cool tech stuff and what cg companies are investing in

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Dale Hagemeyer

Research VP

Gartner

Cool Tech Stuff and What CG Companies are Investing In

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© 2014 Gartner, Inc. and/or its affiliates. All rights reserved. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Part 1: The Cool Stuff


Control of the connected

home relationship will be a

fierce battle

© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.

What Will Be Connected?

Connected: Appliances, cars, entertainment, HVAC, toys, lights, mirrors, doors, windows, blinds, alarm, solar panels, smart meter, furniture, switches, panel, cameras, house plants, tools, toothbrush, cutlery, bike, slippers, Rx bottles, medical monitors, clothing.

500

connected

things


Whoever Becomes the "Command Center" Will Influence Customer Relationship

Source: Apple

Source: Google Nest

Source: Samsung

#GartnerSYM


Wearables will be the next

major interaction channel


A Wearable Can Be Payment, Ticket, Tracking, Insurance

Source: Fitbit

Source: PruHealth

Source: Disney


A Wearable Can Be Fashion Accessory, Shopping Aid, Customer Channel

Source: Shop X

Source: Tory Burch


The "maker movement"

will go mainstream


Graphics: Please check if these images can be used. The analyst does not have the copyrights.


Manufacturing, supply chain,

sourcing, and product

management will change…a lot!


Never-ending life cycle: No "sunsetting" of products that can be 3D printed

Ultrashort life cycle or premarket: Create one-off, limited quantity, production runs

Concept Design Low

volume

Mass

production On demand

Long life cycle

Product Management Will Have Long, Ultrashort and Never-Ending Life Cycles for the Same Product


Print here?

Import from here?

Make, buy, or buy the rights to make?

Robots change the labor cost equation.

Sourcing Will Go Local as the Traditional Options of "Make/Buy" and "Offshore/Onshore" Blur


Ownership models will change


Leasing Models Will Use Digital Technology to Remove Risk

Time-based depreciation

Usage-based depreciation

Residual value

= Time-based "swag"

52%

52%

74% Light usage

22%

Heavy usage

= Time + Usage- based

Valu

e o

f asset

Va

lue

of asset


Customer engagement change

mechanisms


Workforce Planning Will Include Humans, Augmented Humans, and Smart Machines

versus


Customer engagement becomes

very virtual


Optimization becomes the norm


Retail Activity Optimization

Function Benefits

Reflect store conditions from night

before through POS

Low latency

Identify opportunities at store level Reduce redundancy and guesswork

Prioritize opportunities Maximize ROI

Task corresponding salesperson Accountability and ability to execute

Optimize the route to be taken Minimize drive time and fuel use

Factor in constraints like fuel costs,

seasonality, doctor appointment

Individualize by territory instead of

"averages"

Predictive modeling Determine what has to be done today to

improve outcome/avoid problem tomorrow

"These technologies use advanced modeling (regression analysis and linear programming) to drive the activities that manufacturers want executed by field sales personnel

dedicated to in-store activities …"

— "Hype Cycle for Consumer Goods, 2014" 21 July 2014 (G00262533)


Digital isn’t just a consumer thing


Speech/Image Recognition

Function Benefits

"Speak" the observations — like

and order

Efficiency of talk versus type

Bluetooth interface Helps when using large devices

like tablets

Noise cancelling Eliminate errors

--------------------- -------------------

Digital audit Speed, accuracy

Compare realogram to planogram Generate KPIs to drive action

Space analytics Leverage in negotiations


Image Recognition (Smart Image Interpretation)

Turning actual retail into digital diagram and comparing to planogram

Courtesy of Trax Image Recognition


“Mobile commerce” really means

“anywhere commerce”


• Growing Number of Touchpoints: - Mobile (Smartphone, Tablet)

- Social

- Face to Face

- Phone

- IPTV

- In-Game

- Google Glass

- Xbox Live, PlayStation

- Xbox Kinect

- iTunes, Google Play

- Digital Interactive Displays

- More …

• Consumerization of the Customer Experience:

- Customers Expect Similar Customer Experiences Regardless of the Type of Commerce

- B2B Organizations Get to Leverage B2C Knowledge and Experience

Commerce Is Anywhere


Commerce Is Anywhere

Newark.com element14

Website

Facebook

Mobile App

Web TV


“Internet of Things” intersects

with Digital…in an anywhere

reality


Smart Things in Smart Homes Will Create New Digital Business Growth Opportunities


