Having never written a blog before, the setup of this module was completely new to me.  I have hugely enjoyed it and have found the subject content extremely interesting.  Some of the highlights for me were:

• Artificial intelligence
• Augmented Reality
• Virtual reality
• Smart cities
• The sharing economy and the circular economy.
• 3D printing

Image source 1, 2, 3, 4, 5, 6.

These topics grabbed my attention and the discussions around them added value and enjoyment to the subject matter.  It was interesting to hear of other people’s experiences and thoughts on each area, particularly how they thought things would develop in the future.  How other students interpreted questions and activities, developed my knowledge of the subject and reading other people’s comments, supported my understanding of activities.  I feel that I have gained a valuable incite into the future of technology and how businesses are reinventing themselves to keep up in this fast paced environment.

Reflection

Critical thinking is an area that I find difficult and something that I will continue to develop into the future.  Reading other blogs and seeing their style of writing, has supported me in this area.

When commenting on other blogs, I have tried to add value by finding additional information that I could add to their post to deepen and support their understanding of the topic.  Initially, my comments were more descriptive (Journalists and Civil Engineers), I then started to be more reflective (Amazon and HMV). Within later posts, I have tried to become more critical (Apple and Monzo).

Image source 1, Image source 2, Image source 3.

Another area that has helped to develop my learning, are comments made on my blog posts.  The comments on my first post were mainly supportive, reflecting on what had been written without much new content added (Teaching blog).  My second blog had fewer comments but some were more reflective (M.A.C. blog), however I think I could have developed that discussion further .  My third blog received comments which were much more critical and added a new dimension to the discussion, which enabled me to reflect and respond, creating a great dialog (Fitbit Blog).

During this module, I have endeavoured to become more critical in my own writing and to take on board comments and links that have added to my posts, enhancing my learning of the topic.

Personal development and future learning

The skills I have learnt in blog writing have helped me to develop my writing in this style and this I can use in my current job role and into the future. I feel empowered to try new digital and social media platforms at work and now feel confident that I can create the appropriate material. 

I plan to continue with my professional development by attending additional training and workshops, thereby increasing my skills and my ability in this style of writing.

I feel that I have developed my critical thinking skills, which will be extremely helpful moving into the next modules and when completing my dissertation. I can also apply these skills to other aspects of my life.

And finally…

It’s been a great module!  This is the end of a chapter, but not the end of the adventure.  Next is Marketing Strategies, so let the journey continue….

Word count – 528

Links to 4 required posts

• https://marketinglingo198444744.wordpress.com/2019/02/17/take-that-traditional-banking/comment-page-1/?unapproved=6&moderation-hash=1c17b3bbec3db248f9cf260d5e1f5b07#comment-6

• https://samratcliffeonline.wordpress.com/2019/02/03/why-his-masters-voice-is-getting-quieter-and-quieter-in-an-increasingly-digital-world/comment-page-1/#comment-11

• https://samratcliffeonline.wordpress.com/2019/02/17/a-second-bite-at-the-apple/comment-page-1/#comment-18

• https://stagegate.home.blog/2019/02/01/clicks-and-mortar/comment-page-1/#comment-10

Many of us have a Fitbit and use it to monitor our steps, health, miles walked and heart rate. They have evolved from a black band, which counted steps, heart rate and exercise levels, to a smartwatch which can do so much more.  Introducing the Fitbit Versa, their new smartwatch.

Fitbit has transformed the wearable fitness technology space and has created a range of devices designed for daily wear.  It has achieved overnight success and rocketing sales, but what is the strategic digital business model behind the product and can it evolve enough to withstand the tough competition in the fast paced arena of smartwatches?

Disruptive innovation….

Inspired by the Nintendo Wii and its motion sensor technology, two software engineers James Park and Eric Friedman caused disruptive innovation within the fitness tracker industry by inventing the Fitbit in 2007.

