Brand – Vivaldi https://vivaldigroup.com/en Writing the Next Chapter in Business and Brands Tue, 27 Jun 2023 22:00:39 +0000 en-US hourly 1 https://wordpress.org/?v=4.8.22 Inventing Creative Solutions with Darren Richardson https://vivaldigroup.com/en/blogs/inventing-creative-solutions-darren-richardson/ Wed, 05 Oct 2022 16:58:39 +0000 http://vivaldigroup.com/en/?post_type=blogs&p=6442 Vivaldi is pleased to welcome Darren Richardson as Global Senior Partner, Chief Creative & Technology. Darren has led some of the world’s most award-winning agencies as the Chief Creative and Managing Director, bridging the gap between traditional and digital creative, working in the UK, the Netherlands, USA, Canada, and Germany. While leading agencies, Darren has […]

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Vivaldi is pleased to welcome Darren Richardson as Global Senior Partner, Chief Creative & Technology.

Darren has led some of the world’s most award-winning agencies as the Chief Creative and Managing Director, bridging the gap between traditional and digital creative, working in the UK, the Netherlands, USA, Canada, and Germany. While leading agencies, Darren has earned over 100 international awards for projects from print design to product innovation, including work for Pepsi, Smart Car, and Getty Images.

In this Q&A, Darren shares how he thinks about the intersection of technology and design, what captures his interest outside of work, and his career journey from financial industry software programmer to chief creative.

 

Q: How would you define what a “creative technologist” is?

A: I believe a creative technologist can come from tech, creative, production or consulting. Many people think of creative technology as a niche, but I think it’s a massive discipline with many different facets offering many different viewpoints. Take designers for example, you can have an industrial designer, a product designer, a communication designer, a packaging designer — you get the point. The same applies to a creative technologist — the tech vs. creative vs. production vs. consulting skills are dialed up or down depending on the individual.

There is a sweet spot though where a creative technologist has had time in both camps and can look at ideas first from a brand point of view, and then look at how the technology can enhance concepts so that the tech and ideas seem to work together seamlessly, as if they had belonged together all along.

Q: You began your career working as a programmer and found your way into the creative agency world, can you share a bit about that evolution and what guided you?

A: I started my career as a programmer working in the financial industry on the big broker software. While working in that sector though, I always found myself playing and tinkering on my lunch break — always creating little Windows desktop games. The passion I’d had as a teen just stayed with me, even in finance. One day my manager threw Macromedia Flash 2 on my desk and said, “Darren, take a look at this, please. We want you to lead on the new intranet development, but we want it to be engaging and interactive.”

As you can imagine, I was in heaven! I installed the software almost immediately and began playing with the functions and timeline coding. I wanted to learn more though, so I set up a forum which was purely based on Flash and the coding language, Actionscript. That forum ended up becoming the biggest forum in Europe and competed with others across the USA.

Throughout the entire experience, I had learned so much from others and also shared my experiences as well. Web Designer magazine, a global publication, approached me to write magazine articles on design, UX and coding. It was a great way to pass on all the knowledge I had learned from others. Eventually, I was even approached by book publishers to do the same and I ended up co-writing three books on the subject matter.

As you can probably imagine, by this time I was hooked on creating entertaining experiences! A small independent agency working for the BBC approached me to become their interactive creative director and lead the way in creating digital experiences on and offline.

Eventually, I went on to R/GA and Isobar – still in the digital realm – but it wasn’t until I left the UK in 2010 to work on the Adidas World Cup campaign that I learned the dark arts of traditional creative. I found it to be just as fascinating as the digital realm that I had left. Eventually, I moved on to Canada to work as a creative director at CP+B and then back again to Europe as the Chief Creative Officer of BBDO and Proximity in Germany and then CCO of Havas. In 2019 I finally headed back home to the UK and joined WPP to lead one of their biggest clients, and today I am here at Vivaldi.

That’s probably the really long way to answer your question! The short way would be: the shift was easier than I thought. I am one of those lucky people that are able to use the left and right sides of the brain at the same time, so I found it a natural fit and have enjoyed the ride so far.

Q: If you were just starting out in your career today, is there a sector you would gravitate toward?

A: Trick question…of course, consulting! The reason I moved from the world’s biggest ad agency was that I saw the value is with the conversations at the C-suite level; they hold the vision for their brands and are ultimately the decision makers. Having a direct connection will enable you to find and create the right solutions. Also, unlike some consulting agencies, Vivaldi has the ability to deliver end to end solutions, not just stopping at the strategy.

This is where anybody starting their career can make the biggest impact, for themselves with growth and learning and moving brands forward.

Q: You have written a couple of books – how does writing influence or impact the creative work you do?

A: At the time it hugely impacted me, because to author a book you must do tons of research to make sure your subject matter is not all subjective; this was especially true for the books I was writing on programming and design. It is a massive undertaking, and you come out of the process with more knowledge than when you started, so it’s hugely rewarding.

Q: What excites you about creativity now?

