBOOK MESSENGER
Everlane is leveraging Facebook Messenger to engage with consumers on a more personal level.
57
OTHER APPAREL VENDORS: FITS.ME 1 2
3 4
1. Entry into the virtual fitting room 2. Select your body type 3. Provides recommended size for specified product with virtual depiction 4. Allows you to see what other sizes would look like on similar body type
58
AUGMENTED REALITY?
The Ikea Catalog App allows customers to envision what product will look like in their own home before purchasing
59
NEXT GEN FIT TOOLS
Yoox’s “Butler Service” in China sends packages via FedEx and has the FedEx worker wait outside while the customer tries on items and hands back a package for product they wish to return
60
WARBY PARKER VIRTUAL TRY ON
Warby Parker Virtual Try On enables customers to see what styles look like on their face by uploading personal photos
61
NEXT GEN LIVE CHAT: SMS/TEXT
Food delivery service Munchery
communicates with customers via text
message for delivery updates and follow up.
62
VISUAL SEARCH
Neiman Marcus’ Snap. Find. Shop tool, (powered by Slyce) allows users to snap an image of fashion items and be instantly provided with all close matching products currently available on neimanmarcus.com
63
CONNECTED FITTING ROOMS
Neiman Marcus Memory Mirror records outfits as 8 second videos to enable 360 degree views, side-by-side comparisons and sharing capabilities
Rebecca Minkoff stores feature oversize screens to browse additional product and request items to try on, bridging online/offline experiences
OMNICHANNEL CUSTOMER ENGAGEMENT:
65
Company Multichannel Sophistication
HARD BEFORE IT GETS EASY
6%
26%
38%
29%
Advanced: "Way ahead of peers"
Moderate: "We have id'd strategy & are executing"
In Process: "We are developing strategy"
Lagging: We have yet to set our long-term strategy"
2013
Source: SPS Commerce, “Retail Insight: 2015: Fulfilling Customer Expectations≈
66
Company Perceived Multichannel Sophistication
HARD BEFORE IT GETS EASY
6%
26%
38%
29%
5%
26%
32%
37%
Advanced: "Way ahead of peers"
Moderate: "We have id'd strategy & are executing"
In Process: "We are developing strategy"
Lagging: We have yet to set our long-term strategy"
2014 2013
Source: SPS Commerce, “Retail Insight: 2015: Fulfilling Customer Expectations
67
31%
21%
16%
16%
8%
8%
Online Channel Receives Full Credit for the Transaction
In-Store Channel Receives Full Credit for the Transaction
Credit for the Transaction Would be Split Between Channels
Irrelevant, Company Operates a Single P&L Across Channels
Credit for the Transaction Would be Accounted for Entirely Sperately from
Unsure / Other
INCENTIVES DRIVE PERFORMANCE Revenue Attribution for Omnichannel Sales U.S. & European Retailers, 2013
Source: Forrester, “Customer Desires Vs. Retailer Capabilities: Minding the Omni-Channel Gap”
68
CHECKOUT: APPLE VS EVERYONE ELSE
Single page however requires customer to enter all information and hit save between each step
One-Touch Pay
0
On / Off Gifting
0
Live Stock Status
0
69
HEAD TO HEAD WITH AMAZON
Everlane tested 1 hour delivery for New York and San Francisco. Delivery was available on weekdays from 9 am to 6 pm, $4.99 for one item and free for two pieces or more.
Sephora’s Flash Subscription: $10 for one year What you get:
- Unlimited, FREE 2-Day Shipping - No minimum purchase required
- Applies to EVERY order for an entire year
- Special overnight rate of $ 5.95 - FREE for VIB Rouge Members
70
FROM CART TO CAR
1 Selfridges launched Click & Collect at all stores in May 2013.
2 In November 2013, the brand opens the world’s first department store Click & Collect Drive Through at its London Oxford Street store.
1
2
Selfridges expects its Click & Collect service to account for at least 25% of all online orders Source: Econsultancy
71
FROM CART TO CAR
Amazon’s partnership with Audi and DHL enabled delivery of packages to the trunk of customer’s cars
Volvo’s Roam Delivery service provided delivery companies with the location of your Volvo and a one-time digital key to leave packages inside
72
CHOOSE YOUR DELIVERY TIME
Delivery.walmart.com allows customers to select their delivery time in 2 or 4 hour slots.
73
NARROWING WINDOWS
Though not rolled out to every location, U.K. retailer, Argos, offers in-store pickup windows at small as 60 minutes; highlights reserve online, immediate in-store pick up during checkout
74
OMNICHANNEL BEHAVIOR ON PDP
75
1 Harvey Nichol’s new Click & Try service allows customers to meet with a Style Advisor, who will have the consumer’s order ready to try on for sizing.
2 The re-launched HN website (April 2014) includes a renewed focus on stores.
3 Services and events are prominently featured across HarveyNichols.com
1 2
3
Click & Try: Harvey Nichols
HIGH TOUCH: CLICK & TRY
76
OMNICHANNEL ITERATION
The ability to reserve in-store is promoted on-site, in email marketing, and offline
Reserve in-store can be used on a mobile device to support shoppers on the go
SMS notifications let users know when their reserved items are available in-store
CUSTOMER ENGAGEMENT CONCLUSIONS:
78
CONCLUSIONS / QUESTIONS 1. What role does implicit & explicit data play in
customizing your brand’s customer journey?
2. Have you shifted your priorities to tackle high touch and low touch customer service?
3. Does your omnichannel strategy take into account convenience as well as conversion?
4. How are you tackling next generation solutions for your most loyal customers?
#RIC15
