A wave of digital change: Trends in digital E-nnovation 2013 - In association with - Deloitte
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In association with
A wave of digital change:
Trends in digital
E-nnovation 2013
1
Keynote
Introduction
Keynote
Just this year, Europe has experienced double e-commerce, in efforts to not only spread
digit growth rates, and expects to see industry knowledge and exchange successful
Our trends
sales reach over 300 billion euros by 2016. practices, but to jump start discussions on
Electronic and apparel online shopping, the future of the business market we’re all
particularly cross-border, have been on the a part of. Global trends will be compared
Big data
rise, trending throughout the continent at with current developments in the Central and
rates that are predicted to double by 2015. Eastern European markets. The conference
provides an ideal meeting place for people
Mobile
In the past, Western and Central Europe who have the greatest influence on the
have taken the lead in B2C markets, but trade in the region, including CEOs and
Eastern Europe is quickly gaining speed top management of the most important
Cloud
to its neighbors. With Poland right in the companies in the sector, experts and
middle of it all, we feel we have the best experienced practitioners of e-commerce,
seat in the house. Our B2C market is more as well as young, creative entrepreneurs
Social
mature than Eastern Europe, though we’re engaged in innovative projects.
still part “underdog” in comparison to the
Scandinavian countries, UK, Germany, As part of the ‘e-nnovation’, Deloitte, Allegro
UX
Netherlands and France. and PayU have prepared this report – which
outlines some of the important digital trends
This autumn, between the 24th and 25th of that are currently shaping e-commerce
Payments
October, the city of Poznan will become the industry and society more broadly.
special place, where the greatest companies,
The internet brands and business ventures touching We strongly believe that following the
of things e-commerce come together for the fourth example of the previous editions, the
edition of ‘e-nnovation’ confernce. e-nnovation 2013’ will create a space that
will help your form new partnerships and
Security ‘E-nnovation’ channels all parts of the world, cooperation, and will contribute to the rise
bringing together top players of global of new international initiatives.
Economic
Impact
Implications
About us
2
Keynote
Introduction
Introduction
It’s been twenty years since Mosaic, the first The next wave of change is now upon us researchers have pointed to the “plasticity” The current changes in digital technologies
web browser was released to the public Social media has come into the mainstream, of the human brain, and noted that even constitute both threats, and significant
Our trends
in 1993. Since then, we’ve seen several while cloud computing and big data in adulthood, we’re constantly adapting, opportunities for business. This report
waves of digital change shift how we live are doing the same. The shift in ways learning and changing – “neuroplasticity contains an analysis of how digital currently
our day-to-day lives. First, we could suddenly of doing business is perhaps reflected is not only possible, but [. . .] it is constantly affects us and the economy, as well
Big data
access information from around the world, in the bankruptcy of Kodak and the rise in action”4. Consequently, arguments have as practical examples of what is being done,
or send e-mail to friends on other continents of Instagram. The former once employed been made that the Internet is changing how and what is possible in the digital space.
in an instant. Then, we could download 62,000 people and filed for bankruptcy we think and reason. Negative perspectives
Mobile
music, do our banking, or trade shares from in 20122. The latter employed 13 staff and argue that we’re becoming more superficial, In writing this report, we hope that it will
our PCs. Each time customers changed their was bought by Facebook for $1 billion USD and easily distracted. Others point out that trigger ideas, inspire, and if necessary,
behaviour, businesses reacted, and there in the same year3. we’re capable of both ‘skimming’ and ‘deep spur to action. For the professionals
Cloud
were both winners and losers. The next diving’ into information, and can now who contributed, we thank you
great wave of digital change is now with us process and analyse information much – and for our readers, we invite you to join
– and business must take notice. The changes we see are underlaid by better than before6. Whichever is the case, the conversation.
Social
broader shifts in technology and society. the Internet has changed our daily actions
The adoption of mobile means that and expectations.
The first waves of digital change have already smartphone and tablet sales have overtaken
UX
hit business. In the beginning we saw the PCs this year. In the US, the percentage
growth, and then the burst of the Dot Com of smartphone owners was 11% in 2007. We’re also seeing the first generation
bubble. Afterwards, digital business was It’s currently at 31% in Poland – and has of ‘digital natives’. This new generation
Payments
more mature – here we saw digital firms grown to around 50% in the US4,5. Cheaper is comprised of people who have grown
disrupt, successfully compete with – and sensors and connectivity means that objects up with the internet throughout their lives.
The internet in some cases, outcompete traditional from trucks to handbags are gaining Digital natives not only want, but expect
of things companies. The businesses that adapted to internet connectivity, as the ‘Internet of a great experience in the digital channel,
our changing digital habits survived. Those Things’ expands. The internet is becoming whether it’s in social media, banking,
that didn’t struggled. Blockbuster succumbed ubiquitous. or shopping. Poland is not immune to this
Security to the rise of video-on-demand and Netflix: generational shift. We have one of the
after first rejecting an offer to partner with highest social media usage rates in the world
Economic their digital rival1. Borders did not adapt Not only does the Internet surround us, – higher than Germany, France or Japan,
Impact quickly enough to Amazon and customer it is changing the way we act, what we but also one of the biggest gaps between
desire for a convenient digital channel. And expect and potentially, how we think. young and old – and not all areas of business
how many of us attended auctions before We now check prices on our phones while seem to have noticed.
Implications the advent of Ebay and Allegro? at the shops, and sit on the couch with our The combination of smartphone adoption,
tablet while watching TV. We don’t require ubiquitous internet, and the rise digital
physical bank branches (or ATMs) to carry natives and our own expectations mean
About us out most of our transactions – and we businesses needs to respond, or risk being
expect the digital channel to work. Medical left behind by those that do.
