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Technology: Luxury’s Bae?

Technology may be cold, technical and unemotional but with every advancement, new frontiers of human desires and behaviours are found, greater sophistication of interaction is driven and unknown concepts and creative ideas are revealed. Luxury has been defined by quality and exclusivity, while technology has been governed more by openness and speed, but when collided, technology can help define our understanding of what makes luxury.

The blur between offline and online, the need for immediate receipt of purchases, the desire to share teamed with the constant exposure to others peoples curated lives and the trend of personalisation has led to a sped up, evolved and more global luxury landscape. Bi-seasonal fashion calendars are being challenged by a runway to store approach, technological advancement will only speed up the ability to produce and deliver clothes more quickly. Physical stores can facilitate this by being micro warehouses. Success will be found from increasingly sophisticated stock control, delivery, production and management technologies that allow brands to take market share. Luxury players are moving increasingly to third party platforms to help increase virtual footfall, meaning that brands need to protect their identity and image, when housed in locations they don’t control. The reluctant move of many brands to an online platform will be further tested by this trend, and they must begin to consider how can they provide a holistic, sensory, all-encompassing brand experience not just online but on sites they don’t control.

Customer Experience is constantly being developed. Customers base their expectations from different industries. If Tesco can deliver next day, why can’t Hermes? Virtual, augmented reality and advancements in A.I., will lead to new opportunities for customers to connect with brands. Even our phones have the power to create new products for luxury brands. Could the Kimoji be defined as the luxe emoji? Certainly, geolocation data will be utilised to provide real time updates to shoppers, helping to blend offline and online. Previously, we have seen high street/mass consumer brands lead the way in technology advancements, but investment in technology skillsets will become of increasing importance to luxury brands. With greater understanding of how customers shop, the ability to mine that data to influence the creative direction of the brand becomes an exciting, yet controversial and risky, way to design new collections. Could we see data scientists walking down the runway with lead designers to close the show…the ultimate geek chic?

More broadly that this, technology has an effect on how society defines luxury retail. Historically, exclusivity, quality, hierarchy and formality have governed. Now, sportswear is worn to luxury restaurants, trainers are acceptable with evening dresses, experience over possessions are valued, and social, economic conciseness has helped lead to more subtle luxe statements. Globalisation, teamed with varying economic development, has caused sub-cultures of luxury perception; Beijing want Rose Gold iPhones, Copenhagen want plain white sneakers. But the common thread - technology - connects them all. The real winners will be the luxury brands that harness the power that technology brings us: the power to connect with people.

The business of podcasting

If you ever worry about the ability of society to be creative, go on your podcast app and your mind will soon be relieved and then slightly overwhelmed at the sheer scale of nuanced, clever and imaginative programs out there. An eclectic mix ranging from the serious to the deliciously mundane; Podcasts have become the voice of everything and surprisingly are only just being considered major players in terms of revenue generated.

It’s a weird ad economy in the Podcast world, with a few companies loving the medium and really dominating in the space; notably younger B2C startups such as Squarespace, Casper etc. Podcasts aren’t able to garner a huge amount of data, it’s difficult to know if ads were listened to or acted on which puts off the majority of traditional firms. On the flipside, these shows have a furiously loyal following, appeal to very specific demographics and normally command the listeners full attention. Increasingly, sponsors are beginning to understand this and capitalize on the uniqueness of each podcast, developing tailored ads that mirror the tone of the podcast, almost acting as an embellishment rather than a detractor to the story. For example, in the latest cult hit podcast “S-Town” (16mill downloads in its first week), the sponsor BlueApron didn’t want to spoil the “scene based” experience of the show so they didn’t play an ad in the first episode and they recorded the ads at a school so there was background noise and edited in a style similar to that of the podcast.

With podcasters often entrepreneurial by nature, many see the opportunity to gather such a strong following as simply a marketing/community building tool rather than an outpost of deep literary musings. Foundr podcast, utilizes its large listener following by selling other services to help those wanting to start a business. Shopify has ShopifyMasters, a podcast to help inspire and educate its Shopify subscribers into how best to run their ecommerce business.

