Category Archives: Marketing

…a fictional glimpse into the real future

As I’m sure you’ve read, the Metaverse is all the rage right now- even though mainstream adoption could be a decade out.  With Facebook officially changing its name to Meta, as well as tech heavyweights like Microsoft and Nvidia investing heavily- there is much discussion and speculation around the future vision of what the Metaverse and its variants.

Most of the discussions focus around either the consumer, social Metaverse forthcoming from Meta sometime in the future, or the corporate version of the Metaverse coming from Microsoft in the nearer term.  But the lens that I thought would be interesting to explore is not distinctly business or consumer, but how ‘businesses’ prepare for the ‘consumer’ Metaverse.  More specifically, what businesses should be thinking about as they prepare to open up an entirely new market by peddling their wares on the social, gaming, consumer Metaverse.

To do this- let’s look at a fictional company, Hoodie-X, that makes physical clothes that are sold in retail stores and can be purchased digitally via Ecommerce stores.  They became a viral phenomenon when their hoodies were spotted as worn by tech titans in Silicon Valley.  Since then- they have become extremely popular among millennials, as well as tech employees that work remotely and in companies with a more casual dress code.  Hoodie-X just hit $1B in annual sales, and is looking to open up new markets to continue their growth trajectory.

The challenge they face is that after being in business for 10 years, they’ve saturated their top distribution options across the planet.  They sell direct-to-consumer online, and have maximized their marketing efforts across all channels- including paid ads, SEO, email, social, mobile and direct mail.  They’ve partnered with major department stores in the U.S., EMEA and APAC and have experienced significant success.  While they could invest more in these areas, they’ve started to see diminishing returns from their efforts.

While it seems like a moonshot, Hoodie-X’s CMO is extremely excited about the prospect of the Metaverse.  In the company’s annual planning meetings- the CMO presents the concept of taking their entire physical hoodie line and offering virtual replicas of every hoodie on Meta’s Horizon Worlds, which is currently the most popular Metaverse available.  While the idea may seem like a novelty, the CMO expands on their plan for the Metaverse and why this could truly create an opportunity as significant or even bigger than their physical or Ecommerce business.

Here are the highlights from Hoodie-X’s case to embrace the Metaverse:

• Sizeable New Market Opportunity by 2030
  1. The Global Metaverse Market reached USD 21.91 billion in 2020, projected to grow at a whopping CAGR of 41.7% from 2021 to 2030¹
  1. In extrapolating these projections, the numbers equate to a $504 billion global total addressable market (TAM) opportunity by 2030
  1. Specifically for the luxury goods niche within the Metaverse, Morgan Stanley projects that it will present brands with a $50 billion revenue opportunity within the decade²
  1. The profit associated with selling virtual clothing will be attractive given the near zero overhead

• Mirror Avatar and Your Wardrobe
  • Establish a model that whenever a consumer purchases a physical hoodie, grant the customer a token to seamlessly redeem a digital version that can be used in their application / game of choice
  • Seamlessly mirroring the physical and virtual goods will drive higher customer loyalty for those that spend significant time online

• Create Limited Edition Avatar Fashion with NFT’s
  • Leverage NFT’s.  To explain this concept- think of an official, custom pair of (virtual) Nike Air Jordan 1’s that have never been seen by the world.  If you were to secure an NFT for this pair of Jordans, you would own the exclusive rights to this digital asset.  This is what your brand can produce by issuing NFT’s (non-fungible tokens), which is a unique digital identifier recorded on the blockchain to certify its undisputed authenticity and ownership.
  • The more time consumers spend online, the more concerned they may be with their digital identity and potentially enjoy showing off their one-of-a-kind, limited edition NFT’s
  • Consumers will conceivably be able to traverse different Metaverse platforms with their unique, limited edition NFT fashion assets (with blockchain proof)

• Test New, Risk-Free Fashion Concepts
  • Create a risk-free model to test new products in the Metaverse before manufacturing and releasing new physical goods
  • Generate customer surveys to collect opinions on new designs and styles
  • Build a virtuous product development cycle of Metaverse virtual tests, customer feedback and releasing new styles based on fan favorites

• Immersive Advertising
  • Once Virtual Reality (VR) becomes a mainstream element of the Metaverse, brands can create more immersive, embedded advertising opportunities within games, concerts, events and virtual worlds
  • When Augmented Reality (AR) enters the world of the Metaverse, brands can harness their creativity by leveraging more immersive advertising opportunities that straddle the virtual and physical worlds

• ‘Big Brother-Style’ Data Collection
  • Once VR and AR become mainstream, although a bit creepy- the tech behemoths behind the technology may be able to collect data on your movements, eye contractions and mind reactions
  • A 2018 Stanford Virtual Human Interaction Lab paper estimated that 20 minutes in a VR simulation allows almost 2 million body language recordings³
  • Tech companies can leverage this data to gain better insights on how to drive increased adoption, engagement and purchase behavior

As you consider the case that HoodieX’s CMO has made for the Metaverse, I’ll leave you with this quote from the Forbes article, “More Than A Trend: Entering The Metaverse Will Become A Necessity For Brands”

“The virtual economy will become as important as the physical economy. Many brands intuitively or on purpose are moving towards the metaverse which is creating a global economy on track to exceed the current one many times over. There will be no other option but to join it. Otherwise, you will not survive as a company.”

