Tag Archive | online

Why you will never meet Bob: The takeover of Ticketfly by Pandora

Ilistening-music_0magine sitting in a train. Take a look at the person on your left hand side. Meet Bob. You don’t know Bob, and you will never get to know Bob, as Bob is staring out of the window with his headphones on. Look straight ahead again. There is a couple sitting opposite of you, sharing a set of earphones and head-banging on music you cannot hear. At the back of the train, you suddenly see your friend Denise, and you call out her name; unfortunately, she does not seem to hear you as she is fully engaged in a new Spotify playlist she just discovered. You decide to pull out your headphones and put on the new album of Mumford & Sons.

Music is everywhere. Music has been everywhere for decades, yet recently, a new technological development disrupted the entire industry; streaming services. Companies such as Spotify, Rdio, Apple Music, Pandora and Tidal are all engaged in fierce competition to attract most paying customers. However, these companies face two problems. Firstly, although customers seem to grow very fond of music streaming services – almost 15 billion numbers were streamed in the United Kingdom in 2014 (The Guardian 2015), and United States music streaming revenues surged to over 1 billion dollars in the first half of 2015 (Statista 2015) -, these services still do not make enough revenue to become profitable. Secondly, artists do not love streaming services as much as users do. We all can recall the moment that Taylor Swift decided to withdraw her music from Spotify, and other artists as Beyonce and Ed Sheeran have also attempted to get around the influence of these streaming services. As can be derived from the ongoing discussion regarding streaming royalties, it seems that artists do not feel treated fairly by these businesses (The Economist 2015).

However, yesterday Pandora announced a takeover that might mark a change in the relationship between artists and streaming services. With its takeover of Ticketfly, an online concert ticketing service similar to Ticketmaster, Pandora will soon be able to directly sell concert tickets to music listeners. Whilst services as Pandora and Spotify were already promoting the sales of tickets through ads leading the listener to third-party websites, Pandora has now decided to move the entire purchase process to within its own ecosystem.

Pandora can use its experience in data collection to specifically target customers that might be interested in concert tickets from a certain artist. Apart from strengthening the ties between listening to music and visiting a concert hence increasing the music experience for users, Pandora also strengthens bonding with artists by this takeover. As concert tickets sales is still booming business (Techcrunch 2015) and has even become the main source of income for artists (Forbes 2015), artists will eventually be able to leverage the enormous user database of Pandora and even specifically target their ideal customer, without having to pay any additional promotion costs.

For Pandora itself, the acquisition of Ticketfly might also create more opportunities to generate revenue, and perhaps turn into a profitable business on the long-run. Pandora seems to have found a unique way to use its massive amounts of data to increase value for both parties simultaneously in its two-sided market, therefore increasing pressure on competitors such as Spotify and Apple Music.

Do you think that with this step, Pandora has revolutionised the music streaming service industry once again, ensuring that Bob can get involved even further with his favourite bands? Do other music streaming services have to follow? Or do you think there is another answer to low profits and weak bonds with artists?

Sources:

The Economist 2015, The dry stream of musicians’ royalties. Viewed 9 October 2015. Accessible via <http://www.economist.com/blogs/prospero/2015/09/music-business>.

Forbes 2015, Pandora’s purchase of Ticketfly finally good news for shareholders. Viewed 9 October 2015. Accessible via <http://www.forbes.com/sites/bobbyowsinski/2015/10/08/pandoras-purchase-of-ticketfly-finally-good-news-for-shareholders/>.

The Guardian 2015, Streaming: the future of the music industry, or its nightmare? Viewed 9 October 2015. Accessible via <http://www.theguardian.com/technology/2015/jan/02/streaming-music-industry-apple-google>.

Statista 2015, Music streaming revenues surpass physical format sales. Viewed 9 October 2015. Accessible via <http://www.statista.com/chart/3852/us-music-industry-revenues/>.

Techcrunch 2015, Pandora Acquires Ticketfly for $450m to sell concert tickets. Viewed 9 October 2015. Accessible via <http://techcrunch.com/2015/10/07/pandora-acquires-ticketfly-for-450m-in-a-bid-to-sell-tickets-to-live-music-shows/#.db6ey8:pyx4>.

