How will traditional grocers compete against Internet retailers such as HelloFresh and Amazon in the future?
Grocery shopping is a time-consuming activity, especially in todays frantic world where time is of essence to most people. The rise of both partners in a household having stable jobs minimises the time available to do groceries even further. According to market research by US company Time Institute, the average customer spends 41 minutes in a store. Considering the 9 to 5 workday, that takes up almost 5% of your remaining day if you include the hours you spend sleeping. On top of that, sorting your food, preparing it, eating it, and cleaning up will amount to some 3 hours and 27 minutes according to the Organization for Economic Cooperation and Development. Wouldn’t it be very convenient if you could cut those hours by the time spent doing groceries?
This is what Internet retailers such as HelloFresh are offering. They provide an array of meal plans for individuals, partners, and families, and have weekly changing menus for a variety of food options. Of course they do not actually cook the meal or clean up for you, however they will eliminate your task of having to go out, buy food, and come back. As you would probably guess, this is offered for a premium price, but are consumers willing to spend this extra money for the convenience? And furthermore, is it sustainable to deliver fresh groceries?
If we look at the retail giant Amazon, we can apply the same to a slightly different concept – food delivery, not meal delivery. Its services are already in full operation in the United States and the United Kingdom. An expansion is also planned for Germany, Amazons biggest market in Europe. However, the business model has one major downside that newcomers could not cope with: it is barely a break-even operation. Giants such as Amazon can handle losing out or breaking even in a business model, especially when it comes with positive network effects. Shoppers that are Amazon Fresh customers automatically receive everything Amazon Prime users do as well. Thus they are very likely to contribute to other non-grocery item orders.
Newcomers that step right into the game, offering online groceries and meals only, have the disadvantages that they do not posses a network yet, nor can they leverage losses. This makes it very attractive for consumers to turn to Amazon for example instead of going to HelloFresh.
Nevertheless, this puts traditional grocers at risk because the in-store grocery shopping is increasingly being replaced by online orders. I believe soon enough we could come to a point where grocery stores do not sell non-perishable and non-food products anymore (to say the least), but merely fresh items such as meats, fruits, and vegetables (if it still remains profitable for them to do so), whilst online grocers will take care of the rest.
The grocery shopping industry is in the end still very inefficient when you look at all the points at which groceries can be traced back to. The documentary FoodInc from Netflix states that the average distance a meal travels before it ends in a grocery store in the US is something like 1,200 miles (if I remember correctly). Cutting out the traditional grocer could be a method to reduce that travel distance of food, or at the very least speed up the time it takes for an item to reach your kitchen at home.
The transition to a global digital economy in 2014 was sporadic – brisk in some countries, choppy in others. By year’s end, the seven biggest emerging markets were larger than the G7, in purchasing power parity terms. Plus, consumers in the Asia-Pacific region were expected to spend more online last year than consumers in North America. The opportunities to serve the e-consumer were growing – if you knew where to look.
These changing rhythms in digital commerce are more than a China, or even an Asia, story. Far from Silicon Valley, Shanghai, or Singapore, a German company, Rocket Internet, has been busy launching e-commerce start-ups across a wide range of emerging and frontier markets. Their stated mission: To become the world’s largest internet platform outside the U.S. and China. Many such “Rocket” companies are poised to become the Alibabas and Amazons for the rest of the world: Jumia, which operates in nine countries across Africa; Namshi in the Middle East; Lazada and Zalora in ASEAN; Jabong in India; and Kaymu in 33 markets across Africa, Asia, Europe, and the Middle East.
Private equity and venture capital money have been concentrating in certain markets in ways that mimic the electronic gold rush in Silicon Valley. During the summer of 2014 alone $3 billion poured into India’s e-commerce sector, where, in addition to local innovators like Flipkart and Snapdeal, there are nearly 200 digital commerce startups flush with private investment and venture capital funds. This is happening in a country where online vendors largely operate on a cash-on-delivery (COD) basis. Credit cards or PayPal are rarely used; according to the Reserve Bank of India, 90% of all monetary transactions in India are in cash. Even Amazon localized its approach in India to offer COD as a service. India and other middle-income countries such as Indonesia and Colombia all have high cash dependence. But even where cash is still king, digital marketplaces are innovating at a remarkable pace. Nimble e-commerce players are simply working with and around the persistence of cash.
To understand more about these types of changes around the world, researchers developed an “index” to identify how a group of countries stack up against each other in terms of readiness for a digital economy. The Digital Evolution Index (DEI) is derived from four broad drivers:
- supply-side factors : including access, fulfillment, and transactions infrastructure;
- demand-side factors : including consumer behaviors and trends, financial and Internet and social media savviness;
- innovations : including the entrepreneurial, technological and funding ecosystems, presence and extent of disruptive forces and the presence of a start-up culture and mindset;
- institutions : including government effectiveness and its role in business, laws and regulations and promoting the digital ecosystem.
The resulting index includes a ranking of 50 countries, which were chosen because they are either home to most of the current 3 billion internet users or they are where the next billion users are likely to come from.
As part of the research was to understand who was changing quickly to prepare for the digital marketplace and who wasn’t. Perhaps not surprisingly, developing countries in Asia and Latin America are leading in momentum, reflecting their overall economic gains. But the analysis revealed other interesting patterns.
Take, for example, Singapore and The Netherlands. Both are among the top 10 countries in present levels of digital evolution. But when considered the momentum – i.e., the five-year rate of change from 2008 to 2013 – the two countries are far apart. Singapore has been steadily advancing in developing a world-class digital infrastructure, through public-private partnerships, to further entrench its status as a regional communications hub. Through ongoing investment, it remains an attractive destination for start-ups and for private equity and venture capital. The Netherlands, meanwhile, has been rapidly losing steam. The Dutch government’s austerity measures beginning in late 2010 reduced investment into elements of the digital ecosystem. Its stagnant, and at times slipping, consumer demand led investors to seek greener pastures.
Based on the performance of countries on the index during the years 2008 to 2013, researches assigned them to one of four trajectory zones: Stand Out, Stall Out, Break Out, and Watch Out.
- Stand Out countries have shown high levels of digital development in the past and continue to remain on an upward trajectory.
- Stall Out countries have achieved a high level of evolution in the past but are losing momentum and risk falling behind.
- Break Out countries have the potential to develop strong digital economies. Though their overall score is still low, they are moving upward and are poised to become Stand Out countries in the future.
- Watch Out countries face significant opportunities and challenges, with low scores on both current level and upward motion of their DEI. Some may be able to overcome limitations with clever innovations and stopgap measures, while others seem to be stuck.
Break Out countries such as India, China, Brazil, Vietnam, and the Philippines are improving their digital readiness quite rapidly. But the next phase of growth is harder to achieve. Staying on this trajectory means confronting challenges like improving supply infrastructure and nurturing sophisticated domestic consumers.
Watch Out countries like Indonesia, Russia, Nigeria, Egypt, and Kenya have important things in common like institutional uncertainty and a low commitment to reform. They possess one or two outstanding qualities — predominantly demographics — that make them attractive to businesses and investors, but they expend a lot of energy innovating around institutional and infrastructural constraints. Unclogging these bottlenecks would let these countries direct their innovation resources to more productive uses.
Most Western and Northern European countries, Australia, and Japan have been Stalling Out. The only way they can jump-start their recovery is to follow what Stand Out countries do best: redouble on innovation and continue to seek markets beyond domestic borders. Stall Out countries are also aging. Attracting talented, young immigrants can help revive innovation quickly.
What does the future hold? The next billion consumers to come online will be making their digital decisions on a mobile device – very different from the practices of the first billion that helped build many of the foundations of the current e-commerce industry. There will continue to be strong cross-border influences as the competitive field evolves: even if Europe slows, a European company, such as Rocket Internet, can grow by targeting the fast-growing markets in the emerging world; giants out of the emerging world, such as Alibaba, with their newfound resources and brand, will look for markets elsewhere; old stalwarts, such as Amazon and Google will seek growth in new markets and new product areas. Emerging economies will continue to evolve differently, as will their newly online consumers. Businesses will have to innovate by customizing their approaches to this multi-speed planet, and in working around institutional and infrastructural constraints, particularly in markets that are home to the next billion online consumers.
