Lezioni Loyalty Marketing

Impact of Digitization

Digital technology has had a significant impact on various aspects of our society and economy. Here are some key effects:

Supply

• Digital allows new sources of supply that were previously impossible or uneconomic to provide to enter the product and labor markets.
• Platforms like Airbnb have unlocked the supply of new accommodation options.
• Ride-sharing services like Uber have brought more cars on the roads that were underutilized.
• Amazon Web Services provide new options and opportunities for businesses.

Market Making

To make new supply and new demand match, new intermediaries arise, known as infomediaries.

Demand

Digital technology gives customers complete information and allows for the unbundling and bundling of aspects of products and services that were previously combined or separate.

Consumers are growing accustomed to having their needs fulfilled how and when they want, often at no cost.

Companies address this by providing user-friendly order processes, smart recommendation engines, custom bundling of products, digitally enhanced product offerings, and new business models.

DIGITIZATION

Extreme impact– New and enhanced value propositions: giving customers what they always wanted in new more efficient ways translates in new value propositions that give people what they did not realise they wanted. Many of these new propositions link digital and physical worlds and use availability of data and ubiquitous connectivity– The delivery of these new value propositions requires rethinking and reimagining of business systems and industry value chains.

– Hyperscale platforms such as Apple and Google can exploit algorithms and network effects, can cross sell automatedly and look at products and categories in new ways (Amazon launched Kindle to sell books and Prime subscriptions, not e-readers). Platforms create barriers to entry who can access, analyse and exploit relevant information to create the new value– Those proposition will have an advantage.

The impact of ICT on company strategy according to Porter and Millar (1985)

1. ICT can improve the strategic

1. ICT are a fundamental part of the decision-making process
2. ICT are a tool useful for implementation of a given strategy
3. ICT are a source of innovation (product and process) at company, channel and industry level
4. ICT enable the building of intangible assets based on information and knowledge

Impact on The Value of Data

Data's value is shifting from its primary use to its potential future uses.

In the past, collection, storing, and analysis were constrained. Today, thanks to the ICT revolution, costs have collapsed.

Data value needs to be considered in terms of all possible ways it can be employed in the future, not simply how it is used at present.

Extracting Value from data

The goal today is using search traffic to discover trends in consumer preferences. - Amazon manages other businesses e-commerce to learn what else people buy, to improve offer and recommendations

Who can profit from Big Data?

• Holders of the data
• Holders of the skills
• Holders of the "big data mindset"

Google and...

Amazon is well positioned.

IMPACT ON MARKETING

The big data revolution impacts marketing on two fronts:

1. Understanding markets and customers.

Thanks to the improvements in online and offline tracking of individuals and content, it is possible to introduce new segmentation approaches (think of computer image recognition and image analytics applied to images and videos posted by users) and to understand customer journeys. In turn, journeys that show similarities can be clustered together to define 'personas', which may serve as the basis.

The IR helps providing new tools, types of data, different quantity of data that can be employed to understand. It is possible to do best segmentation. Segmentation used to be done with easily available variables like demographic one. In the past these variables were available and easy to use; demographic variable today doesn't explain much of our choices and preferences. Over the past 70 years marketers have tried to find new approaches.

To segmentation new variables of segmentation that really divides customers. Company has started looking into behavioural variables (what we buy, why they buy). These variables are tautological, they don't ask reason, they look the fact. It's easier to monitor customer by using behavioural measures. Behavioural variables are available today because of information revolution. The IR is strongly changing mkt because is offering marketers new variables for a more powerful segmentation.

Managing the customer experience. This takes the form of not only managing contents and channels/media for communication, but also managing interactions with customers, including personalizing offers, introducing smart and robotic services and designing new intelligent touchpoints. The IR is providing companies opportunity and tools for changing and managing customer experience.

Companies today live in a very competitive environment; they know they have to manage the entire customer journey because the

experience is important. The opportunities for encountering a specific brand are very numerous today. Think about a brand: Levi's Jeans for ex. We can go online, on web site, amazon, Zalando, physical stores, my friends and look of what people says about Levi's. Before we decide to buy Levi's Jeans in each of these stages there are hundreds of different touchpoints which are occasion of encounter the brand. If I walk into a store, I can touch jeans (physical touchpoint), but If I go online and I see customers reviews (digital touchpoint).

Customer Experience is the evolvement of a customer emotional, sensorial and social responses to a firm's offering. We need to understand a lot about the journey, the firm has to be present in the correct touchpoint.

Today IR is providing brands tools and data in order to manage the customer experience (meaning different channels to the customer encountering brand). The brand manages social medias, tv spots, you tube, traditional

advertising and more and more the interaction of the customers with the brand can be personalized.

FROM FUNNEL TO JOURNEY

Stitch Fix:

STITCH FIX is an American fashion retailer which works only online. Founded in 2011 as a personal styling e-commerce website, it delivers a selection of clothes guaranteed to match each customer's preferences for a monthly subscription fee.

