tag:econsultancy.com,2008:/topics/digital-transformation Latest Digital Transformation content from Econsultancy 2018-03-16T15:32:47+00:00 tag:econsultancy.com,2008:BlogPost/69874 2018-03-16T15:32:47+00:00 2018-03-16T15:32:47+00:00 Capital One's new browser extension is a great example of common-sense fintech innovation Patricio Robles <p>The new browser extension aims to help customers avoid one of the biggest problems cardholders face: fraud.</p> <p>It works by detecting when a user is on a checkout page and automatically creating a one-off virtual credit card number to complete that specific purchase. By using a unique virtual credit card number for each individual purchase, users can be more easily protected from data theft and in the case of a recurring payment, they can more easily prevent a merchant from billing them in the future without their authorization.</p> <p><img src="https://assets.econsultancy.com/images/0009/2948/eno.png" alt="" width="700" height="525"></p> <h3>Innovation doesn't have to be complicated</h3> <p>As TechCrunch's Sarah Perez <a href="https://techcrunch.com/2018/03/09/capital-ones-shopping-assistant-eno-can-now-dole-out-virtual-card-numbers-in-the-browser/amp/">noted</a>, virtual credit card numbers are not new. Major card issuers, including Citi and Bank of America, offer them and Capital One introduced them late last year.</p> <p>Not too long ago, virtual card numbers were a selling point for a number of fintech startups. For example, a venture-backed startup called Final, which billed itself as “a credit card built for the 21st century”, made virtual card numbers a central feature of its service.</p> <p>Obviously, the barrier to offering virtual card numbers is extremely low, which is why Capital One's Eno browser extension is so important. Specifically, it is unique in that it automatically detects checkout pages and creates the virtual numbers without users having to do so manually. The need to manually create numbers is a significant source of friction that results in virtual credit card numbers not being used as frequently as they could be.</p> <h3>Innovation and competitive advantage</h3> <p>Will Capital One's Eno browser extension give the company a competitive advantage? That remains to be seen. Certainly, fintechs as well as other major card issuers are capable of building similar browser extensions. </p> <p>But this is a good example of how established financial institutions can innovate without having to build complex new technologies. Even if the functionality in the Eno browser extension eventually becomes ubiquitous, there's potentially significant value for Capital One if it can market it effectively to cardholders and drive adoption.</p> <p>After all, even if Eno doesn't drive new cardholder acquisition, it can improve cardholder experience by helping cardholders mitigate against fraud headaches and help Capital One reduce the costs associated with fraud. That's a fintech win-win.</p> <p><em><strong>More on fintech:</strong></em></p> <ul> <li><a href="https://econsultancy.com/blog/69851-amazon-is-looking-to-partner-with-a-bank-to-offer-checking-accounts">Amazon is looking to partner with a bank to offer checking accounts</a></li> <li><a href="https://econsultancy.com/blog/69824-how-can-financial-services-companies-win-featured-snippets-in-search-an-investigation">How can financial services companies win featured snippets in search? An investigation</a></li> </ul> tag:econsultancy.com,2008:BlogPost/69867 2018-03-14T14:30:00+00:00 2018-03-14T14:30:00+00:00 How healthcare companies are getting creative to acquire data Patricio Robles <p>Here are five examples of how healthcare companies are acquiring data.</p> <h3>Roche bought an EHR</h3> <p>Last month, Swiss pharma giant Roche <a href="https://www.roche.com/media/store/releases/med-cor-2018-02-15.htm">announced</a> that it is acquiring health technology company Flatiron Health for $1.9bn. Flatiron Health, which Roche already owned a minority stake in, is the maker of an electronic health record (EHR) platform that is specifically tailored to the needs of oncology providers.</p> <p>Because of its oncology focus, Flatiron Health was in a unique position to collect data that could be used for cancer research, and that was a key reason, if not the primary reason, that Roche shelled out $1.9bn to buy the company.</p> <p>As Roche CEO Daniel O'Day explained, "This is an important step in our personalised healthcare strategy for Roche, as we believe that regulatory-grade real-world evidence is a key ingredient to accelerate the development of, and access to, new cancer treatments. As a leading technology company in oncology, Flatiron Health is best positioned to provide the technology and data analytics infrastructure needed not only for Roche, but for oncology research and development efforts across the entire industry."</p> <h3>UnitedHealthcare is paying its customers to use a fitness tracker</h3> <p>In early 2017, UnitedHealthcare, one of the largest health insurers in the U.S., <a href="https://www.cnbc.com/2017/01/05/unitedhealthcare-and-fitbit-to-pay-users-up-to-1500-to-use-devices.html">began a wellness program called Motion</a> that paid individuals it insures up to $1,500 to complete fitness goals while wearing a Fitbit device. Just this month, it was reported that UnitedHealthcare <a href="https://www.marketwatch.com/amp/story/guid/5A4DE17E-225F-11E8-8157-A2A536BAD589">expanded the program</a> to include Apple wearables, namely the Apple Watch.