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Posts Tagged ‘Technology’

The digital transformation of customer service in retail banking is changing the depth and form of relationships of banks with their customers. The increasing shift to direct digital self-service channels re-shapes how consumers interact with retail banks. As explained in the first part of this article, the effects of this transformation can be seen and felt at physical bank branches and away from the branches through remote online channels (including web-based service platforms and mobile apps). Furthermore, ‘customer service’ practically entails the customers’ operations of regular account maintenance but also their acquisition of various banking services and financial products (e.g., deposits, loans, equity and bonds). Hence the digital transformation is affecting broadly and simultaneously retail banking service as well as marketing to customers.

The focus of the first part of the article was a review of the ways in which the five main banks in Israel approach the digital transformation in the domain of retail banking, and especially how the banks choose to balance between the digital and human modes of interaction and service in their relations with customers. It considered the observed forms and methods of implementing their approaches and discussed their implications regarding the digital-human balance. Particular attention was awarded nonetheless to the effects that digital channels of interaction may have on the premises of retail bank branches — their organisation, interior design, and functions.

The approach taken by Bank Mizrahi-Tefahot may be seen as surprising to digital advocates because it is ‘going against the stream’, yet it is tapping on some sensitive nerves of  consumers. The advertising campaign of the bank — carrying the title “On the things really important, there is no substitute to humanity” — commits not to sacrifice contact with human bank representatives in the sake of digital self-service. This is a promise of reassurance for many bank customers who still do not feel comfortable and confident with over reliance on supposedly self-sufficient digital channels. But a question remains to address: Does the campaign stand on a solid strategic ground? One would want to know if there is substantive managerial commitment behind the campaign and a plan to execute it.

A declaration of the bank on its latest strategic plan offers an affirmative answer. According to a press release published by Bank Mizrahi-Tefahot in November 2016, the strategic plan for the years  2017-2021 stands on three legs: (a) intensifying the focus on business sectors and expanding activities directed to them; (b) sustaining and solidifying the bank’s stature as a leader in the retail domain; and (c) being a central operator of financial assets in banking (22 Nov. ’16, origin in Hebrew). Regarding the second goal on retail that is of our interest here, the bank specifically qualifies its goal as “providing personal and human service supported by innovative technology”. In this statement the bank emphasises the order of priority between ‘personal and human service’ and technology, whereof the role of the latter is to facilitate and enhance customer service. As explained by Bank Mizrahi-Tefahot, the strategy is on the one hand service-driven and on the other hand aimed at reducing prices by applying a unique and advanced technological platform (i.e., the platform’s purpose is increasing efficiency in operating and delivering customer service).

The strategic statement clarifies that the bank is not about to put its technologies ahead of its customers, how it treats and serves them. It maintains that the role of the digital technologies is to increase efficiencies (e.g., saving time, facilitating processes) and not to replace human service. Bank Mizrahi-Tefahot is not shy on utilising customer-facing digital tools and facilities for interface and information processing, but it does so as a supplement to human service. Already six years ago the bank initiated a ‘hybrid banking’ programme designed to smooth communication between a customer and his or her ‘personal banker’ at the branch via phone, e-mail or SMS services (they called it ‘an ideal combination between personal and digital’). Lately the bank has recognized a need to highlight the connection between ‘personal’ and ‘human’ as contra to the increasing reliance on digital service channels in other banks. The intention declared by the bank to increase its number of branches also asserts that it does not intend to make itself more distant from customers and less physically accessible to them. It is perhaps not a ground-breaking attitude yet it offers stability, credibility, and confidence in bankers to be there in person for the customers.

However, there are still certain aspects the bank can further develop: For instance, applying digital technology is not just about efficiencies and prices, especially when utilised in direct customer-facing services; how customers experience the digital service is highly important (e.g., it should be visually fluent, easy-to-use, effective). Digital self-service should not claim to improve customer service overall by replacing human service, but it can contribute to improved customer service as a whole. The strategy statement is not clear about the experience of customers when applying digital technologies. Bank Mizrahi-Tefahot should also clarify how web-based and mobile app elements of its platform are integrated in its overall view of personal-human and digital customer service (e.g., enabling chats with human bank assistants and not with virtual assistants [chatbots]). Additionally, as suggested in Part 1, the bank can develop its own service model for combining digital self-service stations with human assistance and guidance within a branch.

Let us now take a brief look at the strategy in other Israeli banks:

Bank HaPoalim is seeking to reflect flexibility in its balance between human and digital banking. The bank’s Head of Retail Division said in October 2016: “we are not requiring the customers to choose between human and technological, instead providing them with a right combination between the two” (press release, 26 Oct. ’16, origin in Hebrew). The declared strategy of the bank is offering human, personal and technological banking. However, other expressions used by the bank suggest that the balance is weighed more heavily to the side of technology. For example, the bank uses  ambiguous terminology such as “more advanced and human technology“; its real priority or emphasis is revealed in the impressive expression “digital empowerment of the customers”. The new services the bank is taking special pride in, as presented in the press release, are a ‘virtual branch’ in a mobile app and human guidance in its new ‘Poalim Digital’ branches on how to use an iPad for banking services.

The senior bank executive is not insensitive to consumer concerns about the use of advanced technologies — he recognises that some customers perceive them as threatening, creating an emotional distance, and lacking in personal touch. Yet the bank appears to be pushing too hard to impose technologies that many customers may not be ready for yet, and implicitly pushes its human bankers to the sideline. Bank HaPoalim is trying to strike a difficult balance between the technological (digital) and human factors by attempting to be ‘human as well as personal as well as technological’ altogether.

In Bank Leumi digital banking (‘Leumi Digital’) is put at the centre, as manifest in its website-based platform, information ‘kiosks’ in physical branches, and its mobile app. More recently the bank added its ‘virtual assistant’ chat utility for customers to seek assistance in using the online and mobile account applications. In its strategy statement, Bank Leumi refers to “organizational and technological capabilities, efficient and innovative” (origin in Hebrew). It also commits to upgrading its service model and value propositions as part of a customer-centered culture. However. the bank does not make specific reference to integration between ‘technological’ and ‘human’ in its relations with (domestic) customers. As commented in Part 1, the mix between digital and human modes of service seems to be incomplete, as if working in separate compartments (‘silos’) of service.

The vision of Bank Leumi is accordingly to “lead initiating and innovative banking for the customer”. Overall, the key words most salient in the vision and strategy statements of the bank are technology, efficiency and innovation. There is no specific mentioning of the human factor. Bank Leumi must be credited for its consistent and prolonged support for providing banking services through direct channels that free customers from arriving to the branches. In the late 1990s this bank was a pioneer in Israel in establishing a ‘direct bank’ based on its telephony call centre. Later on a website was added. Whereas the initial entity was cancelled, the foundation was laid out, tried and proven for further development and assimilation in the main service operations of the bank. Advanced digital technologies, as they are better known these days, could come only natural to this bank. The next challenge of Bank Leumi would be to streamline its connections between human and digital modes of interaction and service to customers both in physical and virtual/remote domains. Admittedly, the suggestion made here may be contrary to the leading view at the bank; however, customer service should feel seamless and unified, not  like living in two different worlds of ‘digital banking’ and ‘human banking’.

Bank Discount is actually delivering a very clear message about the place it reserves for ‘humanity’ in its approach to customer service. Its actions on transition to digital banking seem to be more mild compared with the two leading banks. The strategic plan of the bank for 2015-2019 states: “We at Bank Discount have set before our eyes the experience of personal, human and professional service for all our customers. We believe that we should integrate humanity with professionalism, and to that aim we direct our actions every day” (launched in 2014, origin in Hebrew). The words are very positive: the bank is truly seeing the customer at the centre, not the technology, and the way to serve customers better is to do it professionally (possibly the bank’s sought competitive advantage).

Bank Discount is doing whatever is necessary to utilise up-to-date technologies in banking but not as proactively and forcefully as in Bank HaPoalim or Bank Leumi. Its direct banking operations include the TeleBank call centre, a web-based platform and a mobile app for account management; it also offers a personalised information app My Finance (providing market data etc.) and has recently introduced a ‘virtual assistant’ utility. Bank Discount may still be required to be more explicit about its view on the digital front, but foremost it can further clarify its approach to integrating digital and human modes of service and balancing between them.

Bank Benleumi is going along, combining traditional and digital banking facilities and utilities. Unfortunately, however, the bank does not disclose much information about its strategic plans, views or priorities. Hence it is difficult to tell where the bank is heading in implementing digital banking services nor how they would be balanced vis-à-vis human banking modes of interaction and service.

In its profile (Hebrew) Bank Benleumi states that it is “acting to increase its hold in the retail sector” with reference to its acquisitions of two smaller banks (and their branch networks) aimed at particular segments, and completing the merger of an upscale private banking business as a division within the bank. It also lists the general types of banking services and advanced digital channels that are seen as vital to strengthening its hold in the retail sector. As other banks it delivers direct digital banking services through a web-based platform and a mobile app, information ‘kiosks’ and a SMS update service; Bank Benleumi was early to launch a ‘virtual assistant’ utility (named ‘Fibi’ after the ‘mother’ holding company). Yet the bank remains vague about the nature of customer experience one can expect in future at the bank in its branches and in virtual digital domains, and specifically what place a digital-human balance will take in customer relationships.

Banks need to plan and configure carefully how to tie together the different advisory and operational (transactional) services they provide to their customers in human and digital modes of interaction, especially so when performed in the premises of a physical branch. These modes should not be just combined but integrated and complementary. It should be done both cleverly and sensitively.

A digital-reliant branch should prove what advantages it avails customers to patron such a branch as opposed to conducting their operations on the website or a mobile app: for example, it could be more convenient to work on devices and screens at the digital branch, offer value-added functionalities, be easier to find information or to complete successfully the required banking tasks. Nevertheless, a mixed human-digital branch can provide an important additional advantage: a customer who has just finished to search independently for product information on a work-station or watch an instructional video at the branch, can right away turn to one of the professional (human) advisors to clarify remaining issues and perform relevant actions with the help of the banker-advisor. That is an essential implication of a ‘digical’ (digital + physical) approach to retail banking (Baxter and Rigby, 2014).