Fitbit successfully bridged ‘the Chasm’ on the technology adoption cycle and sold 2000 pre-orders on its first day and hasn’t looked back.  According to Waters (2015), this instant uptake of products was caused by two main factors, the increase in obese people and the number of people who are interested in monitoring their own health.

According to the Gartner Hype cycle, products follow 5 key stages in their life cycle. Below outlines Fitbit’s journey through these stages.

1. On the rise…

In order to achieve success, Fitbit used SMAC (Social, Mobile, Analytics, Cloud) to form its digital business model as part of its Business Model Canvas.

Social – Social media including LinkedIn, Twitter, Facebook, Instagram and Blog posts are used to communicate with both existing and new potential customers.

Mobile – The Fitbit app is designed to monitor your progress, is fully digitalised and can be accessed on a laptop as well as a phone and tablet. The website has responsive layouts so that it can be accessed across a wide range of devices and platforms, giving people greater flexibility on how to engage with the site. Additional services offered are Fitbit premium, Fitbit health, Fitbit care, Fitbit pay and Fitbit coach.

Fitbit products are available in physical stores and can also be bought online through the Fitbit website or other various online stores such as Amazon. 

Analytics – The Fitbit devices are designed to sync with the mobile app and dashboard.  This web based platform provides a wide range of analytics on your health, fitness and progress.  You can interact through the app with friends, on virtual walks and challenges, whilst earning badges.

Cloud – Data is collected and stored in the cloud regularly, monitoring and recording data for each person. This information can be then used to support your fitness journey and also for marketing purposes.

According to Agomuoh (2014), Fitbit strengthened its digital business strategy, when the 2014 campaign ‘Find your Fit’ was launched. By using the metrics available from its customer base, Fitbit was able to identify the different aged user groups and their reasons for engaging with the product.  Product advertising campaigns, through relevant platforms, were then carried out to match the gender, age and fitness level of the targeted audience.

2. At the top…

Fitbit has cleverly placed itself as the leading expert in fitness trackers and is unrivalled in its current technology.  In a report by Statista (2019), the value of Fitbit rose from 5 million to 1.8 billion US dollars between 2010 and 2015.  55.2 million Fitbits were sold globally in 2016 and it is expected that in 2022, 105 million will be sold worldwide.

Fitbit revenue 2010 – 2017

3. Falling into the trough…

Yet with the increasing popularity of the Apple watch, sales have been decreasing at a steady rate since 2017.  In Fitbit’s 2^nd Quarter review of 2018 (Fitbit, 2019), figures showed a drop in sales of 24% year on year.  However, Fitbit believes that this quarter is the trough in decreasing sales, but that tracker sales will start to increase again. 

Peckham (2019) supports this by commenting that the company is going from strength to strength. However contrary to this, Hemple (2018) noted that the total demand for Fitbit fitness trackers in the mid-market is low, as people are looking for cheaper options.

4. Climbing the slope… recreation of the digital business model.

Fitbit realised that in order to survive they need to change their business model and “become a platform not just a product” (Marshall, 2016). So in April 2018, Fitbit announced a partnership with Google, planning to “innovate and transform the future of digital health and wearables, leading to positive health outcomes for people around the world” (Dominic, 2018).  It will sync with Google’s new cloud health interface, connecting users’ data with their electronic medical files, giving medical professionals greater ability in monitoring health conditions. With this in mind, Antin (2018) remarks that fitness trackers are now climbing the slope.

Having said all this, will this new digital business model be enough to keep Fitbit going?  Chauhan (2018) warns against Fitbit pinning its hopes on this market, as there are other products successfully competing in the healthcare sector.  Bromley (2019) commented the Fitbit could disappear before the end of 2019, if it fails to keep up with the market competition.

5. Entering the plateau…

Although Fitbit are not there yet, my thoughts are that wearables will continue to evolve and will eventually enter the plateau to become part of everyday living. According to Crucius (2018), wearables are here to stay and that the future looks bright. 

