The Future of Retail – Brick and Mortars Woke Up

According to Piers Fawkes, Founder and President PSFK, “it is an exciting time when it comes to retail. There is transition taking place and some of that is painful. And it will continue to be painful in some places such as department stores. But we are seeing a lot of really exciting ideas and innovations. It’s like retail has woken up.” 

His company just released the latest results of a trend study which tracks the evolution of retail in all of its forms. Here are the highlights:

No More Digital and Offline Divide
The future looks very different from the retail of the past. This point in time marks the end of the digital and offline divide. For one thing, there are more opportunities for brick and mortar stores as shopper experiences are increasingly blended with retail sales. There is a digital underpinning to store sales because now customers expect coordination between all channels from online and the physical store space.

For retailers, it is more important than ever to build an integrated retail business now referred to as  blended retail. It is no longer an offline versus online competition. Offline should work more to its strengths and use online channels to fulfill certain needs. The result, brick and mortar stores are becoming more of a playground rather than a place to just purchase and eventually, in the near future, won't be the place for the actual purchase transactions. 

Higher Consumer Expectations
The consumer mindset is shifting. Consumers don't only want to save time in their shopping excursion, but also want to add value during their visit. They are seeing all channels – offline and online – as a way into the store and seek consistencies across each platform and device. Ideally all should work together holistically.

Nike seeks to meet their most avid consumers’ expectations by, as Ron Faris, General Manager, of Nike’s s23NYC Digital Studio and SNKRS App, described, “creating a sense of community and vibe that you might get in a festival, but on your phone.” Nike is building emotion digitally among their coveted demographic of Sneakerheads fanatics by treating product as content. For example, using AR, Nike buries hints to a stash of highly prized, limited-edition sneakers into their mobile app. Sneakerheads see the shoe on the app and enter a geo-fenced physical area, like a park, where they locate the hidden limited-edition sneakers that they can then purchase in the store. In this way, Nike is shaping sneaker culture by creating a sense of urgency, excitement and scarcity within their most ardent consumer segment.

Advice for Brick and Mortar Stores
Stores should avidly create opportunities for consumer exploration and identity-building through:
    >  Revolving discovery. No more static retail space. Create excitement by changing merchandise frequently to support themes. Support that effort by programming events around the store. An example is the Timberland Concept Store Tree Lab which changes every six weeks.

        >  Integrated wellness. Capitalize on continued growth of wellness market by making spa and fitness part of the retail experience. An example is The Wellery at Saks Fifth Avenue

     >  Educated confidence. Offer hands on workshops and immersive learning activities in the store to build confidence around purchases. An example is Lowe’s Holoroom How To which can show consumers how a new bathroom would look before the project begins. Learn basic home improvement skills before applying them in the real world using VR technology. 

?    >   Valued attention. Serve need and connect to specific consumers based on their interests and proclivities. Transform previously frustrating shopping moments into luxurious experiences that add value to a retail experience. An example is MM.LaFleur which offers a personal shopper experience via a pre-visit survey. The dressing room is set up before the shopper arrives. 

While offline retail has remained fairly static over the years, e-commerce has gone through three modern digital cycles according to PSFK. 1.0, the Follow Model, uses platforms like Facebook. 2.0 is the Intimate Model like Snapchat and 3.0 is the Tribal Cult Model that fuses the first two trends and adds influencers into it by building energy and emotion and creating social bonfires. The inclusion of brick and mortar into the digital Tribal Cult Model hearkens a brand new age of retail when both offline and online can benefit and thrive.

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The Future of Women in Technology. Interview with Deborah Wahl

Gender discrimination and pay disparity is a hot topic in today’s workplace. Related to that discussion is the representation of women in the STEM fields. Deborah Wahl, CMO, Data Driven Innovator, is known for developing the "Agency of the Future" model, merging talent and technology with digital, data and human intelligence.

She was a marketing professional in the car business (Ford of Brasil, Lincoln, Mazda, Toyota, Lexus) rising to CMO at Chrysler before moving to McDonald’s USA.  “I’m focused on technology because I believe it is necessary for every marketer to understand. .. the transformation with technology - how to use it to get closer to and more engaged with my target consumers,” she stated, “We all need to think like a CTO.” 

I sat down with Wahl and spoke to her about the status of women in the industry and the importance of diversity. 

Charlene Weisler: What are the biggest challenges in assuring company diversity today?

Deborah Wahl: To be successful, we must continue to nurture a diverse pipeline, starting at the beginning, which is why I support initiatives like the ANA’s Talent Forward Alliance with the twin goals of inspiring and elevating the quality of talent from the university system and building skills for existing employees.  Second, we need to stay purposeful and relentless about breaking down stereotypes of what types of people succeed and supporting diverse talent.  My biggest fear is that high performing diverse talent will be fed up with the slow progress in our industry and go elsewhere.  We need to act now.  

Weisler: A study from the 1960s concluded that the best technologists were disinterested in people and disliked activities involving close personal interaction. This led to more men being hired for tech positions at the expense of women. Do you think that this is still the case today? 

