Salo digital transformation in the food industry

20.4.2017
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Maatalous-metsätieteellinen tiedekunta
DIGITAL
TRANSFORMATION IN
THE FOOD INDUSTRY
Jari Salo
Professor of Marketing, University of Helsinki
Adjunct Professor of Digital Marketing, Aalto University School of Business
Associate Editor of Internet Research
20/04/2017
UCT 160
OBS 25
AALTO 10 40
20/04/2017Presentation Name / Firstname Lastname 2

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COMPANY REFERENCES

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TRANSFORMATIONTRANSFORMATION
WHY DIGITAL?
• Create new customer
relationships
• Enhance old relationships
• Improve service
”experience” (CEM)
(mobile, augmented,
social, location)
• Create and extend brand
awareness
• Old ways of advertising do
not always reach
youngsters (with content
marketing – native/viral
reach is better)
• Simplify the fuzzy front end
of innovation (PDM,
NPD/NSD/R&D)
• Increase sales, reduce
overall costs and receiving
payments earlier
• Decrease cost of service,
operations and channel
structure
• Behavioral change -
gamification

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WHAT HAS INFLUENCED INVESTMENT
DECISIONS TO DIGITAL ACTIVITIES?
Divia (Digital Business Network), Finland 2014
Consumer behavior Cost Immediacy –
fast rech
Customer interactionEasy targeting
GOALS SET FOR DIGITAL
Better service
Increasing sales
Increasing customer interaction
Improving communications
Improving advertising
Strengthening the brand
MobileEmail

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HOW TO MANAGE
TRANSFORMATION?
HOW TO MANAGE
TRANSFORMATION?
Onlinemetrics
SCM
CEM
INNOVATION
Business
Strategy
Customer
Strategy
Business
Strategy
Customer
Strategy
Value
capture
Value
creation
Value co-
creation
Value
capture
Value
creation
Value co-
creation
Performance
assesment
processes
a) Shareholder
results
b)
Performance
measuring
c) KPI
Performance
assesment
processes
a) Shareholder
results
b)
Performance
measuring
c) KPI
Multichannel
integration
-FB, Instagram,
Twitter
-YouTube
-Email & newsletters
-Company websites,
extranets, electronic
marketplaces
-SEO/SEA, web
advertising
-Blogs, pods, -Vpods,
webcasts
-Mobile, location
based services,
augmented/virtual
reality
-Data science
Multichannel
integration
-FB, Instagram,
Twitter
-YouTube
-Email & newsletters
-Company websites,
extranets, electronic
marketplaces
-SEO/SEA, web
advertising
-Blogs, pods, -Vpods,
webcasts
-Mobile, location
based services,
augmented/virtual
reality
-Data science
Information systems
- Data management
- Front & back office applications
- Big data and cloud applications
Information systems
- Data management
- Front & back office applications
- Big data and cloud applications
HOLISTIC VIEW - DIGITAL
TRANSFORMATION FRAMEWORK

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CRM-CEMCRM-CEM
DRIVING TO STORE / ACTION
• Mobile
• Customer letters (email)
• SEM (SEA+SEO)
• Twitter lead cards

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Measuring mobile: SK
Restaurants
SK
Databa
se
AND OTHERS DRIVING TRAFFIC
• SEA +SEO= SEM
• Newsletters (Email biggest ROI of digital)
• Twitter advertising and lead generation cards (LGC)
• Banner ads
• Content marketing (Video and social)

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CUSTOMER LETTERS - PATH TO
PURCHASE (KUMAR & SALO 2016, JMC)
• 11 companies provided access to their live e-newsletters account
• Thousands of e-newsletters send over several years
• 6 months period was selected and the e-newsletters were analyzed
• Four regions are used to depict the visual scene of e-newsletters
CUSTOMER LETTER - PATH TO PURCHASE
EXAMPLE FROM OUR RESEARCH
• The average click-through rate of email is 16% with
an open rate of almost 20%.
• The un-subscription rate is low at 0.22%.
• We analyzed number of links, number of words in subject
line and body, number of pics etc. impact to CTR.
• Reverse U effect – NE receives most of the clicks
U

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IN
STORE
• Beacons
• Digital signage - smart displays
• Real-time category management
CONTEXT / LOCATION
AWERENESS
• Apple's iBeacon technology - in-store
Bluetooth location trackers designed to
interact with smartphones - enables
retailers and app publishers to identify
people individually the moment they enter
a shop
• iBeacon available with many vendors
• Similar to iJack service which we
developed with Teliasonera in early 2000
which they abandoned in 2004 Sales/deals
80%
Content relevant to
interest/
Location 62%
Swirl 2013

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DATA VISUALIZATION - DASHBOARDS
Similar heat maps available for banner ads and
other digital marketing tools
•About a year ago, Urban Research, a
fast-growing and popular fashion, home
and lifestyle retailer, launched an
experiment in Tokyo’s Parco Ikebukuro.
•Allows customers to stand in front of one
of two 60-inch screens, select clothing
items they want to try on and see
themselves dressed in the products within
seconds.
•Customers’ movements are represented
fluidly on the screen in 3D and customers
can use an integrated iPad to take
pictures of themselves and share them
with friends on social networks.
VIRTUAL CHANGING BOOTHS

