Imagine a World - Gam's Blog

Personal Data Banks

realtean — Tue, 30 Oct 2018 16:14:47 +0000

Personal Data Banks

The commercial world is already saturated with vendor messages of data being the new oil, we get all that. Amazon is scaling new peaks of revenue based on its entire business model being driven by analytics. Financial Services organizations have long exploited the speed of data analysis to gain competitive advantage. Social Media companies are efficient data manufactories that drive their advertising revenues. The upsides and downsides are now becoming apparent and with it a new opportunity.

30th October 2018

If data flowing within a single organization has value, the value of the data flowing around a network of organizations has to be greater still. However, data cannot flow freely without control. The understanding that sensitive personal data cannot be traded without permission has spawned a restrictive governance in GDPR – a framework that is punishing to organizations and almost impossible to enforce at scale. Customers are increasingly aggrieved by data breaches and surprising evidence of their data crossing organizational boundaries, yet to regain control requires great effort with little tangible benefit.

Money, or rather currency has mobility, governance and transparency. Data should have the same properties. We are creating the technology infrastructure that will allow personal data to behave like money in terms of control and provenance. Where consumer’s data can be held securely with its owner’s permission at its original source, shared between organizations where there is value to both the consumer and the organizations. There is a groundswell driven in part by GDPR, and partly by new technologies, yet overcoming customer apathy is the challenge that is faced by myriad startups in the space.

By working with organizations that are still currently trusted with vital information by their customers , we believe we have a compelling solution that will be easy on the customer and inspire the transformation of your business enabling the development of a more equitable relationship (with your customer) and a deeper more enduring level of trust to engage with the data opportunities for the future.

realtean Tue, 10/30/2018 - 16:14

Digital Nervous Systems for Retailers

realtean — Sun, 04 Mar 2018 22:15:25 +0000

Digital Nervous Systems for Retailers

Last week’s press reported retailers visibly quaking in their boots at Amazon’s proposed purchase of Wholefoods. The Amazon machine is not just in the backyard, it’s climbing up to the roof ready to unceremoniously kick the tiles off. (June 2017)

What is to be feared most, the world’s largest assortment, the insanely efficient distribution machine, or the star-fleet of drones being prepared to solve the last mile problem? Amazon’s slogan, ‘The Earth’s Most Customer-Centric Company’ might hold the clue to its not-so-secret sauce. How this principle was applied at the Washington Post provides a playbook for digital transformation.

Transforming the Washington Post

When Jeff Bezos acquired the Washington Post in 2013, the paper was losing revenue and its losses were widening. Bezos told the staff to 'Stop whining that the Web took publishing away from you, took your business model. It also brought new models’.

Under Bezos, the IT division was doubled to 250, recruiting high-quality talent for a mission to save journalism. In the same way that Tesla shunned off-the-shelf ERP to build their own, the Post developed its own technology that fundamentally changed the process of publishing the news.

Today’s news is delivered in real-time and cannot be held up by download speeds. It provided the paper with deep visibility into users online behaviors - which stories each prefers to read, how far down they scroll, which headlines, images or videos work for which users at what time of day. All this information is delivered in real time back to the news room and used to optimize photos, headlines and even formats for each mobile device. As a result, year-on-year online readership is up 22% and annual digital advertising revenue exceeds $100M.

The Bricks and Mortar Cul-de-Sac

Bricks and mortar retailers are having a hard time adapting their core business processes to the digital world. Senior leadership teams have likely grown up taking title to goods, running operations where inventory and availability were tightly coupled and the job of print and television advertising was to get the customer into the store. Up-ending that model takes most leadership teams well outside their comfort zones which makes digital innovation a struggle at best. Yet the disruption coming from digitally native new entrants such as Wayfair, Zulilly and Warby Parker is an undeniable threat to business as usual. Amazon, Alibaba and Rakuten present another degree of threat.

Creating a Digital Nervous System

The Washington Post is transforming itself by gaining unprecedented insight into its reader while simultaneously building the automated systems to act in real time on those insights. What is the parallel for the retailer looking to escape the dead-end-street that they find themselves in? Studying the Post’s transformation, I see three capabilities required of retailer’s digital nervous system:

1. Anatomy of Acquisition

Today’s customer is continually exposed to campaigns from every brand and retailer chasing their business. Data Management Platforms (DMPs), Ad’ networks and exchanges are helping to improve targeting via current media, but Augmented and Virtual Realities and A.I.-based Conversational Agents are only just getting established as channels.

The Omnichannel retailer’s challenge is now to optimize spend, timing and targeting across all available media. Traditional retailers might not be used to the dynamic environment where there is no static formula that a marketing department can develop and commit. Instead, online marketing becomes a portfolio of experiments that are measured against a set of target outcomes, that feedback data to machine learning algorithms that are continually adjusting audience, timing, content, then making real time purchasing decisions.

2. Customer Value Machine

The aim is to replace the rather one-sided metric of Customer Lifetime Value with one that is deliberately customer-centric. How can the retailer create a machine that generates value for the customer on an increasing scale?

Twenty years ago, the news process involved the curation, research and reporting of events by skilled journalists and editors. News today is captured in real-time and fed directly into myriad distribution channels with little or no editorial. There is more news with more perspectives, delivered instantly but with less guaranteed quality. As a purveyor of the truth, the Post has re-engineered itself to deliver editorial quality at a seemingly impossible speed and scale with an effective and compelling paywall proposition.

Retailers must develop unique value to their customers in a trading environment where switching cost is low and customer loyalty is a fragile concept. There is so much behavioral and transactional data available that identifying, profiling and understanding your customer as a micro-segment is table-stakes. Advantage will come through a machine that injects individual customer insight into every customer touchpoint experience. If a specific customer has low price sensitivity but demands speed of service, every communication, every interaction and every assortment presentation must be programmed with this information. Likewise for customers who are cash-poor and time-rich.

