The Challenge for The Fashion Brand, Apple

Updated, March 2015

Whilst some are calling the Apple Watch a game changer, many tech observers have missed the point. The Apple Watch is a fashion accessory and it makes Apple a fashion brand. Whilst previous products from the iPod onwards have had a lifestyle element to their branding, the watch puts Apple firmly into the fashion accessory market. The industry bible, Women’s Wear Daily pointed out that Apple’s real competition is not from other tech providers such as Samsung, but the from the mid-range watch manufacturers such as Swatch and Guess. Both of these companies are developing their own products due out within the next 12 months.

Apple understand the importance of being a fashion brand. They have made significant hires from Burberry and Gap, not to mention the addition of leading designer Marc Newson. A number of fashion and watch journalists were invited to the launch event, which further demonstrates the importance of the sector to Apple.

What was the fashion industry’s reaction to the Apple Watch? Generally favourable, but not totally blown away. It’s probably best summed up by Alex Blanter from A.T. Kearney, who specialises in fashion insight:

“Everybody is still trying to figure out how to make a smartwatch a truly must-have device, rather than an interesting and curious novelty,”

An interesting take on the Apple Watch came from HSBC Research who looked at the market for the product in China. They pointed out that luxury watches are bought not to tell the time, but as a status symbol. Is the Apple Watch a sufficient status symbol for that market? They pointed out that the most significant market in this area were as gifts. On that basis, Louis Vuitton or high end sporting goods are competitors as much as watch brands. Perhaps that is Apple’s biggest challenge. Whilst smartphones are (arguably) an essential item, the Apple Watch is not. As an accessory, watches are replaced much less frequently than smartphones. Whilst there is clearly a market amongst the early adopters, does it have what it takes to compete in the higher end accessories market? Understanding the retail challenge, Apple announced that the Watch would be available in selected retailers such as Galeries Lafayette in Paris, and Selfridges luxury hall in London.

One thing that is in Apple’s favour is that they’ve created a product that has watchmaker’s credentials. The Hodinkee watch blog declared the Apple Watch to be a bona fide time-piece, from the overall design, through to the straps, the astronomy face and the rotating crown. The review makes a convincing case for the Apple Watch as a genuine watch. Following the official launch in March 2015, commentators generally agreed that the Watch meets the stylish credentials that consumers are looking for. However, the watchmakers blog pointed out after the launch, Apple will not be in the high end $17,000 Edition, but rather, from shifting a large amount of $500 mid-range watches.

It’s not just the existing watch makers – brands from Motorola to Huwei have also launched equally attractive smart pieces. This is not the first time that Apple has entered an existing market saturated with products. Aside from the brief partnership with Motorola, Apple had never launched a phone before the iPhone.  However, when it comes to smartwatches, in spite of some predictions, as the tech analyst Benedict Evans points out, no one really knows the answer. The ultimate questions is whether Apple brand is sufficient to drive the large scale adoption that the company is hoping for.

Why Can’t We Use Mobile to Manage the Ebola Virus?

I recently spoke at an event about the role of mobile and big data. The two most useful examples related to health. The first was how the movement of mobile phones in Kenya helps to identify the movement of mosquitos and thus the spread of Malaria. The second was how Swedish and US researchers used mobile movements track people in the Haiti disaster area, and the number who had left subsequently. From this they could identify the number of missing people.

Could the same approach be made to manage the spread of Ebola? If health organisations could use location from the mobile operators it would be possible to see where people  from infected areas have moved to (including overseas). From this they could spot where the virus might appear next. That could deliver a much faster response and to isolate the outbreaks more quickly. Just a thought. Or maybe it’s already being done?

Mobile and The Big Data Question?

How can brand marketers leverage ‘big data’ to engage more users? That’s pretty much the question that I was asked to speak about recently at the DMA. The explosion of mobile is certainly creating a lot of data, from active channels such as social media updates or sharing, to passive data such as location services or WiFi connections. However, using that information in brand marketing is not that simple. Whilst it’s straight forward on a technical level, but even where individuals are not identified, they are wary of intrusion because mobile devices are so personal. Perhaps the answer lies in focusing on the user, being useful and delivering a better service. The best examples of this come not form brands, but from using mobile data to bring improvements in areas such as healthcare.

The following Slideshare is from my talk, ‘Mobile and The Big Data Question’.