With Podcast ad revenues expected to grow 25% a year till 2020, relative immaturity of the medium and strong connection that the audience has with the host and broader community, this friendly, trusting and more personable form of media is only set to grow. And if you’re wondering why I choose the imagine above, rejoice, because it means you haven’t listened to the latest “This American Life” podcast and therefore have 7 episodes of pure excitement ahead of you!

Loving the crew

Products change, technologies develop and consumers become more sophisticated but one thing seems to remain constant, to become a successful relevant brand, building a community around your product not only helps your brand awareness but also imbeds your brand in your customers lives, allowing your brand to grow and flourish.

It seems that the community aspect becomes even more powerful when personal goals, feelings and emotions are involved; such as health, beauty and fitness brands. Social Media has amplified this, hosting the platform for customers to feel connected and to connect with their global clique. The benefit to a brand to do this is also the product range it can bring. Soulcycle, the great white shark of spin classes, has slowly cultivated their community creating a real sense of belonging for their “riders”. Starting with products to compliment your ride experience like clothes, water bottles etc they now are venturing into beauty launching a range of “spiritual bath products”. That might not be your thing, but with annual revenues of over $150 million and a small army of dedicated fans across the world they are in the position to shape their product offering and this small product shift could mark the beginning of a new business ecosystem.

Similarly a new era of beauty brands have formed that use their community as part of their product development and marketing. Premium beauty, no longer restricted to the unfriendly department store counters is now open to everyone with brands like Kylie Cosmetic and Glossier. Not only do they use their community to test ideas and validate products, but by bringing you on the journey, they make you feel connected with something bigger. This is powerful and Headspace, the mindfulness app, is taking notice of it, partnering with Spotify to help both their users bases live “healthier and happier lives”. Why did this happen? Because the Spotify community began making a lot of mediation/ mindfulness playlists and Spotify listened and took note.

With all this innovation, its primal instinct that becomes more apparent; the needing to be part of a community. Finance, with natural barriers to sharing and information disclosure, has yet to reach the same level of community sophistication that more lifestyle focused brands are able to achieve. Obviously financial products may not be so Instagram palatable but they achieve the same goals; they bring their users closer to achieve their dreams and ultimately make their lives better. I guess it’s just a matter of time and creativity before consumers love a financial account as much as they love their lux gym classes, at least long term at £30 per class you can’t have one without the other!

Cloud Wars

Its earnings seasons, results are out and unsurprisingly Alphabet, Microsoft and Amazon are acing it. Beating analysts’ projections and seeing their year on year growth steadily increase is pretty amazing for such established players .

Their connection though runs deeper. They are at war, competing in a land grab to become king of the cloud, which being a marathon not a sprint, is a long and difficult game to play. The stakes themselves are massive, with large corporations, governments and the public now relying on these services. Holding such a staggering amount of data in their hands along with the crucial element their services play in the running of (our lives?!) these giants are becoming the gods that will rule the online world. A natural oligopoly has been created, where cost of entry is outrageously high. This restriction on the number of competitors is risky, with such a crucial aspect these services play an outage or security breach could bring untold ramifications.

It will be interesting to watch this battle play out. For Amazon, it is already a significant part of their profit making business, Microsoft cloud service Azure grew by 93% over the past year and for Alphabet who is relatively new to the game their cloud services have already becoming their fastest growing business. A tangible product it may not be, but the battle has already well and truly commenced.

One size fits no one

One size fits all is an odd concept by definition, clinically untrue yet totally accepted in society. Finance is a victim of this syndrome, with so many complexities, including regulation and risk factors, deep personalisation is an extra headache that can be avoided.

