Category Archives: Opinion

DayMate: for structure in our daily lives


Do you recognize these situations where you have a lot to do, or just simple have some tasks you keep on procrastinating? Your App Store probably offers a lot of these ‘to do’ applications. DayMate is a new arrival in this ‘to do’ industry but offers more than the mainstream ‘to do’ applications. DayMate aims to provide structure in your daily life, which especially comes in handy for people whom have difficulties with remembering chores or are chaotic-minded. The Dutch application DayMate is the follow-up of the already known application Assist Help. Assist Help was developed by Annemiek Modderman, whom son is suffering from ADHD. People suffering from ADHD face difficulties with applying structure in their daily lifes which leads to malfunctioning of their wellbeing. AssistHelp was already a great success for these people, however, DayMate is optimized for special use by using a clear standard setting and look&feel.

How does it work?

You simply add a task, by naming it and choosing an icon that comes with it. The icon appears in the center of the screen when the task is ‘active’ at the moment. There is a standard setting of 18 icons such as a washing machine (for doing the laundry), a trash bin, a Euro-sign and so on. The user specifies the begin and end time of the task and specifies on which days this certain task occurs. DayMate is especially designed for recurring tasks, in order to make your daily life more structured. That is also the reason why the user cannot set a specific date, because it should reoccur on specific days, which makes DayMate not an application for reminding certain activities.

Any weaknesses or strengths?

In the weekplanning, the user can see the coming tasks for that specific week, however DayMate only allows you to see the planned tasks per day, and does not provide a whole overview. Which is in my concern a pitfall of the application. A strength however, is the special support extension of the application. Users can assign a supervisor, whom keeps up to date with your planned tasks and can see your progress by using a certain ‘sensitivity measure’ which is basically a chosen smiley by the user of his/her mood.

So all together..

DayMate’s charm is especially its charisma and simplicity. DayMate can be a useful application for anyone who wants to bring some structure in his/her life, because you will be reminded with simple icons and notifications to perform a set of operations. For people with autism spectrum syndrome DayMate ensures greater clarity, especially with the tasks feature and setting apart of a supervisor. The clear design without too many bells and whistles, makes sure you do not get distracted.

References:

http://www.daymate.nl

http://www.iculture.nl/apps/review-daymate-structuur-activiteiten/

 http://www.autisme.nl/autisme-nieuws/oktober-2016/nieuwe-nederlandse-app-daymate-geeft-rust-in-je-dag.aspx

How social media changed the way we communicate


Social media has changed the way how consumers and marketers communicate. Word-of-mouth is more and more shifting from offline to online platforms. Social media websites respond to this shift by providing public forums where individual consumers can show their own voices. Thereby, the consumers have the accessibility to product information from other consumers that could influence their purchase decision. This kind of word-of-mouth increases the way that consumers process information and the way that marketing messages are distributed. Needless to say that this has an impact on consumer decision making and thus marketing strategies.

Why is this paper so important?

This paper is about how an individual becomes socialized through positive interaction on social media websites to use some product or service and what the impact of that is. This paper is important because it is distinguishing itself from existing literature by focussing on peer communication in online socialization processes. Particularly the influence of peer communication through social media web sites on consumers’ purchase decision. This has rarely been investigated and this research tries to fill the gap.

Methodology

To test the research question, the researchers used the data set of one of the largest Internet portal in China, www.sina.com. The researches placed an extra link on the homepage of the site, asking whether the visitor wanted to participate. To increase the incentive of the visitor, the participants had a chance to win a laptop. A total of 935 participants clicked the survey link, which makes the research quite dependable.

The most important result is that peer communication through social meida positively influences purchase intentions in two ways: a direct influence through conformity and an indirect influence by reinforcing precept involvement. This peer communication can be increased by strengthening individual-level tie strength with peers as well the group-level identification with a peer group.

Main strengths and Managerial Implications

One of the main strengths of this article is their data collection. The article used real life data to test their research, liked already discussed here above. Because of this real-fie data, the validity of the paper can be guaranteed.

This paper divides the managerial implications into three parties: implication for Marketers, implication for Online Advertisers and implication for Social Media Website Operators. I want to address the most important ones. This article can be used Online Advertisers for many reasons. Increasing activity of the users at social media platforms, may encourage visitors to build new kinds of relationships with the sponsoring organization. Besides, an advertiser that can use social media to respond effectively to consumer commentary on review sites gains a great advantage because it can engage customers in conversations to understand their needs and build relationships throughout the purchase and after purchase process.

 

X Wang, C Yu, Y Wei (2012) “Social media peer communication and impacts on purchase intentions: A consumer socialization framework”. Journal of Interactive Marketing, 26(4), 198-208

Healthcare at the heart of the digital revolution


Nowadays, we are used to make appointments for the doctor, dentist or other healthcare specialists through the phone. We dial the number of the practice, we dial our way through a phone menu and in the end, after waiting in line for a couple of minutes, we reach the assistant who tells us when our desired specialist is available for an appointment. This appointment scheduling is a daily struggle for doctors and clients. There are 8 billion European doctor appointments booked annually and doctors spend 18 hours a week on average scheduling these appointments.

