Alexa’s Echo Show 5 is designed to be put in more rooms. Image credit: Amazon
Companies are not keeping up with consumers’ growing appetite for artificially intelligent customer service, with a new report from the Capgemini Research Institute finding that less than half of the top firms in retail, banking and automotive offer voice assistants or chatbots.
Consumers increasingly prefer experiencing ownership rather than outright possession ownership, thus birthing the subscription-based, mobile-driven rental economy for products. Image credit: Porsche
Porsche Cars North America will launch its Porsche Passport and Porsche Drive mobility services to four new cities in North America after a successful pilot in Atlanta that expands on-demand access to customers.
Facebook is giving consumers more control over their data. Image credit: Facebook
Social network Facebook is looking to assuage privacy criticisms by being more transparent with consumers about where their data is shared.
The new privacy feature, called Off-Facebook Activity, allows users to view a summary of the Web sites and mobile applications that share information with Facebook, as well as clear the information if desired. This new feature comes after Facebook has repeatedly faced government and consumer scrutiny for mishandling users’ private information.
“Facebook is letting users control their data sharing in a way that is, at the surface of the platform, not buried in the footer – which is really unique,” said Paige Montgomery, senior marketing manager at Intelligent Demand, Denver, CO. “Usually the fine print and data sharing rules are buried within the company’s privacy policies and within the language that makes it almost impossible for consumers to understand exactly what type of data companies are capturing on their Web sites.
“It’s equally as confusing for the general consumer to understand how to opt out of things like third-party ad services or retargeting – unless you understand the tech in the first place,” she said.
Privacy push
The launch of Off-Facebook Activity is one of the tech company’s first privacy initiatives since being hit with a record $5 billion fine from the Federal Trade Commission.
As part of its settlement with the FTC, Facebook has agreed to launch more stringent data privacy policies within its organization, including setting up more oversight within its leadership. Facebook has recently announced its vision for more privacy on its platforms, but this FTC-ordered plan is on a bigger organization-wide scale than earlier efforts (see story).
Facebook founder Mark Zuckerberg. Image credit: Facebook
Off-Facebook Activity is currently being rolled out to users in Ireland, South Korea and Spain, before being implemented elsewhere.
Consumers will be able to see and control the data that third-party sites and apps send Facebook about their online activity.
Users can disconnect this information, and they can even choose to disconnect future off-Facebook tracking from their accounts. This will be available for all off-Facebook online activity, or select apps and Web sites.
Once off-Facebook actions are cleared, the social network will remove users’ identifying information from the data sent by apps and sites. This will also prevent Facebook from targeting advertisements on Facebook and Instagram based on consumers’ online activity.
“While a great deal of Facebook users are concerned about how their data is being used, chances are they have already taken steps that already exist on Facebook through privacy settings to guard against that,” said Katy Lucey, director of paid social at Tinuiti, Atlanta. “It’s impossible to gauge whether we will see mass adoption or not.”
Targeted online advertising is one of the revenue streams that keeps Facebook free for its billions of users. Brands and businesses send consumer data to the social network by using online business tools, such as Facebook Pixel or Facebook Login.
“For those heavily reliant on Web site retargeting, they might see reach within those audiences affected,” Ms. Lucey said. “However, other segments such as interests, demographics, list audiences and lookalikes won’t be affected by the change, so if brands haven’t begun testing those out, they should explore their options there.”
Facebook recently launched a rewards-based market research program. Image credit: Facebook
Facebook acknowledges that allowing users to have more control over their data may have repercussions on advertising.
“We expect [Off-Facebook Activity] could have some impact on our business, but we believe giving people control over their data is more important,” the company said in a blog post announcing the new feature.
Safeguarding data
Facebook is not alone in making privacy moves that may hamper marketers.
Technology giant Apple is continuing its pro-privacy crusade, but its latest features may alienate many developers and advertisers.
With Apple’s forthcoming iOS 13, debuting this fall, it will be easier than ever for consumers to protect their personal information and prevent third parties from exploiting user data.
One of the most important features is “Sign in with Apple,” a new way for users to log in to mobile applications and Web sites.
Apple will offer an option to create a unique, random email address that forwards messages to users’ real inboxes. Ultimately, this ensures that users’ activity cannot be tracked within the app and tied to their profiles (see story).
Amazon’s Alexa voice assistant and Echo devices have also been the subject of privacy concerns. Consumers can be wary about adding devices with microphones or a camera to their homes.
With users increasingly calling for control over their data, Amazon is letting Echo owners delete everything that they said in a day from recordings. This command will eventually evolve to let users clear what they have just said to Alexa.
As part of this privacy move, Amazon has created a new hub for its Echo devices that enables owners to understand what information is being collected through the devices (see story).