Prompted by the rise in on-demand/gig economy, a custom service is becoming a way to distinguish a product offering. Insurance, a classic customer unfriendly/confusing/prohibitive industry is being shaken by new entrants capitalising on the downstream impacts of the gig/sharing economy. Tego an on-demand insurance provider for food and courier drivers are an amazing example of how knowing your customer and challenging convention opens up new opportunities’ to business. They insure UberEats, Delvieroo etc drivers whilst they are working, the drivers simply activate and deactivate the insurance cover when they start and end their shift. Similarly, Cuvva have taken advantage of the rise in car sharing, offering insurance quoted by the amount you use the car, as opposed to broader criteria set more traditionally.

These refreshing services not only help solve an unmet need but also improve the image of the financial industry as a whole. With services being provided that are transparent and built around a user experience expectations are rising and literally driving the competition forward.

I eat data for dinner

What to eat for dinner is a daily questions that poses a disproportional amount of worry to my brain. This only intensifies when I go to restaurants, often creating more stress the pleasure. I just wish they could know me better than I know myself. Turns out they do, or at least they are well on their way.

Restaurant analytics is the new plat du jour. With notoriously low margins and high cost to entry, for a restaurant to ace life they need a good handle on analytics as much as they need organic avocados. Open Table is an analytical iceberg which may look pretty superficial to the everyday dinner who simply books through their site. In reality, to the restaurateur, this service has become a crystal ball to success. With over 21 million dinners per month, they can track your whole restaurant experience to improve the experience for the end customer as well as provide efficiencies to the restaurant.

It’s a great example of how data can clearly equal a better output and a broader business model. They have a suite of products that looks after the lifecycle of visit, from booking, to table management, both of which benefit deeply from greater access to, and analysis of, data. They have data that can help restaurants decide where is best to open and where to advertise and maybe even what I want for dinner.

Collaborative disruption?!

Disruption has its pros. It drives efficiencies, gives fresh perspective on things and gets more heads trying to solve a problem. But, the energy behind this disruption not just disrupts but devastates and when this devastation occurs in areas of public good, perhaps this energy is being misspent.

An example of this is journalism, with massive disruption over the past 10 years, institutions that previously had been the foundation of society and permanent pillars in our lives, are in question. Instead, the credential to become a journalist lies more with internet connection and social media followers. A great output of this has been the revitalisation of content, innovation has been made on how modern content is written and displayed. Buzzfeed, LadBible, podcasts like PodSaveAmerica (they did Obamas last interview), have iterated on previously stale publishing methods to rejuvenate a whole audience back into news.

This is a small part of the overall problem; news now is incentivised on reader volume not reader value. News publishing start-ups are incentivised on hyper growth and a quick exit as opposed to creating a long term trustworthy news source. Shareholder rewards support disruption not collaboration.

These things are hard to align but the potential of combining the innovation of the new firms with the raw power and knowledge of the old, would bring an even better way to operate news publication and lead to outputs more powerful than a like or share.

On-demand laziness

It is crazy the amount of “on-demand” services that are now being offered. Food, clothes, cleaning, cars…we have moved into an immediate action world, an anti-planning society. Horrendously afraid of commitment, business models are created to service these unfavourable primal instincts.

This on demand laziness craze is great for companies that deliver instant gratification and is slightly more awkward for companies that try and service a more longer term substantial need, like finance. Starbucks, towards the extreme end of instant gratification, saw one of its mega fans this week hack an Amazon Dash button, to deliver instead of Amazon products, their Starbucks pre order.

I can’t work out if by creating all these services that encourage last minute, instant decisions we are encouraging laziness or actually remodelling efficiency. It seems its utilising the equilibrium of supply and demand in real time. However, we must consider the impact it has; human cost (e.g. on demand delivery workers) and longer term perspective cost (e.g. your pension). But in the meantime enjoy having it all or become a hacker of laziness https://www.ryanpickren.com/starbucks-button

Bot life

Even though technology accessibility is becoming more widespread, there are still significant barriers to accessing new technologies. Battery, old software, data restriction… truly innovative solutions should be able to find a way around them.

