5 Key Premises for Winning in the Future Digital World: Stephan Zimmermann Keynote [Rakuten Optimism 2018]
It’s an unusually cool Friday morning in San Francisco. Even without a cloud in the sky to block the September sun, I needed to make sure I didn’t forget a zip-up jacket in my hotel room before heading out the door. The summer weather has been dissipating back in my home city of Chicago, but […]
It’s an unusually cool Friday morning in San Francisco. Even without a cloud in the sky to block the September sun, I needed to make sure I didn’t forget a zip-up jacket in my hotel room before heading out the door. The summer weather has been dissipating back in my home city of Chicago, but San Francisco has become ripe with fall. For myself and many other industry experts, marketers and thought leaders, this is just another reminder that the holiday season is just about to appear. Today, however, is about more than the 2018 holiday season. Today is a day for firsts. Specifically, today, September 7, is the first ever Rakuten Optimism conference.
Rakuten Optimism is unlike any other conference I’ve attended before. Rakuten Marketing, the company that I’m a part of, is just one of many businesses under the Rakuten Inc. umbrella. Now, for the first time in my time with the company, we’re all being brought together under one roof to celebrate not only the individual industries we work in but how we all work together to provide a holistic and cohesive experience for end users. Keynotes, fireside chats, breakout sessions and a full-fledged concert round out a full day of events and opportunities to learn from some of the brightest thought leaders today.
I quickly shuffle my way into the Bill Graham Civic Auditorium and find a seat, shedding myself of the zip-up jacket. Several keynotes kick off the morning, and I switch between taking notes, posting pictures on Instagram and updates on Twitter in rapid-fire succession. The goal: share the expertise in real-time, as fast as I can.
Stephan Zimmerman on Winning in the Future Digital World by Seeing the Present
One keynote speaker, Stephan Zimmermann of McKinsey & Company, took the stage at Rakuten Optimism to discuss the future of digital and e-commerce trends based on core trends seen today.
He started by making an early example of three companies at key moments in their past:
- Facebook going public at $105 billion,
- Instagram gaining 152 million users, and
- Amazon opening 50 distribution centers.
These examples, according to Zimmermann, were indications of where each company was headed. He then showed the current landscape of the digital world with three “elephants” – Amazon, Google and Facebook. Similar to the aforementioned companies, with what these companies are accomplishing right now, indicates that they will be “the future we [advertisers] are going to live in,” Zimmermann tells the filled room in the Bill Graham Civic Auditorium, “and it’s a little bit of a scary one.” Zimmermann proceeds to pose a question to the audience that they’re already, most likely, thinking: “wow do we succeed in a world like this?”
According to Zimmermann, there are ways to create and capitalize on the success of these three companies. Here’s an outline of what Zimmermann calls the “5 key premises for success.”
1. Know your next consumer
Zimmermann discusses Gen Z – currently 25% of the population – and what their impact will be in the future. Specifically the difference between them and their predecessor Millennials. Zimmermann makes it clear that knowing this generation is critical no matter who you are because in five years they will have critical direct buying power in the marketplace.
“It’a generation that responds to conversation” Zimmermann on Gen-Z consumers #RakutenOptimism2018
— Rakuten Marketing (@RakutenMKTG) September 7, 2018
Thinking about the consumer of tomorrow is just as crucial as delivering the right experience to the customer today. This is no secret to marketers, but what marketers should be mindful of are both trends in consumer experiences outside of their own brand as well as observed interactions and behaviors within their current marketing and advertising efforts. These two areas work in tandem with one another, while one may occasionally lead the other. For example, consider mobile shopping: a brand may observe an increase in digital orders from mobile devices, while at the same time seeing more insights into what experiences customers do and don’t want when shopping on a mobile device. It takes a combination of both these areas to get a holistic view of what the customer will want – and expect – to see in the future from their mobile shopping experience. This is especially crucial when relating it back to Zimmermann’s original point about different generations of consumers.
2. Create rich experiences
What is a rich experience? This is an experience that embraces the consumer or shopper in a way that gives them more of what they want in the ways they want it. Zimmermann notes 3D product images and video support as examples of rich experiences that have huge success returns. There is a 50% higher conversion on products with 3D images, and a 30% higher level of satisfaction on video support.
We’ve discussed several aspects of ways marketers can employ a “rich experience” in their own strategies. This ranges from video content to experiential marketing tactics and even includes areas such as cause-driven marketing. What’s important, however, is that brands and marketers continue to think about how their customers (and potential customers) are seeking new experiences – and then find ways to provide those experiences that are as memorable as they are engaging.
3. New interfaces
Once upon a time, consumers shopped through mobile devices – but those devices were flip phones. Mobile phones have evolved into the sophisticated, multi-function devices that we use them for today. However, the evolution of the mobile phone doesn’t stop with the growth of m-commerce. Zimmermann highlights voice devices as an example of a new interface that brands will want to capitalize on – or risk getting left behind. In just two years, voice devices have grown exponentially in both adoption and functionality. This growth can either be an opportunity for brands or a setback. It all depends on whether or not they take advantage of these new interfaces.
This requires as much attention to behaviors and trends as it does testing and evaluation. Brands who try to quickly jump on the latest trend without doing proper research and testing to understand not only why they work but why consumers enjoy using them will find that they’re going to hinder their customer’s shopping experience rather than enhance it. That’s why testing how to best utilize new interfaces is so critical as well.
4. Personalized interactions
Personalization is not a new word for brands or marketers but brands are always looking to do more. In fact, according to Zimmermann, brands may HAVE to do more with the expectations nowadays of consumers. Only 23% of consumers think brands do a good job of personalization, Zimmermann cites, and only 15% of brands are on a path towards personalized marketing.
#RakutenOptimism2018 @INscribeDigital personalization improves the smaller the segment -macro to micro, then 1-1, then real time, crosschannel, trigger based
— Kelly Peterson (@kpeters1) September 7, 2018
This has been a challenge for many marketers for a long time, but it’s one that brands will need to continue working to address. Taking advantage of the latest tools and trends to deliver more personalized interactions is key.
5. New subscription models
Subscription services are growing rapidly. Zimmermann highlights that subscription services have grown from 7% to 15%, and is headed towards taking 40% of non-housing income for consumers. This is a great example of a trend that is growing and, based on the data of that growth from yesterday to today, we can better predict where it’s headed tomorrow.
Before Zimmermann leaves the stage, he wants the audience to know two key messages. First, says Zimmermann, is that the future is already here. Second, he says, is that the future is overestimated in the short term – but it is critical that brands, marketers and industry professionals alike don’t underestimate it in the long term. “This,” says Zimmermann, “will separate the winners from the losers.”