A Wearable Engagement? Two Things Brands Need Consider

There’s been plenty of talk about the future of wearable computing. Both major manufacturers (such as Samsung and Sony) and start-ups (such as Pebble and Fitbit) have been producing a range of fitness tracking, smartwatches and the occasional pair of smart glasses (think Google Glass). It’s also generated plenty of hype, where the talk has been vastly in excess of the actually uptake. In spite of this, wearable devices will still impact on our consumer lives. Brands are already thinking about how they can use this as a channel to deliver service or engagement to customers. It’s not easy though. With so many devices appearing, we will see consumers adopting the right devices for their needs, personal preference and budget. Through that, we will see each user with a unique technology eco system – no one will be the same. This raises a few thorny issues, that I’ve blogged about elsewhere, that may lead to the inevitable brand marketing fails.

Data and Privacy

Dull though it might sound, the whole issue of collecting data and user privacy is a major challenge. Brand marketers love collecting ‘data’. The more the better (it’s often used as a KPI). Wearables are great at generating data. Lots of it. However, brands need to be careful how they use it. If you think of mobile devices personal and unshared, then wearables are likely to be even more so. Think of what they do. Tracking things like health, for example. It’s unlikely we would want to share that information with a brand. Not only that, but too much marketing may simply lead to consumer fatigue. Read more here

The Right Content

Whether it is for performance or engagement reasons, content marketing has become the core strategy for many businesses. At the moment we think of content very much in terms of delivering to ‘screens’. In the world of wearables, it’s not always about screens; in the future brands will need to think of content in terms of touching, feeling and hearing. Read more here

The world of wearables is an exciting, but a largely beta one. These are just two examples of the challenges to brands, but there will be many more along the way.

 

 

No One Wants to Steal Your Crappy Idea*

The other week I delivered a short presentation to a major software company – it was a meeting where I would share some ideas and insight around innovation. Someone met me outside and handed me a non-disclosure agreement to sign before I entered the building. I happily put my scribble on it because it confirmed one thing to me. There would be nothing of any interest or significance that would be disclosed to me.

Whilst I can understand the point of an NDA for commercially sensitive information, such as financial or sales figures, asking for confidentiality for an idea is pointless. They cannot be copyrighted, and enforcing non-disclosure is very difficult. I would take the opposite view and argue, instead, in favour of disclosure. Good ideas should be shared. That is part of the innovation process.

NDAs are popular with start-ups. They are convinced that their ideas are so amazing that anyone who hears them will ‘steal’ them and try to make money off it.

This is totally nuts for a couple of reasons:
Firstly, an idea is exactly that. It’s an idea. It’s not a product or a service. Right now in cities such as London, New York or San Francisco there are thousands of start-ups desperately trying to raise money to commercialise their ideas. I know. I’ve just been through a start-up incubation programme and met a lot of these guys. Raising investment is hard. Really hard. In particular, investors don’t invest in ideas. They invest in businesses. Start-ups need to create a viable product or service, boot-strap the initial stages (that usually means living off baked beans for a while), find some clients or build a massive audience, and then jump through endless hoops before there is the slightest sniff of investment money. To think that someone will run off with ‘your’ idea and make millions from it is therefore far fetched.

Secondly, as a general rule, the longer the NDA, the crappier the idea. I recently heard about someone who claimed to have the most fantastic concept for an app. Before telling even their closest friends they made them sign a detailed NDA. And the app? It was for making gift wish-lists (now why didn’t Amazon think of that?).

The fact is that ideas are best when they are shared. The crappy ones are quickly thrown out, and the good ones are refined and developed. There’s a great TED talk from Steven Johnston about innovation (http://youtu.be/0af00UcTO-c) where he explains how coffee houses were a place of discourse and the development of ideas in Victorian Britain. Perhaps that’s what start-ups should be doing right now?

So why do so many start-ups insist on trying to protect their ideas? I think that for these people, NDAs act as a form of validation (and probably spurred on by the kind of secrecy that Apple loves). Getting others to sign them is a way of saying ‘our idea is really worth something’, even though it’s probably crap. And maybe those people who sign the NDAs help to maintain the delusion. Eventually, I hope that people will realise that ideas are better shared. Look at what Google does. They put all of their products out in Beta and take plenty of feedback. Look at the amazing scientific ideas that came out of sharing ideas in the coffee shops in 19th Century England.

