Web 2.0 Expo New York ! The Future of Ecommerce: " Frictionless, Social, Everywhere ! October 10 th -13 th , 2011 ! ! Presented by Elastic Path Software Chief Strategy Officer Cliff Conneighton ! Elastic Path Research and Consulting !
" Elastic Path has more experience selling digital content than anyone ! Elastic Path Research and Consulting !
#1 subscribed ecommerce blog ! ! www.getelastic.com ! ! Elastic Path Research and Consulting ! Elastic Path Research and Consulting !
Elastic Path Research & Consulting !
In 2010, consumers globally spent $2 trillion on digital information and entertainment products and services This will increase to $2.8 trillion by 2015 Elastic Path Research & Consulting !
Digital is different. It must be: Frictionless ! ! Social ! ! Everywhere ! Elastic Path Research & Consulting !
Frictionless • Transactions in the context of life ! • Only relevant offers ! Elastic Path Research & Consulting !
Social • Control of the brand has shifted to the crowd ! • Anyone can be a merchant, author, reviewer, developer, reporter, editor, or publisher ! Elastic Path Research & Consulting !
Commerce must be everywhere • Sellers come from anywhere ! • Products come from anywhere ! • Information about products comes from anywhere ! • Buyers come from anywhere ! • Transactions can occur anywhere ! • Technology comes from anywhere ! Elastic Path Research & Consulting !
elas·tic \i-las-tik\ • capable of ready change or easy expansion or contraction: not rigid or constricted ! • receptive to new ideas: adaptable ! ! Elastic Commerce ! Elastic Path Research & Consulting !
Many face an existential challenge February sales of ebooks tripled y/y, CAGR forecast = 72% ! Traditional down 34% ! %#""$ !"##"$%&' %("$ %'"$ %&"$ %!"$ %"$ !"##$ !"#"$ Elastic Path Research & Consulting !
Books moving to digital almost as fully as music did ebook adoption 25% ! • 2/3 have gone exclusively ebook ! • 36% of e-buyers spend more in total across all formats ! • If new book by favorite author is available only in print? ! • – Readers over 55, 47% would wait for the ebook ! source: AAP & Elastic Path Software Research Paper “ Brave New Publishing World: Assessing the Impact of Ebooks on Consumers” ! Elastic Path Research & Consulting !
Digital Goods for the Holidays 63% will consider buying ! • – 27% plan to for sure ! • 53% for their children ! • 47% for other relatives ! • 46% for spouses or partners ! • 30% of digital buyers will spend more overall ! – 15% of all shoppers will spend more ! source: Upcoming Elastic Path Research Report “Virtual Goods Mean Real Money This Holiday” available Nov 1, 2011 at www.elasticpath.com/resources ! Elastic Path Research & Consulting !
Gamers shifting from boxed to digital downloads In 2011 v 2010 ! • – 73% to spend the same or more on downloads ! – 63% to spend the same or more on boxed games ! – 76% of PC & Mac gamers with tablets and smartphones plan to spend same or more on mobile games ! Electronic Arts Q4 2011 earnings call: will become a " • “ fully integrated digital entertainment company ” ! 6 million unique users access Steam daily ! • source: Elastic Path Software Research Paper “ The State of PC Gaming: The Shift from Packaged Goods to Digital Distribution” ! Elastic Path Research & Consulting !
Gamers want new commerce models 73% find title bundles ! • – All current and future downloadable content ! 70% would view embedded ads to play for free ! • 51% would pay monthly fee for unlimited games ! • 77% would buy more with “try before you buy” ! • source: Elastic Path Software Research Paper “ The State of PC Gaming: The Shift from Packaged Goods to Digital Distribution” Elastic Path Research & Consulting !
Readers want new commerce models 71% like all-you-can-read subscriptions idea ! • 70% will accept embedded ads to reduce price ! • 75% will refer on social sites for discounts ! • 79% interested in group buying discounts ! • Recommend/review on social media now: ! • – 66% of 18-24 ! – 47% of 35-54 ! – 19% of 55+ ! >50% young adults would “rent” rather than buy ! • 36% would buy more if could share/loan more ! • source: Elastic Path Research Paper “The Future of Newspapers and Magazines in the Digital Era” Elastic Path Research & Consulting !
Gartner’s advice • Balance fear of giving too much away against the danger of stakeholders not participating in your ecosystem. ! • “Targeted acts of digital generosity" can introduce your business to a huge audience of new customers. ! Elastic Path Research & Consulting !
Google Catalogs kills ecommerce as we know it Elastic Path Research & Consulting !
Markets are colliding creator publisher retailer consumer Elastic Path Research & Consulting !
Markets Are Colliding, Not Converging Devices compete ! • – phones, laptops, tablets, game consoles, set-top boxes, connected TVs ! Monetization vehicles compete ! • – Pay-walls, advertising and unit selling ! Content providers and markets compete ! • – Google, Apple telcos, publishers, software developers, device manufacturers all compete to sell apps and control mobile commerce & digital media ! – YouTube competes with Apple, Netflix, on-demand TV ! – Wireless, wire line, cable and Microsoft (Skype) all compete. ! What business is a media company in? What business is a media company in? ! Elastic Path Research & Consulting !
Traditional Retail Hard-goods Relationship Order ! wait ! Ship ! Elastic Path Research & Consulting !
New Era of Digital Relationship play ! contribute ! socialize ! explore ! experience ! download ! view ! read ! watch ! try ! query ! renew ! now ! extend ! continue ! offer ! learn ! upgrade ! Requires Digital Relationship Management ! for a perpetual interactive relationship ! Elastic Path Research & Consulting !
Four enablers of digital relationship management 1. Entitlements ! 2. Better product discovery/offer management ! 3. New approach to integration ! 4. Flexible digital-centric commerce platform ! Elastic Path Research & Consulting !
What good is a “Stock Keeping Unit” $ $ when you are delivering a copy of a fi le? $ really selling “Entitlements” ! Elastic Path Research & Consulting !
A digital product is different. It can be: • Time-based ! • Copied ! • Used simultaneously ! • Disaggregated ! • Bundled ! • Consumed in bites ! • Subscribed ! Elastic Path Research & Consulting !
The The back list back list is now the is now the front list front list . . The The archive archive is now is now prime time prime time . . Right product " Right content " Right person " Right context " Right price ! Customer’s POV: ! Seller’s POV: ! ! ! Product Discovery ! Offer Management ! Elastic Path Research & Consulting !
Long Tail v. Paradox of Choice Offer management ! Product Discovery ! Elastic Path Research & Consulting !
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