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Fi Bendall
Expert
+ About Fi Bendall

Fi Bendall is chief executive of The Bendalls Group and a Westpac/AFR 2015 100 Women of Influence, who was described by CEO Magazine as 'The CEO's Secret Weapon'. An expert and pioneer in digital strategy, she has over 23 years’ experience in the digital and tech sectors.

No place for 'boring' retailers

Monday, September 24, 2018

Former Myer CEO Bernie Brookes came out earlier this week with scathing commentary on Australia’s retail sector, saying most retailers were doing a poor job at exciting and enticing customers into their stores.

“You still walk into department stores and discount department stores … [in Australia] and they’re as boring as batsh*t, they really are,” he told attendees at a retail conference seminar in Melbourne.

Brookes, who was at the helm of Myer for nearly a decade before he stepped down in 2015, said too many retailers seemed to be content with wishy-washy offerings. “At the moment they’re all fighting in the same space, but none of them have a point of difference,” he told SmartCompany.

Brookes is certainly not alone in his assessment that Australian retailers can be a little on the staid side. Last year, an analyst for investment bank Citi went as far as to call the fashion lines he was seeing in stores dull.

“In our view, winter sales are weak because fashion trends are hardly different to last year and lack enticing colours. It’s all about black, khaki, pale pink and leopard print (yet again),” the fashionista analyst said.

And it’s to a very large degree true. The Australian shopping experience, especially when it comes to department stores and even retail fashion, is not terribly exciting. It definitely lacks the wow factor people want when they go shopping.

Brookes suggested retailers need to up the ante on experiential shopping, citing overseas retailers like Macy’s and Selfridges as examples to follow.

Another thing Australian retailers are still struggling with, and which Brookes himself never really succeeded at in his time at Myer, is integrating digital and bricks-and-mortar to create a seamless and modern shopping experience for customers.

This is still something with which retailers the world over, not just Australian ones, are coming to grips. Traditional retailers, especially department stores, have been under massive pressure to protect their patch and profits as online retailers have muscled in on margins. In many cases, and perhaps understandably, that has led to conservative retail strategies that have sought to emphasis discount retailing instead of premium brand strategies.

Traditional retailers were always going to struggle to outrun the likes of Amazon, or even British online fashion retailer Asos, on price. The one thing they have in their arsenal is the in-store experience, or ‘experiential’ retail as Brookes calls it. The trick for smart retailers has been to work out how they leverage their bricks-and-mortar with clever digital options. Australian retailers are not really there yet.

US department store Nordstrom has been cited as one department store that is working with some success towards a better integration of digital and physical elements in its strategy, creating what some in the retail industry call an omnichannel strategy.

The reality is that shoppers are now totally at ease with using their smartphones to price shop on the spot and research items as they browse in-store. They want to be able to order online and pick up at their convenience. They want some colour and fun when they walk into a store too.

If Australian retailers don’t want to be “boring as batsh*t”, they will have to work on integrating digital and physical, as well as bringing some life back into their stores.

 

The rise and rise of Instagram

Wednesday, September 19, 2018

Facebook has had a miserable past year or two. Mark Zuckerberg no longer looks like the sprightly Harvard dropout genius who created a billion-dollar company and game-changing platform. He looks worn down, worried, and like he wants to be somewhere else. 

He looks like the guy who wants to be living the Instagrammable life but is stuck in the worst sort of neverending Facebook news feed scroll. 

Because while Facebook has had to fight allegations that it is simultaneously destroying democracy and making people depressed, its pretty younger counterpart Instagram is flitting about from 5-star restaurants to movie premieres hobnobbing with celebrities and the beautiful people. 

Yes, there are no doubt social ills connected to the Instagram phenomenon too. However, the magnitude of those issues seems far less grave than what is confronting Mark Zuckerberg at Facebook. 