• Vlad Panchenko (CEO and Founder at DMarket, a marketplace and technology for building virtual worlds) ⁴

¹ – Metaverse Market Worth USD 21.91 Billion In 2020 and is Predicted to Grow at 41.7% CAGR by 2030 – Report by Market Research Future (MRFR) – https://www.globenewswire.com/news-release/2021/12/14/2351695/0/en/Metaverse-Market-Worth-USD-21-91-Billion-In-2020-and-is-Predicted-to-Grow-at-41-7-CAGR-by-2030-Report-by-Market-Research-Future-MRFR.html

² – Lucrative for luxury: Metaverse could untap $50bn for brands by 2030 – https://www.cityam.com/lucrative-for-luxury-metaverse-could-untap-50bn-for-brands-by-2030/

³ – Conquering the metaverse: 3 ways that businesses can find real customers in virtual worlds – https://fortune.com/2021/12/03/metaverse-business-nfts-real-estate-virtual-reality-roblox/

⁴ – More Than A Trend: Entering The Metaverse Will Become A Necessity For Brands https://www.forbes.com/sites/cathyhackl/2021/06/24/more-than-a-trend-entering-the-metaverse-will-become-a-necessity-for-brands/?sh=40ce569555ab

Do you ever get those creepy, yet intuitive push notifications on your mobile phone from Yelp?  Like, “Jason, are you near La Super-Rica Taqueria?  Here are some reviews…”

I don’t know why, but of all apps- I’m fascinated at how Yelp does this.  Don’t get me wrong, all location aware apps are cool- like Find My iPhone, Starbucks and Pokemon Go.  But for me- Yelp is the most practical.  I eat out at restaurants 2-4 times per week, and am always looking for a good new place, especially when I’m outside of my hometown.

What’s particularly fascinating is when you enter a new town that you may not be familiar with, and as you do- Yelp sends a push notification recommending a restaurant as you arrive, to help you find a new place to grab grub.  This is super practical in my opinion.  I’m usually traveling for work, and always looking for a new lunch spot.  I mean how many times can I go to Chipotle and Starbucks?!  Bring on a new lunch spot, bring on a new local café!

Or what’s even creepier is if you just left a restaurant, bar, etc.. on occasion it asks for a review of where you just were.  How did it know?!  Obviously with the phone’s GPS technology, but that’s pretty impressive that it knows that you were actually in that specific location.  I went to the new local Dave and Busters the other weekend, and low and behold- as I walked out.. it asked ‘how did you enjoy Dave & Busters?’.

So turn on that push notification and location services on your phone, and you will find a new world of culinary delights!

Inspired by last Thursday’s article in the Wall Street Journal, “The Age of Personalized Everything”, I thought I would explore how deeply personalized products have become here in the year 2019.  Although I’m in the business of personalized marketing, I was not fully aware of the revolution where actual products are becoming personalized, just for you. 

What’s driving this seems to be what’s driving the entire digital revolution- the treasure trove of data companies are collecting, and their ability to use it in meaningful ways.  On the demand side- this is the new era where customers rule, and with the advent of apps like Netflix and Amazon, customers have come to expect everything personalized just for them.  In other words, the dialogue here is… “Yo Gatorade, where’s your ‘Recommendation’ made for me, just like I’m picking a Friday night series to binge on?!”

Here’s a breakdown of some of the groundbreaking new personalized products, and yes- these are for reals:

1. CREATE YOUR OWN GATORADE FLAVOR

This year, Gatorade is launching “Gx”, which is a customizable hydration system.  This is where the Apple Watch meets your green electrolyte sugar water.  They’ve developed a sweat patch, which tracks your sweat profile and concocts your own Gx drink.  To create a so-called sweat profile, you stick the sweat patch on your forearm during a workout, and it records how much sweat you perspire for about 30 minutes and how salty it is.  You take a photo of your sweaty patch and send it to the Gx app, which uses image-recognition software to read it. Those results are combined with weather data, the duration and intensity of training and a questionnaire that asks athletes to detail their performance goals. Once the right Gx formula is determined, users buy concentrated pods of it online, load it into a special Gx bottle and add water.

2. DNA-BASED WEIGHT LOSS

Many of you have probably heard of the weight-loss program, Nutrisystem.  Well now they’re taking the idea of losing some pounds to the next level.  Last year Nutrisystem introduced DNA Body Blueprint, an at-home DNA test that is the basis of a 40-page report on nutrition needs, metabolism and fitness suggestions based on the user’s genetic coding. The test delivers new insight into an individual’s weight-loss efforts. This is fascinating, but what happened to just working out and eating healthy?