Doctolib
Doctolib is a French startup that aims to make this process more efficient. The SaaS (software as a service) doctor booking platform is a service that finds nearby health professionals at whom the client can book and track appointments online. Doctolib uses cloud computing and the internet to improve healthcare access for patients in France.

The startup consists of a community of over 17.000 specialists such as dermatologists, dentists, surgeons, gynecologists, urologists, ophthalmologists and allergists. Doctolib collaborates with 435 healthcare centers, such as hospitals, clinics and other establishments.
The service is able to help reduce booking costs of healthcare specialists up to 30% and simultaneously help decrease no-shows up top 75%. Furthermore, Doctolib puts specialists on the map and make them more visible to clients. Through this, specialists get around 20 new clients per month. For the Software, healthcare specialists pay a monthly fee of €99,-.

The main goal of Doctolib is to help healthcare specialists with their appointment scheduling with online reservations. Doctolib strives to deliver a seamless healthcare experience for healthcare specialists and patients.

doctolib

Competition
That all sounds very impressive, but there are several players on the market that offer online reservation systems. The main advantage of Doctolib over its competition is that it uses cloud computing. Doctolib tries to offer an innovative, integrated experience through the cloud, to give doctors a clearer, up to date overview of their schedule. This requires large amounts of human effort and the dedicated employees of Doctolib get this done. That is why Doctolib has a competitive advantage, higher customer satisfaction and a market share of 80%. 

Efficiency criteria
Doctolib can be seen as efficient business model since patients are better off, doctors are better off and there are no other firms on the market that offer similar integrated solutions. Doctolib creates value for clients and doctors, if more participants of both groups use the software, both parties maximize their profitability. 

Future
The software is now only available for doctors in France, but Doctolib is currently working on an expansion towards Germany. The long-term purpose for Doctolib is to take over the entire European market.

All things considered, Doctolib has a bright and promising future. I am very curious what Doctolib will bring to the healthcare industry and if the Netherlands will soon be conquered by this tech startup.

schermafbeelding-2017-03-05-om-11-02-05

Sources:
Tsekouras, D. (2016), Lecture 1: Introduction to value co-creation, Rotterdam School of Management.

http://tech.eu/brief/doctolib-series-c/

Doctolib Grabs $20 Million For Its Booking Platform For Doctors

http://vator.tv/news/2017-01-27-doctolib-a-booking-platform-for-doctors-raises-26m

Get the London Look – Snap, Try and Buy


Any girl has heard about Rimmel London (remember: get the london look?) at least once in her life, or has seen the advertisements often containing a celebrity, such as Kate Moss. Now, unfortunately most of us do not look like Kate Moss (no offense), which means that make-up that looks amazing on her, might look a bit less amazing on us. But do you really wanna buy all the products she wears, only to realize that the look shown in the advertisement does not suit you?

Ofcourse not!

Luckily, Rimmel has realized this, and came up with a solution: the Get The London Look app! The app works as follows (Rimmel, 2017):

  1. SNAP – Take a picture of a makeup look in a magazine or from a real person
  2. TRY – Try her look virtually live in the app
  3. SHARE – Share your look with friends
  4. BUY – Buy any product from the app

So, for example, I see Kate Moss in a magazine (preferably in a Rimmel London ad, otherwise I still cannot buy the right product haha), I snap a photo of her look, try it out on myself and if I am unsure, I send the look to my friends. I was really eager to try out the app, but I couldn’t find it in the Dutch iTunes app store. Further, when I tried sending up for an email with the download link through the Rimmel London website, I could not click on ‘accept the terms & conditions’. Not a very good promotion of the app, I’d say 😉

So, what about the efficiency criteria?

If the app indeed works, the joint profitability criteria is definitely met. The consumers benefit from using the app, as they do not need to go the store to get a look done on them or buy unnecessary products that do not suit them. Even though the company had to invest in creating the app, the app will allow them -in my opinion- to obtain more customers. For example, when people try out looks and are happy they obtained a product, they will come back. Further, allowing customers to share looks with their friends will probably make their friends eager to use the app and purchase products as well.

Further, I think the app would be a lot of fun to use. It is always nice to see different make-up looks on yourself (as a girl, at least) and if you want to have extra fun, you can even try it out on guys 😉 To see for yourself, here are two screenshots from the app (taken from here in case you’d like to see more).

screen696x696 screen696x696-1

 

 

 

 

 

 

 

As with the Lancôme: future of beauty blog, the institutional environment is less relevant in this case. Further, the feasibility requirement is met, as the app already exists and has quite some positive reviews on the app store (see here).

If someone manages to download the app, please let me know what you think of it and perhaps we can try it out in class!

To find out more: https://uk.rimmellondon.com/get-the-look/virtual-makeover

What are you going to eat tonight?


We all have that moment once in a while that we don’t want to cook. But also ordering at Deliveroo or Foodora doesn’t sound that attractive anymore, since you feel like a regular customer already. You miss the home cooked meals of your mother, but don’t want to spend hours in the kitchen to make an attempt of copying her dish. What to do? AirDnD offers the solution.