Compare these two recent headlines and you quickly get an idea of the challenges facing each platform:

  • “After Russia was accused of using memes and viral images to influence elections, Facebook will now fact-check pictures and videos”
  • “5 influencer tips for taking the perfect food photo for Instagram”

The other thing is that Instagram is a business still on the rise, whereas Facebook's growth trajectory is starting to level out. It is the mega platform of social media, with 2.23 billion monthly active users as of the second quarter of 2018, but user acquisition has got that much harder, while user retention has become a significant concern.

According to an analysis by Recode, Facebook added 22 million new monthly active users for 2018 Q2, its lowest quarter-over-quarter rise since at least early 2011 for that all-important growth metric. Growth in the US and Canada has been stagnant now for the past year, while user numbers have dropped a little in Europe.

Contrast that to Instagram, which is Facebook’s sister site after having been acquired by Facebook for around $US1 billion in 2012. Instagram hit a billion monthly active users in June 2018, doubling the number of people using the site since June 2016. 

Not only is it growing quickly, but it has also become the darling of advertisers, who see it as a perfect fit for marketing and selling to consumers. Mired in all of its other issues, Facebook continues to have trouble convincing advertisers its an effective sales platform. 

Facebook's gargantuan size is its main attraction. Much like the Yellow Pages of yesteryear, businesses and advertisers believe they have to be on Facebook because it is so dominant. However, that does not mean they think it's necessarily effective. 

In the case of Instagram, advertisers want to use the site because it connects very directly to the aspirational nature of consumers. It boils down to the fact we mostly show off in pictures (Instagram), while we rant and complain in words (Facebook).  

Facebook is not going anywhere anytime soon. However, Facebook as a company is looking increasingly towards Instagram for growth and advertising revenue. Mark Zuckerberg will be hoping Russian bots don't start using Instagram food photos to influence elections. He'll be in real trouble then.

 

A picture's worth 1000 words

Wednesday, September 12, 2018

“Seeing comes before words. The child looks and recognises before it can speak.” Those are the first words in art critic John Berger’s book Ways of Seeing. We see the power of images in our world every day, so it makes a lot of sense that significant amounts of smart money in advertising and marketing is being spent on visual recognition technologies. 

Think about your recollection of famous people and world events; an associated image is the most common thing that springs to mind. Most of us probably see Marilyn Monroe in that iconic white dress before we even think of the name of the movie that image comes from: ‘The Seven Year Itch.' It's why companies spend billions of dollars a year meticulously pimping and preening their brand image, from their merchandising collateral, through to staff uniforms and brand logos. 

AI drives visual recognition software. The software can identify and categorise images, still and video, in a way that will increasingly come to resemble what we have now with the text-based internet search engines. It's the next step away from the internet as we currently know it to a far more all-encompassing thing that will include even more data from images, as well as the Internet of Things devices.  

At an elementary level, you will be able to watch a video, let's say a clip of Marilyn Monroe in The Seven Year Itch, and then search the images in the clip, like the famous white dress, and immediately receive information on where you can buy that dress, for example.  

As consumers, we respond instinctively to the images we see. That's why social media platforms like Instagram, Pinterest and Snapchat are so beloved by marketers. All three platforms are dominated by visual imagery. According to one statistic, something like 95 million photos and videos are shared on Instagram a day, and over 40 billion photos and videos have been posted on Instagram since it started. The other two major visual social media platforms would register similar types of numbers. 

Generally, images speak in a more direct, less ambiguous way to consumers than words. Get the image right, and it’s a direct hit to the visual cortex of the consumer, which marketers hope means a direct line to the consumer’s credit card.

The likes of IBM, Google and Facebook (which owns Instagram) are all working on applying artificial intelligence to visual recognition software as part of the broader push into computer vision. Because so much shopping involves visual browsing on the internet, at least as part of the initial research phase, visual recognition technology is seen as a massively valuable potential tool that marketers can use to hook in consumers at the earliest stage of the buying process.  