We may be on a journey toward a digital planet — but we’re all traveling at different speeds.
Short video about this article : http://bcove.me/nbmmm7et
Since the 1980s, Microsoft has dominated the productivity suite market. They increasingly extended their customer-base, and became a norm for offices and home users alike. With the trend towards cloud technology, new competitors like Google Apps emerged. Google Apps offers customers a freemium deal, where they receive the core product for free and can purchase additional cloud storage. Enterprise customers were offered a subscription-based payment plan, either monthly or annually, which gave them access to Googles services, but only until now. Google just announced that they will now offer Google Apps for Work for free for customers, until their contract with competing suites runs out. Google entered the market on the lower-end with their simple product offering, but increasingly extended their reach to enterprise customers. This new development can be considered an attack against Microsoft, an attempt to increasingly entice customers to switch from Microsoft to Google. Google now even offers firms to pay parts of their deployment costs, after their contract with competitors runs out. This strategy seems to be in line with the statement recently published by Amit Singh, head of Google for Work, where he says that Google wants users to use Microsoft and Google simultaneously, and that he believes in the long-run they will stop using Microsoft licenses. Eliminating the subscription model for enterprise users can be seen as an extension of this statement. Not only does Google want enterprise users to use the suites simultaneously, they also want them to do it for free, but only until their contracts with competitors run out. Then, Google will likely hope that customers switch completely to Google Apps. In any case, this new development will likely worry Microsoft, who are being attacked in their prime business area, the productivity suite market for enterprise customers. It will be interesting to see how Microsoft reacts to this. What do you think? What can Microsoft do to solidify their position within the market? What can they do to stop Google Apps from continuously stealing customers from them? They already introduced online functionalities to their traditional offline products to combat the trend towards the cloud, but can they change anything within their pricing structures?
Bort, J. (2015). Google shares its plan to nab 80% of Microsoft’s Office business. [online] Business Insider. Available at: http://uk.businessinsider.com/google-plan-to-beat-microsoft-office-2015-2?r=US&IR=T [Accessed 19 Oct. 2015].
Perez, S. (2015). Google Goes After Microsoft And IBM By Making Google Apps For Work Free While Customers Still Under Competitors Contract. [online] TechCrunch. Available at: http://techcrunch.com/2015/10/19/google-goes-after-microsoft-ibm-by-making-google-apps-for-work-free-while-customers-still-under-competitors-contract/ [Accessed 19 Oct. 2015].
Let me ask you a question. When you want to buy something, what are the first steps you take? You “google” your product. You ask your friends. Or you visit the website where you think they’ll probably have. Right? This creates a standard for your searching pattern. If you are predictive in your search pattern, big companies can use this in their advantage, especially if you use Google for everything. Google’s entire business model runs because of this.
Since the latest generation “Z” is used to use the Internet all the time, you see signs as online shopping is growing tremendously. E-commerce is thereby becoming more and more important. Companies as Amazon and Alibaba are now growing every day. Due the economies of scale and higher efficiency, they manage to keep their costs low and therefore sell items at low prices as possible.
The E-commerce business also relies on the reviews consumers place. Other people’s experience also does matter. Thus, consumers are connected in a social level.
Big platforms, such as Google, are making advantage of their information power. Google sees an opportunity, by launching Google Shopping, in helping webshops selling items through their platform. Instead of browsing through various websites as a consumer, checking for the cheapest items, hoping for the website to be reliable; Google takes all those concerns away by making it more convenient for the future shopper.
The same goes for Facebook. Facebook isn’t all about social media anymore. They implemented Facebook Shopping (helping webshops) into their website and you can purchase the items with your Facebook credits. That’s right; Facebook also has a paying system. The new sunglasses you asked your friends with a Facebook update, is now advertised through Facebook and you can pay for it, again with your Facebook account.
You can easily stick to less websites since business models from various platforms are expanding. What’s next: YouTube will take over television and start streaming everything? This is already happening over time.
Normally, I think a company should stick to one secure business model by doing where they are good at. Somehow, Google and Facebook found their way in doing this in a good way.
Are they loosing their focus? Or is this the way they can take over people’s mind and let them use their platform for almost everything? What does this mean for small companies if these big players take over a large market share and are active in several markets? Is it a battle between the giants such as Facebook and Google?
Not that I’m concerned, but I’m pretty curious about this. What I can give you as a tip is to use your common sense. Don’t forget about other players than Facebook and Google in the E-commerce world.
What do you think?
America’s national food, beverage and household brands struggle to regain favor in the hearts and minds of US consumers for the fifth year in a row, according to Deloitte’s annual “American Pantry” study (June 2015) of more than 354 brands across 34 product categories.
Consumer packaged good is a type of good that is consumed every day by the average consumer. The consumer packaged goods industry is one of the largest in North America, valued at approximately US$2 trillion. Although growth has slowed in this industry, companies that provide CPGs still benefit from large margins and strong balance sheets.
Nearly 3 in 4 (73 percent) consumer packaged goods (CPG) categories show an overall decline in their brands’ “must-have” status, meaning that shoppers would purchase whether on sale or not. However, this year’s study also showed a drop in store brands’ appeal, improved consumer perceptions of the economy, and shoppers’ willingness to pay a premium for attributes such as health and convenience–which may signal a turning point that is set to further disrupt the CPG industry after years of consumer caution.
While the majority of consumers say they are committed to sustained frugality year after year, findings point to early signs that they may finally be responding to a belated but increasingly strong economic recovery. It creates tremendous opportunities and risks for companies in this sector, given households’ lack of commitment to national brands brought on by years of stretching dollars to the limit. Brands that get things right can use the economy’s momentum to regain their place on consumers’ shelves, but those that move too slowly could very well be left behind.
While previous years of economic stagnation fueled consumers’ interest in store brands, this year’s study revealed that trend may be reversing as recession-weary consumers loosen their purse strings. The number of consumers who view store brands as a sacrifice (43 percent) jumped 10 percentage points, while fewer consumers (65 percent) indicate they are more open to trying store branded products, an eight percentage point decline.
Moreover, roughly one-quarter (25 percent) of consumers indicate they are willing to pay 10 percent or more for a product that is new or innovative, and one-third (33 percent) will do so for a craft version of food or beverages.
Digital paves the “path to purchase”
According to the study, more than half (55 percent) of consumers turn to digital tools to research products , up from 45 percent last year, and ahead of the number who do so to compare prices (48 percent), which remained flat compared with last year. This is a good example of the consumer informedness. Additionally, four in ten (37 percent) use devices to make shopping lists or meal plans. These behaviors signal multiple points to interact with people along the path to purchase outside of traditional discounts, from building today’s list to planning next week’s dinner.
Consumer packaged goods companies should note that when it comes to online orders and delivery, there is a noticeable gap between consumers’ interest levels and current activity. For example, 38 percent of consumers are interested in online grocery orders for in-store pick up, but only 11 percent already use this service. Similarly, 27 percent are interested in home delivery orders placed online for recurring purchases, but only 11 percent already use such a service. The study suggests there may be a shortage of services consumers seek, creating significant unmet demand that CPG companies can pursue for growth.
Winning at the shelf: Price is just one tool
Understanding the drivers of at-the-shelf purchases can help brands improve their promotional strategies and better connect with consumers, according to Deloitte’s study.
Roughly half (51 percent) of consumers make purchase decisions at the shelf, and while discounts and promotions are important, they are not the only deciding factor. When asked what triggers an impulse buy, 89 percent of shoppers cite discounted prices, but many also indicate that they bought an item because they remembered it when they spotted it in the store (81 percent), and nearly two-thirds (63 percent) say they did so because they wanted to try a new product.
Although price remains the single biggest factor influencing at-the-shelf purchases, many other aspects can also catch shoppers’ attention. CPG companies should step back and consider challenging the status quo, rather than immediately resorting to discounts and promotions. Focusing more effort on non-price related triggers might seem risky in the short-term, but may improve long-term brand health, loyalty and margins.
