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The New Deals

By Becky Ebenkamp

Published Oct 1, 2014 8:00 AM

Businesses and consumers are getting closer than ever, and it’s not just about purchases, pricing and products. Distinguishing brand and product from those of competitors is becoming increasingly important. Savvy business innovators are leveraging technology to transform the marketplace.

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Attention, shoppers: Good news about the technological revolution that is rapidly changing how we purchase products and, as a result, our relationships with brands. Innovative ideas are beginning to truly impact consumers’ lives. Finally!

Now the bad news: We must manage our expectations. “The Future” won’t take the form of some 1950s sci-fi fantasy — don’t plan on strapping on that long-promised jetpack or shopping for a robot maid anytime soon.

Rather than conjuring up overhyped, must-have gizmos, entrepreneurs and forward-thinking companies are designing and adapting advancements to upset the status quo. Yes, we’ll see cool new products, but we’ll also have superior shopping experiences, better service and two-way communication. Businesses are lowering costs (and prices), analyzing data instantly and customizing goods to individual tastes. They’re even studying our patterns and tastes to predict what we’ll want to buy a year from now.

Brave New Brands

As companies develop smarter machines that “learn” to meet people’s preferences and anticipate their desires, it seems an operating system resembling the “female” lead in the film Her isn’t far off. While the latest MacBook Pro isn’t stocked with ScarJo’s smoky rasp, brands are beginning to differentiate from the product pack with intuitive properties.

Deloitte’s annual “Technology Trends” report tracks how “disruptive” forces are transforming business and society. The 2014 study highlighted analytics and mobile, social and other advancements.

“The rapid pace and reinvention of information technology are changing business,” says Bill Briggs, chief technology officer of Deloitte Consulting and former head of Deloitte Digital. Briggs helps clients anticipate the impact that emerging technologies may have on their businesses and shoppers. He says disruption occurs when what is “normal” is displaced by a reimagined version of how value is created or competition is forged.

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Jim Stengel

Disruption occurred, for example, when phones became smart and started recommending restaurants and traffic routes. The spoken-input query is a relatively recent tech breakthrough, yet people now take it for granted. Peer-to-peer networks are disrupting business-to-consumer businesses, and crowdsourcing is another collaborative phenomenon that could usurp the services of consultants. “People used to go to the Internet to get information,” says Jim Stengel, adjunct professor at the UCLA Anderson School of Management and president/CEO of the Jim Stengel Company. According to Stengel, who was formerly global marketing officer at Procter & Gamble, “Tesla, Pinterest, Uber, Airbnb, My Fitness Pal — these are all brands that are coming to the consumer to bring them what they need, [and it’s] forcing change in many categories.”

Aaron Hirschhorn M.B.A. ’05 agrees. “The Internet is connecting us in real life today,” the Venice, California-based entrepreneur says. “It’s not about just posting comments anymore — companies now fill real needs in people’s lives.”

The democratization of entrepreneurship is reshaping businesses, says Guy Kawasaki M.B.A. ’79, who’s advised Google’s Motorola business and, as chief evangelist, helped create the cult of Apple. “Everything that a start-up needs today is either free or cheap — infrastructure, tools, marketing, real estate — which means many more people can start companies.”

John Tabis M.B.A. ’06 says this wide array of tools helped him start and scale his floral supply business, www.thebouqs.com. “It’s easier than ever to get a business off the ground,” says Tabis, as sharing replaces antiquated business models. “You can take advantage of all the open-source software available to increase productivity with fewer people.”

Keith Chen sees the sharing economy merging with the parts of our lives that were the least touched by technology.

“Companies like Uber are bringing logistics to how we move around,” notes Chen, an associate professor of economics at UCLA Anderson who consults for the alt-transportation app. “There have been many logistical advances in how companies like Walmart move goods into people’s hands, and now [data insights] are revolutionizing how people get around. It may even influence the way future cities are arranged.”