Wahl: Unfortunately, yes.  That’s what I mean by breaking down stereotypes and opening ourselves up to talent.  Campaigns like GE’s Female Scientists and State Street’s Fearless Girl are just what’s needed.  Study after study shows unconscious bias exists throughout our culture.  We need to hammer at it and use every tool to change perceptions.  The payoff- campaigns that have high GEM qualified ads increase sales by 50%. (Gender Equality Measure that scores ads or entertainment on how prominently they depict women) And, we desperately need diversity in this space to create better solutions.  

Weisler: What are the biggest challenges for women in technology today?

Wahl: I’ve worked in some very male dominated businesses like Automotive and Homebuilding.  The challenge for women in tech is the same - building networks, being heard, overcoming the cultural walls.  Success comes when women support each other and that their networks can be as effective as any other.  We also need purposeful action.  As an example, conference curators need to be purposeful about what speakers they choose so that a variety of thought and role models is represented.  

Weisler: Gender discrimination is more than harassment. Pay disparity impacts a woman's earning power through her career. What can be done about this?

Wahl: First, we each have a responsibility to resolve this.  I made it a priority in each of my positions.  Second, the issues are related to what we discussed above - the unconscious bias and stereotypes that too often determine who gets promoted and how they are valued.  Transparency is the first step.  We can’t fix what we don’t look at and talk about.  “Pay secrecy is one of the things that continues to pay discrimination and the wage gap” Maya Raghu, director of workplace equality and senior counsel at the Nation Women’s Law Center.  I’d say silence is at the root of a lot of our diversity issues.

Weisler: Give me some predictions of the future for women in technology in the next five years.

Wahl: I’m very hopeful.  There’s a big effort to change our stereotypes and make technology expected and accessible for everyone.  But this doesn’t mean it will be easy.  For every man and women who believes that a diverse workforce makes us more competitive, productive and successful, we each need to do our part every day.  Speak up, encourage, see things differently and take action. 

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Using Blockchain to Disrupt Media

Just when you thought the media landscape was quieting down, a new non-profit research and development foundation called the AdLedger Consortium has been created to further disrupt the buy/sell model, this time by using blockchain. This consortium is charged with implementing global technical standards, protocols and solutions for digital media and blockchain. 

The group’s founding members consist of a range of companies from technology, advertising agencies, media sellers and data vendors who are pooling their expertise and efforts to, according to the press release, “bring transparency and data security to the ad tech supply chain through blockchain technology.” According to their press release, founding member companies include, Canoe, GroupM, Cadent, Meredith, IPG Mediabrands and Neustar, among others.

Why Apply Blockchain to Digital Media
At a recent Frankfurt Kurnit event, Gordon Platt, President, Gotham Media, explained that when it comes to media and advertising, "Blockchain technology will bring media licensing and distribution into the 21st Century, enabling creators to control access to their work and ensuring that they get paid for its use."

Eric John, Deputy Director, Video Center of Excellence at the Interactive Advertising Bureau (IAB) noted that in the areas of fraud and safety, “It takes automation to and entirely new level.” On the plus side, blockchain offers a failsafe, verifiable, immutable protocol to permanently link data for use in transactions and data tracking. Privacy compliance is part of this focus.

But caution is advised. “Putting a social network on the blockchain is harder than you think,” warned Benji Rogers, CEO and Co-Founder, Dot Blockchain Media. “If it links to extremist content, you can never take it down,” he explained. “You might siphon millions of dollars to the wrong person and can’t turn it off.”

Privacy Compliance Legislation
The concern about data privacy is being addressed through legislation by the EU called the General Data Protection Regulation (GDPR) scheduled to go into effect in May 2018. Its implementation is a call to action for companies interested in creating and supporting a privacy compliant peer-to-peer decentralized network for media. Through the use of blockchain, companies can address a range of data issues from transparency to supply chain inefficiency to data security and portability to reconciliation and payments that comply with the new EU regulation.

According to Gabe Greenberg, CEO and Co-Founder of GABBCON, Global Audience Based Buying Conference and Consultancy, “Blockchain has the ability to help media by illuminating the current opacity in the supply chain and, by extension, eliminating fraud and moving economic value back to publishers and advertisers.” And, importantly, it offers a secure, privacy-compliant ability to transact that protects the user's private data. 

AdLedger Proof of Concepts
AdLedger is working on two different proofs of concept right now. The first is OpenGPDR, which will cryptographically store data on a data controller’s private blockchain, creating an audit trail. This will help companies manage the new privacy rights under the GDPR regulations of the Right to Access and the Right to be Forgotten.

The second proof of concept is Campaign Reconciliation which focuses on streamlining the campaign reconciliation process showing “what a campaign transacted from cradle to grave would look like on a blockchain,” stated Greenberg. Led by Amichai Lichtenstein, Director of Product Management at AppNexus, the project includes the creation of a contained blockchain network with a set number of players that combines disparate sources of immediate metrics based on measurement KPI’s tied to campaign delivery. Touted as a single source of truth, the ledger will ideally showcase blockchain’s ability to reduce the amount of campaign discrepancies and offer more transparency for buyers and sellers.

