Smart brands are searched for: react now or lose out

According to a Bitkom study, there will be more than one million smart homes in Germany by 2020. Worldwide, the Internet of things will interconnect 50 billion devices at that time. FMCG brands are not only awaiting this development euphorically, since networked and/or intelligent household devices will significantly change the buying behaviours of many consumers away from the shopping list towards on-demand purchases. The rapidly advancing voice control sector will further invigorate this development: ‘Hey Alexa, I need a new detergent.’ – and Amazon’s voice assistant orders a product right away. Those not adjusting their market positioning and product communication according to the rules of the smart home will suffer a rude awakening at the hands of consumers in the near future.

Transformation of the buyer decision process

Large brands enter the age of the smart home with a decisive advantage. Because one thing consumers will not want to do when shopping via voice control is comparing products and prices for hours. Therefore, the chosen brand will be ‘his’ brand or simply the one that comes to mind first when thinking about the product. According to a study, most shoppers already choose between merely two brands per product. In a smart home, the relevant set of consumers will shrink further and thereby increase pressure on smaller manufacturers. For companies like Zewa and Labello, the smart home offers an opportunity for long-term customer retention. Others might, for the time being, not receive any attention from consumers at all.

They are therefore required to quickly consider how to become a ‘smart brand’ to exploit the opportunities of web-enabled devices for innovatively appealing to customers. For regardless of how small the relevant set of a smart home becomes, there is always space for an innovation leader.

The ‘touchpoint home’ as a new point of sale

Household devices with an internet connection establish new communication channels between their owners and manufacturers. FMCG brands can use these channels to approach their target consumers. Possibilities include, for example, collaborations with device manufacturers: for instance, new fridges alert their owners when the expiration date of foodstuff is closing in. ‘Your cream cheese will expire in two days. Would you like to order some?’ – a product suggestion appears on the integrated touch screen immediately.

It is likewise realistic to include an advertisement via an app connected to the device. Technically skilled owners of electric toothbrushes use such an app to receive tips for optimal cleaning while brushing and are probably also receptive to one or the other toothpaste recommendation.

The possibility to contact customers exactly at the time of need turns the smart home into a promising point of sale. Smart brands attain the opportunity for an exclusive sales pitch while competitors vie for the attention of stressed shoppers on a supermarket shelf. The requirement: they have to consider how to provide an added value.

FMCG goes digital

To become the uncontested go-to brand in a smart home, FMCG brands need to go one step further: with the development of a digital product, for example, in form of an in-house app for a networked device, a real unique selling point can be created. Let’s return to the example of the detergent: how do I remove this tomato stain from my jacket? Which washing cycle is best for the new silk blouse? The new app by the detergent manufacturer knows the answer. Additionally, it can interact with the smart washing machine to assist with the correct dosage. Collaborations with manufacturers are possible here as well for the app might already be pre-installed when purchasing the machine.

An application of this kind does not characteristically target sales only. However, it is a central tool to positively stand out from the competition. If the digital content provides a genuine added value and is continually resumed, the best-case scenario sees the formation of a committed community that indefinitely chooses the brand they trust.

Digital is not a foregone success

The development of digital products is uncharted territory for most FMCG brands and can, without a well thought-through concept, turn into an expensive and bad investment. This does, however, not mean that new communication channels should not be tapped just to be on the safe side. Still, they need to ensure that product, smart home integration and digital storytelling are in perfect harmony. When the brand and service provider only meet to devise an ad campaign, it is usually way too late. Instead, all parties should be on board from the product development stage onwards.

Thinking in the long-term, this opens up possibilities for entirely new business models for manufacturing consumer products: we may soon see the first washing machine with integrated Ariel programme software or Persil tips for red wine stains. For FMCG manufacturers, the chances of becoming the trusted brand when positioning themselves in the touchpoint home rises in line with the amount of creativity and added value. In any case, trust is what’s needed in the smart home, because consumers will seriously deliberate who to let into their domiciles.

This article was also published at horizont.net.