Consumers Will Expect Relationships to Be Easier, Personal, Real Time

Real Time Services

(Just for Me)

100% Availability (Just for Me)

Offers and Rewards

(Just for Me)

Cognizant Content

(Just for Me)

Airbnb for Everything

(Just for Me)

Products Designed

(Just for Me)

www.flickr.com/photos/56041749@N02/5790659498


Business Moment: Using a Paint Purchase to Sell Laundry Detergent

1. House detects mild water damage to walls in son's bedroom. Determines repainting is needed.

2. House sends message to mom requesting approval for repaint.

4. Mom approves. House sends paint matching specs., quantity and shopping list to retailer where owner is part of loyalty program. Paint manufacturer is alerted.

5. Retailer is out of stock on laundry detergent. FMCG company offers to ship directly to the house same day via drone. Retailer checks with house to see if anything else is needed. Mom approves all recommendations.

3. Laundry machine chimes in and adds extra detergent to the order as mom is a messy painter.

6. House notifies the car of impending trip to retailer.

7. Retailer mobile app provides a list of links for painting how-to videos and a list of links to local painters.

www.flickr.com/photos/56041749@N02/5790659498


New capabilities in business

intelligence

© 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 32

Smart Pattern Discovery

"Gartner predicts that, by 2015, Smart Pattern Discovery will be the most in-

demand business intelligence (BI) platform user experience paradigm,

enabling mainstream business consumers to get insights from data.

These innovations have the potential to expand access to sophisticated

interactive analysis and insights to business consumers and nontraditional BI users — the approximately 70% of

users in organizations that currently do not use BI tools or have statistical

backgrounds." Hype Cycle for Business Intelligence and Analytics, 2014, Alexander Linden, July 30, 2014


www.beyondcore.com

Customer Example: Fortune 500 Marketing Department Objective: Predict the most valuable customers based on their activity in first three

months

7.5 X more valuable

5 X more valuable

1st Order Analysis 2st Order Analysis (8000 combinations in 4 mins.)

1.3 X more valuable

Do campaign in Do campaign in

1.2 X more valuable Completely

unprofitable


www.beyondcore.com


Consumer Goods Investment

Trends


Part 2: CG Industry

Investment Trends


Definitions:

Mega: More that $10B in annual revenue

Large: More than $1B but less than $10B in annual revenue

Small: $500M to less than $1B in annual revenue

37


25%

17% 19% 19%

20%

$500 million to lessthan $1 billion USD

$1 billion to less than$3 billion USD



$10 billion USD ormore

SS05. Please indicate your entire organization's approximate total annual revenue for the last fiscal year.

n=140

Respondent profile: Annual Revenue

Statistics are approximations calculated from range mid points

Mean=$5.1 billion


Who is driving the selection

process?


1%

2%

14%

41%

41%

Business units define IT strategies with the ITdepartment's knowledge but no support

Business units define and implement IT strategiesautonomously without the IT department's

knowledge

Business units define their IT strategies and expectIT department to support them

The IT department has a leader role in defining ITstrategies across the organization

The IT department and business units define ITstrategies and make decisions together

Q02. Which of the following best describes how your organization's business units and IT department work together?

n=140

Business units and IT are collaborative in 41% of organizations.


14%

34%

21%

17%

1%

13%

Initiatives are undertaken and funded by different departments, including IT, withno central coordination or strategy

Initiatives are undertaken, coordinated and funded centrally by IT

Initiatives are undertaken, coordinated and funded centrally by a business unitoutside of IT

Initiatives are undertaken and funded by different departments with some centralcoordination and funding provided by IT

Initiatives are undertaken and funded by departments with central coordinationand funding provided by another entity

Initiatives are undertaken by IT and/or business departments but governed,managed and controlled by a central body or steering committee

Q10. Which of the following best describes your organization’s current approach to decision-making for technology solutions when applied to sales and marketing functions?

n=139, Base: Excluding DK.

IT most commonly owns decision-making for sales and marketing technology solutions


Business units and IT are more often collaborative in large and mega organizations while the IT department is more likely to be a leader in small organizations.

