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New Customer Behavior

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by

Ling Xu

on 3 December 2013

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Transcript of New Customer Behavior

As we know the experience
New Customer Behavior
Nowadays' catalysts
Low cost carriers
Growth of cities as destinations
Rise of retail as the alternative attraction
Centrality of web / electronic marketing and data sourcing

Understanding The Future Customer
What do we want to achieve ?
Visitor Numbers: more customers alwa
y
s a goo
d

starting point to understand business
Something of a struggle: when we are n
ot great
at understanding the consumer

Holiday Buying Behavior
Understanding Buyer Behavior
Tourism Development
Access
Attractions
Accommodation
Activities
Through:
It's a race with retailers
Our world in 2013
Thank you for your attention!
Present by Ling XU
Holiday Decision Making Hierarchy

1. Mother
1.Mother 2.Children
1. Mother 2. Children 3. Father
1. Mother 2. Children 3. Dog 4. Father

Designing for Consumption
• Do we design hotels
wit
h knowledge of consumers ?
• Spaces we create and
ho
w they are used


Critical Touch Points
First Physical Contact. for example: check in

Attention is focused on owners of credit cards
Other adults

Service encounter can be transformed if attention is focused on reasons for holiday location / choice / expenditure
OR the most important people
in
the pa
rents
lives: their Children
Se
rvice encounters with Chil
dren: we
employ
lots
of teenagers and they
know
how to look a
fter
small children bec
ause
they have yo
unge
r brother and
siste
rs.”

Is now electronic
100% Transparent
Trailed and Photographed
Displayed and exchanged
Consolidated and detailed
Twitter, Facebook, Trip adviser

Scale is important here
The number: 500 million -- the number of photos uploaded and shared every minute in 2013
This has changed our industry and will continue to do so

• Oxfo
rd
Street, Regent Stree
t,
Bond Street in London
• The
la
rgest combination of ret
ail
spend on the planet

BUT
The race is over
British Muse
um
5.5 m visitors
Oxford Street
Foo
tfall 140 m visitors
81% of tourists t
o Lo
ndon list shopping as a mus
t do
activity

How is it characterized ?
How is it defined ?
Seems like its all about IT and Retail

Professor J John Lennon's approach
When I knew you wanted to understand future consumption I interviewed people
People a lot smarter than me
But not from tourism people
Chief Executive ASOS
Chief Technical Officer Microsoft

ASOS
Microsoft
£1+ Billion Retail Sales
No Stores
1 Warehouse, 7 websites, 150+ countries
Free Delivery
UK based
UK 3% of consumer base
In 8 years UK 1%

Internet is just another phase of retail development
Technology is an enabler allowing people to make big decisions in a very short time
But what about Oxford Street, London
Everyone still goes to Top Shop

Choice is killing the Old World
Not everyone has access to Oxford Street or Top Shop, Oxford Street
They do on the internet
Choice on-line v Choice in Store

Building web appeal
No one enjoys viewing 7-8 websites - better one site that has everything
Then make it Personal – how do we simplify the offer / profile algorithm
1 They buy at night / 2 They buy a lot on line / 3 Personalization and the idea of a personal stylist helps (style library)

Building awareness – from web to brand
ASOS saw space opening in fashion
Employed young people who:
Love Fashion
Love mobile
Love internet
They also love holidays as Facebook will testify

Largest clothing retailer in Australia with no traditional marketing and 2-3 days delivery time
Awareness and growth only via Facebook, Twitter and other social media channels
Shaping future:
Pervasive Connectivity
HD Collaboration
Natural Interaction (wearable nanotech)
Everyone’s mobile
Social Graphics
Big Data and Better Insights

In store experience is on-line:
Marketing
Everything is about story telling
The new shopping
No longer “How can I help you ?”
Now its how can I help myself
Buying the Microphone:
Scan microphone bar code on line
See what users think of the product
Compare price on line / in store
Shopping has changed


Apple
The toddlers favourite toy
Baby friendly Apps
Toddler Teasers, Baby Fun !, Instant Arcade, Peek-a-Boo, Pocket Zoo.
Apple is the favourite brand among children
Pass tablet to child and they are hooked
But I want the best for my child...

