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Adaptive Apps: Reimagining The Future

Mike Gualtieri, Principal AnalystForrester

Adaptive Apps: Reimagining The FutureMike Gualtieri, Principal AnalystSeptember 9, 2014

© 2014 Forrester Research, Inc. Reproduction Prohibited 3

We have entered the age of the customer

#Royalty

Trend

Consumers want to be treated like royalty.

Royalty experiences have contextual

awareness and adapt to serve a single consumer.

Treat consumers like royalty to get their loyalty.


How well do you know this consumer?› Male

› 35 years old

› Single

› Resides in New York City

› Makes $100,000 per year

What do you predict he would do if the bank accidently transferred $5,000 into his bank account?

A. Give the money back

B. Take the money and run

Quiz

George Costanza

#BigData

Trend

Big Data means all your data++.


30%

7%12%

21%

30%

9% 8%14%

35% 34%

Business Decision Makers Technology Decision Makers

Base: 452 North American technology decision-makersRespondents answering “don’t know” are not shownSource: Global Data and Analytics Survey, 2014

Base: 249 North American business decision-makersRespondents answering “don’t know” are not shownSource: Global Data and Analytics Survey, 2014

Most technology decision makers get it; 30% of business decision makers are confused.


Big Data gushes from many sources…

• Data described by a schema

• Relational database, XML, delimited flat file, system events

Structured text

• Free-form text

• Email, documents, tweets, blog comments, Facebook status, genome

Unstructured text

• Audio, images, video

• Surveillance cameras, geological survey maps, Siri voice

Binary

eCommerce

MR

P

Web analytics

eCommerce

Web

Mo

bile

Finance

Customer Service

CR

M

Cla

ims

BPM

Excel & Access

Dat

a

war

eho

use

Plan

nin

g

Em

ail

Customer Service

ERP

Marketing

So

cial

Med

ia

PO

S

Field Operations

VOC


What percentage of enterprise data do firms use for analytics?

A. 12%

B. 34%

C. 53%

D. 76%

EnterpriseData

Quiz


What percentage of enterprise data do firms use for analytics?

A. 12%

B. 34%

C. 53%

D. 76%

EnterpriseData

Quiz

Source: Forrester Research

1100

1001

1011

001

0100

1001

1011

001

0100

1100

1101

101

0100

1001

1011

001

Historical

Transactions

Customer data

Ops

Gather all your data to breakdown silos and prepare it for deeper analysis.

Data

Now, analyze the heck out of it - every which way.

Process

Predictive analytics and streaming analytics have momentum.

Non Modeled Data Exploration And Discovery

Advanced Visualization

Metadata Generated Analytics

Search/Interactive Discovery

Process Analytics

Embedded Analytics

Web Analytics

Reporting

10%13%

16%18%

21%21%

24%29%

33%37%

49%50%

56%58%

81%

15%21%

20%20%

27%32%

19%33%

42%35%

50%54%

59%57%

77%

20142012

“What is your firm's/business unit's current use of the following technologies?”

Base: : Forrsights BI/Big Data Survey, Q3 2012: 634 Business Intelligence users and planners

Reporting is the only

‘widely’ used BI technology

Base: : Forrsights BI/Big Data Survey, Q2 2014: 452 Tech decision makers

Advanced analytics is

growing strongly

+30%

+62%

+52%

#Predictive

Trend

Predictive models can predict customer attributes and behavior.

DEFINITION

FORRESTERTechniques, tools, and technologies

that use data to find models – models that can anticipate outcomes with a significant probability of accuracy.


Predictive models can be very powerful and profitable, but understand that:

› Predictive models are about probabilities, not absolutes

› Predictive models may not exist for every question

But, when they work they give you an “unfair” advantage.

Predictive models can have a delightful, multiplicative effect on the bottom line

Direct Marketing – 1% response rate

Send marketing mail to 1,000,000 customers at cost of $2 per mailing to sell a $220 service.

$2 x 1,000,000 $2,000,000

1% response rate means 10,000 customer will buy service

$220 x 10,000 $2,200,000

Profit* $200,000

Predictive Direct Marketing – 3% response rate

Send marketing mail to 250,000 customers predicted most likely to buy at cost of $2 per mailing to sell a $220 service

$2 x 250,000 $500,000

3% response rate means 7,500 customer will buy service

$220 x 7,500 $1,650,000

Profit when using a predictive model* $1,150,000

Traditional

Predictive

* Profit calculation does not include other expenses


Predictive analytics is very different from the traditional analytics approach

Traditional Analytics Data Science

• Choose a business outcome to improve

• Discuss and decide what data will be relevant

• Develop a data model

• Design reports and dashboards

• Choose business outcome to improve

• Assemble all possible data

• Run algorithms to find relevant data & predictive model

• Use the predictive model


Big Data is the fuel of predictive analytics;

statistical and machine learning algorithms are

the engine.

How can you provide a perfect , individualized product recommendation?

Recommend

Turkey

How can you predict where customers will be on Thanksgiving.

Repeat

Should you make an offer she can’t refuse or send a gentle nudge?

Stop

What if you knew your customer was near your store on a sunny day?

How can Spotify use accelerometer data generated by customers while they listen?

Activity

How can you boost performance and retain your employees?

Performance

#Streaming

Data in motion is as valuable as data at rest.

Trend

Apps are blind – use APIs to make them see.


If you can measure it, then you can use it


Streaming analytics can uniquely enable three new tiers of app functionality

Source: April 22, 2014, “Use Sensors To Take Apps To The Next Level Of Customer Engagement” Forrester report

Adaptive apps anticipates a customer’s intent and adapts to serve them.

Trend


Design principles for adaptive apps

› Learning who the customer really is

› Detect the customer’s intent in the moment

› Morph functionality and content to match intent

› Optimize for the device (or channel)

Trip1

Easy. Buy a copper tube ice maker kit.

Trip2

Buy a shut-off valve for the copper tubing.

Trip3

Buy a T-connector to tap the cold water supply line.

Trip4

Whoops. Also need to buy a hacksaw to cut the copper pipe.

Trip5

Finally. A special drill bit to make a hole in the kitchen floor for the copper tubing.

Adaptive apps can make your customers feel intensely loyal.


You must infuse your app architecture with predictive components...


…and expose them as APIs

Developer API API Team

Predictive Analytics

AppAdaptive App

Data Scientist

#Opportunity?


Perfect opportunity! Your competitors are busy with other priorities.

Source: “The State Of Retailing Online 2014” a Shop.org study conducted by Forrester Research

“What are your top three initiatives and priorities for your online (digital) business in 2014?”


Customers are ready.

#Imagination

What kinds of apps could you develop if could

predict and adapt to what customers need in the

moment?

Thank youMike Gualtieri

[email protected]

Download - Adaptive Apps: Reimagining the Future - Forrester

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