Why mobile programmatic does not yet use its full potential

The mobile Internet booms in Germany, both in terms of users and traffic. Even shopping on a smart phone is becoming more popular. At the same time, programmatic advertising has established itself as a fixed value, at least in online media business. As a consequence of both developments, mobile programmatic would therefore have to be a big hit. But the advertising volumes in this segment – beyond the silos of Facebook and Google – do not grow to the extent which one would expect. Why is it that mobile programmatic advertising does not yet use its full potential in Germany?

When we talk about mobile advertising today, we mean primarily in-app advertising with formats such as banners and video ads, all the way to full-screen interstitials. Three out of four advertising dollars are presently spent with apps. Apart from the fact that there are significantly different and fewer web formats in apps than on the desktop and the use of data on Apple devices is made difficult by the lack of cookie acceptance, in terms of programmatic possibilities, the mobile web works in a very similar wayto the web that we access on the desktop computer.

German marketers have overslept the topic

And indeed, mobile apps have already experienced a boost through programmatic advertising: before the era of DSP and SSP, coverage could only be booked via aggregators. A third-party control via the agency’s or client’s ad server was not possible. Due to the advertising ID from apps today, a very stable identifier is available which permits a longer-lasting profiling than a browser cookie. Via programmatic advertising, an advertising client can control his campaign, targeting these profiles for the first time in an app-encompassing way.

And there is another important advantage: data providers make data available that permit new and effective campaign approaches, especially in the area of hyper-local targeting – to address potential customers in close proximity, directly and accurately.

So why the hesitation? German marketers of quality apps have slept through the topic of programmatic advertising. They are only slowly making their coverages for in-app advertising reasonably programmatically usable – because this includes more than simply adjusting the app to the supply-side platform. This carelessness means that large parts of the programmatically available offer of mobile advertising in Germany still consists of opaque ranges of international marketplaces.

Not the technology, but the advertising formats are the obstacle

And in the “Global Exchanges” there are considerable deficits concerning transparency and technical control. The consequence: AdFraud – traffic which is generated, not by human users, but by so-called bots – is a significant problem for mobile in-app advertising, both in terms of reach and data, and thus represents an obstacle to growth for the industry as a whole.

With the extensive possibilities of programmatic advertising, mobile advertising also becomes easier to book and to control in a targeted fashion. But programmatic, too, cannot solve a central problem which advertising on smart phones generally still has: there is still the lack of large-scale, attractive advertising formats which are indeed eye-catching, but still do not annoy the users. If we can cope better with this challenge, the boom will be yet to come for mobile advertising.

Facebook Messenger chatbots: a communication channel for brands?

For six months, chatbots have existed in Facebook Messenger and there are now more than 30,000 available for users. The initial hype has calmed down and now companies are wondering if bots actually have the potential to become relevant communication and distribution channels for their content.

All chatbots essentially work in the same way. Users ask the bot a question and the bot searches through its stored database in accordance with certain rules, in order to respond with a suitable answer. The greater the database, the greater the knowledge which the chatbot can revert back to.

Mobile driven user behaviour and technical developments smooth the way

The requirements needed for the success of chatbots certainly exist: On one hand, internet usage is extending increasingly to mobile devices and here communication occurs primarily through instant messengers. The approach to text messaging has finally become seen as an everyday matter and the users have got accustomed to this reduced communication form.

On the other hand, all major tech companies are investing massively in the development of artificial intelligence, machine learning and in the understanding and processing of natural language through algorithms. Bot providers can relatively easily incorporate offers and services of interested companies into chatbots via standardised interfaces.

Unpredictable human communication

It will remain some time before a conversation with a chatbot is indistinguishable from a talk with a real person, as many chatbots currently reach the limits of their communication rather quickly. Either they fail in the correct processing of human communication, including all unpredictable factors such as slang, dialect or typos, or their repertoire of responses is rapidly used up. Initial reactions of early adopters were sobering. Among other factors, this was due to the fact that Facebook opened the chatbot platform for developers only a few weeks before the official launch.

Facebooks vice president of messaging products, Davis Marcus, admitted that this time frame was possibly too short to develop a good chatbot. Since the launch, Facebook has made many APIs and much guidance available to developers. We can therefore look forward to seeing how the second generation of bots will turn out.