A: The way technology has advanced so much and will continue to do so. This in turn has opened the opportunities for better creative solutions and I want to be the one inventing these solutions. What excites me specifically is BIG ideas that have been beautifully executed so the consumer can see the idea and message clearly and connect to the idea and the brand.

Q: Is there a book or podcast you’d recommend?

A: I spend more of my time on LinkedIn and blogs, learning as much as I can. Seeing technology that I might be able to hack into a solution for clients or beautiful art that might inspire a design direction. I’m a bit of a sponge like that.

Q: Do you have any passions or interests outside of work that people might not expect?

A: My son’s football team, where I am the manager. I am also a creative nerd gamer (very cliché). I play on Xbox and VR mainly, but have all the other consoles, even the old ones like the first PlayStation. Music. I have quite a lot of vinyl and my taste is very varied. I have classical, jazz, blues, rock, pop, dance, rap… the list is long so I will spare you. But my favorite artist is the one and only Mr. Jimi Hendrix.

Q: How are you thinking about this new role at Vivaldi?

A: I’m excited! We have super smart and talented people, and everyone I’ve met has been very welcoming. My role will be to push and get the best out of the creative; to connect creative, technology and strategy to solve business problems, and partner that with our strategy team to find the right solutions for the clients. I also have a good track record of leadership, therefore, I would like to instill my learnings and help our talent become future leaders. And lastly, have fun doing all of the above.

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Exploring the Evolving Future of Media with Michael Monheim https://vivaldigroup.com/en/blogs/exploring-evolving-future-media-michael-monheim/ Fri, 19 Aug 2022 13:25:36 +0000 http://vivaldigroup.com/en/?post_type=blogs&p=6415 Vivaldi is pleased to welcome Michael Monheim as Partner, Media & Entertainment. Formerly the Vice President of Business Development for AccuWeather, facilitating partnerships in Europe and Latin America, Michael brings decades of experience working in television and international markets. He also previously spent nearly two decades at Axel Springer Group, leading US business and helping […]

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Vivaldi is pleased to welcome Michael Monheim as Partner, Media & Entertainment.

Formerly the Vice President of Business Development for AccuWeather, facilitating partnerships in Europe and Latin America, Michael brings decades of experience working in television and international markets.

He also previously spent nearly two decades at Axel Springer Group, leading US business and helping it grow into the leading European media company within the US media and agency community. During his time there, he enabled Axel Springer Group to become a world-class digital publisher with a significantly expanded footprint in the Americas.

In this Q&A, Michael shares insights on the evolution of television, the impact of new technologies, and what he most enjoys outside of work.

 

Q: How did you originally get connected to Vivaldi?

A: I met Erich Joachimsthaler a few years ago through a mutual friend. We have both been active in two organizations with “German executives living in the US.”

Q: Your business background includes time working with AccuWeather, SevenOne Media in Germany and Viacom/MTV in Latin America — how have you seen the television space evolve over the years?

A: Over the last few years there has been a strategic focus of big broadcasters to digitize TV building advanced TV products. Furthermore, there is major consolidation in the TV market to become more competitive versus the big players like Google, Meta, etc.

There are challenges in the TV spaces in terms of digital transformation:

  1. TV usage shift/decline: There is an accelerated shift to OTT (over-the-top television) and VOD (video on demand).
  2. Fragmented inventory: Various OTT platforms; tech challenges (like ad serving) and no holistic measurement.
  3. Market and company structure: Transformation of silo structures internal/external; major change process.
  4. Increasing competition: Netflix, Amazon and Disney enter AVOD (advertising-based video on demand) business; Google’s TV attack growing CTV reach.

Digitizing TV will reposition the TV space to secure and lever existing TV revenues and build advertising products to participate in a growing digital market.

While Linear TV is declining over the next five years, Advanced TV (Programmatic TV, Total Video and Addressable TV) will all grow steadily. This will secure and lever ad revenues for broadcasters in the future.

I do see the evolution from linear to digital/addressable TV. Streaming and personalized video formats are on the rise and related business models will drive the future for publishers and all players involved.

Q: How has location/region played a role in the work that you’ve done, knowing you’ve concentrated on different geographic areas? 

A: I have lived and worked in Europe, the US, LATAM, and Asia. In previous years, it was very important to be present locally. I learned a lot about customs and business practices which was very valuable. I traveled very regularly to all the markets I covered to stay in touch personally.

I feel that location/region does not play as big of a role today. You can perfectly do your job from anywhere remotely and it is more accepted, especially after covid. If need be, you can always travel and meet clients or colleagues in person.

Q: What are some current trends or challenges that you’re paying special attention to in the media and entertainment space?

A: The future is based on three building blocks: content, data, and tech. The combination of those three will drive the next years (e.g. Apple, Netflix …)

Also, cryptocurrency. There will be a massive runway ahead as the number of consumers trading crypto will double in the next 12 months. Crypto is expected to power ecommerce, video gaming, data, and NFTs. It’s going to become a mainstream payment method. Even on the ad side. It will be totally integrated. But it’s not clear what it will look like yet.

