7 Digital Trends of 2014, How To Exploit Them

    The year 2014, similarly to 2013, will be a year that will give us a hint about how our digital future will look like, however new technology will still not bring dramatic changes to our lives, it will just make our living easier. The main changes will continue to happen in the areas of: mobile, social media, content & video, clever digital devices, smart shopping, big data, and cloud. 

     “There is no escaping a digital future. Right now we are at a crossroads. …The Earth will become one digital room with everyone in it. For the first time in history, physical reality will not be the only reality,“ says Dan Abelow, an American digital development guru, a graduate of Harvard and the Wharton School, patented inventor, technology consultant and author, owner of Expandiverse. “How many in 1970 foresaw what 2010 looks like? The speed at which 2013 becomes 2033 will be far faster … Today´s digital seems cool. But it´s only just begun.” Dan Abelow expects huge increase in location based marketing, rapid proliferation of devices and the explosion of the Internet of Things. People will be more dependent on the technological breakthroughs; cognitive computing will be the next big trend.

     Progress cannot be stopped. More and more CEOs are personally sponsoring the agenda of digitalization; more and more marketers are re-allocating budgets to digital activities. They respond to changes in the digital landscape, enabled by permanent connectivity, resulting in social media and new technology addiction. In the meantime, Facebook in the U.S. managed to attract more young consumers than traditional TV stations, whose viewership is declining, due to paid streaming. The value of digital advertising today in America exceeds the value of TV ads. Advertising on Google surpasses the summary of paid ads of all newspapers and magazines. No wonder that the value of new media Companies tops the traditional media firms.

     As about three billion people on the Earth have on-line access today (while China´s user base is twice as big as the U.S. one), human society moved from information hungry into information overloaded. But digital disruption is not just about easy access to information; it is also about new experiences and fun. On average, users spend the daily minimum of one hour on their mobile phones, and one hour on their tablet (eMarketer.com, USA). The World is becoming multiscreen - one individual using multiple devices and screens (PC, smart phones, tablets, smart TV, wearables,…). As the sales of tablets crush PC sales, and smart phone sales boom, smart phones and tablets are becoming the center and integrating component of consumers´ multiplatform lives. Creating a buzz in the digital sphere will be the new art, companies will have to adjust to all the changes.

7 Most Distinctive Trends For 2014

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           1. MOBILE

     Mobile is perceived as the most disruptive media and marketing trend. Mobile currently accounts for one fifth of Internet traffic and it is expected that it will surpass desktop in two years. Mobile rules in the U.S.: about one third of organic search today is happening over mobile (RKG); mobile video traffic is continuing to surge; the majority of e-mails opened is occurring on mobile devices; and social media and music are now also mostly mobile (Facebook 65%, Twitter 80%, Pandora 85%). Mobile also changes shopping habits. According to eMarketer.com 19% of internet sales will actualize over mobile in 2014 in the U.S. (in Europe even 24%) and the percentages will continue to grow quickly.

     All these changes mean that Companies will have to adjust to them quickly, not only in communication with their customers. The route to success will lead via user friendly responsive designs, the reallocation of budget to mobile advertising, and setting up business models reflecting on users mobility – not only in the area of m-commerce, but also in the area of data availability for mobile employees.

     

      2. SOCIAL MEDIA

     The question will not be if the Company should be present in Social Media, but rather in what scale, with which targets and with what relevant content. If the years 2012 and 2013 were about focus on acquisition of large fan/followers numbers and driving their engagement, the year 2014 will become a year, when companies will capitalize on their learning from failures and experiments, they will effectively target brand ambassadors, passionate and influential brand advocates. They will increase the content attractiveness – also thanks to micro video formats. Marketer will continue to integrate their social media activities with their entire content strategy. Facebook, Twitter, and more and more significant Google +, Tumblr, Instagram a Pinterest will be the priority for brand communication in 2014. In B2B LinkedIn will continue to lead the game.

3. CONTENT + VIDEO

     Content will remain the king, but it will be crucial to adapt it to multiple formats – video, micro video, blogs, white papers, studies, articles, webinars, e-books, live presentations, e-mail newsletters etc. – and also to multiple screens (PC vs. tablet vs. mobile). The primary focus for companies will remain in building the relationship with customers to build the image of an iconic brand, not the hard-sell. The shift from content towards context indicated also recent changes that Google made in search algorithm and when it removed keyword data from Google Analytics. The deeper geo-location focus of Google´s algorithm will be requiring localized link-building in companies target markets.