What is AirDnD?
AirDnD is founded in 2015 by Rob Lagendijk and his motive is simple: it provides amateur and home chefs – you, me, your neighbour – the possibility to start their own mini restaurant in their home. “This is the moment to participate in the share economy and food is hot” are the words of CEO and founder Rob. AirDnD stands for Air Drink ‘n Dine. The platform is intended for home chefs, not for entrepreneurs. Other people can enjoy a home cooked mail by one of their neighbours by looking for interesting dishes on the platform itself.

So, how does it work exactly?
The platform is a two-sided market and creates a community between home chefs and people who wants to go out for a lovely home cooked meal. It solely depends on the value creation of the users and they put the customer in charge! Home chefs can create their own page where they can state their menu card, the prices for their different kind of dishes and even mention when they are ‘open’. You can specify your profile by telling other people how you live, what you like and how your house looks like.

People who wants to eat are also creating a profile, so that they can look for a home chef in their neighbourhood. After finding the ideal chef, you can make a reservation on the site. And before you know it, you are at the table with a couple of strangers at one of your neighbour’s house enjoying a nice, home cooked meal!

schermafbeelding-2017-02-17-om-22-20-52

Home chefs determine their own price for their dishes. For €15 you can enjoy a “Fishy lunch” or pay some more for a four-course menu including wine. AirDnD is asking 10% for each reservation. So if a home chef is asking €15 for their dish, the guest will pay €16,50. The payments are done through the platform.

Challenges of new business idea’s
A new business idea is always facing some challenges. Like many other starters, take UBER or Airbnb for example, AirDnD is coping with these challenges. The biggest burden AirDnD has to cope with is the “Koninklijke Horeca Nederland”. Royal Horeca Netherlands (KHN) pursues its activities to the best possible business environment for the hospitality industry. They are scared that AirDnD will take the customers away from current restaurants. The KNH thinks that the home chefs who are using AirDnD must comply to the same rules as restaurants. Otherwise the competition is unfair they claim.

And now?
The founder of AirDnD is not worried about this challenges and believes in his idea. In the first couple of weeks there were already 700 home chefs registering on the site. Within a year they have grown to over 2000 different home chefs, opening up their house to strangers to enjoy a home cooked meal and they are still growing. The philosophy of AirDnD is simple: they just want to create a unique experience and offer great food for food lovers!

What do you think?
Will AirDnD be a succes? And will you make use of the opportunity to eat a lovely home cooked meal by one of your neighbors?

Sources
Tsekouras, D. (2017, 2 February). Introduction to Customer Centric Digital Commerce. Accessed on https://bb-app01.ict.eur.nl/webapps/blackboard/content/listContent.jsp?course_id=_29596_1&content_id=_165770_1

www.rtlnieuws.nl/editienl/dineren-bij-thuiskok-woonkamer-schoner-dan-restaurant
www.airdnd.nl/platform/Search?search=rotterdam
www.airdnd.nl
www.khn.nl/themas/belangenbehartiging
binnenland.eenvandaag.nl/tv-items/62883/horeca_vreest_valse_concurrentie_van_hobbykoks_airdnd

 

 

Crowdsourcing as solution to distant search


Crowdsourcing may have been around for a long time, but the advent of the Internet and other communication technologies has opened up many possibilities for the phenomenon to play out. Nowadays crowdsourcing plays a bigger role in strategic management than ever before. This paper adresses that under certain circumstances crowdsourcing transforms distant search into local search, improving the effectiveness of problem solving for firms. Under certain circumstances a firm may choose to crowdsource problem solving rather than solve the problem internally or contract it to a designated supplier.

These circumstances depend on several factors: the characteristics of the problem, the knowledge required for the solution, the crowd, and the solutions to be evaluated. In the paper, the authors compare the different forms (designated contractor, internal sourcing and crowdsourcing) for every aforementioned factor. By outlining the circumstances under which crowdsourcing may be a better mechanism for solving some problems, this article helps deepen our understanding of firm boundaries. However, the paper mainly highlights the circumstances in which crowdsourcing is the optimal form, but does not consider the consequences of crowdsourcing. The paper was lacking of considering the legal base of crowdsourcing, in most crowdsource cases there is no contract. Workers can run anytime they want, and an idea might be reused in anytime. If the authors would consider some (negative) consequences the paper would increase in reliability.

A related business example which can be linked to the article is the Netflix Prize. Adding this competition element, the Netflix example is a typical form of tournament-based crowdsourcing. In 2006, Neflix launched the Netflix Prize, “a machine learning and data mining competition for movie recommendations.” Netflix intention with the $1 million prize  was that it may encourage a range of algorithmic solutions to improve the company’s existing recommendation program, Cinematch, by 10%. The Netflix Prize demonstrates the power of crowdsourcing in developing innovative solutions for complex problems. Further, it is an interesting example of how setting various stages in the competition can help further push teams to achieve new success by combining their solutions with other contestants.

As mentioned above, the characteristics of the required solution knowledge, the problem to be solved, the crowd, and the solutions to be evaluated all have an impact on a focal agent’s probability of crowdsourcing a problem. Furthermore, the paper addresses that IT moderates that relation. How? The Internet facilitates the performance of tasks through crowdsourcing, which involves more arm’s-length transactions than traditional outsourcing to a designated contractor. The potential improvements in problem solving costs and effectiveness that come from crowdsourcing could have important consequences for both existing and emerging strategies.