For long term success, however, two central requirements must be fulfilled, above all:

Discovery: There is currently no easy way to find chatbots for Facebook Messenger, as we are still waiting for the launch of the announced bot store. The user must therefore know the name of the bot and integrate it via the search function of Messenger. Other messengers like Kik, Telegram or Skype already offer overview catalogues.

Added value: So that users don’t delete a chatbot after trying it out just once, from the first use on, the bot must offer real added value. This can include various aspects:

  • Reducing complexity and information: shopping bots, such as Tommy Hilfiger’s chatbot, help users when looking for suitable products, by giving them a pre-selection of products through targeted questions. The added value of news bots like the one of CNN also depends upon a reduction in information. Users indicate which content they are interested in and then receive suitable contributions in return through push messages.
  • Time efficiency and problem solving: The airline KLM emphasises special service for their customers: if you want to change your seating place, for example, you don’t need to open the app. You can simply send a quick message to the KLM bot.
  • Additional offers: In several US cities, through the Absolut Vodka chatbot, users can find bars in which the product is available. The added value here is that the user receives a voucher for a free drink as well.

If these points are further optimised in the new generation of chatbots and the problem of discovering bots is resolved, there is much to suggest that these services will establish themselves as communication channels for brands. With a sufficient amount of offers, in Europe and in North America Facebook Messeger could become a mobile central service point for users, just as weChat, LINE and Kik have done in many Asian markets.

For what reason a prototype is better than the “perfect” solution

Seamless commerce, connected retail, customer centricity: these are only some of the catch phrases, which these days bombard participants uninhibited, at conferences, trade shows and in workshops. They all should explain, how a relevant, added value can actually be created. And yet, I wonder occasionally, if the concept “connected commerce” is not sometimes misunderstood.

The goal of “connected commerce” is namely not, to find solutions for imaginary problems, in order to be able to create a case of application for the latest “hot shit”. In fact, technology, services, and applications should be intertwined in a way, that smart approaches are created, to solve the actual and real (!) customer problems. With everything that you do, the following question must remain central: What do my customers really need in their specific situation, in order to be perfectly happy? If the latest trends can help with that, all the better. If not, we simply have to develop other ideas.

Know your customers like you know yourself

Therefore, the challenge is to gain a comprehensive knowledge about the own target audience, which goes beyond simple sociodemographic characteristics. Tracking and sophisticated data analysis tools are a good start for this. Often, you learn about the attitudes and needs of the customers best through a direct confrontation with them – for example through interviews, observations, or user tests.

The provided results can also be potentially surprising and present a new, completely unthought-of challenge. But that is exactly how it works with transformations and disruptive processes. They wake us up and open our eyes to the needs and requirements, which the customers actually have.

WORK, WORK, WORK

When the wishes, expectations, and concrete problems of customers become known, you can begin to work out concrete solutions for them. The best way to do so, is to test the first prototypes in a few stores.

The advantage of prototypes is obvious: short development and release periods. Furthermore, they are cheaper than extensive solutions and are still sufficient for testing approaches. They can consist of graphic click dummies or first application versions, in which the idea is implemented with basic functions. The form, as a start, does not completely matter yet. It is essential that contact with customers takes place and the first experiences with exposure to the solution are collected. For this, it is naturally important, to establish processes for the continual improvement of the solution, in which user feedback loops and corrections to the prototype are planned for.

Setbacks and a perceived failure are, incidentally, effective for work on prototypes. Even if it sounds trite: you learn more from mistakes than from successes. And with every critique, the solution is improved! Whether the prototype is expanded in the end, elaborated as a real project, or discontinued and replaced by a new solution approach – and whether the newest hot shit is actually called into action, doesn’t have to be definite at this point of time. What is important: little by little you get closer to the needs of your customers.

With the technology that is already available to us today, many actual customer problems are solvable. For that, concentrating on the hurdles in the Customer Journey is necessary, as well as the rigorous involvement of the customer.