Q: How are you seeing the pandemic and work-from-home impacting what’s in store for the future of media?

A: Increased consumer time spent with technology and media has been sustained coming out of the pandemic. As the entire growth curve has shifted upwards, more consumer time will lead to new opportunities to grow and build businesses.

We will see more and more IoT (internet of things) such as AR/VR to go mainstream — in businesses as well as in households. Gamification will create access to Web3. In terms of ecommerce, in 2025, 10% to 15% of all automobiles will be sold online. Other categories like jewelry and furniture are expected to grow.

Q: What do you see the future of entertainment looking like? What opportunity areas do you believe are on the horizon?

A: With Web3 kicking in we will see more and more interaction of consumers in the metaverse. Real life is morphing into digital and the other way round. Brands needs to ask for support and knowledge to identify possibilities.

Video games are the next technology leading to the metaverse, and search, social, shopping, events, and banking will increasingly take place inside of video games.

Reach super users (26% of all users) account for the majority of time and money spent on ecommerce, VR, music, and video games, and super-serving them will be critical to drive growth.

Q: Looking over your career roles, including time in digital publishing with Axel Springer Group and in Business Development at Blockbuster Video, what would you say is the most valuable lesson you’ve learned?

A: The most important lesson is to stay in touch and nurture the relationships with business partners, clients and old colleagues. Never burn bridges with old employers, as the world is very small and even more connected — you always meet twice.

Q: What is a book or podcast you’d recommend, and why?

A: Bharat Anand’s “The Content Trap.” It talks about how to do well and not become a victim of digital transformation. It describes great case studies (Tencent, Shibsted and NYTimes) that are relevant lessons with learnings to avoid mistakes in digital transformation. A key takeaway is how content enables customers’ connectivity in a connected world.

For a podcast: Amobee Out Loud “Live from the Croisette,” talking about this year’s Cannes Lions.

Q: What’s a passion of yours outside of work?

A: I’m very passionate about sports — tennis, swimming, race biking, and skiing. I used to do track and field competitively. I’m also interested in political science and arts and enjoy history. Traveling is a big passion of mine. It opens your mind and puts things in a different perspective.

I left home at age 10 and went to boarding school in Switzerland. People were from all different countries, different religions, different food preferences. You really learn to understand people. It really helped in my career when I’ve traveled for business or private life. I’m able to have connections with people in different areas of the world. That’s the beauty of travel.

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How energy companies can future-proof their businesses https://vivaldigroup.com/en/blogs/how-energy-companies-can-future-proof-their-businesses/ Wed, 11 May 2022 19:05:36 +0000 http://vivaldigroup.com/en/?post_type=blogs&p=6331 For years, energy companies have lamented that they are stuck in a “low involvement” category. There is substantial evidence to support this view: consumers interact for less than 10 minutes per year with their energy provider*, and thanks to price comparison platforms, consumers solely consider price as the single decision criterion when choosing a provider. […]

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For years, energy companies have lamented that they are stuck in a “low involvement” category. There is substantial evidence to support this view: consumers interact for less than 10 minutes per year with their energy provider*, and thanks to price comparison platforms, consumers solely consider price as the single decision criterion when choosing a provider. This has led to brands with very little differentiation and hardly any relationship to their customers beyond the annual invoice. 

However, given the terrible war in Europe and its implications on the international energy market, energy is now a high involvement topic. Consumers are willing to rethink their energy supply and their individual setup. The pressing questions are complex and costly: Is my next new car an electric vehicle? Where do I get a charging point and what does it cost? Should I get solar panels on my roof and a battery in the garage? Is gas still a reliable source of energy for my company? What is the most efficient heating system? These are all complex buying decisions that are far from being low involvement. 

These buying decisions also sit under an even more complex layer of socio-economic questions: How dependent are we from energy imports? Should we aim for more energy autarky? How can people make their businesses more sustainable? Even decisions made long ago are up for discussion again. For instance, as recent research shows, 70% of Germans now support extending the operating lives of nuclear power plants. 

Neither energy consumers nor energy suppliers can answer these pressing questions on their own, but energy suppliers must play an active role. According to Vivaldi’s research**, even weeks before the war in Ukraine consumers expected energy companies to play a proactive role in the transition towards new energy solutions. 

To meet these consumer expectations, energy suppliers must get active in two areas: First, they must proactively start a dialogue about the most pressing questions with their customers. This can include regular consumer panels across regions and market segments, social listening approaches, or a consumer advisory board that discusses with management. And second, they must develop new and innovative solutions and services. For example, the leasing of solar panels, heating as a service, or bundles around smart energy management. Both areas must be addressed simultaneously. But the good news: these topics are closely interrelated and can support each other. Gaining new insights from customers through focused research can serve as input into the innovation process, and newly developed services will in turn stimulate new conversations. 

