December 7, 2015

How data, convenience and content lead to commerce

A new way of selling is about to deploy. For years, digital companies have been investing in convenience and data. The combination of knowing the customer and making it easy for the customer to buy, has led to the gigantic growth of companies like Amazon, Spotify and Booking.com. Now we are about to enter the next phase. A phase where content is added to the equation. 

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Alibaba bought Youku Tudou

A few weeks ago, we had the pleasure of visiting Youku Tudou in China. Youku Tudou is a combination of what we know as YouTube and Netflix. They combine an offering of user-generated content and content created in-house. Make no mistake, by the way, Youku Tudou was launched a few months before YouTube. These guys are no copycats.

Just prior to our visit they had been acquired by Alibaba for 3.5 billion dollars. The employees were smiling from ear to ear. To be honest, though, we didn’t get it at first. We didn’t understand why this merger took place. It’s like Amazon buying YouTube.

The power of combined data with personalization software

The answer is data. What could you do if you combined YouTube’s humongous data volume with that of Amazon? Well, that’s exactly what they are doing: they know what you bought and what you would like to buy. They also know which content you like to watch. Well, that is a very powerful combination. Certainly if you are aware of the impressive technology they can rely on to customize content based on your personal profile. Imagine that I like Diet Coke and someone else likes regular Coke. Well, if we are both watching the same content, the main characters in my video will be drinking Diet Coke whereas on your screen they will be drinking regular Coke. The product placement will be adapted based on your personal shopping profile.

Data, personalized content and convenience lead to commerce

The last part is important. Those personalized product placements will become clickable and Alibaba will be able to deliver the products you need as you are watching Youku Tudou content. If you know that e-commerce delivery time in Shanghai is often only 1 hour, it’s easy to see the power of this combination.

If you make it easy to buy stuff, if you personalize it to a high extent, then a guaranteed sale is almost guaranteed.

A new digital relationship

The digital relationship between companies and their customers will evolve in accordance with this model. Convenience is the new loyalty. Data enables companies to create this convenience combined with very personalized content. The combination of these elements leads to sales and commerce.  It will be very interesting to see how this evolves over the next few years.