Beyond driving for revenues, modern businesses must consider the human quotient in all they do. This means
a human-centered engagement infrastructure that
builds relationships with customers digitally through meaningful value, connections, and communications. Smart technology engagement platforms combined with customer-first mindsets can re-imagine customer journeys not only to compete for the future, but also relevance
in every moment that matters to customers. That’s the important aspect about the human quotient—it plugs brands into the exact moments that matter to custom- ers. Highly personal touch points are instrumental in guiding the next steps of customers closer to, or further away from, a brand now and forever. These meaningful moments require modern forms of engagement that prioritize one-to-one personalization, context consider- ation, cross-channel communication, and right time/right place/right message delivery at scale. Just because your brand is winning today doesn’t mean that future shock isn’t on the horizon. Plan for it. The clock is ticking.
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The Next Modern Commerce Disruption: A Blueprint to Win in the Age of Personalization by Brian Solis
1. A Marketer’s Blueprint to Win in the Age
of Personalization
The Next Modern Commerce Disruption:
By: Brian Solis
Principal Analyst, Altimeter Group
2. 2
In 1970, futurist Alvin Toffler wrote Future Shock, a
powerful and controversial look at how the speed and
volume of change affects individuals and societies. The
book and subsequent intellectual movement explored
how a majority of social problems are symptoms of
“future shock,” where people, populations, industries, and
governments experience too much rapid technological
change in too brief a time. Businesses once too big to fail
have become chapters in the history books of business
evolution. This could be part of the reason why only 71
companies remain from the original 1955 Fortune 500
list. Future shock leads to complacency or paralysis, which
inhibits progress or even triggers regression. Today that’s
exactly what’s happening in retail and other commerce.
Strategists seem paralyzed, unable to move quickly or
notably enough to stave off disruption. They still sell
and market the same old way, while expecting differ-
ent outcomes. Almost every major department store,
including Macy’s, Kohl’s, Wal-Mart and Sears, have
closed hundreds of stores recently, trying to propel
themselves out of future shock. In the first quarter of
2017 alone, 19 retail brands including Sears, Macy’s
and Staples closed a combined 3,507 stores(1).
Introduction
But traditional commerce brands are not the only ones
in disruption’s path. E-commerce companies disrupt-
ing traditional retailers now face disruption from
modern commerce companies, such as Dollar Shave
Club, Gilt, Uber, Airbnb, and others. Disruption is a
constant. Anyone believing modern commerce ends
with today’s most popular start-ups and progres-
sive brands risks the blows of future shock.
What’s new eventually becomes old replaced by the
new-new players who inevitably discover different ways to
innovate and deliver new value to connected customers.
The next innovators are premised on what I call the human
quotient. They build on emerging technology trends to
offer new service and engagement models, which cater
to the ever-changing preferences and expectations of
connected customers. At its core, the human quotient
serves as the guiding ethos of how a company operates
and innovates. Marketing, sales, customer-relationship
management, and product development are based on
integrating new technologies and services to keep up with
people’s changing values, behaviors, and preferences.
Beyond driving for revenues, modern businesses must
consider the human quotient in all they do. This means
a human-centered engagement infrastructure that
builds relationships with customers digitally through
meaningful value, connections, and communications.
Smart technology engagement platforms combined with
customer-first mindsets can re-imagine customer journeys
not only to compete for the future, but also relevance
in every moment that matters to customers. That’s the
important aspect about the human quotient—it plugs
brands into the exact moments that matter to custom-
ers. Highly personal touch points are instrumental in
guiding the next steps of customers closer to, or further
away from, a brand now and forever. These meaningful
moments require modern forms of engagement that
prioritize one-to-one personalization, context consider-
ation, cross-channel communication, and right time/right
place/right message delivery at scale. Just because your
brand is winning today doesn’t mean that future shock
isn’t on the horizon. Plan for it. The clock is ticking.