3. Merchandise Telemetry

If the Post is able to optimize the headline, content, images and video of a story for its target customers on the actual devices where they are reading, then why can’t a retailer think about its products in the same way? For example, a clothing retailer should be able to see which micro-segments seeks out garments with different color thread used to sew the buttons on. A furniture retailer should be able to find all pieces that have a certain wood finish at a particular price point and identify all households that have purchased that finish in the last 30 days.

As conversational interfaces become popular we start to see that the product attributes written up are more suited to a visual user interface, yet are too clumsy for the text interfaces of A.I. Agents and the voice interfaces of Amazon Alexa and Google Home.

Today’s merchandising applications are based on a Product Master that provides structured attribution to allow the category to be managed top-down. Yet we are going to need a far more granular and semantic definition that will allow merchandise to be tracked like the particles in the Large Hadron Collider. Armed with systems like this, Data Science can then deliver true competitive advantage.

The Challenge

For Omnichannel retailers with a legacy store portfolio and distribution infrastructure, the transformation required to run digital-first may be too disruptive to their established operations - in a classic Innovator's Dilemma scenario. Few will succeed and we will witness many established names and trusted brands closing their doors or being acquired by faster digital natives buying the physical presence.

realtean Sun, 03/04/2018 - 22:15

Thoughts of selling personal data

Gam Dias — Sun, 04 Mar 2018 00:00:00 +0000

Thoughts of selling personal data

Over the last few years there have been a number of stories, ideas and postings regarding selling personal data. I thought I'd gather them up in one place because they are defining a requirement that needs to be fulfilled - probably within the next 12 months. Original post from 2007, updated Feb 2018.

2002 - Chris Downs, founder of the Service Innovation and Design company Live|Work set up a project called Loome. Here he offered 800 pages of personal information up for sale on eBay. The project was also covered by Business Week in its article Wanna See My Personal Data? Pay Up.

2003 - John Deighton of Harvard Business School also proposed that individuals should capitalize on their personal data rather than relying on regulators to protect their privacy from Telemarketers, Dataminers and Consumer companies. An interview with Deighton was published by CNET News. The concept was detailed in his paper 'Market Solutions to Privacy Problems?'

2006 - Dennis D. McDonald has also been considering the sale of his personal medical and financial data. The principles that he states include the individual being the rightful owner of the data and therefore being the one who will stand to financially benefit from any transaction involving that data. The idea is detailed in his blog entry entitled Should We Be Able to Buy and Sell our Personal Financial and Medical Data?

2006 - The Register reports a scheme by Bracknell Forest Borough Council in the UK that allows individuals to sell their own personal data that is collected on Council issued Smartcards. 45,000 residents carry cards that contain information such as library books borrowed, indications of income and family. A council spokesman said that this data could allow companies to target direct mail with enough accuracy to stop it being annoying, as it would present people with offers that were of genuine interest. Proceeds from the sales would create discounted council tax for the data owner. The story can be found at Data sales for tax cuts.

2007 - An person only identified by the eBay handle 'highlytargeted' has auctioned off ' non-personally identifiable information to help you better target ads to me'. The package included the past 30 days internet search queries, past 90 days web surfing history, past 30 days online and offline purchase activity, Age, Gender, Ethnicity, Marital status and Geo location and the right to target one email ad per day to me for 30 days. If the auction is still available, you can see it here.

2007 - Iain Henderson who blogs on Right Side Up articulates the need for a system of Personal Information Management that will allow an individual to take ownership of their data, to be informed of data breaches and to be able to captalize on any trading of that personal information. More detail can be found on the Right Side Up site in the posting Can I own my data.

2011 - Finally, i-allow is offering a service where you are able to lock up your personal data and with permission, let it out to various marketing agencies. Presumably the marketers pay i-allow, i-allow skim a little (or probably a lot) and then pass the remainder onto the consumer as a dividend from their data. The only problem I can see with this is that your data is actually already out there in databases, marketing lists and with the credit checking agencies. The opt-out clause on any of these data sources needs to be strong and implemented. Here's what WSJ had to say about it in their post Web's Hot New Commodity: Privacy

2011 - Time Magazine reports on the multi-billion dollar industry trading our personal data, an industry that has developed right under our noses and without our explicit consent. The fact that is this now mainstream news maybe of note, but I believe the stronger forces in play are the sheer volume of personal data that is already being traded, the complete dependence of the marketing industry on this data and the apathy or ignorance of the average consumer as to the potential risks associated with this practice. The full Time Magazine post provides the full detail Data Mining: How Companies Now Know Everything About You

2014 - A couple of new hopeful experiments have appeared on the horizon. Firstly there is Data Coup Others Take Your Data For Free, This Site Pays Cash and secondly there is The Good Data Share Your Data, Fund Microloans To Developing World. Both sites allow you to push your social feeds into their repository and they broker the aggregated data to third parties. In return the customer gets money. My question, how much money will cause a customer to go to the trouble? What is the threshold ratio between customers who have time but no money and customers who have money but no time. This will also determine the value of that data to potential buyers. Let's keep watching the space.

2015 - 2015 has brought another raft of hopeful contenders in the space. PBB is a technology platform that gives you control of the data you produce every day. Personal Blackbox has created the Personal Data Independence Trust - due for launch anytime soon. Handshake in the UK is trying a similar approach, "The basic idea is to create a marketplace for personal data. “Handshake.uk.com will turn what has previously been stolen into a currency which can be traded,”

2017 - Data Wallet has gained funding and has launched a blockchain powered personal data management platform, that has created a marketplace for data processors to acquire data, compensating individuals with digital tokens that can be spent on AI services. Wibson is another blockchain based centralized data marketplace, allowing individuals to sell their own data. So the blockchain idea of distributed and secured data creates a level of security, but the low unit value of personal data still remains an obstacle to gaining consumer adoption at scale.

Gam Dias Sun, 03/04/2018 - 00:00

Witnessing the Re-Invention of Retail

realtean — Sat, 17 Jun 2017 00:00:00 +0000

Witnessing the Re-Invention of Retail

Recent trajectories of three retailing behemoths are indicative of another sea-change in the industry. Sears Holdings facing certain demise within the next 12 months, Walmart desperately trying to re-invent itself and Amazon steadily marching forwards eating everything in its path. What are the lessons for the rest of the retail sector?