There are massive challenges for the energy industry, but currently, the window of opportunity has never been open wider. Major players of the industry have clearly understood the challenge. E.ON’s latest campaign states: “The time for action is now,” and presents a cross-disciplinary initiative of scientists, consumers, analysts, and operations managers, thus stimulating new conversations. 

The field for innovations is broad. Companies should consider opening investments in renewable energy and related ventures as does the Swiss investment firm smartenergy. German company BayWa r.e. encourages its partners to rethink energy for good: “How it is produced, stored, and can be best used … is essential to the future of our planet.” They come with impressive references for how they support businesses, regions, and even whole countries to cut CO2 emissions and to get energy transformation going. Innovative players from other industries are also pushing into the energy market: Tesla offers solar roofs to produce clean energy, electric cars, and an app to control everything in one place. Smart home technology is being developed by IKEA, with its IKEA Home smart App. 

Energy companies must step up and connect more deeply with customers. Developing reliable and flexible products and services, including hardware, software, and tariffs, will be a step in the right direction. Creativity and innovation will be the tools to keep customers happy, to manage energy transformation, and to develop future-proof business models. 

 

* Source: Accenture New Energy Consumer research, 2017 

** Vivaldi conducted a representative study among the general population in several European countries with over 3,000 participants, conducted Q1 2022. 

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Energy companies at a crossroads: The decision to become a true commodity or evolve into a larger platform https://vivaldigroup.com/en/blogs/energy-companies-at-a-crossroads/ Mon, 25 Apr 2022 16:36:18 +0000 http://vivaldigroup.com/en/?post_type=blogs&p=6309 The post Energy companies at a crossroads: The decision to become a true commodity or evolve into a larger platform appeared first on Vivaldi.

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The global energy crisis caused by the war in Ukraine has highlighted many of the systemic weaknesses of the current energy market. Consumers have become acutely aware of the instability of many providers and the need for a secure and stable supply, which has become an urgent issue for millions. 

For energy providers, there is a choice to be made: to operate as the commodities they’ve promised to be – or to transform into wider-reaching platforms.  

In general, retail landscapes are experiencing disruption. As retail activities in cities decline, shoppers are more attuned to digital platforms. The department stores of yesterday are now the marketplaces of Amazon, Ebay, Zalando and others. We do not frequent the good old record store anymore but rather immerse ourselves into music ecosystems that both actively and subliminally guide our behaviors and tastes. The truth is that what can become a platform, will become a platform.  

The retail business of energy providers, long seen as the prototype of an oligopolistic incumbent, is bound to be disrupted next. Two key factors will be driving this change: new opportunities, and growing consumer awareness. The wider energy ecosystem is bringing these new opportunities, from electric mobility to generating power at home to smart home systems. Potent market players with renowned brands are entering the space. Additionally, the recent price hike paired with the instability of some European providers, has generated more consumer awareness about the relevance of secure and stable supply. 

 music industry transformed and now the energy sector

The ecosystem play will significantly change the market dynamics. From a 1:n relationship between an energy provider and its many customers, exchanging power or gas for a defined price, to a multitude of new solutions and hence, interactions between various market players. While the last major innovation in energy retailing was smart metering, it did not truly impact consumer behavior. Digitally monitoring consumption has been shown to provide a very limited benefit. 

An ecosystem play rather becomes a battle about owning the customer interface and forming the dominant platform, which hosts the majority of interactions. Building on their long-lasting relationship and trust, incumbent providers still have the opportunity to actively frame this interaction field and guide consumer behavior and choices. However, market reality does not show a big push coming from energy providers. Rather challenger brands like Tesla have started to encroach on the space far beyond selling electric vehicles. They have bridged the last mile with photovoltaic and battery solutions, infiltrating people’s homes and home screens. 

In the future, a successful energy brand will need to stand for orchestrating various aspects of people’s lives: from balancing power supply and consumption to embedding in kitchen appliances, home heating, lighting and entertainment systems. It will not be predominantly about power or gas. Instead, it will be about connecting every consumer to their ideal combination of providers and manufacturers in order to create a seamless and sustainable solution that truly contains value. Providing the operating system for people’s homes will be creating a virtuous cycle. 

In this scenario, remaining simply an energy provider will eventually lead to becoming a second-tier supplier in the backrow – literally ending up as commodity. Just as streaming services like Spotify have replaced major record labels in propelling the next music success, it will take a platform brand to influence consumers and deliver value.  

With the recent price hikes, consumers have also learned that energy providers, as they currently exist, only have very limited abilities to significantly impact macroeconomic aspects. Here are three things energy providers can do to evolve: 

  1. Look at consumers’ lives from a truly outside-in perspective. Evaluate the market opportunities beyond immediate adjacencies. Just adding charging stations does not solve for the broader opportunity. Leverage data to provide efficient energy use tailored to people’s lives. 
  2. Acknowledge the strategic relevance and role of brand. Brand often is seen as a minor driver in energy sales relative to tariff structures and sales activities. However, not a single successful platform provider has created an interaction field without a powerful brand. 
  3. Set up a dedicated team and utilize platform thinking tools. For this, Vivaldi has specifically developed a Platform Toolkit. Framing the interaction field goes beyond classical innovation or value proposition development. 

