Author: rssmasher

At the Big Ten basketball championship final at New York’s Madison Square Garden earlier this month, four rows of seats and dedicated space at Delta’s Sky360° VIP lounge were reserved for event sponsor SoFi. Most people using these facilities were not SoFi employees, but its customers, who occupied the front two rows and enjoyed complimentary cocktails and food at the lounge.

It’s all part of a VIP approach to keeping customers and adding new ones — a strategy the company said is worth the investment.

“Even for someone who has a great job and makes a nice living, it’s hard to imagine [customers] spending discretionary income on that — we want to treat our members,” said Libby Leffler, vice president of membership at SoFi. “The best way to build trust is through these community events; we’re seeing those members are referring people from their networks like their workplace or where they went to school.”

Read the full story on tearsheet.co

The post Inside SoFi’s ‘VIP’ customer retention approach appeared first on Digiday.

Wunderman launched its artificial intelligence division last July with the purpose to help the agency’s clients retain their customers using what it calls “conversational technology.”

Now, it’s ready to start selling its AI solutions with Microsoft. The benefit here is that Microsoft will share Wunderman’s solutions, hopefully bringing in new clients. Wunderman’s AI division is located in the agency’s Seattle office, one of the agency’s 200 offices across 70 markets. According to the company, there are around 150 people — 100 data scientists and 50 consultants — working on designated AI projects.

The WPP agency already has a few clients that are interested, from telecommunications to consumer electronics companies, according to Seth Solomons, CEO of Wunderman North America.

Wunderman’s AI division focuses on using AI to create text-based or voice-activated chatbots and virtual assistants for its clients on four major platforms: Microsoft, Amazon Web Services, Google and IBM, according to Robbee Minicola, global lead of Wunderman AI and president of Wunderman Seattle. Wunderman’s interest in AI is tied to the growth of voice, said Minicola. In March, digital agency Rain and tech firms Voicebot and PullString released a study that found that 20 percent of the U.S. population owns a smart speaker.

Wunderman’s partnership with Microsoft spawns from Minicola’s own background. Minicola, left her post as director of global business development at Microsoft to create Wunderman’s AI division, first joining as president of the Seattle office in November 2016.

Right away, Minicola’s relationship with Microsoft paid off, and she secured a partnership with the company to build the agency’s first set of AI solutions for Cortana. Six months later, Wunderman’s AI service launched, and Minicola assumed the position as global lead of the division.

Today, the partnership with Microsoft remains strong and comes with perks. Minicola said Wunderman gets early insights into what Microsoft is building before it launches beta tests as well as the ability to test ideas on concepts within its AI platform.

“It’s super powerful because the space is moving so fast,” said Minicola. “If you’re not with the engineers that build the platform in the [beginning] phase, then what you’re building today is already outdated.”

Artificial intelligence is the newest shiny object marketers are chasing, with agencies launching their own services to help their clients navigate the technology

Minicola said Wunderman has invested “millions in resources and technology to deliver AI and machine learning solutions for its clients” and that AI is a “key component to Wunderman’s mandate of helping its clients to be ‘Future Ready.’” She claims Wunderman’s investment in AI and predictive analytics is “the largest of any agency.”

Despite such strong ties to Microsoft, Wunderman isn’t only interested in creating chatbots using only platforms’ own APIs. In fact, Wunderman views creating standalone skills for assistants like Cortana, Amazon Alexa and Google Assistant as counter to what it’s really trying to achieve for its clients, said Minicola.

“Building your voice business only on third-party platforms means that all of the knowledge is used and owned by that platform,” she said. “It would be like choosing to not have a brand website and allowing your web presence to only be on Facebook. Not a good idea.”

For this reason, Minicola said Wunderman also builds proprietary conversational tech that clients can then implement in third-party assistants like Alexa, Microsoft Cortana or the Google Assistant.