The Tale of Three Retailers

Sears, Roebuck & Company the store where America once shopped, founded at the end of the 19th Century and dominant as a mail-order and then department store retailer throughout the 20th Century. Declining revenues, store closures and the sale of key brands indicate that this retailer is simply going away. Nostalgia aside, Sears is done, simply unable to respond to the needs of today's retail business model not based around the anchor store. Its employees need to re-skill and move on. Macy's, JC Penney and a host of other retailers are already facing the same challenges.

Walmart-Stores, Inc., founded in the 1960's, quickly rose to be the Fortune One Global retailer. Their innovations in vendor management, inventory control and supply chain management, allowed them to dominate the superstore category for thirty years. The economies of scale they created were unparalleled, yet the emergence of online was not an area that those efficiencies provided competitive advantage. Walmart.com and Walmart Labs received billions of dollars in investment and benefited from the brand and access to the parent's negotiating power. Walmart continues to acquire, spending further billions on online propositions, yet its core DNA may still not be able to adapt itself to tomorrow's retail business model. Other category killers such as TJ Maxx, Home Depot, Best Buy and Staples will be in the same boat.

Amazon.com, founded in 1994 with the clear objective of being the "Earth's Most Customer-centric Company". Amazon runs an ultra-lean business and with shocking precision at both planetary scale and internet speed. The customer is truly the focal point of every proposition and efficiencies are designed around exactly that. Amazon understands data and science - every action customers take or don't take is part of a series of experiments that will tell Amazon how to sell more products to more people. And now with the acquisition of Wholefoods, they are about to bring all of this effectiveness into bricks and mortar and the grocery category. In the US there is Amazon and eBay, hot on their heels from Asia are Flipkart, Alibaba and Rakuten but nothing from Europe.

The Future of Retail

The next 5-10 years in the retail sector will see many changes, here are five of the most significant:

The role of physical stores - Physical stores are where customers will get instant gratification, be able to touch, sample and try-on products and get true empathy and advice from experts. More retailers will need to design the store environment as a theater of experience rather than the walk-able inventory that it is today. The physical store is also an interface for things done online, for example picking up orders and returning items. The long awaited 'store of the future' will be with us shortly.

Delivery and Receipt - Delivery to the home of non-perishables has been optimized, but society needs to adapt consumers' ability to receive goods when not at home. This would be locker rooms in apartments, digital lock-boxes for houses or local pick-up locations at physical stores. Grocery delivery from central distribution centers has been elusive - since the ill-fated Webvan, no retailer has tried this on a national scale. Walmart and now Amazon have local stores holding inventory of fresh items, so expect things to change fast.

Other Channels - A.I. Agents will power voice and text based interactions. Amazon Alexa, Google Home and Apple Homepod will allow customers to interact via voice. Facebook Messenger and other chatbots will allow them to interact via text. And the existing web/mobile channels will allow them to interact visually. Augmented Reality and Virtual Reality will turn retailing into a game and a movie. Access to retail will be ubiquitous and contextual - as consumers walk into a store they will be able experience the store physically and digitally. Following WeChat, the smartphone will be the gateway to the retail experience.

Customer - What is customer loyalty today and what will it be tomorrow? Are our loyalty programs and coupons and promotions a race to the bottom. How have Trader Joe's and Amazon been so successful without loyalty programs? How do we engage our customers across channels and then keep them coming back and spending more? We are able to trace our customers on- and offline with increasing precision even with the new data privacy regulations. Customers are both complex and predictable, just don't take them for granted.

Data - The lifeblood of tomorrow's retail organization, it will not be enough simply to have after-the-event analysis of what happened. Data will feed every live process in the organization and will enable dynamic operational, merchandising and interface strategies. Data will need to be granular and semantic, it will need to be captured and made instantly available to the machine-learning based systems that make decisions. Short-cycle fashion should be able to forecast the sales of each colorway each fabric on each style of blouse or be able to determine the exact customer to target a specific style of heel on a shoe. Product attribute data will need to be semantically rich. A sale needs to be instantly attributable to the marketing campaigns that influenced it. In terms of understanding data, the retail organization needs to be as advanced as the crew on the deck of a spaceship.

realtean Sat, 06/17/2017 - 01:00

Sears, Eddie Lampert and the Wolves of Yellowstone

realtean — Sat, 17 Jun 2017 00:00:00 +0000

Sears, Eddie Lampert and the Wolves of Yellowstone

Sears is a dying retailer, with a business model that is unable to adapt and compete in the new digital-first world. As it sells off its real estate, retail nameplates and product brands, it clears the way for a new breed. LIke the wolves of Yellowstone, Eddie Lampert is doing the industry a favor. (March 2017)

In 1995 fourteen wolves were reintroduced in Yellowstone Park. The wolves' hunting patterns rapidly decreased the population of deer and forced them to steer clear open space. Without the heavy grazing, the vegetation returned and the insects and berries brought back other species of birds and mammals that had been long absent. The root systems of the aspens and willows decreased the erosion of the river banks and even the rivers flowed differently. The entire ecosystem of Yellowstone was altered by the introduction of just fourteen apex predators.

Old Retailers Not Suited to the New Environment

Today in 2017 the retail landscape is much like Yellowstone had become without wolves. The century-old US retail ecosystem, stalwarts like Macy’s Sears, Roebuck and Co. and relied on large store formats at the center of areas of population, carrying a broad inventory of products. As the country sprawled into suburbs, shopping malls sprang up. Today those malls are dying and the flagship urban locations struggle to get foot traffic.

The problem for the remaining centenarian retailers is that their entire business was optimized around serving physical stores. In today’s retail environment this old guard is incorrectly invested. Too much real-estate, too many store staff, a huge value of inventory dispersed to physical stores to maintain local availability, and too much cost tied up in supply chains. Compounding this problem, these retailers continue to spend on brand advertising, promotional campaigns and discounting just to herd customers to their locations.