 During this time of turbulence, assessing these three steps will open the possibility for energy providers to evolve beyond their current capacities, and set themselves up for future success.  

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The Importance of Interactivity in a Post-COVID World https://vivaldigroup.com/en/blogs/interactivity-in-post-covid-world/ Fri, 31 Jul 2020 17:48:49 +0000 http://vivaldigroup.com/en/?post_type=blogs&p=5671 “I think it’s that high testosterone type thinking that everything and everybody needs to disrupt everybody else. We gotta be a little bit more conscious in this post-COVID era that disruption is not the game. Disrupting everybody may be a nice thing for a workshop, but it is not a real worthy goal.” Recently, our […]

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“I think it’s that high testosterone type thinking that everything and everybody needs to disrupt everybody else. We gotta be a little bit more conscious in this post-COVID era that disruption is not the game. Disrupting everybody may be a nice thing for a workshop, but it is not a real worthy goal.”

Recently, our CEO Erich Joachimsthaler spoke with ETBrandEquity.com to discuss how personalization is becoming the key factor in developing a more competitive edge and building a new brand. Read the full article here.

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A Running List of Brands we Admire for their COVID-19 Action https://vivaldigroup.com/en/blogs/running-list-brands-admire-covid-19-action/ Fri, 27 Mar 2020 18:32:31 +0000 http://vivaldigroup.com/en/?post_type=blogs&p=5139 With society, businesses, and individual lives being rapidly upended by COVID-19 all over the world, it can feel as though our newsfeeds are updating with even more daunting developments by the minute – which is why we wanted to provide some respite from the anxiety-provoking news and spotlight brands we admire for their action during […]

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With society, businesses, and individual lives being rapidly upended by COVID-19 all over the world, it can feel as though our newsfeeds are updating with even more daunting developments by the minute – which is why we wanted to provide some respite from the anxiety-provoking news and spotlight brands we admire for their action during this global pandemic. These companies are putting their money where their mouth is, demonstrating their commitment to their larger mission of serving their customers, communities, and the greater good during this difficult time of uncertainty and vulnerability. 

Sweetgreen – Arming Hospital & Medical Workers with Locally Sourced Sustenance 

With in-person services and socialization put to a halt until further notice, the restaurant industry is among the hardest hit by this pandemic. However, despite the threat of daunting revenue projections and an unforeseeable future dictated by COVID-19, Sweetgreen – the locally sourced, healthy, fast-casual salad chain – is putting the medical community fighting this pandemic first. Acting on their company’s mission “to inspire healthier communities by connecting people to real food,” Sweetgreen has repurposed and dedicated its outpost operations to delivering free salads and bowls to the hospital workers and medical personnel sacrificing their lives to combat this crisis.

Vita Coco – Using their Gains to Benefit Communities In Need

 

As consumers attempt to prepare as best they can for the unknown and continued disruption to their lives, people are stocking up in droves on the household and pantry items that they deem essential. So, while many other industries are suffering from staggering sales declines, other F&B and household product brands are experiencing the opposite. Among the F&B products consumers have chosen to amass, Vita Coco – a nutrient-rich, shelf-stable, coconut water brand – has seen a dramatic uptick in sales, increasing upwards of 100% across large, key retailers. As Co-Founder and CEO, Michael Kirban reflected on the company’s recent spike, he took to LinkedIn to ask, “But when things get bad, shouldn’t we be doing good?” Vita Coco has since committed to donate $1MM of their incremental profit gained as a result of this pandemic to organizations directly helping those that need it most. Kirban is also urging other businesses that are in similar positions of privilege to “make [Vita Coco’s] donation seem small!”

ClassPass, CorePower Yoga, and Peloton – Bringing Fitness to Everyone

Once flocked to by consumers looking to improve or maintain their health and well-being, workout studios have shut their doors to protect people from the potential spread of dangerous germs that group exercise and shared equipment could enable. As the COVID-19 situation unfolded, ClassPass, the online fitness class booking platform, continuously updated its response with the health and safety of their customers in mind, while also recognizing that the urge to workout and stay fit was not going to go away for their customers. ClassPass’ first move was waiving the cancellation fees and rolling over any unused credits to encourage anyone who felt unsafe and/or uncomfortable attending classes to take precautions. Less than 2 days later, as the gravity of the COVID-19 situation became more apparent, ClassPass revisited their plan and put the onus on the company to act responsibly. ClassPass removed the ability for its customers to book any upcoming classes and suspended billing on all memberships until further notice. Despite no money coming in from its members, the company is still continuing 

to provide members access to their audio and video workouts online for free as part of their dedication to “helping people feel their best.” Similarly, CorePower Yoga, a cardio-yoga fitness studio chain, has made their special collection of online classes free while their studios remain closed, and Peloton has extended their free trial of its app by 3x to 90 days.