It is not suggested in any way that branches of the future in every bank should look and function all alike. However, each retail bank can use a core model of a ‘mixed’ digital-and-human branch and adjust its design in every aspect according to a degree of balance its management sees fit and desirable between the digital and human modes of interaction and service, assigning more weight to the digital factor or the human factor. Moreover, a bank may choose its preferred balance in a typical branch, balance the human and digital factors across a few branch formats, and not least co-ordinate between services provided in a branch and away from the branch. Banks will undoubtedly find they have a lot of flexibility and room for creativity in setting the appropriate and differentiated strategy for each of them.

Ron Ventura, Ph.D. (Marketing)

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The digital transformation of retail banking is clearly apparent by now. The way consumers manage their banking accounts (e.g., deposits, savings, investments) and run their finances keeps changing by relying on digital channels and tools to perform more and more account operations.  Most dramatically in recent years, the organisation, design and function of retail bank branches is going through re-conception and change.

Two fundamental dimensions of this transformation may be detected:

(A) Away from a branch: Account operations are shifted to digital channels of direct banking detached from bank branches. That is, banking operations are performed more frequently without requiring customers to visit a branch (e.g., using an online web-based account-management platform or a mobile app), and furthermore without interacting with human bank representatives (e.g.,  talking by phone with a representative at a bank’s call centre).

(B) At a branch: The physical environment of a bank’s retail branch is transforming by re-allocating space, facilities and human versus digital resources at the branch between banking activities. This means distinguishing between banking activities that are performed in self-service by the customers using digital working-stations or ‘kiosks’, and activities that involve human bank professionals. The transformation is affecting the site of a branch all around, within the branch and areas next to it. A salient implication of this process is the elimination of human tellers within a branch; many of the ordinary account operations will be performed with minimal or no interaction with a bank representative within a branch or in adjacent areas. Interaction with human bank professionals will be mostly reserved to consultation and for purchasing more complicated bank services (e.g., loans) or financial products (e.g., investments).

Obviously those changes are not wholly new — customers are familiar with and use various self-service, direct digital channels, as they add-up, for different lengths of time (e.g., ATMs, enhanced digital information kiosks , websites, mobile apps). The current change is in acceleration and extent of utilisation of digital technologies: the frequency in which customers are using them; the degree of customers’ freedom in choosing between digital and human modes of service for any particular activity; the types of services or products that will be diverted to digital platforms (e.g., certain loans will be arranged without meeting a bank advisor in person, perhaps by video conference); and re-shaping the environment and activity in banks’ branches.

The article explores the digital transformation by reference to the five main banks in Israel. It will especially discuss how banks balance between the human and digital factors in serving their customers. Some additional aspects of the transformation will be explained in the course of this review.

To remove any doubt, it must be emphasised that all five banks are engaged in implementing digital self-service platforms and facilities in serving their customers and offering them financial products (in addition to the now ‘classic’ direct banking by call centres). They differ, however, in how they propose and plan to balance between their digital and human channels and modes of service.

The two leading banks in Israel (Bank HaPoalim [‘workers’] and Bank Leumi [‘national’]) seem to take the transition to digital banking the most seriously and most extensively. These banks compete neck and neck for many years, swapping between them the first and second market positions occasionally, yet both are distinctively greater in scale and market dominance than the three other main banks. Both banks appear to follow more closely on the vision of digital banking transformation conveyed last year by Dr. Hedva Ber, Banking Supervisor at the central Bank of Israel, and her projection of how this ‘digital revolution’ should proceed. Nonetheless, these two banks differ on some issues in their approach to implementing the transformation.

Bank HaPoalim is advancing an initiative to establish digital-reliant branches — five branches already exist, two of them in the Tel-Aviv area. Customers utilise tablets (iPads) or larger screens on table-tops to perform their needed operations in self-service in principle; they may ask, however, for assistance from a bank representative in the branch. There are no visible desks for personal meetings with banking advisors for consultation. The branch in northern Tel-Aviv, for example, is one large open space with long white desks in the centre, a large screen on the wall, and a sitting area with personal ‘working stations’ on the left side of the branch. It has a look resembling an Apple store, elegant and flashy. One cannot find in this space the traditional partitions where customers can sit for more private and intimate consultations with banking professional advisors. This digital branch is built on site of the old-model branch.

This is a rather radical move that may precede too early the formation of mixed branches recommended and applied in other countries as the core model. Indeed most of the bank’s branches (more than 260 in total) are still more traditional; the bank plans to reduce the number of its branches and replace some of those traditional branches with new digital ones. Yet by doing so the bank could miss an important stage of preparing the public for the change.

Bank Leumi is going in a somewhat different direction, encouraging its customers to utilise mostly its direct channels that do not involve coming to one of its branches. At the branches, the bank is in major progress to eliminate all its counters of human tellers; customers are referred to enhanced information kiosks (‘Leumi Digital’) that also allow for some account operations, and to ATM machines. These stations are located in a separate interim lobby area before entering the main hall of the branch, which is dedicated only to personal sittings with banking advisors. The bank is working overall to reduce the number of its branches (currently about 250).

The bank is taking a positive move in the right direction, and yet it is not complete because the bank does not truly mix digital with human service resources in the branch. What Bank Leumi is doing is more of a re-arrangement than genuine re-modelling. Indeed it eliminates the function of human tellers, but it does not integrate the digital and human modes of service in a hybrid model and design.

Many bank branches in the country have three ‘service areas’: (a) A couple of ATMs and digital kiosks outside the branch (i.e., on street front); (b) A few ATMs and digital kiosks in a protected lobby area that customers may enter and use also outside working hours of the branch; (c) A main hall of the branch where customers can receive service or consult more privately with bank representatives and professional advisors. Some branches may have a ground floor for assistance usually with the more basic functions and a second floor for consulting on more complex issues. Bank HaPoalim created a new branch version primarily reliant on advanced digital facilities; Bank Leumi eliminated human service for basic teller functions but keeps the digital facilities outside the branch per se — it does not welcome customers using those stations to enter inside the branch.

However, the intention of a new model being developed for bank branches is to entail a combination of digital and human modes of service working next to each other. In a common hall customers can use one of the digital working stations or sit with an advisor on any specific issue more complex and financially significant. A customer may use the digital station while standing or sitting on a couch, read materials on products and perform operations. He or she may also watch instructive videos on a large screen. It should be a much more convenient and pleasant setting than using the information kiosk machine. A bank representative should be available for guidance and assistance with the digital self-service stations. But when more serious consultation becomes necessary the customer can approach one of the expert advisors sitting in partitioned meeting corners. Digital and human channels are thus in immediate access close to each other.

  • Best examples of layout, design and organisation of the new form of bank branches around the world can be found in the website of The Financial Brand: Branch Design (also see their latest Design Showcase from Fall 2016). Give special notice to the mixture of self-service stations and private zones for consultation with bank experts-advisors within the branch.

Banks may build in addition to mixed primary branches also secondary smaller digital branches (e.g., in shopping malls) to provide a convenient, quiet and pleasant place for customers to work on their bank accounts vis-à-vis using a bank’s app on their smartphones. Being similar to the model of the new “Poalim Digital” branches, they are not supposed to come in place of a cross-mode primary branch. Likewise, offering working stations in a lobby, to be used almost any hour, adjacent to the branch is not supposed to be in place of a self-service digital zone within the branch with a human assistant  (formerly a teller) ready to guide if needed. Bank Leumi should not confuse the two types of self-service by digital means. Moreover, the bank must have a digital zone integrated in the overall design of the branch that will be welcoming, visually pleasant, convenient and friendly.

Two of the smaller main banks (Bank Discount and Bank Benleumi [‘international’]) maintain at large the traditional branch format and offer in parallel a variety of digital channels with their facilities (e.g., information  kiosks) and applications (e.g., website, mobile app). They do not make yet any clear or particular stand on the balance they see fit between the digital and human modes of service. Hence, while they make sure to be up-to-date on the technological front of digital direct banking services, there is no apparent major move beyond that which would reflect a more strategic approach to a desirable human-digital balance.

But then there is Bank Mizrahi-Tefahot that has chosen to take a more distinct approach to the digital-human balance by assigning greater weight to the human factor — more precisely, committing not to sacrifice human interaction in favour of digital channels. The bank may have thus found an important dimension to differentiate its brand from the competing banks.

The bank is aiming to solidify its position as the third largest bank in Israel, climbing one position up by pushing back Bank Discount. Bank Mizrahi-Tefahot currently operates about 150 branches, and contrary to the leading banks it plans to increase this number towards 200 branches. In September 2016 the bank launched an advertising campaign, emphasising human touch, with a tagline (translated from Hebrew):

  • “On the things really important, there is no substitute to humanity.”

It purports to persuade prospect banking customers (as well as its own current customers), who still seek and prefer human interaction, that at this bank customers will continue to be able to find a human representative to talk to. Billboard ad posters, displayed until recently, proposed that the bank will cater to consumers’ concerns as they complain to their banks as follows (exemplar statements translated from Hebrew):

  • “Is it no longer possible to talk with a human in this bank?”
  • “Enough with apps, give me a human” [to talk to] — the ad “answers” that if you want to talk to a human, call a specific number.
  • “You closed the branch on [X] street. Is only the ATM left now? What is happening with you?” (the original Hebrew phrase plays on dual meaning in using the word ‘closed’)

The bank implicitly commits to maintain human reference for customers on banking issues that matter more or less. Indeed the bank does not fall behind in offering a variety of digital facilities, applications and tools for customers to manage their accounts. Yet the bank steps forward to assure customers that addressing a human representative at the bank will not be sacrificed in favour of the digital direct channels. For instance, the bank offers customers the possibility to talk by phone not only with a human representative at the call centre but also with one’s personal banker (account manager) or advisor at the branch where the account is held, reached through a direct (seamless) phone extension.

