How do the established behemoths of the ASX attract young Australians as customers and staff? It’s a question that challenges three leading chief executives of the banking, fast-moving consumer goods and premium retail organisations who met to discuss the issue in the offices of Facebook in Sydney for a special BOSS roundtable.
For Alison Watkins of Coca-Cola Amatil, Shayne Elliott from the ANZ Banking Group and John Dixon of David Jones some searching questions are: How does a CEO overseeing thousands of people stay in touch with the smartphone-connected younger generations?
What sort of staff should you employ to ensure your business is implementing the technologies that will connect with them?
Do the changes in digital technology mean rethinking traditional employment strategies?
Should advertising campaigns change and put more emphasis on social media?
What are the appropriate boundaries for the use of personal data?
Before answering these questions, Stephen Scheeler (pictured right), managing director of Facebook in Australia and New Zealand, provided some context to the mobile revolution.
He says the penetration of smartphones in Australia is about 84 per cent but among those aged under 24 it is 90 per cent.
Scheeler says the most profound change to have occurred over the past decade is in the consumer experience.
“The biggest single disconnect and difference between one generation and the next is what they expect from brands that they love, from services that they get and from the media that they consume,” he says.
“Over the next three, four, five years I think the shift is going to start to become absolutely profound. It is going to loom so massively in every business in Australia, every enterprise is going to have a huge mobile challenge and I don’t think many are prepared to deal with it today.”
Scheeler says that even Facebook, which has a 32-year-old CEO in Mark Zuckerberg, struggles to keep up with the pace of change driven by youth.
Encourage collaboration
Alison Watkins says she is fortunate to have a young son who is a gaming YouTuber.
“I went along to this amazing gaming convention called BlizzCon in LA just a couple of weeks back with my son,” she says.
“It was just to really understand how the gaming industry is changing the way young consumers are entertaining themselves and how do we as a company engage with that.
“You can easily be sitting there thinking you get it, but you’re so out of touch.”
Watkins says the need to be in touch with younger Australians has affected her thinking about the Coca-Cola Amatil workforce.
“We have a lot of really good young people in our business,” she says. “What I think we need to do really well is listening and empowering them. So I don’t think we’ve got that right yet. Judgment and experience, I like to think, still counts for something. So it’s how do you find that balance?”
Coca-Cola Amatil has just launched Facebook at Work to encourage collaboration at work among young staff members.
Watkins is impressed by the approach taken by Shayne Elliott at ANZ, who appointed former Google Australia managing director Maile Carnegie as group executive of digital banking. “Maile’s job in running digital is how to create that great customer experience. Nobody wants a mortgage. People want to buy a home or a stable business or whatever but nobody wants a loan. So how do you engage that customer experience and make that interesting and not a commodity?” Elliott says.
Strategic thinking
Elliott admits that virtually all the big financial decisions taken in people’s lives are done face-to-face and not online. That explains why the bank is opening branches with no tellers and no money. Instead the people in the branch are there to advise on home loans, insurance and other products.
Elliott says the explosion in the use of smartphones has influenced the bank’s strategic thinking. It was the first and only one of the big four banks to offer Apple Pay and its goMoney app is used by one million customers.
The Apple Pay decision was an obvious one for Elliott for two reasons. He says iPhones are owned by affluent Australians and two-thirds of ANZ customers have iPhones.
“We should listen to our customers and it forces us to innovate, it forces us to think of new ways to service those customers,” he says.
Elliott says ANZ’s new chief information officer, Gerard Florian, is a big data and cloud-computing specialist who will use digital technology to speed up everything about the ANZ customer experience.
Digital space
John Dixon, the new CEO of David Jones, says digital capability is paramount for staff in a mobile world. “I think the tenure of digitally minded people, certainly in what I’ve experienced in retail over the last few years, is much less,” he says.
“In the old days actually having people that had been in your business 10 years or 20 years was seen as a real sort of attribute.
“There are still many positions within an organisation where that level of experience is very, very important.
“But I think in the digital space actually, both the employees want to be more promiscuous, you know, they want to move around, they want to get as many different experiences as possible.
“I think companies are having to think quite differently about that. Actually having people in those sorts of roles for, you know, maybe three, four, five years, is not necessarily a good thing because you want to be constantly refreshing that talent pool and bringing people in with new thinking and new experiences from different tech industries.”
Dixon is clearly going to bring new employment practices to David Jones to achieve his target of having 10 per cent of sales online within three years.
“We’re having to think quite differently about where we source people from and actually almost deliberately saying, ‘If we only retain this person for a couple of years, that’s absolutely fine because they’ll make a massive difference’.
“But they then might actually appear to be a little bit past their sell-by date after two-three years and there’ll be different people with different experiences coming through.”
Retail perspective
Dixon has come to David Jones after a 25-year career with British retailer Marks & Spencer in the United Kingdom and France.
He says Australia will inevitably follow the UK lead where on average 15 per cent of sales are online and at some retailers it is as high as 30 or 40 per cent. “That is a seismic shift compared to 10 to 15 years ago,” he says.
“But actually you don’t have to go that far back when we talk about mobile specifically, because five years ago, online traffic would have been very low single digits in terms of what was coming through mobile and now it will be well over 50 per cent.
“I think that’s one of the opportunities in Australia, because this market is less well developed from a retail perspective.
“There are those opportunities to learn the lessons from some of the mistakes that have been made in some of those other markets in the northern hemisphere.”
Dixon is shocked that Australia has one of the highest levels of smartphone penetration, one of the most advanced online banking systems and yet retailers are significantly lagging. “I think it’s pretty obvious to everybody that if you’ve got that high level of smartphone penetration, you’ve got people living their lives through mobile technology in such an increasing way, that it’s going to happen in retail,” he says. “I think retail’s just got a lot of catching up to do.”
One topic that is at the top of mind for all three CEOs and Scheeler at Facebook is privacy. Elliott says he won’t allow ANZ to use analysis of personal data to push products to customers unless there is a benefit to them.
“There’s a caution in our industry about how we use data to make sure we’re doing it for a good purpose,” he says. “We know there’s a group of people out there who love that and there’s a whole bunch of people who find it creepy and don’t like targeted things.”
Special offers
Watkins says Coca-Cola Amatil tries things with consumers in pilot studies to discover if consumers find them useful. For example, she is not sure if some consumers will like a new technology that the company may use to allow Coke vending machines to communicate and interact with someone passing by with a smartphone. The idea is to target special offers but it is only in its infancy.
Dixon has already entered a partnership with Facebook.
“I think our partnership with Facebook is very important in terms of directly reaching customers, hearing back directly from them, what they like, what they don’t like, what they want more of, what they want less of,” he says.
“I think also it is part of how we bring together all the various forms of data into the business.”
Scheeler says Facebook is very cautious about the use of users’ data. “The heart and soul of Facebook is respect for our users’ data and the experiences that they have with us,” he says. “So we are very cautious about the use of that data, how we allow it to be used either by ourselves or third parties.”
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