We are currently experiencing a convergence of technologies and capacity that is permanently altering the mode of commerce: web-enabled communications; e-commerce adoption, mobile phone up-take; high-speed broadband penetration; affordable consumer electronics devices; cloud computing services; software-as-a-service; social networking adoption; and so on.
This shifting environment is presenting incredible opportunities for business. By adopting an exploratory posture geared to learning, fashion businesses may focus on maximising their potential to ride the wave of opportunity. With consideration to key themes and trends, decision-makers can create a frame of reference to explore and discover new approaches to their core business processes and customer acquisition channels.
Social media
The phenomenal rise of media platforms like Instagram, Pinterest and Tumblr allow people to express themselves in a manner unprecedented in the history of the web.
On these platforms, users are both curators of content as well as creators. In the Friendster, MySpace and pre-newsfeed Facebook phase of social networks the focus was purely networked connections.
Since the coming of Twitter in the mid-to-late 2000s together with the mobile web, focus has shifted dramatically to centre around real-time communication and content. The connected consumer now tells the story of her experiences and communicates her worldview using content created on mobile and curated via web.
She is actively broadcasting, compiling, sharing and remixing content to both her friends and wider audiences, creating her digital self.
To maintain relevance on social platforms, marketers must humanise brands and products using content that communicates their brand and product stories authentically, and with empathy and compassion.
The mobile web
The evolution of the social or connected web is being enabled by the growth of smartphone adoption globally.
According to the International Telecommunications Union, there were 5.9 billion mobile subscribers globally in 2011 – this amounts to about 87 per cent of the world’s population. The Union reports a staggering 1.2 billion of those subscribers utilise smartphones connected to the web. This uptake is confirmed in sales figures released by smartphone manufacturers – via Android Developers Dashboards – in the second quarter of 2012, 158 million smartphones were shipped globally.
For the technically minded, Android (Google) is now the most popular operating system globally, and surpassed iOS (Apple) in the second quarter of 2012 with 68 per cent of sales compared to iOS with 17 per cent. This trend is reflected in the current US smartphone subscriber market share according to comScore. While surpassing iOS in global activations, the Android app ecosystem is certainly not preferred by developers (contrary to ambitious predictions as such by Google Chairman Eric Schmidt in December 2011). Currently only one in four hardware manufacturers are running the latest version (Jellybean) of Android.
Native access to the mobile operating system is clearly one of the most strategically critical “battlegrounds” of our web-services future. Google, Apple, Facebook and Amazon are on a collision course to own this customer acquisition channel and seek to build huge vertically integrated web-services businesses around it. The recent release of the Facebook Home “apporating” system (a Facebook layer or skin on top of Android) is indicative of this trend.
Uptake of web-enabled mobile devices is presenting incredible opportunities for mobile commerce. According to Nielsen, mobile payments are growing at a staggering 430 per cent year-on-year in Australia and 1000 mobile transactions take place here every hour. Over one-third of all smartphones have purchased a product using the device. This trend is leading to the emergence of new mobile enabled payment solutions. The global leader in the space is Square (imagine PayPal connected to a smartphone app that works like an eftpos terminal), while the launch in Australia of the ANZ FastPay solution is noteworthy.
Gamification
The global online gaming market was forecast to reach $21 billion US in 2012. The popularity of games is clear on smartphones – games are the most popular category of app downloaded from the App Store according to Neilsen, and regularly reach 60 to 65 per cent of downloads by category. Indeed, the gaming industry may be considered the new Hollywood because of its share of entertainment spending. In 2011 Activision Publishing announced that its game Call of Duty: Modern Warfare 3 crossed $1 billion US in sales in just 16 days, eclipsing the record set in 2009 by the feature film Avatar, which reached the $1 billion US milestone in 17 days. At its best fashion is playful, fun and expressive – interest in games presents a new opportunity for marketers to reimagine engagement through the prism of gamification.
Multi-screen media landscape
According to a 2012 joint Google, Ipsos and Sterling Brands study with a substantial control group of 1,600 persons, 90 per cent of all media is consumed via a screen and 38 per cent of daily media interactions take place on smartphones. The research shows a mere 10 per cent of consumed media is non-screen (comprising radio, newspapers or magazines). On average 4.4 hours of leisure time is spent in front of screens each day in the US.
This screen-based media landscape is bringing up new behavioural or usage patterns. People now own multiple devices or screens, with the device of choice driven by context: the amount of time at hand; the goal in mind; the physical location; and the relative state-of-mind (leisure or work). Consumers now move sequentially between multiple devices to accomplish tasks such as social networking, planning a trip or watching video content.
This constant connectedness is naturally changing the way people shop. Spur-of-the-moment or spontaneous shopping – whether inspired by a recollection or in response to immediate surroundings like display advertising – accounts for around 80 per cent of all shopping on smartphones, according to the joint study. It is therefore important to tailor experiences to each channel: on smartphones simplicity-of-use and immediate feedback is imperative. Interestingly, in the majority of instances the path to purchase is completed on another device such as a PC/laptop.
Social TV
Of particular impact to TV programming and advertisers, the TV screen does not capture total attention. A recent US study found 77% of TV viewers watched while accompanied by another device (49 per cent with a smartphone and 34 per cent with a PC/laptop).
This suggests the trend to social or event TV will continue, where conversation coinciding with major events is followed simultaneously on Twitter via hashtags.
Indeed, Twitter emerged as a media company in 2012: it shed its heritage as a social utility by restraining access to its social graph API for third-party client applications (i.e. controlling more of the user experience than previously); and it embraced a media partnership with US television network NBC to curate millions of tweets during the London Olympics from athletes, their families and fans. Twitter will continue its evolution as a media company in 2013: the recently announced “Nielsen Twitter TV Rating” will seek to define and measure the reach of real-time TV conversations on Twitter in the US market. The aim is to quantify the impact for advertisers running integrated campaigns combining paid and earned media across the event TV and multi-screen experiences.
Smart TV
The TV screen may be aptly considered the final frontier for traditional media, for it is essentially the final screen of the trifecta (pocket, tablet and loungeroom) to become web-enabled. Smart TV – televisions and set-top boxes with web features – may refer to hybrid set-top boxes (combining terrestrial digital, cable and internet) and IPTV (internet protocol TV or web-only TV). Multiple use-cases exist, including video-on-demand, time-shifting TV, web applications, video telephony, surveillance, gaming and shopping. Inevitably, this will offer a range of opportunities for fashion businesses that is set to play out over the next few years.
On the delivery side, network speed and capacity is set to increase as the National Broadband Network (NBN) is progressively implemented across Australia over the next decade. While the exact specifications of the roll-out will remain uncertain until after the federal election in September 2013 (ALP policy calls for fibre-to-the-premises while Coalition policy calls for fibre-to-the-node), the NBN has the potential to increase speeds from 100Mbps to as much as 1000Mbps in time. Similarly, video compression standards are constantly improving – the High Efficiency Video Coding (HEVC) video compression standard is now finalised, offering double the data compression ratio compared to its predecessor H.264/MPEG-4. This means that compared to H.264 – the compression standard for Blu-Ray video – HEVC doubles video streaming quality and halves bandwidth requirements.
On the content side, SBS, ABC and Foxtel all offer digital specific content. Globally, Netflix launched its on-demand video service in the Nordic countries in mid-October 2012, while HBO Nordic is available to pay television subscribers in Sweden. With an internet user-base around 90 per cent of the population, the Nordic region is considered the testing ground for internet-only subscription content services.