Word count: 876

References

• Agomuoh, F. (2014). Fitbit Dominates The Wearables Market, But Can It Survive The Coming Onslaught Of Smart Watches?. Retrieved February 16, 2019 from ://www.ibtimes.com/fitbit-dominates-wearables-market-can-it-survive-coming-onslaught-smart-watches-1725780

• Antin, A. (2018). Hypecycle for wearable devices, 2018. Retrieved February 16, 2019 from https://www.gartner.com/doc/3883070/hype-cycle-wearable-devices-

• Bromley, J. (2019). 8 Companies That Could Disappear Before 2019 Is Over. Retrieved February 12, 2019 from https://investorplace.com/2019/02/8-companies-disappear-2019/

• Chauhan, H. (2018). 3 reasons to stay away from Fitbit. Retrieved February 12, 2019 from https://www.fool.com/investing/2018/03/16/3-reasons-to-stay-away-from-fitbit.aspx

• Crucius, S. (2018). Wearable Tech is Here to Stay with a Robust Presence in the Future Healthcare Industry. Retrieved February 15, 2019 from ://www.wearable-technologies.com/2018/06/wearable-tech-is-here-to-stay-with-a-robust-presence-in-the-future-healthcare-industry/

• Draper, S. (2018). How Fitbit is Trying to Transform Healthcare, While Transforming Itself. Retrieved February 16, 2019 from https://www.wearable-technologies.com/2018/06/how-fitbit-is-trying-to-transform-healthcare-while-transforming-itself/

• Dominic, A. (2018). Fitbit Reports 15 Percent Drop in 2018 Q2 Revenue Despite Strong Smartwatch Sales. Retrieved February 12, 2019 from https://www.clubindustry.com/news/fitbit-reports-15-percent-drop-2018-q2-revenue-despite-strong-smartwatch-sales  

• Fitbit. (2019). Fitbit Reports Second Quarter 2018 Results. Retrieved February 13, 2019 from https://investor.fitbit.com/press/press-releases/press-release-details/2018/Fitbit-Reports-Second-Quarter-2018-Results/default.aspx

• Hempel, Dr. (2018) Fitbit in trouble, reasons why market leader is struggling. Retrieved February 13, 2019 from https://www.dr-hempel-network.com/digital-health-startups/fitbit-in-trouble/

• Marshall, G. (2016). The story of Fitbit: How a wooden box became a $4 billion company. Retrieved February 16, 2019 from https://www.wareable.com/fitbit/youre-fitbit-and-you-know-it-how-a-wooden-box-became-a-dollar-4-billion-company

• Peckham, J. (2019). Best Fitbit 2019: which is right for you. Retrieved February 13, 2019 from https://www.techradar.com/news/wearables/best-fitbit-which-is-right-for-you-1322700

• Statista. (2019). Fitbit Inc. revenue from 2010 to 2017 (in million U.S. dollars). Retrieved February 15, 2019 from https://www.statista.com/topics/2595/fitbit/

• Waters, C. (2015). How Fitbit is disrupting traditional business models. Retrieved February 13, 2019 from https://www.smartcompany.com.au/technology/how-fitbit-is-disrupting-traditional-business-models/

“As the high street continues to change, retailers who bridge the gap between digital and real-world interactions will prosper.”

Michael Jackson, Venture Capitalist, 2018.

M.A.C. cosmetics is an example of a highly successful high street business that has looked to maximise profit by operating an online store, while constantly changing and evolving to meet consumer demands (Bhasin, 2018). Consumers are becoming more savvy, they know what they want and they demand the best. Brands are no longer in control, the consumer is.

M.A.C. has managed to successfully bridge the gap between digital and physical locations, as it operates within department stores, high street shops and has a significant online and social media presence (Mohasoa, 2014).

How it all started….

