the evolution of customer experience: 10 trends you can’t...
TRANSCRIPT
The Evolution of Customer Experience:
P f D L H ff
The Evolution of Customer Experience:10 Trends You Can’t Afford to Miss
Professor Donna L. HoffmanChancellor’s Chair and Co-Director, Sloan Center for Internet Retailing
A. Gary Anderson Graduate School of ManagementU i it f C lif i Ri idUniversity of California, Riverside
http://sloan.ucr.edu/
MSI Conference on “Leveraging Online Media and Online Marketing” Miramonte Resort and UCR Palm Desert Campus February 6-8, 2008
Overview
The Internet is Unique
The Evolution of Customer Experience
How to “Future-Proof” Against Change
Q&A
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Web 1.0, 2.0, 3.0
Web 1.0Web as a conduit for data. “Text and image.” Basic infrastructure built. Static sites, then some dynamic content and interactivityinteractivity.
Web as an operating system Facilitates sharing andWeb as an operating system. Facilitates sharing and participation. Seamless connection of applications (i.e. geographic mapping) and services (i.e. photo-sharing). The “mash-up”. “Lego phase,” with parts that connect.
Web 2.0
Semantic Web. Web can “understand itself.” Web less of a catalog and more of a guide. World Wide Database. Artificial i t lli T l f l d ti d tWeb 3 0 intelligence. Truly useful recommendations and answers to questions like: “I’m looking for a warm place to vacation and I have a budget of $3,000. Oh, and I have an 11-year-old child.”
Web 3.0
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Source: http://www.nytimes.com/2006/11/12/business/12web.html?ex=1320987600&en=254d697964cedc62&ei=5088
Web 1.0 vs. 2.0
Web 1.0: AOL buys Time Warner.Web 2.0: Google buys YouTube.
Web 1 0: New media company buys old media companyWeb 1.0: New media company buys old media company.Web 2.0: New media company buys new media company.
Web 1.0: Users create the content (Slashdot).Web 2.0: Users create the content (Flickr).
Web 1.0: Crap sites on Geocities.Web 2.0: Crap sites on MySpace.
Web 1.0: Writing.gWeb 2.0: Rating.
Web 1.0: Cool Site of the Day.Web 2.0: Technorati.com.
Web 1.0: Bookmarking.Web 2.0: Bookmark sharing.
Web 1.0: Pointless Flash widgets.
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Web 2.0: Pointless “Ajax” widgets.
Source: http://www.zeldman.com/2006/10/17/web-20-thinking-game/
Web 2.0 Puts Consumers in Control
Web 2.0 allows Web 2.0 allows consumers toconsumers toconsumers to consumers to CONTROL their CONTROL their experienceexperience
It gives them the It gives them the freedom to do freedom to do WHAT THEY WANTWHAT THEY WANT
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Web 3.0 Augments That Control
del.icio.us
Web 3.0 integrates AI with human intervention
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For Some, Web 2.0 is Not Pretty!
"When people say to me it's a Web 2.0 application, I want to puke."
Guy Kawasaki, in Newsweek, 4/3/06
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Web 2.0 Embodies Some Important Ideas
Consumers are both the producers and consumers of their own t t d li icontent and online services
Enables markets as “conversations”Enables markets as conversations
Watchwords are collaboration, sharing, and community
What the Internet was meant to be
What does this mean for Online Marketers?
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Focus on the Consumer Behaviors, Not the Buzz
An Alphabet Soup of Technologies
Social ApplicationsBlogs, Vlogs, Photo-blogs, Mob blogsWikisAjax (Asynchronous Javascript + XML), Flash
RSS, AtomSocial bookmarking & taggingSocial networksVideo sharing (photos, videos)Podcasting (aka audio blogging)Vidcasts vodcasts (video casting)
RSS, AtomJSON, XMLFeed readers/aggregatorsRIA (Rich Internet Applications)Web as platformREST, SOAP Vidcasts, vodcasts (video casting)
Content syndication (RSS)Mash-ups
APIs, P2P, SOA…
Why do consumers use these applications? What behaviors do the technologies enable?
M k d f hMarketers need to focus on the consumer behaviors – i.e. what people do with the applications; why they use them and how.
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That is what counts.
What’s in Store for Customer Experience in Web 2.0+?
Examine the evolution of customer experience in the context of ten important trends
These follow from Web 2.0+ (going into Web 3.0).
We need some kind of analysis framework to organize ideas.
A reasonable framework starts with how the Internet is different.