Health and wellness attributes also rank high on consumers’ shopping lists. Nearly nine in 10 consumers (86 percent) prefer convenient options that are also healthy, and 25 percent are willing to pay a 10 percent premium or more for healthier versions of a product. Further, 41 percent chose the product at the shelf because the label addressed their health and wellness concerns.
Do you recognize yourself in these findings?
How often do you stand still for a red light, while you are in a hurry? Waiting in those traffic jams when you’re heading to work are becoming annoying every day. Not finding any parking space close to your favourite restaurant where you have a reservation in just five minutes. And since the world’s urban population is expanding, these problems can become even worse.
Fear no more! With the upcoming technologies and smart devices, it becomes easier to save your time in a precise way. This blog is about the upcoming trend of cities worldwide are becoming smarter!
According to the Guardian, cities such as Amsterdam, Barcelona and Manchester are getting. Smart cities are cities that are you using technology on a useful manner by developing techniques of combining people, data and IT processes all together. By building sensors, cameras and using several other devices, cities create a huge amount of measurable big data. This big data helps a city to make it more safe, accessible, pleasant or more green simply by analysing it.
Second, municipalities can also make use of their own data by knowing its citizens: where they live, their work life, when they do groceries, et cetera. This helps the city to plan their next move for building a new shopping mall for instance.
Also, more and more devices are connected to the Internet. All these devices are collecting data with their sensors and monitoring every move. Imagine if all these devices are uploading valuable information to the Internet and find a way to communicate with each other in a network. And this network is connected to various platforms or cloud-based services. This so called collaborating from smart devices is called the Internet of things.
Example. Imagine your phone knows that you have an appointment within an hour. Normally, you think that it will you take you twenty minutes to get there. What you don’t know is that there is a car accident in your planned route. Your phone can suggest a new route and tell you at what exact time you have to leave from the location you are at. If more people work this way, municipalities have the control over traffic jams in their city and people can easily be alerted in time. Local police can schedule their surveillance route more efficient.
Due this change in technology, cities can predict or respond quickly to what is happening in a city. Managing these data flows (big data) helps them to regulate air pollution, create more safety for their citizens or manage traffic for example. This is spread out in smart city segments such as energy, transportation healthcare, building, infrastructure and governance. By doing this, cities can improve the quality of life for their citizens.
Using all this data, gives companies an opportunity in this market. Think about from analysing and securing this data. This data creates a lot of potential. According to an article in the Forbes written by Sarwant Singh, two researched found out that this combined market has a potential worth $1,5 trillion worldwide. Smart cities can take different roles in these engagements:
What do you think? Does the future seem so bright? Are you afraid like you’re always been watched? How about the security issues with all this sensitive information?
Let me know what you think…
In recent times, online retailing has undergone significant transformation as a result of increased competition. In this fierce competition, Amazon is one of the leading players.
A thorough analysis of Amazon’s IS strategy showed us that Amazon has always been a forerunner in innovating and implementing the newest technologies and IS strategies. Amazon follows a data driven approach and has heavily invested in big data analytics. These intelligent models have helped provide customized solutions to customers. Amazon has also greatly leveraged its partnerships and set up successful networks. Such and many other strategies have been key success factors for Amazon.
However, consumers have become more demanding in terms of having an enriched shopping experience. While interviewing an Amazon employee, we found that increasing product return rates has become a disturbing trend from them. One emerging technology we felt could help them reduce their returns rate and enable them to create a strategic difference in its business approach is ‘Augmented Reality’. Since customers will be able to make better informed purchase decisions, there will reductions in returns.
A thorough evaluation of the AR technology proved to a feasible venture for amazon. Amazon has already ventured into this arena with Amazon Flow, a visual search engine. Amazon also plans to expand further in online groceries segment where AR has already made waves. Thus venturing in AR is strategically advantageous for Amazon. Technologically as well, there are not many constraints since a wide variety of applications already exist. Amazon’s main task would be to collate these different technologies and integrate them.
Internet will be the primary mode for user interaction for the AR system. Also, a camera would be required to capture the user’s physical environment. In order to ensure that the user sees the actual size of the virtual product, the Tangible AR technique can be implemented. (Kato et al, 2000). The implementation of the AR system should begin with pilot implementations in the first year as it would give meaningful insights and customer feedback. Secondly, it is important to integrate the newly developed AR system with the existing knowledge base and workflows. The context-specific information gathered from AR can be used to enhance other functions such as warehousing requirements, delivery logistics and relationships with third-party sellers.
The benefits that Amazon will be able to gain with successful implementation of AR are increased sales and profits, lesser returns and increased customer satisfaction. Amazon could also find new avenues via AR and this will reinforce Amazon as a pioneer in technological innovation. We have also identified some risks like compatibility issues in integration of available technologies. Since AR is still emerging, there is no confirmation of the final cost of the implementation. If the final developed system ends up too bandwidth-heavy, too slow or the interface is difficult to comprehend, it will dissuade customers from using the feature.
In conclusion, we can see that there are certain risks involved with implementing this new technology but the benefits certainly outweigh these risks.
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Social media has totally integrated in to our lives. We are constantly updating our status on Facebook or Twitter to let our social network know how we are feeling and what we are doing. For that reason Twitter is an ideal source for data if you want to predict human behavior on a large scale. Researchers from the University of Rochester thought the same way and wanted to make prediction on human behavior on a large scale that would be useful for both individuals and organizations. They therefor decided to try and predict the spread of diseases through Twitter posts. And they succeeded to do so, but how did they do it?
A twitter post contains a couple of simple elements. First of all there are some lines with text in which a person self-reports what he is doing or how he is feeling. From this they were able to detect if a person was having an influenza-type of disease. A twitter post also contains a date and a time, which needless to say helps map out the pattern of disease spread on a more detailed level. However, what they first of all need to map out the pattern of disease spread is a location of someone who is giving of influenza type signals. They achieved to collect this data through the fine-grained GPS location that is attached to a Tweet. By tracking this data from millions of tweets they were able to map out the spread of these influenza type diseases (Couwenberg, 2011; Sadilek, Kautz, & Silenzio, 2012). After that they created an application called GermTracker were you can explore the pattern of the spread of diseases. It also shows you on a map were sick people have been in the last couple of hours and were you currently are through your GPS location and how sick people near you could have impacted your health (Humanaut, 2015; Sadilek, Kautz, & Silenzio, 2012).
However, they took it a step further by combining these patterns of disease spread with dozens of other factors that compose a threat to a persons health like pollution levels. From this they are able to make predictions eight days in to the future about what your health is going to be like. They do this by combining these different data sets with your GPS locations of the last couple of days. For example, people that take the subway every day, visit bars often or live close to pollution sources are significantly more likely to catch the flu. According to researchers from the University of Rochester these predictions are right 90% of the time. They track around 10 cities over the world which gives them a pretty good idea of what a typical day in terms of diseases look like in these cities based on historical data. The can compare new days with these typical days and issue alerts when they see a rise in the number of sick people in a certain geographical area. On a personal level a person can use this information to make choices that can help him avoid getting sick. For example, you could decide to not take the subway to your work but go by bike. According to the researchers the application could also be of public use by assisting the government in giving of health alerts (Sadilek, Kautz, & Silenzio, 2012).
Personally, I cannot see the benefits of obtaining all this information on a personal level. In my opinion you cannot run from a disease and I wouldn’t want to spend my time on trying to avoid it. But seeing the fact that ten thousands of people use GermTracker on a daily basis, this is apparently a matter of opinion. On a public level however, I think this application has a huge potential when it comes to assisting public health institutions. For example it could help hospitals by alerting them that they can expect a higher number of people coming in with certain diseases and thus help them more effectively deploy human resources. It could also assist hospitals in estimating the number of flu shots that should be available by predicting the chance of a flu epidemic. What do you think about this application? Would you appreciate it that an application lets you know that an hour ago a sick person was at the restaurant where you are now eating a meal? Would you like to know that you are going to be sick in a couple of days or would that be a depressing thought for you? Definitely interesting questions which will probably differ from person to person.
