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Untethered: How People Will Shape, And Be Shaped By, The #FutureOfRetail

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Back in October of 2013 I was asked by PSFK to write an accompanying piece for the 2014 Future of Retail report. My essay, republished below, originally appeared here.

The-future-of-Retail-PSFK

Perhaps more than anything else, the 21st century has been marked by its ability to disconnect long-held paradigms from what were previously perceived to be sturdy moorings. Many of the things we’ve long held as truths, be they in relation to work, family, religion, media or technology have been blown apart by cultural upheaval and scientific advancement. The result has been that people – let’s do away with terms like ‘consumers’ for now – have been thrown into a new reality (or emancipated from the old one, depending upon your viewpoint).  This sort of disruption inevitably benefits some and hurts others, especially in the short term. But as an equilibrium is achieved, people learn how to maneuver in the system.

PSFK’s Future of Retail report, not unlike a William Gibson novel, provides a provocative peek into the very near future. As Creative Culturalist at Y&R New York, it’s my job to observe, and ideally directly experience, these trends and help our agency, and by extension our clients, make sense of them.  Having digested an executive summary of the FoR report, I’d like to propose a sort of macro-macro trend. One that speaks to the larger societal evolution we are experiencing, manifested within the retail category. I call it untethered.

As retailers slough off the physical back end of manufacturing via off-shoring, and outsource other, ‘soft-cost’ functions such as tech support, we’ve seen the retail industry ‘untether’ from local communities in many ways.  I think we’ll see this continue and, combined with other advances in technology, the ‘untethering’ will also appear ‘at the front of the store’ as the very notion of the “store” itself changes.

We’ve seen the dramatic affects on retail as the way people buy products has changed, first from home computers and more recently from their mobile devices, or the ‘showrooming’ trend.  Now as content becomes a sales channel via mobile and 2nd screen technology – the report provides interesting examples of this – the very nature of the ‘storefront’ changes.  Is a shoppable music video a piece of content, an advertisement or a digital shop? The answer is “yes.” Omni-Point-Of-Purchase as the report refers to it blurs lines and removes friction from previously discreet interactions.

An intriguing knock-on effect of this could be how this alters the roles of employee, customer and ‘brand advocate,’ that elusive yet highly sought after super fan that has been the Holy Grail of corporate social media efforts. You could also easily throw in ‘producer’ to the salesperson/customer/advocate mix. Sites such as Etsy now allow virtually anyone to become their own retail brand, further ‘untethering’ the individual from the systems of the last century.

Can a retail brand exist purely in the digital world? If so, what does it mean to be a ‘salesperson’ of such a venture? Does that role cease to exist? Or does that person become ‘untethered?’ Could there be a new role, in the vein of an Avon representative, where you become affiliated with a number of brands, earning money for selling and promoting products? Now a person can use the entire arsenal of social networks and tools to act as a salesperson, customer service rep and brand advocate, and it could be done anytime, from anywhere.

Retail brands have long courted influencers with large networks, but the efforts usually lacked real strategy and it was difficult to track success. Now however the tools exist, from real-time big data dashboards to personalized customer profiles that remember purchasing histories, to allow a new type of employee to really drive the bottom line for retailers, and provide retail value to people.

We’ve seen the rise of the curator in recent years. Those clever and resourceful folks with impeccable Pinterest boards and finely appointed email newsletters. In an ‘untethered’ world these people will become ‘retail consultants’ perhaps getting paid a commission from an company, but perhaps also benefitting from a customer subscription service. The purchase funnel is now a purchase network and those savvy enough to understand the game – from all sides – will surely figure out how to benefit from it.

The ‘untethered’ retail environment opens new interpretations and opportunities for loyalty programs as well, another trend noted in the report. We’ve come a long way from the ribbon cutting ceremonies of old. Gamified, social experiences disconnected from a retailer’s physical space (if they even have one), will encourage new and novel partnerships.  There will be an opportunity to re-imagine the loyalty program from the individual to the community – especially in an ‘untethered’ world where people will have a greater need than ever to connect.

In an untethered world the role of advertising, and the advertising agency, will – must – evolve. The same pressures being brought to bear on retail will also be evident in the world of marketing. Communications will need to be further customized, personalized, relevant and delivered in real-time. But the nature of the message will need to change as well. Instead of a brand sponsoring a movie, perhaps a movie will sponsor a brand? Young directors will offer to make films about a retailer or their product, imbed sales opportunities directly within the film and receive a percentage of the sales.

All futures are possible at this time, but this we know for sure – those that don’t embrace the future, be they retailer or person, will find themselves in a world in which they will struggle to succeed.

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Hey Advertisers, What’s Your Post 30-Second Spot Plan?

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If this is the future, you'd better have a plan that includes something more than 30-second spots.

If this is the future, you’d better have a plan that includes something more than 30-second spots.

The 30-second commercial is not dead, despite what Trevor Beattie thinks. But, here’s something to consider, I could easily consume 4+ hours of content, anytime and just about anywhere, night after night, and not see one 30-second spot. Game of Thrones on Demand via HBO or HBO Go, followed by two episodes of binge watching some old series on Netflix, then I’ll play an hour of Call of Duty on the Xbox 360, followed by catching an out of market West Coast Major League Baseball game online.  That’s not trying to get by on scraps, that’s all top tier entertainment.

Read the Netflix Long Term View  and you’ll get a glimpse into how that company sees the future. It’s a fascinating piece, and shows how they, along with HBO and others, are likely to be capturing the lion’s share of attention, certainly from the upscale market. So, if you are a brand like Land Rover or Virgin Atlantic or Waldorf or Revlon or Dell or Crystal Cruises what do you do? We’re not talking about simple DVR commercial skipping, we’re talking about a future where some of the best, most watched and talked about content simply doesn’t have ads at all.