M.A.C. was set up in 1984 by two friends, makeup artist Frank Toskan and salon owner Frank Angelo.  They saw a gap in the cosmetics market for vibrantly coloured, high quality makeup that lasted. They launched M.A.C. cosmetics in Toronto, Canada and initially aimed their new brand of makeup towards professionals.  They wanted to establish themselves as the “ultimate colour authority” (M.A.C., 2018). 

M.A.C.’s first retail store opened in New York in 1991, using makeup artists as customer service advisers. The brand received international acclaim within the industry and by 1995, M.A.C. had been purchased by the world renowned Estée Lauder group.  The products are now available online and sold worldwide in over 105 countries.

M.A.C.’s opportunities and challenges in the digital world

Digitalisation has completely changed consumer behaviour, particularly in the cosmetics industry (Simpson and Craig, 2018). One of the challenges that M.A.C. faces according to Stickyeyes (2014), is the widening age range of their customer base and their varying digital habits.

Big opportunities for M.A.C. are social media and word-of-mouth, which are the main forms of communication they use with consumers (Quaatey, 2012) (Idigo, 2015). M.A.C. engages with vloggers, such as Patrick Starrr and bloggers, who influence and create social media posts and videos to promote the brand on various networking sites. This has led to greater engagement with consumers and higher sales (Estée Lauder companies, 2017). M.A.C. has 84.81% social media engagement and is the most blogged about brand in the market (Stickyeyes, 2014).

The challenge of social media is that it has caused disruption and changed the way the brand interacts with the consumer. It is now a two way channel, where consumers can feedback their comments instantly and in public. Consumers Affairs website (2019) allows consumers to write compliments and complaints about their experience with M.A.C. both online and in store. Simpson and Craig (2018) note that this could potentially have a damaging effect on the brand itself.

Another challenge facing M.A.C is that customers are looking to have the same experience online as they have in store. M.A.C. has resolved this by bringing Augmented Reality into stores and having makeup artists giving advice online, thus merging and harmonising the two aspects of the business.

AR is hitting the cosmetics industry by storm, as beauty companies work to develop Artificial Intelligence and AR to appeal to younger generations (Coady, 2018).  M.A.C. has teamed up with ModiFace to create a ‘virtual try on mirror’ in stores.  This AR software, virtually applies makeup to your skin so that you can see if it suits you without actually trying it on.

“We believe the new ModiFace-powered mirrors will be a game-changing addition to our stores.”

Tim Tareco, M.A.C.’s senior vice president of visual merchandising and store design, 2017.

In addition to all this, AI is being used to predict future market trends and online customer service chat bots and digital assistants are being used to support the customer. 

Opportunities and challenges in the physical world

“Retailing is about digital and face-to-face interactions with customers and how the different channels complement each other”

Helen Dickinson, British Retail Consortium’s (BRC) chief executive, 2018.

The face of high street retailing is changing and Young (2018) described how companies need to upskill their retail staff in digital technology, which is infiltrating the high street stores. M.A.C. has maximised this opportunity by training staff to use the AV virtual mirrors, which they are installing into stores. Kirkpatrick (2017) states that these mirrors will help to increase sales and footfall in bricks and mortar stores.

According to a NatWest report (2018), retailing will be about experiences and not just buying the items. M.A.C. continues to capitalise on its unique selling point, whereby all sales representatives are makeup artists. There is a wide range of makeup services offered which encourages customers to visit instore.

There has been a decline in department stores beauty sales in recent years (Coady, 2018). According to a survey carried out by Ecommerce (2018), 51% of people shop on line. 55% of these customers have shopped more on line this year, than they did last year. Simpson and Craig (2018) confirm this by noting that more people are buying products online than in a physical store. Estée Lauder’s annual report (2017) supports this, by reporting a reduction of revenue in M.A.C’s high street stores. However, this will not faze M.A.C., as they are leading the way with the biggest overall market share in online beauty sales of 5.1% (Yurieff, 2017).