</p> <p>While the primary goal of the UnitedHealthcare Motion program is to reduce the company's costs by encouraging its insured to live healthier lifestyles, make no doubt about it: the tracking data it gathers from participants could be worth its weight in gold. For example, by correlating fitness tracking data with costs and demographic information, the company could develop more robust wellness models and programs.</p> <h3>Genentech and Pfizer partnered with 23andMe</h3> <p>Genetic testing and analytics company 23andMe gives individuals the ability to learn about their ancestry, genetic health risks and overall wellness through a simple saliva test.</p> <p>Not surprisingly, many people are interested in learning more about who they are genetically and that has helped the company collect more than 2m samples, giving the company a database of genetic information that is extremely attractive to pharma and biotech companies.</p> <p>The pharmas and biotechs that 23andMe has worked with include Pfizer, <a href="https://www.bloomberg.com/news/articles/2015-01-12/23andme-gives-pfizer-dna-data-as-startup-seeks-growth">which acquired 23andMe DNA data</a> "to help find new targets to treat disease and to design clinical trials", and Genentech, which partnered with the Google-backed company <a href="https://www.forbes.com/sites/matthewherper/2015/01/06/surprise-with-60-million-genentech-deal-23andme-has-a-business-plan/">to conduct in-depth research on Parkinson's</a>.</p> <h3>Amgen got cozy with an insurer</h3> <p>For pharmas looking to acquire data, partnerships with health insurers are an obvious fit for a number of reasons, including the fact that insurers have access to large patient populations.</p> <p>An example of a pharma-insurer tie-up can be seen with Amgen, <a href="http://www.pmlive.com/pharma_news/amgen_real_world_study_and_mobile_data_partnership_1203895">which teamed up with Humana</a>, a large American insurer, to create research initiatives targeting multiple conditions by applying technologies like wearables, mobile apps and Bluetooth-enabled drug delivery services.</p> <h3>Boehringer Ingelheim integrated a sensor from Propeller Health into an inhaler</h3> <p>One of the biggest challenges in the healthcare industry is getting patients to take their medicine. In an effort to better understand how patients interact with its products, Boehringer Ingelheim partnered with digital asthma and COPD management platform Propeller Health to create a sensor that attached to one of its inhalers.</p> <p>The sensor enabled Boehringer Ingelheim to collect data about usage, not only helping the company identify reasons for nonadherence but to develop ways to help encourage adherence.</p> <p>As Propeller Health CEO David Van Sickle <a href="http://www.mobihealthnews.com/36942/boehringer-ingelheim-propeller-health-team-up-for-sensor-enabled-inhaler-pilot">explained</a>:</p> <blockquote> <p>It means things like being able to deliver subtle audiovisual cues when the medication hasn't been used and the time for a dose has passed. Or predicting when someone is leaving their home and giving them an alert so they can take a moment to go back and get their morning dose. It means the sensors sort of knowing how much medication is remaining and suggesting an appropriate time for refilling the prescription. And it means thinking about ways to put information about the daily use of these medications to work, to think of ways we can reward individuals intrinsically and extrinsically to motivate better adherence.</p> </blockquote> <p>Similar approaches <a href="https://clinicaltrials.gov/ct2/show/NCT02593032">are being explored</a> for treatments delivered in pill form and if the research proves that adherence is improved, expect to see connected inhalers and pillboxes become common.</p> <p><em>To learn more about digital transformation in Pharma, join us at ePharma in New York on March 21-23. Our VP of Research Stefan Tornquist will be discussing the future of digital and marketing with Anthony Lambrou, Director of Corporate Strategy and Innovation at Pfizer, as well as hosting a roundtable for you to learn, share and connect with fellow pharma marketers. Find out more and secure your spot:</em></p> <ul> <li><em><a href="https://lifesciences.knect365.com/epharma/agenda/3#epharma-roundtable-digital-transformation-to-future-proof-your-marketing">ePharma Roundtable: Digital Transformation to Future-Proof Your Marketing</a></em></li> <li><em><a href="https://lifesciences.knect365.com/epharma/agenda/3#main-stage-keynotes_the-future-of-digital-and-marketing">The Future of Digital and Marketing</a></em></li> </ul> tag:econsultancy.com,2008:BlogPost/69855 2018-03-12T13:30:00+00:00 2018-03-12T13:30:00+00:00 Employer-sponsored healthcare initiatives will create new opportunities for pharmas & medical device companies Patricio Robles <p>Combined, the four companies have over a million employees and are thus exposed to the rising costs of healthcare that have been plaguing the United States for years. Warren Buffett, one of the world's richest people and the CEO of Berkshire Hathaway, didn't mince words when discussing the cost of healthcare: “the ballooning costs of healthcare act as a hungry tapeworm on the American economy.” </p> <p>Detailed information about how these initiatives will function is limited, but what is known is that both will rely heavily on technology.