References:

Afuah, A., & Tucci, C. (2012). Crowdsourcing as a solution to distant search. The Management Review

https://digit.hbs.org/submission/the-netflix-prize-crowdsourcing-to-improve-dvd-recommendations/

 

Why Recommendation Agents Should Let Us Participate


“I see you are looking at our infinite range of stuffed animals, may I help you find what you need?” They are the salespeople of the online retailers; recommendation agents (RA’s). By capturing our perceived preferences based on browsing patterns or interests, RA’s aim to understand our needs. Not an unnecessary luxury of any sort, as the complexity and amount of information we are confronted with often exceeds our limited information-processing capacities and thus the benefits of RA’s can turn into costs. (Dabholkar, 2006; West et al., 1999). If there would be a Maslow pyramid for online shopping needs, it would be the bottom layer; a basic need, indeed.

However, one recommendation agent does not fit all. Different websites use different types of RA’s and the extent to which we can interact with these systems is heavily influenced by the interface design and its dialogue initiation process. Ranging from extensive questionnaires to not even a “hello, I’m here”, the possibility to participate in a two-way dialogue depends on the online salesperson you have encountered. But does the quality and quantity of customers’ input really matter?

In their lab based experiment, using existing RA’s in a controlled setting, Dabholkar and Sheng (2011) show that greater consumer participation in using RA’s leads to more satisfaction, greater trust and higher purchase intentions with respect to the recommended products and the system itself. Existing research already elaborates on the effects of participation in decision making on satisfaction, trust and purchase intentions in the offline and online context (Driscoll, 1978; Chang et al., 2009; Yoon 2002). In addition, much research has been conducted in the RA field, but upon this point failed to combine these two topics.

A great strength in Dabholkar and Shengs’ research, is the fact that there is a significant importance in understanding these relationships in the RA field as they are of huge strategic importance to online marketers. Therefore this topic is highly relevant. Moreover, by adding the dimension of financial risk, the authors are able to also identify that higher product prices moderate the need of participation in the RA context. This gives marketers insight for which products their recommendation agents should have high/low levels of possible interaction and therefore are able to personalize their RA’s per product and possibly increase purchases.

But, there are also a few limitations that need to be taken into account. One could argue that the used sample is non-representative for the online shopping population, as it completely consisted of college students with an average age of 21.91. Although the authors highlight the fact that the largest share of the Internet population is aged 18-32, it is not unthinkable that a student’s perception of financial risk differs from a middle aged person with substantially more spending power. Besides, students perceptions of trust in the online shopping context may be not completely representative, as they grew up with the Internet.

Summarizing, Dabholkar and Sheng give great insights in the effects of consumer participation in RA’s on satisfaction, trust and even purchase intentions. However, generalizability at this point is questionable, so further research across different age groups needs to be conducted to validate these results. But for now; Does your customer base primarily consist of students? Then it is time to revaluate your online salespeople. Get them to communicate with us, we would love to talk!

 

Chang, C. C., Chen, H. Y., & Huang, I. C. (2009). The interplay between customer participation and difficulty of design examples in the online designing process and its effect on customer satisfaction: Mediational analyses. Cyber Psychology & Behaviour, 12(2), 147-154.
Dabholkar, P. A. (2006). Factors influencing consumer choice of a ‘rating web site’: An experimental investigation of an online interactive decision aid. Journal of Marketing Theory & Practice, 14(4), 259-273.
Dabholkar, P. A., & Sheng, X. (2011). Consumer participation in using online recommendation agents: effects on satisfaction, trust and purchase intentions. The Service Industries Journal, 32(9), 1433-1449.
Driscoll, J. W. (1978). Trust and participation in organizational decision making as predictors of satisfaction. Academy of Management Journal, 21(1), 44-56.
West, P. M., Ariely, D., Bellman, S., Bradlow, E., Huber, J., Johnson, E., . . . Schkade, D. (1999). Agents to the Rescue? Marketing Letters, 10(3), 285-300.
Yoon, S. J. (2002). The antecedents and consequences of trust in online-purchase decisions. Journal of Interactive Marketing, 16(2), 47-63.

Mapping the Impact of Social Media for Innovation


Facebook, YouTube, Instagram, Wikis, Twitter – Social media (SM) are everywhere. Those websites and applications allow the creation and exchange of user-generated content in a community setting (Kaplan & Haenlein, 2010). The users are not only private people, but also companies are exploring SM as a tool for commercial success. Next to outbound marketing, SM are also applied to enhance business interactions as part of the innovation and product development process (Kenly & Poston, 2011). However, so far new product development (NPD) through social media channels can only be observed anecdotally. Specialized consultancies also jump on the train and offer their services to get a piece of the pie (Accenture Interactive, 2017). But how nourishing is this pie?

The impact of SM on innovation performance was investigated in a study by Roberts, Piller and Lüttgens (2016). The analysis of 186 companies contributed to a better understanding of the dynamics between SM activities and NPD performance. The idea to use SM for innovation and NPD purposes is not novel. However, their study reveals some surprising results:

  • Gathering information from SM channels can lead to higher performance, but only when embedded in complementary, formalized processes. A defined structure and sequence for the flow of activities provides control, helps to reduce uncertainty and mitigates risk.
  • The relationship between SM usage and innovation performance is not entirely positive. An extremely broad application of SM results in a negative performance effect for all kind of innovation projects.
  • The relationship between seeking market-related and technology-related information in the open innovation context is complementary. Leveraging this dependency has a significant positive effect on NPD performance.
  • SM is better suited for gathering need information than for accessing solution information. Depending on the information needed, the explicit SM channels (forums, social networks, blogs, wikis etc.) differ.