3
Keynote
Key take-aways from this report
Introduction
Our trends
Big data
Mobile
1 How we use the internet is changing
We’ve reached a tipping point. There are now more smart phones and tablets being sold than there are personal computers
– and we are no longer tethered to PCs when accessing the internet. The web comes with us when we’re browsing at a shore,
paying for items, or watching TV. Companies can now design for phenomena that merge the physical and the digital, and weren’t
commonplace a few years ago: showrooming, social commerce, and mobile payments to name just a few.
Customers’
expectations
in digital are
changing, and
2 Customers no longer just want digital, they expect it
Cloud
Customers are becoming used to digital options in their interactions with companies, and have come to expect it delivered business needs
Social
with a sound user experience. Social media is now regularly used for tasks from customer service to recruitment, in addition
to advertising and maintaining brand presence. A seamless mobile experience is also becoming ‘expected’ and the production to respond.
and use of apps around the world has mushroomed, while the payments space in particular is being disrupted by mobile.
UX
Payments
The internet
of things
3 Business can adjust to current needs…
Big data can help businesses refine their understanding of just what those customer needs are, and inform decision making. Data
analytics is cheaper than ever, allowing even smaller businesses to benefit. User Experience and mobile payments are already on
the radar for many businesses, while security should not be forgotten as an immediate concern. As the digital channel becomes
more and more important, it also becomes a more lucrative target.
4 … and prepare for new ones
Security
Analysts predict that the Internet of Things could contribute $14 trillion to the global economy by 2022. Though it’s still in its
Economic infancy, IoT it is creating a buzz, and is a space to watch. Not only can it help retailers track their logistics and internal processes,
Impact it can revolutionise how we interact with our physical space – from products and billboards, to each other. Finally, it’s likely
that cloud, will give us access to technologies that aren’t even invented yet – without requiring us to invest in infrastructure.
Consequently, businesses should have a sound understanding of cloud to prepare for the future, whatever it may be.
Implications
About us
4
Keynote
Our trends
Introduction
Our trends Mobile
The report
Big data
Data and analytics are at the heart
Retailers have the opportunity
to change mobile from a threat
covers eight
Big data of developing customer insights.
to an advantage. digital trends
Mobile
and their
Cloud Social implications for
Cloud Cloud Is bringing us some futuristic
technologies without the upfront cost
Social media has gone mainstream
– but is business getting the most
business.
– but integration is challenging. out of it?
Social
It also presents
UX
User Experience Payments an analysis of
Payments
A focus on user experience is no longer
an option – it’s a must have.
“Sell and cell” – smartphones will be
shaping the world of payments. the impact of
e-commerce
The internet
of things on the Polish
Security
Internet of Things Security economy.
The Internet is changing the way we Think you can’t be hacked?
live…again. Think again.
Economic
Impact
Implications The Impact of e-commerce Overall implications for
on the Polish economy business
Our analysis of the impact of A short summary of how businesses
About us e-commerce on the Polish economy. can respond.
5
Keynote
Introduction
Big data
Our trends
Big data is getting bigger
than it used to be
We’re generating a huge
amount of information
And with big data easier
to acess than ever,
Data and
the market is growing... analytics are
Big data
at the heart
Mobile
500M of developing
tweets sent
per day
customer
Cloud
insights – and
with Big Data
BIG
Social Then Now
becoming ever
UX cheaper, it’s
100TB 200TB easier for the
$1B
DATA
Payments
Size of Amazon data
warehouse in 1999
Avg. amount of
stored data for each
Invested in companies
little guys to
take part.
US company with
The internet focusing on big data in 2012
of things over 1000 staff
The world’s data is growing at a pace and
volume not seen before in the history of
Security the world. In 2013, 500 million tweets
Resulting in Market size for Big Data
are sent each day, and 30 billion pieces of
content – including GPS, social interaction,
12TB
Economic
Impact $48B or sentiment data – are shared monthly by
Facebook’s 1.15B active users. Companies
2015 like Amazon and Wal-Mart have long used
Implications this ‘big data’ effectively to develop real
40% of data generated on Twitter daily $10B customer insights. But there’s a twist. Big
data and the analytics that can put it to work
About us Projected year on year 2012 are now accessible to small and medium
growth in Big Data Sources: 4,7,8,9,10 enterprises, not just market giants.
6
Keynote
Using big data can lead to big insights – for large and small business
Introduction
Over a decade ago, three characteristics
were coined as making data ‘Big’: Volume, Retailers like
Velocity, and Variety. All three have grown
since then. In the US, the average volume Burberry
Our trends of data stored by a company of over 1000
employees in 2012 was 200TB – More than combine their
Big data
double Wal-Mart’s data store in 19999.
The pace at which data is being generated, SAP data with
as well as the forms it has taken has also
skyrocketed. The web of a decade ago social data to
make timely
60 000
did not feature Facebook or Twitter, while
Mobile
clickstreams and geo-tagging were in their
Cloud
infancy. But the point isn’t just that there’s
now a lot more data being generated in the adjustments
world – it’s what we can do with it.
data scientists offered by Kaggle to solve analytics problems to their supply
Social
By combining multiple, seemingly unrelated
data sources, businesses can draw business
For one, it’s likely big data will become
a more integral part of our day-to-day work.
data visualisations, helping human experts
gain insights with the aid of number chain.
insights like never before – and the explosion Deloitte has predicted that it’s probable crunching are also gaining use.
of data sources available has allowed that “more users across the value chain But big data is not reserved for Industry
UX
organisations to do just that. Retailers like will need to be able to consume insights giants. Small and medium businesses can
Burberry combine their SAP data with social as part of their daily workflow – or risk benefit too. Importantly for them, big data
data to make timely adjustments to their being left behind”4. Secondly, the speed at has become cheap8 . Kaggle offers more
Payments
supply chain. Wal-Mart uses transactional which we deal with data and analytics will than 60,000 data scientists4 across the world
data, coupled with social media interactions, need to increase – with so much data being in a ‘bidding-style’ format that allows even
The internet blog posts, and location information to help generated so quickly, we need to extract small companies to access high end analytics.
