N E X T G E N C U S TO M E R E N G A G E M E N T
T U E S D A Y, F E B R U A R Y 1 1 , 2 0 1 4
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PETER TEDESCHI
CHIEF EXECUTIVE OFFICER | TEDESCHI
FOOD SHOPS INC
ROUZ JAZAYERI
PARTNER
| KLEINER, PERKINS, CAUFIELD & BARNES
2014 INTERNET TRENDS
Outline
• Key Internet Trends – Growth Continues, Driven by Mobile
• Computing – Yet Another Platform Change…
• Re-Imagination – Businesses, Industries Being Re-Imagined
KEY INTERNET TRENDS –
GROWTH CONTINUES
2.4B Global Internet Users in 2012* –
8% Y/Y Growth*, Driven by Emerging Markets
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Country
China
India
Indonesia
Iran
Russia
Nigeria
Philippines
Brazil
Mexico
USA
Argentina
Egypt
Colombia
Turkey
Vietnam
Top 15
World
2008-2012
Internet User
Adds (MMs)
264
88
39
35
33
31
28
27
19
18
17
17
14
13
12
654
902
2012 Internet
Users (MMs)
564
137
55
42
70
48
34
88
42
244
28
30
25
35
31
1,473
2,406
Y/Y Growth
10%
26
58
205
6
15
32
6
9
3
57
11
39
17
7
15%
8%
Population
Penetration
42%
11
23
55
49
30
35
45
37
78
68
38
54
47
35
34%
34%
Note: *All data (except China) as of 6/12, 2.4B global Internet users and 8% Y/Y growth rate based on the latest available data. China
Internet user data as of 12/12, per CNNIC. Source: United Nations / International Telecommunications Union, internetworldstats.com.
80% of Top Ten Global Internet Properties ‘Made in USA’…
81% of Users Outside America
Top 10 Internet Properties by Global Monthly Unique Visitors, 2/13
Google
Microsoft
Facebook
Yahoo!
Wikipedia
Amazon.com
Apple
Glam Media
Tencent
Baidu.com
USA Users
International Users
0
200
400
600
800
Monthly Unique Visitors (MMs)
1,000
1,200
Source: comScore Global, 2/13.
Global Smartphone Operating Systems ‘Made in USA’…
88% Share from 5% in 2005
Global Smartphone Operating System Market Share
(by Units Shipped), 2005 vs. 2012
Market Share of Smartphone
OS
100%
80%
Other OS
iOS
60%
Android
Windows Phone
40%
BlackBerry OS
Linux
20%
Nokia Symbian
0%
2005
2012
Source: 2005 data per Gartner, 2012 data per IDC.
Mobile Traffic as % of Global Internet Traffic =
Growing 1.5x per Year & Likely to Maintain Trajectory or Accelerate
% of Internet Traffic
30%
Global Mobile Traffic as % of Total Internet Traffic, 12/08 – 5/13
(with Trendline Projection to 5/15E)
Trendline
25%
15%
in 5/13
20%
15%
10%
5%
0.9%
in 5/09
0%
12/08
2.4%
in 5/10
12/09
6%
in 5/11
12/10
10%
in 5/12
12/11
12/12
12/13E
12/14E
Source: StatCounter Global Stats, 5/13. Note that PC-based Internet data bolstered by streaming.
China –
Mobile Internet Access Surpassed PC, Q2:12
% of Chinese Internet Users Accessing the Web
via Desktop PCs vs. via Mobile Phones, 6/07 – 12/12
% of Total Internet Users
in China
100%
96%
80%
75%
via Desktop PC
via Mobile Phone
60%
71%
40%
28%
20%
0%
6/07
12/07
6/08
12/08 6/09
12/09 6/10
12/10 6/11
12/11
6/12
12/12
Source: CNNIC, 1/13.