Couwenbergh, H. 2011. ‘De anatomie van een tweet’. Tweetmania [Online], Available: http://twittermania.nl/2011/04/de-anatomie-van-een-tweet/ [19 Oct 2015]
Humanaut. 2015. ‘Germtracker’. Humanaut [Online], Available:
http://humanaut.is/projects/germtracker/ [19 Oct 2015]
Sadilek, A., Kautz, H., & Silenzio, V. 2012. Predicting Disease Transmission from Geo-Tagged Micro-Blog Data. Proceedings of the Twenty-Sixth AAAI Conference on Artificial Intelligence.
NeuroSciences is a hot topic within business. Especially concerning marketing. Creating a marketing strategy by basing the decisions on customer’s neurological feedback data can open news ways of conducting business. Neuromarketing is a field of marketing research that studies consumers’ sensorimotor, cognitive, and affective response to marketing stimuli.
A good example of a firm using neurosciences in marketing is Netway Sa. Netway SA is a Luxembourg based firm that specialises in NeuroMarketing. Their philosophy is based on approaching business rationally. Its a small firm with offices in luxembourg and Brussels, it operates with under 20 employees and has worked with major clients such as Nespresso and ING. They specialise in website architecture, more accurately the user journey through a website.
Instead of designing websites based on the designer’s gut feeling, Netway bases its choices on pure data. Netway uses neurological feedback from customers to design a user pathway leading the customer to the desired outcome in the website. Their goal is to make the user experience as smooth as possible while ensure that the website serves its purpose. For example, in an after sale service website, the business goal of such a website would be for a reduction in call. Netway will design a website that enables the business to do just that.
Similarly to all good scientific processes, steps must be followed. For Netway it starts with analysing the business needs of their clients, what they aim to achieve through their website. Once the top business goals have been established this small luxembourgish firm designs a website step by step, after every step, the prototype of the website is tested with an average customers. While the customer navigates through the website, the company measures 63 behavioural indicators (using Eye tracking, fMRI and EEG) that shows them how this website performs neurologicaly. Over the years the company learned to understand the data and predict certain behaviours, details such as where the customer looks and when, tells them if their current design is serving the desired business goals.
This shows how data can really shape the way marketing is being conducted, there are endless possibilities for neuromarketing to evolve and this only shows one of the current adaptations. The use of neuro data can sometimes been seen as manipulative however some might argue that it is just creating perfect designs. What do you feel are possible applications of such technologies?
Cable TV has been a big part of most of our childhood shows. But with the advent of the internet era, it is slowly losing to Subscription video on demand (SVoD) providers. Streaming giant Netflix has taken over the market and is currently eclipsing television viewership. Let us take a closer look at a statistics from Nielsen’s survey. 40% of all US households with Cable TV or broadband connection use a SVoD service like Netflix, Hulu Plus or Amazon Prime, out of which Netflix dominates as expected with a 36% share.
Such is the phenomenon that households are increasingly subscribing to only the internet to access SVoD and not subscribing to cable television. This is especially prevelant among young families and students.
The number of households who have broadband connection but do not subscribe to television grew by 16% from to 10.5 million in 2014 as compared to 2012. TV ratings are also on the decline while those of SVoD services like Netflix are shooting up. All this leads us to question whether Cable TV has joined the list of vulnerable markets which are disrupted by the advent of Information and the Internet. We answer this question using the vulnerable market hypothesis by Nelson F. Granados, Robert J. Kauffman, and Bradley King.
- Easy to Enter: The availability of internet has allowed streaming service providers to use it as a low cost distribution channel, something which the incumbents had never tried out before. The internet gives them access to a global audience and hence they are able to gain volumes which they would not have been able to otherwise.
- Attractive to Attack: There exists a customer profitability gradient in the entertainment industry which the new entrants are exploiting. The cable TV providers have for long followed a one size fits all approach. They have floated expensive channel bundles and most viewers had to choose from a fixed set of alternatives. But the streaming service allows viewers to compile their own list of channels which view on a regular basis. For less than $10 a month, one can sign up for Netflix and browse what they have to offer. Since there are no termination fees involved, viewers have the flexibility to cancel the subscription as well. Thus streaming service providers have managed to opportunistically pick off the most passionate viewers who have a higher willingness to pay provided they get exactly the content they want to view. This has left Cable service with the leisure and occasional viewers. No wonder the TV ratings are tumbling.
- Difficult to Defend: Premium networks CBS and HBO announced their won streaming services for next year. In fact CBS shows, past and present can be viewed by subscribing to its streaming network for only $6 a month. This is a major blow to cable service providers since these are marquee brands available only on Pay TV. With such brands announcing their plans to circumvent the existing delivery system, cable TV has just been hit with another bullet. Cable TV providers need to understand the needs of the customer better and provide more customized bundles if they have any chance of a fightback against the SVoD dominance. They have to get rid of the rigid pricing structures and must try to be flexible as per consumer preferences.
Cable service providers have thus got a massive challenge on their hands. As I near the completion of this report, I am myself looking for a streaming service to show me the weekend’s soccer matches. Can Cable TV do something ? Please let me know your views.
- Granados, N., Kauffman, R.J., and King, B. 2008. “How Has Electronic Travel Distribution Been Transformed? A Test of the Theory of Newly-Vulnerable Markets”. Journal of Management Information Systems 25(2) 73-96
- Nielsen, Total Audience Report Q4 2014. Available at: http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2015-reports/total-audience-report-q4-2014.pdf
- The Los Angeles Times, “Moves by HBO, CBS could be tipping point for a la carte pricing” Available at: http://www.latimes.com/business/la-fi-lazarus-20141017-column.html
The Dutch supermarket industry revenue amounts to 41.3 billion euros a year (Euromonitor 2015) and it keeps growing annually. Namely, the associated profitability and the increasing trend for online shopping have strongly influenced the strategies of players in this industry. In 2014, Dutch supermarkets sold 450 million euros worth of groceries through the Internet, which is a 55% increase in comparison to the previous year (Boogert 2015).
The most relevant grocery retail trends spin around online presence, the development of mobile applications and the emphasis on low prices as those incorporate the growing mobility and price sensitiveness of individuals. However, more and more awareness is also being raised in the field of conscious purchasing, food waste reduction and the use of the so-called “ugly foods”.
Our project deals with how the Dutch supermarket chain “Marqt” could effectively align its strategy in order to adapt to the ongoing trends of digital commerce and sustainable product offerings. Marqt is a supermarket chain centered on providing real and original foods that must be locally and sustainably produced and that may not contain any artificial additives. Mostly for this reason, its main customer base consists of “trendy” upper-middle class individuals, which is more or less a niche market. Due to the absence of a loyalty card program, an online store or a mobile app combined with the presence of a weak IT infrastructure, a few options that could aid into the digital transformation of the company were identified and throughly examine so that the supermarket chain would be able to increase its reach and attract more customers.
Marqt already targets food-conscious customers, who value the quality and source of the products they purchase as opposed to only a low price. Therefore, a three phase technology strategy was developed to strengthen Marqt’s unique market position. The first phase consists of an ugly food campaign and the development of a mobile application to expand the customer base. The second phase is an upgrade of the application and the implementation of bundle sales to achieve new cost savings. Finally, the third phase is the development of a full-fledged mobile application creating big data analysis and predictive shopping opportunities. This three phase solution, with iterative strategy adaptation would allow Marqt to develop their technology step-by-step, to ensure its success.
Regarding the resulting benefits, upon careful analysis of the implementation plan, it was estimated that the process would benefit Marqt by increasing customer reach, overall sales and decreasing costs through economies of scale. Furthermore, Marqt would achieve competitive advantage as the first sustainable supermarket with a mobile application and would effectively make use of big data analytics. On the other hand, customers would benefit from quick deliveries, low prices and new bundle services, while the rising distribution of ugly foods would decrease food waste.