Final note….

Digital locations will continue to grow at M.A.C. and within the cosmetics industry generally over the coming years.  This means that high street stores will have to continue to adapt and change to meet the needs of consumers. The advancement of AR, AI and YouTube videos, has helped to ensure that we choose the appropriate products and are able to apply them correctly, without human interaction.  

The question is will we need retail stores in future?

Reference list

• Bhasin, H. (2018). Marketing mix of MAC cosmetics. Retrieved January 30, 2019 from https://www.marketing91.com/marketing-mix-of-mac-cosmetics/

• Coady, M. (2018). The Beauty Industry Faces Its Biggest Challenge, Ever. Retrieved January 28, 2019 from https://www.therobinreport.com/the-beauty-industry-faces-its-biggest-challenge-ever/

• Consumer Affairs. (2019). M.A.C. Cosmetics. Retrieved February 1, 2019 from https://www.consumeraffairs.com/cosmetics/mac-cosmetics.html

• Ecommerce News. (2018). 51% UK consumers prefer to shop online than in-store. Retrieved January 31, 2019 from http://ecommercenews.eu/51-uk-consumers-prefer-to-shop-online-than-in-store/

• Estee lauder companies inc. (2017). Annual report. Retrieved January 31, 2019 from https://www.elcompanies.com/~/media/Files/E/Estee-Lauder/investors/elc-annual-report-2017.pdf

• Idigo, N. (2015). M.A.C. Cosmetics Communication Dashboard. Retrieved January 31, 2019 from MAC COSMETICS COMMUNICATION DASHBOARD

• Kirkpatrick, D. (2017). M.A.C. Cosmetics rolls out in-store AR ‘try on’ mirror. Retrieved February 1, 2019 from https://www.marketingdive.com/news/mac-cosmetics-rolls-out-in-store-ar-try-on-mirror/510830/

• M.A.C. (2018). Our story. Retrieved 30 January, 2019 from https://www.maccosmetics.co.uk/our-story

• Mohasoa, K. (2014). Experiential vs. Traditional Marketing. Retrieved January 28, 2019 from https://www.researchgate.net/publication/309180612_Experiential_vs_Traditional_Marketing

• Natwest. (2018). The future of retail 2018. Retrieved January 31, 2019 from https://www.telegraph.co.uk/business/tips-for-the-future/future-of-retail/

• Quaatey, S. (2012, December 3). Chapter 8 Segmenting and targeting markets. [Weblog]. Retrieved 28 January, 2019 from http://makeupartcosmeticsinc.blogspot.com/2012/12/chapter-8-segmenting-and-targeting.html

• Simpson, G., Craig, E. (2018). How digital has changed cosmetics and what this means for consumers. Retrieved 28 January, 2019 from https://www.campaignlive.co.uk/article/digital-changed-cosmetics-means-consumers/1463485

• Stickyeyes. (2014). Social engagement report: Colour cosmetics. Retrieved January 28, 2019 from http://www.stickyeyes.com/wp-content/uploads/2015/03/Stickyeyes-Colour-Cosmetics-Social-Engagement-Report.pdf?utm_source=hs_automation&utm_medium=email&utm_content=20753998&_hsenc=p2ANqtz–r80h1ra8kPhyHLWIbtUZa4nQLkhmGk9p9wq0QcnMKTxypqjJLquCW0UMvXaENN2ueDBoVcs0AAgHruRBGArgyrxXS7_zBtyhd9un2Lk-CKVuL9MQ&_hsmi=20753998

• Young, N. (2018) High street shake-up: Challenges facing the retail sector. Retrieved January 30, 2019 from http://www.movecommercial.com/high-street-challenges-facing-retail-sector/

• Yurieff, K. (2017). Who’s Winning in Online Beauty Right Now. Retrieved February 1, 2019 from https://www.thestreet.com/story/14003281/1/who-s-winning-in-online-beauty-right-now.html