of things gauge business demand when launching insights and signals from data streams in near Services like Factual, Intuit, or Allegro.pl share
new products4. Both Netflix and Amazon real-time, instead of storing “everything” for location, industry, or sales volume data with
utilise ‘recommendation engines’ which can later consideration10. customers, allowing them to derive customer
Security suggest a product that we’re more likely to insights. Small businesses are taking
buy – not just based on our past purchases, Day to day use, as well as speedy processing advantage, using big data to understand
Economic but on our online behaviour. The benefits of of data were evident at the London Olympic ‘who’ customers are, engage them through
this are considerable. Some analysts claim games. The Games’ Organising Committee their preferred channels, and outcompete
Impact
retailers can improve their margins by up (LOCOG) established a big data process that much larger rivals11. Big data is a powerful
to 60% through better use of big data11. delivered a report (mostly from feedback business tool, and now it’s for just about
Implications But supercomputers and number crunching via social media) to major Olympic games everyone.
have been around for a long time – so in venues every morning to action aspects that
relation to Big Data, what else is new? could be improved for the next day12. This
About us kind of data processing immediacy is just the
beginning – and solutions such as real-time
7
Keynote
Big data case studies
Introduction
Netflix – Selecting investment based
on customer behaviour
Looking at its customer data, Netflix knew
that those who had streamed films by
In one case, Walmart launched a new
range of spicy chips in California and the Netflix made
director David Fincher also tended to like
films featuring Kevin Spacey. Likewise,
South West based on analysis of social
media chatter and transactional data of an investment
Our trends a significant portion of their audience liked
the original BBC “House of Cards” mini-
various chip products across the country.
Big data was successfully used to identify of $100M to
Big data
series. Netflix judged a significant enough
‘intersection’ in these groups to determine
a market opportunity, and successfully launch
a product for a specific geographic area. produce 26
that the show had a market and was worthy
of investment. They then used their data GE – Improving operations episodes of
Mobile
driven confidence to outpace rival bidders
by indicating the company would not even
GE’s ‘Grid IQ Insight’ tool mines social data
to help electrical utility companies identify ‘House of Cards’
Cloud
require a pilot to be developed before
committing to the entire series.
and validate service outages in a timely
manner, determine the resources needed based in part on
The use of big data went further. Even trailers
to address them, and accelerate the repair
process4. its analysis of
Social
In the US, Netflix uses big data not only
to recommend products for its customers,
for the show were delivered depending on
data analysis. Kevin Spacey fans saw trailers The tool mines social data – including big data.
but to inform decisions about which shows featuring him, women watching ‘Thelma tweets with mention of electrical outages,
to invest in. and Louise’ saw trailers featuring the show’s geo location data and attachments such
UX
female characters and serious film buffs as photos – to verify and gain more detail
In a well-publicised case, Netflix made an saw trailers that reflected [David] Fincher’s on incidents. Photos and videos of the
investment of around $100M to produce touch14. environment, such as fires or downed trees,
Payments
26 episodes of ‘House of Cards’, directed help personnel select appropriate tools for
by David Fincher and starring Kevin Spacey According to the company’s chief the task, while ‘clusters’ of social media
The internet based in part on its analysis of big data. communications officer, the use of big data data can help validate whether an incident
of things The decision has resulted in Nine Emmy gave Netflix “confidence that [they] could has occurred. All of this assists in planning
nominations and according to Netflix – the find an audience”14 for the show. This kind a faster, more effective response.
most streamed show in the US and 40 other of approach is spreading, and competitors
Security countries13,14. like Amazon are also looking to use a data-
driven method to select original content.
Economic Netflix gathers viewing data from 30 million
“plays” a day, including when customers Walmart – Launching products with
Impact
pause, rewind and fast forward. This is big data
blended with data from social media As part of its ‘Social Genome Platform’
Implications interactions, web searches, as well as Walmart uses multiple types of data,
comments generated by thousand of viewers including social media updates, blogs,
(paid by Netflix) who make notes on genre, transactional data, images and location
About us mood, and other elements in every moment data to help the business effectively predict
of screened shows14,15. demand and launch products86.
8
Keynote
My Perspective
Big Data introduces a new generation to the tools that have been bought.
Introduction of technologies and architectures for coping
with the size, diversity, and change that Rather than capturing terabytes of data and
characterize data sources in the modern rushing into large programs, organizations
business ecosystem. The possibilities need to focus only on the data needed to
Our trends
presented by Big Data are numerous and deliver well defined and specific outcomes.
together with advanced Analytics they offer In many cases it doesn’t immediately require
Big data exciting new capabilities for analysing high- looking at social media or other new external
volumes of rapidly evolving data streams, sources of data.
particularly unstructured data representing
social media, geospatial data or click streams. According to big data research by the
Mobile
Economist Intelligence Unit, more than
However, Big Data is not a magical panacea 75% of senior executives from over 500
for achieving business goals like better companies say that they are wasting more
Cloud
understanding of customers, enhancing than half the data they already hold.
service differentiation, reducing risk Companies need to learn how to make
or improving performance. Big Data is still better use of what they already have.