</p> <p>The press release announcing the Amazon-Berkshire-JPMorgan venture stated “the initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.” <a href="https://www.acwellness.com/">A website for AC Wellness</a> reveals “AC Wellness Network believes that having trusting, accessible relationships with our patients, enabled by technology, promotes high-quality care and a unique patient experience.”</p> <h3>An imperative for pharma and medical device companies</h3> <p>While it's too early to speculate about the impact these employer-sponsored initiatives will have on the broader healthcare market, it's not too early for pharma and medical device companies to start thinking about how these tech-focused initiatives will affect their businesses.</p> <p>Specifically, as employers seek to improve the quality of care their employees receive while at the same time reducing costs, pharma and medical device companies should consider that their opportunity to participate in these ventures could very well be based on the digital and technology assets they develop:</p> <p><strong>Information</strong></p> <p><a href="https://econsultancy.com/blog/67131-pharma-s-mobile-social-efforts-aren-t-as-healthy-as-they-should-be">According to </a>Deloitte Consulting and the Gerson Lehrman Group (GLG), 84% of physicians say that that efficacy and outcome data, as well as clinical guidelines, influence their drug utilization decisions. 65% of physicians are interested in interacting with pharma around this type of content, which could include clinical trial data, updates on new studies and comparative effectiveness information.</p> <p>The implication is clear: pharmas with a large bank of content will be increasingly attractive partners.</p> <p><strong>Data</strong></p> <p>For obvious reasons, data is one of the most valuable assets, if not <em>the</em> most valuable asset, in healthcare today. Pharma and medical device companies that are well-positioned to generate and share data, as well as to consume and analyze it, will likely have significant advantages in forging relationships with employer-sponsored healthcare ventures.</p> <p><strong>Platforms</strong></p> <p>It is likely that employer-sponsored healthcare ventures will employ existing or new technology platforms. Pharma and medical device companies should be prepared to integrate with them.</p> <p>The good news is that many pharma and medical device companies have already started investing in the above and as more and more employers launch their own healthcare initiatives, pharmas and medical device manufacturers will find that they have new opportunities to make their investments pay. </p> <p><em>To learn more about digital transformation in Pharma, join us at ePharma in New York on March 21-23. Our VP of Research Stefan Tornquist will be discussing the future of digital and marketing with Anthony Lambrou, Director of Corporate Strategy and Innovation at Pfizer, as well as hosting a roundtable for you to learn, share and connect with fellow pharma marketers. Find out more and secure your spot:</em></p> <ul> <li><em><a href="https://lifesciences.knect365.com/epharma/agenda/3#epharma-roundtable-digital-transformation-to-future-proof-your-marketing">ePharma Roundtable: Digital Transformation to Future-Proof Your Marketing</a></em></li> <li><em><a href="https://lifesciences.knect365.com/epharma/agenda/3#main-stage-keynotes_the-future-of-digital-and-marketing">The Future of Digital and Marketing</a></em></li> </ul> tag:econsultancy.com,2008:BlogPost/69852 2018-03-08T13:15:27+00:00 2018-03-08T13:15:27+00:00 Will digital phenotyping ever be applied to pharma marketing? Patricio Robles <p>While pharma marketers have lots of room for improvement in terms of how they connect to professionals and consumers online, they're increasingly active in digital channels ranging from search to social.</p> <p>Through these digital channels, pharma marketers have the opportunity to connect healthcare professionals and consumers to content and resources that are relevant to conditions they treat, are being treated for, or need treatment for.</p> <p>Of course, thanks to regulations like <a href="https://econsultancy.com/blog/67498-digital-media-vs-hipaa-violations-risking-your-reputation-in-healthcare">HIPAA</a>, pharma marketers are far more limited in how they can target their digital ads. Use of first-party data is generally a no-no, and some otherwise commonly-used types of remarketing are also often not permissible.</p> <p>This makes it more difficult for pharma marketers to reach the specific people they want to reach. So they develop campaigns that are less granularly targeted and thus often more expensive. They purchase ads against specific condition-related terms. And so on and so forth.