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VIRTUAL CHANGING BOOTH
BENEFITS
• No inventory needed
• Scan a QR code to buy
• Easy, especially men seem to like it
REAL-TIME CATEGORY
MANAGEMENT
• Lush sales team can change
the layout of their stores in
response to real-time sales
data
• If one bath bomb is selling well
with a certain shampoo, they
can change the store layout so
the items are closer together.
(Source BBC)
"Not only has this helped to tap in to the ambitious spirit
of staff - competing over which store can do best in terms
of sales and performance - but it also gives them
information to improve the customer experience."

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BEHAVIORAL MARKETING
• E-sales
• Newsletters
• Social
• Shopping cart abandonment recovery
E-SALES
E-sales (salesperson while in “physical” store if not busy
handles chat, social media store, online store, virtual
world store at the same time) – selling multiple channels
In the project tested with Konebox
(old K-group retailer of consumer electronics)

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SOCIAL RETAIL – SOCIAL LOGIN
• Social login - Facebook or other SNS enabled social
commerce with given retailer
• Authenticate identities
• Pull customer information from particular SNS
• Tailor / customize/ morph in real-time the retailers website
• Social labs study showed that in 2012 only 6% of top 500
online retailers used social login
ONE OF OUR PROJECTS: SHOPPING
CART ABANDONMENT RECOVERY
Nosto – or similar SW

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PUTTING IT ALL TOGETHER – OMNI
CHANNEL FUNNEL
LEVELS OF ACTION FOR CEM
(OR AUTOMATION & DATA SCIENCE)
• Individual level data
• Marketing action level data
• Campaign level data
• Multichannel data
• All above over time (CLV)

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MEASURING LEVELS OF ACTION
• Data first
• Giving scores e.g. 0-100 for actions taken by consumer
• Scoring actions over time (time in program, website
clicks, email clicks, Twitter, LinkedIn, Instagram,
Facebook etc. +/- scores, buying patterns and cycles
etc.)
• CLV - measuring over time
• Calls for behavioral marketing that individualized but
automated
E.g. hotels with automated pricing algorithms
MARKETING, SALES & MONEY?
Outside non digital marketing efforts
Outside digital marketing efforts
Store marketing efforts
Or online store marketing efforts
Revenue
The aim of marketing is to know and understand the
customer so well the product or service fits him and sells
itself. (Peter Drucker)

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SCM – B2BSCM – B2B
DATA RICH ENVIRONMENTS:
INDUSTRIAL PERSPECTIVE
• Trucks
• Busses
• Dumpers (e.g. used to carry iron ore in mines)
• Autonomous vehicles
• Telematics (outsourced e.g. to Volvo)

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INCREASING SALES – B2B SOCIAL MEDIA USE
CASE: PONSSE LAUNCH EVENT INVITATION
• Invitation to participate launch
event of new product
Scorpion
• Target market forest
machinery operators/owners
• YouTube campaign
• Target set 500 participants,
over 1000 participated
(double than usual)
• Most importantly all
Scorpions were sold (price
tag 0.5M€ each)
• Price of campaign 1000$
INNOVATIONINNOVATION

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TYPOLOGY OF CUSTOMER INNOVATION
Piller et al., 2011
CASE STARBUCKS
• 125,000 Suggestions from Starbucks clients
• The top idea received over 95,000 votes and over 1,000 comments
• 200 ideas launched
• Starbuck has over 28 million fans on Facebook
• The Facebook fans mostly engage in applications such as event
calendars, discussions and notes
http://www.slideshare.net/kholzap
fel/social-media-success-stories

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CHANGE IN ”DIGITAL”
EVERYDAY OF PEOPLE?
• Search online recipes - by the
ingredients / goods online
(Foodie.fm) delivered to your
home/office
• Music (Spotify)
• Phone - video (Skype)
• Movies & TV-series (Netflix)
• Health and wellbeing – quantified
self (Polar activity bracelets)
• Online learning (younger
generation)
• Young people share sports /
events of everyday to Instagram
and FB
• Sharing baby pictures?
• Smart houses (Bluetooth,
infrared enabled devices, digital
locks, fire alarms e.g. Nest Labs
bought by Google)
• Smart cars (telematics run by e.g.
Volvo)
• Routine work done by computers
/ robots while idea generation/
creativity left to humans
(Designer Eero Aarnio said
without ideas and designs
industrial machines wouldn't
produce anything)
Key question to ask - What kind of experiences are sought after in
general and specifically by customers, employees, managers?

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COMMENTS / QUESTIONS?
jari.salo@helsinki.fi
@digimgt
www.slideshare.net/
jarisa

Salo digital transformation in the food industry

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