(1)
http://uk.businessinsider.com/the-retail-apocalypse-has-officially-descended-on-america-2017-3
3. The New Disruptors and the Rise of Modern Commerce
The 3 Types of Modern Commerce Disruptors
The Original Generation of Modern Commerce Disruptors
Even Disruptors Can Be Disrupted
Advancing the Marketing Mindset from Automation to Personalization
How AI Helps Marketers Humanize Their Brands
The Modern Marketing Blueprint: AI Facilitates the Design of Intelligent and Personal Experiences
Summary: Disruption Isn’t an Accident
4
6
8
10
13
15
18
21
1
2
3
4
5
6
7
8
Table of Contents
5. 5
What do TOMS Shoes, Warby Parker, Dollar Shave
Club, Bonobos, Casper, Poshmark, MeUndies, Birchbox,
The Honest Company, Everlane, and others like them
share in common? Each in its own right represents a
new breed of bold consumer product start-ups that
opened new markets and opportunities. As born-digi-
tal companies, these start-ups can focus on developing
new product, service, and brand models from scratch
without the legacy shackles that govern business
as usual and traditional commerce. These consum-
er-product darlings developed creative and compelling
ways to cultivate new customer relationships through
innovative and more personal, business-service models.
Connected consumers instantly gravitated toward
their relatable mission and purpose, and also cleverly
targeted product sets, and mobile-first designed apps.
News media attention turned them into rock stars. Even
leading e-commerce and global consumer packaged
goods (CPG) companies were forced to take notice.
For example, Dollar Shave Club took on industry
giants Schick and Gillette with a creative, modern
commerce business model. In just four years, Dollar
Shave Club disrupted the traditional shaving market
by building a massive brand and strong relationships
with connected customers. The company’s hilarious
and unconventional promotional video and YouTube
marketing strategy was not only edgy, but also
incredibly effective in reaching its target audience.
Dollar Shave Club’s use of technology is representative
of a new genre of digital-first business models, focused
services and low prices. But, what is really most important
is that, unlike Gillette and Schick, Dollar Shave Club really
understood its targeted connected consumer market and
curated relevant messages in key channels designed to
keep them engaged. For example, with each blade delivery,
customers get a copy of Bathroom Minutes magazine. It’s
designed to resemble the traditional newspaper comics
and includes shaving and life tips and questions and
answers. The service blends good products, convenient
services, and affordable (cheap) prices. The entertain-
ing content delivered in contextually relevant media
helped the company rise out of nowhere to generating
$150 million in revenue in 2015. A year later, Unilever
bought Dollar Shave Club for $1 billion, an estimated
(2)
https://www.bloomberg.com/news/articles/2016-07-20/why-unilever-really-bought-dollar-shave-club
(3)
http://money.cnn.com/2016/01/07/technology/gilt-groupe-hudsons-bay-saks/
(4)
http://www.collaborativefund.com/blog/how-warby-parker-casper-and-dollar-shave-club-are-inspiring-a-new-generation-of-entrepreneurs/
CHAPTER 1 The New Disruptors and the Rise of Modern Commerce
five times more than expected revenue(2)
—a testament to
the start-up’s innovative marketing and the importance
of connected consumers to the future of business.
Dollar Shave Club is just one representative of emergent
brands that understand connected customers and
up-end models of rival traditional players. Other
innovative start-ups such as Warby Parker, Bonobos,
Casper, Poshmark, MeUndies, Birchbox, and Stitch
Fix are building new brands and business models,
which are already generating hundreds of millions
in revenue at the expense of traditional retailers. In
another recent acquisition, Hudson’s Bay Co., owners
of Saks Fifth Avenue, also purchased Gilt Groupe for
$250 million(3)
. Consumer values and new competi-
tion are moving too fast for laggard brands. As a result,
mergers and acquisitions are at an all-time high(4)
.
6. 6
The 3 Types of
Modern Commerce Disruptors
CHAPTER 2
7. 7
Many dominant brands built reputations on giving
customers what they could expect—predictability.
This created a status quo mindset where the design
of products, services, and experiences were largely
transactional and good enough for most people. But
along the way, customers became connected and as a
result, informed, empowered, demanding, and elusive.
Now, people expect anything but the status quo.
People today want to feel like they matter as customers.
They don’t just want generic emails or text messages
about sales. They don’t want trendy chatbots to help
them buy stuff via Facebook. They don’t just expect
great customer service. Customers want to feel valued.
Customers want to believe that your company values their
time, understands how they communicate, and appreciates
their preferences. They want one-to-one personalized,
tailored engagement, or at the very least, the semblance
of it, at each touch point. This is the human quotient. But
even the most modern of modern brands is underesti-
mating the human quotient in customer engagement.