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Internet is different.
The Internet is Unique
1 Networked1. Networked2. Digital3. Interactive4. Measurable5. Limitless Content6. Addressable6. Addressable7. Consumers in Control8. Vulnerable9 Convergent9. Convergent10.Augmentable
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Source: Hoffman and Novak (2004), A Conceptual Framework for Considering Web-Based Business Models and Potential Revenue Streams
The Internet is Changing Customer Experience
A typical home in 1975:
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Source: http://www.pewinternet.org/ppt/2006%20-%205.9.06%20SOCAP.pdf
The Internet is Changing Customer Experience
A typical home today in 2007:
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Source: http://www.pewinternet.org/ppt/2006%20-%205.9.06%20SOCAP.pdf
The Internet is Changing Customer Experience
More mobile
More multitasking
Active roles in content creation
The Internet is changing their expectations
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These Changes Are Expected To Accelerate Over Time
The four laws of technology operate exponentially (“better, faster and cheaper”):
Moore’s Law – processing power doublesevery 24 months
Gilder’s Law – communications power doubles every 8 months
Kryder’s Law – storage power doubles every 13 months
Metcalfe’s Law – the value of a network is proportional to the square of the number of users
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Think About the Impact of “Better, Faster, Cheaper”
Exponential growth in…• Computing power• Communications power• Storage power• Network usefulness
Affecting each of the following 10 years from now…• Search enginesSearch engines• Web browsers• Product merchandising• Online retail spacesOnline retail spaces• Online community and communication• Entertainment• Who and what consumers trust
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Who and what consumers trust
Important Trends
1 Networked Social marketplaces1. Networked Social marketplaces2. Digital ABBA3. Interactive Consumer-generated media4 M bl S i l di ti i ti4. Measurable Social media optimization5. Limitless Content “Help me find it”6. Addressable “Do it for me”7. Control “I’ll do it myself”8. Vulnerable Brandjacking9 Convergent Digital convergence9. Convergent Digital convergence10.Augmentable Augmented reality
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Source: Hoffman and Novak (2004), A Conceptual Framework for Considering Web-Based Business Models and Potential Revenue Streams
Social Networks Are the Web’s Fastest Growing Sites
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1. Networked Social Marketplaces
Web 1.0 looked at social networking sites from the perspective of “eyeballs”
Web 2.0 will “monetize” the phenomenon by recognizing that social networks are the world’s largest (digital) marketplaces
Web 3.0 will integrate agent technology to help people find what they are looking for, possibly in virtual worlds
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Web 2.0: Social Shopping
Social networking sites are rapidly morphing into social marketplaces thanks to widgets.
These social media applications let consumers create their own Web
i th th texperiences – the ones they want, not the ones you think they want!
Applications bring the store to the buyer –this kind of “distributed shopping” is one step on the path of the evolution into social marketplaces
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marketplaces
2. Digital ABBA
Atoms to Bits and Back to Atoms
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Product Merchandising: Olfactory and Haptic Interfaces
S t D C b T h
Input Translation – atoms to bits and back to atoms
Scent Dome CyberTouch
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Source:http://www.trisenx.com/scent_dome.htmlhttp://www.immersion.com/3d/products/cyber_touch.php
3D Printing Will Soon Be in Reach for Consumers
Consumers will be able to “print” customized products in the privacy of their own homes
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3. Interactive Consumer-Generated Media
User-generated content (video and photosharing blogging) has come aUser generated content (video and photosharing, blogging) has come a long way in a short period of time:• Unsolicited product reviews/commentary (text)• unsolicited video commentaryunsolicited video commentary• solicited media (“co-creation” or “participatory advertising”)
C t d di i i i i i t b f i lConsumer-generated media is gaining in importance because of social networks – word-of-mouth is elevated because consumers in the network have known reputations and are trusted.
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Consumers Are Passionate About Their Favorite Brands
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User-Created Content
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The new bar at the Tramway needs furniture!
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“Videopinions” Enhance Word of Mouth
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Kimberly-Clark Encourages Consumers to “Let It Out”
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Co-Creation Generates Consumer Insights
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4. Measurable Social Media Optimization
Just when you thought you’d mastered SEO, here comes SMO
Turn consumers into “brand ambassadors” that share their brand experiences with the friends in their social networks and help spread the word about your brand
Some key aspects of SMO:
• Make it easier for consumers to link to you and tag your contenttag your content
• Encourage consumers to use your content
B th d k id
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Beware the dark side.