Challenges to Implementation
But there are still some challenges to overcome. The most frequently cited challenge, Greenberg noted, is speed. “The traditional ad tech landscape has high QPS (queries per second) demands that blockchain today would struggle to support, but we are confident that the technology will continue to evolve,” he stated, and added, “Saying that this will remain a challenge forever is assuming no innovation or iteration -- it's like saying a 5-year-old will never be tall enough to ride a roller coaster.” Even with this challenge, the expectation is that there will be increasing traction to embed blockchain in digital media throughout 2018.

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Deepening the Connection To Hispanic Consumers

Hispanic spending is projected to grow 85% over the next 10 years and reach $1.7 trillion by 2020, which makes this market segment one of the most important consumer targets for advertisers.  But how can marketers meaningfully connect with Hispanic consumers?  MAGNA and Univision have just released the results of a seminal research study titled "Marketing to the Hispanic Mindset" that measures the impact of contextual targeting (topic, language and culture) in digital video ad experiences.

Among other key insights, the study revealed that language and culture targeting in digital video ads can double the purchase intent of Hispanic consumers and increase their emotional connection with brands.

Surveying 6,000 Hispanic consumers, the study is the first of its kind to include mobile face-tracking in Hispanic research.  "We wanted to understand the role of language and context in digital advertising, including mobile and emotional facial coding to gain deep insights," said Roberto Ruiz, Executive Vice President, Insights and Analytics at Univision.

I sat down with Ruiz and Kara Manatt, Senior Vice President, Intelligence Solutions Strategy at MAGNA to delve more deeply into how the right targeting can connect brands with the Hispanic consumer.

Charlene Weisler:  Tell me how targeting can impact ad receptivity among Hispanics.

Kara Manatt:  We tested three types of targeting.  The first, Topic targeting -- when the topic of the ad is related to the topic of the content it appears in front of -- replicated what we tested among a general audience.  An example would be content on the health benefits of owning a cat that has a pre-roll ad for a cat food brand.  Obviously, there is a strong connection between the product being advertised and the editorial context in which it appears.

The second type that we explored in the study was Language targeting, which is when the language of the ad is matched to the language of the content.  For example, Spanish-language pre-roll ads that run into Spanish-language video content.

Cultural targeting was the third area; that is when an ad speaks to Hispanics through culture.  This can be a bit trickier to nail down since there are a lot of different ways to do that, such as through music, food and specific Latino events.  In Cultural targeting you align an ad that connects on a cultural level with content that does the same thing.

Weisler:  What were the major takeaways from the study?

Manatt:  The key findings for us were the big differences in persuasion metrics, particularly the really important and hard-to-move metrics like brand favorability and purchase intent.  Using language and cultural targeting to double purchase intent was the No. 1 key takeaway; we saw double the impact from merely changing the environment and not the ad.  The other takeaway was that it helps build a relationship between the brand and the consumer.  Hispanics are particularly sensitive to cultural messaging from an advertiser.  They are receptive to the brand going the extra mile by speaking to them in their own language and making that cultural connection.  This is not lost on the consumer.  Again, notably you are not changing the ad.  You are only changing the environment.

Roberto Ruiz:  We also gathered a lot of data on mobile targeting.  When we used the emotion tracking part of the study and we looked at the percentage lift in emotion due to cultural targeting versus no targeting, we saw that with cultural targeting there was more emotion expressed by the people watching the ad.  So, the fact that cultural targeting had a huge impact in emotion on ads received via computers and mobile -- in mobile we saw 60% more emotion being expressed by the Spanish dominant and bi-lingual Hispanics -- told us that cultural targeting is creating a visceral connection and driving emotion.  We know that in branding, emotional connection is really what drives equity.

Weisler:  Were there any surprises in the results?

Manatt:  It's not often we find that what is good for the brand is something that is also good for the consumer.  It is good for brand metrics, but it also leads to a better overall media experience for the consumer.

Ruiz:  It surprised me that Language targeting and Topic targeting performed the best on smartphones.  There is so little data on how to create effective mobile ads that I thought this finding was very interesting.

Weisler:  What are your recommendations to advertisers?

Ruiz:  We say that these are building blocks -- each step leads to a deeper and more profound relationship to the consumer.  Don't limit yourself to Topic targeting and Language targeting.  Take it all the way to Topic, In-Language and Culture to have very powerful digital ads.  You will see the brand KPIs go up.  This research surveyed 6,000 consumers -- a large study with a representative sample that includes non-self-reported data (data that was collected by an app) and that builds on these three targeting steps.  You can see the lift from each one.  But if brands want to do cultural targeting they have to do their homework.  They have to understand the consumer insights that connect the brand to the category, to the consumer and create a solid, culturally targeted creative ad.

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