Technology of the Week “B2C e-commerce”: The future of shopping

deprives-you-of-tangibility

Since the rise of the internet in our everyday life, a lot has changed. Firms had to revolutionise their product strategies, adapt to a whole new 4Ps conception, and serve a whole new platform of markets, namely e-markets. The trend of e-shopping was then introduced in order for firms to increase sales via the e-commerce channel. This lead to further innovations in order to contrast the vicious competitive environment of e-markets, while trying to transfer the in-store shopping experience directly online. With that being said, this article will introduce two new emerging technologies that are involved in the realistic transition between in-store and online shopping through Augmented Reality (AR).

Social Shopping

Social shopping is an e-commerce methodology bridging social media and online shopping together. Social media impacts the shopping behaviour in a way in which other people like friends, family, bloggers and celebrities recommend and suggest certain products and services to the consumers. The idea behind a social shopping website is that it provides the potential customer with blogs and virtual communities to help him in his decision in buying consumer goods and services. This is achieved by the average consumer share his shopping ideas, exchanging opinions on products, and recommending one another on what to buy and what not to buy.

A research on social shopping in 2010 found out that consumers’ trust in product recommendations had not only a direct and significant positive effect on their purchase intentions, but also a strong indirect positive effect on buying the product from that specific website where the information was originally found. The intention of a consumer to purchase a good directly from the website could in that case directly be affected by the trust in the website, thus creating an incentive to build a online shopping platform (Yu, 2010).

To better understand this, we used Shopcade as an example to analyse the technology further, and base conclusions.

shopcade

Shopcade is a website and mobile app that creates a community of fashionistas and allows anyone to easily purchase the items that they see posted. The site has two main sections: the trending section and the feed section.

The trending feed is curated by the app itself. This means that it is a section with content posted only by the Shopcade team. This content comes usually in the form of blog posts regarding different fashion trends, whether it is for clothing, accessories or other items (for example, one post gave the most recent trends in duvet covers). Being a content provider as well as a service provider definitely adds value for the customers of the company. On the other hand, the feed section contains content created exclusively by bloggers and members of the community. This adds even more to the social aspect of Shopcade, giving a very Instagram-like feel to the whole social experience. This is what Shopcade does successfully. It actually created a situation where online shopping offers an experience that would be awkward to achieve in the store.

Below, the SWOT analysis of Social Shopping can be observed. It is directly applicable to the case of Shopcade.

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When it comes to their revenue model, Shopcade offers nothing new. As can be expected from such a business, they make money from affiliate marketing and sales. This means that they receive commission for all the purchases made from their website. In addition, some brands want more exposure, which requires them to pay more money to Shopcade.

Virtual Fitting Room (VRF)

Fitsme-has-built-a-virtual-fitting-room-platform-that-can-be-easily-integrated-onto-the-sites-of-online-retailers.

VRFs are the online substitution of in-store fitting rooms. It is available on PC-laptop and mobile devices. VFRs rely heavily on Augmented Reality (AR), which employs specialized software and hardware to merge the digital and the physical worlds by immersing digital information into real video to generate persuasive looking scenes in real-time. Personal measurements can be included online to allow the framework to build a 3-D avatar of the customer fitting the item. It’s built on a three-step algorithm: it builds/scan the user body through data measurements (size, width, length…), reference points (i.e face and figure) via AR, and finally, it builds the avatar incorporating the clothes on a superimposed 3D image.

Software companies such as Virtusize, Fits.me and Clothes Horse have all adapted this new technology providing it to big retail companies, attempting to tackle the fit challenge with a range of technology-based solutions, from “morphing mannequins” to size recommendation engines, all with the goal to simulate the physical fit and sizing experience (G. Randall, 2015).

Often enough shoppers complain about long waiting lines in shops and poorly set up fitting rooms. Conditions such as terrible lighting and a lack of space in the room tend to dominate the endless list of complaints. The slow but steady introduction of VFR has revolutionised the shopping industry, specifically the e-commerce aspect of it.

Using VRFs could actually increase the pleasure of shopping in many ways. Firstly, there is no hassle of having to physically put on several different clothes. The ability to take pictures whilst “trying on” these clothes means that customers can easily compare outfits. Furthermore, many side-menus can be added into the technology, this would be up to a firm to research what sort of features its customers need when trying on clothes. Some great features that many shoppers and experts posted include the ability to like and dislike garments, save pictures of outfits for later, see reviews and prices of products, as well as the ability to call in real-time service (LinkedIn, 2015).