These findings imply the positivity of SM for a firm’s innovation performance. But I personally doubt its large-scale effectiveness. After having screened the literature for mentioned best-practice examples, there are enormous differences between companies in how they leverage and exploit benefits of SM usage for innovative efforts. The involvement of customers into new product creations for consumer goods rather resembles the characteristics of a marketing or market research tools. Haribo asked its fan base to vote on new flavors for a special edition during the 2014 soccer world cup. Home-appliances manufacturer Liebherr invited its customers to participate in a fridge-design competition. In contrast to that, I found technology-oriented companies, like NASA, or IBM in collaboration with Topcoder, to give their followers far more influential power by posting demanding challenges. This is surprising, because the study stated SM to be more suitable for gathering needs than (technical) solutions. So, is there a difference between industries concerning the successful integration of SM in NPD? Are technology companies simply more knowledgeable in utilizing SM? Or are their users simply identifying more with the product and thus engaging in NPD processes? The multitude of questions call for a further investigation of the results in relation to different industries and specific firm capabilities in dealing with SM. Hence, up to now how nourishing and likely this cake for businesses and consultancies is, might still be questionable and has to be answered for individual initiatives specifically.

 


References

Accenture Interactive (2017). Social Media: Optimization to Harness Innovation. Retrieved February 15, 2017, from https://www.accenture.com/us-en/insight-social-media-optimization-harness-innovation-summary

Kaplan, A. M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business horizons53(1), 59-68.

Kenly, A., & Poston, B. (2011). Social Media and Product Innovation: Early Adopters Reaping Benefits amidst Challenge and Uncertainty. In A Kalypso White Paper. Kalypso.

Roberts, D. L., Piller, F. T., & Lüttgens, D. (2016). Mapping the Impact of Social Media for Innovation: The Role of Social Media in Explaining Innovation Performance in the PDMA Comparative Performance Assessment Study. Journal of Product Innovation Management33(S1), 117-135.

The Visible Hand? Demand Effects of Recommendation Networks in Electronic Markets


When you watch a movie on Netflix, when you listen to music on Spotify, when you watch clips on Youtube, when you search for connections on LinkedIn or when you are shopping online on Bol.com, it appears often that you come across a sentence like: “you might also like”, “people you may know”, “customers who bought this item, also bought…”. Sometimes this suggestion might interest you and you click on it, but that is not always the case. Why do these recommendations appear and how do companies find the correct ones to recommend? What do these products have in common and how do they influence each other?

unknown

This paper of Oestreicher-Singer and Sundararajan (2012) explains these questions by focusing on online product or copurchase networks. In these networks, related products that each have their own network position, are linked to each other. The associations among products, and thus the product’s virtual shelf positions, are visible to the customers through recommendation hyperlinks. The main result states that this visibility of networks can cause a threefold average increase in the influence that complementary products, and thus not only recommended products, have on each other’s demand levels and that it amplifies the shared purchasing of complementary products.

To come to this result, data about the copurchase network of 250,000 books sold on Amazon.com is collected, which is used to test how demand levels are related. The data are tested on three types of possible correlations in demand. Firstly the visible network neighbours with explicit visible hyperlinks. Secondly the complementary products without visible hyperlinks, but with related demand which is controlled for unobserved sources of complementarity that might exist regardless of a visible hyperlink by constructing three alternative sets of complementary products and finally the similar environmental conditions with similar individual or environmental characteristics of the products. Besides these types of correlations, the study found that demand is also affected by the product’s individual characteristics of price, secondary market offers, vintage, in-degree and assortative mixing.

Strength of this study is that a real life setting is used to test the interdependencies, which increases the validity. Downside however is that the study is only about books. For the generalizability, it would be better to also look at other products and services such as movies, cameras or clothing.

The most remarkable outcome, besides the main result, is probably that this visibility has a stronger influence on newer and more popular products, because they ‘use’ the attention of their network position more efficiently. Recently published products are more influenced by neighbouring products, because the effect of observational learning on sales will be smaller when a consumer already has a strong prior idea of a product. Additionally, the conversion rate of recommendations that originate from more popular products is higher and sequentially the same level of total incoming traffic from fewer, more popular sources is associated with higher demand.

This study is important, because as the importance of electronic commerce continues to grow, the ability to control cross-product effects in electronic markets has become a key strategic marketing lever for firms, especially with new and popular products, and that is exactly why you see recommendation sentences when you shop online.

 

Sources

Oestreicher-Singer, G., Sundararajan, A. (2012) The Visible Hand? Demand Effects of Recommendation Networks in Electronic Markets. Management Science 58(11):1963-1981.

Tsekouras, D. (2017) ‘Session 2: Personalization & Product Recommendations, Rotterdam: Rotterdam School of Management (9th of February 2017).