Another driving force in the rise of visual recognition technologies and the general importance of visual imagery is that commerce has been globalised. English might still be regarded as the international language of business, but that’s being challenged by Chinese, as well as Arabic and Spanish in other parts of the world. However, visual communication to a large extent crosses these boundaries. A LOL emoji, like McDonald’s golden arches, is recognised and easily comprehended the world over. It’s significant that 80% of Instagram’s users, for example, are from outside of the US. 

The complex business of business will still require the technical nuances of the written word, but more and more the business of selling things will rely on the power of visuals.

 

Tech - can it make aged care sexy?

Monday, August 20, 2018

Many countries in the Western World, including Australia, are facing the challenges of looking after ageing populations. We're now seeing Baby Boomers (usually defined as those born from 1946 to 1962) move into retirement, with a proportion of older boomers either accessing aged care services or even entering aged care residences, which is a significant change in the lives of these people. 

All this is happening at an unprecedented rate, not only because of the demographic swell of boomers, but also because we are, on average, living longer and healthier lives, and working longer too. According to recent figures, Australia has the third highest life expectancy age in the world at 82.5 years, just after Switzerland, 82.7, and Japan, 83.3.

In his appendix to the Aged Care Financing Authority Second Annual Report 2014, Professor Graeme Hugo noted four critical demographic factors to consider about Australia's ageing population:

  • The ABS anticipates the number of people aged 65 plus in Australia will increase by 84.8% - from 3.1 million to 5.7 million - between 2011 and 2031.
  • The proportion of people aged 65 plus will increase from 13.8% in 2011 to 18.7% in 2031.
  • The financial and social characteristics of the ageing cohort will play a part in policy decisions: “Baby boomers differ in a myriad of ways from the previous generation of older people, and this will also have a major impact on the nature of the care and residential arrangements which they need, seek, prefer and can pay for.”
  • "Finally, the geography of the next generation of the older Australian population will be different to that of the previous generation." Which means ageing populations don't live where aged care facilities are now located.

It's not only Western countries confronting this issue. Nations like China and Japan are also grappling with lopsided demographics, with younger generations left to pick up some of the bill.

We're talking about a serious international problem for many societies and their politicians. Which also means we're talking about a potentially tremendous opportunity for businesses and smart entrepreneurs who can find, and treat, the pain points of ageing.

As with almost every other aspect of our lives these days, many think technology holds one of the primary keys to how we will look after ourselves and our loved ones as we grow older. Entrepreneurs are already exploring tech-based solutions for aged care issues like in-home care, incontinence, mobility, and social isolation.

Australian company Simavita is in the business of high-tech incontinence solutions. The ASX-listed company “develops and markets advanced systems associated with smart, wearable and disposable technologies for the aged and disabled care market and also for the global diaper manufacturing industry.” 

Its primary technology is a sensor system that helps both individuals and carers better manage toileting. Anyone who has worked in aged care, or knows someone who is incontinent, will know that poor management of this condition can cause serious health problems. As Simavita says on its website: “When you take away the guesswork, health, safety and dignity are restored.”

Euromonitor International estimated the adult incontinence market in the US was worth around $2 billion in 2016 and forecast to grow at 6-8% over the next five years to 2021. That’s just a small slice of the massive overall opportunity in aged care and ageing.

Two groups of potential entrepreneurs are well-situated to tap into this burgeoning market for aged care products and services: older people whom themselves are experiencing some of the problems associated with ageing; and the women who already make up the bulk of the aged care workforce. 

Of course, it's entirely possible younger people can come up with excellent solutions to problems experienced by people twice and thrice their age. However, entrepreneurs tend to look to their own experiences and lives when they think about developing products and services.

Vastly more women than men work in the aged care sector. According to data from the Workplace Gender Equality Agency, women make up 82% of the residential aged care workforce overall, and 37% of the CEOs in this sector are women. Many workers in the sector, including those that go onto senior positions, come from nursing or social work backgrounds, both disciplines dominated by women. It's not necessarily a guarantee that entrepreneurial innovation will originate from this pool, but the numbers do at least tilt towards such a possibility. 