“The ability to serve consumers ads based on their actual interests and online behavior is incredibly valuable, so losing that would be a disadvantage of course, but it might actually lead to more quality clicks, impressions and cost-per-action in the long run,” Intelligent Demand’s Ms. Montgomery said. “Users who opt out of having their data connected are probably not motivated buyers or the types of consumers who are likely to click that ‘buy now’ button.”
Apple Card is primarily designed to function as a mobile payment option. Image courtesy of Apple
Technology giant Apple is looking to conquer another category with the launch of its credit card in partnership with Goldman Sachs, in a move that is poised to extend its influence in the payments space.
Apple Card, which became available to select consumers in the United States on Aug. 6, is positioned as a digitally-driven alternative to bank-issued credit. With Apple’s loyal following, what does this move mean for upscale credit cards that similarly court the affluent?
“The company had already entered the market via Apple Pay,” said Jill Gonzalez, analyst at WalletHub, Washington, D.C. “Moving to credit cards seems like a natural development, and it basically makes a line of credit available for Apple Pay users.
“That’s because the card is best suited for those who use Apple Pay on a regular basis, as the rewards are highest when using this payment method,” she said. “It’s also worth noting that the Apple credit card issued by Goldman Sachs is not the first to hit the market, as Barclays also offers an Apple credit card.”
Ms. Gonzalez is not affiliated with Apple, but agreed to comment as an industry expert. Apple was reached for comment.
Credit extension
Apple Card is centered around the company’s iPhone, and consumers have to own a compatible version of the device to be eligible for the card.
Primarily, Apple Card operates through the iPhone’s Wallet application. At bricks-and-mortar stores, consumers can charge purchases on the virtual card through Apple Pay.
The digital card can also be used to make online purchases. When shopping on Apple’s browser Safari, the consumer’s Apple Card details will automatically populate.
Once approved, consumers can immediately begin to use the digital card. However, cardholders can request to have a titanium card sent to them if they wish. This card operates on Mastercard’s network, making it widely accepted.
One of the aspects that Apple emphasized in the design of Apple Card is simplicity.
Customer service is accessible via text message round the clock.
Apple will also use machine learning to more thoroughly describe transactions. Consumers can also pinpoint transactions on a map to jog their memory.
Apple Card will show consumers where they made purchases. Image courtesy of Apple
Cardholders earn a 2 percent cash bonus from every purchase, and a 3 percent bonus for purchases made via Apple’s stores, which is delivered each day rather than on a monthly basis. This bonus can be deposited into a bank account or used for purchases and other transactions.
Apple Card’s cash bonus is 1 percent for purchases made with the physical card, prompting consumers to use digital payments instead.
“The Apple Card joins an already crowded market full of cash-back cards,” said Sara Rathner, credit cards expert at NerdWallet, San Francisco.
“While cards offering 1.5 percent cash back on all purchases have become the baseline, Apple’s 2 percent cash back on purchases made with Apple Pay could nudge more cards in that direction,” she said. “Right now, the Citi Double Cash is one of the few no-fee cards offering 2 percent cash back on everything.”
This is not Apple’s first credit card rewards program. Previously, Apple had partnered on a rewards card with Barclays Card, but the alliance is reportedly ending as Apple Card launches.
Apple is also seeking to make credit more transparent.
Consumers are encouraged to accrue the least amount of interest. The payment feature on the app lets consumers calculate the amount of interest that will be paid depending on what exact portion of the balance they choose to pay.
Apple has also made its card fee-free.
Following its other privacy pushes, Apple has designed its card to be secure. The Apple Card leverages features such as Face ID and Touch ID for verification.
The physical card has no numbers on it, in an effort to prevent unauthorized use if the card is stolen.
Apple Card is made is titanium. Image credit: Apple
Apple has said that it wants the card to be accessible to a wide range of its iPhone owners. But from the metal card to the connection to iPhone, the Apple Card is poised to appeal to an affluent audience, putting it head to head with other credit companies such as American Express and Luxury Card.
“Metal cards used to just be for American Express Black card holders, but they’ve since become available to a wider audience,” Ms. Rathner said. “The Chase Sapphire Preferred, Sapphire Reserve, AMEX Platinum and Capital One Venture are popular metal cards.
“There’s a certain sense of luxury and power that comes with plunking down a heavy card to pay for something, so many credit card issuers began to offer them with their more premium rewards cards,” she said. “Often those cards come with valuable benefits like sign-up bonuses, concierge service and airport lounge access.
“The Apple Card isn’t a travel card, so the metal design has more to do with Apple’s aesthetic. They make simple, beautiful products.”
Mobile payments
Aside from increased competition among credit firms, Apple Card will also usher in even more impetus for retailers to establish mobile payment options.
“Because the Apple Card earns a higher cash-back rate when you use Apple Pay, it literally pays to use your digital wallet whenever possible,” Ms. Rathner said. “This will definitely nudge cardholders toward using Apple Pay as often as they can, and increase demand for retailers to adopt this technology if they haven’t yet.”
