Top Five Digital Consumer Trends in...

Top Five Digital Consumer Trends in 2018February 2018

Michelle Evans, Global Head of Digital Consumer Research

© Euromonitor International

2

Euromonitor International

INTRODUCTION


3

Michelle EvansGlobal Head of Digital Consumer ResearchEuromonitor International

Industry ExpertiseAt Euromonitor, Michelle oversees the company’s digital consumer research to provide actionable insights into how technology is reshaping commerce. Recognized as a thought leader in digital commerce, she was named to Innotribe’s Power Women in Fintech in 2015, Asian Entrepreneur's Women on Top in Tech in 2016 and to Remodista’s Women2Watch in 2018. She regularly shares her expertise across industry events whether as a speaker, chairperson or juror and authors a biweekly column for Forbes.

About the speaker

INTRODUCTION

4

3.6 billionGlobal internet users as of 2018, which equates to nearly half of

the population being online

53%Connected consumers reporting they would be lost without said

internet access


5

The constant

innovation driven by

technology has inspired

a number of

megatrends

that are reshaping the

world.



6

Connected Consumers

Shopping Reinvented

6

Experience More

7

28%Connected consumers use a

phone to compare prices in store on at least a weekly basis

24%Connected consumers use a phone on a weekly basis for

buying a good or service



8

1.Digital life converges in super apps

2.Data as the new currency

3.Keeping the tab open

4.Mobile wallets going global

5.Outlets will get their tech injection

The five most impactful tech-driven trends that will reshape commerce in 2018

INTRODUCTION


9

Digital life converges in super apps

1.


10

Mobile apps were first developed around individual activities

DIGITAL LIFE CONVERGES IN SUPER APPS

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Control appliances

Order foodservice online

Buy an item or service

In-store mobile payment

Use health or fitness app

Compare prices in store

Read reviews

Stream music online

Watch a TV or video

Take a photo or video

Visit a social networking site

Use of a messaging app

Send a text message

Send and receive emails

Browse the internet

% of Online Respondents

Most Popular Mobile Phone Activities, 2017

Utility

11

Financial

Lifestyle

Retail Communication



12

Opportunities for stakeholders across commerce ecosystem


ManufacturersConnect with consumers in more authentic ways to engage and serve

MerchantsTarget consumers in new ways to increase foot traffic and drive conversion

Payment NetworksReap benefits from an increase in digital payments due to cards being preloaded in platforms

ConsumerExperience a more convenient and enhanced commerce interaction

China shows the world where the internet is going

13

Chinese super apps, such as WeChat, have expanded beyond the protection of the great firewall, giving others a glimpse of what seamless integration across channels and platforms looks like.



14

WeChat is the posterchild for super app revolution


0 200,000 400,000 600,000 800,000 1,000,000 1,200,000

Douban

LinkedIn

MOMO

Meipai

Baidu Tieba

Youku/Tudou

Sina Weibo

Q Zone

QQ

WeChat

Active Number of Monthly Users Mid-Year (‘000 Persons)

Top Social Media Websites in China

2017 2016


15

Western tech titans are making strides toward the super app


Alphabet• Communication: Gmail, Google Plus• Financial: Google Pay• Lifestyle: YouTube• Retail: Google Search, Google Express, Google Shopping• Utility: Google Maps, Google Assistant, Google Drive, Google Translate

Apple• Communication: Mail• Financial: Apple Pay• Lifestyle: iTunes• Retail: Apple Pay• Utility: Apple Maps, AirDrop

Facebook• Communication: Facebook, Facebook Messenger, WhatsApp• Financial: Facebook Messenger (P2P payments)• Lifestyle: Facebook Timeline• Retail: Marketplace, Order Food, Facebook Messenger Chatbots• Utility: Facebook Events Calendar and Weather

China

US

16


A Tale of Two Markets: US and China

Old habits die hard

Mobile-first mentality

S-commerce sophistication

New ways of saying “Hello”


17

Implications of super apps on players across the commerce ecosystem


A new breed of competitors

Competitors may no longer come from

one’s core category or industry as new types

of players emerge

Who owns the consumer

relationship

Tech companies could become intermediaries

in more consumer transactions and thus control the end-user

relationship

Evolving consumer

expectations

Companies are being judged on the last

great experience the consumer had with a

brand

Acceleration of the digital

transformation

Growing app integration would likely

accelerate the shift toward digital channels for all steps in the path

to purchase


18

Data as the new currency

2.