     The creation of content that is easily consumed in the mobile environment will become a necessity – it will become natural to have responsible designs, more actionable and shorter blogs and location based content marketing enabled by GPS technology. Short videos and pictures will have bigger impact on young target group than plain texts. The creation of viral videos with the use of the micro video applications - Twitter Vine (6 sec), Instagram (15 sec), MixBit (16 sec), and Tumblr GIFs  will increase the interest in sharing, as Coca-Cola, Oreo, and RedBull already learnt (micro video on Vine increased sharing 4x vs. classical viral video).

     With the increased popularity of video format among consumers, it is expected that 9 in 10 brands in the US will increase their spending into video advertising, most probably at the expense of TV campaigns (Adap.tv and Digiday: State of the Video Industry). Video will also become fluid medium - Apple TV, Chromecast, You Tube – will enable syncing content across screens, so that consumers can return to the point when they stopped film watching, even if they change the viewing device. At the same time ads will be optimized for the screen size.

     Enterprises will use their own resources and vehicles to connect to a person on their own terms, not relying on any outside source to create a meaningful brand relationship. Netflix (House of Cards), Red Bull (Media House) and Amazon (Alpha House) have already tried to break through all the noise on their own. They stopped the co-operation with agencies and rather established their own newsrooms and production studios. 

      4.    INTERNET OF THINGS (IoT)

     “Internet of Things” (IoT) and all of the devices associated with it will explode in 2014. It is expected that very soon smart watches (Pebble, Omate, Sony, Samsung Galaxy Gear, Nissan´s Nismo), smart glasses (Google Glass), medical devices, fitness wristbands (like Nike+ Fuelband or FitBit) and other  smart products will become attractive to masses not only in the U.S., where according to Business Insider already 13% of people tried at least one wearable product. As wearable technology becomes ubiquitous in 2014, devices will change the way we interact with existing screens and they will also make our lives easier.  The market of wearables will boom globally from 750 million USD in 2012 to estimated 5.8 billion USD in 2018, according to Transparency Market Research. The health and fitness market will continue to play a key role in bringing the wearable technology to consumers. 

5. DIGITIZED RETAIL EXPERIENCE

     Shopping experience will move to new heights. Brick-and-mortal shops will be offering not just products, but a lifestyle. Stores will look very different. Cash registers will enable mobile payments; shoppers will be attracted by digital displays. There will be greater expectation on services and personalization. Internet shopping will continue to grow double digit, while mobile commerce will record the biggest dynamics (global value of e-commerce reached nearly 1.3 trillion USD last year, according to eMarketer).

     Shopping will no longer be linked to a physical store, consumers will be using their permanent connectivity to search the internet for information and compare competitive offers. The shopping trip will start earlier and end later than it used to. The consumer will always be in the consideration phase for purchasing something. Retailers will start to understand the consumer in greater detail, the path to purchase across all off-line and online touch points, and they will be able to segment that path to derive valuable insights to make better strategic and tactical investment decisions. 

6. BIG DATA 
     
     For 2014, the International Data Group (IDG) predicts that the topic of “Big Data” will become a priority for a minimum of 70% of large companies, who will each invest, on average, 8 million USD, into this project. The focus will move from the agenda of collecting, storing and sorting big amounts of not-related data, into using the Big Data related applications, that will be smarter, context aware, location sensitive, predictive, visualized, simplified and actionable, thus enabling companies and their managers to improve the quality and the speed of their decision making, to improve the planning and the new product / service development process.

     There will be more dependence on cloud services, as it will be more advantageous to store big amounts of structured data in the CLOUD.

      7.  CLOUD COMPUTING

     The global market of cloud services will continue to grow rapidly; according to Gartner, it will reach 148.8 billion USD in 2014. Cloud will become the most important data manager. Cloud service providers that guarantee data security and offer the clever linking with the off-line world, will have the biggest competitive advantage. It is expected, that the biggest portion of the cloud market will be taken by Amazon, Apple, Microsoft and Google, that will explain to companies and individuals the benefits of cloud storage and that will provide their clients safe base.

VISION 2025

     The upcoming DIGITAL era will produce significantly bigger amounts of intelligently assisted programs, smart advisers, smart devices, modern industrial systems, robots, etc. than we can foresee today. According to the Company Cisco, in the future, the Internet of Things will transform into the INTERNET OF EVERYTHING (IoE). The Internet will link people, processes and data together, and we will observe the boom of smart homes, smart offices, smart industries, and smart cars. It is expected that people will be connected by miniature chips that will enable wireless long-distance connectivity to the Internet.