Naturally, the prices are significantly lower for conversational chatbots created for one of these platforms than those for proprietary tech. A chatbot for a dedicated campaign period costs less than a chatbot for customer service, but both are priced at $150,000 or less, according to Minicola. Creating a proprietary virtual assistant that builds on the chatbot foundation would cost the most, up to millions of dollars, said Minicola.

Minicola said the 9-month-old division has worked with 11 clients — most of which had worked with Wunderman in the past — so far, and all projects are still in the production phase. Wunderman cannot disclose its AI-specific clients, said Minicola, but the agency’s clients include Microsoft and T-Mobile.

Still, AI is so new that many clients are still figuring out how they should implement it, Solomons said. “Now that we’re in 2018, we’re taking a much more practical approach,” he said. “So, as opposed to trying to find new and interesting ways to deploy AI, it’s much more about solving real problems big and small.”

The post Inside Wunderman’s 150-person AI practice appeared first on Digiday.

The threat is real.

Consulting firms are ready to be taken seriously in the advertising game, having been dismissed by agency bosses. Marketing shifted from a cost center to a growth lever at many big brands in 2017, and consequently, a nontransparent, complex agency model was scrutinized by many of those same businesses. For consulting firms that have spent recent years understanding blockchain, martech and audience data, the shift couldn’t be more timely.

The post Consulting firms are poised to take part of the ad agency business appeared first on Digiday.

A year after sneaker marketplace Stadium Goods opened in 2014, co-founder and CEO John McPheters had an eye-opening experience in his Soho store. It was late 2015, not long after the company’s first standalone retail store opened, when a Chinese customer purchased $10,000 worth of sneakers in cash. He told McPheters he planned to ship all he had bought back to China, where he would resell it.

“That was a real ‘What just happened?’ moment that caught my attention. I decided we had to find the right path to China, because we clearly had a customer there,” said McPheters.

Today, China is Stadium Goods’ second-largest country in terms of revenue, after the U.S. Tmall, the Alibaba-owned platform the company partnered with to launch in the region, is neck-and-neck with Amazon as the highest generator of revenue after the brand’s website. The retailer also works with eBay and Zolando. In 2017, Stadium Goods did an estimated $100 million in revenue, and McPheters said the company is shipping out about 200 to 300 pair of sneakers per day to be distributed through a network of partners in China. The company has a team of five that’s dedicated to growth and strategy in China, and it works with the Shanghai agency Magic Panda to plot localized campaigns and influencer work.

“We’ve barely scratched the surface. Over time, China could easily surpass the U.S. as the biggest country for e-commerce sales for us,” he said. “It’s astounding how much opportunity still exists and how much scale is possible. For now, we’ve built up a foundation: a good-sized audience and recognition for our brand. China has been a first mover for us, and we’re going to continue to invest.”

The trust factor
For Stadium Goods, which sells sneakers that are unworn and are being resold by private owners, the China opportunity is centered on building trust with an eager customer base. The prevalence of counterfeit products is an ongoing problem for Chinese customers, who do a majority of their shopping online.

“Counterfeiting is so common in China that these shoppers can’t even trust that a physical Nike store is selling legitimate products, let alone an online marketplace,” said McPheters.

That leaves a huge opportunity for a legitimate online seller in the streetwear space, as appetite for trends and brands in the region is growing. Overall, China’s highest-spending customer skews younger: millennials ages 25 to 34 account for 65 percent of total consumer growth, according to Boston Consulting Group, a percentage that’s expected to grow by 11 percent year over year between now and 2021. Globally, the streetwear market is worth $300 billion, while the sneaker resale market is worth $55 billion, according to Bain & Co.

And streetwear brands are among the most covetable for China’s young spenders, as the lines between street and luxury fashion blur. (In February, Stadium Goods received an undisclosed investment from LVMH Luxury Ventures.) Locally, the industry is growing: China’s Key Opinion Leaders (influencers) are frequently promoting local designers and brands in the space, like Babyghost, Li-Ning and CLOT. Yohood, a streetwear trade fair put on by magazine and lifestyle company Yoho, brought together 60,000 streetwear fans and 150 brands during a September event in Shanghai.