This article was also published at lead-digital.de.

Looking behind, looking ahead.

The rules of VR are still unwritten. A rare opportunity for brand communication.

Innovations in the communication sector are routinely advertised and seldom redeemed. With virtual reality, it is different. This ‘Next Big Thing’ justifies every hype. VR used to be under rather than overestimated because it really is a completely new medium.

When a new, successful medium develops, it must be compared for a time with what is already known, in order to learn about the concepts. This influences the creative form for a while. Film began as, ‘living photography, perfect in every detail and life-sized’, television as visual radio, the World Wide Web as hypertext. With VR it is exactly as the name implies, which in this case refers to: VR is ‘something like reality’. Naturally, VR explains as little about reality as any other medium. But we leave out research and convention, in order to classify VR as a medium. That is why every article about VR is a personal account, and that is why experience really makes a difference here: you cannot grasp what you have not experienced.

VR will be regarded as an immersive medium, with the promise of ‘as if’ — as if you were there, as if you are the person, being represented. The idea of visual immersion is, however, actually older. In 1787 Robert Barker built his walk-in, 360-Degree-Views and called it ‘Panorama‘. Even older are the ‘peep-boxes’, which were popular in 19th-century salons and funfairs; small, wooden apparatuses for viewing exhibitions on paper, wood or glass. Early VR-Gears as well.

These panoramas and peep-boxes were primarily optical illusions. With digitalisation in the 1980’s, came tactility in production, the viewer becoming an actor. Jaron Lanier developed the ‘Data Glove‘ and characterised the notion of Virtual Reality. The visual representation, which the Data Glove can operate, is still abstract and prone to blocks, but trendsetting. One’s own body awareness influences what we see. We can act within the picture.

In modern VR both come together — physicality and panorama. To that end, VR has a few tricks up its sleeves, which effectively outwit our brain. And currently, it seems to be, as if we still fall for this repeatedly. The transfer to the virtual abyss in the laboratory for the umpteenth repetition got the heart pounding and generated measurable, bodily fear. False experiences in the VR-Dummy, the simulated person, who ‘I’ am, can trigger quasi-traumatic effects. So noticeable , that the consciousness researcher Thomas Metzinger, formulated an Ethics of VR Production with his colleagues.

vr-gocht-header

In British Thorpe Park, the mentalist and illusionist Derren Brown, been sending visitors to his ‘Ghost Train‘ since July. Equipped with a VR gear kit, you are literally a participant in a gruesome scenario, attacked by demons and other such passengers. Brown strengthens the already convincing VR illusion with motion, change of location, and being touched by actors. Pure immersion.

And there is a lot to say about it, that this miracle of ‘presence’ passes, that it is a phenomenon of the pioneer phase. It does not lack the experience of recipients or the rules of form. Both producers and recipients are still experimenting. It is an exploration of the grammar of the medium, the conventions made possible.

This shows in a wide variety of forms, leading to an explosion of ideas. Currently, it seems VR can be anything: theatre, film, documentary, e-learning, horror-trip, and yes, even video conference. One of the founders of the US production firm Wevr, Anthony Batt, describes it perfectly [‘Studio 360’, New Yorker, 25. April 2016]:

‘Does that mean our stuff is always perfect? Fuck no! It means we start with no idea of how we´re gonna make a project work, and we make it work. Or we don´t, and the whole thing turns to jello, and we learn.’

It is a great opportunity for brand communication, to take part in the development of this grammar. Two features help in the process: first, today short formats are best suited for VR and second, are comparatively cost-effective, feasible productions.

Let’s face it: 90% of brand communication is more or less friendly circumvention. Re-targeting is no fun for the audience. With VR, an ad may finally be a spectacle. Well done, it allows your audience to have a (spectacular, enlightening, shocking) experience. To take part in this entirely new medium is an opportunity, that will not so quickly come again.

 

vr-roadshow2-2016-teaser

Join the VR experience live with our Roadshow “Reality by Virtuality” in Hamburg, Cologne, Munich and Berlin.