Below, the SWOT analysis of Social Shopping can be observed, applicable to every aspect of the VRFs. As it can be observed, it is filled with opportunities leaving thoughts and space for improvement.

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Future perspectives

With the VFR component only, the customers missed the social element of shopping. On the other side, the current social shopping services do not offer a developed VFR experience yet, making a visit to the store easily a necessity. We believe these technologies will merge together as the result will provide an improved customer experience. In the future those various digital resources – VFR and Social Shopping included- will be combined in an overall bigger market. Indeed, as someone will be shopping from his home -trying out clothes through the VFR system-, the person will be able to ask the opinion of a friend or a shopping assistant; involving social shopping (IBM, 2010).

The combination of those two technologies presses the question whether physical retail shops will exist in the future. It seems not to be a question of “If” but “When” physical stores will become obsolete. The reader should ask himself in how much time this change would have taken place: 5, 10, 20 years? It is difficult to say. Humans tend to think linearly, however the rate at which technology imposes itself on the world rather corresponds to an exponential curve as Ray Kurzweil and the institution of Singularity University (2012) are professing.

Sources:

Yu, K.-L. H.-C.-Y.-P. (2010). Antecedents and consequences of trust in online product recommendations”, Online Information Review.
Randall, G. (2015). Fashion ecommerce: are virtual fitting rooms the silver bullet?. [online] Econsultancy. Available at: https://econsultancy.com/blog/66058-fashion-ecommerce- are-virtual-fitting-rooms-the-silver-bullet/ [Accessed 18 Sep. 2015].
LinkedIn (2015). Virtual changing rooms will revolutionize fashion retail [online] Available at: https://www.linkedin.com/pulse/virtual-changing-rooms- revolutionize-fashion-retail-moles-mba

Team 13:
Claudio Corti
Maximilian Wiedmaier
Alex Furnica
Maxim Gggurevic
Paul Grandjouan

Your News

Everyone wants to stay up to date, and wants to be aware of the latest news. This results in a booming market of news applications. We are all familiar with NU.nl for the basic news and funny facts, NOS.nl if we would like to have some more insights and a lot of people have installed Bright nowadays to be able to get to know the latest innovations and lifestyle trends. All these news applications are slightly different and we want to have access to them all on our mobile phone to stay up to date. But is there no easier way to read this variety of news articles?

Let me introduce you to Recent News. This news application is launched in September 2015 and is taking care of the importance of customization. Recent News will first ask their new users to fill in their interests and what kind of articles they are looking for. There are many subjects and specializations to choose from. After this artificial intelligence will take over. A learning system is integrated and Recent News will customize your news based on your preferences, past reading behaviour and similar users. The news application is able to learn your interests and will propose exactly these articles you may like to read (Bright, 2015; Recent News, 2015).

In my opinion Recent News is one of the innovations that is able to serve the future. Nowadays users will ask for more personal and customized products and services. Because of the Internet the market is more transparent than ever, consumers are better informed and they can find exactly what they want (Clemons, 2008). Firms have to make sure that they will respond to these needs; firms have to be able to customize their services the best they can. Clemons (2008) shows that this trend called resonance marketing; the firm should find the perfect fit with the customer.
Another feature of Recent News will also fit the latest trends: the location-based suggestions. Recent News will propose the users news articles based on their location. According to Ghose, Goldfarb and Han (2013) mobile Internet differs from Internet on personal computers. They show that mobile Internet is an important driver of the rise of location-based services. In our case Recent News will respond closely by proposing articles to their users based on their location, within news application local news becomes more important and preferable.

I am curious about how the future will look like. How can we still improve customization and make products and services even more personalized? Is artificial intelligence the future of businesses to customize the services and is this the way to really get to know the customers? Besides that I am wondering if news applications such as Recent News are able to replace the variety of news applications that exist these days? Let’s count the number of news apps that we have right now and compare it to the number we will have over two years.