Social
data and it should be approached it the same
way as any other Enterprise Information Over the last ten years, companies
Management challenge. invested heavily in ERP, CRM or core
UX
systems, processing millions of customer Taking a lean approach, defining the Dariusz Flisiak, Deloitte
Companies should start with asking the right transactions daily but are still unable to right business questions, looking at the Dariusz Flisiak is a Director at Deloitte
business questions and then work to find answer fundamental questions like which internal data available today – as well as Poland specializing in Analytics, Big Data,
Payments
the appropriate choices of data sources and customers are most likely to buy specific opportunities to gradually supplement it Performance Management and Information
technologies to address their needs. I believe products, or what is the acceptable price with external data sources would allow firms Management solutions. He has thirteen years
The internet the most important advantages of embracing range for a product in a specific market to use data in a more efficient and intelligent of experience in business and IT consulting,
of things Big Data today refer to getting to know or for a group of customers. Very few have way. This will allow them to listen, learn and with an emphasis on enabling strategic
customers better – where the customers started using the information in their systems engage better with their customers in the information for clients.
are, what their needs and preferences to build models approximating customer future.
Security are or how they want to be contacted. lifetime value, or discovering events that He has developed and implemented Analytics
Furthermore, the answers to these questions make customers more interested in specific strategies and solutions for Financial,
Economic change dynamically so businesses should products. One example of such event Consumer Goods, Telecommunication and
Impact work on understanding the drivers and learn from the financial services area might be Public Sector companies worldwide.
to track the changes, so that they’re able a situation where a customer without credit
to present customers with better tailored card starts traveling abroad (e.g. the bank Dariusz holds an Executive MBA from
Implications products and offers in a timely way. can infer it from debit card transactions) Warsaw School of Economics and the
– It might be a good opportunity to call him University of Minnesota, Carlson School
Very few companies embarking on Big Data or her with a credit card and insurance offer. of Management.
About us programs understand that the strength and
quality of Big Data analysis bear little relation
9
Keynote
Implications of big data
– and what you can do
Introduction
Our trends
Big data
Mobile
1 Define what you want
Before you start, define your priorities and opportunities in big data. You can consider selecting a specific domain in which to
begin (e.g. customer, product, pricing or risk). Asking yourself questions about ‘sticky’ business issues can help determine your
focus – “Who are the next 1,000 customers we’ll lose – and why?”, “What factors most influence our customers’ loyalty?”, “Which
facilities are using more energy than they should?”.
Combining
human expertise
with machine
learning, data
Cloud
Social 2 Start small and deliver
Don’t try to do too much at once. Instead, start small and aim to deliver a success quickly, while you have momentum. Focus on
areas where your organisation has the most expertise, and focus on a tangible, bounded project. Run some experiments to test
the data and deliver results. But once the scope is set, don’t limit your data to just one domain. Feel free to investigate seemingly
‘unrelated’ data sets – it’s at the intersection of different types of data that valuable insights often occur.
visualisation and
other tools can
produce timely
3
UX
Invest in talent
Combining human expertise with machine learning, data visualisation and other tools can produce timely results with less
results with less
Payments investment in infrastructure – and gives a higher tolerance for error. Imperfections in data sources and the limitations of machine
learning can be counteracted by human insights and domain knowledge. To make big data effective, you’ll first need people
investment in
The internet
to help understand the information assets at your disposal and understand business priorities. Only then can you move to
determining technology needs.
infrastructure.
of things
Security
Economic
Impact
4 Keep your data disciplined
If you’re investing in big data, you’ll need to invest in data discipline – Core data management, master data management,
integration, and stewardship are important, even during your smallest pilot projects. Data discipline is one of the foundations
on which your big data investment will be developed, so build it well.
Implications
About us
10Keynote
Introduction
Mobile
Our trends Companies are catching up Mobile access
to the internet
Big data
62% 60%
is shifting how
Mobile
52%
customers shop
Future 100 Future 100 WIG20
– and retailers
Mobile is overtaking PC
Cloud
companies
have
a publically
companies
have mobile
enabled
companies
have
a publically
have the chance
Social
available app websites available app
to change mobile
But the customer is already there... from a threat to
UX
50%
65% 70%
an advantage.
Finally, we’ve reached a tipping point
30%
Payments 20% – there are now more smart phones
13% and tablets sold globally than there are
2009 2013 2017 PC’s. Mobile is changing the way customers
The internet 80% 33% purchase, from research, to browsing
of things customers customers and payment. A large number of customers
Global market share
multiscreen showroom are ‘showrooming’ – checking product prices
PC/Laptop
Mobile and reviews on mobile devices while in store,
Security
before making a purchasing decision. Near
...and habits in Poland are starting field communications have realised new
Economic to reflect the latest trends possibilities in mobile payment, and taken
Impact Showrooming with a mobile location-based marketing possibilities to
a new level. Mobile is here, and businesses
that don’t take notice may lose out.
Implications
31% 28%
20% 25%
About us UK US PL PL
Sources: 4,10,16, Deloitte (avarage) (16-30 y.)
11Keynote
A new way of shopping is already here
Introduction
For Lenovo, the milestone came in August
201317 – the company now sells more One third of
smartphones than it does PCs and laptops,
and is rebranding itself as a ‘PC Plus’ customers admit
Our trends company. This ascendancy of mobile device
numbers is echoed in the strategies of other to showrooming.
Big data
firms. Furthermore, some researchers claim
that it’s not just the amount of devices sold, Mature retailers
but the time spent on ‘non-voice’ mobile
devices which now exceeds that of PCs18. have responded
Mobile
The hundreds of millions of internet devices
now in our hands are changing the way we by treating
Cloud
act – and the way we shop. There are several
key mobile trends of which retailers should this as an
take note:
opportunity
Social
Multiscreening – using an internet
connected device while watching TV is information on an iPad or a smartphone than
on a PC. Herein lies the difference – unlike
food store attempted to charge customers
$5 for ‘just looking’6.
to finalise sales
UX
now a common activity, and it is offering
new ways of interacting with brands. the PC, mobile devices come shopping with
us. More mature retailers have responded
in store.