19

Data has emerged as the world’s most valuable commodity

DATA AS THE NEW CURRENCY

1) IBM

2) AT&T

3) Eastman Kodak

4) General Motors

5) Standard Oil of NJ

6) Texaco

7) Sears, Roebuck

8) General Electric

9) Polaroid

10) Gulf Oil

1) Apple

2) Alphabet

3) Microsoft

4) Amazon

5) Facebook

6) Berkshire Hathaway

7) Johnson & Johnson

8) Exxon Mobil

9) JP Morgan Chase

10) Wells Fargo & Co.

Most Valuable Companies in the US, 1967 Most Valuable Companies in the US, 2017

Source: ForbesNote: 2017 rankings as of November. 1967 rankings were adjusted for inflation.


20

Consumers expect brands to craft individually tailored stories


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Generation Z

Millennials

Generation X

Baby Boomers

Desires to be Distinct from Others, 2017

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree


21

Tech plays a key role in enabling brands to craft the story of one


Machine learning

• About: Teaches itself with minimal programming• Example: Marketers can use it to determine the best time to send emails to customers

Image recognition

• About: Recognises patterns in images• Example: Enable brands and retailers to curate search results for individual consumers

Cluster analysis

• About: Organises mounds of data into insights• Example: Marketers could leverage for more effective customer segmentations

Natural language processing

• About: Interpret what people are saying in words or text• Example: Companies could automate the customer service experience of the future

Empower store associates

Providing the personal touch

22

Improving recommendations


Beauty giant L’Oréal sells a connected hairbrush that analyses the user’s hair, including the force used when brushing, as well as the number of strokes taken.

The high-tech brush transmits this data to a mobile app, which provides the user with a quality score and ranking as well as offers hair tips and personalised product suggestions.

23

Dynamic Yield’s technology leverages machine learning to build customer personas based on data points like geo-specific events, on-site interactions and purchasing behaviour.

Brands could leverage these segments to better match customers to the products they are most likely to use or to prevent limited stock from being promoted to shoppers who frequently return items.

24


25

Concerns regarding data privacy continue to plague digital uptake


0 20 40 60 80 100

Using the internet adds a great deal to my daily stress

I freely share personal information online

I prefer to communicate online rather than face to face

It is important to cultivate my personal brand online

Targeted ads are an invasion of privacy

I would be lost without internet access

% Online Respondents

Attitudes Towards the Internet Among Global Consumers, 2017


26

The European Union’s sweeping privacy laws have global implications


Tougher requirements for obtaining consent for collecting personal data

Requires a company to delete data if it is no longer used for the purpose it was collected

Requires a company to delete data if the individual revokes consent

Requires companies to notify the EU government of data breaches within 72 hours of learning about the breach

Firms handling significant amounts of sensitive data will be required to appoint a data protection officer

Fines of up to EUR20m or 4% of a company’s global revenue for non-compliance

Key Aspects of the European Union’s General Data Protection Regulation


27

Keeping the tab open

3.


28

Digital boosts old-time subscription models

KEEPING THE TAB OPEN

Surprise subscription

boxes

Regular supplies

Short-term access

Long-term leasing

Many subscription services were born in the last decade

29


0% 50% 100%

Baby Boomers

Generation X

Generation Z

Millennials


Subscription Service Use by Generation, 2017

Currently use a subscription serviceHave used a subscription service in the pastHave never used a subscription service


30

How the subscription business model benefits both sides


What’s in it for the

consumer?

Convenience

Value

CommunityPremium offers

Experiential consumption

What’s in it for the

business?