COMPUTING –
YET ANOTHER PLATFORM CHANGE…
Smartphone Subscriber Growth = Remains Rapid
1.5B Subscribers, 31% Growth, 21% Penetration in 2013E
Rank Country
1
2
3
4
5
6
7
8
9
10
11
12
China
USA
Japan*
Brazil
India
UK
Korea
Indonesia
France
Germany
Russia
Mexico
13
14
15
Saudi Arabia
Italy
Australia
2013E
Smartphone Smartphone
Smartphone
as % of
Sub Y/Y
Subs (MM)
Total Subs
Growth
354
219
94
70
67
43
38
36
33
32
30
21
21
21
20
Rank Country
2013E
Smartphone Smartphone
Smartphone
as % of
Sub Y/Y
Subs (MM)
Total Subs
Growth
29%
58
76
23
6
53
67
11
46
29
12
19
31%
28
15
28
52
22
18
34
27
29
38
43
16
17
18
19
20
21
22
23
24
25
26
27
Spain
Philippines
Canada
Thailand
Turkey
Argentina
Malaysia
South Africa
Netherlands
Taiwan
Poland
Iran
20
19
19
18
17
15
15
14
12
12
11
10
33%
18
63
21
24
25
35
20
58
37
20
10
14%
34
21
30
30
37
19
26
27
60
25
40
38
23
60
36
25
27
28
29
30
Egypt
Sweden
Hong Kong
10
9
8
10
60
59
34
16
31
2013E Global Smartphone Stats:
Subscribers = 1,492MM
Penetration = 21%
Growth = 31%
Note: *Japan data per Morgan Stanley Research estimate. Source: Informa.
Smartphone Usage =
Still Early Stage With Tremendous (3-4x) Upside
Global Smartphone vs. Mobile Phone Users, 2013E
6,000
5B+ Mobile
Phone Users
Global Users (MM)
5,000
4,000
3,000
1.5B
2,000
Smartphone
Users
1,000
0
Smartphone
Mobile Phone
Source: Morgan Stanley Research estimates.
Note: One user may have multiple devices - actual number of actual smartphone + mobile phone devices in use (subscription numbers) may
be higher than user numbers.
World’s Content is Increasingly Findable + Shared + Tagged Digital Info Created + Shared up 9x in Five Years
Amount of global digital information created & shared
– from documents to pictures to tweets –
grew 9x in five years to nearly 2 zettabytes* in 2011, per IDC.
Global Digital Information Created & Shared, 2005 – 2015E
Digital Information
Created & Shared
(zettabytes)
8
6
4
2
0
2005
2007
2009
2011
2013E
2015E
Note: * 1 zettabyte = 1 trillion gigabytes. Source: IDC report “Extracting Value from Chaos” 6/11.
iPods Changed Media Industry…iPhones Ramped Even Faster…iPad Growth
(2x iPhone) Leaves “Siblings” in Dust
First 14 Quarters Cumulative Unit Shipments, iPod vs. iPhone vs. iPad
iPad
iPad
iPad
80,000
16,000
180,000
iPhone
iPhone
iPhone
iPod
iPod
iPod
70,000
14,000
160,000
Global Unit Shipments (000)
Global
(000)
Shipments(000)
UnitShipments
GlobalUnit
140,000
60,000
12,000
120,000
50,000
10,000
100,000
40,000
8,000
80,000
6,000
30,000
60,000
4,000
20,000
40,000
2,000
10,000
20,000
000
000
111
222
333
444
555
666
777
888
99
9
Quarters
After
Launch
Quarters
After
Launch
Quarters After Launch
10
10
10
11
11
11
12
12
12
13
13
13
14
14
14
Source: Apple, as of CQ3:13 (14 quarters post iPad launch).
Launch Dates: iPod (11/10/01), iPhone (6/29/07), iPad (4/3/10)
Android ‘Phone’ Adoption Has Ramped Even Faster –
Over 6x iPhone
First 20 Quarters Cumulative Global Android & iPhone Unit Shipments
Android
Android
1,400
1,400
iPhone
iPhone
Global Cumulative Unit Shipments
(MM)
1,200
1,200
1,000
1,000
800
800
600
600
400
400
200
0
0
1
2
3
4
5
6
7
8
9 10 11 12
Quarters After Launch
13
14
15
16
17
18
19
20
Source: Gartner, Morgan Stanley Research, as of Q3:13.