A lot of people in America don't like going to the shops to buy clothes. So, this company creates a new business: customers have to share style, size, price preferences with a personal stylist. The company sends 5 clothes to your home and you have to try your fix on in the comfort of your home. Then you leave feedback and pay for only the items you keep. And finally, you return the other items in the envelope provided.

A new customer starts by filling out a survey describing her fashion and style preferences. They collect data when we fill out the questionnaire. They try to get information on what we do online, what we buy,

what brands we like, and they use these to personalize experience. It’s important to know what is popular and what’s no. Every single product can be divided into a series of attributes.

Some attributes were in a product and other in another product. We ask the software to combine the feature to create items that don’t exist. They ask humans if they like it or not. So they selected some of these new items, go to one supplier and try to produce a lotto, if the manufacturers agree they try to sell these items to the people who has he higher probability to like this product based on the data about it. After that the retailer could create its own brand.

The creation is based on the algorithm.

ARTIFICIAL INTELLIGENCE (AI)

John McCarthy in 1956 was the first to use the term artificial intelligence in the proposal he co-authored for a workshop at the Dartmouth College Summer Research Project on Artificial Intelligence. The goal was to investigate ways in which machines could be made to

simulateaspects of intelligence. Although the Dartmouth workshop created a unified identity for the field and a dedicated research community, many of the technical ideas that have come to characterize AI existed much earlier. Machines are not intelligent, but they can perform activities with characteristics of human behaviour. What is intelligence?

1. Learn from environment
2. Logic deduction
3. Adapt to context
4. Abstract reasoning
5. Reason
6. Recognize
7. Plan
8. Understand

Definition of Artificial Intelligence: Artificial Intelligence (AI) is a science AND a set of computational technologies that are inspired by the ways people use their nervous systems and bodies to sense, learn, reason, and take action (Stone et al 2016) Artificial intelligence is a science devoted to making machines intelligent, and intelligence is that quality that enables an entity to function appropriately and with foresight in its environment (Nillson 2010) Alan Turing The most influential ideas came from Alan Turing, whoto make a comeback in the 1990s. With advancements in technology, building systems driven by real-world data became more feasible, cheaper, and more reliable. The Internet's capacity for managing large amounts of data, along with the availability of computing power and storage, played a crucial role in this resurgence. Scientists shifted their focus from building "strong AI" to weak AI, which refers to intelligent systems that specialize in specific aspects of intelligence, such as image recognition. This approach allowed for more practical and achievable goals in the field of AI. Overall, these developments have paved the way for significant advancements in artificial intelligence, enabling it to become a prominent and influential field in modern times.ammed.’ Machine learning algorithms allow computers to analyze large amounts of data,identify patterns, and make predictions or decisions without being explicitly programmed to doso.Deep learning, on the other hand, is a subset of machine learning that focuses on artificialneural networks. These networks are inspired by the structure and function of the human brainand are capable of learning and making decisions in a similar way to humans.AI in TransportationIn the transportation sector, AI is being used to improve safety, efficiency, and convenience. Self-driving cars, for example, use AI algorithms to analyze sensor data and make decisions aboutacceleration, braking, and steering. AI is also being used to optimize traffic flow, predictmaintenance needs, and enhance public transportation systems.AI in Public Safety and SecurityAI is also playing a crucial role in public safety and security. Facial recognition technology, forexample, is being used to identify and track individuals in real-time, helping law enforcementagencies prevent and solve crimes. AI algorithms are also being used to analyze surveillancefootage, detect suspicious behavior, and identify potential threats.AI in Employment and WorkplaceAI is transforming the way we work and the types of jobs available. Automation and roboticsare replacing repetitive and mundane tasks, allowing humans to focus on more complex andcreative work. AI algorithms are also being used in recruitment processes to analyze resumesand identify the best candidates for a job.AI in HealthcareAI has the potential to revolutionize healthcare by improving diagnosis, treatment, and patientcare. AI algorithms can analyze medical images, such as X-rays and MRIs, to detect diseases andabnormalities with a high level of accuracy. AI is also being used to develop personalizedtreatment plans and predict patient outcomes.AI in Home/Service RobotsAI-powered robots are becoming increasingly common in homes and workplaces. These robotscan perform a variety of tasks, such as cleaning, cooking, and even providing companionship tothe elderly. AI algorithms enable these robots to understand and respond to human commandsand adapt to different environments.AI in EducationAI is also being integrated into education systems to enhance learning experiences. Intelligenttutoring systems, for example, use AI algorithms to personalize instruction and provide feedbackto students. AI can also analyze student data to identify areas of improvement and recommendcustomized learning resources.AI in Low Resource CommunitiesAI has the potential to address the needs of low resource communities by providing access toessential services and resources. For example, AI-powered mobile apps can provide healthcareinformation and advice to individuals in remote areas. AI algorithms can also be used to optimizeenergy usage and improve access to clean water and sanitation.AI in EntertainmentAI is transforming the entertainment industry by creating immersive and personalizedexperiences. Streaming platforms, for example, use AI algorithms to recommend movies andTV shows based on user preferences. AI is also being used to create virtual characters andenhance visual effects in movies and video games.