Recommendation networks and the long tail of e-commerce


Nowadays, we almost can’t imagine online shopping without recommendations systems. Popular electronic commerce websites like Amazon, Bol.com, Asos.com and so on all have a section with products they personally recommend to their customers. This is often displayed as: ‘You may also like…’ showing multiple products related to the ones you have recently viewed.

Integrating social networks like Facebook and Instagram into the world of electronic commerce is on the up and can contribute to the personalized recommendation systems of online retailers. In this way, customers get personalized recommendations based on what friends in their networks bought. This makes the less popular products, which customer normally not have looked for, more visible and stimulates consumers to buy products that they normally wouldn’t have found. These products are known as ‘the Long Tail’ products and are often presented as ‘Customers like you also bought…’.

To put it differently, if consumers get e-commerce recommendations based on their networks, the level of awareness for less popular products will increase. This means that the distribution of revenue and demand is influenced and shifts more towards a long tail distribution and away from selling primarily the most popular products. Simply by peer-based recommendations, customers will buy more and different products than they would normally have.

 

Research done by Oestreicher-Singer & Sundararjan (2012), investigates the impact of peer-based recommendations on the demand and revenue distribution. They research the influence of network-based recommendations on the online sales of 250.000 books from online retailer Amazon.com. The research shows that by recommending books based on what friends in customers’ networks bought, the distribution of demand and revenue is highly influenced. The researchers focused on the top 20% most popular and top 20% most unpopular products.

Categories of unpopular books that were displayed based on peer-recommendations experienced a 50% increase in revenue whilst the commonly unpopular books experienced a 15% decrease in revenue. This meant that the unpopular books suddenly became more visible to customers which led to an 50% increase in sales.

That all sounds quite impressive, but one could not say that this 50% increase was only caused by the visibility of products through recommendations. Different other contemporary factors also contribute to the redistribution of demand and revenue of consumers. Lower search costs and higher product variety for instance, have a great influence on the long tail of e-commerce.

 

All things considered, e-commerce is highly influenced by the power of social networks. The influence of recommendation networks positively affects to phenomenon of the long tail demand. Selling less of more rather than more of less is going to characterize the e-commerce demand curve in the future. The implementation of ‘what other customers like you bought’ will continue to impact our online shopping behavior. If companies implement the right recommendation systems to influence consumer demand, the opportunities are endless!

 

Sources:

Anderson, C. 2006. The Long Tail: Why the future of Business Is Selling Less of More. Hyperion Press.

 

Brynjolfsson, E., Hu, Y., and Smith, M.D. 2006. From Nichees to Riches: Anotomy of the Long Tail. Management Review 47(4) 67-71.

 

Oestreicher-Singer, G., & Sundararajan, A. (2012). Recommendation networks and the long tail of electronic commerce. MIS Quarterly

“Buy a present for my wife” said Jan to the phone


This year St. Valentine’s Day caught millions of men by surprise, again, leaving them wondering what present to buy for their partners. What if somebody or something could perform this burdensome task in a timely manner? There might be a solution…

Viv

Viv is an intelligent personal assistant introduced to the market on May 9, 216 and acquired by Samsung in October 2016. Similar products such as Siri, Google Now, Microsoft’s Cortana and Amazon’s Alexa can perform some basic tasks but nothing beyond the tasks they’ve been programmed to do. Due to artificial intelligence, Viv can generate code by itself and learn about the world as it gets exposed to more user requests and new information.

This makes it by no means a universal product. Viv is expected to learn and store information about every user, and learn with time how to serve him or her personally. For example, if the owner asks: “I need to buy a present for my life for St. Valentine’s Day”, Viv should be able to predict what a suitable present would be or perhaps book a table for two at a fancy restaurant downtown.

Continue reading “Buy a present for my wife” said Jan to the phone

Synetiq- Crowdsourced Neuromarketing


For my third blogpost, because of my personal ties, I decided to research interesting Hungarian startups. In the past years, many interesting startups appeared in Budapest such as Presi or Tresorit, that inspired new founders and investors and boosted the whole startup scene in Hungary. The business I choose to present emerged from this creative boom and belongs to one of the most innovative and promising Hungarian companies.

Continue reading Synetiq- Crowdsourced Neuromarketing

The technical weakness of Bitcoin


Bitcoin, the coin of the people. But is it truly? Let’s first get back to how bitcoins work. The bitcoin is the first decentralized digital currency that you can send through the internet. Bitcoin goes directly from person to person, which means that the fees are much lower, you can use them in every country, your account cannot be frozen and there are no arbitrary limits. Although, this is what bitcoin promised at the launch in 2008 (WeUseCoins, 2011).

Continue reading The technical weakness of Bitcoin

Pack Up and Let’s Go Somewhere!


Always wanted go on a vacation, but put off by the tedious work of research, planning and calculating the budget?

Pack Up + Go is a new type of travel agency that can get rid of all the hassle and frustration by planning the vacation for you! They make reservation for all the necessary accommodations, and they plan your itinerary to the finest details. Till now this sounds just like a mere extension of service compared to the traditional travel agency. But what really sets Pack Up + Go apart is that they will not reveal your destination until you leave (Packupgo, 2016). In a broad sense, this is similar to Hotwire, where the identity of the hotel remains secret till you have booked it.