New Online Giants and Innovative Retail Startups

Today they compete head-on against a cohort of online giants like Amazon, eBay, Jet, Alibaba and Rakuten, and are being nibbled at by thousands of small stores on cheap ecommerce platforms and new niche models of retailing.

Introduction of the Wolves

If, a decade ago you had the foresight to see this happening what would you do? If you were already in retail like Walmart and BestBuy you would invest heavily in new digital models. If you were not, would you seek out an old-guard retailer whose value was tied-up in the dying business model. When Eddie Lampert looked at Sears he saw a fortune in real-estate and tremendous equity in retail brandnames like Orchard Supply and Land's End and product brands like Craftsman and Kenmore. Yet the vertically integrated, multi-brand business model was going to be unsustainable in the brave new world that was clearly coming.

Making Way for the New

Sears is not having a happy time as it fights its demise. However, like the willows and aspens in Yellowstone, we see the retail model being fundamentally changed by companies like Warby Parker, Zulily, ModCloth, Etsy, and Birchbox. Their models began without the crippling overhead of maintaining huge physical store networks. Instead customers shop online and are fulfilled directly out of the distribution center. They have built engagement and conversion models that bricks and mortar cannot touch. Having established themselves,the online pure plays are now investing in physical stores to complement their optimized online offerings.

Read All About It

Sears and Its Hedge Fund Owner, in Slow Decline Together NYTimes (March 2017)

Oldest US Retailing Companies In Business The Balance (September 2016)

Dying shopping malls are wreaking havoc on suburban America Business Insider (Mar 2017)

There really are too many stores. Just ask the retailers. Washington Post (April 2016)

The Biggest Problem Facing Retailers? Too Much Real Estate MadMobile (October 2016)

Sears is on the brink of catastrophe as store closures loom and top execs flee the company Business Insider (December 2016)

Inside Sears' death spiral: How an iconic American brand has been driven to the edge of bankruptcy Business Insider (January 2017)

How Subscription Commerce is Transforming Retail My Total Retail (April 2016)

Amazon Wants Cheerios, Oreos and Other Brands to Bypass Wal-Mart Bloomberg (March 2017)

Jet.com’s New York Store Isn’t The New Front Line In The Online Grocery War Fast Company (April 2017)

The Wolves of Yellowstone Script from the Video

In 1995 fourteen wolves were reintroduced in Yellowstone National Park
But no-one expected the miracle that the wolves would bring
It all started with the wolves hunting deer
Which led the population of deer to rapidly decrease
The wolves presence also made the deer avoid areas where they were an easy prey
The deers’ absence in these areas meant plants could grow again
Beautiful aspen and willow trees began to flourish
That’s when things really started to happen
With the trees and bushes came more berries and bugs
Thanks to that various bird species returned to the national park
But the increased tree population also attracted another species
The beaver, previously extinct in the region was back
Their dams then attracted otters, muskrats and various reptiles
The wolves also killed coyotes
As a result, the mice and rabbit population grew
This attracted red foxes, weasels, badgers and hawks to the park
Even the population of bald eagles rose
But here’s where it gets really interesting
The wolves even changed the rivers
With the better balance between predator and prey
Came the possibility for other species to thrive
The increased vegetation growth made erosion decrease
And river banks were stabilized
Channels narrowed
More pools formed
And the rivers stayed more fixed in their course
So the wolves did not only give Yellowstone’s huge eco system new balance
They also changed the park’s physical geography

realtean Sat, 06/17/2017 - 01:00

The Walmart - Jet.com story hints at the new ecommerce infrastructure

realtean — Mon, 08 Aug 2016 08:35:49 +0000

The Walmart - Jet.com story hints at the new ecommerce infrastructure

Walmart's interest in Jet.com led me to a 2013 Patent that might describe the e-commerce infrastructure that enables Jet to offer 'Gain Sharing'. Jet is able to take a large number of independent variables from a broad range of systems and bring them together to set a discounted price at the the cart. (August 2016)

August 2016, Walmart is rumored to be in talks to acquire the one year old online retailer Jet.com. Despite an impressive fundraising and a first year’s growth that took it to a $1B valuation, Jet’s customer retention and repeat purchasing seem unable to compete with the massive effects of Amazon Prime.

The Jet e-commerce model also differentiates itself through ‘gain sharing’ and by the fact that it relies on its suppliers to handle shipping logistics, fulfillment and returns.

Further speculation suggests that Walmart wants to have Jet Founder and CEO, Marc Lore head up the Walmart’s e-commerce operation. Over the past five year Walmart.com has made some sizable acquisitions but its model seems to have been to brute force the path to a 3% market share (compared to Amazon’s 31%).

From a retail technology perspective, the interesting part of the acquisition is the ‘gain sharing’ model, where the price the customer pays reflects the basket size, product availability and shipping costs. As Jet.com relies on its suppliers to handle logistics, the systems that run in the background will be how all this is carried out and I wanted to find out more.

On July 25, 2016 in Nevada District Court there was a Patent Infringement case heard for Consolidated Transaction Processing LLC v. Jet.com, Inc.. This case focused on two almost identical patents, one of which is Sending targeted product offerings based on personal information filed in 2012 by Robert S. Alvin, CEO of Netline.

Unlike most e-commerce which has separate system for each of the business functions the patent describes a deeply integrated e-commerce system funneling information from the network into the decision module that sets the deal parameters in real time. So the supplier catalogs are pulled regularly into the product database - uploading of product data even in batch mode is a major friction point for most e-commerce architectures.

The personalization is done as a function of how a user request for the site passes user information and a dynamic pricing function that reacts to demand, supply, promotions and some other variables - this is another messy problem that most e-commerce organizations solve with people and rule sets.

Order processing, fraud detection, payments and CC processing are all integrated. Distributor selection is also driven by margins and delivery forecast - so it’s got the smarts built in which means that the optimizations can have greater effect up and down the supply and demand chains.