AB InBev, Diageo, and Pernod Ricard – Taking their Inputs to Produce New Outputs

With healthcare workers and consumers alike fearful of the spread of COVID-19, a dire shortage of medical and other disinfectant supplies continues. While some individuals are taking to Amazon to make a killing by upcharging these products by an exorbitant amount, many large spirit manufacturers are temporarily repurposing their operations in an effort to produce and donate hand sanitizers to those who need it most. Pernod Ricard was among the first major distillers to disclose their plan to produce and donate 70,000 liters of alcohol for hydroalcoholic gel. Shortly thereafter, Anheuser-Busch InBev and Diageo, the world’s largest beer company and largest distiller, respectively, both committed to donating millions of liters of alcohol to make disinfectant products and distribute them to healthcare systems and workers.

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11 Industry Leaders Ready For Platformization https://vivaldigroup.com/en/blogs/industry-leaders-platformization/ Mon, 25 Mar 2019 22:41:22 +0000 http://vivaldigroup.com/en/?post_type=blogs&p=4285 The factors of platform potential are the most important determinants of business health and future growth, and yet it has never been measured until now. – Erich Joachimsthaler, Founder & CEO of Vivaldi Vivaldi’s Platformization Potential Study is a forward-looking, comprehensive report that introduces the top companies with the most potential to capture exponential growth. Previously, […]

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The factors of platform potential are the most important determinants of business health and future growth, and yet it has never been measured until now. – Erich Joachimsthaler, Founder & CEO of Vivaldi

Vivaldi’s Platformization Potential Study is a forward-looking, comprehensive report that introduces the top companies with the most potential to capture exponential growth. Previously, we took a deep-dive into the two lenses that guided our analysis. Read more about lens 1 and lens 2, which consists of factors 1, 2, 3, 4, and 5.

Using these two lenses, we assessed the companies comprising the S&P 500. We considered these 500 companies to be a representative sample since they account for 80% of the American equity market by market capitalization. We deployed various triangulation methods combining different sources of data for each of the determining factors. We used a dyadic assessment protocol where two or more researchers assessed each company independently on a given factor. Each company’s platformization opportunity was assessed according to the factors relative to their industry.

Please see below for a list of the top scoring company in each of the 11 industries studied, and follow the hyperlinks to explore the near-term potential each company has to become a platform business.

Tech, Media, & Entertainment: Netflix, Inc.
Retail & Apparel: NIKE, Inc.
Financials: Capital One
Transportation: Harley-Davidson, Inc.
Healthcare: Pfizer Inc.
Materials: The Sherwin-Williams Company
Industrials: Equifax Inc.
Utilities: NRG Energy, Inc.
Real Estate: MGM Resorts International
Food, Personal Care, & Household: Estée Lauder
Energy: Phillips 66

Netflix is one of the FANGAs, but we believe it isn’t entirely a platform business and that it hasn’t attained its full potential. Although Netflix incorporates technology, it is still a pipeline business. Netflix either produces, pays for, or licenses its content, for which its 150 million consumers are willing to pay a monthly fee. While attractive, its current business model requires significant investment and its current data generation is limited to the customers logged into its platform.

Netflix has a high potential to further transform into a platform business and unlock exponential growth by leveraging network effects. For example, it can create an open platform that hosts more than just shows and movies. Any vendor of digital content, be it games, sports, or even e-learning, can then look to Netflix as a host to get in front of its subscribers.

2019 is a pivotal year as the streaming industry becomes increasingly cluttered, with Disney, WarnerMedia, ESPN+, Facebook Watch, amazon Prime Video, Hulu, Dazn, and others challenging Netflix. However, with an opportunity to engage with customers beyond its existing media platforms, Netflix can extend its data collection and learning. This would allow Netflix to beat the competition by unlocking more ideas that could ultimately improve their offerings.

Factor of Greatest Opportunity: Industry Position & Ecosystem Potential

 

Nike is a strong S&P 500 performer, yet it still has not leveraged its opportunity to become a platform business. Not only was Nike late in connecting directly with consumers, despite early experimentation with Nike+, it was also late in participating in existing third-party marketplaces like Amazon.

Nike currently offers a multitude of services on different mobile applications, but combining these interfaces into one comprehensive lifestyle app would enable customers to conveniently engage with the brand everyday.

To further capitalize on its opportunity to create value through interactions, Nike could dive deeper into developing or hosting content for their users to enjoy, be it sociocultural, fitness- focused, or professional sports related. This would allow them to establish a network of like- minded partner vendors and organizations that match their customers’ lifestyles.

Nike has merely scratched the surface of its potential beyond running shoes, apparel, and equipment. They need to build the technology infrastructure to create value through data and analytics. With this, it has endless possibilities.

Factor of Greatest Opportunity: Value Through Data & Analytics

 

Capital One has a potential to orchestrate a platform by delivering its product and service portfolio in entirely new ways. Instead of pushing its standard offerings by market segment, it could create a business model based on a high degree of personalization, customization, and context- driven value-added services.

