Business Transformation: The Next 5 Years Through the Eyes...

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Business Transformation:The Next 5 Years Through the Eyes of Brands and ConsumersR i c h a r d H a r t e l l

G l o b a l P r e s i d e n t , P u b l i c i s M e d i a B u s i n e s s T r a n s f o r m a t i o n

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A Global Consulting Practice to Unlock Our Clients’ Growth by Re-engineering their Consumer & Customer Experience

Publicis Media Business Transformation

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Transformation requires a shift from siloed approaches

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Platform & Operations• Product

• Regulation

• Operations

• People

• Processes

• Technology

• Innovation

Customer Experience• All customer touch

points

• Marketing

• Retailers

• Service excellence

• Partners

• Connected services

Digital customer experience, GUI• Web

• Mobile

• Tablet

• IOT

Media & Advertising• TV

• OOH, Press

• Digital

• Promotions

• Shopper

• Events

• Influencer (PR & Sponsorship)

UXMedia &

AdvertisingCustomer Experience

Platform, dataorganisation

and operations

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To connecting consumer and customer experienceswith business capability building

Customer Experience

• All customer touch points

• Marketing

• Retailers

• Service excellence

• Partners

• Connected services

Digital customer experience, GUI

• Web

• Mobile

• Tablet

• IOT

Media & Advertising• TV

• OOH, Press

• Digital

• Promotions

• Shopper

• Events

• Influencer (PR & Sponsorship)

Platform & operations

• Product

• Services

• Pricing

• Regulation

• Operations

• People

• Processes

• Central v Local

• Technology

• Innovation

Platform, dataorganisation

and operations

Media & Advertising CCXUX

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Our Services

InventionExperience

Design

EvolutionCapabilityBuilding

DisruptionInnovation

Partnerships

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+ | +

- | - - | +

+ | -

Technical Capability

Marketing Capability

Uniquely placed to unleash the alchemy of intelligence, creativity and technology to transform our clients’ businesses

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H O W D O C O N S U M E R S A N D E X E C U T I V E S E X P E C T B U S I N E S S T O T R A N S F O R M

O V E R T H E N E X T 5 Y E A R S ?

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The Purpose and Approach

WHO & WHERE1799 consumers and 759 executives

7 countriesUKUSAFranceGermanyIndiaChinaAustralia

WHAT12 categoriesBankingBeauty & GroomingAlcoholic BeveragesCarsAirlinesSupermarketsMedia & EntertainmentEveryday GroceriesFashion RetailersConsumer ElectronicsTelcosFast Food

6 key trendsAI & Personalized DataDemocratized InnovationOn-Demand AccessNew Payment Methods and Alternative CurrenciesSeamless ShoppingSharing Economy

HOWSurvey and Prediction Markets

Prediction MarketsA “stockmarket-like” gamification technique that asks consumers and execs to bet on the future impact of a particular trend.

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Disruption is mainstream

Around 2/3rds of us embrace the rate of change

Little difference between execs and consumers

Little difference between young and old

Q: Over the last couple of decades, technology has had a profound impact on our world. The rate at which we find information, communicate with others, and access goods and services is unprecedented. With this in mind, how do you feel about the current rate of change?Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)

7%

13%

23%

57%

4%

10%

25%

60%

2%

4%

28%

67%

I wish things would return to slower,simpler times

I think the rate of change is too fast andI find it hard to keep up

I would be happy if the rate of changewere even faster than it is now

I fully embrace the rate at which theworld is changing

Executive

18-34

35+

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There is an Expectation Gap

86% of execs feel they are meeting consumers expectations

Only 61% of consumers think they are meeting them

A wide variation in some categories versus others

Executive Question: To what extent do you feel that your business is currently meeting your customer’s expectations? % AgreeConsumer Question:. To what extent do you feel that companies and brands are innovating to meet customer expectations in… % Agree Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) : Executives (759)Average sample size by category: (51)

64%

56%

61%

68%

80%

54%

62%

71%

60%

69%

57%

64%

74%

80%

81%

84%

85%

87%

88%

90%

91%

92%

93%

95%

Everyday Groceries

Fast Food

Fashion Retailers

Supermarkets

Consumer Electronics

Airlines

Telecommunication Companies

Media & Entertainment

Banking

Cars

Alcoholic Beverages

Beauty & Grooming Products

Executives Consumers

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Execs Could Be Falling For

The Dunning Kruger Bias –

Mistakenly Assessing Their Ability As Much Higher Than It Is

The Dunning-Kruger EffectSource: Unskilled and Unaware of it: how difficulties in recognizing one’s own incompetence lead to inflated self-assessments. J. Kruger & D. Dunning. (1999)