Facebook messenger is a great example of simple platform that can be accessed by a huge audience. The simplicity of its service has catalysed a new trend on the platform, chatbots, which are providing users a cohesive and easy interaction with a service. Many brands use it for bookings and shopping, like Adidas, and the proximity between a company and your friends within one services totally changes the tone, forcing a deeper yet more casual customer relationship. For the service providers, it’s a friendly, efficient way to engage and also convert customers.

This relatively low cost yet high volume way of connecting with people has led to some amazing services being provided. DoNotPay, a FB messenger bot first created to help people out of parking ticket fines has been repurposed to help asylum seekers with their applications. Previously, a lot of valuable lawyer time was spent on form filling and admin but this bot allows the user to enter info and answer questions that route them to the appropriate service. This frees up lawyer time for critical cases.

Discoverability is a hurdle, it’s difficult to know what services are out there. But with app fatigue, website malaise and general over supply of information, it gives services a new way to ace life.

Alexa pleads the Fifth

For someone worth as much as Zuck, the recent discovery that he covers his laptop camera and microphone with tape is actually rather reassuring that he has a proactive attitude to security, given that the company he owns knows more about you then you know yourself. It highlights the odd parallax we are living in where technology facilitates a significant part of our lives, yet the laws that govern these technologies are not as robust as those that are trying to break them.

Amazons Alexa was involved a minor soap opera last year when “she” was effectively asked to contest against her owner in a murder case. A morale predicament, Amazon refused to give over the data arguing that is was protected by the First Amendment. For Amazon it is crucial they are seen to protect their customers data if they are to continue selling fairly intrusive technologies that broaden their business model.

But there is an uncomfortable undertone, the power of your data seems to still lie with the firms that gather it and within that, multiple agendas can take place. Who is to know the very data that is held from law enforcement is not used to learn more about your recommended products, sell to advertisers or to cross sell other services. Luckily, Nokia has just re-released the classic 3310, the retro classic with pretty much no features and therefore little room for a security threat but more importantly it brings Snake back into our lives!

The entrepreneurial API

A real benefit of online advancements has been the increased opportunity to create your own company. Something that previously had high barriers to entry has been radically democratised, with entire companies created to help other companies start. The host of services that exist is a digital illustration of the new way to departmentalise a company. APIs act as your procurement and get you the services you need, when you need them with little resourcing impact. This allows the founders to focus on the core value they bring to the company, often product vison or creation and effectively outsource the other parts that aren’t in their skill set.

Shopify and Wix are great examples of the new type of services created to support these small businesses. A new age consultant, where their service is digital products, their advice is blogs, case studies and podcasts and their fee structure is a freemium model. They understand their customers so build tools that sit next to their core product offering (building a website) to help them in every aspect of their business, invaluable for those that don’t know where to begin.

This impact is exponential, if a small business can easily add web chat, ace SEO, create T&Es they have such greater control of their destiny; keeping their costs down and focusing effort on what will really differentiate them. For large companies this can be a worry, although they benefit from economies of scale, they tend to be more distant from their customers and also trapped in an internal battle of improving processes and systems instead of improving their core products.

These services like Shopify and Wix make you feel part of something bigger, opening a world where your dream can be your reality and where you have the power to deliver as long as your API is GOALS.

MVP: Small is the new big

MVP, easy to say, hard to do. “Minimum Viable Product” is a concept preached within tech, where you build just enough features to validate an idea and continue its development. It’s also a concept that goes against human nature, showing off something that you know isn’t doing everything it could. But perhaps this technique could be useful in our lives - a more structured approach to Mindfulness.

We’ve reached a point where we have saturated our digital life goals MVP, we have enough to do far more than we need or even want to do. Look at the home screen on your phone, brimming full of features you don’t use, a visual representation of our crowded lives. With 2.2 million apps available to download, how many do you actually use every day? Maybe 5?

Silicon Valley are taking note and MVPing your life is the new app culture. Look at Amazon Echo, which radically simplifies their entire service. The rise of AI also demonstrates a movement towards providing the end user with the simplest service to satisfy their needs. Content curation is becoming the differentiator in social. Users are over something before it even began, so efforts are increasing to ensure a personalised - and therefore great - experience.