Without undermining their commitment for human reference, Bank Mizrahi-Tefahot may still modify the way it delivers certain services (e.g., teller-type) with human assistance at a branch. A new model may involve a zone equipped with digital self-service stations but supported with stronger human presence or qualifications of bank assistants for customers than what may be offered in other banks. The human resources dedicated to fulfill these positions and the tasks assigned to them should be planned anew.

Of course promises have to be tested in the reality of customer service at the bank. The bank has to prove it can deliver on its commitment to make human representatives available to customers when necessary. A critical reason banking customers turn to direct digital channels is being dissatisfied with either the long time customers feel they have to wait to reach a human representative or the level of assistance they get (e.g., professional, efficient, courteous). Nevertheless, there always remain the more complex and significant issues in which customers may need more serious consultation and human guidance in making a decision and completing a procedure (and sometimes being able to negotiate terms), help they cannot receive adequately through a self-service digital channel. Trust in customer-bank relationships is also dependent on that.

With regard to the advertising campaign of Bank Mizrahi-Tefahot, an imminent question arises: Is the message delivered in this campaign backed by a more profound vision and strategic plan? In other words, one would want to know that the campaign stands on solid ground and is not only a marketing communication idea hanging-in-the-air. A second part of this article, soon to come, will address this question, and will also examine what strategic position and attitude take the other four banks on balancing between digital and human resources and modes of service.

Ron Ventura, Ph.D. (Marketing)

 

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Tremors continue to shake ground in the field of television viewing since the start of this decade,  especially with respect to how televised content is consumed. It is possible to say that the concept of television is being transformed. The move of Netflix away from rental of DVDs, delivered by mail, towards online streaming, seems to have signaled the start of this transformation which is affecting the consumers and the media industry together. Netflix is of course not doing it alone, changing how televised video content is made available to consumers — other digital services include Hulu, Amazon Prime, and YouTube, as better known examples. Many consumers, most of all Millennials, are attracted to having better control and discretion of what, how and when they watch video programming content of the kind we are used to associate with TV.

Two primary shifts in TV viewing need to be considered: (1) watching less TV programmes in real-time; but more important and characteristic of the changes in the past decade: (2) watching less TV on the screen of a TV set in favour of screens of personal computers, tablets and smartphones. The first shift is not so new — watching a programme not at the time of its scheduled broadcast can be traced to at least thirty-five years ago thanks to the VCR (Video Cassette Recorder); later on came the DVD, but most DVD sets used by households were non-recorders.

The popularity of watching TV content in shifted-time has increased somewhat more with the introduction of new devices and services, namely Digital Video Recorder (DVR) and Video-on-Demand (VOD). The VOD service has actually created new options for viewers to access a special video library and watch programmes or films that are not available on broadcast channels (not available at all or not at that period).

The second shift noted is more closely associated with the Internet availability of video content, including TV programmes, that is not dependent on traditional broadcasters (networks, but also cable and satellite TV services). Whether the application for watching the content is web-based or a mobile app is less crucial to our matter. Streaming potentially breaks the tie between the televised content and the physical TV set (but that is an option, not a necessity). It is not surprising that new-age digital media companies that offer video content by streaming have been followed by the TV networks worldwide that now allow consumers to view their programmes online (viewing may be free or by paid subscription).

As we look into greater details of various possibilities of viewing televised content, we may find that defining TV viewing is not clear-cut. For instance, if one is streaming the content of a programme (e.g., a comedy episode) ordered from Netflix to a laptop that is connected to a TV set (or streaming directly to a Smart TV), is he or she watching TV? Apparently, 79% of US streamers primarily stream the video content to their TV sets! (CSG International, Insights Blog, 8 Sept. 2016). Vice versa, if one is watching a programme (e.g., evening news) at the time of its broadcast but on a laptop by live streaming, is he or she not watching TV? It can be confusing. Consumers stream TV content of the type of TV series episodes (e.g., comedy, drama, crime), documentaries, news editions, as well as cinema films. The key to achieve greater coherence and consistency may be to define ‘TV’ by the kind of its programming content, not by the technology of devices or distribution platforms (BARB’s Annual Viewing Report: UK’s Viewing Habits, April 2016, pp. 6-7, also see pp. 8-9).

Many consumers, mostly the younger ones (under 35), are turning away from fixed timetable TV programming. They are more selective in regard to the programmes they wish to watch at the time convenient to them. The choice of more savvy TV viewers is getting more in a form of cherry-picking. They may receive recommendations what programmes to watch from friends who have similar tastes or from the online content provider based on their stated preferences and past viewing behaviour (possibly adding what similar-in-kind programmes others are viewing). Consumers may choose to watch, for example, legacy TV series or programmes of a particular genre, as well as new selections of TV-type programmes produced independently by video content providers such as Netflix, exclusive to their subscribers.

For consumers who have less leisure time it may also become a matter of efficiency in allocating their limited TV viewing time to the programmes they really want to watch, thus not being constrained by the programmes scheduled for those hours. People watch only a small portion of the channels available to them in their TV cable or satellite packages, and are less comfortable with their inflexible programming plans. TV viewers wander to other channels such as a VOD service of their regular provider or by streaming from online video content providers.

When looking at ‘traditional TV viewing’, which includes live TV (aka real-time or linear) and adjunct time-shifted services like DVR and VOD(†), the number of weekly hours US young persons ages 18-24 spend watching TV has decreased across all quarters from a level of 23-26 hours in 2011 to a level of 15-18 hours in 2015, and further to 14-16 hours in 2016 (excluding Q4). In addition, when comparing between age groups, it can be seen that the 12-17 years (teenagers) and 18-24 years age groups are most similar to each other in the number of their TV watching hour(decreasing between Q1/2011 and  Q3/2016) and are now even closer to each other than five years ago. There is a decline in number of weekly TV watching hours also in the 25-34 age group, and though more modest a decline, also among those ages 35-49, but there is no discernible trend in age group 35-64 and even a small increase among seniors 65 years old and above (based on data from Nielsen, visualised by MarketingCharts.com). Note that the band of weekly hours mounts as the age rises. Another chart summarises those differences more sharply: the number of hours spent watching TV per week decreased in the younger age groups (12-17 & 18-24) by 37%-40% in five years, 28% still in age group 25-34, and only ~11% among ages 35-49 (weekly hours increased 7% among 65+).

  • Note: The original figures by Nielsen indicate that most traditional TV viewing time is still ‘live’ or linear, accounting for 85%-90% of time, and the rest goes to viewing programmes by DVR or VOD (figures of BARB for the UK indicate a similar ratio).
  • † Clarification: ‘Live’ TV includes of course live programmes or events that are taking place and filmed as they are broadcast or transmitted, but ‘live’ refers here more generally to programmes that are viewed at the time scheduled by a TV company for broadcasting, to be distinguised from programmes watched at a time chosen by a viewer. One possible development is that the concept of VOD will be expanded dramatically.
  • Statistics about streaming usage are still difficult to obtain. Figures brought by MarketingCharts from a less familiar source (‘SSRS’ online and mobile survey company) suggest that the number of hours Millennials spend weekly watching streamed content through various modes increased gradually and almost continuously in 2013-2015, though the overall level is still modest (~1.5 hours in 2013, rising up from 3.3 to  4.5 hours during 2014 until standing on a plateau of 5.5-5.7 hours in 2015).

Research of the British Broadcasters’ Audience Research Board (BARB) notably shows that, other than the TV screen, personal computers (desktop/laptop) and tablets are the  more frequently used for watching TV content on their screens, usually in the evening, while smartphones remain much less popular — smartphones are probably less accepted for TV viewing because their screens are too small to enjoy the images and are not convenient to watch for an extended time. Furthermore, with no evidence showing otherwise, it seems a greater part of time spent viewing not on a TV screen in the UK is still done at home (BARB’s Annual Viewing Report, April 2016, pp. 10-11).

The more traditional TV networks and service providers (cable and satellite) have to acknowledge that the rules of the game in the TV domain have changed: “As both traditional service providers and streaming services alike are looking to engage viewing audiences and hold on to subscribers, catering to the individual needs of each viewer is increasingly paramount” (CSG International: Insights Blog, see their infographic of global content viewing trends). Indeed we can see that TV networks and service providers try to adapt at different levels of extent and pace to changes in the competitive environment and shifts thereof in viewing patterns of consumers. Networks are getting more deeply into the Internet space, availing at least some of their content to viewers by streaming on their websites or through mobile apps, and even greater programming content may be offered to customers by subscription (e.g., BBC iPlayer). Especially in the area of news, we see news websites inserting more video content into their reports, including live coverage. The cable and satellite service providers are working to enhance their channels and VOD libraries to bring content that viewers may be seeking by streaming (e.g., HBO) and thus dissuade customers from churning to other services.

The media industry, most broadly speaking, sees a lot of movement in recent years. It seems that media companies, mainly the larger corporations, are trying to get into each other’s territory — TV (broadcast, streaming), digital media content (Internet & mobile), telecom infrastructure, TV and cinema production, etc. The new business and technology mixtures are created through mergers and acquisitions, accompanied by integration of different functions (horizontal and vertical) that will enable companies greater capabilities along the wider spectrum of the production and transmission of video content to consumers. Notably, there is emphasis on delivery of digital content through various platforms in combined modes (e.g., text, still images, video and audio). Content characteristic of TV programmes is just part of the media ‘basket’ companies are planning to offer their customers. A further implication is that content of different domains in Internet and TV formats will be increasingly blended on the same screen — from news information and education to entertainment and shopping.

In a highly remarkable merger in sight, AT&T is planned to acquire Time Warner for $85 billion. The deal between the parties is already agreed, but approval by the American antitrust authority is still in question (peculiarly, a political matter is also involved because of the bitter dispute between President Trump and CNN owned by Time Warner). This merger would combine the competencies of Time Warner mainly in content (including production and broadcasting) with the telecommunication infrastructure and services of AT&T in Internet and wireless (‘mobile’) communication. It should allow the integrated corporation to reach a wider audience with a richer and greatly varied content on screens of TV sets, personal computers and mobile devices.