</p> <p>But in the not too distant future, is it possible that pharma marketers will have access to targeting solutions based on digital phenotyping?</p> <p>As the New York Times <a href="https://www.nytimes.com/2018/02/25/technology/smartphones-mental-health.html">recently detailed</a> in a piece about digital phenotyping, which one study defined as “moment-by-moment quantification of the individual-level human phenotype in situ using data from personal digital devices, a growing number of tech companies and researchers “are tracking users' social media posts, calls, scrolls and clicks in search of behavior changes that could correlate with disease symptoms.”</p> <p>Much of the exploration of digital phenotyping to date has focused on mental illness and mood disorders. For instance, Mindstrong Health, a mental health startup, is analyzing smartphone usage in an attempt to detect signs of depression. And Facebook is already using artificial intelligence to scan content posted by users for signs of suicidal thought. In some cases, it has used its technology to display notifications or to alert local authorities so they can follow up and intervene if necessary.</p> <p>While there are significant questions about the accuracy of digital phenotyping, it's not difficult to see the potential for it to also be applied to digital marketing, giving pharma marketers the ability to target consumers on more than just demographics, stated interests, search keywords and the like.</p> <h3>The big question: will this ever happen?</h3> <p>That isn't clear. Facebook, for instance, <a href="https://www.statnews.com/2016/11/01/facebook-pharma-drug-ads/">has been vying for pharma ad dollars</a>, apparently with mixed success. The social media giant late last year <a href="https://www.cnbc.com/2017/09/07/facebook-held-a-breakfast-to-promote-clinical-trials-strategy.html">held an event</a> to pitch pharma marketers on the use of Facebook to target users for clinical trials. At that event, it reportedly indicated that it would not allow pharma marketers to target users based on health conditions.</p> <p>Facebook's stance makes sense. Allowing pharma marketers to target its users based on conditions the social network knows or thinks they have would almost certainly lead to a PR backlash. There would no doubt be calls for legal and regulatory action. In Europe this sort of profiling is regulated by the new <a href="https://econsultancy.com/hello/gdpr-for-marketers/">GDPR</a>.</p> <h3>A reminder of the value of digital data</h3> <p>While it's possible that other players in the digital advertising ecosystem might be more willing than Facebook to apply digital phenotyping to marketing solutions – there is already a sizable and growing market for <a href="https://www.mediapost.com/publications/article/312819/in-pharma-marketing-programmatic-offers-solutions.html">third-party data</a> – one of the most important take-aways for pharma marketers in the rise of digital phenotyping is that digital data is extremely valuable and might prove even more valuable than previously thought.</p> <p>Pharma marketers should keep this in mind as they develop homegrown digital initiatives.</p> <p><em>To learn more about digital transformation in Pharma, join us at ePharma in New York on March 21-23. Our VP of Research Stefan Tornquist will be discussing the future of digital and marketing with Anthony Lambrou, Director of Corporate Strategy and Innovation at Pfizer, as well as hosting a roundtable for you to learn, share and connect with fellow pharma marketers. Find out more and secure your spot:</em></p> <ul> <li><em><a href="https://lifesciences.knect365.com/epharma/agenda/3#epharma-roundtable-digital-transformation-to-future-proof-your-marketing">ePharma Roundtable: Digital Transformation to Future-Proof Your Marketing</a></em></li> <li><em><a href="https://lifesciences.knect365.com/epharma/agenda/3#main-stage-keynotes_the-future-of-digital-and-marketing">The Future of Digital and Marketing</a></em></li> </ul> tag:econsultancy.com,2008:TrainingDate/3467 2018-03-08T13:12:08+00:00 2018-03-08T13:12:08+00:00 Fast Track Digital Transformation <p>Digital Transformation. The buzzword of the moment. Everybody from IBM to the British Government claim to be in the throes of digital transformation. But what is it and what does it mean in practice?</p> <p>This course will cut through the hype and answer a simple question. What does digital mean for how you do business? You will learn how digital has changed consumer behaviour. You will discover what steps you will need to take if your organisation is going to survive in this new business reality.</p> tag:econsultancy.com,2008:BlogPost/69851 2018-03-07T14:52:05+00:00 2018-03-07T14:52:05+00:00 Amazon is looking to partner with a bank to offer checking accounts Patricio Robles <p>According to the Journal, “The talks with financial firms are focused on creating a product that would appeal to younger customers and those without bank accounts.” Specifically:</p> <blockquote> <p>Last fall, [Amazon] put out a request for proposals from several banks for a hybrid-type checking account and is weighing pitches from firms including JPMorgan and Capital One Financial Corp., some of the people said. It is too early to say exactly what the product will look like, including whether it would give customers the ability to write checks, directly pay bills, or access to a nationwide ATM network.