Guarantee revenue stream

Build direct relationships

Encourage consumer

loyalty

Build data on consumers

Attract new consumers

WHAT’S IN IT FOR THE CONSUMER?

Subscriptions reinvent areas of consumptionlike entertainment

31


0 20 40 60 80 100

China

Germany

Canada

South Korea

Japan

Australia

France

UK

United Arab Emirates

US

Digital streaming services, USD

Per Capita Spend on Digital Streaming Services, 2017 / 2022

2017 2022

Internet of Things is expected to further boost subscription business models

32


0 20 40 60 80 100

Smartwatch

Smart appliance

Wearable fitness tracking

Wireless speakers

Console gaming system

Tablet

Desktop computer

Digital flatscreen TV

Laptop computer

Smartphone

% of Online Global Respondents

Device Ownership, 2016 / 2017

2017 2016

Case study: Amazon

One company with a strategy that most illustrates an intent to capture on this shift is Amazon with its Amazon Dash programme, which has evolved from purchases that a consumer can make at a tap of a button to automation.


34

Home care likely to be impacted by shift toward passive consumption


0 2 4 6 8 10 12 14 16 18 20 22 24 26 28

Home Care Internet Retailing 2017-2022 CAGR %

0

10

20

30

40

50

60

70

80

90

100

Digital

China

US

UK

Russia

JapanItaly

Germany

Australia

Indonesia

Argentina

Thailand

Saudi Arabia

Switzerland

Ukraine

Malaysia

Israel

Poland

Mexico

Slovakia

Brazil

Hong Kong, China

Egypt

Morocco

South Korea

Canada

Austria

Belgium

Vietnam

Greece

Philippines

Norway

Czech Republic

Sweden

HungaryTurkey

Romania

Promising Markets for Internet-Based Home Care Purchases

2017-2022 Absolute Value0

200400600800

1,0001,169


35

Machine-aided commerce will re-define what brand loyalty means


Traditional Marketing Funnel

Awareness

Interest

Consideration

Intent

Evaluation

Purchase


36

Mobile wallets going global

4.


37

Consumers in motion propel the expansion of payment networks

MOBILE WALLETS GOING GLOBAL

-6

-4

-2

0

2

4

6

8

10

2007 -2008

2008 -2009

2009 -2010

2010 -2011

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

2016 -2017

Y-o-

Y G

row

th

Growth in the Number of Trips Taken Worldwide, 2007-2017

Number of Domestic Trips Number of International Trips


38

China is the biggest market for outbound tourism spend since 2012


Others

Macau

USA

Hong Kong

Japan

Thailand

0

100,000

200,000

300,000

'17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30

Outbound Tourism Expenditure from China, 2017-2030

USD

mn

Chinese travellers play a key role in mobile wallet globalisation

Chinese wallets like Alipay are moving West, as the spending power of the country’s residents grows and the government improves international cooperation, allowing consumers to travel to more nations.

He (Steve Jobs) wanted to create something that was so instrumental and integrated in peoples' lives that you'd rather leave your wallet at home than your iPhone.

Former iPhone product marketing engineer

Bob Borchers said of Steve Jobs’ vision for the iPhone


41

Apple Pay global expansion follows US traveller to wealthy markets


0 10,000 20,000 30,000 40,000

China

Spain

Dominican Republic

Germany

Puerto Rico

Italy

UK

France

Canada

Mexico

Number of Trips in 2017

Outbound Departures from the US, 2017

0 5,000 10,000 15,000 20,000

Puerto Rico

Australia

Spain

UK

Germany

Italy

India

China

Canada

Mexico

Retail Value RSP, USD

Outbound Tourism Expenditure from the US, 2017

Apple Pay supportedApple Pay not supported


42

Samsung Pay followed the South Korean traveller more closely


0 2,000 4,000 6,000 8,000

Indonesia

Macau

Taiwan

Hong Kong

Vietnam

Thailand

Philippines

US

China

Japan

Number of Trips in 2017

Outbound Departures from the South Korea, 2017

0 5,000 10,000 15,000 20,000

Macau

Singapore

Vietnam

Australia

Taiwan

Phillippines

Thailand

China

Japan

US

Retail Value RSP, USD

Outbound Tourism Expenditure from South Korea, 2017

Samsung Pay supportedSamsung Pay not supported

$3 trillionPayments expected to be made

on a mobile device in 2022 across the 47 countries where

Euromonitor International conducts this research

75%China and the US will contribute to the overall size of the mobile

payments market in 2022


44

Outlets will get their tech injection

5.