Continue reading Pack Up and Let’s Go Somewhere!

Patreon: Will you be my Patron?


In the last few years a lot of crowdfunding platforms have appeared or gained popularity after Kickstarter had its big success story. People like to invest in ideas they find interesting or that suit to their unmet needs. Kickstarter and IndieGogo are two examples of crowdfunding platforms for entrepreneurs who want to start a business or develop a product. However in recent years these several crowdfunding platforms have taken on different roles in providing funding (Floship, 2015).

Continue reading Patreon: Will you be my Patron?

The Future of Co-Creation: An Augmented Reality


So imagine you are working on co-creating a physical product with people from all over the world. Now, you want to explain to your co-creators how you would like to adjust some attributes of the product. But since their not physically near you, explaining exactly what you mean would be considered hard by most.

What if there was some way to see a model of your product right in front of you, your co-creators had the same model in front of them and you would all be able to work on it real-time?

Continue reading The Future of Co-Creation: An Augmented Reality

Google Photos: enhancing Google’s product portfolio


The application

Google introduced Google Photos (referred to as Photos for the remainder of this blog) in May 2015 (Sabharwal, 2015). Photos is an application that manages your photos and can run in your browser, on your desktop and on your mobile devices (i.e. smartphone and tablet). Photos allows you to upload an unlimited amount of photos* and videos* for free. Besides, the application provides great search functionalities (i.e. search for persons, places and things), share possibilities and smart creations (such as stories and after movies). Therefore, Photos has become the central place for all my 14.000 photos and videos. For an impression of Google Photos, please see the screenshot from Google below.

Continue reading Google Photos: enhancing Google’s product portfolio

Friendsurance: Social risk sharing


“Don’t underestimate what people are willing to do to save money.” (Kunde, 2012)

These are the words by Tim Kunde, the co-founder of Friendsurance, the first insurance company to break the traditional mindset and pave the way into a social, peer-to-peer insurance sector. The past few sessions of the course have highlighted the growing importance of the customer for the creation of value and pointed towards the innovative business model called the “sharing economy”. From Zipcar to Find-A-Desk, various examples have been outlined to illustrate that this approach has spread into countless customer-centric business areas. Yet, most insurance companies have been hesitant in adopting this business model.

Continue reading Friendsurance: Social risk sharing

Fan Funding – Let’s retake charge!


Through crowdsourcing of many kinds, people can support causes they are passionate about and, in the case of equity crowdfunding, even buy shares with voting shares, such that they gain a say in the operations of the organization or project they support. However, can people really fund and take charge of the things they are most passionate about?
*
“Amongst all unimportant subjects, football is by far the most important.”  – Pope John Paul II
*
The amount to which a large share of habitants of European countries, and many more worldwide, care about their favorite football club can hardly be overestimated. Though how often do we read about mismanaged clubs in severe financial problems? Opportunistic behavior of the top management of clubs unfortunately is rather rule than exception in the industry of football, often resulting in a short term focus, immense amount of debts and, in turn, the decay or even the liquidation of a club. Whereas the often very rich board members and owners are simply replaced after such disasters and move on with their comfortable lives, the fans are left in grief over the loss of their great pride and passion.
*
There is hope. In the last years, some highly interesting and promising initiatives have taken place to redistribute a part of the control of a club to its fans. Due to financial mismanagement, from the 2009/2010 season onwards, the former British Premier League side Portsmouth Football Club was relegated three times in a row and the club found itself on the brink of extinction. But, in 2013, the fans injected 2.5 million pounds in their club, through a community share issue with partial ownership rights for each shareholder. The fans, essentially a club’s customers as they buy tickets and merchandise, saved Portsmouth and made ‘Pompey’ the largest fan-owned football club in the UK. The investing fans are united in the Portsmouth Supporter Trust (PST), which has to approve any major decision of the club’s board, such as the issuing of loan capital or venturing in acquisitions. While this yet is a beautiful example of what consumer involvement can do, last year a crowdfunding campaign backed by Portsmouth fans went a step further even. On Tifosy.com, a newly established platform with the aim to stimulate active supporter backings and decision rights, raised 270,000 pounds for Portsmouth to construct its first-ever club-owned academy, right in the heart of the city of Portsmouth.
tifosy
*
The video below tells the great story of the Portsmouth fans’ actions.
 *
Two fans of 3rd Bundesliga side FC Fortuna Köln had an even greater ambition. The plan they launched last year proposed that any Fortuna supporter could fund its beloved club and, in turn, gained a vote on a wide array of possible decisions, including whether or not to buy a particular player, realize an investment to the clubs premises or even to sack the first squad’s manager. Every pound invested represents one vote, and the fan opinions alltogether would decide which actions the club had to take. Unfortunately, this highly democratic, wisdom-of-the-crowd enabling, crowdfunding campaign did not reach its funding goal, but the idea might very well turn out an industry changing one in the long run.
 *
The organization Supporters Direct promotes and researches the cause of the so-called Supporters Share Ownership. In their extensive 2013 report on this topic, the authors identify a rapidly increasing interest of both fans and politicians, whereas club owners and board members, the incumbent agents in this industry, display a fierce reluctance to venture in this kind of acquiring funds. To overcome this deadlock, the authors recommend policy makers to establish a Community Football Fund which would be created as a social investment intermediary capable of securing various forms of social investment to assist supporter ownership. Supporters Direct is paving the way for widespread supported ownership of football clubs, giving hopes to all those fans opposing the modern reality of football, where clubs are subject to the dangers of the few elite owners spending billions, those of the short term oriented, opportunistic board members and the investors who view players and clubs as mere investment vehicles.
 *
Sooner than expected, we might witness crowdfunding radically transform yet another industry; the highly conservative, but yet so deeply cherished industry of football. Let’s make it happen!
– Niek A. van der Horst
Crawley Town v Portsmouth - npower Football League One