</p> </blockquote> <p>At this point, Amazon is reportedly not considering pursuing a banking license, which would subject it to a significant regulatory process and potentially hamper the aggressive expansion of its core and new businesses.</p> <p>Amazon's interest in offering a checking account-like product is ostensibly aimed at helping Amazon reduce the fees it pays banks and payment processors. While Amazon already offers customers the ability to connect their accounts to their bank accounts for ACH payments, which typically have processing costs, if Amazon customers have an Amazon checking account, they might be more inclined to connect to and use that account to pay for purchases.</p> <p>It's also possible that Amazon could offer checking account customers incentives, and later develop other financial products that carry incentives. Already, Amazon offers branded Visa credit cards through JPMorgan Chase that gives holders three to five percent cash back on their Amazon purchases. </p> <h3>Success is not guaranteed</h3> <p>While the fact that Amazon is interested in partnering and not competing with banks is seemingly good news for banks that have already seen their businesses disrupted by smaller fintech upstarts, it's not clear whether an Amazon partnership would be a net positive or net negative for a large bank.</p> <p>On one hand, there's no guarantee that an Amazon partnership would be successful. Case in point: in 2016, Amazon teamed up with Wells Fargo to offer members of its Student Prime program a 0.05% interest rate discount on their Wells Fargo student loans but the partnership <a href="https://econsultancy.com/admin/blog_posts/69851-amazon-is-looking-to-partner-with-a-bank-to-offer-checking-accounts/edit/https:/techcrunch.com/2016/09/01/amazon-ends-its-student-loan-partnership-with-wells-fargo-six-weeks-after-launch/">was terminated weeks later</a> for reasons the companies wouldn't disclose.</p> <p>On the other hand, if Amazon is successful, it could be a double-edged sword for the company's partner bank. After all, the partner will gain deposits, but Amazon will likely largely own the customer relationship and experience, giving it significant leverage.</p> <p>This highlights one of the newer dilemmas banks will face <a href="https://econsultancy.com/blog/69680-fintechs-and-banks-to-partner-in-2018-thanks-to-open-banking">as the fintech revolution evolves and produces more partnerships</a>: banks will have to figure out the best ways to partner with third parties ranging from small fintechs to huge companies like Amazon. While the latter have obvious appeal, banks would be wise to consider that partnerships under which they act as a service provider to another brand might not serve them well long term. </p> tag:econsultancy.com,2008:ConferenceEvent/931 2018-03-06T05:55:02+00:00 2018-03-06T05:55:02+00:00 Breakfast Series: Digital Transformation for HR Leaders <p>In our report, <a style="color: #2976b2;" href="https://econsultancy.com/reports/the-future-of-hr-in-the-digital-age/" target="_self">The Future of HR in the Digital Age</a>, the HR role is changing in response to challenges and opportunities brought by digital. This series of talks is intended to provide HR professionals with an overview of the current challenges facing the HR function in any organization, how digital technologies are changing how we work and learn and how HR professionals can transform business functions to excel in a digital-empowered world. </p> <p>Join us at this breakfast briefing as we curate and highlight the key digital trends, challenges, opportunities and developments that are going to affect HR and how HR can play a role in digital transformation.</p> tag:econsultancy.com,2008:BlogPost/69828 2018-02-28T11:11:29+00:00 2018-02-28T11:11:29+00:00 Banks set to release money management apps as UX change spurred by Open Banking Patricio Robles <p>As <a href="https://www.cnbc.com/amp/2018/02/26/reuters-america-britains-big-banks-play-catch-up-with-fintech-with-new-apps.html">reported by</a> Reuters, HSBC, Lloyds and RBS “are at various stages of producing cutting-edge apps that will allow customers to pull data from different accounts, even those at rival lenders, on their mobile devices and home computers.”</p> <p>The goal: position themselves to better compete with fintech upstarts like mobile-only bank Monzo, which already offers such an app.</p> <p>In just nine months, Monzo's app saw its user base grow 300%, to 450,000, reflecting demand among tech-savvy consumers, particularly those coveted millennials.</p> <p>According to Jeremy Light, the managing director of Accenture Payment Services for Europe, Africa and Latin America, money management apps that aggregate data from multiple institutions will be a bare necessity for banks thanks to Open Banking rules. </p> <p>“You will have to have them, because if you don't you're out of the game,” he told Reuters. “It's really all of the other services that you then start offering.”