Fear not! Connected Retail in Four Steps

In a few years, commerce might look like this: since I can see online that the jeans I really want are available at the shop around the corner, I can just head out to try them on in person. Just before I go into the shop, I receive a push notification on my smartphone telling me that I can buy the shirt from my wish list immediately, with a five-euro discount. The trousers are already ready for me in the shop. The trousers and shirt both fit, but because I don’t want to take them with me right now, the shopkeeper sends them to me at no extra cost. As the shopkeeper has also looked at my purchase history and knows what I like, he also recommends a jacket to me. The jacket might not be available in-store in blue (the colour I want), but I can take a look at it on a digital signage screen. I then add the jacket to my wish list, which I can access online and in-store. I pay for the shirt and trousers with my smartphone – there’s no need for cash – and leave the shop. Everything is conveniently delivered to me at home the next day.

This is one of many scenarios currently being tested to offer clients the best possible digital and personalised customer service, even at point of sale (POS). For salespeople who haven’t yet considered the idea of connected retail, it might seem almost menacing at first glance: How are you supposed to do all of that? What aspects are relevant to me? And where should I start?

From my experience, I’d like to recommend the following steps:

1. It all starts with the CEO

The first requirement is a business leader who is completely behind the idea. Without that, it just won’t work. Developing and implementing successful connected retail solutions is a matter for the boss as this can influence the entire structure of an organization.

It’s important for all internal stakeholders to be involved in the project. A cross-channel shopping experience that combines analogue and digital elements requires a variety of skills: marketing, IT, sales, and the shopkeeper must all be brought to the table. Even the employees in the shop play a key role because only they can successfully apply the concept in practice. You therefore need to create a holistic vision from the very beginning for all participants to work toward.

2. The client is the focus of all activities

The target audience is, of course, the client. “User centricity” shouldn’t just be a buzzword, it should be self-evident. You shouldn’t begin without identifying the client’s needs and understanding their behaviours. Only by doing so can you really offer them relevant services on the appropriate POS touch points to offer interactions that create added value.

Even a simple tablet can enable added value interaction: a shopkeeper can call up additional product information for the customer and offer them additional products that aren’t currently to hand. Furthermore they can access the customer’s purchase history, which is saved on a digital customer card and offers information about the customer’s preferences.

3. Think big, but start smart

Complete your vision with an integrated view on your comprehensive touch point system, but develop new touch points step by step. Gain experience and develop it further. And, above all: avoid an off-the-rack solution that isn’t tailored to your clients.

Come up with potential solutions for small problems, develop the approaches to implementing them, and test them directly in short cycles. This iterative approach allows you to start with minor investments and safeguards against losing investments. Only when the scenario is successful as a prototype should you start with elaborate linkages of ERP-, CRM-, or till systems.

4. Don’t wait, start now

Start collecting ideas from smaller projects with your partners (retail, agency, etc.). These experiences will improve your collaboration before larger projects arise and create a uniform image for clients.

But most importantly: start now! Anyone who hesitates now will be left with nothing in the long run because, ultimately, the client will shop at the business that makes the correct information or products available at the correct time, in the correct place, and in the correct context – online and offline.

This article was also published at wuv.de.

Four Steps to a Secure E-Commerce Solution

It was possibly only a simple development error that led to a security gap at eBay in December 2015, which had the potential to intercept client passwords during the login process. The consequences of hacker attacks that take advantage of such breakdowns can be substantial – and extremely unpleasant for the user: SPAM-mail, Phishing or stolen credit cards are only a few of them.

And the eBay example shows: large players are also not spared. Up to 87 percent of all websites have medium security flaws, while 50 percent have serious security gaps. The resulting annual loss worldwide is over 400 billion US Dollars. Stores not only risk serious damage to their image with data loss. Online stores are responsible for the security of client data, and are accordingly liable for data leaks. Processes and methods that target the security of e-commerce solutions are therefore indispensable for stores. However, this is not limited to a particular phase in a project, but runs through the entire period up to the day of implementation and activation. Security is an indispensable part of the design process, part of the implementation, part of the system infrastructure and part of the operation.