Heineken’s UCL “Star Player” and Coca
Cola’s ‘Chok! Chok! Chok!’ campaign by treating showrooming as a chance to
in Hong Kong provided mobile content Showrooming – Around one third of finalise sales in store by targeting users of
Payments customers admit to showrooming – going mobile devices. This turns showrooming
matched to TV. The upcoming Zeebox
platform goes further, and will allow viewers to stores to browse and try out products into an opportunity. BestBuy, Target (US),
The internet to buy items inspired by shows, while – before purchasing them somewhere as well as Media Markt and Saturn (Poland) Smartphones in Poland
of things watching them live19. Multiscreening can else. Mobile allows customers to search allow customers to compare prices with the
be used to lead customers all the way from for information and compare prices during competition in store – and some employ
initial interactions up to purchase. their visit – 28% of shoppers in Poland21 aggressive price matching to convince the
Security showroom with their mobile. Electronics customer to make the purchasing decision
Research online, purchase offline and homewares20 are categories that are there and then. Walmart goes further, with
Mobile devices are even more likely to be particularly affected. mobile apps that guide showroomers around
Economic
Impact used at an earlier stage, for initial product their store – and successfully encourage 8M
research. The practice of ‘Research Online,
Purchase Offline’ (ROPO) has been around
Showrooming constitutes a threat for
retailers – In the US, Best Buy and Walmart
them to use Walmart’s online channel while
on the premises.
6M
Implications since the beginning of e-commerce suffered as customers browsed in their
– Research implies that around 50% stores, only to complete the purchase Mobile is already here – and the businesses
of consumers actively research products elsewhere online. Early attempts to that embrace and adapt to new practices
About us online before purchase20. And now, we are counteract this were unsuccessful – in one stand to gain ground.
becoming more likely to look for product well publicised case, an Australian speciality 2012 2013
12Keynote
Mobile case studies
Introduction
Best Buy – Working with showrooming played over 12 times for every teen in Hong
Kong19. The showroomer
Silvercar – Mobile first is presented
Our trends In the US, Silvercar utilised the increasingly
popular ‘mobile first’ approach in designing with a list
Big data
their online presence. Rather than designing
a new website, followed by a mobile version of comparison
as an ‘add on’, the company built the mobile
version first. This allowed the company to prices... and can
Mobile
start with a small investment and scale up.
It also helped design a better user experience pay and check
Cloud
(what works on mobile usually works for
web – but not the other way around) all out directly from
while capturing more of the growing mobile
channel25. their phone.
The electronics and appliance categories product I want cheaper on the web, and
Social
are amongst those most affected I can get it for that lower price right here,
by showrooming. Recently, one of the than why not?”. This way ‘showroomers’
biggest retailers in the game has responded can be directly converted into paying
UX
with a model solution. Best Buy is using clients on the spot.
the mobile channel to bring customers These methods have both advantages
into the store. The retailer has created and pitfalls, but some analysts are already
Payments
an application that makes use of the pointing to this strategy helping halt last
company’s existing ‘ecosystem’ and works year’s 3% fall in sales23,24. Whatever the
The internet on a number of levels: contributing factors, Best Buy’s 2013 sales
of things 1) Using a geo-tagging, the app allows have remained steady, and the share price
customers to ‘check-in’ at physical store has more than doubled in the 12 months
locations to receive rewards points on their from September last year.
Security existing loyalty program – Customers are
incentivised to come into the brick and Coca Cola – Brand interaction
Economic mortar stores In Hong Kong, Coca Cola launched what
2) The app also features ‘deal of the day’ became the territory’s most successful
Impact
discounts specific to in-store items, further branded app by combining mobile
driving foot traffic functionality with a TV ad – which featured
Implications 3) The above are coupled with an aggressive a Coke bottle being opened and the cap
pricing strategy. Best Buy will match the falling off. Viewers could ‘scan’ the caps with
price of deals customers find online, their mobile phone as they fell, and capture
About us lowering the relative benefits of leaving instant prizes. The results were impressive
to purchase elsewhere. “If I’ve found the – sales rose by 11%, and the game was
13Keynote
My Perspective – The mobile revolution
“Every once in a while a revolutionary
Introduction product comes along that changes
everything…”.
That’s how Steve Jobs began his presentation
of the very first iPhone, in January 2007.
Our trends
From today’s perspective it’s still hard to
believe what kind of breakthrough this
Big data product has made in most of our lives.
In the latest Mary Meeker’s Internet Trends
presentation, we can see that mobile traffic
as a percentage of total internet traffic is
Mobile
growing one-and a half fold per year. This
will get faster. The latest Cisco research
shows that by the end of 2013 there will
Cloud
be already more mobile connected devices
than there are people in the world. From
a different perspective, approximately 370
Social
thousand babies are born per day, but in that
same time, more than 500 thousand iPhones
are sold and around 2.4 million Android
UX
devices activated. the same today, Mobile is not a PC. Using eCommerce. Przemysław Budkowski, SVP Marketplace,
the Print vs Web example and referring The best example of the revolution, online Allegro Group
So, with the mobile revolution happening to the Newspaper Association of America (research) to offline (purchase) and vice versa Responsible for managing transaction
Payments
in front of our eyes, how do we achieve report, Newspapers have lost $40 Billion in (showrooming) is happening already. In the platforms, Comparison Search Engines
success? Who is playing this game and what advertising revenue since 2000. If you don’t 2013 Future of Business Report, Brian Solis and eShop solutions in CEE.
The internet are the rules? want to lose the mobile game, make sure states that Millennials already trust strangers He was previously managing director
of things The difference between smartphones and you are ready for a complete revolution over family and friends. They lean on User- of Allegro – the largest Polish marketplace.
other revolutionary devices (the likes of print, in your product design, in your business Generated Experience to aid purchasing Before joining Allegro Group he worked
radio or TV) is that smartphones are really orientation and most importantly in your decisions. Look at this, and other similar as CEE Product Marketing Manager Google
Security smart! They are permanently carried, are customer behaviour. examples, as an opportunity to reinvent the in Ireland, US and in Poland as well for
always on and already have built-in sensor When we look at the statistics of daily mobile rules of your business. Orange Business Services (France Telecom
Economic mechanisms that can not only automate usage, we can see that we do in fact perform Group) in Ireland.