Boogert, E 2015, ‘Online Omzet Nederlandse Supermarkten: 450 miljoen’, Emerce, 9 June, viewed 14 October 2015,<http://www.emerce.nl/nieuws/online-omzet-nederlandse-supermarkten-450-miljoen>
Euromonitor, 2015, Internet Retailing in the Netherlands, Euromonitor, viewed 11 October 2015,<https://www.portal.euromonitor.com/portal/analysis/tab>
Robbert Slot 359775
Gustav Martins Upmanis 388884
Kuni Nakajima 366667
Desislava Danovska 356770
Simone Jeurissen 373456
The health of heart disease patients can be improved by technology that they are already familiar with: cellphones. During a recent study, patients with heart disease enrolled in a program and received four text messages on a weekly basis on their cellphones, whereby encouragement was made to make heart-healthy lifestyle choices (the name of the technology is called TEXT ME). These encouragements include messages related to reducing salt intake, quit smoking, etc. 325 patients have received such messages over the course of a six-month study. In order to establish a comparison, a separate control group of patients with coronary heart disease did not receive a text message concerning the health of their heart. At the end of the study period, the group that received texts had lower levels of bad cholesterol, lower body mass indexes (BMI) and lower blood pressure than the control group. The text receiving groups were more likely to have a tendency to quit smoking.
This study is one of the many recent studies that attempt to reap the benefits of technologies to tackle heart diseases by using everyday technologies (e.g., cellphones) to fight against cardiovascular diseases. Many apps exist that aim at assisting patients to monitor their heart health, but not much research has been conducted that tests whether those apps actually work. These trials such as TEXT ME prove that interventions concerning mobile health, can positively influence behaviors of patients and improve risk profiles in the short term, even if these applications are extremely simple. Even other text-messaging technologies that aim at motivating to act upon the tendency of weight loss and smoking cessation have shown equally promising results.
The study however had some limitations, even though the technology showed promising results in fighting heart disease. The first limitation is that is solely conducted on one location (Australia), which makes it unclear if the results would be the same among patients living elsewhere (Chow et. al, 2012).
What do you think about this technology? Do you think it would help you being more healthy and skip that glass of soda in the evening?
Chow, C. K., Redfern, J., Thiagalingam, A., Jan, S., Whittaker, R., Hackett, M., … & Hillis, G. S. (2012). Design and rationale of the tobacco, exercise and diet messages (TEXT ME) trial of a text message-based intervention for ongoing prevention of cardiovascular disease in people with coronary disease: a randomised controlled trial protocol. BMJ open, 2(1), e000606.
I would like to introduce a new company/platform, which is invented by two Dutch men: Trunkrs. The concept of Trunkrs is quit new and very interesting.
Trunkrs is a platform where everybody (with a driver license and a car) can register themselves as a deliverer of packages. It is a new kind of a C2C platform, where consumer and consumer find each other. The system is innovative and easy. It provides to earn some extra money, next to your daily job / life. Let me explain the concept with an example: if you are living in Utrecht and you are working in Amsterdam, everyday you ride the same distance and the same road between Utrecht and Amsterdam. Why wouldn’t you bring someone’s order / package to him or her if it were on your road? Trunkrs enables this.
It’s working as follows:
1) You register on the website of Trunkrs (www.trunkrs.nl) and become a Trunkr
2) You fill in where you’re going to (each day)
3) You take the package
4) You deliver it to the owner
5) You get paid by Trunkrs
One of the most valuable things of this new platform for the receiver of the order/package is that the delivery is the same day (delivery 2.0) as the receiver places the order. If you place your order before 15:00, you will get your order the same evening. This is quit new in the Netherlands and for some people this possibility is still a little bit unbelievable. With the technological opportunities and technologies of nowadays, we should not be surprised with projects like Trunkrs. It is really a valuable concept. The consumer (receiver of the order) gets his or hers order the same day and the driver (the Trunkr) earns some extra money while he or she is driving to work / to home.
On the website of Trunks you can find more information about them.
The Free to Play pricing strategy to the gaming industry equivalent of FREEMIUM. FREEMIUM usually refers to business models such as LinkedIn or Dropbox similarly Free to play games (F2P) are games that users can access for free. The revenue model of these games usually is based on selling additional features such as “Extra Lives” or can be based on creating a revenue stream from advertising. This pricing strategy currently rules the Smartphone gaming industry. See the graph bellow.
Out of the top 100 grossing apps, across the major mobile platforms, were using this model.
Keeping in mind that within these apps 91% in googleplay, 80% on iPhone and 72% on iPad are apps tied to games.
Some argue that such game do not have the potential to create sustainable profits as shown by candy crush saga’s fall in popularity and revenues.
However some games do it right.
Dota 2 for example a Multiplayer Online Battle Arena game is one of the most successful free to play games offered by Steam, the most popular online market for PC video games.
What does Dota 2 do better?
The game focuses on giving the free player the best possible user experience. The features offered by Valve (Developers of the game) are not based on annoyance such as Ads or longer loading times, neither are based on performance features. There is not one feature offered that gives any player an inherent advantage over others. Instead “items” that allow users to customise and change the appearance of characters, and items that allow to alter their gaming experience, such as different interface looks or background musics are sold for prices ranging from $1 to 10$ on average.
By offering free users an optimal user experience, Valve also makes sure to maximise the size of the player network. This enables the company to find alternate revenue sources based on the devoted community. An example would be the yearly tournament organised by the Developers. Every year Valve organises a tournament in which the 20 best teams around the world meet to become the world champions. This event is followed by fans all around the world with hundred thousands of people watching the matches live.
Taking the International 2015 as an example what really was interesting about the international is the way they raised the money constituting the prize pool. They created new Special items and features especially designed in honour of the event that were sold at different times throughout the period preceding the tournament. A percentage of the revenue generated by these items was used for the tournament reward prize pool and the rest became pure profit. this motivated the players to purchase the items for two reasons: they were limited Items only sold during the event and they were contributing to making the tournament a success. Moreover the more the users spend, the more rewards benefited the the entire community. At every New $million reached, the players were granted new special Features affecting all players. On the graph below you can see how each newly available items created sudden rises in the money raised.
This example shows how the Free to Play pricing strategy allows for the creation of infinite revenue model possibilities. When done right, F2P models can also make customers happy to spend money on the game if it means helping a community they are proud to belong to. This pricing strategy has only been introduced to the gaming industry a few years ago and has been ruling it ever since. This shows the true potential of the FREEMIUM economy. What will the next industry be?
Using information management to predict questions by customers
In the service industry, service providers often receive the same questions over and over again. However, in the service industry it does not matter what question you receive, it all depends on your solution and communication of that solution. The service industry has changed from the back side of a company to the front end and flagship of a company. This claim is supported by Singh (2011), “the service industries these days involve the front end facilities, which help in serving the customers in order to clear the immediate needs and to make him comfortable for the other service demands.” In a more demanding economy, customers expect the service provider to help them immediately fix their problem.
From my experience as a helpdesk employee, clients often state the same question multiple times. With the current information systems, it might be possible to predict the question a customer will ask. For example, a new customer will be more likely to ask a basic question and can therefore better be redirected to a less experienced worker, so that a more experienced worker is available for other questions.
In a way, you would like to predict customer behaviour. One way is using the model explained by Optimove. Through this system, customer behaviour is tracked for a period of time and an analysis is created. However, it will be difficult to correctly implement this, since there is no knowledge about what a customer is doing at the moment they need the service desk. Therefore, such a model should never be leading in an organization but it can be used as an predictive model to decrease the time for a solution to be proposed. In my opinion, such a system would be extremely useful when implemented in a correct way and with the right parameters to perform the analysis.