If you’re interested, it’s worth scanning the patent document. Most e-commerce systems have evolved over time and have had to accommodate legacy order management and supply chain infrastructures, they generally have homegrown merchandising applications and pre-packaged Content Management Systems and WebStores. Over the next few years, deep integration and higher level of automation will be required to be a player in the increasingly competitive mass retail space.

Reading

Wal-Mart in Talks to Buy Web Retailer Jet.com WSJ (August 3, 2016)

Jet.com has been trying to beat Amazon at entirely the wrong game Quartz (August 4, 2016)

Wal-Mart’s Deal for Jet.com Said to Hinge on Keeping Its Founder Bloomberg (August 6, 2016)

Walmart Announces Acquisition of Social Media Company Kosmix Walmart Press Release (April 18, 2011)

Walmart Announces Acquisition of Digital Entertainment Provider, VUDU

15 Acquisitions by @WalmartLabs Walmart Labs Blog (Luvocracy, Stylr, Adchemy, Yumprint, Torbit, Inkiru, OneOps, TastyLabs, Social Calendar, Small Society, Grabble, OneRiot, Kosmix, Set Direction, Vudu)

realtean Mon, 08/08/2016 - 09:35

The Asymmetry of Personal Data

realtean — Thu, 06 Jun 2013 01:15:28 +0000

The Asymmetry of Personal Data

There is an asymmetry between personal data held by companies and by the individual consumer. Companies know a lot about us, we don't know much at all -- even about what they know. What's the right balance and are we on our way there? (June 2013)

Why do we care about Privacy?

Privacy is a relatively new notion in Society. When we started living in our own houses, creating rooms, doors and locks - we got used to the notion of 'privacy'. In the last 50 years, we as individuals have become more private and isolated with both 'good' and 'bad' outcomes.

The last 15 years have seen us reconnected in new ways. I might no longer talk to my neighbor in person, but I reveal all sorts of information to people I have never physically met. So we have new social models that we have never before encountered.

It is within this backdrop that we should be discussing the balance of data asymmetry between companies and consumers. Back in 2000 I had this notion that organizations would be custodians of our personal data. Over the last 12 years, my idealist perspective has not really changed but I have been observing how business models have adapted to not only leverage personal data, but to capture more and more of it from us.

Five Questions on Privacy

Q1: As an individual, most 'transactions' you perform with or facilitated by an organization leave some sort of record behind. What are those records and where are they stored?

Q2: What value to the organization might that record provide? Another way of asking, how will that organization benefit (maybe monetize) just that data?

Q3: What happens if that unit if data is either aggregated with other people's data or other aspects of your own data? How would the organization benefit?

Q4: Going further, now think about your privacy - how would all of that data being used by organizations infringe upon or maybe even violate your privacy?

Q5: And further yet, your safety - think about if that data was to fall into the wrong hands, how might this be used to defraud you or put you in danger? If the regime you live under turned hostile, how could that data be used against you?

What is the right balance?

To figure this out, maybe ask first what is the 'wrong balance' - and do so at extreme ends of the spectrum

So first see what happens if ALL the data ended up with the consumer. We'd have to construct a working model for how this would manifest in the real world
Then what might happen if ALL the data ended up with the companies. This model is equally tricky as each corporation would have a silo of your data unless it was joined up somehow. I like to think that there are 3 classes of personal data an organization might have (using the example of a bank):

Class I: Personal facts: indisputable information - (e.g. my name, mailing address, DOB, SSN etc.) - I like to think of this as my data that I should be able to authenticate
Class II: Transactional facts: the data that is created as a result of the transactions that the organization manages on my behalf - (e.g. payments in, payments out, interest earned, amounts loaned, amounts repaid, interest charged) - this data really belongs to the organization to create and authenticate)
Class III: Profile data; this is data that is derived from the transactions, the personal facts and perhaps by combing with other data from the entire population. (e.g. the earnings segment that I am in, my propensity to pay back loans - i.e. credit score)

Scenario 1. Consumer gets to own all their data

A practical implementation where all the data ends up with the consumer: lets say that data is valued like money - and for arguments sake, let's say that our existing banking system also banks our data in addition to our money. Citibank will now be the bank for all of my data, all Classes as defined above. So simple things become easier - anytime I need to provide my address or personal details, I just point them to my data vault at the bank with the right level of permission and they can get my shipping address, or email if the goods are electronic. Nice because when I change my address, I only need to make one change. Now for the airline loyalty program, the travel history now needs to be housed with the bank, not insurmountable, but it does mean that the airline will have to continually send air-travel records to the bank for storage, but it also means that the bank would be able to aggregate all of my travel across airlines. This would go into a profile computed by the bank. That profile would be 'shared'' between myself and the bank - and if my profile was sold to an advertiser, they might see that I am a valuable air travels and I might be in the market for a new flight. Implications for making services easy for the individual are pretty horrible - companies that held no data about you would require some access to your data each time they tried to deal with you.

Scenario 2. Company gets to own all the customer data

This is sort of where it is now. Customers are giving up all the data in return for free use of services. We sign in to Google and search for things to the extent where Google knows our most intimate desires, problems and aspirations. We use Facebook for free and in return give up our conversations to them. We use the bank (not for free) but the bank is able to track every financial transaction. Credit cards, Loyalty Programs, Memberships schemes, Healthcare - our data presently lives in the databases of companies. In fact we really actually own very little - and all seems to be working fine.

Based on these two scenarios, seems like we already have a working model where companies own our data and we're okay with that because of the free stuff, personalization and convenience we get in return

Where are we today?

Let's fight the good fight for personal data being ours - maybe the ability to control it, manage who sees it and perhaps benefit for more than convenience - could we actually monetize our own data. If there was some sort of personal data tsunami event where a billion people's data was hijacked and people lost things, then maybe, we'd get motivated to do something.

My view is that it's not really going to change much. Compare two businesses, one that controlled your data and advertised to you versus the a second that made you pay a fee but did not advertise - right now, the model is that the first would win.

Back to the original question: what's the right balance?