Launch Dates: iPhone (6/29/07), Android (10/22/08).
Tablet Shipments =
Surpassed Desktop PCs & Notebooks in Q4:12, < 3 Years from Intro
Global Units Shipped (MMs)
60
Global PC (Desktop / Notebook) and Tablet Shipments by Quarter
Q1:95 – Q1:13
50
40
30
20
10
0
Q1:95
Q1:97
Q1:99 Q1:01 Q1:03 Q1:05 Q1:07
Desktop PCs
Notebook PCs
Q1:09 Q1:11
Tablets
Q1:13
Note: Notebook PCs include Netbooks.
Source: Katy Huberty, Ehud Gelblum, Morgan Stanley Research. Gartner. Data as of 4/13.
Technology Cycles – Still Early Cycle on Smartphones + Tablets,
Now Wearables Coming on Strong, Faster than Typical 10-Year Cycle
Technology Cycles Have Tended to Last Ten Years
Mainframe
Computing
1960s
Mini
Computing
1970s
Personal
Computing
1980s
Desktop Internet
Computing
1990s
Mobile Internet
Computing
2000s
Wearable /
Everywhere
Computing
2014+
Image Source: Computersciencelab.com, Wikipedia, IBM, Apple, Google, NTT docomo, Google, Jawbone, Pebble, Nest
Mobile Users Reach to Phone ~150x a Day…
Could be Hands-Free with Wearables
# of Times Typical User Checks Phone per Day
Messaging
Voice Call
Checking Time
Music
Gaming
Social Media
Camera
Alarm
News & Alerts
Calendar
Web
Search
Other
23
22
18
13
12
9
8
8
6
5
3
3
14
0
5
10
15
20
Source: TomiAhonen Almanac 2013, LINK. ‘Other’ includes voicemail, charging and miscellaneous activities. We cross-checked Tomi’s analysis to gain context. Our references
include: 1) Motorola Mobility / Google (consumers interact with their phones more than 100x per day, mid-2012); 2) Leading 3G Carrier with Operations in Europe & Asia (smartphone
users interact with mobiles ~150x per day); 3) IDC (51 blended average of social sessions per smartphone user per day in USA, 3/13…excluded services like checking time, alarm and
calendar events, web browsing, gaming, using camera, listening to music, searching, using maps, charging and other activities that require checking the phone) and 4) other third
parties, including app providers.
25
New Major Technology Cycles = Often Support 10x More Users &
Devices, Driven by Lower Price + Improved Functionality
Devices (MM in Log Scale)
Computing Growth Drivers Over Time, 1960 – 2020E
100,000
10,000
1,000
1B+ Units
100
100MM+
Units
10
1
1960
10B+
Units???
1MM+
Units
1970
10MM+
Units
1980
1990
2000
2010
2020
Note: PC installed base reached 100MM in 1993, cellphone / Internet users reached 1B in 2002 / 2005 respectively;
Source: ITU, Morgan Stanley Research.
RE-IMAGINATION BUSINESSES, BUSINESS MODELS,
INDUSTRIES BEING RE-IMAGINED
@ AN ACCELERATING PACE
Long Ago, People Danced @ Concerts,
Now They Video / Click / Share / Tweet…
1990s
2010s
Source: Left image – 123RF.com. Right image – amandarose.co.uk.
Re-Imagination of Basic Business Process…
Building / Funding
KickStarter / Indiegogo
Logistics
JD.com (360buy)
Manufacturing
MakerBot
Online / Social Distribution /
Real-Time Progress
At Your Door Same-Day Delivery / Real-Time
Tracking / Last Mile on Bikes
3-D Prototyping / Printing
Education
Codecademy
Housing
Airbnb
Transportation
Uber
Accessible by Anyone,
Anywhere, Anytime
Turn Privately-Owned Properties
into Hotel Experience
On-Demand Transportation
Re-Imagination of R&D…
Minted
•
•
85K designs submitted
4MM monthly visitors
Quirky
•
•
87K designs submitted
360K registered users
99Designs
•
•
228K designers
216K contests
Source: Company data.