Singh, K. (2011), What is the role of management information systems in the service sector, http://www.mbaofficial.com/mba-courses/management-information-system/what-is-the-role-of-management-information-systems-in-the-service-sector/
TheLeanSixSigmaCompany is active in the consultancy sector, where they advise, coach and train organizations and individuals the Lean Six Sigma methodology. This methodology offers a framework which allows the organization to continuously improve their business processes in a structured way. By analyzing the business model and the environmental analysis, TLSSC needs to innovate to be able compete in the market. TLSSC currently has a traditional way of educating people and they could increase their performance by introducing e-learning in their business model. Three methods of e-learning, Blended Learning, Virtual Mentor and Virtual Classroom, are analyzed and than graded based on a Balanced Scorecard. Blended Learning is the most traditional of the three, as this entails a combination of tradional physical courses and online learning to complement these traditional courses. Virtual Mentor and Virtual Classroom are completely digitalized, but differ in the way of contact with the instructor. The grading criteria used in this analysis are based on an interview with one of the owners of TLSSC. These objectives are the most important aspects for TLSS and needs to be taken into account when determining a new strategy.
Virtual Classroom achieved the highest score and would be therefore the desired method. Regarding the current state of TLSSC’s operations, Virtual classrooms are not suitable yet for TLSSC. Therefore TLSSC should start with implementing Blended Learning, which still incorporates part of the traditional way of teaching, one of the core values of TLSSC. Blended learning will help them to extend their courses online, saving time of the trainers. When TLSSC has mastered the concept, their next step will be to gradually implement Virtual Classroom.
Last week Match Group announced their IPO. Probably you’ve never heard of Match Group before, but when I tell you it is the parent of Tinder most of you might know it. With this IPO they’re planning to collect $ 100.000.000,- . It made me wondering how it’s possible that an in essence free dating app can be worth so much.
The first thing I found out is that Match Group, also owner of OKcupid and Match.com, managed quiet well to create revenue. With total revenues of $ 883.300.000,- dollar and a net income of $ 148.400.000 for 2014 they are a big player in the booming market of online dating. For the U.S. the use of dating sites increased the last five years from 2,7 million in 2009 to 5,6 million in 2014 (Datinginsider, 2015). And U.S. has with its 2% “online” citizens active on dating sites a far lower number than Europa, with 15%. According to Egan (2003) the online personal category is one of the most lucrative forms of paid content on the web.
Why is online dating so popular? In their research Ellison et all (2006) have a quite logical answer to that. Mediated matchmaking isn’t something new and overtime the social stigma on online dating was diminished. That combined with only needing an internet connection and the possibility to date within your comfort zone and the affordable cost of internet match making results in low barriers. Another upside from online dating is the possibility to build your own profile and what is seen is that people often present the ideal version of their selves: their profile represents a combination of who they actually are and who they want to be. But, with a possible offline encounter in mind, they also tent to create a reliable presentation of theirselves.
Tinder was a first mover regarding location-based real-time dating (Handel & Shklovski, 2012). According to CEO of Match.com, Sam Yagan, Tinder gives the people what they want: an easier and faster way to meet someone new in real time. “This device is the thing that marries online dating and offline dating…. Mobile dating is one of the few digital products that, when you use it, is designed to lead to a meeting.” (James, 2015). And maybe that is why Tinder became so popular: It is free, easy to use (just link it to your Facebook and you’re online) and it creates a bridge between online and offline. By adding paid features they are able to create revenue. The question is, is it worth another $ 100.000.000 ?
Ellison, N., Heino, R., & Gibbs, J. (2006). Managing impressions online: Self‐presentation processes in the online dating environment. Journal of Computer‐Mediated Communication, 11(2), 415-441.
Handel, M., & Shklovski, I. (2012). Disclosure, Ambiguity and Risk Reduction in RealTime Dating Sites. Proceedings of the 17th ACM international conference on supporting group work. 175-178.
James, J. L. (2015). Mobile Dating in the Digital Age: Computer-Mediated Communication and Relationship Building on Tinder (Doctoral dissertation, Texas State University).
Wells, J. & Armental, M. (2015) ‘Match group files for IPO’, The Wallstreet Journal, 16 October 2015, Available: http://www.wsj.com/articles/match-group-files-for-ipo-1445032992
Dating Insider (2011) ‘Vijftien procent internetgebruikers gebruikt wel eens datingsite’ 23 December 2011. Available: http://www.datinginsider.nl/vijftien-procent-internetgeruikers-gebruikt-datingsite
Dating Insider (2015) ‘Gebruik van datingsites in de laatste vijf jaar verdubbeld (VS)’ 7 March 2015. Available:http://www.datinginsider.nl/gebruik-van-datingsites-in-de-laatste-vijf-jaar-verdubbeld-vs
With fitness bracelets and mobile apps some people allow voluntarily to keep track of sleep patterns, exercise, nutrition and stress. But since companies are dealing in those dates, the confidentiality of our biological data is placed under pressure. The upcoming revision of the data protection law will not give us enough protection. Therefore, a fundamental review of our privacy law is required.
Technology and people are becoming more intimately connected. Technology is everywhere and without realizing it is collecting information about us. Companies follow surf- and click behavior. Besides that, companies start collecting biological data due to the introduction of wearables such as bracelets and fitness apps. Biodata can be used to deduce sensitive information about our physical and mental health. For example, walking patterns can show early signs of dementia.
Many people find it interesting to collect biological data of themselves. The reason for this is that the data can give some useful insights, for example a bad sleeping pattern on days they eat just before they went to bed. More and more companies want to have biodata: research found that 20 popular health apps share data with more than 76 parties. Further, health insurers are experimenting with health apps. Those who live healthy can earn points to pay less premium. Those things happen now on a voluntary basis. But it is certainly conceivable that there will be more pressure on employees and insured people to keep their health data.
In the Netherlands, there is a kind of protection – the concept of ‘informed permission’, part of the Data Protection Act. However, in the digital world this concept loses meaning. For individuals it is not clear what exactly happens with their data. For individuals to oversee it impracticable what happens to their data and what the consequences are. Data is traded in mini seconds through online auctions and enriched to detailed profiles. Consumers do not know what profiles they are assigned, neither what kind of products or services there will be offered to them of the basis of their data.
Trading in online data, the resulting information asymmetry and the effects of using data on individuals, ask for an adjustment of our fundamental right to privacy.
Do you agree that the government should take action to protect us from the data industry?
https://rathenaunl.wordpress.com/2015/03/02/pas-op-voor-de-handel-in-onze-hartslag-en-bloeddruk/, 2015, used on 19 October 2015
Information management in auditing
With an increase in information in companies, there has been additional pressure on the audit procedure to ensure the information flow is free of fraud. Buchanan and Gibbs (2007) claim that “the information audit (IA) is central to the effective organisational management of information, however, there is
evidence from the field that the IA is neither fully accepted nor commonly practiced.” In an economy, where information is gradually becoming more important it cannot be the case that an audit will not focus on these processes. If we refer to the intra-organizational information systems, all parts of the value chain communicate with each other through information systems. This means that a transaction will be passed through different information systems and stored at different location. If we take an example of a bike manufacturer and its value chain. When an order is manufactured, this will be recorded in several information systems, like the operational, transaction-processing and financial information systems. It cannot be the case that when these systems communicate information, thus creating a flow of information, this will not be checked in an audit. This is also the conclusion of Buchanan and Gibbs (2007).
In the recent years, the focus has been placed on the flow of information, through the performance of an IT audit. For example, EY created a document about the ten key IT considerations for an internal audit. EY (2013) claims that “considerations related to information technology are central to any organization’s effort to ensure that issues are addressed quickly and thoroughly.” It is positive that audit firms also shift their focus to the IT side of a business. However, it also creates challenges since companies will need IT savvy employees, who are also interested in auditing to perform these audits and set a minimum standard
Buchanan, S. & Gibb, F. (2007), The information audit: Role and scope, International Journal of Information Management, p. 159-172
EY (2013), Ten key IT considerations for internal audit, http://www.ey.com/Publication/vwLUAssets/Ten_key_IT_considerations_for_internal_audit/$FILE/Ten_key_IT_considerations_for_internal_audit.pdf
Sustainability has been a hot topic for a couple of years know and people in the western world have incorporated sustainability more and more in their daily lives. Some examples would be the increasing number of households that is putting solar panels on the top of their roofs to produce green energy and the increasing sales of electrical car models like Tesla and Toyota Prius. Step by step we are becoming more aware that we are the tenants of our own planet and have to make wise choices about the use of both finite and renewable energy sources. From this, it can be concluded that environmental issues have become a public concern in the last decade. However, this development also has implications for organizations.