Stengel agrees. “The way people buy and shop will continue to evolve,” says the professor/brand consultant who taught a course at the 2014 Cannes Lions advertising festival called the Jim Stengel Young Marketers Academy. “Companies need to focus on what can be made faster, more intuitive, more desired.”

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Stengel notes several big brand innovators, including Burberry, whose interactive London store engages shoppers, and Delta, which has embraced mobile. “Google, of course, is constantly innovating, as is Amazon,” he notes.

But Kawasaki — now chief evangelist of online graphic design tool Canva — is hard-pressed to name names of large companies leading the way.

“Apple led the pack before, but it’s fallen behind,” he laments. “I’d say that adapting innovative ideas is still the domain of start-ups: They don’t know what they don’t know, so they try more risky ideas.”

UCLA alumni are at the forefront of innovations that impact their fields and alter the way people shop for everything from financial services to pet care.

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Keith Chen

For dog lover Hirschhorn, necessity was the mother of invention. He found entrepreneurial inspiration after returning from a 10-day trip and learning of Rocky and Rambo’s Unfortunate Kennel Experience: “Our bill was $1,400, and one of my dogs hid under my desk for two days!” Hirschhorn recalls.

In 2012, he launched DogVacay, a more humane and affordable kennel alternative that pairs pet owners with one of 15,000 carefully screened hosts/sitters. With 500,000 nights booked and $15 million in new investment, the web-based dog-sitting network is disrupting pet services and Hirschhorn’s main competitors: 1) kennels and 2) your friends and family. (See “Dog Days,” UCLA Magazine, January 2013, for more on his business.)

Technology helped The Bouqs reinvent the floral supply chain. The e-retailer eliminates waste by bypassing the industry’s many middlemen and delivering directly from farm to consumer.

Tabis launched www.thebouqs.com in 2012 with a novel notion: Buying flowers should be simple, transparent and affordable. Cut on order, they are sourced from Ecuador — eliminating the waste of one out of three stems that occurs in conventional flower retailing.

“We’re the opposite of Amazon,” Tabis says. “We use technology to offer an on-demand service.”

The JOBS Act (a 2012 bill to loosen regulations on small-business investment) included regulatory-rule changes that make this prime time to upset stale financial sector processes. In 2009, Thomas Foley ’06 cofounded Xpert Financial — which markets Xpert ATS, an online platform for investing in private companies — with fellow Bruin Adam Draper ’12. Foley also cofounded Venovate, an online platform where accredited investors can access alternative assets, such as real estate, natural resources and venture capital.

On the B2B side, TargetClose devised an “intelligent routing” system that enables direct-response sites to tailor each visitor’s experience.

“Ninety-nine percent of the time, you, me and my grandmother get the exact same website experience,” says Kelly Perdew J.D./M.B.A. ’96, co-founder and CEO — and winner of The Apprentice 2. “Our technology learns individual buyer intent and gives each person a different user experience by responding with the optimal offer, content and product recommendations.”

TargetClose uses “anything knowable” to know us better: browser and device types, whether there are media playing, the search term, or whether the visitor searched at all.

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Caprice Willard

Boston Retail Partners, an independent retail management consulting firm, observed a disconnect among retailers. While 95 percent consider customer engagement a top initiative, only 3 percent can identify shoppers via their smartphones when they walk in the door.

Meet the outlier: Macy’s. Caprice Willard ’94 is vice president/regional planning manager of women’s apparel for the retailer’s Southwest region, about 100 stores. As liaison between them and Macy’s HQ, her eyes and ears — and excellent analytics — ensure that each store stocks the best assortment for its shoppers.

“We are the voice of the customer, and we tailor every single retail area to that customer,” Willard says, explaining the art and science of slicing and dicing shopper data and gleaning insights. If one store always runs out of size 4 jeans in Brand X, Macy’s adjusts the local mix. Macy’s even made Fast Company’s 2014 “World’s Top 10 Most Innovative Companies in Retail” for “mainstreaming everywhere retail.”