(Here are some of my crappy ideas. I’m trying to get them all off the ground – please feel free to help me.)

*I think I borrowed the title for this blog from something I read a while back. I can’t find it, but here’s something on a very similar theme: http://ruidelgado.com/2013/11/12/steal-your-startup-idea/

Don’t Expect Wearable Tech to Catch on Just Yet

At the recent tech shows, SES, MWC and now SXSW, the big talk was around wearable devices. However, they are not that new.  We’ve had wearables for decades, in the form of:TV Camera

All of these can be categorized as either accessories or single task devices. In many ways, today’s generation of wearables are really not that different. In terms of use, is a Pebble Watch really that different to a Bluetooth earpiece, for example?

Predictions for wearable sales show growing numbers:

Sounds like a lot? Compare that to smartphones, where 456m were sold in the third quarter in 2013, making sales of close to 1 billion per year. To give wearable uptake a bit more context, think about the rapid adoption rates of iPads or apps. There’s a long way to go for wearables.

I think there are three primary reasons why wearable uptake will be so slow:

This last point is the greatest barrier to adoption. Whilst online news and blogging sites are full of technologists who love all the gadgets, that doesn’t seem to represent the majority. Most people just aren’t that bothered. We love our smartphones, which have become the centre of our digital lives. Health is certainly one area where wearables can offer real benefits, but aside from specific applications, wearables have a long way to go before they become truly useful.

Bluetooth – The Revenge

Remember Bluetooth marketing? Well it’s back, kind of, in the form of Beacons and Bluetooth Low Energy (BLE).  It’s a proximity device that connects to smartphones via BLE and can send information and take payments seamlessly. There was much talk in marketing circles about the potential of Apple’s iBeacon, but what are the possibilities for marketers? And is it a realistic proposition?

At 2013’s launch of the iPhone 5S/C one feature slipped by barely noticed – iBeacons. The system makes use of a function called Bluetooth Low Energy. It has been available in high end smartphones for a few years, and unlike its earlier predecessor, it uses tiny amounts of power to connect to nearby devices. Beacons are small units (2-3cm long) that can be powered off a lithium watch battery for a couple of years. These can then be situated around a store and send data to and from smartphones via an app.

Imagine I go in to a department store, and I have their app on my smartphone. As I enter it, a Beacon picks up my presence and alert pops up on my mobile to tell me of an offer in a particular department. As I reach the relevant department, the app tells me where the product is. If I decide to purchase, then I can simply confirm that through the app. At the till, a photo pops up to confirm my identity and I leave the store. For many brands, that kind of scenario seems to offer a great solution to problems such as ‘showrooming’. It allows them to have a consumer conversation precisely at the point of purchase.

The system has already been tested by Shopkick in Macy’s  and will shortly be rolled out to over 100 Amerian Eagle Stores. . There are also companies such as Estimote who are supplying beacons that can be cheaply purchased. Some commentators have suggested that they will become an important, distruptive technology this year

Of course, Beacons are not without their problems, many of them are similar to the old-style Bluetooth. For starters, the handset needs to have the right features available; BLE and location services turned on, and a relevant app installed (according to TNS, around 35% of people in the UK use the Bluetooth feature on their handset). But as with other marketing technologies, there are also issues of user permissions and expectations. Whilst Beacons can be used to precisely monitor and guide customers through a store, the question is whether they will find this acceptable. For example, will consumers allow their photo to pop-up on the store till in order to allow them to make an automated payment on their smartphone? Given recent privacy issues from the NSA to the WiFi tracking in London, it is unlikely that consumers will trust brands enough to allow it (there will be the inevitable cry of ‘Minority Report’).

In many ways, Beacons are a slightly more targeted version of Bluetooth marketing. Some people think it could change the world,  but history suggests that the take up by consumers will be pretty small.

 

 

The Internet of (useless) Things

In his book 23 Things They Don’t Tell You about Capitalism, Ha-Joon Chang, suggests that the invention of the washing machine has brought about major social change.  In the US,  it allowed women to enter the world of work much more easily, thus driving significant changes in the social structure. Clearly, the invention of the washing machine addressed an important problem. On the other hand, LG’s texting washing machine does not (Charles Arthur explained the problem very well, in last week’s Observer). The washing machine is just one of a number of objects that connect through LGs system, HomeChat.