Re-Imagining News & Information Flow
THEN
NOW
Delayed, but Dedicated Reporters
+ Cameramen Regional or National Reach
Citizen Reporting via Mobile,
Real-Time, Global Reach
Re-Imagining Magazines
THEN
NOW
Piles of Print Copies
Current, Shareable, Personal
Re-Imagining Higher Education
THEN
NOW
Lectures, Reading, Expensive
Interactive, Online, Blended Learning
Re-Imagination is
Alive & Well
Mobile, Social, Local
ROUZ JAZAYERI
PARTNER
| KLEINER, PERKINS, CAUFIELD & BARNES
ANTHONY SHOP
Chief Strategy Officer & Co-Founder
| SOCIAL DRIVER
NextGen Customer Engagement:
People are the New Channel
put people at the center
originate, don’t replicate
embrace the culture
put people at the center
Converging Media
Social Driver
Driver C
anvas
Social
Canvas
TALKING
LISTENING
SHARING
ENGAGING
EMPOWERED AUDIENCE
STRENGTHENING
RELATIONSHIP
GROWING
AUDIENCE
ORGANIZATION CENTRIC
originate, don’t replicate
Tesco’s Home Plus
Subway Virtual Store
Boardroom
Conference room
Showroom
ask “why?”
embrace the culture
papal inaugurals: benedict xvi vs. francis
2005
2013
vs.
when innovation pops…
ANTHONY SHOP
Chief Strategy Officer & Co-Founder
| SOCIAL DRIVER
KATIE ELFERING
SENIOR DIRECTOR
| CEB ICONOCULTURE
Right-Sized Engagement
aka “Stop Trying Too Hard”
MASS COMMUNICATION
MASS OF
COMMUNICATORS
THEN
NOW
Marketer aspirations don’t align with consumer realities
• Marketers want to be BFFs with their consumers
• Consumers don’t have the time or desire to be BFFs with brands
Copyright NACS 2014
Right-Sized Engagement
Copyright NACS 2014
Know Thyself
Know your brand
• Current strengths
• Consumer expectations
Know your category
• Purchase frequency and intensity
• Level of emotion
Copyright NACS 2014
Know Yourself
At G.E., we’re not going to be Facebook.
We’re not going to be Apple. We’re pretty
cool with what we are.
We have embraced our geeky side. We’re
geeky, and we’re proud of it.
(Beth Comstock, senior vice president and chief marketing officer
at the General Electric Company, NYTimes.com | 6 October 2013)
Copyright NACS 2014
Think Like a Consumer
1.
2.
How long does it take?
What do I get?
tweets
pins
status updates
Vine clips
videos
emails/newsletters
blogs
Copyright NACS 2014
personalized reccos
discounts
free samples/products
events
ongoing service
“free” samples/products
Case Study:
Taco Bell Doritos Locos Launch
Copyright NACS 2014
Be a Tool
A good tool is…
• Additive, not interruptive
• Disruptive with purpose
• Participatory by choice
Copyright NACS 2014
Getting to the Right Size
First, know your brand, know your category:
• What role does your category/product realistically play in consumers’ lives?
Next, think like a consumer:
• Is it worth it for me to spend my time and energy for what I get out of it?
Then, be a tool:
• Be present, not invasive. Balance usefulness and entertainment. Add something
to their lives.
And remember…
Copyright NACS 2014
Brand is not what you tell your
customers –
brand is what your customers tell
their friends.
@rachelsklar | 17 February 2013
Copyright NACS 2014
KATIE ELFERING
SENIOR DIRECTOR
| CEB ICONOCULTURE
PETER TEDESCHI
CHIEF EXECUTIVE OFFICER | TEDESCHI
FOOD SHOPS INC
N E X T G E N C U S TO M E R E N G A G E M E N T
T U E S D A Y, F E B R U A R Y 1 1 , 2 0 1 4