The Dunning Kruger Effect

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BT is on the Agenda but still a work in progress

76%

Have a consultantworking on it

67%

Think their agenda isgaining strong momentum

81%

Of execs have aBT agenda in place

But the majority are not yet half way through

54%

Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Executives (759)

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32%

32%

33%

34%

36%

36%

38%

41%

Outdated or unavailablesystems and processes

Unforgiving competitivelandscape

Lack of digital capabilities

Insufficient resources

Lack of data and data skills

Organizational barriers

Keeping up with latesttechnology

Talent pool challenges

The focus is around IT infrastructure, digital expertise and marketing.The challenges are talent, organization and agility.

73%

74%

77%

78%

79%

80%

80%

82%

Company Culture

Talent &Recruitment

Data Management

Production

Customer Services

Marketing

Digital Expertise

Infrastructure & IT

Q: Execs: Where do you feel your business transformation activity is having the most impact?

Q: Execs: What are the greatest challenges in pursuing a business transformation agenda?

Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Executives (759)

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Q: Which Companies Will Play The Biggest Role In Shaping Future Products, Services, & Customer Experience?

Most agree that big tech companies will shape future products, services and customer experience

39%

42%

56%

36%

47%

78%

33%

44%

30%

59%

49%

82%

43%

48%

43%

38%

36%

84%

Government agencies and organizations

Start-ups and entrepreneurs

Communities, networks, or organizations thatdon't yet exist

The same companies and brands that haveexisted for generations

Peer-to-peer networks where individuals interactdirectly

Big tech companies of today (e.g. Google,Facebook, Tencent etc.)

Executive 18-34 35+

Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)

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New Payment Methods On Demand Access

Seamless Shopping Artificial Intelligence

Sharing Economy

Democratized Innovation

Media & Ent

Banking

Auto

Telco

Supermarkets

Everyday Groceries

Consumer Electronics

Fashion

Fast Food

Beauty & Grooming

Alcohol

Airlines

Cate

gorie

s

Consumers and Executives were asked to predict the disruptive impact of six trends across 12 categories

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Expectation around disruption tends to sit where people’s money (and data) matters most

0

20

40

60

80

100

120

140

160

180

200

30 40 50 60 70

Aver

age

Betti

ng In

dex

Average PLI (Prediction Likelihood %)

Over 50% PLI significant

Banking

Auto

Consumer ElectronicsSupermarkets

Media & EntertainmentTelco

Fashion

Everyday Groceries

Fast FoodBeauty & Grooming

AirlinesAlcohol

Source: Publicis Media Business Transformation Practice Research. November 2016. Global Base Size: Consumers (1,799) / 18-34 (739) / 35+ 1060) : Executives (759)*PLI = The calculated probability of this statement being true. Predictions are relative to 12 other categories tested. PLI scores over 50% are significant.

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Consumer 18-34 Executives

NEW PAYMENT

85% PLI561 BI

D. INNOVATION AI

DRIVER DRIVER DRIVER

Everydayrelevance

Disruption in progress

61% PLI163 BI

59% PLI141 BI


New Entrantse.g. Venmo

Security concern

AutomatedCustomer service

NEW PAYMENT AI D. INNOVATION

85% PLI354 BI

65% PLI172 BI

64% PLI151 BI


Outsource decision making / efficiency

Question ability to keep up

New Entrantse.g. Fintech Start Ups


Role of banking & branches

Robots replacing humans

On Demand Access (56% PLI / 133 BI) / Seamless Shopping (52% PLI / 97 BI / Sharing Economy (49% PLI / 77 BI) On Demand Access (60% PLI / 136 BI) / Sharing Economy (52% PLI / 94 BI) / Seamless Shopping (42% PLI / 69 BI)


Banking:New Payments, Democratized Innovation and AI are the trends seen as most likely to disrupt

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Auto:Sharing Economy, On-Demand and AI are the trends seen as most likely to disrupt


SHARING ECON

81% PLI395 BI

ON DEMAND AI


SHARING ECON ON DEMAND NEW PAYMENT


55% PLI110 BI

55% PLI138 BI

Instant access & ride sharing e.g. Zipcar/Uber

Mobile tech driving services like Uber

Seamless Shopping (46% PLI / 76 BI) / New Payment Methods (43% PLI / 56 BI) / Democratized Innovation (41% PLI / 59 BI)

Onset of self-driving cars

80% PLI287 BI

58% PLI136 BI

54% PLI107 BI

Connected cars to deliver new experiences for customers

And data streams for marketers

Driverless cars reducing need for insurance

New paths to purchase e.g. virtual showrooming

New players force biz definition shift from selling cars to mobility services

D. Innovation (53% PLI / 115 BI) / Artificial Intelligence (51% PLI / 114 BI) / Seamless Shopping (44% PLI / 71 BI)




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Consumer Electronics:Democratic Innovation, AI and Sharing Economy are the trends seen as most likely to disrupt


D. INNOVATION

76% PLI240 BI

AI SHARING ECON


ON DEMAND SHARING ECON NEW PAYMENT


74% PLI268 BI

56% PLI96 BI

62% PLI143 BI

62% PLI141BI

57% PLI115 BI

People primed & excited for CE innovation.