At the recent Consumer Electronics Show the talk in the tech world lately has been around connecteds and wearables. The low cost of computing and ease of development is seeing a plethora of products from both major electronic companies and start-up businesses. CES was packed with them … as someone pointed out, there were more wearables than wrists available.

 ‘Who buys an internet fridge and doesn’t already own a tablet? Who goes “I’ve got an iPad but I’d rather listen to music on my fridge”?’
Tom Coates, Mind the Product 2012

The problem that many of these products have is that they don’t address any real problems, nor make my life better. Of course if the machine could dry, fold and put the clothes away, then that would be interesting to me. Or better still, invent self cleaning fabrics that required no washing and no water or power usage. CES has therefore demonstrated the problem with the next generation of computing (or the Internet of Things or Connecteds and Wearables, or whatever you’d like to call them). There are many possibilities for the technology, but very few uses. It looks like we’re in for a phase of slightly useless ‘enhancements’ that we just don’t need.

This Tumblr probably explains the problem best: http://fuckyeahinternetfridge.tumblr.com/

And now, Wearables for Pets

Otto: Connected pet collar for dogs and cats The world of wearable computing is not just a human affair. Otto, a UK Startup has developed a connected collar, feeder and cloud services for dogs and cats. Think Nike Fuel for animals (but with knobs on). Otto addresses a real problem, that of the growing obesity in dogs and cats. There are 130 million overweight animals in the US, UK and France alone.

The company has developed an activity tracker that attaches to a collar. It measures the energy used by a dog and cat, which is then mapped against the size and breed to deliver a feeding plan, all controlled by a smarphone app. Additionally, a feeder can be added that automatically dispenses the right amount of food based on the energy used by the pet.

Otto is currently at the prototype stage, and the company has just launched an Indiegogo campaign to raise funds for full production here: http://www.indiegogo.com/projects/otto-petcare-systems/x/5668585

The Medium is The Message (why teenagers are going to Instagram and Snapchat) …

Where are all the teenagers going? Instagram and Snapchat it would seem …

A recent Pew Internet study, was followed by aFacebook announcement, that teenagers have largely lost interest in their network. Those of us in the business have been observing this trend for some time. And for brands, this could be  a problem. Just as they are starting to see some ROI from Facebook ads or promoted Tweets, this hard-to-reach audience has left the building.

Of course, this is nothing new, and if you understand teenage behaviour, it should come as no surprise. Like most users, teenagers are driven by need, and not technology. As a teenager you want to communicate (not with your parents of course) and find your place amongst your  peers. That communication has always been  done in school break-time, or by passing notes in class. As mobile phones took off, SMS became the communication tool, and MSN online (fast and almost free). Then it switched to BBM. For a short while it was Facebook and then Twitter. And now, it’s Instagram and Snapchat. The latter is seeing 350m photos uploaded per day, which is equal to that of Facebook.

In many ways, these Instagram and Snapchat are perfect for teenage users. The key drivers are cost, speed and where their peers are. Teenagers aren’t looking to write long prose, whatever they do needs to be done as cheaply as possible and they will tend to drift to the channels that don’t include their parents (and they have no channel loyalty). Instagram and Snapchat also come with the added bonus of pictures. For many, a picture expresses far more than a few words. For some observers though, perhaps there is a little too much expressing. Whilst Instagram is more public, Snapchat has been accused of being a place where teenagers are ‘sexting’ each other. We have no evidence if this is true or not, but it is important to keep in mind that whenever younger people adopt a new comms channel, there is always some kind of moral backlash. BBM was blamed for triggering the UK riots in 2011. Facebook was a corrupting influence, SMS was seen as ruining our language. Whatever the choice, the medium will usually be blamed. The reality is that it is purely a communication channel and they are essentially neutral – they can either be a force for good or bad. It depends on who/how it is used.

Perhaps the best way to understand the teenage engagement with Snapchat is this article by Rory Murdock. Whilst adults view photographs as permanent, or even nostalgic records, teenagers think of most photos as temporary, ethereal and worthless. Think of Snapchat like the notes passed around at school.  Short comments that are instantly disposable.

One thing is certain about all this. The teenage channels are constantly changing. Don’t expect Snapchat or Instagram to dominate a few years from now and advertisers will probably still be chasing their audience. But largely speaking the behaviour stays the same, but the channel in which it’s done will change.