     According to CISCO, the potential economical value of the market of the Internet of Everything (IoE) accounts for ca 6.2 trillion of USD in 2025. Companies that adapt quickly to the upcoming massive changes in the Digital world will be the ones that can capitalize on them and survive the uncertain future. There is no possible way to escape the digital future.

This article was written for the magazine Business Woman  (01-2014 issue) 

VISION 2014+: Profit Growth Paths Exist, If You Stay Flexible

Growth supporting management tools like costs´ optimization and effectiveness of processes are in the Czech Republic already fully exploited. Is it still sustainable to continue in cost cutting after five years of streamlining thanks to the economical crisis?, asks Jana Budikova, strategic management consultant and owner of JBC Consulting. She sees the competitive advantage for companies in the area of quality of products and services, as well as in their constant improvement and innovation.

Do you see new trends or issues Companies seek a consulting advice for?

The business environment is changing. My recommendation for small and mid-sized companies, not just for next year, but also for the years to come, is to focus on searching new growth areas – via innovation of products, services, the way of delivering customer experience and last but not least in innovation of intercompany processes and business models of running a Company. I would definitely devote full attention to exploiting new opportunities resulting from presence in the digital world. I do not mean only quality and responsiveness of web pages; I see opportunities in communication with customers via social media and in mobile space. I would focus on integration of on-line and off-line worlds, to maximize synergies from both channels. I would also smartly segment the customer base into groups, so that I could offer individual approach to the most loyal customers who generate the highest turnover for my company. I would do everything for understanding the needs of my customers, so that my offer is as closest as possible towards their imaginations. Exceptional customer service can on top of that represent in the Czech environment competitive advantage for many companies.

To assure efficient company operations, I would not be afraid to use the services of trusted cloud computing IT companies. Cloud setting combined with big data management helps to structure the data and share it more effectively, the territorial distances are diminished, and actualization and safety of IT systems is in the hands of professionals, who make the IT operations simpler and less costly. On top of that, thanks to pre-defined data structure, leaders can better measure the business and thus to better manage it. Overall I would try to outsource specific areas of expertise, in which I cannot fully utilize the personnel on an annual basis – these areas could range from setting a strategy of a company toward accounting agenda outsourcing. This would enable me to free up resources for innovations.

I wouldn´t be afraid also to use the investment support from so called „seed fund“, i.e. the Czech development fund, that should hopefully finally start its operations in 2014.  I would not create my business model based on this state & EU financed capital (up to 50% resp. 70%), I would like to use the extra investments for acceleration of innovation speed, increasing the probability of innovation success with the No. of launched innovative ideas.

You advise to exploit internet more seriously. Why?

Growth opportunities exist in the retail world, but not only there. The percentage of people, who at present buy goods or services via internet, grows each year (editors note: according to the company Shoptet, at least once a year 79% of Czech internet users buy goods or services via internet;  at least once a month 43%).  Internet shopping still accounts only for 5-6% of total retail turnover in the Czech Republic and this channel grows continuously, despite the negative trend of total retail segment caused by the economical crisis.

The world of internet offers a lot of new opportunities in the area of on-line marketing and tailor made presentation of a company; new chances exist also in the area of development of internet applications used in many branches – from data search and sorting, towards publishing, reservation activities, e-learning, toward tools for better administration, accounting management or legal financial claims management.  Small or middle sized companies can effectively use these applications or they can get themselves into the business of applications development with the prospect to operate them worldwide.

You mentioned that it is necessary to be close to the customers. What specific actions should companies take to fulfill that mission?

There are several areas, where I would suggest focusing.  In the process of new products or services development, we can use Crowdsourcing for generation of new ideas and for testing of their attractiveness – e.g. internet open group development of a new drink, its flavor, packaging or even a brand name. For implementation of new ideas we can use a method of Crowdfunding – obtaining micro investments from general public with the motivation, that contributors will receive a new product sooner than others and that they will obtain several other advantages, once the new product or service is launched.