Perhaps its not so much a question of balance. Companies will know more about us than we know - because there is benefit to them knowing versus us knowing. They can deal with us in aggregate (to determine how to market to broad segments) and deal with us individually (which allows them to deal with us more conveniently). We already know ourselves, our preferences and our behaviors. Where we don't, services like Mint.com, Google, 23andme.com, Jawbone Up will tell us. For those of us that want to be introspective there is nothing stopping us.

Let's acknowledge that companies do know more about us because of their very nature. What is wrong and right in my opinion is where the company might use that data dishonestly. Or fails to take adequate precautions that the data may be at risk of being breached by a malevolent organization.

Companies were prevented from using data in an unfair manner - for example, I could not be denied health insurance based on certain ethnic criteria. Could I be denied insurance based on the fact that a large proportion of my Facebook friends had also been denied insurance?

However, to use data about me to blackmail me, con me or fool me into doing something I did not intend. That is where I have a problem. And where data is held insecurely that might cause my personal safety or security to be compromised.

Things that were written

Intel Fuels a Rebellion Around Your Data on MIT Technology Review, May 20th, 2013

Does the Web make Experts Dumb from the Confused of Calcutta Blog
U.S. intelligence mining data from nine U.S. Internet companies in broad secret program in the Washington Post, June 6th, 2013

realtean Thu, 06/06/2013 - 02:15

Beyond Omni-Channel

Gam Dias — Mon, 18 Mar 2013 05:07:14 +0000

Beyond Omni-Channel

Omni-Channel retailing seems to be all the rage these days - aligning assortment, centralizing inventory and providing a seamless customer experience. However, there are a number of interesting startups that are innovating beyond the current Omni-channel paradigms (March 2013)

I've been in a number of meetings recently where large established retailers discussed their Omni-Channel strategies. Efforts focused on integrating 3 silos of brick and mortar, web and mobile: a customer can be recognized across all three channels; that assortment, inventory and pricing have some consistency and parity across channels; and that browsing, checkout and fulfillment for a single transaction can be executed over multiple of the channels. For established retailers with even moderate transaction volumes, these are non-trivial goals.

However, I recently encountered three retail propositions that go beyond the usual definitions of Omni-Channel. These businesses are successfully combining online and physical store with print and publishing in novel and exciting ways:

Story: The physical store that's a magazine

If a store was a magazine with an editorial calendar it would change theme, merchandise and decor on a regular basis. That's exactly what Story in Manhattan's meatpacking district does. The recent Wellness Story theme showcased products from well-known and independent brands. At NRF in January 2013, founder Rachel Shechtman explained how she put the store into a pre-launch beta - a phase normally reserved for software - where she sold merchandise from online startups. Today the store changes format more frequently than most pure-play online stores. Just how responsive can a store be - Story proves that it can be done.

Visit Story at 144 10th Avenue at 19th Street, New York, NY 10011 or online at ThisIsStory.com

Wingtip: The club that is a loyalty scheme that is a multi-channel store

Walk through the marbled hall of gentleman's outfitter Wingtip, then ride the elevator up to the 10th floor and step into the wood paneled lounge of the Wingtip Club. Complete with whisky bar, golf simulator and pocket squares and ties that can be borrowed by members. Monthly subscription dues are converted to members points that can be spent in the store. Armchairs and sofas upholstered with suiting fabrics available for bespoke tailoring. Experience a certain lifestyle, then buy the jacket in the store or online. How deeply can a retailer integrate a loyalty scheme with a multi-channel proposition - Wingtip shows how it can be done.

Visit Wingtip at 550 Montgomery St., San Francisco, CA or online at Wingtip.com

Goop: The magazine that is an online store

Every Thursday, an online store is delivered to inboxes around the world. Founded by Gywneth Paltrow, Goop brings together the editorial depth of a magazine and a carefully curated range of products to match. Although the site has been getting some pretty rough press online for its editorial style, the fact that it has meshed a magazine, online newsletter and store is a revolution that more publishers could consider rather than sticking with PPC advertising. For retailers, how can your mailed or online promotional flyer turn into a publication that can be read, (critiqued), and shopped - Goop demonstrates how it can be done.

Goop.com

I've also met with three more companies that are providing tools for businesses to go beyond the traditional Omni-Channel integration projects:

Soldsie: Turn Facebook comments into transactions

There is a point of friction in Social Shopping - the fact that I have to leave the Social Media site and click through to the retailers website, where I must put the item into the cart, then I can proceed to pay. Soldie very simply allows a Facebook fan page (or whatever they are called now), to initiate a transaction by a Facebook member simply typing the word 'sold' into a comment box. The Soldsie service then emails an invoice to the customer who can fill in payment and shipping details. Simple, elegant and almost friction-free. For retailers who really want to turn Social into Shopping, Soldsie will make that possible.

Soldsie.com

Bay Sensors: Google Analytics for your physical store

Palo Alto, CA based BaySensors is equipping physical retail stores with a set of sensors and data analytics that will allow the merchant to have the same degree of analysis that they would have for their online properties. Sensors on the outside monitor passing foot and vehicular traffic - when correlated to window displays and signage, it is possible to measure the effects of signage on traffic slowing down and then entering the store. Sensors on the inside monitor location, volume, gender mix and movement - and correlating this to departmental PoS information provides an accurate picture of how people are shopping. For Omni-channel retailers who are gaining from using web-analytics, BaySensors brings this to the physical world"

BaySensors.com

TreeSaver: Tools to enable you to create magazines with ease

Treesaver is new and comes from the publishing industry, but the idea of democratizing the publishing process opens up all sorts of opportunities for retailers and content creators alike. Instead of now creating a blog and running PPC affiliate advertisements, being able to quickly put up a magazine becomes possible. Taking the example of Goop where the magazine has a cart and checkout, my next task is to get the owners of Treesaver to put the retail infrastructure with cart and checkout on the site. For Omnichannel retailers who want to do something interesting with their magazine, Treesaver might have an answer sometime soon.