“People are so busy now,” explains Willard. “They want to be able to shop wherever and whenever, and omni-channel opportunities allow them to click and get what they want on a mobile device.”

Kyle Cobb ’06, M.B.A. ’12 works as a product manager at an innovative solar installation company, SunPower Corporation. Last year, he and his partners’ company Greenbotics was acquired by SunPower. Greenbotics developed a robotic vehicle system called CleanFleet that automates solar-panel cleaning at power plants.

The innovation? A cost- and time-saving technology, since dirty panels can lose 15 percent of their energy yield.

Getting Schooled

In close proximity to many innovative industries — Hollywood’s entertainment/content complex, Silicon Beach’s technology — UCLA is preparing future business leaders to compete in a modern marketplace in which everything from product design to service is being reimagined.

In his last year at Anderson, Asmi Shah M.B.A. ’14 ran Anderson’s Entrepreneur Association Conference, which unites students, professors, entrepreneurs and investors. Two of that year’s finalists, Vow to be Chic and Neural Analytics, raised funding and are executing their businesses.

Today’s grads, Kawasaki thinks, are better prepared because their education is more “real world,” less Fortune 500/packaged goods. “Nobodies are the new somebodies,” says Kawasaki, who is one of Anderson’s 100 Inspirational Alumni.

Tabis says UCLA is where The Bouqs and his entrepreneurial desire were lit. “Anderson has a really great culture, and they focus on much more than the M.B.A. content,” he notes. “Several classes [stressed the value of] relationships in business.”

Willard found her bliss — and a 20-year career — while getting schooled: She was recruited for Macy’s Executive Trainee Program at UCLA’s Career Center. The English major had planned to become a teacher.

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Guy Kawasaki

“I really love what I do, and I stumbled into it,” says Willard, who was honored as one of the “Most Powerful Women in Finance/Retail” by Women of Color magazine in 2012.

“Retail isn’t an exact science — customers still pick the pink one instead of the black one, even though all our research says the opposite,” Willard explains. “[But] liberal arts majors live in the gray: There’s no exact science when you’re breaking down a poem or analyzing Shakespeare.” She’s noticing that more M.B.A.s are minoring in something different to round themselves out.

Minoring in philosophy was a life-changing experience for Foley because he learned to ask, “Why?” “Classes, readings and discussions taught me how to think, how to ask questions and how to never accept ‘That’s the way it’s always been done.’ ”

Stengel, who teaches a course about the chief marketing officer called Next Generation CMO for second-year Anderson students, says millennials want to work for an organization with a strong culture and a purpose that improves lives. If their business school’s curriculum isn’t inspiring, this generation will go elsewhere to learn and prepare for their business world.

Serial entrepreneur Perdew, who delivered a keynote address at this year’s Entrepreneur Association Conference, says Anderson promotes a symbiotic, hands-on business experience: Students get trained while providing companies with cheap labor. Being a Bruin even gave him a leg up on his reality-TV competition.

“If you’ve taken Bill Cockrum’s finance class — or Al Osborne’s ‘Doing Deals’ — you’re pretty prepared for The Apprentice,” Perdew quipped.

“I try to bring [my work] to the classroom,” says Chen, who teaches classes in behavioral economics, competitive strategy and behavioral decision theory. One class is working on a menu-choices project for white-hot dining chain Umami Burger. Another helps Chen consult for Uber, which is changing the staid car-service industry “through lots of math and interesting technology.” Uber’s co-founder, Travis Kalanick, also attended UCLA.

SunPower’s Cobb credits UCLA with plucking him out of his small-town Chico, Calif., background and transplanting him into a diverse, stimulating environment. “It helps you find yourself and exposes you to things so you’ll be better prepared for career challenges,” he says. Relationships, he says, opened every door in his career. “Foster them in school, and use your time wisely by becoming an entrepreneur in a collaborative, low-risk environment,” he advises. “Worst-case scenario: You leave with a degree. Why not try to start a business at the same time?”