Time Warner holds a broad and impressive portfolio of TV channels, production units and digital services for delivering their content. The most famous brand is probably CNN which includes its American and International channels. But Time Warner also owns HBO for TV programmes and Cinemax for cinema films, both available to subscribers by streaming. In fact, Time Warner also owned in the past the AOL Internet company. In 2015 AOL moved hands to Verizon telecom company, and just within months Verizon also acquired the troubled Internet company Yahoo. The expansion of Verizon is yet another example of an integration of telecom infrastructure and services with digital  content capabilities, but it does not have yet a strong TV presence.

  • Time Warner spun off its print arm of magazines in 2014, identified now as the independent company Time Inc.. Some of its better known magazine brands include the Time magazine of current affairs and Fortune magazine of business affairs, but overall the company publishes magazines in various areas of interest (e.g., entertainment, fashion & beauty, photography, home and design, as well as politics, business and technology).

The TV business is reshaping. Frahad Manjoo of the New-York Times (October 2016 [1]) foresees a future of TV “built on lots of bold, possibly speculative experiments”. Advanced digital technology companies (information, Internet & mobile) of the kind of Google, Amazon, Facebook and Netflix may readily disrupt efforts of the large telecom and “old-guard” media companies. When TV viewing habits also are fluctuating and reforming, business decisions involve much “educated guessing”.  In another article, Barnes and Steel [2] consider repercussions of the AT&T-Time Warner deal on other media and telecom companies. While some of those companies declare their objection and intent to fight the merger, they may follow a similar trail.  The cases of four companies are reviewed:

  1. The Walt Disney Company insists on its market position as a predator and not as a prey to technology companies. Its current objective is to bring more premium TV channels directly to consumers by streaming; that may entail the purchase of desired brands (e.g., Pixar, Marvel, ESPN).
  2. Comcast, a telecom company (cable [TV] and broadband), is also the owner of TV networks or channels  (e.g., NBC and MSNBC), as well as film and TV studios. It may not sit idle and may try to take over another telecom company to complement its coverage (e.g., extending to wireless).
  3. 21st Century Fox (cable TV, films) is claiming to have no plans of expansion and entering into new areas. It previously failed to acquire Time Warner (2014). But the recent AT&T-Time Warner deal may change their plans. (The Murdoch family is currently aiming to take full control of UK-based Sky satellite TV).
  4. CBS and Viacom engage together in TV broadcasting, a cable TV service, and TV and cinema productions. The controlling owner (Redstone family) may now be encouraged to unite the sister companies (once again) into a single corporation.

We should not rush to assume that watching TV programmes on a TV set or watching programmes in real-time are about to end anytime soon. Traditional live TV viewing and digital video viewing are complementary, possibly preferred on different devices at different times and in differing circumstances (eMarketer, 14 March 2016).

There may be personal but also social benefits or incentives to watching programmes or films in the ‘old-fashioned’ way. First, enjoyment and visual comfort, particularly for certain types of video content, are expected to be greater when viewed on a large screen (37” and above). Second, there is real value in watching a programme such as an episode of a popular TV series at the same time with others so that one can share impressions and discuss it with acquaintances the next day or right after the show. A similar argument can be made for watching live a sports contest, on top of the thrill of watching the event as it unfolds. Third, there is still pleasure and enjoyment in watching TV together with family or friends on a large TV set at one’s home (and in some cases in a pub or bar).

The new technological developments in distributing and displaying video content in high quality, offer opportunities for consumers to improve and enrich in several ways their experience of viewing TV programing and other types of video content. Consumers would be given more freedom of choice and flexibility to watch TV as they truly like. Companies in the wide spectrum of media, telecom and Internet may also find new business possibilities to enhance their services to customers, including in particular TV-like content. But it will take more time to see how the TV domain shapes-up.

Ron Ventura, Ph.D. (Marketing)

Notes:

In New-York Times (International Edition), 26 October 2016:

[1]  “A Risky Bid With the TV Industry Up for Grabs”, Farhad Manjoo,

[2] “A Chilly Reaction to AT&T Deal”, Brooks Barnes and Emily Steel

 

 

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Touch-screens are becoming the norm of display and interaction on mobile devices, from smartphones to tablets — devices with screen sizes in the range of 4” to 10”. Maximal area of the device’s face is dedicated to the screen, leaving a thin surrounding frame with enough space primarily for the physical ‘On’ button (e.g., awakening the screen, returning to the ‘Home’ display). Most controls for operating a smartphone or tablet and their applications are now virtual, represented as visual icons, symbols and keystrokes on the screen. Users can interact with the device (even for dialing a phone number) by pointing, swiping and similar hand (finger) gestures applied to the screen’s display. It all sounds and feels great, and mostly functions alright, but not all is bright — there is still much room for improvement and better fine-tuning.

The focal devices of this article are smartphones with screens normally between 4” and 5.4” and tablets that carry mostly screens in size of 7” to 10” (extra-size smartphones, also-known-as ‘phablets’, embody a screen larger than 5.4”). They essentially enlarge the real-estate of the screen by doing away with physical controls on the device (buttons and keypads). Operation of the device and interaction with its applications is delegated almost wholly to the touch of virtual controls and other finger-gestures.

This new form of handheld computer-type devices provides a highly advanced class of viewing verbal and pictorial content and interacting with them through manual gestures. Touch-screens were available already in the turn of the century with Personal Digital Assistants (PDAs). The touch-screens of smartphones and tablets are yet empowered in several important aspects: (1) they can be operated with the touch of fingers without need for a pen or stylus; (2) the screens are larger; and (3) the images are in much higher quality. The differences do not end here, if only to mention the communication abilities of the more recent mobile devices. Smartphones in particular can be said to converge a phone and a PDA in a single device, but with some additional capabilities that neither mobile phones nor PDAs have had in earlier times.

The first critical problem to address with touch-screen mobile devices concerns writing. A user is likely to encounter difficulties frequently when writing text with a virtual keyboard — it is rather easy to miss target character keystrokes. The difficulty is not simply in typing text but in getting the words spelled correctly, and overall avoiding character typing errors. The difficulty to produce a text without errors is likely to turn out more acute and agitating with smartphones and the smaller tablets (i.e., 7-8”). It may also cause users to leave spaces in the wrong places, and inversely to concatenate words. Correcting errors can be furthermore annoying when the user cannot find the direction arrows or point his or her finger to stand at the right position of correction; going backspace is not useful if one already moved to another line when the earlier error is noticed or any other correction of text is demanded.

Mobile devices foster writing correspondence texts (e.g., e-mails, chatting, social media updates and comments) even faster than with other modes, specially when users are in motion.  People tend to write correspondence as such more quickly and haphazardly, taking less care to avoid mistakes, and textproofing before sending is usually not in high priority or time-affordable. The result is that producing a well-thought and error-free text message on a touch-screen with a virtual keyboard may be an irritating mission (e.g., either abort message or send it with some errors).

  • Writing alphanumeric text with a 12-key physical pad is hardly convenient, and is usually time-consuming. In that sense QWERTY-type keyboards, physical or virtual, are better. There is yet an important difference to notice: The keys on a physical keyboard (e.g.,  Nokia E5 that followed on the original Blackberry phones) can be quite small but they feel like separated bumpers (i.e., giving the user a tactile feedback where the finger rests) whereas a virtual keyboard is completely flat and smooth. The cost of the physical keyboard is of course the smaller screen.

Mistyping is mostly associated with failure to accurately ‘hit’ the intended character keystroke with one’s index finger, and often enough with the thumb (e.g., when in motion and only one hand is free to hold the device and write). That is because virtual character keys tend to be too small for our fingers used for texting (less so on 10” tablet screens). The kind of errors that may result are typing the wrong character, typing the same character inadvertently twice, or  not typing the designated character. Apparently, failing to execute selected actions also occurs with images, such as when having to press virtual buttons or activating icon and text hyperlinks. These controls could be related to the device and its utilities or embedded in websites and imported apps. These issues are well-explained by Steven Hoober in an article in UXMatters (“Common Misconceptions About Touch”, 18 March 2013). Hoober makes an important distinction between seeing clearly text and icon targets and touching them effectively, and he recommends target sizes for them (in measures of points and millimeters).

Hoober refers to an additional sensitive and critical consideration in preventing users from taking accidentally the wrong action: he calls this ‘preventing interference errors’. He clearly suggests to avoid placing controls for actions with opposite consequences too near each other lest trying to touch-press one control could result in adversely activating the other unwanted control. This applies especially to actions associated with catastrophic results or outcomes that are difficult to undo. For instance, he recommends separating sufficiently the locations of controls for Send and Delete actions (Hoober recommends a distance of at least 8mms and preferably 10mms between centres of the controls [the target point of finger contact]).

Touch-screen devices benefit indeed from a larger screen real-estate for image display. But there is nonetheless competition on that real-estate for the content of display, and competition can be quite tough especially on devices with screens smaller than 7” in size. The competition is prominently between images of controls and the content of device utilities, webpages and apps. It applies primarily to the interface of a virtual keyboard that requires a relatively large space (in some cases up to 50% of screen area). However, there could be other controls needed for operating the device and specific utilities, websites or apps (e.g., designers may have to give up on some pictorial imagery in order to allow enough space for action controls like “Add to Basket”).

Focusing on the virtual keyboard: when called-upon to write, it pops-up and hides  other content of the display (e.g., e-mail message, shopping webpage) in the lower part of the screen. It may hide content that the user actually needs to see while proceeding in composing a message or responding to content in a website. The smaller the screen, on one hand a larger part of the underlying display is hidden, on the other hand the keystrokes have to be smaller. Unlike with a physical keyboard, the virtual one can at least be dropped out when not in use and called again when needed for writing. But it can be disturbing if every few moments one has to drop out the keyboard and surface it again to resume writing. With larger screens there should still be enough space for text in the e-mail message editor that one can scroll; with screens 7” or less one may be able to see only up to four lines at a time and even that in small type difficult to read (changing zoom may help but also cause trouble — more below).

Virtual keyboards on mobile devices are split into two or three displays due to space limitations (e.g., Latin letters as for English or German [but with some order variations], numeric figures and symbols, and an extra keyboard for non-Latin alphabets as Hebrew, Arabic, Cyrillic). But in any particular set of keyboard display, some character keys or controls may have to be forsaken for space limitations. As suggested above, it is most annoying when the direction arrows are eliminated (e.g., on a Samsung 7” tablet) because it makes it more difficult to go back and forth across a text while composing and editing it.