</p> <p>Big banks seem to get that. </p> <p>HSBC, for instance, has allocated $2bn for technology investments and is about to launch a new app that contains features that are present in Monzo's app. These include a tool that calculates disposable income and sends notifications to users when certain events, such as the exceeding of a set spending threshold, occur.</p> <p>Interestingly, HSBC's app will eventually become available to customers of other banks, demonstrating just how far some banks are willing to take their embrace of the new landscape Open Banking is creating.</p> <h3>Is brand and functional parity enough?</h3> <p>The big question for incumbent banks launching money management apps is whether the strength of their brands and apps that offer functional parity with the apps offered by fintechs will be enough to make up lost ground.</p> <p>On one hand, big banks don't have the best reputations, but when it comes to trust, there is anecdotal evidence suggesting that established banks are seen as more trustworthy than upstarts that haven't been around for very long.</p> <p>As for functionality, given that banks like Lloyds and HSBC are investing billions in digital, there's a strong argument to be made that they shouldn't be aiming to match fintechs feature for feature. Instead, they should seek to take a leadership role when it comes to innovation, using their scale and the vast data that comes with it to identify unmet customer needs and deliver solutions that differentiate them entirely from upstarts that don't have the same scale.</p> <h3>Fintechs increasingly want to collaborate, not compete</h3> <p>As incumbent banks embrace digital, they will also likely find that they have ample opportunity to take advantage of fintechs' weaknesses.</p> <p>While funding for fintechs has been significant and many have, profitability has proven elusive for many fintechs. In fact, only one of the U.K.'s digital banks, Revolut, has apparently <a href="https://www.investing.com/news/technology-news/fintech-revolut-britains-first-digital-bank-to-break-even-1309832">achieved a break-even month</a>. </p> <p>Profitability challenges might explain why the World FinTech Report 2018 recently published by Capgemini and LinkedIn <a href="https://www.bloomberg.com/news/articles/2018-02-27/fintech-startups-need-industry-partners-to-thrive-report-says">found that</a> more than three-quarters of fintech executives surveyed indicated that they now want to collaborate with established institutions, not compete with them.</p> <p>For the U.K.'s big banks, which <a href="https://econsultancy.com/blog/69680-fintechs-and-banks-to-partner-in-2018-thanks-to-open-banking">were already expected to grow their fintech partnerships in 2018 as a result of Open Banking</a>, this dynamic could prove quite favorable for those that move quickly on their own digital initiatives and prove adept at finding ways to seamlessly integrate partner services.</p> <p>With this in mind, it's interesting to note that, according to Reuters, only one major U.K. bank, HSBC, has so far demonstrated an interest in a marketplace model under which their customers can discover and acquire services from partner providers. Look for this to change as Open Banking initiatives launch in earnest.</p> <p><em><strong>More on financial services:</strong></em></p> <ul> <li><a href="https://econsultancy.com/blog/69824-how-can-financial-services-companies-win-featured-snippets-in-search-an-investigation/">How can financial services companies win featured snippets in search? An investigation</a></li> </ul> tag:econsultancy.com,2008:BlogPost/69823 2018-02-26T12:01:42+00:00 2018-02-26T12:01:42+00:00 How digital helped Domino's overtake Pizza Hut Patricio Robles <p>While Domino's ascendancy to the global pizza throne was expected given <a href="https://econsultancy.com/blog/63017-can-pizza-hut-catch-up-with-dominos-online">Pizza Hut's late digital start</a>, the milestone is a demonstration of just how important digital can be to businesses that even little more than a decade ago might have seemed far more insulated from digital disruption than others.</p> <p>Here's a look at some of the key ways Domino's embraced digital and used it to grow.</p> <h3>Digital ordering</h3> <p>Domino's recognized early that the internet would critical to its business and launched digital ordering a decade ago in 2008. Today, it has a large portfolio of digital ordering tools, including a Domino's Tracker that provides customers with real-time tracking of their orders from start to finish and a Pizza Profile feature that gives customers the ability to save all their personal information, such as delivery address and payment method, to speed their orders. </p> <p>Customers can also create an Easy Order profile, which represents their favorite order. Once created, customers can place their favorite order in less than a minute.</p> <p>The most important thing about Domino's digital ordering tools is that they're not just available on desktop and through common mobile platforms like iOS and Android. Instead, they're available across a multitude of platforms, including SMS, Google Home, Amazon Alexa, <a href="https://www.econsultancy.com/blog/68184-domino-s-introduces-dom-the-pizza-bot-for-facebook-messenger">Facebook Messenger</a>, Twitter, Slack, Ford Sync, Apple Watch, Android Wear, Pebble and Samsung Smart TV.