Once the product is widely available on the market, then it is important to offer each customer – either from on-line or from off-line world - personal care, so that he/she gets the feel of uniqueness and returns back for the next shopping. However spam e-mails do not serve well for that purpose. It is more effective to create such an internal data system (of course after receiving permission from a customer enabling to use the data), that will process the profile of a customer. If managers know, which customers buy, how often, in what value, they can prepare tailor made offers, present a very suitable gift, or they can organize a relevant sales supporting event. There are also plenty of opportunities in the Czech Republic, how to improve the atmosphere during the business meetings or in shops. When the Companies learn how to satisfy the real needs of their customers and when they learn to do it most effectively, they can charge higher prices to customers also during the time of an economical downturn. Examples exist. Apple under the leadership of Steve Jobs was one of those clever ones.

However persistency is a key. Since Tim Cook stepped in, Apple abandoned its leadership principles and it started to launch not functional innovations (e.g. Apple Maps), no wonder that customers lost trust. Entrepreneurs should be brave enough to stop product launches, if these cannot meet the highest standards. Quality will remain to be the main competitive advantage.

Are you sure, when today price still plays the most important role?

I have recently met Mrs. Klimova, owner of Aspius, who imports raw meat and offers it to Czech consumers under the brand My Meat “Moje Maso”. She capitalizes on the fact that her competitors try to cut costs at the expense of its quality.  But she set out her business in the direction of quality, and she strictly follows her route. She has put her own picture on each packaging in order to guarantee the product quality, and by that she inspires confidence.  People still understand the difference in quality. And when they want to make a treat for themselves, they will not save on meat.

You have mentioned outsourcing; do you think that companies rather prefer to have every function in house? I though these days are over.

Thanks to the on-going economical downturn, companies reduced the investments into personnel; they have cut positions and combined functions in a way that employees do not have time to properly execute the tasks. These functions are in the same time not outsourced externally. Therefore it is important to assess, what a company can manage itself and for which tasks it is better to hire temporarily external experts. Sometimes it is more advantageous to hire expensive top class expert, who solves the problem quickly and efficiently, but he/she will not hit the P&L long-term. Hiring experts becomes one-off investment, without on-going high fixed costs. The crisis changed the angle of view; and return back is not possible anymore. The rules, that were in place five years ago, are today obsolete. Leaders have to lead in a new way; they have to put flexibility in focus.

These are in principle the key thoughts that I try to pass on, when I come to a company to restart it, to define new strategies for growth and to launch effective processes. It is awesome if you manage to achieve good results today, but it is even more important to look forward, what comes tomorrow or how the world will look like in two, three years. The pressure to reduce costs will remain; the growth has to come with increasing the focus on customers, offering them high quality goods and services and their constant innovation. Only then you can be sure that the gap on the market will be filled by you, not by your competitor.

The way out of crisis will not be easy; maybe the return to growth was even postponed, when the Czech National Bank (CNB) changed the rules on the market thanks to its unexpected currency interventions.  I remain positive, though. We have a lot of capable and successful entrepreneurs in the Czech Republic, who will be able to have their breakthrough despite the obstacles they face. They will become an inspiration for others.

You have mentioned CNB’s intervention. Do you think that it will cause serious problems to entrepreneurs?

Frankly say, I consider this intervention a punch to face to all entrepreneurs, because it was not processed in a standard way, like in Western countries, where interventions are discussed with a government, a president or a Senate.  Normally financial analysts give warning and prepare the expectations of the business community (this time all the analysts predicted an opposite trend i.e. strengthening of the Czech currency).  

Czech economy was considered stable, thus fixing exchange rate was not a standard tool and contracts did not have clauses including covering the exchange rates risks. We are heavily based on imports; with the intervention a lot of entrepreneurs lost money overnight. It would be idealistic to think that entrepreneurs, who already for long time suffer due to the decline of consumer demand and of their margins, have reserves for such unexpected events. They will have to focus now on covering the losses, instead of aiming their efforts and investments into innovations. The trust issue in further steps of CNB remains a problem for future, that will lead only to conservative investment approach.

Argument about deflation has not persuaded you?

I have watched Mr. Singer, the Governor of CNB, on TV and he did not convince me. He totally abandoned the importance of stability of entrepreneurial environment as well as of trust in the system.  I am also not optimistic about his argument about creation of new jobs. International corporations will put focus on cost saving, because they set the targets in Euro already for some time (and they pay rent for shops and offices in Euro). All base costs (including petrol) will increase for everybody, companies will not have the chance to realize full scale price increases, because consumers’ demand is on its low already for long time and companies will not be able to increase salaries. Companies are already over cost optimized.  Rather than currency intervention our economy needs stability of the system and growth stimulating offers, otherwise it will not get out of the crisis.