Impact lots of our daily activities but also completely a very similar set of activities on a mobile as To win, drive all your decisions through one
reinvent the way we interact with our on a PC: we interact with friends, we play goal only: deliver an exceptional customer
environment. games, we watch videos and we shop. But experience (and the rest will follow).
Implications The way we should think about designing for on a 4-inch screen it’s just a very different In today’s world this means being able
those devices also needs to be revolutionary. experience. And our biggest job is to make to adopt quickly and also, being able to
If we journey back to the last twenty plus all that new interactions effortless. Simple question all your previous accomplishments.
About us years for a few examples – Radio was transfer of the big Web into a mobile device But take that risk, because winners will
not TV, the Web was not Print and it’s is a very common mistake, especially in always be the ones that follow the consumer.
14Keynote
Implications of mobile
– and what you can do
Introduction
Our trends
Big data
Mobile
1 Provide a mobile option
With the proliferation of mobile devices, the chances are that a lot of your customers will want to consume information about your
organisation and products via mobile – Or more likely, they already are. Confirm this, and ensure that you’re effectively providing
information and functionality through the mobile channel. This could take the form of apps, a mobile optimised website, or other
solutions depending on your needs.
Context is
everything, so
map a ‘customer
journey’ for your
Cloud
Social 2 Embrace showrooming
If your brand is affected by showrooming, there are several things you can do. Consider if there are benefits to building a mobile
application that rewards shoppers for purchasing in-store or within your own online channel. If your customers are already online
while they shop, try to keep them within your own online ecosystem. In addition, make sure that you monitor review websites as
well as competitor’s prices online to ensure that you’re aware of what your shoppers see when they are showrooming – and look
for ways to differentiate.
client segments
to understand
how you could
UX
use mobile
Payments
The internet
of things
3 Be relevant
Context is everything, so map a ‘customer journey’ for your client segments to understand where and how you could use mobile
during the purchase process in a way that is relevant to them. Reviews, prices, and deals are currently what shoppers primarily
look for on mobile devices – so check if you are providing this information through your mobile channel, and how it fits into
your customers’ retail journey. Consider delivering content that is targeted to the customer’s geo-location. This ability is a key
differentiator between mobile and PC, and adds relevance for the client.
during the
purchase process
in a way that
is relevant to
4
Security
Go mobile first
Economic
When considering your online presence or launching new digital services, think about going mobile first – before designing a
traditional web solution. Not only are customers consuming more and more information through mobile devices, there may be
them.
Impact substantial cost savings associated with first designing a mobile version of the site instead of building a traditional website and
‘tacking on’ a mobile solution at a later date. Mobile design forces you to focus on the elements that are most important to the
Implications customer, and if techniques like responsive web design are used, mobile web can be translated to a ‘full screen’ version relatively
easily. Starting mobile first generally requires lower investment, is more user focused, scales, and allows you to capture both
mobile, tablet and PC customers right away.
About us
15Keynote
Introduction
Cloud
Our trends
Business is well and truly in the cloud There are a wealth of benefits to be had Business is
certainly
Big data
Increased ROI
adopting the
Mobile Faster
Security
cloud – the
next challenge
deployment One size fits all
Greater scalabilty Control and
Cloud
70% Lower up front
investment
compliance
Cons
may now be
Social
Focus core competencies integration.
Pros Some of the initial concerns regarding cloud
(security, remote location of your data) are
UX being resolved, but new challenges are
of businesses globally already employ some form of cloud solution
arising for early adopters and their followers.
Payments As a company forays into the cloud with
its first cloud-based application for a single
And the global cloud market is growing Implementation times are quicker department, other business units may follow
The internet – each with a cloud solution. So how will you
of things Project completion times for a sample group of projects
manage a hybrid of all those clouds?
Global cloud market On demand On premise
(cloud)
Security
Economic
Impact
$40,7B
$241B 59% 56%
2011
Implications 32%
28%
2020
11% 9%
About us
Sources: 10, 27, 29 7 months
16Keynote
Business is in the cloud – integration is the next challenge
Introduction
Cloud computing has created a lot of buzz in
recent years – and has caught attention with Cloud
some advantageous characteristics.
computing is
Our trends These include:
• Flexibility and scalability – assigning a model for
Big data
computing as needed
• Mobility – ubiquitous access and location delivering
independence
• Resource pooling on-demand,
Mobile
• Pay-per-use – predictable pricing.
self-service
Cloud
This in turn led to financial benefits such as:
cost effectiveness (as one paid only for what computing
was used) and lower upfront investment
(as no expensive hardware was required to resources with
Social
be purchased). On the other hand, cloud
also triggered anxiety related to data security, ubiquitous
UX
availability and performance, data control,
and provider maturity. network
Integrating cloud
Hyper-hybrid clouds
All sorts of organizations have been trending
Security and data integrity
Security and data integrity still remain access, rapid
Payments
As cloud solutions become more mature
and adoption becomes more widespread,
towards hyper-hybrid clouds. This is evident
at start-ups, with their cloud-first mentality.
a concern. Regulators have raised their
awareness of cloud-computing and have elasticity, and
The internet
corporations have become more willing to
make use of IaaS, PaaS or SaaS. Launching
As spending is prioritised towards market-
facing products, rather than infrastructure,
been introducing regulations regarding data
processing, supervision, and ownership. a pay-per-use
of things non-business-critical applications (such
as sales, services, marketing and human
these organizations are setting the standard
for the hyper-hybrid environment, using
In particular, recent issues regarding “the
possibility of the personal data being subject business
Security
resources) into the cloud, can be relatively
‘nice and clean’. However, dealing with
it to guide new operating structures and
IT delivery models. Meanwhile, larger
to intelligence gathering or surveillance
by third-country authorities”29, provoked model87.