Treesaver.net

Reading

Making Omni-Channel Retailing a Reality" from Forbes Magazine (Jan 14, 2013)

GoopYou Reading Goop So You Don't Have To Revolutionary concepts will inevitably spawn a spoof

Do, Make, Be, Barf: The Year in Goop on Jezebel (Dec 28th 2012)

Gam Dias Mon, 03/18/2013 - 05:07

Rock Paper Scissors for Digital Businesses

Gam Dias — Sun, 06 Jan 2013 14:04:30 +0000

Rock Paper Scissors for Digital Businesses

The growth of Social Media has elevated identity, privacy and big data to become vital topics for CIOs and CMOs of online businesses. Looking deeper into legislative, consumer and technology trends, I see the challenges for the post-digital organization as: Privacy, Ownership and Persistence. 'Rock, Paper, Scissors' provides a handy metaphor to describe the challenges faced by post-digital businesses. (January 2013)

Pre-Digital Ro-Sham-Bo

As recently as 15 years ago, most personal information of value such as the record of our birth, our health records and our tax history, were preserved on Paper - in books, journals and government and business archives. The Rocks are our material possessions, tangible assets such as property, automobiles and gold, the heavy burdens that we carried as we moved through life. Our pre-digital era Scissors were the tools that we created value with, things that moved matter like shovels, looms, printers and tractors.

Ro-Sham-Bo Post-Digital

Now jump forwards to today's rapidly changing landscape driven by widespread adoption of social technologies and advances in computing power. We see that the Cloud has replaced Paper as the store of information and also as the transaction medium - tickets, currency and images all now electronic. Social Security numbers, credit scores and bank balances are simply ones and zeros on a network of anonymous remote servers. The Rocks have become our relationships, persistent anchors that provide context for our activities. They are the connections between individuals, businesses and government that create business and social opportunities. And the post-digital toolset are the devices that access and manipulate information and manage the relationships - today, computers, tablets and smartphones and tomorrow, our cars, houses and any object with an IP address.

Transforming Pre-Digital Businesses

With such tectonic shifts, businesses or organizations founded on pre-digital values will need to re-think how and where value is created.

Some rights reserved, image by Fuangg

Libraries and bookshops were essentially exchanges for printed matter - reference, fiction and non-fiction. Today Wikipedia has supplanted Encyclopedia Britannica as the popular source of reference knowledge and as its base of contributors and curators grows, doubts about authenticity and accuracy will diminish. Google Books and Project Gutenberg is digitizing the world's inventory of print, which will be consumed via e-Readers and mobile devices. This is how we say goodbye to paper.

School, Universities and other educational institutions that disseminated knowledge via lectures and classroom tutorials make their way online. Coursera has rapidly cultivated a vast repository of course materials and has built a large student base subscribing to those courses. Online education is not only revolutionizing content delivery, but it may change testing and accreditation all together.

Finally in the space of less than three decades, the music industry has moved through vinyl, tape and optical disc to digital cloud-based storage. The distribution model has moved from radio and retail to online purchase, rental by the track and onto online personalized broadcast channels that resemble personal radio stations - an interesting digital irony that could play out across all content forms.

Challenges for Post-Digital Businesses

For businesses that have been founded on post-digital value creation, where information is the primary currency, there are new challenges to be overcome - Privacy, Ownership, and Persistence.

Privacy

Social Data is the trail of information we leave as we interact via social media - the check-ins (geo-positions), the conversations (text and voice) and the image data (photos and videos). As Randi Zuckerberg recently discovered, whatever information we publish runs the risk of being broadcast in a public forum. The Search spiders are now deep inside Social Media busy indexing your personal content.

As long as our online data has sat in corporate silos and remains poorly attributed, the risks are low. But as data is being joined up across silos via various single-sign on services and data science, organizations are building a very rich picture of us without our explicit permission.

Organizations with databases of customer data are amassing mountains of Personally Identifiable Information (PII). Mature data companies like Experian and Equifax, like financial institutions and like database marketing providers have rules and processes for handling PII, but new entrants are sitting on huge potential liabilities. Data based litigation and legislation may eventually catch up - so new organizations building out prized 360 degree customer information systems will need some checks and balances on how this data is handled.

Ownership

Digital content can be copied with equal fidelity and then remixed and enhanced. Although this has spawned huge creativity, for those who make their living as creators of such content, this presents a problem of ownership and licensing.

For those organizations that store and publish digital content, the part they play in its authorized and unauthorized reproduction will come under scrutiny. The digital rights movement may be too late in advocating for encryption, but there is time for innovative business concepts. I am certain there is an alternative path for creators, publishers and consumers that erodes the benefits of piracy and that will foster creativity and entrepreneurial gain.

Persistence

In the last hour we have uploaded over 10 million photos to Facebook, over 100,000 blog posts, and over 37,000 hours of video to YouTube. For now it looks like the growth of cloud storage capacity can keep pace with the growth in volume. Yet the problem may not be with capacity - the storage is currently paid for and maintained by private companies. If Yahoo decides to take down Flickr, then what happens to our uploaded photos? Same for HP and Snapfish or Fox Interactive and Photobucket? When Delicious was removed, how many people lost their bookmarks? What could happen to our webmail? Our music?

A data escrow service would help safeguard our valuable digital content. Solving the problem of persistence creates an opportunity for new digital business concepts: Of the tens of thousands of photographs we upload, which are the ones that are most valuable? Automated selection via usage statistics and preference settings and a payment for escrow and retention rather than printing could provide value and revenue.

Conclusions

There are new challenges for digital businesses to overcome - privacy, ownership and persistence. As we innovate to do this, there are some pre-digital values that we can rekindle - community, trust and relationships. Prior to mass markets, local businesses relied on word of mouth marketing, and building trust with their customers to reach what today's CRM nirvana - a two-way relationship with individuals who become loyal repeat customers and recommenders.

Semantic Retail

Gam Dias — Sun, 11 Dec 2011 03:13:24 +0000

Semantic Retail

Why would a retailer care about the semantic web, surely this is just another technology fad that the IT department can distract itself with instead of delivering faster transaction systems or more accurate and up-to-date reports? Not so. If fact it turns out semantic technology may enable robust solutions to your retail business users' most pressing problems. (December 2011)

Common Outcomes of Data Bottlenecks

Retail information bottlenecks are best understood in the context of the value chain: Assortment Planning; Merchandising; Availability; Fulfillment; Marketing and Customer Loyalty.