Witnessed flurry of innovation & entrepreneurs e.g. start ups/kickstarters

Already feeling impact of SIRI/Cortana/Echo

Smart phones/homes immediate application

Making higher priced CE goods more affordable

New trial/revenue opportunities

IOT pushing connectedness and utility of devices

Quantified self trend pushing functionality

Continued shift to mobile wallets

Checkout anytime anywhere

Connected devices ushered in sharing economy

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Beauty & Grooming:AI, Seamless Shopping & The Sharing Economy are the trends seen as most likely to disrupt


AI

47% PLI75 BI

S. SHOPPING D. INNOVATION


38% PLI39 BI

S. SHOPPING SHARING ECON AI

62% PLI155 BI

46% PLI73 BI


On Demand Access (35% PLI/ 41 BI) / Sharing Economy (35% PLI/ 24 BI) / New Payment Methods (33% PLI/ 31) On Demand Access (43% PLI/ 82 BI) / D. Innovation (42% PLI/ 61 BI) / New Payment Innovation (40% PLI/ 59 BI)

53% PLI92 BI

46% PLI66 BI

Increased personalisation of skincare products

Better data to understand performance of products

Impact of improved performance data on consumer product selection

New paths to purchase

Improved and personalised customer service

Role of facial recognition sensors and related tech in retail environments

Opportunity to speed up consumer decision making

New entrants e.g. home-grown natural trend

New trial/revenue opportunities e.g. Subscription services Birch Box, Dollar Shave Club

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Alcohol:Seamless Shopping, Democratic Innovation and On Demand are the trends most likely to disrupt


S. SHOPPING

46% PLI55 BI

D. INNOVATION SHARING ECON


45% PLI56 BI

40% PLI40 BI

S. SHOPPING D. INNOVATION ON DEMAND

46% PLI86 BI

44% PLI73 BI

41% PLI63 BI


New Payment Methods (40% PLI/ 39 BI) / Artificial Intelligence (36% PLI/ 41 BI) / On Demand Access (34% PLI/ 34 BI) Sharing Economy (39% PLI/ 51 BI) / Artificial Intelligence (37% PLI/ 47 BI) / New Payment Methods (34% PLI/ 40 BI)

Off-licence very trad. transaction environment

New delivery apps like drizly changing retail expectations

Rise of home brewing and craft beer trend and grass roots innovation

Greater visibility of heath and wellbeing in daily lives

Intersection of ride sharing and responsible drinking

New delivery apps like drizly adds a premium service model to existing channels

Crowdfundingreduces need for access and support from establish companies

Concern about competition Amazon could bring


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A tension between personalized experiencesand ’traditional’ brand marketing approaches

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10

20

30

40

50

60

70

80

90

Make lifeeasier for

consumers

Provide apersonalized

and individualservice

Are trustworthy Provideentertainmentand excitement

Providesomething to

believe in

Makeconsumerssmarter by

providing goodinformation

Provide asense of

belonging

Provide afeeling ofprestige

Do the rightthing as

corporatecitizens

Inspireconsumers and

communities

Challengeconventionalwisdom and

behavior

Provide asense ofdiscovery

Unite orconnect

consumers andcommunities

Executive 35+ 18-34

Q: Beyond good quality and value, what attributes will consumers demand the most fromcompanies over the next 5 years?


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1. Disruption is mainstream2. There is a surplus of confidence3. The gap between companies confidence and

consumers expectations is wide4. Transformation is on your competitors agenda5. You are likely less than halfway through your

transformation (and likely always will be)6. Tech is the focus but talent and agility is the

challenge7. Follow the money (and data)8. Big tech is the force but how it disrupts can come

from anywhere and anyone9. Transformation has to cater to individuals but not

lose the universal appeal of brands

9 Learnings

2424

Please get in touch…

[email protected]

www.linkedin.com/in/richardhartell

@richhartell

Business Transformation: The Next 5 Years Through the Eyes...

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