complex, applications with sophisticated enterprises can use cloud to enhance their discussion of introducing the so-called
Economic multilevel user management, which need to large legacy system investments and ERP “Schengen for data” – a law that allows
be integrated not just with local master data solutions. Core in-house systems can form citizens within the euro zone to cross borders
Impact
management, but with other SaaS solutions the foundation upon which emerging without a passport, but does impose hurdles
can be a huge challenge. For this reason, technologies are deployed – without for others. Business may be ‘in’ cloud, but
Implications business rules management for processes sacrificing business compliance and controls. the space continues to evolve.
that depend on multiple cloud services will Organizations that can bridge hyper-hybrid
be an important trend. clouds with their core systems will be at the
About us forefront of improving business performance
with the next wave of digital innovation28.
17Keynote
Cloud case studies
Introduction
Pfizer – Reducing R&D costs by $600
million with cloud
company implemented cloud in 2010.
The deployment of cloud resulted
the implementation of a new cloud based
system to deliver improved communication Taking
in adoption and behavioural changes across
the R&D group – and boosted Pfizer’s
and collaboration services to employees. The
rollout and uptake of the system has resulted advantage of
Our trends competitive advantage. It also opens
possibilities for deploying cloud to other
in:
• Savings of approximately 60% compared cloud computing
Big data
areas of the company – or even using it to
collaborate with other areas of industry30.
with previous IT solution
• Saving approximately 100 hours a month compressed
USA.gov – Savings due to cloud
in IT resources time
• Better collaboration which helps to processing time
Mobile
computing
The US General Services Administration has
improve patient care32.
from weeks to
Cloud
When Pfizer was considering increasing
the utilisation of cloud technologies in its
migrated all of the core resources of the
USA.gov Web portal to The Enterprise Cloud
Telefónica – Mobile operator goes cloud
In 2011, the Spanish telecommunication hours.
organization it chose to focus on R&D, IaaS solution to enable scalable on-demand provider Telefónica, decided to take
the core engine that drives success for resources. The Cloud based solution provided advantage of hybrid private-public cloud and
pharmaceutical companies30. number of benefits and savings: enabling to consolidate 27 European data centres
Social
higher transfer volumes and accommodating containing approximately 18,000 physical
The R&D department was responsible for huge traffic spikes on one side, while servers into extensively virtualized solution of
analysing, organising and computing large avoiding paying for idle capacity on the around 6000 servers. Cloud-computing was
UX
amounts of complex data to provide reliable other. The Office of Citizen Services, has expected to reduce IT costs by 15%, cut the
results back to their scientists as fast as indicated that that the move to Terremark’s delivery of server resources to the business
possible. However, Pfizer was not keeping up cloud platform would “reduce costs by 90%, from 20 to less than 1 week, and bolster
Payments
with the increasing demand for computing while improving capabilities”31. data centre reliability33.
power required to process the information
The internet at a fast rate and a low cost. Both these Bambino Gesù Hospital – Improving
of things factors were critical to Pfizer’s success in the patient care and lowering costs
marketplace. The Vatican hospital “Bambino Gesù
Hospital” is one of Italy’s largest paediatric
Security To solve the problem, Pfizer partnered with research and treatment centres. The hospital
a provider to create a private cloud solution. was receiving complaints from staff about
Economic Taking advantage of cloud computing the effectiveness of data sharing between
compressed compute time from weeks to doctors and nurses working in the operating
Impact
hours. This enabled the company to make rooms, the clinic, at the office and in their
quicker financial and strategic decisions, homes. The main issues were related to
Implications resulting in gains measured in millions of schedule sharing and management, patient
dollars. Furthermore, the solution freed up data exchange and communication on
scientists’ time to focus on core tasks (rather treatment related issues. The old ways
About us than on data processing) decreasing Pfizer’s involved e-mail and other ‘legacy’ methods.
R&D costs by 7%, or $600 million, since the In the end, the IT department supported
18Keynote
My Perspective
Cloud computing has been undergoing An even more dramatic change is happening On the infrastructure side, the cost equation
Introduction a rapid evolution in recent years. at the infrastructure level. The movement is not always positive: if your computing
What started as a novelty quickly became towards virtual cloud environments power consumption is highly variable then
mainstream and it’s hard to imagine a is completely changing the way we think public cloud will be a great way to handle
modern enterprise that is not using any cloud about managing infrastructure. On one hand it with the minimal cost. If it has a significant
Our trends
services. it enables a radical simplification and fixed part then you can most probably run
standardization of the underlying it internally (using a private cloud) and it’ll
Big data However, the term “cloud computing” has hardware as the capacity of the individual be a financially better proposition. Looking
became very stretched due to the hype virtual machines are defined in software. at the current trends, it’s inevitable that
that surrounds the movement. Many quite On the other hand, for the first time, companies will eventually adopt a hybrid
distinct types of services are labeled “cloud” we can treat our infrastructure not as private-public cloud model and it will
Mobile
and sometimes it’s hard to understand why. a hardware with some configuration but enable mix-and-match usage and optimal
It’s a little similar to ‘Big Data’ where even purely as software objects that can and spending for the services. The vast majority
firms analyzing a company’s payroll data should be managed as code. Therefore, of applications running in today’s companies
Cloud
(hundreds of thousands records, trivial by any an “infrastructure as a code” approach are not cloud-ready and it’s one of the
contemporary means) are claiming that they is emerging and it opens up possibilities stumbling blocks on the wide cloud adoption
provide Big Data services. to bring a rich array of techniques from path. However, it’s inevitable that the
Social
the software development world to next generation of apps will support cloud
Types of cloud companies infrastructure. This will enable proper – and this will pave the way for cloud’s wider
First, there is a large group of traditional versioning, change management and testing deployment.