Like in all things in this world, nothing lasts forever. The
barriers to entry are obliterated. The opportunity for
new start-ups and entrepreneurs to disrupt traditional
markets and reap gainful rewards has never been greater.
But with every opportunity, challenges are inherent.
The same forces that drive disruption set the stage
for anyone to be on the receiving end. Today’s disrup-
tors face disruption from next-generation start-ups
and eventually the sleeping giants they awaken.
CHAPTER 2 The 3 Types of Modern Commerce Disruptors
All companies must understand that there will
always be 3 basic types of disruptors:
• the old (laggards or future-shocked)
• the new (disruptors)
• the new-new (next-generation disruptors)
This is no time for leaders to be paralyzed by future shock.
Instead, they must future proof their brands by prioritiz-
ing the human quotient, invest in meaningful customer
engagement using technology platforms in moments and
ways that matter to customers, and continually explore
methods and services to deliver new value to customers.
The first e-commerce companies
that disrupted the incumbent
brick-and-mortar structure,
serving consumers with lower
costs and convenient delivery
Brands in the current commerce
landscape that aim to get in front
of consumers on all channels,
but still opt to message through
impersonal segmentation
Emerging brands that are invested in
understanding and developing a deep
human connection with every consumer
as an audience of one to communicate
with them on their terms—the right device,
the right time, and the right message
9. 9
Disruptors don’t have to look too far outside of their
purview to appreciate what happens when they don’t
invest in evolving customer experiences and engagement.
Before the rise of Dollar Shave Club, Gilt, and other new
e-commerce disruptors, original disruptive companies
like Amazon, eBay, Alibaba, and Overstock.com changed
the way consumers shop. The global popularity of mobile
communication and computing, apps, services, social
media, and user reviews creates a marketplace that’s never
going to settle and will continue to shift and progress.
Amazon is leading the way. Amazon is arguably the
industry standard of e-commerce, logistics, and aggres-
sive pricing. The Amazon model did more than disrupt
traditional retailers and e-tailers around the world. It
also forever changed customers’ expectations, prefer-
ences, and behaviors. Amazon’s effect on consumer
shopping taught it to be intentional in creating innovation
strategies to compete and further disrupt. For example,
Jeff Bezos and company are aggressively investing in the
development of new products and capabilities including
artificial intelligence (AI) and voice-interface devices, AI
and intelligent bots to facilitate transactions and predict
needs and recommend products, Internet of Things (IoT)
appliances, mobile payment systems, intelligent retail
store models, delivery drones, autonomous warehouse
robots and more. Even Amazon continually disrupts
itself to stay relevant to modern customers. But at
its core, Amazon focuses on engagement platforms,
artificial intelligence, and new technologies that help
customers make the right decisions…their way.
CHAPTER 3 The Original Generation of Modern Commerce Disruptors
11. 11
The Customer Experience Impact Report says that 82%
of customers stop doing business with companies due to
bad customer experiences. According to Forrester, 71%
of consumers say inconsistent cross-channel messaging
negatively affects the shopping experience. Interestingly,
one in 10 said inconsistencies in the brand experience
device to device would make them stop interacting
with a brand altogether. Meanwhile, 86% of buyers say
they will pay more for a better customer experience.
Every day, consumers vote with clicks and cash. Along
the way, they leave digital breadcrumbs and openly signal
the need for more human, relevant, and meaningful
experiences. Sophisticated and natively digital brands
and new-age marketers get that. But, even though
disruptors began with inspired corporate missions and
clever business models, their operational and technolog-
ical infrastructure ironically are similar to the traditional
companies they are disrupting. How companies manage
customer journeys is often through silos, each with
engagement philosophies and technologies that by
design introduce unconvincing, competing, or even
disconnected experiences. Without modernizing
marketing operations and customer engagement,
they, too, are vulnerable to the next wave of disrup-
tive companies. It’s only a matter of time.
As digital natives, business and technology models
and customer-centric campaigns naturally focused
on dominant online channels such as mobile, social,
and web. They didn’t endure years of costly digital
transformation and literacy initiatives to shift business
and technology strategies to match the times. Yet,
many rising stars make the same mistakes as their
incumbent counterparts—they miss opportunities to
connect technology and value propositions to digital
customers in ways that align with their attention
spans and preferences. Disruptors aren’t immune.
