Mary Meeker’s internet trends report is one of the most highly anticipated reports of the year. The 213-page report talks about the current state of the internet, global growth trends, connected cars and more. Mary Meeker is a general partner at Kleiner Perkins Caulfield & Byers. She presented the report at Code Conference 2016. Here is the full report.
In this post, we have extracted few key insights and must to know points from the report for those in internet retail space.
1. Online Advertising Efficacy = Still Has Long Way to Go
The report gives impressive data on internet advertising growth trends and shows how online advertising efficacy is not reached to its full potential. According to the report; authentic, entertaining, in-context and often brief video ads works best. The report gives examples of Snapchat’s 3V advertising; vertical (made for mobiles), video (great way to tell a story) and viewing (always full screen).
2. Millennials= Impacting + Evolving Retail
Then, Meeker talks about how commerce and brands are being shaped by the new generation. She explains the different generations and how they have changed the face of retail over the time. The slide below shows how retailers are optimizing for the generational changes.
Millennials comprise of 27% of the population, which is the largest generation in the USA and their spending power should rise significantly in next 10-20 years. So, today’s internet retailers must devote time and efforts to understand the millennials behaviour and needs.
3. Retail = Technology + Media + Distribution Increasingly Intertwined
Technology, media, and distribution are increasingly being intertwined in the new retail industry. The above slide talks about how there remains a very less differentiation between a product and brand. The example given is Warby Parker which is a brand, a product, and a retailer also. In the new distribution models, consumers are buying directly from the brands as well as from the retailers.
Physical retailers are evolving and becoming digital retailers as well and digital retailers are becoming data-optimized physical retailers. So, the key here is the omnichannel presence. An example of the retailer going from offline to online is Neiman Marcus and the retailer who went from online to offline is again Warby Parker.
4. Internet-Enabled Retailers/ Products/ Brands On Rise = Bolstered by Always-On Connectivity + Hyper Targeted Marketing + Images + Personalization
The report says that the internet enabled retailers are on the rise. Connectivity plays an important role here as connected product users can be easily notified when to buy or upgrade their products and they can also be reached by viral sharing over social media.
Hyper-targeted marketing is also a driving growth for retailers/products and brands. Retailers can quickly and easily make new product introductions with hyper-targeting and intent-based marketing via Facebook, Twitter, Instagram etc. Improved analytics of such channels can help retailers to analyze the ROI of their spends in real-time and build strong targeting capabilities.
Next, Ms. Meeker gives a very impressive example of Stitch Fix, who is giving a differentiated experience to each customer, using Netflix and Spotify like content discovery in fashion. Stitch Fix collects data points on customer preferences, styles, and activities. Their stylists use this data with high-end algorithms to improve the product selection. Then, they collect the information on customer experience with curated items to improve the future product selection.
The below slide explains how Stitch Fix is constantly improving their algorithms.
5. Visual (Video + Image) Usage Continues to Rise
The report states that the generation Z (age 1-20) communicate with images rather than images.
The below slide shows how millennial generation behaves on various social networks with visuals.
6. Advertisers / Brands = Finding Ways Into… Camera-Based Storytelling + Creativity + Messaging / Sharing
The report breaks down the smartphone usage mainly into the camera, storytelling, creativity and messaging/sharing usage. Now, the advertisers are finding ways to leverage these sub-categories of smartphone usage.
Below slide showcases, how brand filters are integrated into Snapchat snaps to advertise. Branded Snapchat lenses and Facebook filters are becoming popular among the users. Taco Bell and Iron Man filters are among the highly used filters.
7. Images = Monetization Options Rising
As the image growth remains strong across the various social media platforms, image monetization options are rising. Image-based platforms like Pinterest are being increasingly used for finding products and shopping. And image based peer to peer marketplace like [OfferUp] (https://offerupnow.com/) displays higher engagement levels than and being used for commerce.
This slide talks about Houzz, an image based platform using the power of content and community for commerce.
8. Messaging = Evolving from Simple Social Conversations to Business Related Conversations
Many messaging leaders continue to expand their uses and services to enterprises beyond social messaging. Brands and retailers are using messaging services like Facebook messenger, WeChat to facilitate customer service and commerce. Conversational commerce is ramping up via messaging platforms. The report gives an example of an Instagram shopper’s buying journey where browsing begins on Instagram and payment ends online.
9. Re-Imagining Voice = A New Paradigm in Human-Computer Interaction
The report states that voice should be the most efficient form of computing input. We are still in early innings of a new revolutionary computing interface where we are evolving from keyboards to microphones and keyboards. The report shows how word accuracy rate of voice search has increased over the years and these technology improvements are giving rise to mobile voice assistant usage.
Below slide depicts how voice is gaining search share on different search platforms. According to Andrew Ng, Chief Scientist at Baidu; in next five years, at least 50% of all searches are going to image and voice search.
Thanks for reading. Hope you find these insights useful in planning business strategies for your business.