For many organizations in the market place, sustainability has become a so called order qualifier or order winner, depending on the specific market, industry and society the organization operates in (Shahbazpour & Seidle, 2006). Many of them have even incorporated sustainability into their mission statement like Unilever (2015) who states the following: “we are committed to continuously improving the way we manage our environmental impacts and are working towards our longer-term goal of developing a sustainable business”. Thus, sustainability has become a critical factor for organizations to compete in the marketplace and some of them have succeeded to turn it into a competitive advantage. But how does an organization become a sustainable business? Well, this is a complicated process which goes further then only making your business processes more environmental friendly, like reducing electricity usage or Co2 output in your production process. But it also encompasses altering an organizations identity by embedding sustainability into the strategy and changing the culture into one that supports sustainability. Research has found that “sustainable companies are willing and able to engage in the kind of ongoing transformational change that is required as social expectations evolve” and that “they aggressively create new processes, products and business models that improve environmental, social and governance performance” (Eccles, Miller Perkins & Serafeim, 2012).
But what part is information technology playing in this story? Is it part of the problem or is it part of the solution? Well information technology itself is not a big part of the problem, seeing the fact that it only contributes for 2% of the global carbon emissions. However, IT is already a big part of today’s solutions. Currently IT is having a wide array of positive effects on business sustainability. IT has provided organizations with insights into their impact on the environment by giving them the tools to monitor environmental parameters like energy use and Co2 output. From these insights strategies can be developed to reduce these outputs. IT has also provided organizations with numerous tools to directly influence their environmental footprint, like e-invoicing which is making organizations more paperless (Economist Business Intelligence, 2009). Especially the future possibilities of enhancing business sustainability through big data analytics are very exciting. But we are only at the beginning of figuring out what we can do with the huge amounts of data that we are generating on a daily basis. However, big data is already giving organizations the ability to understand the entire end-to-end impact their business activities are having on sustainability. This means that they are also able to look outside the boundaries of their own organization, which is often the place were organizations have the biggest environmental impacts (Hsu, 2014).
So think about the importance of sustainability for your organization. Does it affect your market position or can you gain a competitive advantage from it? In which ways is your organization already a sustainable business and how can you make your organization more sustainable? But especially think about how IT can help you accomplish your desired state of business sustainability.
Eccles, R.G., Miller Perkins, K., & Serafeim, G. 2012. How to Become a Sustainable Company. MIT Sloan Management Review, 53(4): 43 – 51.
Economist Intelligence Unit. 2009. IT and sustainability: bringing best practices to business. Oracle [Online], Available: http://www.oracle.com/us/products/applications/green/056899.pdf [12 Oct 2015]
Hsu, J. 2014. ‘Why big data will have a big impact on sustainability’. The Guardian [Online], Available: http://www.theguardian.com/sustainable-business/big-data-impact-sustainable-business [12 Oct 2015]
Shahbazpour, M., & Seidel, R. H. 2006. Using Sustainability for Competitive Advantage. 13th CIRP International Conference On Life Cycle Engineering, Leuven, Belgium.
Unilever. 2015. ‘Purpose and principles’. Unilever [Online], Available: http://www.unilever.co.uk/aboutus/purposeandprinciples/ [12 Oct 2015]
Yes, you read that correctly. You might wonder how this will be enabled. It all comes down to a magic word: Technology.
Wearable sensors will provide a high-tech solution and be able to interpret the gestures in sign language and translate them into English, making the barrier between deaf people and those who don’t understand sign language. Engineers at A&M University in Texas are currently developing wearable devices that can sense movement and muscle activity in an individual’s arm.
How does this life-enhancing device work? This device operates by figuring out the gestures someone is making by the utilization of two distinct sensors. These sensors consist of one that is able to react to the motion of the wrist and the other one to the muscular movement in the arm. Afterward, a program wirelessly receives this data and converts it into English translation. After doing some research, the engineers concluded that there are devices that aimed at translating sign language into text – these did unfortunately not have a very advanced design. A prototype system was developed that recognizes words that people use daily in their daily conversations. Gradually more words are added that are not frequently used with the means to initiate a more profound vocabulary.
Even though the technology has the potential to drastically enhance the lives of deaf people, an important drawback is associated with the system. The system has to be trained to respond to each individual that wears the device. This training process involves in asking the user to repeat every hand gesture a couple of times. The latter can take up to 30 minutes to complete. The underlying reason for this mechanism lies in the fact that each body and each muscle structure is different, obliging the system to get acquainted with the user’s body movements (Dodgson, 2015).
What do you think about this technology? Do you believe it will enhance many people’s lives or make it more difficult?
Dodgson, L. (2015). Wearable Sensors Could Translate Sign Language Into English. Retrieved from: http://www.livescience.com/52491-wearable-sensors-translate-sign-language.html
Facebook, Instagram, Twitter, Airbnb, Amazon & co. We use online platforms and services all the time. Some more frequent than others. Some for social purposes, others for commercial ones. But what all these platforms have in common: they collect user data. (And we produce a lot of it, up to 2.5 quintillion bytes per day!) It starts with name, email, age, address and goes up to and beyond interests, daily habits, purchasing habits, personal likes and dislikes. Companies use this information to optimize their services, improve their products and for direct monetization purposes. These include showing you relevant ads and selling your data to 3rd parties.
“If you’re not paying for it, you are the product”
The question is, is this a future safe business model? Will users not want to take control of their data and monetize it themselves?
Some companies, including Google, are testing alternatives. In November 2014, Google launched an ‘ad-free net experience’. Here users could pay a monthly fee between 1 and 3 USD for ad-free sites. In this case your data is not used ‘against’ you, and revenues come from direct payments by the user. But you have to pay for it!
New startups are looking at ways to turn this trend around. One example is DataWallet. The startup lets you connect all your online accounts, including Facebook, Amazon and Twitter, to a DataWallet account. It then extracts all user data accumulated by the platforms you use, anonymizes it and then sells it to companies. You are put in control of your data. And can monetize it.
Check it out here: https://www.datawallet.io/?ref=2ss0uaglo8
Make sure you sign up and give it a try! They’ve got your data anyway..so why not try and make a buck with it?
What do you think, Is this the future? Will we soon have full control of the data we produce online, with the ability to monetize it ourselves? Or will it only run parallel to the current, existing business model?
by Martin Kayser (353884mk)
BBC News, (2015). Google launches ad-free net experiment – BBC News. [online] Available at: http://www.bbc.com/news/technology-30144073 [Accessed 2 Oct. 2015].
DataWallet, (2015). DataWallet FAQ. [online] Available at: https://www.datawallet.io/faq [Accessed 2 Oct. 2015].
Goodson, S. (2012). If You’re Not Paying For It, You Become The Product. [online] Forbes.com. Available at: http://www.forbes.com/sites/marketshare/2012/03/05/if-youre-not-paying-for-it-you-become-the-product/ [Accessed 2 Oct. 2015].
Ha, A. (2015). Backed By Tim Draper, DataWallet Pays Users To Share Their Online Data With Businesses. [online] TechCrunch. Available at: http://techcrunch.com/2015/07/10/datawallet-seed-funding/ [Accessed 2 Oct. 2015].
ibm.com, (2015). IBM – What is big data?. [online] Available at: http://www-01.ibm.com/software/data/bigdata/what-is-big-data.html [Accessed 2 Oct. 2015].
In the last couple of years, there has been a considerable increase in the number of drugs sold online, via the Dark Web. This number is only expected to increase, not at last because of the growing usage and availability of the Internet. I thought it was quite interesting to see how it appears to be quite normal nowadays to browse through the online catalogue of drugs, select your preferences, put the selected items in the shopping cart, and order. So I did a bit of research, and I have quite a story to tell you all, so grab that cup of coffee and embrace yourselves!
So, before we begin, here’s a short 101 on Dark Markets. In 2002 the ‘Onion Router’ (Tor) was released. This is a technology that basically allows everyone within these dark markets to hide their identity and location. It enables secure and confidential communication, preventing users (including governmental agencies) to track down your browsing activity. On Tor, virtually everything is anonymized!