Experts around the world preach the importance of
customer experience and the need to invest in technolo-
gies and strategies that better engage customers in each
moment in the journey. Customer experience is more
than a buzzword. It’s critical for disruptors to recognize
the discerning needs of the incredibly savvy consumers
they’re chasing and managing. Customer experiences
are about connecting with people in ways that are
preferred, intuitive, productive, and engaging. Modern
marketers get that. But they don’t walk the walk.
Modern marketers either underestimate or don’t
understand the urgency of delivering integrated, person-
alized customer experiences. They miss simple cues for
improving relationships before, during, and after transac-
tions. They engage new digital platforms but employ old
engagement tactics. This mismatch leads to common
mistakes with costly consequences, as shown to the right:
CHAPTER 4 Even Disruptors Can Be Disrupted
44% of direct mail
is never opened
46% of consumers
opt out of mobile push notifications
More than $280 billion
is abandoned in digital shopping carts
every year
91% of consumers
unsubscribe from emails
12. 12
These stats shouldn’t surprise. They reflect what
happens when business automates traditional market-
ing. It may be easy and inexpensive to batch and blast
emails and mobile push notifications to wider and
wider audiences. But scaling mediocrity means risking
disruption. Instead, brands should invest in one-to-one
personalization models, which make up for flat conver-
sions by increasing volume and reach. Even in the best
of cases, it brings the right message to a lot of the wrong
people often in the wrong channels at the wrong time.
While it may have worked for years, its fading
effect is now only accelerating. Consumers have
suffered enough heedless experiences. When
modern businesses ignore customers’ telltale
signals, they show entrepreneurs and investors their
weak spot, encouraging their own disruption.
A business or brand cannot open new doors without
doing new things. Growth is stunted when businesses
do not prioritize intelligent, integrated platforms to
facilitate one-to-one personalization in the channels,
moments, and ways that matter. Relying on intelli-
gent, integrated platforms nurture experiences that
energize customer acquisition and retention.
Automation can be a crutch for lackluster marketing.
Intelligent engagement is the remedy. To compete for
the future, thwart disruption, and continue to disrupt,
successful strategies require a systematic and decisive
focus on experience design that puts shifting customer
preferences and behaviors at the center of everything.
By engaging customers in the moments that matter
in the ways that matter, brands evolve from the old
way of doing things to become relevant today via
new means. Modern commerce brands, however,
also relentlessly strive to deliver hyper-personaliza-
tion using a combination of next-gen technology and
human engagement to further set the bar higher for
“new-new” approaches. This transforms the concept of
scale from one-to-many to that of engaging an audience
of one, where each customer feels unique and valued.
Traditional companies lean on old ways of customer
engagement via aging communication processes, such
as traditional snail mail and batch and blast email. While
disruptors also rely on snail mail and email, they also have
invested in mobile communications. Even the new still
haven’t mastered effective, cross-channel, one-to-one
personalized engagement. Often mobile communication
is limited to dumb push notifications. Email and mobile
are largely fragmented with different platforms and
teams for each. Adding to the negative experience, these
communications lack dynamic content and AI smarts.
New-new disruptors factor in the human quotient. They
not only embrace one-to-one personalization, but they
have invested in AI platforms and teams to support
personalized, right-time, right-place, right-message
dynamic engagement in the moments that matter at scale.
CHAPTER 4 Even Disruptors Can Be Disrupted
14. 14
Every consumer believes that they are an audience of one.
Modern marketers must leverage intelligent platforms with
customer-centricity to scale one-to-one personalization.
The human quotient is the foundation for next genera-
tion disruption. It centers the business on one-to-one
personalization by learning about customer preferences,
behaviors, and context now and over time. By combin-
ing those insights with intelligent platforms, brands can
genuinely market, message, and engage in the moment
that matters for each individual consumer. By design,
brands can personalize marketing with the right content,
at the right time, on the right channel, on the right device.
Ask a successful founder of a natively digital brand the
inspiration for taking the bold risk of starting a new
company. They might answer, “I see a growing group of
people who experience moments that matter differently
than other brands realize. It is an opportunity to learn from
them to better serve them through the design of relevant
new products and services. Because they are so differ-
ent, we need to engage them differently. We must be as
CHAPTER 5 Advancing the Marketing Mindset from Automation to Personalization
innovative with customer engagement and experience
design as we are with products and business models.”
