Web 2.0 Expo New York ! The Future of Ecommerce: " Frictionless, - - PowerPoint PPT Presentation

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Web 2.0 Expo New York ! The Future of Ecommerce: " Frictionless, - - PowerPoint PPT Presentation

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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 ! "

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Elastic Path Research and Consulting!

Web 2.0 Expo New York! The Future of Ecommerce:" Frictionless, Social, Everywhere!

October 10th-13th, 2011!

! Presented by Elastic Path Software Chief Strategy Officer Cliff Conneighton!

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Elastic Path Research and Consulting!

Elastic Path has more experience selling digital content than anyone

" !

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Elastic Path Research and Consulting! Elastic Path Research and Consulting!

#1 subscribed ecommerce blog! ! www.getelastic.com!

!

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Elastic Path Research & Consulting!

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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

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Elastic Path Research & Consulting!

Digital is different. It must be:

Frictionless! ! Social! ! Everywhere!

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Elastic Path Research & Consulting!

Frictionless

  • Transactions in the context of life!
  • Only relevant offers!
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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!

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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!
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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!

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Elastic Path Research & Consulting!

!"#"$ !"##$ %"$ %!"$ %&"$ %'"$ %("$ %#""$ !"##"$%&'

Many face an existential challenge

February sales of ebooks tripled y/y, CAGR forecast = 72%!

Traditional down 34%!

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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”!

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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!

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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”!

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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”

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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”

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Elastic Path Research & Consulting!

Gartner’s advice

  • Balance fear of giving too much away against the danger
  • f stakeholders not participating in your ecosystem. !
  • “Targeted acts of digital generosity" can introduce your

business to a huge audience of new customers. !

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Elastic Path Research & Consulting!

Google Catalogs kills ecommerce as we know it

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Elastic Path Research & Consulting!

Markets are colliding

creator publisher retailer consumer

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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?!

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Elastic Path Research & Consulting!

Traditional Retail Hard-goods Relationship

wait!

Order! Ship!

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Elastic Path Research & Consulting!

New Era of Digital Relationship

Requires Digital Relationship Management!

for a perpetual interactive relationship!

now!

download! read! watch! experience! socialize! try! contribute! view! explore! play! query! renew! extend!

  • ffer!

upgrade! learn! continue!

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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!
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Elastic Path Research & Consulting!

What good is a “Stock Keeping Unit” $

$ $

when you are delivering a copy of a file? really selling “Entitlements”!

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Elastic Path Research & Consulting!

A digital product is different. It can be:

  • Time-based!
  • Copied!
  • Used simultaneously!
  • Disaggregated!
  • Bundled!
  • Consumed in bites!
  • Subscribed!
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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:! ! Product Discovery! Seller’s POV:! ! Offer Management!

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Elastic Path Research & Consulting!

Long Tail v. Paradox of Choice

Offer management !Product Discovery!

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Elastic Path Research & Consulting!

Commerce Software " Vendor Ecosystem!

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Elastic Path Research & Consulting!

The Integration Challenge

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Traditional API approach inappropriate for Elastic Commerce

Requir Requirements for a new model of commer ements for a new model of commerce API: ce API:!

  • Built for Media developers, not Java developers!
  • Navigable REST!
  • Scope focused on commerce: terse = fast!
  • Optimized for the new universe of devices!
  • Oriented to javascript, not XML!
  • Perfect for iOS, Flash, jQuery!
  • Enabling decoupled, agile workflow!
  • Not assuming a bricks & mortar shopping model!
  • Security model in the user’s context!
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“Great people can trump bad structures. Getting the perfect structure for innovation is not as important as creating an environment in which innovation flourishes.”

Source: Gartner

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Higher level of departure allows innovation, differentiation

Tomorrow! 2010! 2000! 1990! 1980! 1970! 1960!

!

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1/*?3<$<:;;1-<1$@/*^:-;$ We have seen this movie before.

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A balanced development architecture is required!

Fully bespoke Fully bespoke!

  • !Total flexibility!
  • !High IT skill!
  • !High TCO!
  • !Costly to keep up "

!with technology!

Elastic Elastic!

  • !Total flexibility!
  • !Moderate IT skill!
  • !Low TCO!
  • !Easy to keep up "

!with technology!

Fully packaged Fully packaged!

  • !Low flexibility!
  • !Lower IT skill!
  • !Lower TCO!
  • !Costly to keep up "

!with technology!

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Elastic Path Research and Consulting!

Future elastic commerce system requirements!

1. Built on the foundation of entitlements#! 2. Enable great customer experience on variety of devices and internet of things!

!- To enable selling in the context of life.!

3. Make buying experience more relevant and frictionless! 4. Optimize integration with vast ecosystem! 5. Architected for flexibility & extensibility!

Because digital is different!

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Elastic Path Research and Consulting!

Web: www.elasticpath.com | Blog: www.getelastic.com!

research ! advisory ! software ! services !

cliff@elasticpath.com!

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