UX
Software as a Service web applications of virtual infrastructure. The emerging Krzysztof Dąbrowski, CTO, Allegro Group
and application suites that have rebranded software defined networking (SDN) solutions Management Board member responsible
themselves as cloud applications. These will nicely complement the mix, and for IT development and IT operations in the
Payments
offerings have matured significantly ultimately enable the virtualization of the Central and Eastern Europe. For the last two
over time, especially given the fact that whole environment (data, application and years, Krzysztof is busy transforming Allegro
The internet those types of applications have been networking). Group into a modern, agile software house.
of things present on the market since late nineties. He initiated one of European largest group-
While they offer a compelling replacement Challenges and possibilities wide Scrum transition and is a big proponent
for the traditional on-premise applications Of course, the cloud is not without its of Lean and Agile methods. Being a former
Security they remain relatively closed and challenges. On the application side, programmer and engineer by calling he
self-contained. the usual data security and confidentiality values clean, minimalistic designs and code
Economic issues arise. The recent PRISM scandal craftsmanship. Being manager by choice,
Impact A new breed of cloud applications was a serious cold shower to the whole he tries to change the world for the better
The new breed of cloud applications industry. Data management and integration by nudging people around him. He previously
that came later leveraged open protocols is posing as big challenge as with traditional built and led software development practice
Implications and provided the rich APIs that enabled applications. Combined with the relatively at Roche’s shared service center in Warsaw.
unprecedented possibilities of constructing slow throughput of an internet connection
sophisticated cloud-based solutions based vs. high-speed internal networks, it creates
About us on multiple services provided by different an interesting challenge for the data intensive
vendors. enterprises.
19Keynote
Implications of Cloud
– and what you can do
Introduction
Our trends
Big data
Mobile
1 Consider if cloud is right for you
If you’ve never considered applying a cloud solution in your firm, maybe it’s high time to think it over. The benefits can be
considerable. Cloud does always present a risk associated with lessened control, but part of this can be mitigated by evaluating
cloud based solutions for the non-core functions of your organisation, such as CRM, sales, HR, payroll or collaboration functions.
These are points of entry that are often easier to introduce, and can be implemented in a way that makes them seem ‘familiar’ to
your workforce, aiding uptake. However, always bear in mind the downsides and security implications – and weight them up with
You’ll need to
evaluate where
cloud service
Cloud
the advantages. models are
suited to solve
Social
UX
2 Determine where cloud may be the best fit
If you’ve decided you want to implement cloud solutions, you’ll need to evaluate where cloud services models are suited to solve
your business problems – and whether they fit your technical environment. Cloud could be a fit if you require:
• Predictable pricing: You want to be charged based on usage, rather than on perpetual licensing or allocation
• Ubiquitous network access: The service offered is available wherever and whenever the network is available
• Resource pooling and location independence: Multi-tenant, with shared resources that subscribers cannot explicitly specify
your business
problems.
or partition
Payments • Self-service: The service can be directly accessed by users, features on-demand provisioning, while services are readied in close
to real-time
• Elasticity of supply: Ability to scale up or down to meet resource demands28.
The internet
3
of things
Effectively integrate clouds and local infrastructure
Security If your organisation already has a sizeable cloud footprint and you’re looking to further integrate cloud systems into your business,
you should evaluate them first, and see if they’re meeting your original business requirements. Integrating underperforming cloud
solutions presents a risk – it will cost money, increase technology dependencies, and complicate future migration strategies.
Economic
Impact Consider creating common platforms for identity, access, data correlation and business rules. Separating these out from discrete
cloud-based functions may help in the future. Consider cloud-based integration ‘platform-as-a-service’ solutions to complement
Implications enterprise integration layers or service buses. These platforms can manage the interactions between in-house enterprise
applications and cloud services28.
About us
20Keynote
Introduction
Social
Our trends
Social media is becoming
ubiquitous around the world:
Poland has one of the highest
rates of usage in the world:
Business in Poland is getting
on board: With around
Facebook has Polish companies on social media half of the
Big data 1 billion Facebook
38%
86% Facebook
YouTube
world’s internet
1 billion
503 million
YouTube
Sina Weibo
8,78M 30% LinkedIn
users making
Mobile 23% Google+
503 million
359 m
Twitter
Google
active users in Poland
20% Goldenline use of Facebook
alone, the power
18% Twitter
Cloud ...and just overtook local service Nasza Klasa
15% Blogs
Social and global business is starting Rates of social media usage globaly
10%
8%
Nasza Klasa
Yammer
of social media
to implement it internally: 52% UK in the digital
50%
space is beyond
US
UX Russia
50% but social media could still be
Payments
70%
40%
39%
Poland
France
used much more effectively:
doubt.
38% Italy Social media is ubiquitous, and in business
34% Germany it’s being used for everything from brand
The internet
62% 59% promotion to customer service to social
2011 30% Japan
of things shopping. However, getting the most out
29% Greece
Keeping up with Influencing brand of social media requires a lot more than
trends image using it as an advertising channel, or simply
Security
‘being’ on Facebook and Twitter. Social can
but one of the biggest gaps
Economic 90% between young and old: 35% 28%
open up a wealth of possibilities if used
properly. And if you’re not using it to your
Impact Facebook use in Poland by age
full advantage, your competition probably is.
Better understand Recruitment
customers
Implications 2013
Fortune 500 companies who have 29% 29%
13% 25% 11%
9%
or are establishing a social network 5%
About us 20% 2%
Increasing sales Reducing customer-
Sources: 4,10, 34, 35, 36, 37 13-17 18-24 23-34 35-44 45-54 55-64 65+ acquisition costs
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