</p> <p><img src="https://assets.econsultancy.com/images/resized/0009/2485/dominos-smartwatch-app-blog-flyer.jpg" alt="" width="470" height="247"></p> <p>Domino's calls its cross-device and cross-platform technology Domino's Anyware and its purpose is simple: make it possible for customers to order pizza anywhere, anytime with as little friction as possible. Whether a customer wants to order using a popular voice-driven smart speaker or with an emoji on Twitter, Domino's has them covered. </p> <p>That has proven critical to keeping Domino's popular with younger consumers, many of whom have demonstrated a preference for brands that allow them to seamlessly engage across platforms.</p> <h3>Social</h3> <p>In 2009, Domino's <a href="http://www.nytimes.com/2009/04/16/business/media/16dominos.html">got a crash course in social media crisis management</a> when two of its employees filmed a disgusting prank while on the job. The video they posted to YouTube went viral, putting Domino's in a very tough spot.</p> <p>Despite the fact it was no master of social media yet, the company did what many companies have failed to do when faced with a crisis: it responded aggressively as quickly as it could. It took quick action to fire the employees in question, set up a Twitter account so that it could engage in the conversation customers were having on the then still nascent social platform, and published a video with its CEO in which he addressed the matter.</p> <p>Domino's would go on to use social to good effect later that same year when it launched <a href="https://econsultancy.com/blog/69597-10-deliciously-creative-domino-s-pizza-marketing-campaigns">its Pizza Turnaround campaign</a>, which incorporated the #newpizza hashtag. The campaign generated a lot of buzz and for good reason: in it, Domino's admitted that its pizza sucked and wanted the world to know that it had reinvented its product to make it not suck. </p> <p><iframe src="https://www.youtube.com/embed/AH5R56jILag?wmode=transparent" width="560" height="315"></iframe></p> <p>While obviously bold in a risky way, the campaign was lauded for its honesty and was an overall hit with consumers on social platforms.</p> <h3>Customer experience</h3> <p>Competition for companies like Domino's is rife – there are over 60,000 pizzerias in the U.S. alone – and that means customer experience is critical for large chains like Domino's. </p> <p>One area where Domino's focus on maintaining a high quality, consistent customer experience can be best seen is in its commitment to using employee drivers to deliver pizzas. </p> <p>While Pizza Hut recently partnered with GrubHub for online orders and delivery, and invested $200m in the company, Domino's <a href="https://www.usatoday.com/story/money/2018/02/20/dominos-q-4-earnings-missed-analysts-sales-estimates/354126002/">is adamant</a> that third parties won't ever come between it and its customers.</p> <p>"The efficiency of the delivery process is something we know and understand very, very well. That's not something you’re ever going to see us outsource," Domino's CEO J. Patrick Doyle stated. "The only way to bring a long-term competitive advantage is to do it yourself."</p> <h3>Hard technology</h3> <p>While Domino's has no plans to outsource delivery, one day of course pizzas might effectively deliver themselves thanks to self-driving cars. This possibility could obviously help Domino's bottom line, so last year, <a href="https://www.usatoday.com/story/money/cars/2017/08/28/ford-and-dominos-team-up-test-driverless-pizza-delivery/610350001/">Domino's teamed up with Ford</a> and launched a pizza delivery test using a Ford Fusion Hybrid Autonomous Research Vehicle. </p> <p>Randomly-selected customers in Ann Arbor, Michigan were given the opportunity to participate in the test, which also included another new technology: a Domino’s Heatwave Compartment located inside the self-driving car. This experimental device allows customers to retrieve their pizzas upon delivery using a unique code that unlocks the compartment.</p> <p>It wasn't the first time that Domino's had experimented with the application of new technology for deliveries. It had previously built a prototype delivery car, <a href="http://www.adweek.com/creativity/dominos-just-unveiled-radical-pizza-delivery-car-took-4-years-build-167707/">dubbed the DXP</a>, which contained a warming oven capable of holding 80 pizzas as well as storage for sides, dipping sauces and bottles of soda. </p> <p><img src="https://assets.econsultancy.com/images/resized/0009/2484/dominos-dxp-chevrolet-spark-blog-flyer.jpg" alt="" width="470" height="312"></p> <h3>Staffing</h3> <p>Domino's is headquartered in Ann Arbor, Michigan, which thanks to the presence of the University of Michigan, is fast becoming one of the Midwest's most promising innovation and tech hubs. That has no doubt helped Domino's orient its employee ranks to a culture of innovation.</p> <p>According to Domino’s CEO Doyle, "we are as much a tech company as we are a pizza company" and that is evidenced by the fact that at Domino's headquarters, half of its 800 employees work in software and analytics.