Relying on gestures can save space for screen real-estate and help in making interactions fluid and efficient, but working with a touch-screen has limitations. Raluca Budiu of Nielsen & Norman Group (user experience research and usability experts, 19 April 2015) lists some of the main problems that may arise for users: (1) The leading problem concerns typing, and particularly the need to continuously divide attention between the content written and the keypad area; (2) Poor tactile feedback, small keypads and crowded keys make the typing experience more troublesome; (3) The target size of controls or keys has to be considerably larger with touch interface to optimize reaching time and minimise errors compared with a mouse; (4) Since there can be many target areas on a touch-screen (especially of smartphones), it is easy to make accidental touch errors (see Hoober’s ‘interference error’) — some errors can “leave the user disoriented and unsure of what happened”. Budiu notes that respecting the Undo usability heuristic is furthermore important with mobile devices.

References to those main problems could be found in the earlier paragraphs of this article. Two more issues are addressed below:

Scrolling over a touch-screen — Mobile devices do not apply a scrolling bar — the user can scroll by swiping the index finger in a swoosh movement up or down over the touch-screen. The smaller the screen, and if one is in a landscape mode, more scrolling may be needed (shifting left and right is also possible). Trouble may start when the window display is populated by ‘clickable’ tiles or pictures: if the user does not swipe the finger quickly and lightly enough over the image, he or she may activate the underlying link rather than scroll across the window. When that happens, the user may arrive to a different window display, and one has to find the way back. More disturbing, when the content is online and connectivity can be slow on occasion, the user may remain stuck for a long time before being able to return to the desired location of content and resume work.

Zooming and automatic change of size —  Since type on touch-screens of mobile devices can be small and uneasy to read, one can zoom-in to enlarge the display appearance and the text in it. This is usually done by swiping the index and thumb fingers away from each other over the screen (conversely, one can zoom-out to reduce size but see more content by bringing the fingers closer together). But caution: one has to be accurate, and this does not always work so well. One may accidentally “blow” a picture image over the whole screen, for instance. When writing an e-mail message zooming can be helpful as one toggles between writing and reading the composed text. Yet, these devices are smart and sometimes they try to adjust the size for you according to the identified mode of use; sometimes it is appropriate but on occasion it causes trouble and nuisance. In more drastic cases, whilst trying to enlarge the type on a webpage, the system may lock in a loop and continue zooming-in until the user can see nothing coherent and has to start over again.

  • Note that the scrolling and size problems were encountered much more frequently on a Samsung tablet, either 7” or 10”, than on an Apple’s 10” iPad .

People may discover at times that although they were sure they could see exactly where their hand should reach and act, it somehow missed the target. That may happen because perception augmented by cognitive conception and processes of location and action are not the same in the human brain. These processes are connected (i.e., they share and pass information between them) but are nonetheless distinct. Visual information flows and is processed in two pathways: (a) perceptual but non-conceptual information is passed through the ventral stream to the temporal lobe where percepts are interpreted into meaningful images of scenes and objects; (b) visuospatial (location) and visuomotor (action) signals are transferred through the dorsal stream to the parietal lobe to guide, for instance, our manual movements. The ventral-temporal (semantic) visual system allows to identify a target for action yet the dorsal-parietal (pragmatic) visual system is responsible in parallel for determining where the target is and how to act upon it. Furthermore, action requires only a subset of information from percepts, including size, shape and orientation of a target object to complete a task, much less than what we perceive and even recognize as seeing. The conceptual identity of the target is mostly not required.

Jacob and Jeannerod (2003), distinguishing between Semantic and Pragmatic vision as cited above, argue that pragmatic vision processed in the parietal lobe is more complex and multi-layered than has been theorised and described in literature on vision. Humans may believe they act on whatever they perceive (as an image) but in fact they usually act on the nonconscious signals that arrive directly to the parietal lobe. Recognising and identifying clearly the target and understanding what to do with it are therefore not enough — the target should be designed in a form that permits (affords) the visuomotor system to perform the action correctly and efficiently. The semantic and pragmatic processes occur simultaneously. In some instances the semantic system may assist the pragmatic system but usually deliberate intervention is not needed. A user should not have to tilt the tablet, for example, while trying to accurately and slowly direct his finger to touch the small backward or forward arrows of the browser on the touch-screen. This is an example of an effortful action users should not be driven to.

Using mobile devices with touch-screens has advantages and can be a gratifying experience. But there is also a lot that can be done to improve that experience, moreover if the aspiration is that consumers will use these devices much more frequently for performing more tasks, and especially that they will use tablets more than desktop and laptop computers in the future. Although the touch-screen mobile devices promote to use fingers, they should support the use of a pen or stylus and perhaps even encourage it with smaller screen devices (for typing and not just for drawing). It is also helpful to enlarge the images of keystrokes, icons and symbols as one approaches to touch any of these controls. These are just hints and there are probably many more ways interaction designers can create to improve mobile users’ experiences, making them more effective and enjoyable.

Ron Ventura, Ph.D. (Marketing)

Reference:

Ways of Seeing: The Scope and Limits of Visual Cognition; Pierre Jacob and Marc Jeannerod, 2003; Oxford University Press.

Additional recommended reading:

Mobile Computing; Jesper Kjeldskov; In Encyclopedia of Human-Computer Interaction (2nd edition, Chapter 9); Interaction Design Foundation.

 

 

 

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A new film this year, “Sully”, tells the story of US Airways Flight 1549 that landed safely onto the water surface of the Hudson River on 15 January 2009 following a drastic damage to the plane’s two engines. This article is specifically about the decision process of the captain Chesley (Sully) Sullenberger with the backing of his co-pilot (first officer) Jeff Skiles; the film helps to highlight some instructive and interesting aspects of human judgement and decision-making in an acute crisis situation. Furthermore, the film shows how those cognitive processes contrast with computer algorithms and simulations and why the ‘human factor’ must not be ignored.

There were altogether 155 people on board of the Airbus A320 aircraft in its flight 1549 from New-York to North Carolina: 150 passengers and five crew members. The story unfolds whilst following Sully in the aftermath of the incident during the investigation of the US National Transportation Safety Board (NTSB) which he was facing together with Skiles. The film (directed by Clint Eastwood, featuring Tom Hanks as Sully and Aaron Ackhart as Skiles, 2016) is based on Sullenberger’s autobiographic book “Highest Duty: My Search for What Really Matters” (2009). Additional resources such as interviews and documentaries were also used in preparation of this article.

  • The film is excellent, recommended for its way of delivering the drama of the story during and after the flight, and for the acting of the leading actors. A caution to those who have not seen the film: the article includes some ‘spoilers’. On the other hand, facts of this flight and the investigation that followed were essentially known before the film.

This article is not explicitly about consumers, although the passengers, as customers, were obviously directly affected by the conduct of the pilots as it saved their lives. The focus, as presented above, is on the decision process of the captain Sullenberger. We may expect that such an extraordinary positive outcome of the flight, rescued from a dangerous circumstance, would have a favourable impact on the image of the airline US Airways that employs such talented flight crew members. But improving corporate image or customer service and relationships were not the relevant considerations during the flight, just saving lives.

Incident Schedule: Less than 2 minutes after take-off (at ~15:27) a flock of birds (Canada geese) clashed into both engines of the aircraft. It is vital to realise that from that moment, the flight lasted less than four minutes! The captain took control of the plane from his co-pilot immediately after impact with the birds, and then had between 30 seconds to one minute to make a decision where to land.  Next, just 151 seconds passed from impact with the birds and until the plane was approaching right above the Hudson river for landing on the water. Finally, impact with water occurred 208 seconds after impact with the birds (at ~15:30).

Using Heuristics: The investigators of NTSB told Sully (Hanks) about flight calculations performed in their computer simulations, and argued that according to the simulation results it had not been inevitable to land on the Hudson river, a highly risky type of crash-land. In response, Sully said that it had been impossible for himself and Skiles to perform all those detailed calculations during the four minutes of the flight after the impact of the birds with the aircraft’s engines; he was relying instead on what he saw with his eyes in front of him — the course of the plane and the terrain below them as the plane was gliding with no engine power.

The visual guidance Sully describes as using to navigate the plane resembles a type of ‘gaze heuristic’ identified by professor Gerd Gigerenzer (1). In the example given by Gigerenzer, a player who tries to catch a ball flying in the air does not have time to calculate the trajectory of the ball, considering its initial position, speed and angle of projection. Moreover, the player should also take into account wind, air resistance and ball spin. The ball would be on the ground by the time the player makes the necessary estimations and computation. An alternative intuitive strategy (heuristic) is to ‘fix gaze on the ball, start running, and adjust one’s speed so that the angle of gaze remains constant’. The situation of the aircraft flight is of course different, more complex and perilous, but a similar logic seems to hold: navigating the plane in air safely towards the terrain surface (land or water) when there is no time for any advanced computation (the pilot’s gaze would have to be fixed on the terrain beneath towards a prospect landing ‘runway’). Winter winds in New-York City on that frozen day have probably made the landing task even more complicated.  But in those few minutes available to Sully, he found this type of ‘gaze’ or eyesight guiding rule the most practical and helpful.

Relying on Senses: Sullenberger made extensive use of his senses (visual, auditory, olfactory) to collect every information he could get from his surrounding environment. To start with, the pilots could see the birds coming in front of them right before some of them were clashing into the engines — this evidence was crucial to identifying instantly the cause of the problem though they still needed some time to assess the extent of damage. In an interview to CBS’s programme 60 Minutes (with Katie Couric, February 2009), Sully says that he saw the smoke coming out from both engines, smelled the burned flesh of the birds, and subsequently heard a hushing noise from the engines (i.e., made by the remaining blades). He could also feel the trembling of the broken engines. This multi-modal sensory information contributed to convincing him that the engines were lost (i.e., unable to produce thrust) in addition to failure to restart them. Sully also utilised all that time information from the various meters or clocks in the cockpit dashboard in front of him (while Skiles was reading to him from the manuals). The captain was thus attentive to multiple visual stimuli (including and beyond using a visual guidance heuristic) in his decision process, from early judgement to action on his decision to land onto the water of the Hudson river.