As users, we need to focus on two simple questions: What is your MVP? What features can you simply discontinue?

I guess this will evolve and change as we do. For now, I just know that the Avocado emoji is my MVP. That’s enough for me.

The Silicon powers of persuasion

If time = money why do we spend so much of it staring at screens? There must be only so many apps to look at and cat videos to watch. Surely we are capable of spending the least amount of time on our devices to do what we need to do and then get on with our lives?

Turns out that would be a no, but to give us credit, the people that design our online lives use powerful physiological techniques to get us hooked. Our phones are a slot machine in the digital nexus; we put in our time, likes and shares and notifications emerge from our devices in just the right amount to maintain our intrigue and keep us there just that little bit longer. Persuasive technology is everywhere. Why does it take a while when you open an app and click on notifications for them to load? Because in those few moments we get our dopamine hit in anticipation of what could be and we want more. This lingering and yet ever present curiosity many be amusing to play with for the engineers that construct these experiences but the power they exert on society is potentially rather worrying. The majority of their performance is measured on increasing time spent, a land grab for our lives.

With a clear business model of creating an obsession and then exploiting it, who police’s these experiences? Who is the urban planner of our online lives? Perhaps our values need to change, just like organic food is monetarily worth more to a consumer, could a healthier online experience be worth an additional cost to the user. The issue comes down to the raw way tech companies make money from free services, we pay them in time not $, but would we ultimately be better off the other way around. A user to Facebook is worth $7 per year, if instead we paid to use Facebook would this enable them to create the perfect, efficient experience for us that ultimately makes our lives better? Unfortunately, this incentive isn’t there and as users we need to be aware of how we are being manipulated and if we want to allow that manipulation to happen.

As a company that has the power to unlock people’s dreams, it should be our responsibility to ensure the experience our customers have motivates them to do the right thing for them. This means we need to be more interesting, engaging and addictive then the alternatives. It also means we face an entirely new competitor landscape with a shift from FS firms to Lad Bible, Pokémon Go and Tinder.

There are 3 versions of the truth: your truth, my truth and the fake truth

If a million people believe something, does that make it the truth? Nope. Unfortunately, the evolution of news publishing hasn’t taken that on board. News gets pushed to us based on social engagement, shares, likes and comments. Virality trumps truth, and with a rapidly changing news system, decentralisation of content writers and deficiency in readers’ attention time, we have fostered the perfect environment for us to be fed thrilling, exciting and provocative news.

Yet, news by nature may not be those three things. It may be important, but rather dull. It probably won’t fit neatly into a 140 character synopsis. It certainly won’t be more entertaining than watching a dog do the mannequin challenge. But while it’s the truth we should know, a business model has been created to do the exact opposite. For example, an American Facebook user is worth four times more than a user outside the US (in terms of ad revenue). With a lot of activity within the states to report on, American-sounding (but not American-owned) websites have been created and filled with content that is deliberately sensational, scandalous and totally shareable for a US user. Whenever that content is shared, the author receives a small cut per view, and a sustainable business continues to grow.

Both Facebook and Google are trying to tackle this, signing up to the adeptly named “International Fact-Checking Network”, tweaking their algorithms and highlighting ways to report false news. We have gone from information overload to misinformation overload and we need to up our awareness of source credibility. Because a Malaysian fireman did not marry a snake, a Chinese zoo was never going to name a gorilla ‘Harambe McHarambeface’, and it's getting pretty bad if even the White House press secretary can't tell the difference.

Strategic Squad Goals

Your friends say a lot about you: what you like, who you are, your vibe. This is especially true if by friends we mean, corporate friends. Partnerships have always been prevalent in the corporate world, yet with the large number of tech start-ups, finding your crew has never been so important to your success.