Sichere E-Commerce Lösung

The following points in particular should be addressed:

Define clear requirements

It seems so mundane, but it is so important: Security begins before the project starts. And each web-store has its own requirements. In a B2B shop which charges a fee for the download of technical documents, it is of course extremely important to design very safe identification or customer registration and access protection. For a telecommunications provider that offers all of its products through a self-service portal, it is equally crucial that only the authorised user has access on the contract and invoice data. Although both examples require the implementation of access security tools, the underlying requirements are different. These must be recognised in the “Requirements-Engineering” phase, and form the basis for later implementation.

Set your standards

“Secure Coding Standards” help developers write secure codes for the web. Ideally, they fall back on safety tested frameworks. Although these preventive investments are immensely important for the security of the web application, there are still no recognised industrial standards, or a norm which defines the security of web applications. Therefore each agency or online shop must take on the responsibility itself and create its own portfolio of standards in the areas of quality assurance, security and testing.

Therefore, a few years ago we started to collect best practices or recommendations from experts, for example the Open Web Security Application Project (OWASP), so that every client does not need to search for a standard themselves, and to be able to offer truly measurable security.

Search for your security flaws

In addition, at the end of any development, we put it through a “Web Application Security Test”, which checks whether our security standards are actually adhered to. In order to do so, we work with a certified “Ethical Hacker”, a specially trained IT expert that possesses a hacker’s knowledge, but who is working for us. Additionally, this is done using various software tools (we use, for example, IBM AppScan) that simulate attacks on the application. Any suspicious reaction by the application is documented and must later be manually verified or falsified. At the end, there is a report that documents the security flaws that have been found, and provides technical assistance to help rectify the problems.

Consider each security flaw found in this phase not as an error by the programmer, but rather as a success! You’ve discovered this in the development phase. The later an error comes to light, the more expensive it is to rectify.

Conduct continuous monitoring

Factors that cannot be influenced, such as the execution environment (browser), different devices (desktop and mobile) and heterogeneous systems introduce challenges to e-commerce solutions that are not always predictable in advance. Selective security and penetration tests, in which experts (e.g., certified ethical hackers) perform targeted attack attempts, help to keep these factors in mind. Because the number of newly discovered security flaws and the ways in which software gaps can be exploited grows daily.

Moreover, there is the option to install an additional “Web Application Firewall” (WAF). This one checks every incoming request before it is passed on to the actual web application. Therefore, a WAF needs to have a complex set of rules that is customised to the particular web application. Suspicious requests are rejected immediately, and, under predefined conditions, could raise an alarm (e.g., through an email to an administrator, when 100 requests per second are sent from an IP address that contain the code for a SQL injection). As a WAF is an independent system, attack attempts do not even come close to the protected application, or the data to be protected.

Be Secure from the Beginning

The cornerstone for a secure e-commerce solution must therefore already be selected during the design – even before the software is actually used. In addition, regular testing of the software, as well as any resulting updates is unavoidable and absolutely necessary. Only then it is possible to keep the software up to date, and to ensure its safety.

This article was also published at e-commerce-magazin.de.

The Opportunities of Digitisation

“It is time to expose the heinous nature of the phone, and condemn its many inventors.” No, this critique is not aimed at the smart phone. This is not about digital detox or the NSA. The citation comes from an 1877 edition of the New York Times. The author was already worried about the privacy of citizens. But criticising technology has not stopped its development: more than three-quarters of Germans now have a smart phone. For those under 30, it has superseded the television as the most “indispensable” device. Digitisation has reached our pockets and handbags, and even our bodies.

This fact has far reaching implications, and has created many opportunities, but also risks. As with every important technological development, there will be attempts to misuse these new capabilities. However, the opportunities created by digitisation far exceed the risks. We will learn, as a society and as individuals, to deal with it and we will mature in the process of digitization.

Opportunities for the Individual and Society

Today we take completely for granted that we can use our smart phones to buy our bus ticket, read the news or weather forecast, listen to music, time our jog, and chat with friends. For individuals, this digital transformation means more comfort, quicker access to information and new forms of communication. According to Statista, around 14 percent of Germans meet their partners through online dating sites. We pay for this comfort with our data. How we deal with this new currency in the future will be a social and individual learning process. Data protection is an important topic in politics, business and for each individual.