66%

46% 54%

0% 20% 40% 60% 80%

Business units define IT strategies with the ITdepartment's knowledge but no support

Business units define and implement ITstrategies autonomously without the IT

department's knowledge

Business units define their IT strategies andexpect IT department to support them

The IT department has a leader role in definingIT strategies across the organization

The IT department and business units define ITstrategies and make decisions together

Mega (n=28) Large (n=77) Small (n=35)

42

Q02. Which of the following best describes how your organization's business units and IT department work together? By S05. Please indicate your entire organization's approximate total annual revenue for the last fiscal year.

n varies by segment


What factors are driving the

technology selection process?


Criteria for evaluating and ultimately selecting providers of new sales and marketing technology solutions: Mean summary

44

Initial consideration; n=129; Final selection, n=124, Base: Excluding Not Sure

Q; Which of the following attributes or criteria are most influential in your organization’s initial consideration and evaluation and in your final selection of providers when deploying new sales and marketing technology solutions? Please distribute 100

“influence” points across the following criteria.

Vertical focus 6.37

Specialized technical skills 9.29

Incumbent or ‘preferred provider’ status 5.94

My organization’s internal politics 7.80

Provider’s technology partners 6.42

Demonstrated business understanding 8.28

Demonstrated technology innovation 7.98

Rapid solution deployment 7.36

Self-service tools 5.93

Trusted brand with credibility in my organization 7.75

Market leader status 6.55

Flexibility in contract negotiation 6.16

Globally integrated solutions 8.02

Cultural fit 6.14

Vertical focus 5.54

Specialized technical skills 9.47

Incumbent or ‘preferred provider’ status 5.99

My organization’s internal politics 7.35

Provider’s technology partners 5.87

Demonstrated business understanding 8.54

Demonstrated technology innovation 7.61

Rapid solution deployment 7.77

Self-service tools 6.79

Trusted brand with credibility in my organization 7.55

Market leader status 5.90

Flexibility in contract negotiation 6.89

Globally integrated solutions 8.70

Cultural fit 6.02

Criteria for initial consideration & evaluation Criteria for final selection


Mega companies who are going to use as-a-Service already are – the 1% difference in % is due to the drop in n. Large and small companies will be catching up. And, for all sizes, the use of custom-designed solutions is fading. Q06A/B. Which of the following most accurately describes your organization’s primary strategy for sales and marketing technology solutions? And which do you anticipate will be your primary strategy in 24 months from now? by company size

43%

15%

14%

30%

32%

33%

11%

22%

Today (n=28)

In 24 months (n=27)

Mega companies (n varies by question)

45

45%

16%

24%

25%

18%

49%

13%

11%

Today

In 24 months

Large companies (n=76)

40%

27%

23%

21%

26%

46%

11%

6%

Today (n=35)

In 24 months (n=33)

Small companies (n varies by question)

KEY:

Use custom-designed

or configured solutions

Use Out-of the Box or

turnkey solutions with

little or no customization

Use as-a-Service

models (e.g. SaaS,

PaaS, BPaaS)

Use Out-of the Box or

turnkey solutions with

customization

-2%

-29% +1%

+15% Change in 2 years: -28% +1% +12%

+30% -3%

-13% +20% -5%

n varies by segment, Base: Excluding DK.


Unique functionality is preferred regardless of company size

46

61%

53% 57%

39%

47% 43%

Mega companies (n=28) Large companies (n=77) Small companies (n=35)

Option A: Unique functionality through integrated “Best of Breed” point solutions

Option B: “Good-enough” functionality through “all in one” solutions

Q:. Which of the following options or scenarios most closely describes your preferred client experience with providers of sales

and marketing technology solutions?

n varies by segment


36% 35%

29%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Technology underpinsour business operationsbut does not differentiate

us

Technology is a businessenabler and a

mechanism to driveefficiency

Technology plays animportant and increasingrole within the business

Technology touchesevery aspect of thebusiness and adds

significant value

Technology is critical tothe success and growth

of the business

Mega (n=28) Large (n=77) Small (n=35)

47

Role of Technology within the Business: the Dominant Mindset varies by Company Size Q01. Which of the following statements best describes how your organization uses technology within the business? by S05. Please indicate your entire organization's approximate total annual revenue for the last fiscal year.

n varies by segment


Option A: Low-cost solution will

be prioritized, 36%

Option B: Measurable

impact to business

performance will be prioritized,

64%

Q12_5. Which of the following options or scenarios most closely describes your preferred client experience with providers of sales and marketing technology solutions?

n=140

A majority prioritizes measureable business impacts over low-cost solutions.