The global mobile wallet market is expected to reach more than $3 trillion by 2022, making mobile commerce for luxury brands a highly desirable prospect in the future.
Currently, the mobile wallet market is valued at more than $500 billion and is set to grow massively over the next four years, according to a report from Zion Market Research. Luxury brands looking to capitalize on mobile commerce, particularly in China, would do well to invest in mobile wallets (see story).
Many high-end retailers have already leaned in to Apple Pay.
British childrenswear retailer Childrensalon responded to consumers’ growing use of mobile for online shopping with the introduction of Apple Pay for its Web site.
In what the ecommerce site heralded as an industry first, Childrensalon began accepting Apple Pay for Web in 2017. With luxury clients increasingly gravitating toward smaller screens, retailers are raising the chance of mobile conversions with payment solutions (see story).
“The card is mostly aimed at those who use Apple Pay,” Ms. Gonzalez said. “I expect that it will be received with more enthusiasm by the younger generations, who tend to use technology and especially smartphones for anything and everything.”
Giorgio Armani is introducing AR makeup try-ons on its WeChat mini program. Image credit: ModiFace
Italian fashion label Giorgio Armani is catering to the growing online market for beauty in China by becoming the first luxury brand to incorporate 3D augmented reality makeup try-ons into its WeChat mini program.
Beauty group L’Oréal’s AR makeup platform ModiFace will be supporting Armani Beauty’s virtual makeup application on WeChat, one of the leading social media platforms in China. More than a quarter of beauty buys in China are made online, underscoring the importance of prestige cosmetics brands investing in ecommerce tools.
“Today’s consumer wants to be a involved with something bigger than a brand boasting only status or legacy,” said Aleni Mackarey, chief operating officer at Base Beauty Creative Agency, New York. “She is looking for the brand that tells a story and creates a moment to make her feel like she is a part of the community.
“A try-on tool that allows her to be in the heart of the action earns her trust and keeps her coming back to see what’s next,” she said.
Ms. Mackarey is not affiliated with ModiFace, but agreed to comment as an industry expert. ModiFace was reached for comment.
Virtual makeup
Armani Beauty’s AR try-on is meant to mimic the virtual mirrors that are becoming more commonplace in Chinese bricks-and-mortar stores.
Users can virtually sample Armani products, such as lip colors, with the shades remaining consistent as consumers pose in front of their smartphone cameras. The app also allows users to take screenshots, save images, compare before and after images in a split-screen mode and share on social media.
Giorgio Armani is bringing virtual makeup to its WeChat mini program. Image courtesy of ModiFace
The beauty industry has been at the forefront of bringing AR uses to the masses, but this is the first use of 3D makeup try-on through WeChat. With more than 200 million daily users, WeChat mini programs such as Armani’s represent a significant ecommerce opportunity for L’Oréal.
Since acquiring ModiFace in March 2018, L’Oréal has partnered with platforms, including Amazon and Facebook, to bring AR experiences directly to consumers.
The beauty group’s partnership with Facebook allows it to bring the interactive technology to a wider audience, since many people are using the social network, eliminating the need for users to have to download the ModiFace app.
ModiFace technology is seamlessly integrated with Facebook, allowing brands from L’Oréal direct access to consumers for makeup testing. In addition to Giorgio Armani, brands such as Lancôme and Yves Saint Laurent allow users to try on different makeup looks virtually from their inventory of products (see story).
Previously, ModiFace integrated its AR into Samsung’s live video experience on its Galaxy S9 and S9+ phones, letting consumers explore makeup looks without needing a separate app (see story).
Along with ModiFace, Giorgio Armani also has a partnership with AR beauty platform Perfect365. The mobile app has been dowloaded more than 100 million times, and 65 percent of users are women between the ages of 17 and 34 (see story).
Beauty in China
China’s beauty market is of great importance to luxury brands, and prestige players such as L’Oréal need to continue to innovate as Chinese consumers are increasingly interested in trying lesser-known labels.
According to a new report from Reuter: Intelligence, 85 percent of women and 70 percent of Chinese men are curious about niche brands, and 92 percent of male beauty buyers say they prefer indie options. These brands are a growing competition for bigger labels, as consumers believe niche products put more investment into developing formulas than marketing.
Additionally, while Chinese consumers are heavily engaging and shopping on digital channels, they still value the bricks-and-mortar experience for beauty buying. The majority of consumers agree that physical stores enable them to try on products before buying (see story).
In China, 27 percent of all beauty purchases are made online, according to Euromonitor (see story).
L’Oréal’s sales were up 11.4 percent in the first quarter of the 2019, propelled partly by double-digit growth in its luxury division, including Armani.
In addition to L’Oréal Luxe’s buoyancy, the company also saw strong sales increases in Asia Pacific, at travel retail and in ecommerce (see story).