Before the discovery of printing, knowledge was hoarded in monasteries, where information was copied by hand. Reading was a privilege for those who could afford books. Today, everyone with an Internet connection has global access to information and educational resources. The democratisation of knowledge includes not only the consumption of information, but also freedom of expression: via commentary, blogs and social media, we can take part in public and political life. But we must also be able to cope with the fact that these capabilities will be used to every degree of stupidity. More importantly, in a networked world, social mistakes get visible more quickly than ever before. The Wikileaks revelations, for instance, could never have happened without digitisation.

Opportunities for Business and Marketing

In many markets, digitisation has allowed companies to provide service without spatial or temporal restrictions. This will give a boost to all industries. And digitisation will help processes to become even more efficient. A recent Bitkom study estimates that the potential for increase in productivity (keyword industry 4.0)  in Germany could result in a gain of up to 78 billion Euros by 2025.

For marketing and brands, the digital transformation means they can, and must, be more relevant and employ more targeted communications. The right message at the right time in the right place requires data – not necessarily personal information, but also anonymous information are sufficient. People, users and consumers expect brands to offer more service in the future, as well as clear added value and to take meaningful action.

Criticism of technology is always an important part of societal debate. However, the past has proven that it is much more useful to make market developments than to reject them categorically. This is especially true for the digital transformation.

This article was also published in Horizont, edition 40/2016.

The customer in the centre! Seriously?

Personalisation is currently one of the mega trends in marketing. In less than two years, the market has developed to the point where there is no avoiding it. For business clients and solution providers as well. On the provider side, almost all industry giants, such as Adobe, Oracle, Salesforce, Microsoft, and IBM are building out their cloud marketing solutions. On the client side, they are increasingly looking for answers on how to use these new opportunities for profit. Finally, as a private user, most individuals have experienced how impressive personalisation and automation can be when scrolling through recommendations on Amazon, or when their own smartphone calculates, unasked, the time it will take to get from work to home. And new capabilities promise that this is just the beginning. It’s high time to use this potential for your own customers. Many of the mentioned cloud solutions now provide hitherto unimagined possibilities. Customers can now find more relevant information and be more quickly and efficiently served and supported, whether it is before or after they make a purchase.

Nevertheless, individual companies should be cautious. Experience shows that, over time, personalisation cannot remain a marketing trick. The decision to adopt these technical solutions is only the beginning. True personalisation means the desire or intention to distinguish one client from another. And you must be willing! This is not just a task for systems and machines, but rather it is a task for people, and, finally, the whole organisation. When companies take the route towards personalisation, they quickly realise where the opportunities lie, as well as the risks. Departmental structures, which for years guaranteed successful business management, now prevent many companies from truly understanding customers’ interests and using that knowledge effectively. It seems logical and paradoxical at the same time: to serve and support customers individually with relevant information, more people and departments in the company must work together without barriers.

This means creating horizontals that include departments such as sales, marketing, customer service etc. When a customer has just signed a mobile phone contract, it doesn’t make sense to them to continue seeing incompatible products from the same brand. Or if the customer is inconvenienced with answering further questions to supplement an online profile, but they’ve been a valued customer in retail stores for a long time. Vertical integration is required as well: areas such as procurement, IT, legal, etc., need to implement the necessary infrastructure, data and systems, as well ensure legal compliance. How should an IT department know which system is the best fit for a certain marketing strategy? The consulting market to prepare companies for the age of personalisation is booming right now. From a conceptual standpoint, but as well from the organisational perspective, removing barriers across departments makes companies more capable of acting.

