building business models around e-commerce and augmented reality
TRANSCRIPT
Building Business Models Around E-Commerce and Augmented Reality
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Snapshot: We’re an interactive marketing agency with a passion for emerging media and technologies
Services: Interactive Video, Social Media Marketing, Mobile Marketing, Website/Application Development
AR Products: Webcam Social Shopper / Fashionista, Cannonballz, ZugSTAR
Founded: 2001
Location: Los Angeles / New York
Web: www.zugara.com
Blog: www.weareorganizedchaos.com
Facebook: www.facebook.com/zugara
YouTube: www.youtube.com/zugara
Twitter: www.twitter.com/zugara
PROFILE
HELLO… WE’RE ZUGARA
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State of E-Commerce
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Online Retail Sales Continue to Rise…
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Web-Influenced Retail Sales Rise As Well…
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Peers Continue To Influence Purchase Decision
• Eighty-three percent of online shoppers said they are interested in sharing information about their purchases with people they know
• 74 percent are influenced by the opinions of others in their decision to buy the product in the first place.
(Manage Smarter, September 2009)
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But What’s Missing?
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Shopping Offline Is An Emotional and Social Experience
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Online…Not So Much
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The “consumer experience” has made very little progress in the last 15 years
Amazon1990’s
Amazon2010
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45% of U.S. online shoppers abandoned shopping carts multiple times over a span of three weeks. (Paypal & ComScore)
Abandoned Carts
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Conversion rates are low, with the “gold standard” being between 2% and 3%
Low Conversions
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The average return rate for online clothing retailers is about 20% but goes as high as 50% for some. (Forrester Research)
High Return Rates
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What Are Brands Doing To Evolve The E-Commerce Experience?
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E-Commerce Innovations – Social Media
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E-Commerce Innovations – Interactive Video
<- Zappos Interactive Product Videos
<- Sales increased from 6% to 30% when product had video associated with it
Samsung Live Video Customer / -> Product Support
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YouTube & Video Chat Generation
• 36% of Skype-Skype calls included Video
• Chatroulette had 960,000 unique U.S. visitors in February
Sources: GigaOM – Skype By The Numbers. It’s Really BigComscore – Chatroullette Takes The College Crowd By Storm
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Projected Webcam Growth
Markets for webcams at $1.8 billion in 2008 are anticipated to reach $3.2 billion by 2015, growing in response to decreases in unit costs and increases.
(Wintergreen Research - Worldwide WebCam Market Shares, Strategies, and Forecasts, 2009-2015)
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This Changes Everything…
Augmented Reality Experiences Through Standard Consumer Webcams
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E-Commerce & The Augmented“Product” Experience
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Augmented Reality Shopping – Ray-Ban
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Augmented Reality Shopping – Ray-Ban
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Augmented Reality Shopping - Tissot
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Augmented Reality Shopping - Tissot
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Augmented Reality Shopping - Fashionista
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Augmented Reality Shopping - Fashionista
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How Do We Use AR To
Enhance The E-Commerce
Experience For The
Consumer?
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Focus On Utility
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Integrate Social Media
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No Software Downloads
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Building Business Models Around E-Commerce and Augmented Reality
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• Virtual Worlds– Second Life
• Social Media– Facebook, Twitter
• Mobile Marketing– Admob, iPhone Apps
• Online Video– Brightcove, YouTube
• Blog Networks / Advertising– Gawker, AOL
Monetization of Prior Emerging Media & Technology
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• What’s the ROI?
• Will Consumers Actually Use It?
• What Other Brands Are Using AR?
• What Analytics Can You Share?
Questions and Challenges
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So Where Does That Leave AR?
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• CPM ads (“cost per thousand views”; banner ads online and regular ads in print, TV and radio)
• CPC ads (“cost per click”; think Google ads)• CPA ads (“cost per action”; pay only if the customer
performs a certain action)• CPT ads (“cost per transaction”; you pay only if the
customer brought to you from a media sites becomes a paying customer.)
• Lead generation (you pay for qualified names of potential customers)
• Subscription revenues• Affiliate revenues (think: Amazon Associates)• Rental of subscriber lists• Sale of information (selling data about users–
aggregate/statistical or individual–to third parties)• Licensing of brand (people pay to use a media brand
as implied endorsement)• Licensing of content (syndication)• Getting the users to create something of value for
free and applying any of the above to monetize it. (Like Digg or our own Reddit)
• Upgraded service/content (ed: aka “freemium”)
AR Technology Has Ability To Work With Multiple Revenue Models
• Alternate output (pdf; print/print-on-demand; customized Shared Book style; etc.)
• Custom services/feeds• Live events• “Souvenirs”/”Merchandise”• Co-branded spinoff• Cost Per Install (popular with top Facebook apps who
can help others get installs)• Sponsorships (ads of some sort that are sold based
on time, not on the number of impressions)• Listings (paying a time based amount to list something
like a job or real estate on your website)• Paid Inclusion (a form of CPC advertising where an
advertiser pays to be included in a search result)• Streaming Audio Advertising (like radio advertising
delivered in the audio stream after a certain amount of audio content has been delivered)
• Streaming Video Advertising (like streaming audio but in video)
• API Fees (charging third parties to access your API)
Source: Wired Magazine
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Most AR Companies Offer a Software Based Revenue Model
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How Do We Target Areas Like E-Commerce?
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“Augmented Reality is a solution looking for a problem…”
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Problem: Bridge The Gap Between Offline and Online Shopping
Offline ShoppingSocial but time consuming
Online ShoppingConvenient but not social
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Solution: Augmented Reality
WebcamSocial
ShopperDemo
At Booth #114
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Market Data• In 2009, 154 million people in the U.S. bought something online, or 67% of the online population (4%
more than in 2008). (Forrester Research)• 80% of Gen X and 71% of Gen Y internet users buy products online. (Pew Internet & American Life
Project)• Amount people spent on clothing online: $13.6 Bil. (US Census)
• Amount people spent on clothing in store: $7.0 Bil. • 83% of online shoppers said they are interested in sharing information about their purchases with people
they know, while 74% are influenced by the opinions of others in their decision to buy the product in the first place. (Manage Smarter)
• Online social network users were three times more likely to trust their peers' opinions over advertising when making purchase decisions. (Jupiter Research)
• B2B interactive marketing spending will climb to nearly $4.8 billion in 2014. (Forrester Research)