*

Resources

Buy this team, April 2012, The Economist, accessible at: http://www.economist.com/node/21553493

Crowdfunding: Football’s 12th Man!, April 3rd 2014, FC Business, accessible at: http://fcbusiness.co.uk/news/article/newsitem=3057/title=crowdfunding%3A+football%26%23039%3Bs+12th+man!

Is fan ownership the answer to struggling football clubs?, November 27th 2013, The Guardian, accessible at: http://www.theguardian.com/social-enterprise-network/2013/nov/27/fan-ownership-football-premier-league

Portsmouth FC Academy campaign successfully raised £270,000, August 16th, Tifosy, accessible at: https://www.tifosy.com/en/campaigns/pompey-academy

Start-up-Netzwerk für Fortuna Köln, April 8th 2014, Kölner Stadt Anseiger, accessible at: www.ksta.de/koeln/crowdfunding-start-up-netzwerk-fuer-fortuna-koeln,15187530,28071496.html

Supporter Share Ownership, 2013, Supporters Direct, accessible at: http://www.supporters-direct.org/wp-content/uploads/2013/11/Supporter_Share_Ownership.pdf

China joins the big data game


Big data, a broad term describing the collection and use of data so large and so complicated that traditional models do not suffice. With the digitalization of modern society big data has become a buzzword that is mentioned whenever and wherever. The possibilities seem endless, companies can find patterns and links in places where no one would have expected them. Amazon, for example, knows you so well that it can ship your next package before you even order it. This massive data collection hasn’t come without its negativity. How much information should be available for a company to use? Privacy concerns lead to regular court cases, where often the companies are forced to stop or change the way they collect data. Clearly there is a limit to data collection, or is there?

Last year China announced its Social Credit System, a nationwide system giving an individual score to each of its 1,3 billion citizen. The system incorporates multiple criteria from general information as job and criminal behavior, but it also incorporates social values. Creemers, a china specialist, says: ‘This is a deliberate effort by the Chinese government to promote among its citizens “socialist core values” such as patriotism, respecting the elderly, working hard and avoiding extravagant consumption. A bad ‘credit score’ can result in being not eligible for certain jobs, housing or credit to start a company.’

The Chinese Academy says the Chinese society has changed over the past decades. China went from a from a society of acquaintances into a society of strangers. Huge cities have increased the anonymity of the Chinese citizen which led to trust being much harder to establish, thus hurting social and economic progress. ‘When people’s behavior isn’t bound by their morality, a system must be used to restrict their actions.’ The Social Credit System uses encouragement to keep trust and constraints against breaking trust as incentive mechanisms, and its objective is raising the honest mentality and credit levels of the entire society. China’s aim is clear, it wants to improve all citizens. Professor W. Shuqin, who works on the Social Credit System, further explains these intentions of china. Around half of all Chinese contracts are not fulfilled, this hurts the economy and is of low moral standard. Business in china is a dangerous and with this fast paced society it is important that people can verify each other’s creditworthiness. The social score can be used as a simple, accurate and fast check to see who you are doing business with.

In its first introduction the Social Credit System might not be more than a fast and efficient way to check if you are dealing with an honest business man or not, but nothing stops China from adding more and more behavioral measurements to the credit system to steer its citizens. Future versions possibly include ranking of hobbies, searches, books you read or restaurants you visited. The Social Credit system could then be used instead of a resume, and certain jobs might only be attainable for the ones with extreme high credit scores. China can even link your score to your friends, thus punishing you when your friends ‘misbehave’. China’s implementation of big data might be impressive on a technological level, but feels scary on a moral level.

Sources:

Cannon, M,. Supreme Court denies appeal in Google Street View case, TechTimes, June 30 http://www.techtimes.com/articles/9454/20140630/supreme-court-denies-appeal-in-google-street-view-case.htm

Bensinger, G,. Amazon Wants to Ship Your Package Before You Buy It, wsj, 17 January 2014 http://blogs.wsj.com/digits/2014/01/17/amazon-wants-to-ship-your-package-before-you-buy-it/

Brandsma, H,. China rates its own citizens – including online behavior, De Volkskrant, 25 April 2015 http://www.volkskrant.nl/buitenland/china-rates-its-own-citizens-including-online-behaviour~a3979668/

Planning Outline for the Construction of a Social Credit System (2014-2020), China Copyright and Media, 25 April 2015 https://chinacopyrightandmedia.wordpress.com/2014/06/14/planning-outline-for-the-construction-of-a-social-credit-system-2014-2020