Aged care, and ageing generally, might not be sexy. However, it's set to grow and is on the radar of government and the private sector. Consumers will be looking for products and services that help them age gracefully and in good health. Investors will be looking for great ideas and smart people to provide the products and services those consumers are starting to demand. Smart entrepreneurs will be thinking about how technology can be used to meet these demands.

 

Could cryptocurrency save Facebook?

Wednesday, August 15, 2018

Facebook’s drastic share price fall last week has set alarm bells ringing about the direction of Mark Zuckerberg’s social media behemoth. 

Facebook’s market cap dropped by about $US123 billion, with its Nasdaq share price falling close to 20% in one day, from $217.50 to $174.89. It appears Facebook’s woes over the past couple of years have finally caught up to its market valuation. 

The main reason cited for this massive fall is Facebook’s projection of slower growth and earnings, made by the company in an earnings call. That’s certainly a significant factor, but it’s hard to ignore everything else that has been going on with the company, including the fake news imbroglio brought on by the US election and privacy issues highlighted by the EU’s implementation of its General Data Protection Regulation (GDPR) laws.

Here’s a list I made in an article I wrote for Switzer earlier this year of the significant problems Facebook is confronting:

  • Russian influence in the 2016 US election, fake news, and the erosion of democracy and civil debate
  • Harassment and bullying, especially of young people and women
  • Content moderation and monitoring in the light of video streaming on Facebook Live of suicides and other disturbing events
  • Fractious relationships with news outlets and publishers
  • Studies and reports concluding that excessive social media could lead to depression
  • Continuing prosecution by EU authorities concerning privacy controls and data collection and sharing

Many of these issues are ongoing and yet to be resolved. They will continue to act as a drag on Facebook’s growth because the social media network has now moved into the fuzzy area of being both a for-profit enterprise and a de facto public utility of sorts. 

Facebook’s ultimate success, for better or worse, is that it has become an almost indispensable part of many people’s lives. Moreover, with 2.19 billion monthly active users, that’s a lot of people who have come to rely on Facebook as a means to stay in touch.

With both user numbers and earnings growth slowing to a crawl for Facebook the social media site, Facebook the company is looking elsewhere for a growth boost. Messaging apps Messenger and WhatsApp are starting to trickle in some revenue for Facebook, while Instagram is turning into a social media star, making sizeable contributions to its parent company’s coffers.

Some of the reaction to the share price drop has been hyperbolic. Peter Switzer’s article on the matter probably delivered a more sober and sensible verdict: “I don’t think this is curtains for Facebook but it’s probably a slap in the face that it deserved for behaviour unbecoming. I’m sure it will survive, but it will have to live with a lower share price for the moment.”

One exciting area to keep an eye on is Facebook’s moves into blockchain and cryptocurrencies. Blockchain promises security and transparency — two things Facebook is struggling to give its users right now.

Zuckerberg’s New Year message for 2018 signalled his intent to explore the potential uses of blockchain for Facebook. Since then, Facebook has moved the head of Messenger, David Marcus, to head up an internal team tasked with blockchain exploration. As the former president of PayPal, Marcus is an expert in the area of payments, which makes him a good fit for the blockchain role. There has also been speculation about Facebook minting its own cryptocurrency — joking referred to by some as ‘ZuckBuck’.

Facebook has the scale and reach to take blockchain mainstream. It has integrated payments and shopping already, and many users already use Facebook as a means to sign-in to third-party apps and websites. 

Inertia tends to mean people are slow to switch banks, insurance companies, and other critical service providers. The same principle could apply to Facebook. Many users will say they have invested too much time into their Facebook account to switch wholesale to another platform. 

No doubt they will use others (LinkedIn, Twitter, Instagram, etc.) for specific purposes, but they will probably keep Facebook because it’s still where most of their friends and family are. This massive user base makes Facebook a prime candidate to mainstream blockchain for broader uses than just cryptocurrencies.

The possibilities of how blockchain’s capabilities in areas like finance and law can integrate with social could prove to be the light at the end of the tunnel for Facebook.

 

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