You have rich experiences from Germany, is there a recipe for our problems?

I moved to Germany in 2004, to become an Executive Director. During that time Germany had recorded GDP decline and overall the business environment was frozen. Only after Angela Merkel assumed the office of Chancellor of Germany in 2005, and only after she introduced several measures for stimulation of economy and business, the German economy returned to growth and today Germany is economically at the top of Europe. The government introduced several incentives not just for small and medium entrepreneurs. In the same time Angela Merkel managed to drastically reduce the unemployment rate and to keep the low level of inflation. We have something to learn from, I guess. 

This interview was led by Petr Svihel, Chief Editor. It was published in the magazine Trade & Finance (Obchod a Finance) by Mlada Fronta/E15 in December 2013 - you can download the original Czech version / in two parts / here:
- part I.
- part II.

Twitter Went IPO, IBM In Cloud Crisis, Support To Bitcoin

Source: Mashable

  PROFIT IN THE EYES OF AN ENTREPRENEUR:

What news attracted my attention last month?  Selection & commentary by Jana Budikova

Will Twitter Survive the Change of Company Culture?

In November, Twitter went IPO, following the strategy of Facebook. Valuation of Twitter at 22times multiple of its sales, even though the Company still founds itself in a loss, shows, that investors appreciate, rather than its historical P&L performance, the high number of its users reaching 200 million worldwide. Investors recognize increasing trend in the Twitter’s user’s base, mainly in the mobile space. Even though founders celebrate, that they have become rich over night, they may not be fully aware of the pressure they will face from now on - the pressure from investors to deliver results every quarter. Investors expect break-through innovations, continuous growth of turnover and shift from a loss into a profit gain, all of that preferably in very short time. Twitter will have to change its way of Company management. Reporting to shareholders on a three month basis in fact means replacement of truly entrepreneurial, opportunistic leadership approach by traditional management of a company listed on the stock exchange, where the leaders do not have so much freedom to make decision and everything is more focused on processes and short-time horizon. I doubt this is a piece of cake for Jack Dorsey and his soul mates.

American support of Bitcoin

The American Senate gave a green light to the development of a virtual currency. They admitted that eventually Bitcoin (BTC) may become an alternative official payment method, which has its advantages in the digital space. However, such virtual currencies must be first regulated and their security and stability must be solved. It must be clearly stated what role and relationship they have towards other currencies.  Legal rules have to come in force, to protect the currency from money laundry misusing. Before this happens, I would not recommend Bitcoin (BTC) as a payment instrument, but I am positive about its future usage in the digital world. At the beginning, Credit cards and PayPal were also a subject to criminal causes, and today we all use them regularly. So why be afraid of an innovation?

IBM in a cloud crisis

Although the IBM strategic priority is to offer cloud computing services, its leaders struggle to realize this intent. IBM focuses itself over proportionally on the big customers; they lack flexibility towards the market shifts and towards the action of arising competition, like Dropbox and Netflix. IBM managers publicly question Amazon for its low safety level, instead of using the media space for promoting the benefits of its own cloud computing services. No wonder that in the third quarter, IBM recorded the downfall of turnover and profit, despite its acquisition of SoftLayer , the cloud specialist. I believe that to recover the sales of the group, it is important to change the business model, to better define the target group as well as to improve quality and availability of IBM services.

IBM will not be able to reverse the negative trend, unless it will put focus on the small and middle sized companies, who represent the future revenue stream.  And trust in the cloud computing expert will remain the key aspect for choice of a provider. How long can IBM attack the credibility of Amazon when it was IBM who lost the pitch to the American CIA? The CIA has already given the preference in cloud computing to Amazon for the second time.

Microsoft attacks Google

For those of you who want to be officially “anti-google” and do not agree with the fact that Google collects personal data about its users and processes them to change the search order based on paying customers, Microsoft created official web pages, as well as an internet shop Scroogled store.  You can express your opinion towards Google´s actions publicly – you can buy there T-shirts, caps, or an-eight-dollar cup, that suggests you to “keep calm, while Google is stealing your data”. Microsoft builds this way on its campaign “Don´t get scroogled”. It softly points out towards the Bing search engine, which is supposed to be more objective. I cannot judge, but after the recent NSA spying affair in the digital world, I may stay with - still Czech owned- Seznam.

This article (in the Czech language) was published in "Profit" magazine by Mlada fronta on Dec. 9th, 2013 You can download it here: Profit in the Eyes of an Entrepreneur