The centrality of brands
By 2 years 90% of all infants are watching screen media regularly (developed world)
Brand recognition 18-24 months
By 36 months US children can recognize up to 100 brands
Brand preferences expressed at age 4-5 years
56% of adults use brands they remember from chil
d
hood

Think about brands and teenagers
Anxiety and belongness
Majority of teenagers believe buying branded goods will enhance confidence and peer acceptance
Superdry T Shirts, Abercrombie Hoodies
Today's teenagers spend 5-6 x the revenues their parents spent on clothes

Brands and Teenagers
During the period of identity development belonging is a powerful urge for children
Alignment with an external force – using the attributes of that group, that object helps define themselves
More than 60% of teenagers consider brand when choosing clothes and the majority would be reluctant to wear non- branded goods
That’s how Abercrombie can charge £50 for a T shirts and Apple £590 for a phone

So, who really understand the customers?
Probably Mark Zuchenberg (Facebook)
If it was a country it would be between 2nd and 3rd largest in the world by population
More than 60 million da
i
ly status updates
Its where everyone is
Its where we construct our lives
Where we send messages, post invites,

understanding
consumers
Where we post pictures (more than 1 billion images posted per week)
Where we say what we like (the importance of peer recommendation)
This material is gold to those who mine data and big data and understanding your likes, needs and wants is where the market is going

Understanding
consumers
Welcome to the £70 billion world of data mining / knowledge discovery / consumer insights
Companies now can chart your buying habits, race, gender, address, phone no, education, approx. income, family size, pets, film choice and much more creating an ability to understand

Understanding
consumers
The motivations and understandings around what customers buy and do
Every element of what you purchase can be monitored
An airline boarding card or a discount voucher printed from your computer with a bar code gives access to your computer IP address, Facebook profile and posts, date and times you printed and used the boarding pass

Understanding buyer behavior
Your online behavior will be matched to in store purchasing, in this way retailers can understand what ads work for your demographic/ population profile
Personalized sales
communication
The aim is to build programs based on recognition and relevance which comes from knowing preferences, loyalty cards...
In 2011 major concern when it emerged that iPhone and Android phones contain software that tracks and records users locations. Location updates every few seconds why.... A $3 billion market for location based services

Let's look at.....
Walmart
-POS data captured from 3000 stores in 6 countries held in a 7.5 terabyte warehouse (8 x size of US Federal Governments storage facility)
Why ? What sells and what doesn't
Example Hurricane Warning – what to stock ? Torches and batter
ie
s
Beer
Pop Tarts (Strawberry flavor)

G
o
o
g
l
e
Best of
Google
Now with Google maps it knows where you live, car parked in driveway, whether or not your fire is lit
Now Google will know who you like on Facebook, who appears in your photos, what you tweet about
Welcome to the post privacy age

Best of
Google
Most sophisticated predictive algorithms and data tracking capabilities
Google knows what you search for, links search to computers used, knows what online videos we watch, music you stream, articles read, files downloaded, knows what's in your emails (scans automatically for serving contextual advertising).

That brings us back to the customers:
The aim here is to get close to people
So do not loose heart
Those people sit in your restaurant, eat your breakfast, sleep in your beds, take your rides, pay your admission

Access to customers
People are with you for valuable time
They are much more likely to follow a purchase recommendation from someone they know or trust
Humans still have an important role here
Do not squander this time

Tourism can compete
Holiday is a must do
Travel is the norm
Authenticity and personal contact is the desire / aspiration
Personalisation is at the heart of most of the algorithms used for profiling
Here is the advantage for tourism...

Understanding the future tourism consumer
Professor J John Lennon Moffat Centre for Travel and Tourism, Glasgow Caledonian University, UK
www.moffatcentre.com jjle@gcu.ac.uk
Moffat Centre and Scholarships
Moffat Centre revenues created by trading; work in more than 45 countries on over 600 projects
Since 1999 £1.3 million in scholarships awarded by the Moffat Centre to students interested in studying Tourism subjects
Details www.moffatcentre.com
Forecasting ---
Albert Einstein
“I never think of the future, it comes soon enough”
• When I began...
Consumer Forecasting
• Ask Yogi Bear: “This forecasting stuff is really tricky especially about the future”
• Thanks
• Enough from me
• Questions welcome
• www.moffatcentre.com • jjle@gcu.ac.uk
Professor J John Lennon:
Full transcript