Capital One can leverage its information-based technology capabilities and exploit social currency to truly integrate into consumers’ daily lives to solve real problems for them. For example, Capital One can employ customer data to inform and build communities of like-minded spenders. Customers with similar purchasing habits can be connected via a platform that enables experience sharing around relevant events, restaurants, purchases, etc. Capital One can open this platform to merchants as well, allowing them to connect with customers who are interested in their products or services. This engagement amongst users and merchants will allow Capital One to grow their partnership network based on customer interest, thus creating exponential growth in social currency.

Implementing these changes will bring about an entire ecosystem of partners, developers, startups, and other participants in the fintech industry. Capital One has invested significantly in a number of API initiatives, which will eventually create a virtuous cycle of bringing new innovations on a platform that delivers.

Factor of Greatest Opportunity: Social Currency

 

Many years ago, Harley-Davidson discovered that success is not just about product or technology, but also the brand and experience. This epiphany changed the direction of the company. Today Harley is a lifestyle brand with a community of riders, enthusiasts, and participants, that form a global network. It is well-known that the Harley brand relationship runs deep.

With around 200 million motorcyclists in the world, Harley has an enormous business potential to create a marketplace by aggregating demand and becoming the single destination for all riders. This would broaden the community of millions of riders that are organized in the more than 1,400 H.O.G. clubs around the world.

Younger consumers, Millennials, have different needs. This group no longer buys into the value system outlined by a Harley executive in the book Results-Based Leadership: “What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns, and have people be afraid of him.” But Millennials still love riding and Harley can still deliver a brand and experience to fit their needs.

An expanding rider community that includes Millennials could be the basis for growth. Harley can attract a wider network of riders by creating an ecosystem around Harley experiences that fortify rider connections to the brand through network effects. For example, instead of merely recommending destinations to riders, it can aggregate the supply side and build a global network of hospitality, events, and experience partners. As more partners sign on, riders would have richer experiences, and the brand’s value proposition would grow further.

Factor of Greatest Opportunity: Industry Position & Ecosystem Potential 

 

Pfizer is part of a complex health system that includes physicians, hospitals, payers, and patients. There are several opportunities for Pfizer to evolve toward a platform business. In order to illustrate such potential, consider an example for its oncology or cancer business.

Pfizer collaborates with data aggregator, Flatiron Health, which extracts unstructured data from cancer patients’ charts. Flatiron employs a massive team of credentialed oncology abstractors — individuals who interpret data from electronic health records — or any notes, charts, or diagnoses that physicians make during the care delivery process across 265+ oncology clinics, reaching more than 2 million cancer patients.

This data, known as Real-World Evidence (RWE), can be used for Pfizer’s R&D, to get faster approval from the FDA, etc. It also helps Pfizer quickly determine what treatment works best for specific cancer patients.

Pfizer can also collaborate with other oncology companies, such as competitors, to learn about more effective drug combinations, and even collaborate with alternative treatment solutions beyond drugs, leading to improved cancer care.

If Pfizer closely collaborates with other biopharma competitors and provides comprehensive treatment solutions to cure cancer, patients can expect higher quality cancer care and improved therapies. The benefits of assuming leadership in cancer care and orchestrating a broad ecosystem and entire interaction field that includes even the FDA for faster approvals would be enormous for patients living with the condition and their care providers.

Factor of Greatest Opportunity: Industry Position & Ecosystem Potential 

 

Numerous platform opportunities exist for Sherwin-Williams. They have the ear of many potential platform participants – customers, contractors, designers – and they can bolster connectivity by making the technologies they offer interoperable across these participants.

With their focus on customer centricity, paint color app, and Spanish language content, Sherwin-Williams has demonstrated their interest in innovating for growth. With a foundation for better data, they should engage with both consumers and out-of-category vendors to put a century’s worth of customer learnings to work for more than just paint.

By inserting themselves in relevant conversations through collaborations and partnerships, Sherwin-Williams can learn more about participants, generating insights that would be valuable to anyone within the ecosystem. For example, Sherwin-Williams can integrate their offerings and expertise across furnishing retailer websites and social platforms. Sherwin-Williams’ social relevance will grow as users begin to engage with the brand on their partners’ various social pages.

However, digital products are not the greatest opportunity in plain sight. Numerous platforms aggregate subcontractors and suppliers, with main contractors and producers such as architects, structural engineers, HVAC engineers, and the network of interior designers. Sherwin-Williams has exciting opportunities to participate in many of the emerging platform models in the construction industry.

Factors of Greatest Opportunity: Social Currency, Agile Experimentation with New Technology

 

Since last September, and probably well into the future, the public will associate “Equifax” with “data breach.” Nevertheless, Equifax spent 2018 trying to put distance between their present and their past.

To leverage their equities, they can extend beyond credit ratings and offer financial services such as user ratings, insurance, and credit to enable secure online transactions. Factoring in partnerships with insurance or credit companies, Equifax could become the primary interface to help new business owners extend credit to customers.

