Friday, April 24, 2015

The 4 Horsemen

- Apple watch ‘sells out’ in 6 hours. More than Samsung sold in a year.
- Differentiating through customization
- With a combined market cap of $1.3 Tn, the ‘4 Horsemen’ Amazon/Apple/Facebook/Google are worth more than the GDP of So Korea.
- Scott Galloway of NYU believes Pure play is dead. Prediction: Amazon will undertake a transformative brick and mortar purchase in the next year. Who?
- Uber and other rideshare platforms could disrupt the delivery business.
- Facebook is still the DOMINANT social network by far and becoming more powerful. Check out Jon Kirwan on the F8 conference
- Is Google losing its grip on Search leadership??

Seems like Apple comes up a lot in our Digital News, and here we are again, The Apple Watch became available for pre-order on April 10th and sold out in 6 hours. No one actually believes they sold out, except the crazies on, but Apple has become very crafty about creating the perception of scarcity. Really it's marketing 101. But don't worry, you probably won't have a problem getting one if you camp out at your nearby Apple store on the 24th. Or just show up there on the 26th. But regardless of whether the scarcity was real or manufactured, they still sold more watches in 6 hours than Samsung has sold in a year. That's pretty impressive. Interestingly, the model that 'sold out' first was the 18 carat gold one which pushed back delivery dates to July almost immediately. The others are only back ordered till sometime in May.

Customization is on the rise in the online apparel market, according to a new report out last week from L2 Research. It's apparently becoming an expectation for some consumers as shoppers look to put theri own stamp on everything from coffee (Starbucks enables around 80K drink combinations) to digital playlists. Sportswear and Fashion brands are putting the most resources behind customization to develop more revenue and profit through this new means of differentiation. Think of Nike and it's advanced customization tools that let customers print and share posters of their custom sneaks. It got me thinking that offering some level of customization of Philips consumer products might be something to look into. Avent bottles with a baby's picture on them or Sonicare toothbrushes with a kids artwork wrapped around the handle, Norelco shavers and trimmers monogrammed or engraved with the owners signature... hmmmm, something to think about.

And here's something else to think about... the 4 horsemen of technology, Amazon, Apple, Facebook and Google have a combined market cap of $1.306 Trillion that's just more than the GDP of South Korea, and that worth breaks out to about $5Mn per employee, if they were a country, they'd be a utopia.

One of my favorite analysts, Scott Galloway of NYU Stern School, is predicting that Pure play retail is dead. Stores will need ecommerce but etailers will also need stores to survive. Amazon forced other retailers to offer free shipping in the last year, so more than 2/3 of Christmas deliveries were free this past season, but this advantage is eroding because stores are incredibly valuable, flexible warehouses that are allowing businesses like Best Buy, Macys and a dozen others to grow their eCommerce businesses faster than Amazon over the last 5 years as they use stores as local, on-demand delivery sources and click and collect points. Based on this reality, Galloway is predicting that Amazon will make a transformative purchase of a brick and mortar company in the next year, his favorite possibilities are Radio Shack, a Gas Station Chain or the US Postal Service.

We talk alot about disruption here and how it can come from anywhere. Here's another example: Uber and other ride share and car sharing services have already disrupted the rental and taxi businesses, but they may now be positioned to disrupt the package delivery and shipping businesses. In most cities, point to point local transportation is far less expensive and faster than messenger services and big shippers like Fedex and UPS. I'll be interested in how this plays out.

This month's Facebook mention: Though teenagers are spending less time on FB, they're all still members as is almost everyone in Europe who's on a social network and overall, 91% of users age 18-34. In fact, 2/3 of all time on Social Media is now on FB. And other than gmail, FB is the ONLY platform that can track you specifically by your identity. And now, thanks to their cookie free Atlas ad-server, they can do it anywhere on the Web. I hope you all had the chance to listen to Jon Kirwan's terrific presentation on Philips global Digital Excellence Network call. Jon did a great job relating his experience at Facebook's F8 conference which Brands were invited to for the first time this year. GREAT information. If you haven't joined Sarah's bi-weekly call yet, check it out. You won't be disappointed.

Finally, Google still owns the search market with 3 Billion searches/day, but its beginning to be challenged for the first time. There are now a billion searches a day on Facebook, 300 Mn on Twitter, 2/3 of PRODUCT SEARCHs begin on Amazon. These are arguably the highest value searches. And the mobile economy isn't friendly to Google. People are not likely to search when they're in an app. So their cost per click is finally declining overall, net profits and revenues, while still astronomical, are slowing down and Google + is all but dead after a 97% decline in engagement rate, shares of Android devices declined for the first time in Q4 compared to the previous quarter and I heard someone say that Google Glass isn't a wearable it's a prophalactic that will insure the wearer will never conceive a child because no one will ever get near them.