Option A: Control over technology

decisions including specific tools remains with my organization,

69%

Option B: Provider controls;

standard tools and processes

are good enough if delivering the

desired outcome, 31%

Q12_4. Which of the following options or scenarios most closely describes your preferred client experience with providers of sales and marketing technology solutions?

n=140

Over two-thirds prefer to retain control over technology decisions


My organization will choose bleeding edge technology solutions, 29%

My organization will choose leading edge

technology solutions, 44%

My organization will choose proven

technology solutions, 26%

Q07. For sales and marketing processes, which of the following statements most accurately describes your organization’s current buyer profile?

n=140

44% prefer Leading Edge technology solutions


Which technologies are being

prioritized/selected?


In the next 24 months, cloud-based implementations will increase

Cloud-based technology solutions

(developed internally), 19.2%

Cloud-based technology solutions (Purchased SaaS or

BPaaS offering), 22.1%

Internally-developed technology

solutions, 29.4%

Externally-developed technology

solutions, 29.4%

52

Q04. What percentage of solution implementations for your organization involve internally-developed technology solutions, externally-developed technology solutions, or cloud-based technology solutions today, and what you anticipate 24

months from now? : Mean summary

20.2%

24.9%

27.2%

27.7%

In 24 Months

Today n=132 , Base: Excluding DK.


Q04. What percentage of solution implementations for your organization involve internally-developed technology solutions, externally-developed technology solutions, or cloud-based technology solutions today, and what you anticipate 24 months from now? : Mean summary, by company size

20.1%

18.3%

20.7%

24.8%

34.0%

32.5%

25.2%

24.4%

Today

In 24 months

Mega companies (n=26)

53

17.6%

20.5%

23.3%

25.1%

28.3%

25.8%

30.8%

28.6%

Today

In 24 months

Large companies (n=77)

21.9%

21.0%

20.6%

24.7%

28.1%

26.1%

29.5%

28.3%

Today

In 24 months

Small companies (n=35)

KEY:

Cloud-based

technology solutions

(developed internally)

Cloud-based


(Purchased SaaS or

BPaaS offering)

Internally-developed


Externally-developed


+4.1%

+2.9% +1.9%

+4.2% Change in 2 years: -1.8% -1.6% -0.8%

-2.5% -2.2%

-0.9% -2.0% -1.2%

n varies by segment, Base: Excluding DK.


2014 Sales and Marketing-related technology investments

Top Sales and Marketing-related technology investments for FMCG industries (MEGA companies only): 2014 v. 2015

54

n=28, Base: Industry is FMCG and Revenue Group is Mega, Excluding Not Sure

Digital Offers and/or Coupons 21%

Retail Activity Optimization 11%

Master Data Management 25%

Virtual Store Research 11%

Social Media Marketing Platforms 25%

Content Marketing Platforms 11%

Digital Marketing Analytics 11%

Real-Time Customer Offer Engines 14%

Merchandising and Category Optimization 11%

Trade Promotion Optimization 18%

Trade Promotion Management 21%

Consumer Goods Ecommerce 25%

Consumer Mobile applications 29%

Social Analytics 18%
















Marketing Mix Modeling and/or Optimization 25%


Single Source Global Database of Consumer Information 4%

Demand Signal Repository 4%

Retailer Digital Coupons 0%

Crowdsourcing for Retail Audits 0%

Crowdsourcing for Consumer Innovation/New Product Development 4%

Augmented Reality 9%







Intelligent Image Interpretation 4%




Top Sales and Marketing-related technology investments for FMCG industries (LARGE COMPANIES ONLY): 2014 v. 2015

55




























Social Analytics 7%


















n=76, Base: Industry is FMCG and Revenue Group is Large, Excluding Not Sure


Top Sales and Marketing-related technology investments for FMCG industries (SMALL COMPANIES ONLY): 2014 v. 2015

56




























Social Analytics 0%

2014 Sales and Marketing-related technology investments 2015 Sales and Marketing-related technology investments

















n=35, Base: Industry is FMCG and Revenue Group is Small, Excluding Not Sure



Top Sales and Marketing-related technology investments for FMCG industries (North American respondents only): 2014 v. 2015

57

n=40, Base: Industry is FMCG and primary workplace is in North America, Excluding Not Sure





































Augmented Reality 9% Single Source Global Database of Consumer Information 10%








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