Modern disruptors systematically put the customer
experience at the center of everything. Here are
the other strategies they have in common:
• Disruptors are data-driven, enabling them to adapt
and react to consumer preferences in real time
• They use a cross-channel model to engage in the
moments, places, and messages that matter
• AI-powered systems eliminate the guesswork of
segmentation and messaging and use intelligent
insights to engage every consumer as an individual,
at scale
• They follow the digital breadcrumbs consumers
willfully leave behind: location, device, intent, and
activity
16. 16
With the rise of artificial intelligence (AI) and machine
learning, modern marketers have access to a new
class of AI-enabled, marketing automation platforms
that accelerate the implementation of the modern
marketing blueprint. AI-powered marketing platforms
convert customer data and activities into actionable,
personalized insights, which leads to more relevant
and personalized cross-channel consumer engage-
ment. In addition to modern marketers getting smarter
about customer experience and personalization, AI
can interpret digital breadcrumbs, replacing manual
guesswork with automated decision-making.
Specifically, AI-enabled marketing platforms zero in on the
moments that matter to consumers through personalized
messaging at scale across a variety of channels: email,
apps, browser push notifications, web and mobile in-app
messaging, and SMS. AI-enabled marketing platforms
make campaigns feel less like campaigns and more like
conversations, increasing the chances people will engage
with the messages that offer mutually beneficial outcomes.
CHAPTER 6 How AI Helps Marketers Humanize Their Brands
For example, if we compare old-school approaches to
new-school capabilities, disruptors and those who want
to become disruptors will set the foundation for the
development of their modern marketing blueprint.
On the next page, we see how marketers can begin to
lay this foundation by understanding the 5 Ws of modern
marketing and how they should think of each in terms of
the old way of marketing vs. the new way of marketing.
17. Check out
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v.s.
OLD
NEW
18. 18
The Modern Marketing Blueprint:
AI Facilitates the Design of Intelligent
and Personal Experiences
CHAPTER 7
19. 19
Investing in the human quotient instills a culture of
consumer-centricity within modern brands and pushes the
company to incessantly innovate as part of its every-day
business ethos. With intelligent marketing platforms,
businesses will change the game for marketing in how
each consumer is engaged as an audience of one
at scale. This approach, by default, amplifies signal,
reduces noise, and increases accuracy, timing, and use
of brand messages. It improves the overall customer
experience. Perhaps more importantly, brands earn a
value-added, trusted role in empowering customers to
easily and intuitively make decisions on their terms.
This is the modern marketing blueprint powered by
the human quotient and AI. It is designed to help
disruptors from becoming disrupted, built upon
key relationship-building disciplines that start with
understanding and converting those insights into
engagement triggers in the moments that matter. This
then becomes the architecture for experience design.
Marketers align relevant messages with compelling
content to engage consumers precisely and personally.
CHAPTER 7 The Modern Marketing Blueprint: AI Facilitates the Design of Intelligent and Personal Experiences
Future-proofing and disruption as business models starts
with building upon four core pillars: listen, learn, create,
and implement.
Check out the modern marketing blueprint on the next page.
20. LISTEN
LEARN
CREATE
IMPLEMENT
Winning companies are rooted in a consumer-centric
approach, keeping a tight pulse on customer experiences.
The consumer continuously evolves. Marketers must
be mindful of this and keep up in real time.
Each customer journey is different. Marketers must engage
with each person in the exact way that works best for them.
Use the right tools to effectively engage consumers across
channels, creating a seamless consumer experience.
• Establish your brand as consumer-centric—not app-centric, not mobile-
centric, not message-centric. Always evaluate tactics and strategies
from the customer’s point of view.
• Replace classic demographic segmentation with behavioral
segmentation methods, based on what your consumer wants and what
they do at the individual level.
• Collect data based on consumer interactions with the brand through a
variety of channels that represent the journeys they take with the brand.
• Watch how the consumer interacts with the brand organically, draw
conclusions about their preferences, and use this information to
shape messaging.
• Determine on which channel the consumer prefers (or doesn’t prefer)
to interact with the brand.