Silk Road was an illicit platform on the Dark Web established in 2011, mainly enabling drug trafficking. In 2013 the Federal Bureau of Investigation shut down the platform and arrested its owner, ‘Dread Pirate Roberts’ a.k.a. Ross Ulbricht.
After the FBI took down Silk Road and arrested Ross Ulbricht and Charlie Shrem (the executive of a Bitcoin exchange service), one would expect that most of these underworld “businessmen” maybe would consider taking it easy for a while, right? Well, apparently these people didn’t get the memo! After Silk Road’s destruction, a plethora of new online drug markets emerged. The industry competitiveness increased heavily, driving ‘weaker’ drug firms out of business and opening a whole new world for drug dealers.
Now, indeed you might think; ‘How did that happen?’ But it’s quite simple folks. Basically the FBI shot itself in the foot! The arrests and the website-shutdown were widely publicized, introducing ‘dark markets’ to a much wider public. Buyers and sellers started establishing new platforms to keep up with the ever-booming business. So… I guess they actually did get the memo. Mike Power on the matter (google the guy if you don’t know him).
‘The FBI have acted as the most creative marketing and advertising agency that the hidden web drugs sector could have possibly hoped for’
Ladies and Gentleman, a round of applause for the FBI!
However, this does pose another question; if this incident has proven that the FBI is indeed capable of tracking down sellers active on these elicit markets – regardless of the anonymity Tor networks supposedly provide – why are these markets still growing? Well, one of the reasons is that dealers find it safer to do business online. James Martin of Macquarie’s Policing and Intelligence Research Institute states the following:
‘Law enforcement is only part of the risk for people who sell drugs. The bigger risk and more frightening risk is not someone kicking down the door to arrest you, but someone kicking down the door to kill you and steal your stash”.
These online drug markets offer both dealers and customers a less violent trade mechanism. In addition, the anonymity and highly competitive nature of these markets drive down prices and increase the level of quality, given that the vast majority of sales are exclusively based on customer reviews.
So now, you might be thinking; ‘What the hell does this have to do with the Bitcoin guy being arrested?’ Well, the most widely used digital currency in the dark web is Bitcoin (after all, of what use is it to browse anonymously if you are going to pay with your very traceable credit card?). Given that Bitcoin is an encrypted digital currency that allows for anonymous financial transactions, it was a crucial component to the establishment of Silk Road and crypto markets in general. Shrem (our Bitcoin guy) was involved in a money-laundering scheme that allowed Silk Road customers to convert money to bitcoins and vice-versa.
So after Silk Road was shut down, it only makes sense that the share value of Bitcoin crashed, losing up to half a billion dollars, that is, a drop of approximately 25%. However, as more online drug markets were established, Bitcoin’s value rose again above prior levels in a matter of weeks.
So why did I tell you all of this really? Well here are some of the lessons to be learned!
- The use of Tor browsers can be expected to increase exponentially; perhaps not so much because of the ease with which narcotics can be purchased, but more because it offers truly anonymous browsing for the vast majority of users (it took the FBI months to find Ross Ulbricht alone).
- The dark web has created a whole new landscape for criminal activities that current law enforcement techniques are not ready to tackle.
- The online drug markets will continue to grow (not at last thanks to the FBI’s need to be in the limelight).
- The implications of these mysterious markets are very much real. Ross Ulbricht is facing a life sentence, a high level executive has been arrested (more than can be said of the bankers responsible for the financial crisis), and the stock value of Bitcoin fell by up to $500 million upon the shutdown of Silk Road.
- Should you be an (amateur) investor or simply tempted to invest in Bitcoin, make sure to keep an eye on the developments in the dark web!
Buxton, J; Bingham, T 2014, ‘The Rise and Challenge of Dark Net Drug Markets’, Global Drug Policy Observatory, Swansea University
I believe most (aspirant) BIM students are aware of the transformative power of Information Technology and the changes that are yet to come. If not, the six Information Strategy lectures have emphasised its importance and highlighted numerous innovative examples in which information, or information technology, played a key role. However, what annoyed me personally is that the majority of the examples handled in class were about companies employing information technology in order to realize profit maximisation. I am aware that we are enrolled in a Business Administration course, however I do think there are other innovative and more important examples in which information plays a key role. In this blog I would like to highlight some examples on how to harness information and information technology to fight one the biggest challenge today, climate change.
But first lets take a look at the how the IT sector itself is performing regarding energy usage and sustainability. In 2007, analyst Gartner released the statistic that the ICT sector was responsible for 2% of global carbon emissions and this figure has since been widely cited. In 2008, McKinsey has re-quantified the direct emissions from ICT products and services based on expected growth in the sector. ICT in their analysis includes PCs, telecoms networks and devices, printers and data centres. They projected as a low case scenario a compounded annual growth of 6% until 2020 in energy usage of the sector. This is not surprising given the advances of information technology, more and more electronic products entering households every year.
‘While the sector plans to significantly step up t he energy efficiency of its products and services, ICT’s largest influence will be by enabling energy efficiencies in other sectors, an opportunity that could deliver carbon savings five times larger than the total emissions from the entire ICT sector in 2020’ McKinsey & Company
Apart from critically review the sustainability of the IT sector itself, it biggest role – not surprisingly – lies in improving (energy) efficiency in other sectors. According to McKinsey research, these are some of the biggest and most accessible opportunities;
– Smart motors
– Industrial process automation
– Dematerialization (reduce production of DVDs, paper)
– Smart logistics
– Private transport optimization
– Dematerialization (e-commerce, videoconferencing, teleworking)
– Efficient vehicles (plug-ins and smart cars)
– Traffic flow monitoring, planning and simulation
– Smart logistics
– Smart buildings (reduces warehousing space needed through reduction in inventory)
– Dematerialization (reduces energy used in the home through behavior change)
– Smart Grid
– Efficient generation of power
– Combined heat and power (CHP)
Together this can be summarized as the SMART transformation. This transformation will be enabled by information technology, mainly focusing on monitoring and optimization. There’s a big role to play here for students, for example that are enrolled in a(n) (Business) Information Management program. It might be less sexy, but not less important. And lets be honest, controlling product/price informedness in order to realize highest willingness-to-pay and directing trading down/out behavior is downright insignificant in the light of todays challenges. I hope this generates some new ideas, for example for a thesis subject. For more information on this matter I refer to the two main sources below.
McKinsey, Enabling the low carbon economy in the information age http://www.smart2020.org/_assets/files/02_smart2020Report.pdf
BCG, The Role of ICT in Driving a Sustainable Future
Crowdfunding is an interesting example of a platform mediated network. In this case the platform connects people with ideas in need of funding with people that want to fund ideas. There are no winner-take-all dynamics in this industry as multi-homing costs are low and the demand for differentiated features exists.
As there is a demand for differentiated features, the rules that platforms use to govern the exchange between the two user sides are important and offer platform providers means by which they can differentiate themselves. One of the pressing issues in crowdfunding is the problem with product ideas that never materialize. When an idea is funded yet it never materializes, potential funders can quickly lose faith in the platform. In a way it is seller uncertainty fueled market for lemons problem.
Indiegogo – one of the largest crowdfunding platforms – is attempting to find a solution to this problem. They want to answer the question: “How do you get your money back if the product never materializes?”. Indiegogo aims to answer this question by offering an insurance service, called perk insurance. The insurance service is optional and will allow funders to receive a full refund – minus the cost of insurance – if an idea doesn’t materialize before a preset date.
Perk insurance is fairly expensive, the costs run between 10-20 percent of a funding pledge amount. These high premiums could be indicative of fairly high degrees of seller uncertainty, as it would only make sense to purchase such an expensive insurance policy if your faith in the person you are investing in is low.
One of the offerings that offered insurance to funders was Olive – a wearable to manage stress – out of 1447 backers only three made use of the insurance option. These low rates might be indicative that the price of the insurance is too high to overcome the seller uncertainty that some funders experience.