Computer algorithms can ‘pick-up’ and process all the technical information of the aircraft displayed to the pilots in the cockpit. The algorithms may also apply in the computations additional measurements (e.g., climate conditions) and perhaps data from sensors installed in the aircraft. But the computer algorithms cannot ‘experience’ the flight event like the pilots. Sully could ‘feel the aircraft’, almost simultaneously and rapidly perceive the sensory stimuli he received in the cockpit, within and outside the cabin, and respond to them (e.g., make judgement). Information available to him seconds after impact with the birds gave him indications about the condition of the engines that algorithms as used in the simulations could not receive. That point was made clear in the dispute that emerged between Sully and the investigating committee with regard to the condition of one of the engines. The investigators claimed that early tests and simulations suggested one of the engines was still functioning and could allow the pilots to bring the plane to land in one of the nearby airports (returning to La Guardia or reverting to Teterboro in New-Jersey). Sully (Hanks) disagreed and argued that his indications were clear that the second engine referred to was badly damaged and non-functional — both engines had no thrust. Sully was proven right — the committee eventually updated that missing parts of the disputed engine were found and showed that the engine was indeed non-functional, disproving the early tests.

Timing and the Human Factor: The captain Sullenberger had furthermore a strong argument with the investigating committee of NTSB about their simulations in attempt to re-construct or replicate the sequence of events during the flight. The committee argued that pilots in a flight simulator ‘virtually’ made a successful landing in both La Guardia and Teterboro airports when the simulator computer was given the data of the flight. Sully (Hanks) found a problem with those live but virtual simulations. The flight simulation was flawed because it made the assumption the pilots could immediately know where it was possible to land, and they were instructed to do so. Sully and Skiles indeed knew immediately the cause of damage but still needed time to assess the extent of damage before Sully could decide how to react. Therefore, they could not actually turn the plane towards one of those airports right after bird impact as the simulating pilots did. The committee ignored the human factor, as argued by Sully, that had required him up to one minute to realise the extent of damage and his decision options.

The conversation of Sully with air controllers demonstrates his assessments step-by-step in real-time that he could not make it to La Guardia or alternatively to Teterboro — both were effectively considered — before concluding that the aircraft may find itself in the water of the Hudson. Then the captain directed the plane straight above the river in approach to crash-landing. One may also note how brief were his response statements to the air controller.  Sully was confident that landing on the Hudson was “the only viable alternative”. He told so in his interview to CBS. In the film, Sully (Hanks) told Skiles (Ackhart) during a recuperating break outside the committee hall that he had no question left in his mind that they have done the right thing.

Given the strong resistance of Sully, the committee ordered additional flight simulations where the pilots were “held” waiting for 35 seconds to account for the time needed to assess the damage before attempting to land anywhere. Following this minimum delay the simulating pilots failed to land safely neither at La Guardia nor at Teterboro. It was evident that those missing seconds were critical to arriving in time to land in those airports. Worse than that, the committee had to admit (as shown in the film) that the pilots made multiple attempts (17) in their simulations before ‘landing’ successfully in those airports. The human factor of evaluation before making a sound decision in this kind of emergency situation must not be ignored.

Delving a little deeper into the event helps to realise how difficult the situation was.  The pilots were trying to execute a three-part checklist of instructions. They were not told, however, that those instructions were made to match a situation of loss of both engines at a much higher altitude than they were at just after completing take-off. The NTSB’s report (AAR-10-03) finds that the dual engine failure at a low altitude was critical — it allowed the pilots too little time to fulfill the existing three-part checklist. In an interview to Newsweek in 2015, Sullenberger said on that challenge: “We were given a three-page checklist to go through, and we only made it through the first page, so I had to intuitively know what to do.”  The NTSB committee further accepts in its report that landing at La Guardia could succeed only if started right after the bird strike, but as explained earlier, that was unrealistic; importantly, they note the realisation made by Sullenberger that an attempt to land at La Guardia “would have been an irrevocable choice, eliminating all other options”.

The NTSB also commends Sullenberger in its report for operating the Auxiliary Power Unit (APU). The captain asked Skiles to try operating the APU after their failed attempt to restart the engines. Sully decided to take this action before they could reach the article on the APU in the checklist. The operation of the APU was most beneficial according to NTSB to allow electricity on board.

Notwithstanding the judgement and decision-making capabilities of Sully, his decision to land on waters of the Hudson river could have ended-up miserably without his experience and skills as a pilot to execute it rightly. He has had 30 years of experience as a commercial pilot in civil aviation since 1980 (with US Airways and its predecessors), and before that had served in the US Air Force in the 1970s as a pilot of military jets (Phantom F-4). The danger in landing on water is that the plane would swindle and not reach in parallel to the water surface, thus one of the wings might hit water, break-up and cause the whole plane to capsize and break-up into the water (as happened in a flight in 1996). That Sully succeeded to safely “ditch” on water surface is not obvious.

The performance of Sullenberger from decision-making to execution seems extraordinary. His judgement and decision capacity in these flight conditions may be exceptional; it is unclear if other pilots could perform as well as he has done. Human judgement is not infallible; it may be subject to biases and errors and succumb to information overload. It is not too difficult to think of examples of people making bad judgements and decisions (e.g., in finance, health etc.). Yet Sully has demonstrated that high capacity of human judgement and sound decision-making exists, and we can be optimistic about that.

It is hard, and not straightforward, to extend conclusions from flying airplanes to other areas of activity. In one aspect, however, there can be some helpful lessons to learn from this episode in thinking more deeply and critically about the replacement of human judgement and decision-making with computer algorithms, machine learning and robotics. Such algorithms work best in familiar and repeated events or situations. But in new and less familiar situations and in less ordinary and more dynamic conditions humans are able to perform more promptly and appropriately. Computer algorithms can often be very helpful but they are not always and necessarily superior to human thinking.

This kind of discussion is needed, for example, in respect to self-driving cars. It is a very active field in industry these days, connecting automakers with technology companies for installing autonomous computer driving systems in cars. Google is planning on creating ‘driverless’ cars without a steering wheel or pedals; their logic is that humans should not be involved anymore in driving: “Requiring a licensed driver be able to take over from the computer actually increases the likelihood of an accident because people aren’t that reliable” (2). This claim is excessive and questionable. We have to carefully distinguish between computer aid to humans and replacing human judgement and decision-making with computer algorithms.

Chesley (Sully) Sullenberger has allowed himself as the flight captain to be guided by his experience, intuition and common sense to land the plane safely and save the lives of all passengers and crew on board. He was wholly focused on “solving this problem” as he told CBS, the task of landing the plane without casualties. He recruited his best personal resources and skills to this task, and in his success he might give everyone hope and strength in belief in human capacity.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) “Gut Feelings: The Intelligence of the Unconscious”, Gerd Gigerenzer, 2007, Allen Lane (Pinguin Books).

(2) “Some Assembly Required”, Erin Griffith, Fortune (Europe Edition), 1 July 2016.

 

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For the past two years the Internet company Yahoo is under immense pressure: The management led by CEO Marissa Mayer, in office since 2012, is working hard to reinvigorate the core online business of the company with new up-to-date technologies; and furthermore, creating more value, mainly from advertising. The board of directors is seeking to give management more time to find a way out of the difficult times, however it is struggling to fend off pressures from activist investors who demand a break-up of the company in order to salvage the real value they see captured in Yahoo through its stakes in external companies — Alibaba of China and Yahoo Japan. Yahoo is in a delicate and complex situation, carrying a danger that consumers-users will be left behind in the final business outcome.

The key criticism of Yahoo concerns the poor performance of its online advertising system, lagging behind other platforms such as Google (search) and Facebook (social media). The core business of the company entails its search engine and media (news in various domains), acting as sources of income from advertising (e.g., display ads, sponsored results). Display advertising is now active also in Yahoo’s Mail (e-mail service).

Underlying the poor financial performance of the advertising system are mainly two problems: (a) inconvenient and technologically outdated utilities and tools for advertisers when placing their orders for online ads (1); (b) a relatively low volume of search queries by Internet users, particularly far behind Google, and insufficient returns by visitors to the different sections of Yahoo websites. For example, according to figures revealed by the New-York Times, only ten percent (10%) out of one billion monthly visitors of Yahoo websites return every day, suggesting weak brand attachment; the reported figure for Facebook is 65% (2). It may start from failing to persuade more Internet users to make Yahoo a start homepage on their browsers.

Yahoo may be suffering, nevertheless, from a  broader problem of generating income from its online services. That is, the company should not rely only on income from advertising but create additional schemes that can generate income from use of its online services. Yahoo could monetise services, for instance, by charging users on premium plans (e.g., allowing extended storage capacity, more advanced tools or features, increased customisation, access to extended content). Yahoo may further not have a wide enough range of services on which it can charge premiums from registered (logged-in) users. Rightfully, companies are reluctant to ask customers to pay for online services, but that may be an unaffordable privilege, as in the case of Yahoo. Moreover, charging price premiums for enhanced services is legitimate and can contribute to higher perceived quality or value to consumers.

The complexity of the situation can partly be explained by the claim of investors that a greater portion of market value of Yahoo arises from its stakes in Alibaba and Yahoo Japan than from its own activity. Yahoo originally (2005) had a stake of ~24% in the Chinese e-commerce company Alibaba. Shortly before an initial public offering (IPO) of Alibaba in September 2014, that stake was valued $40 billion. During the IPO, Yahoo sold 40% of that stake as agreed with Alibaba to the latter’s requirement. Yahoo eventually collected more than $9bn, available to award shareholders or re-invest in the company (how funds were actually used is unpublished). The remaining stake of Yahoo in Alibaba (~15%) was worth some $30bn in December 2015. Investors thought that not enough value stemmed from Yahoo’s genuine activity before Alibaba’s IPO, and some seem to believe that is nonetheless apparent after the IPO.