But the challenge goes even deeper, who says that personalisation is a good fit for every organisation? Who says that it will be the decisive competitive advantage for a company within a sector? Companies should truly consider whether this is a mega trend they need to follow, and if so, how they can differentiate themselves from competitors. Is the desire to serve clients on a more personal level really in the DNA of the company, and therefore a competitive advantage, or is the competition ultimately superior? In the digital age, personalisation and automation mean an extremely fast pace and the ability to interact, which must be overcome in the long run. And this is a question not only for “old” competitors: this isn’t the first time a mega trend brought new players to the field who understand little of the traditional performance-related competitive advantages of an industry. However, recent factors, such as a consistent focus on personalisation as a key success indicator, have made attacks on established industries…

The Amazon Dash Button: Born in the wrong world?

The Amazon Dash Button has been hotly debated in all forms of media over the last week. Readers of Germany’s “Stern” magazine, for example, had a very clear opinion. More than 70% answered the question “What do you think about the Amazon Dash Button?” with the answer “A load of rubbish”. (Source: stern.de) Why has the response to the Amazon Dash Button, which aims to make a lot of peoples’ lives easier, been so negative?

Lots of arguments against the Dash Button

There are apparently many arguments. After its introduction on the German market, the Dash Button is being hotly debated. Data privacy advocates warn of the possible misuses of the button’s new features. Consumer advocates warn of a lack of price transparency when ordering. Usability experts raise the question of how many Dash Buttons it is sensible to have in a household and we’re wondering what actual benefits they would have for us. But where is all this aversion coming from? After all, with the Dash Button Amazon is the only company offering us a product integrated in everyday life that reflects the ideas of pervasive computing and the internet of things.

The Dash Button is currently only aimed at a specific target audience

Amazon was certainly aware that the Dash Button wouldn’t be mainstream at this stage and that it wouldn’t be every customer’s cup of tea. But we should also be clear that we are living in the world of connected commerce where the effect of the long tail is still valid because the target audience for the Dash Button may be small relatively speaking, but in absolute numbers is large enough to make the Dash Button a successful model for Amazon. Because, according to a survey by “Stern”, 10% of respondents clearly advocated the Dash Button. They said: “Great, I hate shopping in supermarkets!”

Could the real home of the Dash Button possibly be in B2B?

Another reason for the harsh criticism might be that the Dash Button was born in the “wrong world” – in the world of B2C e-commerce. Would it not actually be better suited in B2B e-commerce? Imagine a production operation. Synchronised supply chains, as well as just-in-time and just-in-sequence processes are already a reality in the area of series production. Demand impulses between manufacturers and suppliers synchronize the order and product flows here. But there are still a great number of processes that run manually.
Aside from the rigorously timed series production, there are plenty of production facilities that do not deal in large-scale production. They use machines and tools that need to be serviced at irregular intervals. Replacing and topping up auxiliary and operating materials is also performed according to need. In this scenario, the Amazon Dash Button could optimise internal logistics. If attached to the respective machines, it could be used for various materials or even maintenance services. Orders placed would go to the warehouse or requests to the servicing and maintenance service provider. Using the buttons, internal processes can be initiated and the costs allocated to the correct cost units. If equipped with NFC and the “Purchaser” code carrier, it would even be possible to assign the respective purchaser and thus ensure that only authorised individuals can submit material orders or service requests.
If we take a step back from the manufacturing industry and consider everyday office life, the Dash Button could also be of use in such environments: for example, an employee takes the last pencil or notebook from the material store and immediately orders new products by pressing a button on the shelf. Orders that have been placed can, if desired, be combined into a weekly or monthly order and the order is then automatically submitted at the specified time.
There will certainly be many scenarios like this where the Dash Button could make life a lot simpler. Without any security concerns.

The Dash Button – an exciting first evolutionary step

The Amazon Dash Button is a first mover product of its kind. However, it hasn’t necessarily been greeted with the appropriate levels of euphoria, but instead with a great deal of scepticism. “I am convinced that the Dash Button in its current form will not survive the next two years. But maybe that wasn’t even the idea behind it,” said Gerd Güldenast, Managing Director of hmmh. The Dash Button is a new generation of device that will evolve over the next few years and find new fields of application. It is a further step in the integration of connected commerce in everyday life, in order to improve and simplify life.

Maybe the Amazon Dash Button will find a wonderful home in B2B commerce.

This article was also published at internetworld.de.