• Craft an engagement strategy that focuses on the individual. Personalize
messaging based on individual preferences for content, channel, and
timing.
• Develop an efficient, intuitive, and adaptive click path between engage-
ment and the desired outcome to maximize business results.
• Leverage an AI-powered, marketing automation platform that combines
content and context in a cross-channel program (email, app and browser
push notifications, web and mobile in-app messaging, SMS, and social
media).
• Review campaign performance data at a granular level to know how
marketing efforts impact business objectives.
• Implement process and technology improvements to continuously listen
and learn the consumer’s preferences and behaviors, optimize content
and path accordingly, and improve customer engagement in real time.
THE MODERN MARKETING BLUEPRINT: A “HOW-TO” FOR CONSUMER-FOCUSED MARKETERS
1.
2.
3.
4.
22. 22
Technology and society constantly evolve. Future shock
can affect anyone, at any time, in any place. What’s
new is only new for so long. The new-new, however,
is pervasively imminent because it is rooted by design
in the human quotient—always putting custom-
ers’ preferences and behaviors front and center.
The next generation of Amazons, Ubers, and Dollar
Shave Clubs are hatching plans to modernize modern
commerce. They will use machine learning, AI, and
the human quotient to develop next-generation
businesses to become more relevant, human, and
engaging. To win in round 3, a company must invest
in technology, resources, and models to support
one-to-one personalization in the moments that
matter at scale. That’s at the core of new-new.
All business is personal. In our world of empowered
consumers who face too much noise and too many
choices, people—individuals—must be at the heart of a
brand’s strategy. The only way to earn relevance is to
genuinely care and accordingly engage people as the
individuals they are. That takes understanding what’s
important to them, when, where, and why and in turn,
making investments in smart technologies and customer
experience strategies to engage them their way. Combined
with an AI-powered marketing platform, reaching,
engaging, and converting connected consumers sets
the foundation for mutually beneficial relationships.
The future isn’t written, and this is a call for bold
thinking and acts to remain disruptive through the
continual creation of new value that matters to people
now and as they change. That takes an experience
architecture built from a modern marketing blueprint.
Whether it’s competing for attention, onboarding,
marketing, or building loyalty, one-to-one personal-
ization is the only way to compete for the future. The
need for perpetual modernization never ends. The
pursuit of the new-new future proofs against future
shock. The clock is ticking. The time is now to evolve
from being the new player to the new-new disruptor.
CHAPTER 8 Summary: Disruption Isn’t an Accident
23. 23
The Author
Brian Solis is Principal Analyst and Futurist at Altimeter,
the digital analyst group at Prophet. Brian is also a
keynote speaker, digital anthropologist, and futurist who
studies disruptive technology and its impact on business
and society. In his reports, articles, and books, he sets
out to humanize technology and its effect on business
and society. Brian’s current research explores digital
transformation, innovation, experience design, culture
2.0, and “the future of” industries, trends, and behavior.
Brian is also an award-winning author of seven
best-selling books including X: The Experience
When Business Meets Design, What’s the Future of
Business (WTF), and The End of Business as Usual.
With a loyal online audience of over 600,000 people,
his work makes him a sought-after thought leader
to leading brands, celebrities, and start-ups.
http://www.briansolis.com/
Altimeter is a research and consulting firm owned
by Prophet Brand Strategy that helps companies
understand and act on technology disruption. It gives
business leaders the insight and confidence to help
their companies thrive in the face of disruption. In
addition to publishing research, Altimeter analysts
speak and provide strategy consulting on trends in
leadership, digital transformation, social business,
data disruption, and content marketing strategy.
https://www.prophet.com/thinking/altimeter/
Kahuna is smart marketing automation software that
empowers consumer marketers to personalize journeys
for millions of consumers in seconds, meeting their
expectation of a highly customized experience every time.
Using AI technology and a cross-channel approach, we
help brands understand and effectively communicate with
their customers, leading to superior business outcomes.
Kahuna is trusted by Yahoo!, Yelp, Overstock.com,
Travelzoo, Dollar Shave Club, and hundreds of other
companies. The company was founded in 2012 and has
raised $58M in funding from top investors, including
Sequoia Capital, Tenaya Capital, and SoftTech VC.
https://www.kahuna.com/
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