The amount of success a partnership can bring increases exponentially with the increased creativity and flexibility start-up firms typically offer. Strategic players, the partnerships team need to have a deep understanding of the long term vison and the degree in which that could pivot for the right opportunity. A great example of this is Lyft (an Uber competitor) has team up with Zenefits, WageWorks and other HR/Finance/Payroll tech firms to offer the employee perk of paying for your Lyft ride on you commute with pre-tax dollars. J

Airbnb has teamed with Nest, providing Nest Learning Thermostats to some of its clients for free to help them track and decrease energy consumption. Uber has worked with the National Association of the Deaf to update its app to improve the experience of deaf and hard of hearing users. They also, more predictably, have teamed with Volvo to build a self-driving Uber, a fairly good shout as Volvo is known for its safety whereas Uber arguably isn’t. Perhaps slightly less strategically, is Ubers recent Star Wars app update, where on your app map your Uber car is replaced with Rogue One. That might work for some but I’m good with a Prius and an aux cable.

How big is your closet? Ummm, like 30GB

It is generally considered that hyper-consumption has now turned to over-consumption. Aspiring for luxe stuff is being replaced with aspiring for a great lifestyle, experience or wellbeing. Paradoxically, the popularity of things like fast fashion is ever increasing with brands looking to introduce new products weekly. We are being conditioned to think we need new clothes every few months to keep up with trends but we are also demonstrating cravings for simplicity and authenticity. Just look at the rise of Mindfulness and apps like Headspace.

But don’t stress, maybe the solution is with us, just look up. The Cloud provides a great way to have stuff in a virtual way and with tech advancements, an increasingly sophisticated approach to meeting our needs and changing socio-economic situations. A great example is Rent a Runway, selling a subscription plan for borrowing clothes. By spending $1200 on your subscription per year, you get access to $30,000 worth of clothes. They argue that your closet should be the cloud, you get what you want, when you want and you spend less to do so. To make this plan work they have inadvertently become the world’s largest drycleaners, having a zero day turnaround for clothes returned to being delivered again that evening. They have a distribution strategy on par with Amazon, using department stores and boutiques to act as mini warehouses (and changing rooms). Their analogy is that if people use multiple methods to travel; Uber, taxis, rental cars, buses, why can’t consumers shop with different methods depending on their needs? Maternity wear, for example, is the perfect market for rental.

It’s the sharing economy 2.0, and not only is it a real challenge for the perception of what is appropriate to rent, but an evolution of what ownership looks like. One caveat to that evolution is the T-Shirt. Unlike a car, house or wedding dress, the humble T-Shirt is the one product that perhaps the sharing economy is just not appropriate for.

The Digital Decimation of the Middle Man

Having a great idea and building a product is difficult. But what’s worse is then having to connect with people that want to buy it, a lot of them, and that is an effort. Traditionally, to mitigate this effort, getting your product into a multi brand retailer e.g. John Lewis, would make life a lot easier. However, that ease comes at a cost (to the customer), a 200-300% mark up on what you would sell the item for yourself. Brutal.

This is especially brutal if the product in question, isn’t hugely exciting, desirable or unique. But, boring businesses are big money, and it is that which has lured the tech bros away from driverless cars and 3D printing to ventures old. Direct to Consumer is back, and it’s the boring products that are shining the greatest. Casper (mattresses), Away (luggage) and Care/of (vitamins) are great examples of how a great digital experience, and the utilisation of technology can create a shift in a products’ perception and deliver the product for cheaper.

All 3 companies have built an online community of brand ambassadors and advocates, which is great for promotion, but also allows them to continuously test and change their products. Away aims to provide quality luggage at affordable costs, all possible due to their D2C proposition. Casper developed their mattresses to fit into a cardboard box allowing for instant delivery, something that previously in the mattress world, was just not an option. Care/of creates personalised daily supplements and delivers them in Instagram friendly packaging. You know you’re loved when people share pictures of your product being delivered.

It seems that digital/technology progressions are not just creating opportunities for new products, but give the opportunity to break previous restrictions or moulds. They show how business can be done not just better but for less.

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