References:
Bright, 2015. ‘App van de week: Recent News’ http://www.bright.nl/app-van-de-week-recent-news, last visited: 20 September 2015.
Clemons, E.K. 2008.  How Information Changes Consumer Behavior and Consumer Behavior Determines Corporate Strategy. Journal of Management Information Systems 25(2) 13-40.
Ghose, A., Goldfarb, A., and Han, S. 2013. How is the Mobile Internet Different? Search Costs and Local Activities. Information Systems Research. Articles in Advance. 1-19.
Recent News, 2015. http://www.recent.io/, last visited: 20 September 2015.
Author: Lizan Bakker

Online reviews: Content vs. Reviewer

Word-of-mouth has always been very important. With the rise of the Internet online word-of-mouth is increasingly important nowadays. Everyone wants to know the opinion of their peer consumers and based on this information they will feel more secure to make the final decision in purchasing a product or a service. But how big is the effect of online reviews? Why is one review more reliable to a certain potential customer than another one? Do we rely on what people say or maybe more on who says what?

Forman, Ghose and Wiesenfeld (2008) have done some research about the role of the reviewer identity disclosure in online reviews. This research shows that consumers in general rate a review as more helpful if the review contains identity-descriptive information, which means more information about the reviewer such as their real name, hobbies, profile picture and where they come from. These reviews will even have the power to influence and increase online sales as well.
A notable fact here is that Forman et al. (2008) show that source information (identity-descriptive information) often appears to be more important than the actual content itself. If the source information matches a certain profile and the consumers can identify themselves with this (matching community norms), this review is more likely to be rated as an interesting and helpful review. Social identification makes people more secure about the review and it reduces uncertainty. Especially when there is an overload of information in reviews, source information appears to be a good way to process all the information and customers will use source characteristics as a heuristic device on which they base their final product decision. Common geography for example will also increase the feeling of similarity with other people and this will increase the positive relationship between disclosure of personal information of the reviewer and the sales of a product (Forman et al., 2008).

The results of this research surprise me in a way that in my opinion the Internet is full of fake accounts, unreliable information about people and imaginary identities (DailyInfographic, 2015). So why would we trust this personal information and base our decision on that? Why would we for example trust a review written by a person who comes from the same city more? Isn’t it really easy to just lie about the fact that you are from Rotterdam?

And what about the reviewers’ privacy? If you see the results of the research, it seems like a profitable business for online companies to ask more and more personal information from the reviewers. But how should the reviewer and consumer feel about that? A lot of different resources will warn you these days to just write everything down on the Internet. According to Forbes (2012) personal lives, businesses and careers can be affected in more ways than you think if you share too much information online. The intention can be innocent but the results can be worse than expected. Even some minor personal details, such as where you were born, can be enough for some people to manipulate you (ITProPortal, 2015).

Finally we can state that Forman et al. (2008) did some interesting research about online reviews and the role of a reviewer. Important to know for all kinds of businesses is that bad publicity is not always as devastating as we think. The opinion of a public community might be even more powerful than that.

References:
– Daily Infographic. 2015. ‘How Many Of The Internet’s Users Are Fake’ http://www.dailyinfographic.com/how-many-of-the-internets-users-are-fake, last visited 13 September 2015.
– Forbes. 2012. ‘Sharing Too Much? It’ll Cost You’ http://www.forbes.com/sites/cherylsnappconner/2012/10/19/sharing-too-much-itll-cost-you/, last visited: 10 September 2015.
– Forman, C., A. Ghose, B. Wiesenfeld. 2008. ‘Examining the Relationship Between Reviews and Sales: The Role of Reviewer Identity Disclosure in Electronic Markets’, Information Systems Research, 19(3), 291-313.
– ItProPortal. 2015. ‘The surprising danger posting personal information online’ http://www.itproportal.com/2015/03/13/surprising-danger-posting-personal-information-online/, last visited 13 September 2015.

Author: Lizan Bakker

Cloud for softwares?

Many of you already know what online back up or cloud storage is, but have you already heard of software clouds? Well, it’s online accessibility alright, but for software applications instead of documents or media. Nowadays, big companies require software applications to run their everyday business. All these applications require a lot of IT resources and continuous maintaining. With cloud computing, companies are able to outsource all these tasks, saving loads of money. Instead of installing business applications on their own hardware, companies are able to utilize these from a remote network. So they don’t possess these softwares.

One company that has been successful in this industry is Salesforce. Here is a short video that explains how cloud computing works:

We had a discussion about Dropbox and the potential of it’s business. Unlike cloud storage, companies aren’t that familiar with the business model of Salesforce yet. However I still think there is a growing market for this technology like the online storage. Especially with the falling costs of online storage and the need of accessibility at any time. We now have cloud storage and cloud softwares. What will be next thing up in the “cloud”? What are your thoughts?