47%Connected consumers

globally who want to “see or try before buying”

83%Goods expected to be

purchased in-store globally in 2022

92%Foodservice expected to be

purchased in outlets globally in 2021


46

Digital shifts are changing competitive realities

OUTLETS WILL GET THEIR TECH INJECTION

0% 5% 10% 15% 20% 25% 30%

Canada

Germany

United Arab Emirates

France

Japan

South Korea

Poland

UK

US

Australia

Digital Purchases as a Percentage of Consumer Payments

Consumer Payments Made By Digital Device, 2017 / 2022

2017 2022

Consumers motivated to shop in person to “see” or “try” before buying an item

47


0 20 40 60

Stores are more trustworthy

No delivery-related hassles

Experience of shopping in store

To avoid paying for shipping

Convenient location / access

Better warranty / easier to returnif defective

Immediate purchase

See or try before buying


In-Store Shopping Motivations, 2017

Consumers demonstrate an increased need to “experience more”

48


0% 20% 40% 60%

60+

55-59

50-54

45-49

40-44

35-39

30-34

25-29

20-24

15-19

% of Online Respondents

Attitudes Toward Experiences, 2017

I prefer to spend money on experiences, rather than things

NFC tags

Virtual and augmented

realities

49

3D imaging


In an era in which fans can easily stream games online, the Tottenham Hotspur football club is deploying the most advanced technology to create the ultimate “game day” experience at its new stadium when it opens in 2018.

The club’s state-of-the-art venue will offer LED signage, mobile points of sale, electronic turnstiles with mobile phone ticket entry and click-and-collect food and drink systems to capacity crowds of 61,559 football fans.

Since unmanned checkouts like Tao Café from Alibaba first made headlines, retailers have been knocking on the doors of technology firms wanting to replicate. The rise of more affordable item-level tagging and machine learning have made this possible.

In its simplest form, consumers scan their smartphone for entry. Sensor technology then tracks the consumer in store and adds items they have removed from the shelf to a virtual shopping cart. Others like JD.com in China and Amazon in the US are working on similar initiatives.

Restaurants are utilising technology to improve operational efficiencies and to provide diners with a more seamless consumer experience.

Red Arrow Tap Room in suburban Chicago has 48 self-serve taps featuring craft beer and cider, and tabletop tablets for placing food orders.


53

Key takeaways


54

Leveraging the avalanche of available data to cultivate the

“story of one” will be what distinguishes the winners from the losers in the next decade.

Data as the new currency

Super apps could enable a new breed of competitors, change

who owns the customer relationship, force an evolution of consumer expectations and

most importantly accelerate the overall digital transformation.

Digital life converges in super apps

The old-school subscription model received a digital boost in

the last decade. In the forthcoming Internet of Things era, the idea of keeping the tab

open will take on a new meaning.

Keeping the tab open

The battle for mobile wallet supremacy will come down to the ability of US companies to export their offerings abroad

against the expanding influence of China’s growing middle class.

Mobile wallets going global

Commerce is in the midst of a head-to-toe makeover both in

and outside the physical outlet. As such, players are leveraging a

plethora of technologies to re-imagine physical spaces.

Outlets will get their tech injection

54


Thank youMichelle Evans, Global Head of Digital Consumer Research

[email protected]

Facebook.com/euromonitor/

@mevans14

Linkedin.com/in/michelleevansmaclachlan

Forbes: https://www.forbes.com/sites/michelleevans1/#

Top Five Digital Consumer Trends in...

Documents

Transcript of Top Five Digital Consumer Trends in...