Information about products is not as good as it could be - data received from vendor community can be incomplete, inconsistent and sometimes just plain incorrect. At best poor item information holds up the Assortment planning process and at worst creates lost sales or causes compliance problems with taxes and fees.

Poor item detail data impairs the Search and Browse experience, a problem that results in early session abandonment and sales lost to competitors

Maintaining price competitiveness is difficult in today's environment of flash-sales, offers and aggregators where consumers are able to discover the cheapest prices that are only a click away - this will affect online and in-store items alike.

Incorporating Drop Ship Vendors and 3rd party logistics operations will increase the assortment, this obscures visibility ultimately leaving items unavailable for sale and back-orders leading to a poor customer experience and lost sales.

Finally and most significantly, where customer data is not available to every process leaves both Site Merchants and Marketing at a competitive disadvantage.

Behaviors of the Data Starved Organization

How much time is spent by the Engineering, Reporting or Business departments wrangling data to make a critical decision? The wrangling: first identify the data and locate the source, ensure it is both accurate and viable and finally formatting it into a way that a person or system can act on it.

For strategic decisions this is an overhead that is both acknowledged and justified. However for daily tactical decisions, the difficulty in getting data is often treated as dirty laundry, neither being recognized or accounted for - which means not only a hidden resource / time cost, but more significantly, the opportunity cost of being less agile in response to market, competitor or external factors.

Making Sense of the Data

Once the underlying data around Item, Customer, Inbound Order and Outbound Order is properly mapped into the retailer schema (or Master Data Management System if available) then it opens up whole new capabilities for the IT department to deliver the systems that create competitive advantage.

Data Element	Mapping	Capabilities
Item	Dimensionality of all attributes, Item class(es), Item Component Breakdown, Public Domain Information Concerning Item, Product Reviews and Ratings	Improved search via Google Shopping, LinkedOpenCommerce, Bing and Siri, Price Comparisons, Competitive Market Analysis
Customer	Simple customer attributes, Social Graph Data and Psycho-demographic profiles, Online customer behaviors, Customer transaction history	Basic Segmentation, Simple Collaborative Filtering, Social Shopping, Complex Recommendation, Personal Site Curation (Pico-segmentation); Dynamic User Experiences
Inbound Order	Order Breakdown details, Manufacturer Vendor details, Payment Details, Shipment Tracking, Weather Status, Labor Issues	Ability to better manage inventory by machine insight into order status and ability to expedite orders and smooth out peaks and troughs in availability, ability to carefully manage costs
Outbound Order	Order details, Shipper Details, Shipping Statuses	Manage Order Breakdown Details; Shipper Details; Fees, Tax and Customs Payment Status

The Item, Customer, Inbound and Outbound Lifecycles are documented here.

First Retail's Vision of Semantic Retail

If First Retail achieves its objectives in Semantic Retail, then the term will disappear - all data will be marked up to an extent that machines will read the data about the retail process transaction and make decisions with minimal human curation. Agent Technologies will perform shopping tasks for the consumer.

Examples of thisinclude:

Using semantically available weather data over time mapped to sales to determine the effects of weather on sales and ultimately to predict it that will allow pro-active availability strategies or the ability to track a shipment from manufacturer to distribution center, via vendor, shipper, customs and finally freight company to the back door and monitor for any conditions that will impede with in any way (e.g. GoodRoute for HazMat transportation

Using Social Graph data mapped to the Product Taxonomy to create recommended products for own purchase (e.g. ShoppyCat) and for gifts (e.g. Wantful)

For the consumer to be able to issue a request in some sort of unstructured text (or verbally like with Siri) and then to match those requests with offers in real time (in the same way that Zaarly and Ubokia envisage, but for Vendors in addition to your networks)

First Retail is creating a Semantic Matching Engine that will ingest item catalogs at web-scale in real-time. Coupled to its Unstructured Text Classification capability, this will form part of the new infrastructure required to succeed as a Retailer in tomorrow's marketplace - for further information please send an email to info@firstretail.com

Imagine a World - Gam's Blog

Personal Data Banks

Digital Nervous Systems for Retailers

Transforming the Washington Post

The Bricks and Mortar Cul-de-Sac

Creating a Digital Nervous System

1. Anatomy of Acquisition

2. Customer Value Machine

3. Merchandise Telemetry

The Challenge

Thoughts of selling personal data

Witnessing the Re-Invention of Retail

The Tale of Three Retailers

The Future of Retail

Sears, Eddie Lampert and the Wolves of Yellowstone

Old Retailers Not Suited to the New Environment

New Online Giants and Innovative Retail Startups

Introduction of the Wolves

Making Way for the New

Read All About It

The Wolves of Yellowstone Script from the Video

The Walmart - Jet.com story hints at the new ecommerce infrastructure

Reading

The Asymmetry of Personal Data

Why do we care about Privacy?

Five Questions on Privacy

What is the right balance?

Scenario 1. Consumer gets to own all their data

Scenario 2. Company gets to own all the customer data

Where are we today?

Back to the original question: what's the right balance?

Things that were written

Beyond Omni-Channel

Story: The physical store that's a magazine

Wingtip: The club that is a loyalty scheme that is a multi-channel store

Goop: The magazine that is an online store

Soldsie: Turn Facebook comments into transactions

Bay Sensors: Google Analytics for your physical store

TreeSaver: Tools to enable you to create magazines with ease

Reading

Rock Paper Scissors for Digital Businesses

Pre-Digital Ro-Sham-Bo

Ro-Sham-Bo Post-Digital

Transforming Pre-Digital Businesses

Challenges for Post-Digital Businesses

Privacy

Ownership

Persistence

Conclusions

Other Things to Read

Semantic Retail

Common Outcomes of Data Bottlenecks

Behaviors of the Data Starved Organization

Making Sense of the Data

First Retail's Vision of Semantic Retail

Also Read