Equifax could create value by transforming the way customers interact in an online marketplace. Partnering with Etsy, Amazon Marketplace, and second-hand sale sites, Equifax can offer customers a guarantee that products from the sellers are trustworthy.

The more data captured from consumers, the richer the insights will be for business clients, creating limitless value. If Equifax transitions to such a platform business model, it would be at the center of an entirely new future.

Factor of Greatest Opportunity: Industry Position & Ecosystem Potential 

 

Despite operating in the highly-regulated and monopolistic utilities industry, NRG Energy has managed to make incremental innovations to their business model through their provision of renewable energy.

NRG’s demonstrated ability to build partnerships with the relevant parties and participants in their industry reflects their ambition and could serve as a forerunner for future innovation. For example, their diesel generation partnership with Cummins Diesel produces cleaner and cheaper energy for commercial and industrial customers. It is the type of customer-minded agreement that must be forged for fixed, regulated companies like NRG to

meaningfully improve upon their offerings.

While its scale remains narrow, we also acknowledge NRG’s initial foray into AI by partnering with Stanford University to help their grid manage power fluctuations, resist damage, and recover from storms and other disruptions. Their eventual goal of completely autonomous grid management has enormous potential to eliminate frictions. This will require additional investment in exponential technologies, which we hope NRG undertakes.

Factors of Greatest Opportunity: Agile Experimentation with New Technology

 

In the traditional hospitality business, hotel owners can only extract data and revenue from guests that are staying, dining, or gambling at their properties. However, MGM considers themselves an experience company, more than a hotelier or real estate company. MGM’s recent steps enables them to offer experiences to anyone, anywhere.

Now that MGM has partnered with GVC to launch an online gaming venture, they have the opportunity to maintain constant engagement with their nearly 30 million rewards members.

This helps ensure that MGM can provide and generate value beyond the walls of their physical properties. The more people gamble online, the more MGM benefits, both in revenue and data generation. Not only does this enable exponential revenue growth, but it also builds the foundation to create countless online business extensions and new data environments. Growing in these sectors will allow MGM to capitalize and nurture its core business.

In our opinion, there is real potential here that MGM has not yet tapped.

Factor of Greatest Opportunity: Value Through Data & Analytics

 

Estée Lauder can leverage the breadth of their portfolio of 25 prestige brands by building a new model of how a company in its category operates. What if it changes the linear value- chain process for each diverse brand, and instead, puts at the center an exchange between consumers built on data? If the data that it collects from consumers are at the center, then the brands are in the spokes.

Estée Lauder has an opportunity to strengthen their ecosystem by engaging more directly with consumers. The makeup category’s success in recent years has been driven by apps, Instagram, and YouTube tutorials. Consumers are used to logging on to learn how to use these products. The industry is full of examples of customization and personalization efforts.

Though their brands do have strong social followings, the company could bolster their digital presence by launching an app, or by releasing APIs. Content around beauty education will be pivotal in growing consumer interest and engagement in Estée Lauder brands and products, with featured content personalized for each user, based on their previous purchases. The user data and insights accumulated from the app can help inform new product innovation, as well as guide content creation centered around relevant consumer needs.

For Lauder, the benefits of more direct connections with consumers extend far beyond customer experience. The company could
easily mine interactions to take a real-time pulse on brand popularity, particularly at local levels, allowing them to adjust marketing spend accordingly. Lauder could also use the data to ensure brick and mortar stores go only in areas with demonstrated demand. A data-driven strategy led the company to focus on Chinese customers shopping on mobile apps Tmall and WeChat, contributing to 40% sales growth in the country.

A makeup platform powered by AR is just one of many viable value-creating platforms. Lauder has the brands and the technologies, and now it’s their turn to show customers, Glossier, and Wall Street that they know their categories best, so long as they can capture consumer attention quickly and effectively.

Factor of Greatest Opportunity: Industry Position & Ecosystem PotentialCustomer Centricity PLUS Mindset

 

Phillips 66’s innovations are largely centered around mobile payments. Though this is no longer a unique feature, it does offer a solid initial connection with drivers, which the company leverages to analyze driver habits.

With enough insights into what drivers buy,
aside from gas, Phillips 66 could assemble a proprietary network of third-party vendors. For example, what if drivers unlocked free guacamole at a nearby Chipotle after purchasing 5 gallons from a Phillips 66 pump? Phillips 66 knows that gas station taquitos don’t hold a candle to Chipotle burritos, so why not partner with Chipotle instead?

For Phillips to succeed in the future, their platform will need to also consider the forthcoming changes in behavior that will most impact the industry. Electric cars will not need gasoline, and autonomous vehicles could conceivably steer themselves to the pump unoccupied. Phillips participates in an industry that is both rigid and rapidly evolving. It is unclear what a platform will resemble, but regardless, Phillips must continue collecting data on consumers by any means possible to best position them to adapt.

Factor of Greatest Opportunity: Industry Position & Ecosystem Potential

 

Explore the full study here for action-oriented strategies that can help businesses build better and stronger brands for today’s consumers. 

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