The first two years of Mayer as CEO enjoyed a sense of improvement and optimism. Until the IPO of Alibaba, Yahoo acquired more than forty technology companies to bring fresh methods, tools and skills to the company. The share price of Yahoo climbed from a low of under $20 to above $30 by the end of 2013 and reached $50 in late 2014. But after Alibaba’s IPO, tensions with investors, especially the activist ones, escalated as patience with Mayer as well as the board was running thin. The share price also started to decline back to $30 during 2015 (it recovered to ~$36 since January 2016).

It must be noted that the board of directors together with Mayer did try to find solutions that would satisfy the investors while saving the core business of Yahoo. One plan considered was to sell the remaining stake of Yahoo in Alibaba but that solution was abandoned due to concerns about a looming large tax liability. Another solution, championed by Mayer, was to put the core media and search business of Yahoo on sale in one piece, but that plan was also just recently suspended as the process failed to mature. The most serious prospective buyer was the US telecom company Verizon; they were thinking of merging the activity of Yahoo with that of AOL, acquired last year, but executives were worried about the company’s ability to pull together such an integration effort in a short time (3).

  • Update note (July 2016): After all, a deal was done with Verizon to buy Yahoo for $4.8bn (excluding its stakes in Alibaba and Yahoo Japan.)

In the second part of this article I examine the display and organization of Yahoo’s websites with a user-consumer viewpoint in mind — visual layout, sections and services on the website, composition of content, links, menus and other objects. The examination is focused more on the content and services Yahoo provides to its users rather than its advertising.

Yahoo runs multiple versions of its website in different countries and languages. The major part of the review is centered on the website of Yahoo in the United Kingdom as a pivot exemplar. References will be subsequently made to other versions. Nevertheless, all of the additional websites visited (8) highly resemble the UK website in appearance and composition. Through the examination I intend to argue that Yahoo has not organized and designed the homepages of its website versions appropriately to expose users to, and give them the necessary inducement to access, some of its core services that would also be important sources of income. However, beyond the homepages, I also relate to the ‘portfolio’ of media topical sections and services that comprise the websites.

Some of the graphics on the page were not captured (the title name Yahoo and news bar were supplemented)

Two services of Yahoo are primary assets: the search engine (Yahoo! Search) and the e-mail service (Yahoo! Mail). Both follow the company’s website in substance from its early days. They are essential components of Yahoo’s brand. The search facility is the gate to the enormous content on the Internet. The e-mail service with its mailbox management utilities is at the foundations of the company’s invaluable customer base. Both have advanced over the years and added features, although there is argument over the nature of progress particularly with regard to the search engine. A third additional asset of Yahoo is the media content of news stories and videos in various domains delivered on the website. On the left-hand of the homepage appears a sidebar with links to services and news topics on the website; a ‘global’ heading bar appears on top of any webpage on Yahoo’s site.

As important and interesting as the news media content may be, its preview takes grossly too much space of the homepage. Conversely, the search window for initial queries, while on top, is marginalised on the page, nearly “drowning” in the news content. It sends a message to visitors that this feature is secondary or less to media content. It is little wonder that on-face Internet users perceive Google as the universal search engine (Yahoo has been relying on the powers of search engines of Google and previously Microsoft’s Bing in recent years). The icon-link to the e-mail service is not in a much better position at the top right corner. Even though three links for Mail appear on the homepage — the icon right to the search window, on top of the vertical sidebar, and on left side of the heading bar — none of these positions is central. The allocation of space on the homepage is not reasonably proportional between these three assets. It suggests that Yahoo has become a media company and has practically discounted its two other assets.

The sidebar added to the website in the past two years is a welcome contribution as it helps to quickly familiarise with or easily find some key services and news topics on Yahoo’s site. Nevertheless, icons-links for those services and topics could receive better attention and salience in users’ eyes and minds if they were arranged in a central area of the page adjacent to the Search window and Mail icon (e.g., beneath them). It would give Yahoo an opportunity to promote services or topics with a greater income potential vis-à-vis visitors’ interests and utility in using particular services. For example, the online cloud-based service Flickr for storing, editing and showcasing photos is hardly noticed on the head-bar, and if at all on the sidebar (Flickr was acquired by Yahoo in 2005). If site users could also see more instantly and clearly what functional services (non-news) are offered by Yahoo, it might be better understood why there is a Sign-In option separate from Mail.

  • Extra feature-services such as Contacts, Calendar, Notepad and Messenger (chat) are already included in Mail.

Yahoo highlights on its homepage general news, sport, entertainment and finance. On the ‘homepage’ of the news section one can find more categories such as UK,  World, Science & Tech, Motoring and Celebrity. Links to some of them appear on the sidebar of the UK homepage (e.g., Cars [Motoring], Celebrity). Interestingly, some news/media sections do behave as more autonomous sites and some have a different layout with a visual graphic display of tiles — Parenting, Style and Movies. (In the Italian version, Beauty and Celebrity sections also exhibit a tile ‘art’ display.)

The news headlines with the snippets (briefs) are useful but those do not necessarily belong on the homepage in that long a list. The ‘ribbon’ of images for selected stories would most appropriately fit on the homepage with a focal story changing on top — that is all that needs to remain on the homepage (with some enhancements such as choice of category) while the additional headlines are delegated to the News ‘homepage’. In the final display of the homepage, a concise and elegant arrangement should include the Search window and Mail/ Sign-In icons, surrounded by a News showcase and a palette of selected services or media topics.

  • A visitor has to look deeper into the website to trace additional services that may be  interesting and useful. A few examples: (1) The Finance (news and more) section includes a personalised utility ‘My Portfolios’ for managing investments; (2) On a page enlisting more services one can find Groups (discussion forums) and Shopping. Other features or services on a sidebar or head-bar refer to Weather, Mobile (downloading Yahoo apps), and Answers (subdivision of Search — peer-to-peer Q&A exchanges).

When the homepage of UK website is compared with other country and language websites of Yahoo, it is mostly noticeable that some of the links on the sidebar and head-bar may vary, apparently accounting for regional and cultural differences in public interests. Countries may also be affiliated or in co-operation with different local content and service providers. For instance: Italy assigns more importance to Style, Beauty and Celebrity, also having more invested topical sections; France has a section on real-estate (Immobilier) in affiliation with BFM TV); Australia has a TV section affiliated with PLUS7); and in Germany the Weather and Flickr services are represented on both sidebar and head-bar. It is further observed that the sidebar in Yahoo Australia includes many more links than in other site versions.

Regarding the US website, some differences can be marked. First, subject titles of appear above each news headline. Second, a reference to the social blogspace site Tumblr appears on the head-bar (in addition to Flickr) — it appears also on the site of Australia but not on the other sites visited (Tumblr was acquired by Yahoo in 2013). Third, the US site chose to mention on its sidebar Shopping and Politics.

  • The Yahoo websites exhibit anomalies implying that the company refrains from promoting some of its own in-house or subsidiary services. For instance, Flickr and Tumblr are sidelined, and the latter is exclusive to just a couple of countries. The ‘Shopping’ product search for attractive retailer offers (powered by Nextag) is more often hidden, and Yahoo homepages provide links to eBay and Amazon.

In order to design in practice the most appropriate and effective composition and layout of the homepage, Yahoo may apply usability tests, eye tracking, and possibly also tracking of mouse movements and clicks. These three methodological approaches can be used in parallel or even simultaneously to derive findings that can support and complement each other in guiding the design process. Attention obviously should be paid to visual appeal of the page appearance in the final design. As suggested above, however, emphasis should be directed to the content and services provided by Yahoo as opposed to the advertising space.

Notwithstanding, the homepage is just the start of the journey of a visitor on the website. Of course much depends on the quality of services and content in determining how long a visitor will stay on the site. For example, how the mail, e-commerce (shopping), or photo service platform compare with competition. Particularly with respect to the search engine, continued utilisation relies on relevance, credibility and timeliness (historical to up-to-date) of results generated.

Yahoo provides specialised searches of websites and pages, images, videos, answers, products and more. Yet the company acquired in the past the Altavista engine that was advantageous in retrieving higher-quality and academic-level information sources and materials but it was apparently submerged without leaving a trace; and as indicated earlier, Yahoo has turned to stronger capabilities of competitors at the expense of developing more of their own. Marissa Mayer aims alternately to create a leverage by developing a powerful intelligent search engine for mobile devices in a mobile-friendly site/app. Even though the mobile-driven approach can be a move in the right direction for Yahoo, it may not resolve the suggested problems inherent in the online website, and skeptics doubt that the company has the skills and resources in its current state to accomplish those goals.

Yahoo has a lot at stake. It should not rely on users to know how to get to its services independently or to search for their Internet addresses. The site, online or mobile, has to give a hand and show users the way to the services it wants them most to visit and apply, and there is no better place to start than on the site’s homepage. The solutions needed are not just about technology but in the domain of marketing strategy and user-consumer online and mobile behaviour. Yet, looking at how events roll at Yahoo, the decisions made could be driven by business and financial considerations above the heads of users-consumers.

  • The lessons for Yahoo should now be learnt by Verizon as it intends to merge between functions and capabilities of Yahoo and AOL, and probably rebrand them.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) “Marissa’s Moment of Truth”, Jess Hempel, Fortune Europe Edition, 14 May 2014  pp. 38-44.

(2) “Yahoo’s Suitors Are in the Dark About its Financial Details”, International New-York Times, 16-17 April 2016.

 

 

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In late February the annual Mobile World Congress (MWC) 2016 took place in Barcelona, including a large festive exhibition and a conference next to it. The leading motto of the MWC declared that “Mobile Is Everything“. This motto, directed primarily at people involved in the mobile industry, on either the technology-side or the management-side, could help to increase their interest in the event, create a uniting theme, and energise them to be part of the congress and its community. But what does this ‘invitation’ tell client-companies operating mainly outside the field of mobile telecom and technology? Moreover, what does this call suggest for the lives of consumers?

A little over 100,000 people from 204 countries attended the MWC this year according to MWC official website. Some 2,200 companies were represented in the exhibition; during that time the conference hosted speeches and panel discussions by experts and business leaders. An intensive media coverage on TV, online, and in the press, made sure news from the event reach almost everyone. Everything important, it would appear, has happened that week at the MWC.