</p> <p>While having a large digital staff doesn't necessarily guarantee that a company will be innovative, innovation is hard to achieve without adequate talent and Domino’s results suggest the company's investment in building a digital-heavy staff has paid off handsomely.</p> <p><em><strong>Interested in customer experience? Econsultancy subscribers can download our Best Practice Guide – <a href="https://econsultancy.com/admin/blog_posts/69823-how-digital-helped-domino-s-overtake-pizza-hut/edit/Implementing%20a%20Customer%20Experience%20(CX)%20Strategy%20Best%20Practice%20Guide">Implementing a Customer Experience (CX) Strategy</a></strong></em></p> tag:econsultancy.com,2008:BlogPost/69789 2018-02-12T14:55:00+00:00 2018-02-12T14:55:00+00:00 Goldman Sachs is taking a fintech approach to grow its consumer lending business Patricio Robles <p>Two of the biggest proofs of Goldman's transformation were its launch of GS Bank, a internet bank with a $1 deposit requirement, and Marcus, an online consumer lending platform through which well-qualified consumers could obtain personal loans of up to $30,000. GS Bank has since been merged into Marcus, which now serves as Goldman's consumer brand.</p> <p>That a Wall Street firm once known for serving the extremely well-heeled would create a new brand to target mainstream consumers at all would have been difficult to predict a couple of decades ago, but because of the changes in the market, it's a no-brainer today. As QZ <a href="https://qz.com/1077463/goldman-sachs-gs-thinks-its-fintech-lending-arm-marcus-can-make-as-much-extra-revenue-as-trading/">pointed out</a>, "Goldman thinks it can make $1 billion in extra revenue from its consumer lending business over the next three years, as much as it expects for its trading operations."</p> <p>The challenge for Goldman is that the competition in the consumer deposit and lending spaces is significant and Goldman's name, however storied, doesn't have the same cachet with consumers. So Goldman is taking a page from fintech upstarts to grow Marcus.</p> <p>As <a href="https://www.wsj.com/articles/goldman-sachs-in-talks-with-apple-to-finance-iphonesales-1517999521">detailed by</a> the Wall Street Journal, Goldman is reportedly in talks with Apple to offer buyers of Apple devices financing at point-of-sale. "Customers purchasing a $1,000 iPhone X could take out a loan from Goldman instead of charging it to credit cards that often carry high interest rates," the Journal explained.</p> <p>This type of financing is big business: by one estimate, $80bn of the $200bn consumers borrowed using retailer-affiliated credit cards or point-of-sale loans went towards big-ticket items including electronic gadgets. So if Goldman can position Marcus to offer loans for Apple device purchases, it could be a real shot in the arm for Goldman's consumer brand.</p> <p>Of course, if the model of the potential deals sounds familiar to you, that's because it is. A number of consumer lending upstarts have targeted point-of-sale to reach consumers. For example, Affirm, which was co-founded by former Paypal co-founder and CTO Max Levchin, has partnered with retailers to offer consumers loans for their purchases at point-of-sale.</p> <p><img src="https://assets.econsultancy.com/images/resized/0009/2229/affirm-screenshot-blog-flyer.jpg" alt="" width="470" height="352"></p> <p>Affirm, which bills itself as a "financial company for everyday people", <a href="https://www.racked.com/2017/11/29/16710502/affirm-loan-shopping">reportedly</a> has over 1,000 merchant partners and is said to have originated more than a million loans with an average order size of $750. The company uses its own underwriting model, which <a href="https://bankinnovation.net/2017/09/the-rise-of-alternative-data-in-the-lending-market/">is capable of looking at alternative data</a> and doesn't necessarily require a FICO score, or a good FICO score. On the customer experience side, Affirm is seamlessly integrated into the checkout experience of its merchant partners, making it far easier to convert shoppers into borrowers.</p> <h3>Goldman's advantages</h3> <p>By embracing a similar model to grow its consumer lending business, Goldman could find that it has some big advantages over smaller upstarts like Affirm.</p> <p>First, while the Goldman name might not be a deal-maker for consumers, it could help the firm woo merchants, especially those like Apple, which have worked with Goldman in the past. Second, Goldman's size means it has more capital to lend and it will likely be able to offer interest rates that are more competitive than upstarts.</p> <p>So if Goldman can ink the right deals and deliver customer experiences that are on par with successful fintechs, it's entirely possible that it could quickly become a dominant player in this space. That very real possibility is yet another reminder of why fintechs themselves <a href="https://www.econsultancy.com/blog/69749-fintechs-are-diversifying-so-is-the-unbundling-trend-over">are trying to get bigger and diversify</a>, which is reshaping the financial services landscape they disrupted.</p>