3. (YOUR NAME HERE) VITAMINS

I don’t know about you, but the decision of which vitamins to take has tripped me up for years.  Blue pill or red pill, right?  I’ve always taken the daily multi-vitamin, but I’ve also dabbled in Ginseng for energy, Vitamin B to avoid hair loss (not so effective, to my dismay), and a ridiculous overdose (400% recommended daily amount at least)  of Vitamin C whenever I feel a cold coming.  Then my doctor tells me that vitamins have never actually been medically proven to be effective, so what do you do?  Then comes along the nutrition firm, “Care/of” who aims to demystify the world of vitamins. Customers spend about five minutes online completing a profile of their health needs and goals. Then they receive a list of vitamin recommendations and corresponding research that explains the company’s selections. Customers can select which vitamins they want in their monthly supply of daily vitamin packs. Each pack is printed with the customer’s name, which makes taking daily vitamins fun and builds lucrative word of mouth.  Turns out, people do like posting photos of their name.  Lord help me, Facebook.

4. RIP miADIDAS

While all of these personalization developments are great, will they actually pan out for the companies that are providing them?  Will they generate interest, and can they be profitable given the lack of scale?  One of the biggest personalization announcements back in 2000 was Adidas’ “MiAdidas” customization platform- which allowed customers to create their own personalized versions popular shoes like the Superstar, Stan Smith, and Ultra Boost. But unfortunately, earlier this year- Adidas decided to discontinue miAdidas, and focus in a different direction where customers just help make suggestions for shoe designs.  Back to the drawing board.

References:

https://www.wsj.com/articles/we-now-live-in-a-world-with-customized-shampoo-11555506316

https://solecollector.com/news/2019/02/here-is-why-adidas-discontinued-the-miadidas-customization-program

For the 2^nd post in my “Experience Blog” series, I thought I would provide a commentary on what I like to call the CaaS (Coffee-as-a-Service) Experience.  Starting back at the beginning, the earliest I can remember that coffee became a ‘thing’ was 1996.  It was right when I got out of college that the Frappuccino became mainstream and Starbucks surpassed 1,000 stores.  Low and behold, coffee and all of its many derivations became a must-have.  Whether it was for studying, going to work, relaxing, socializing- we all had that white and green cup in our hand at some point during the day.

For me, the most interesting inflection point was in 2014- which was the advent of Starbucks mobile ordering.  I dabbled a bit in the beginning as a novelty, but little did I know- this would eventually be something that I could not live without.  With mobile ordering, I came to realize that there was no longer a need to ever stand in a Starbucks line again.  And yes, I’m guilty of ordering via the mobile app not just for coffee-on-the-go, but also when I’m sitting in a Starbucks coffee shop for hours.  I have banished Starbucks lines forever. 

But where the Starbucks mobile app drives the most value for me is when I have a morning drive for work during the week.  The routine goes as follows…  Get ready, pack up the car, order Starbucks on mobile app, open/close garage door, drive directly to closest Starbucks (without passing Go) -> Grande Americano and Spinach Feta Wrap in hand.  I honestly don’t even consciously think about this process anymore.  This is what I’d consider a moderately healthy breakfast and a guaranteed caffeine pick me up, all with virtually no effort other than a couple clicks.

In Conclusion:  Starbucks has 100% Nailed the Digital Customer Experience with their Mobile App.

So let’s look at the facts.  This is undoubtedly a priority for Starbucks, and CEO Kevin Johnson is trying to drive more of the business to the Starbucks app.  As of the end of 2018, 12 percent of Starbucks’ total sales came in through its mobile ordering features, according to the latest edition of the PYMNTS Mobile Order-Ahead Tracker.  Clearly room to grow, but a solid footing with only 4 years under their belt.  What an interesting example of a physical store with a physical product, making a successful transformation to a digital business.

But if having your coffee waiting for you at your local Starbucks isn’t good enough, it appears as though consumers are looking for an even more effortless experience.  Coffee delivery.  As of this January, Starbucks has joined efforts with Uber Eats to bring delivery services to U.S. cities.  The two firms piloted the delivery program, starting last fall in Miami. As of January 22^nd, Starbucks delivery was officially up and running in San Francisco. From there, delivery services via Uber Eats are rolling out in Boston, Chicago, Los Angeles, New York and Washington, D.C., and a London pilot is also in the pipeline.  In order to accomplish delivery, Starbucks is being seamlessly integrated into the Uber Eats mobile app, and deliveries are supposed to arrive warm within the half-hour.

And with a look into the future..  believe it or not, coffee is actually being delivered via drone (what?!!!) in Australia. Yes, Alphabet Inc.’s subsidiary Wing, whose most recent trial delivered coffee to 160 households in Canberra, Australia.  Coffee is popular among Wing’s Canberra customers, says Wing CEO James Burgess. It’s not an item typically delivered by car because of how quickly it gets cold. “Our record is 3 minutes and 17 seconds from an order to coffee in hand,” he adds. (The coffee travels in a normal to-go cup and is protected by a recyclable paper cocoon.)

References:

https://www.starbucks.com/about-us/company-information/starbucks-company-timeline

https://www.pymnts.com/earnings/2019/starbucks-mobile-order-delivery-loyalty/

https://www.wsj.com/articles/your-drone-delivered-coffee-is-almost-here-11553918415#_=_