Companies were presenting in the exhibition their technological solutions, methods and products. Each company could summarily describe its areas of specialisation by classification in any of 90 different product categories (companies more frequently applied 3-5 categories). A remarkable variety of mobile-related products, applications and services were shown in the exhibition: mobile devices (i.e., latest models of smartphones and tablets); accessories and mobile-supported peripheral equipment (e.g., virtual reality [VR], 3D printing, Internet of Things [IoT]); mobile apps; equipment and services in connection with mobile communication (e.g., infrastructure, business & tech consulting, data analysis). While some companies demonstrated apps as designed to be used by consumers, most exhibitors offered  platforms for developing apps (custom or adapted) and mobile-oriented methodologies and services intended for business clients.

  • The classification appears to single out the salience of mobile apps these days. It is interesting to note that out of the ninety categories, five were dedicated to App Development: General, Film, Gaming, Music, and Shopping.

Key areas associated with digital marketing (e.g., data analysis, CRM, content management) need to be extended from online (PC-based) to smart mobile devices. Clearly, technology companies that were not originally in the mobile industry have to adapt and add digital solutions respectively for the mobile channel. Yet it is no less a challenge for companies in lines of business that only use digital technologies for improving their performance (e.g., food, cosmetics, fashion, retail) to keep pace with the latest developments — in mobile communication to this matter. Some companies may produce their solutions in-house but many others have to hire specialist companies to provide them with systems or services tailored to their needs. Those kinds of companies, offering business solutions in a mobile context, would be found most likely at the MWC.

Mobile Advertising and Marketing was one of the more crowded categories (290 companies classified). One of the issues receiving particular attention in companies’ offerings is targeted advertising on mobile devices as well as improved targeting techniques for mobile apps. This category is closely tied with data analysis (e.g., to provide input for implementing more accurate personalised targeting), and is also connected with topics of customer relationship management (e.g., loyalty clubs) and content management in the mobile environment. For example, Ingenious Technologies (Germany) is an independent provider of cloud utilities for business analytics and marketing automation (e.g., omni-channel activities, tracking customer journeys), and Jampp (UK) specialises in app marketing, offering ways to grow consumer engagement in mobile apps (e.g., combine machine learning with methods of big data and programmatic buying). Exhibitors also addressed an increasing concern of monetization, that is the ability of businesses to charge and collect payments for content or for products and services that can be ordered on mobile devices, especially via apps.

In an era that promotes digital and data-driven marketing, it becomes imperative to cover and analyse data from mobile touchpoints. The category of Data Analysis (148 companies) includes the marketing aspect, yet relates to applications in other fields as well.  Among the applications concerned: integrating predictive analytics with campaign management (e.g., Lumata [UK]); analytic database platform for IoT and processing app-based queries (e.g., Infobright [Canada]); traffic analytics for enhancing urban mobility of vehicles and people (e.g., INRIX [UK]).

In the category of Consumer Electronics (222 companies) one may find: (a) devices (e.g., Samsung Galaxy S7 smartphones); (b) accessories (e.g., SanDisk’s portable data storage solutions, fast charging [Zap-go-charger, UK] or portable power backup [CasePower, Sweden]); and (c) components (e.g., LED components by Ledmotive [Spain]). But there were also some less usual devices such as a wearable device for tracking a dog’s health and fitness, which comes with an app (Sense of Intelligence [Finland]).

  • The area of audio (music) and video playing gains special interest, and is further connected to gaming and mobile entertainment overall. A couple of examples under the heading of consumer electronics: software for audio enhancement (AM3D A/S [Denmark]; a mobile video platform, supporting live streaming and video chat (avinotech [Germany]). Video also appears in the context of content management, such as an advanced technology for accelerating display of video content in HD TV quality (Giraffic [Israel]).

This brief review would not be complete without the rising category of Location Technologies and Services (141 companies). Location technologies and their applications can be found in different areas, not just marketing or shopping. For instance, a French company (Sensineo) offers an ultra-low-GPS tracking and positioning device which may help in locating cars or dogs, but furthermore important, tracing vulnerable people who may have lost their way and need support or medical assistance — location apps and mobile alarm devices emerge as new aids to healthcare. In the context of advertising, we may refer to technologies that bridge online and offline domains (e.g., targeting by combining text analysis of consumers’  conversations in social media and intelligence on where they go in the physical world [Cluep, Canada], eliciting online-to-offline engagement in brand or retail campaigns [Beintoo, Italy]). Another technology (by Pole Star [France]) specialises in indoor location, involving analytics through precise geofencing (i.e., activation as people enter specified perimeters) and proximity detection. The last three examples have apparent relevance to consumer behaviour during shopping trips.

  • In regard specifically to development of shopping mobile apps (46 companies), there seems to be greater reference of exhibitors to technologies that may support shopping utilities but not enough examples for apps that truly connect retailers and shoppers. As an example for a more relevant app, Tiendeo Web Marketing (Spain) offers an app, working in partnership with retail chains, that informs consumers of weekly ads, deals or coupons in their area of residence.

For businesses that are client-users of technologies and associated services, the message is very clear — in order to be accessible and relevant to consumers, the business must have mobile presence. Consumer brands of products and services, and in retail, cannot afford to neglect the mobile channel. Moreover they must have a strong showing because the competition is intense and ‘mobile is everything’. The need to be present and useful via mobile devices (mobile websites and apps) is undisputed. As more consumers are engaged with their smartphones much of the time, and perform more tasks in mobile mode, companies should be there available to them. The idea, however, that this is all that matters for marketing and customer service is dubious. Companies are under endless pressure to keep to-date with continuous advances in technology. Technology and consulting companies remind their clients all the time that in order to be competitive they must apply the most advanced mobile features and tools. But companies have to be available, effective and attractive through multiple channels and the kind of pressure implied by the MWC’s motto is neither helpful nor productive.

The danger is that companies engaged in consumer marketing may neglect other important channels in attempt to develop a strong mobile presence. In fact, this kind of shift to interactions through newer technological channels has been happening for years. The latest shift advised to companies is from Web 2.0 on personal computers to mobile websites and apps. It could mean that companies would be forced to invest more in mobile compatibility of their websites, while neglecting improvement of the functionality and visual attractiveness of their usual websites. One of the implications of the shift to online and mobile touchpoints is reduction in direct human interactions (e.g., fewer brick-and-mortar service branches, fewer service hours, not enough trained and skilled personnel in call centres). But consumers continue to appeal call centres for help, and when faced with inadequate assistance they are encouraged to prefer computer-based interactions. More companies offer customers options to chat by text, audio and video, but on the other hand they also refer customers more frequently to virtual agents. The mobile facilities are not desirable for everyone, and at least not all of the time; having the most advanced technology is not always an advantage, except for tech-enthusiasts.

Companies that develop technologies and market hardware and software products and associated services are on a constant race to provide more advanced competent solutions. It starts to be a problem when too many companies are pursuing a single main course — mobile in our case. It is the kind of push induced by MWC’s organizers that should worry us. The interest of GSMA — a consortium of mobile telecom operators, joined by device manufacturers, software companies etc. (“broader mobile ecosystem”) — in putting mobile under the spotlight is clear. However, following the claim that “mobile is everything” can have negative consequences for many stakeholders in industry and also for the general public. There is a sense of rush to develop apps and all other sorts of mobile products and utilities that is concerning. It may never develop into a bubble as fifteen years ago because the conditions are different and better (i.e., stronger technological foundations, greater experience), but there are disturbing signs that should alert stakeholders.

It is hard to argue with the many conveniences that mobile phones, particularly smartphones, provide to consumers. Basically, if one is late for a meeting, wants to set a meeting point with a friend in the city, or just needs to update a colleague in the office about anything, he or she can call while being out on the way somewhere. It has become an invaluable time saver as one can settle any professional or business issues at work while travelling. Yet the elevation of mobile phones to computer-based ‘smart’ phones (and in addition tablets) has expanded greatly the number and types of tasks people can perform while being away from home or office. It is not just sending and receiving voice calls and SMS but also e-mails and various forms of updates on social media networks. Then one can check the news and stock prices, prepare shopping lists and compare products and prices while visiting shops, schedule a forgotten appointment for the doctor, order a table at a restaurant for the evening, listen to his favorite music, and far more. The point is that any minute one can find something to do with the smartphone; people cannot lose hold and sight of their smartphones. Smartphones no longer just serve consumers for their convenience but the consumers ‘serve’ the smartphones.

The motto of MWC could be right in arguing that for consumers ‘mobile is everything’, yet it is also complicit in eliciting the consumers to become even more preoccupied with their mobile devices and adopt forms of behaviour that are not honestly in their benefit. Consumers bear a responsibility to notice these effects and sanction their use of mobile devices reasonably. For instance, people not only can call others when convenient but may also be reached by others in less convenient times (e.g., by an employer). Talking and messaging while travelling on a bus, taxi or train is fine but there are stronger warnings now that people put themselves and others in greater danger if doing so while driving, because this diverts their attention from the road. Being preoccupied with their smartphones causes people in general to look less around them and be less communicative with other people. Immediately sorting every query on a website or app may get consumers hasten purchase decisions unnecessarily and also ignore other channels of resolution (e.g., consulting staff in-store). Finally, relying on mobile devices to find any information instantly online evokes people to make less effort to remember and accumulate new knowledge, to retrieve information from memory, and think (i.e., less cognitive effort).

The motto “Mobile Is Everything” sounds shallow and simplistic. Sweeping generalisations usually do no much good — they cannot be taken too seriously. Perhaps this title was meant to be provocative, so as to fuel the MWC with enthusiasm, but it can end up aggravating. The field of mobile telecom and digital technology has much to show for in achievements in recent years. There is no need to suggest that businesses and consumers cannot do without ‘mobile’ and should invest themselves even more fully into it. Using such a motto is not acting out of strength.

Mobile indeed is a great deal, yet is definitely not everything.

Ron Ventura, Ph.D. (Markting)

 

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