Tmall has been a “nurturing” partner to Stadium Goods, according to McPheters, and it’s in the company’s best interest. Tmall, along with local competitors like JD.com, has begun prioritizing the fashion that young customers are interested in buying on its massive platform, by building out the Tmall Fashion Pavilion and recruiting global luxury and streetwear brands alike to sell on the platform, as well as supporting local designers with data and distribution infrastructure.

“Fashion trends, before, would appear in New York or Milan, and then a year later, Chinese customers would get a sense of these new trends,” said Jessica Liu, Tmall’s director of fashion, in a previous Glossy interview. “But because of the way media works now, all trends simultaneously hit in China. A lot of young customers are really sensitive about being on top of these trends, so it’s necessary for us to enable immediate purchasing and gratification.”

Tmall emerged as the right partner for Stadium Goods not just for its reach, but because Alibaba has been rigorous with seller standards in the past few years in order to eliminate counterfeits, and the brand pages put creative control in the hands of the retailers. Visiting Stadium Goods’ Tmall site has the same look and feel of visiting its own website, and shoppers can browse sneakers, apparel and other items from brands like Supreme, Air Jordan, Nike, Palace and more. Overall, the catalogue has more than 5,000 products for sale through Stadium Goods.

Stadium Goods’ store on Tmall

Catering to the Chinese customer
McPheters said the inventory doesn’t differ too much from what’s available on platforms like Amazon and Stadium Goods’ website, but the company does pay attention to what’s trending among Chinese customers and plan accordingly. Right now, Nike basketball shoes, which aren’t currently super hot in the U.S., are selling like crazy in China, so the majority of the retailer’s inventory in that category is being sent there for now.

The strategy overall is to keep a large inventory selection on Tmall, and then raise brand awareness and push certain products through content series and influencer partnerships. That involves investing in video: Stadium Goods hosts a weekly broadcast that showcases new arrivals and trending sneakers out of the store in Soho, in Chinese and starring Chinese influencers like the actor Kris Wu. While these videos usually result in a sales spike, McPheters said the goal is equally to build trust with Tmall customers by grounding the Stadium Goods name in something tangible, like a New York City store. The videos run on the Tmall page as well as on Taobao, another Alibaba marketplace, and social platform Weibo.

“The Chinese customer is very open to watching retailer videos like that. They’re watching a lot of it on mobile devices, which is where the eyeballs are,” said McPheters. “Some of it’s very product-focused, around what’s new and what’s selling best, but it’s more about that awareness and trust factor.”

Sneakers available from Stadium Goods on Tmall

Expanding on the foundation
Overall, Tmall has been a supportive partner to Stadium Goods as the retailer ramps up its presence in China by helping connect it to logistics and distribution partners, and sharing detailed customer data — something that’s not reciprocated by Amazon. That direct support from the brand has let Stadium Goods experiment with different selling formats, like 24-hour flash sales and in-app “games” that fit in with the Chinese customer’s shopping behavior.

“Selling in China is not the easiest thing for an outsider; it’s difficult to figure out the ins and outs, but the difficulty is just in the learning process. Tmall was a huge help in that, and now we can pump a lot of volume through the channel.”

Up next, the retailers plans to set up a WeChat store (right now, the brand has a WeChat page, but transactions aren’t yet enabled), more influencer work (KOLs are a far greater revenue driver than their U.S. equivalents) and brand partnerships, according to McPheters. After spending time working with platform, agency and distribution partners in China, McPheters plans to use that knowledge to help individual brands launch in the region with new collections.

“It’s a big learning curve, and there are a lot of cool brands that the Chinese customer would love, but are relatively small and don’t have the resources to figure out the Chinese platform,” said McPheters. “I see that being a big opportunity for us.”

The post How Stadium Goods is seizing China’s streetwear opportunity appeared first on Digiday.

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