5. Limitless Content “Help Me Find It”
The Internet is an “endless frontier,” but those billions and billions of web pages come with a costof web pages come with a cost.
It i t b i b th i d h d t fi d thiIt is at once becoming both easier and harder to find things
W k h d d h h ff hWe know that consumers do not expend that much effort when searching and that they get very frustrated very quickly when they can’t find what they are looking for.
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Human-Filtered Search
Web 1.0 Directories and Guides
(remember the original Yahoo?)
June 30, 1998
Web 2.0
Web 2.0+
Browse the Yahoo! Shoposphere
Web 3.0 AI integrated with human intervention to improve search
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6. Addressable “Do It For Me” (Personalization)
Google’s personalized search based upon your history
Note – is this a good thing? It limits you. Eliminates the serendipity factor. What if you want something unexpected?What if you want something unexpected?
But you can engineer serendipity.
You want personalized search to be practical (relevant to you) but you also don’t want to rule out serendipitous findings.p g
Nothing really puts these together, yet…
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7. Control “I’ll Do It Myself” (Customization)
Two visions• Company controlled 1:1 individually tailor or personalize the
Web site to meet the customer’s needsWeb site to meet the customer s needs.• Customer controlled 1:1 hijack a Web site and customize it to
make it your own!
• The Web was designed to be hackable – a company’s Web site isn’t static.
• Why shouldn’t consumers be able to modify it to suit their own tastes?
QEDWiki
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Greasemonkey: Froogalize Amazon
BEFORE AFTER
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How will Customization and Personalization Trends Play Out?
Customization has the advantage of being easier to implement and benefits consumer control motives.
But personalization may play a strong role in the future asBut personalization may play a strong role in the future as information increasingly taxes consumers’ abilities to process and integrate it in meaningful ways.
Long run, the four technology laws suggest strongly that personalization will play a dominant role in the futurepersonalization will play a dominant role in the future.
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8. Vulnerable Brandjacking
Consumers are not very good at determining when they are being scammed
Online scammers are using
increasingly sophisticated direct
and online marketing techniques
to execute their crimes.
Online retailers need to stay
informed and keep vigilant!
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9. Convergence Digital Convergence
Digital convergence is a key characteristic of Web 2 0 – itDigital convergence is a key characteristic of Web 2.0 – it provides for the (hopefully) smooth integration among various content sources and technologies into one seamless customer experience.p
Some of the trends we’ve already looked at provide examples of thisof this.
Online retailers need to expand their view of what constitutes the best “channel” to reach customersthe best channel to reach customers.
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Apple: Convergence of Computing, Communications, and Digital Content
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10. Augmentable Convergent Augmentation
Augmented reality
Augmented products
Augmentedconsumers
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productsconsumers
Digital Environments: Augmented Reality
Current Applications: Possible Future Applications:
• Insert additional information into field of view (for example, mechanic
l b l d i t ti )
• Expand a PC screen into the real environment as a virtual image that
b i t t d ith ( i lsees labels and instructions).
• Wearable maps for military and emergency applications.
can be interacted with (special glasses or holograms).
• Virtual holographic plants, artwork, g y pp
• Virtual objects in museums and theme parks (Disney’s Haunted Mansion an early example)
g p pwallpaper and pets.
• Replace car navigation systems with guiding lines and directionsMansion an early example). with guiding lines and directions shown direction on the road.
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Google Maps Street View
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“Window Shopping”
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Social Retailing
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Web Browser Evolution
Mosaic 3.0 (1993) Internet Explorer 6 (2001) Internet Explorer 7 (2006)
Netscape 1.22 (1994)
SphereXplorer 3D Browser (2007)
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Internet Explorer 4 (1997)
Future Web Browsers?
Not so far to get from here (today) …. … to here (in the future).
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Source: http://www.donnarosenartists.com/index.php?navarea=Artist+Gallery&artist=25
How to “Future Proof” Against Exponential Effects
Stay on top of trends and developments. They’re your window into what the future might look like.
Always assume the digital environment will change. (And fast!)
Focus on fundamental aspects of online consumer behavior, not just current best tipractice.
Customers can create and are in control. They aren’t going back to the farm (or passive TV viewing…)
Customers now interact with machines in addition to salespeople and products. Do managers understand these machines?
C t ti f th t ’ d M k t b l dCustomers can satisfy other customers’ needs. Marketers can be replaced.
The online experience is a consumption event in itself. It may be much more interesting than anything a company has on the Web.
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