The E.T. Economy: Disruptive Technology And The Behavior Of Shopping

• (0:30) - Disruptive Technology and New Shopping Behavior
• (2:10) - Google, Facebook and Alibaba Making Waves in the News
• (8:30) - Facebook Ads: Creating a Revolution For Small Business
• (10:00) - The E.T. Economy: It's All About Consumer Experience
• (15:20) - The Gig Economy: Thumbtack, TaskRabbit, Upwork
• (19:00) - Mobile Shopping: SSF Method and 8 Big Predictions for Facebook Marketing
• (25:00) - How Facebook Sells $30 Billion in Advertising
• (28:30) - Episode Roundup: Podcast@Zacks.com

Welcome back to Mind Over Money. I’m Kevin Cook, your field-guide and story-teller for the fascinating arena of Behavioral Economics.

Today we’re diving into to the disruptive technology that creates new shopping behavior… and vice versa!

I call it The E.T. Economy, which stands for Experience + Transformation and I’ll explain that in a moment.

Let me first give you a preview of the next 28 minutes or so…

This show is for you if you are an investor in any of the following companies or their hoping-to-be-disruptive competitors: Google, Amazon (NASDAQ:AMZN), Facebook, Alibaba, Microsoft (NASDAQ:MSFT), Adobe, and Shopify (SHOP) among others.

And this show is for you if you are an entrepreneur in the trenches of online/digital marketing. I’m going to have some cool resources for you to help you grow your business.

Finally, this show will be a whirlwind tour through all these topics as I have experienced them both as an investor and as a friend and consultant to many online marketers.

I have no set script. Just 5 sheets of paper in front of me with mind maps, notes, and quotes. So if I seem to go off on a tangent or two, or double-back on a theme, trust me that there is a method to my madness.

I am attempting to tie together some YUGE changes happening in our global, digital economy.

Changes that are very exciting and they’re happening right now. These waves will be unfolding for many years, so the quicker you understand them, the better for you, your investments, your business, and your family.

The Online Giants Who Reinvented Commerce

And this is such an exciting day to be doing this as 3 of my favorite companies are all in the news: GOOGL, FB and BABA!

Google parent Alphabet (NASDAQ:GOOGL) is being fined $2.7 billion by the EU for antitrust violations with search results. Apparently, this Big Brother was caught not playing fair with their algorithms.

Next up, Facebook (NASDAQ:FB) chief Mark Zuckerberg announced this afternoon that they crossed the threshold of 2 billion monthly active users (NYSE:M) . This is the sound of money to online marketers who know how to strategically and tactically employ FB Advertising for their business!

And Alibaba (NYSE:BABA) saw the price target for its stock hiked to $190 by analysts at JPMorgan (NYSE:JPM) who like the way the “Amazon of China” is becoming a cloud-data-media platform.

Not to mention this blockbuster: BABA chief Jack Ma came to town last week and wowed US investors and entrepreneurs with his vision. When asked if his agenda was to promote Chinese products to American consumers, he said quite the opposite. He is inviting North American small businesses to use his gateway to China’s middle class which is growing to over 500 million people.

That’s a tremendous new market and I explain why, based on my experience with Facebook as an investor and consultant, in the podcast.

The E.T. Economy

My E.T. stands for Experience + Transformation because when you think about what makes people open their wallets and buy, it’s all about either a pleasurable experience (food, clothes, entertainment, travel, sports, etc.) or some type of change or solution (new device, wardrobe, car repair, Dr., lawyer, home, school, etc).

And I don’t mind stealing the title from a favorite childhood movie by a favorite director. Stephen Spielberg was/is a master storyteller who knew that film was a place for both experience and transformation. You could say he’s been the Disney of feature films because he has been so consistently great at it.

For more on the importance of stories in every part of life and business, check out my February 28, 2017 edition of Mind Over Money where I share some great insight from another Hollywood legend, Peter Guber.

Brains Prefer Stories to Make Decisions

Fresh, Friendly, and Fun

As traditional department stores like Macy’s (M) struggle to remain relevant, I always like to use the example of Walmart (NYSE:WMT) vs. Target in the store wars to explain my thesis of The E.T. Economy.

Remember how Target seemed to reinvent out of nowhere and challenge the dominance of Walmart in that category? To me, it was simply about 3 things: being fresher, friendlier, and more fun.

Those three attributes – fresh, friendly, and fun – also rule our online experience. We want to be on attractive sites and apps that are exciting, easy to use, and engage us personally. And if the app connects us quickly to helpful and friendly staff and products, all the better.

Mobile is Not a Screen Size – It’s an Ecosystem

I did some research on this over the winter when I consulted for a startup company who was assigned the task of pitching a new mobile app to Macy’s. The dramatic decline in Macy’s annual sales from $28 billion in 2014 to $25.4 billion (as of April 30, 2017) led to the announcement last summer that the company would be closing 100 stores.

Losing store engagement in the face of a tidal wave of online experiences seems obvious and inevitable to most of us. But losing digital engagement would be the beginning of the end.

Whatever the future of customer engagement that is personal, relevant, and drives more sales, I know I’ll be paying attention to some of the online marketers who contribute to the massive digital sales of Google and Facebook. Together, these two dominate that world and will produce over $100 billion in ad revenue this year.

Here’s one guy you definitely want to listen to if you are doing anything with Facebook advertising: Scott Oldford. Check out his article below and be sure to listen to my full podcast episode to hear me describe his SSF Method of online marketing, funnel building, and converting “relevant relationships into reliable revenue.”

8 Big Predictions for Facebook Advertising in 2017

Oldford is also a master of FB Messenger Bots. Accept his message if you want to learn how to grow your online business.

And leave a comment below or on Twitter @KevinBCook if you liked this topic, want to learn more, or need to share an angle I missed.

Disclosure: I own shares of FB and BABA for Zacks TAZR Trader.

Kevin Cook is a Senior Stock Strategist with Zacks Investment Research where he runs the TAZR Trader and Healthcare Innovators portfolios.