Last week I went to the Machinima Digital Upfront. If you don’t know Machinima that’s ok, unless you are trying to reach the global, male 18-34 demo, then it is a problem. Machinima racks up more than 2 billion views per month across it’s network (internationally, online and mobile devices). They do this with original programming that is tailor made for its audience. At the event they announced new partnerships that will get them into the massive EDM (electronic dance music) market, as well as a partnership with the director Ridley Scott.

On another front there is a discussion over who is going to own the App Battle that is going to be taking place on your phone, tablet, Smart TV / Internet TV / Connected TV and video game console. You can argue who the winner is going to be – Alan Wolk of KIT Digital thinks it will be the MVPDs who have the advantage. I think brands have agreat opportunity, but the truth is, arguing whether we’ll be using a Comcast app or a Google app or a Nike app isn’t the point, the point is we’ll be launching video content from all sorts of providers and producers and that won’t feature a traditional 30-second spot.

So, what’s your post 30-second spot plan? Product integration directly into the content? In-app sponsorship? Create your own app that enhances the viewing experience around content relevant to your brand? Create your own content? Create your own content channel that hosts video from a wide range of producers that aligns with your brand?

Those all sound like pretty compelling options, but “option” may be a misnomer. I think your “TV strategy” needs to be a lot more diverse than simply deciding between broadcast and/or cable. It’s going to involve a sophisticated plan based on your audience and their viewing behaviors. It will require new social analytics like the ones developed by Bluefins Labs, which was recently bought by Twitter. And it’s going to demand a partner who can help you manage a complex web of partnerships and collaborations with content producers, distributors and tech vendors you may not have even heard of five years ago… because they didn’t exist.

Yes, for the foreseeable future the 30-second spot still has a place front and center in your plans. But right now the smartest brands are preparing for a future where YouTube, HBO and Netflix are the equivalent of ABC, CBS and NBC 40 years ago.

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What @HyperIsland Missed with Their Future of Advertising e-Book from #CannesLions

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If you follow the ad industry at all you know that last week was the Cannes Lions International Festival of Creativity. Similarly, if you are on Twitter you know that Hyper Island owned the post-event conversation with their The Future of Advertising e-book. Seemingly everybody was tweeting about it, and for good reason, it was distributed via a Pay With A Tweet social payment system. So, well done, HI.

As for the content of said e-book. Perhaps a little hit or miss, but when you consider they put it together in something like two days (yikes, hours!), it’s a worthy effort. The quick read (it’s 40 pages) is filled with insights and ideas from a host of Cannes attendees all gazing into their crystal balls.  Many of the ideas focused heavily on the role of technology. Here’s a sampling:

  • Death to Digital
  • Up in the cloud
  • Free Global Wi-Fi
  • Smart Clothes
  • Virtual Brick & Mortar
  • e-Funerals
  • 3D printers
  • And general connectivity (thanks to technology)

While all these seem plausible, they don’t strike me as being unique to the advertising industry. These are back-end issues, albeit important and relevant ones. They didn’t really address the need for fundamental changes in how we do business though.

I did very much like the idea put forth by Asa Marklundand Allison Curran:

Brand-sponsored pills with different themes that you take before you sleep for your preferred experience (eg. your rejuvenation brought to you by Aveda, energizing by red bull, romance by Durex, Happiness by Coca Cola).

I had been playing around with this notion myself this past winter and could see it happening. Or at least I could see it being possible, but there would be many ethical questions, etc.

But here’s what I didn’t see directly addressed in the Hyper Island book that I think as an industry we need to consider: What happens to advertising when we enter the era of the Internet of Things? We keep hearing about a future where your orange juice tells your refrigerator that it is time to get some more OJ, and then fridge beams that information to your shopping list app on your phone. Sounds awesome, right?

Well, what type of orange juice, exactly. Do you just keep getting the same brand? What if there is a new brand or another brand has a coupon or, or…?

How do we as marketers interact with ‘things’ in an Internet of Things era? If purchasing decisions will increasingly be made by computers and artificial intelligences, how do marketers navigate that world and engage consumers?  Let’s be honest, most consumers would love to have the tedium of those type of decisions handled electronically. If your bottle of Tide told your washing machine it was almost empty, and the washing machine told your grocery store, or Costco, to put the exact same bottle of Tide in your order, to be picked up (or dropped off at your house!) you’d jump at that. So how do you change a purchase behavior in that scenario?

In the future, agencies will need to have in-house A.I.

I think agencies will have to create their own A.I.

An agency will need to create an Artificial Intelligence that can communicate, instantaneously and in real-time across the Internet will all the digital entities that will be in charge of our purchases. An A.I. that can deliver intercepts with information about discounts, new products, etc that are relevant. It would only send an ad to your house for toilet paper when you are running out of toilet paper. Don’t own a dog? You’ll never get an ad for dog food.

I don’t know all the executional/technological how-tos on this, but I’m convinced that agencies will have to have an A.I. as a response to The Internet of Things. But this will require an entirely new skill set to be absorbed into the agency culture. You’ll need a Creative Technologist / coder hybrid to lead a team of people steeped in data analytics, machine learning, semantic analysis and other sorts of computer science.

I think if things move in that direction, and it is likely in my opinion that it will, then agencies as we know them will cease to exist. Or at least an entirely new type of agency will emerge and will, in a very short period of time, wield tremendous power.

 

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