Shopee exec explains how mobile-first platforms are helping businesses in Southeast Asia optimize

TERENCE PANG   Shopee
Terence Pang, chief commercial officer at Shopee

Southeast Asia (SEA) has seen rapid development in the past decade, as countries become more urbanized, populations more connected and affluent, and technology more advanced. The region is set to be one of the largest and fastest-growing economies over the next few years, with the digital economy accelerating this growth.

One area that has gone from strength to strength is e-commerce. It currently accounts for less than 5% of total retail in SEA but is growing faster than developed markets like China and the US. With rising connectivity, a young population, and a widening middle class, the industry has plenty of headroom for growth.

So it is not surprising that more businesses are going online to capture a slice of this growth. But in a highly diverse and digital-first region, many brands may find it difficult to establish and grow their online presence. Instead of going at it alone, brands should leverage the ecosystems and reach of platforms, so they can focus on the things that matter- growing their business.

Platforms offer a gateway to mobile consumers

The digital revolution in SEA is just beginning and mobile is at the heart, where the majority access the internet mainly via mobile devices. The global pandemic further accelerated mobile digital adoption and consumption. Google estimates that 1 in 3 digital service consumers in SEA are new as e-commerce, food deliveries, and other online services become essential, and 94% plan to stick to these habits even after the pandemic.

A key demand driver is convenience. There is an app for almost everything in SEA and consumers want to shop and access essential services with a few taps of the smartphone. For retail, consumer traffic is flowing to platforms as people can now buy everything they need from luxury products to electronics to groceries all in one app. For them, platforms are a means to “window shop” virtually at any time, as they compare products at scale and shop for all their needs at one destination. In short, convenience is fast becoming the norm.

SEA consumers are also amongst the most engaged in the world, spending more time on mobile than anywhere else, with most on social media apps. For brands to connect and build loyalty with customers means to continually engage them with exciting mobile experiences.

For example, POND’S launched its AI-powered chatbot on Shopee to give users real-time skincare analysis and recommendations, resulting in two times better conversions. Similarly, L’Oreal launched an immersive AI and AR-powered digital experience and complemented the experience with livestreams and mini games, all within the Shopee app, to deepen engagement with consumers for a more personalized online retail experience.

This seamless mobile experience allows brands to focus on finding innovative ways to engage their customers while also enabling higher sales conversions through its integrated ecosystem, which allows one-stop convenience from discovery to delivery.

Brands can hyper-localize at scale with platforms

Though often seen as a bloc, SEA is one of the most diverse regions in the world with a rich mosaic of cultures, languages, ethnicities, beliefs, and nationalities. In Indonesia alone, census data shows that over 800 native languages are spoken in the country.

Countries are also different when it comes to economic conditions. On one hand, Singapore is a relatively affluent and urban city, while countries like Thailand, Indonesia, Vietnam, and the Philippines are still developing with larger rural populations.

This means that brands cannot take a one-size-fits-all approach in developing their digital ecosystems. The vast majority of consumers are more likely to shop with brands that offer personally relevant recommendations, but scaling these efforts can be difficult and costly.

Through the right platforms, brands can now do so easily. The most successful platforms take a hyper local approach, regardless of market, to ensure that everything from the app design to product selection to payment methods are tailored to local audiences. This not only helps to build trust, but also allows brands to more effectively target specific audiences. By analysing the behaviors of millions of users daily, such platforms can also identify consumer insights and trends that allow brands to optimize their marketing or make it more efficient to test a new product or grow a specific segment.

Beyond data and tools, platforms also provide experienced teams that add value to key but often “hidden” aspects of e-commerce such as partnerships or customer service, that are vital to a brand’s relationship with its customers. This allows brands to offer a complete end-to-end experience even if they lack resources or expertise.

Infrastructure support helps brands to connect the dots

SEA’s geography and demography present unique infrastructural challenges to e-commerce. In many countries, fragmented geographies impact delivery reach and timeliness. Countries like Indonesia and the Philippines comprise thousands of islands, stretching delivery times and making it more costly to buy and sell online. Outside of big cities, road and logistics networks are also underdeveloped, further slowing delivery efficiency. But infrastructure is catching up and new solutions are emerging to address the region’s unique needs.

This is both a challenge and opportunity for brands going digital. Consumers in non-metro and rural areas formed the bulk of the region’s new digital consumers in 2020 and will drive e-commerce demand in the future. Shopee observed similar trends in the year-end shopping season, with shopping activity growing significantly in places like West Java in Indonesia and Nonthaburi in Thailand. Brands that can reliably reach and meet the needs of rural shoppers will have an edge.

Fortunately, there is a wave of logistics support emerging to fill delivery gaps from first to last mile, including parcel dropoff services that connect businesses to logistics providers who can ship swiftly and reliably. The key for businesses is again to work with local partners who know the lay of the land and have the right infrastructure to help them achieve the right mix of reliability, speed, and reach. For example, by partnering with local logistics partners throughout SEA, Shopee has cut delivery lead times in East Malaysia in half and can ensure nationwide deliveries in Singapore, Thailand, Indonesia, and the Philippines.

There is a sea of opportunity for online retail but businesses do not have to swim alone. To do more and go further, it is important to team up with the right platforms and partners. I for one am excited to see where we can go together in the future.

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As ESG investment and goals expand and the sector evolves, expectations grow for more accountability and data

US envoy for climate John Kerry, US Secretary of State Antony Blinken, and US President Joe Biden listen as United Nations Secretary General Antonio Guterres speaks on screen during a climate change virtual summit on April 22, 2021, in Washington, DC
US envoy for climate John Kerry, US Secretary of State Antony Blinken, and US President Joe Biden listen as UN Secretary General Antonio Guterres speaks on screen during a climate change virtual summit on April 22, 2021, in Washington, DC

  • Insider polled 614 business decision-makers in 7 countries about investment in innovation, ESG, and purpose.
  • A majority of respondents reported that their companies have ESG policies as well as specific goals.
  • Companies are learning how to measure ESG performance, as investors look for consistent, reliable data and analysis.
  • Visit Insider’s Transforming Business homepage for more stories.

Companies are increasingly setting environmental, social, and governance (ESG) goals, as systems to measure the impact of ESG initiatives are evolving to meet the moment.

The momentum could be a driver of new areas of business transformation, particularly if companies focus on outcomes in diversity, equity, and inclusion (DEI).

The increased focus on ESG is unmissable. During a Transforming Business roundtable in December, Insider asked the panel about a reported surge in demand for ESG investing, fueled at least in part by the pandemic.

“Millennials are value-led investors – and they’re getting older and they’re getting wealthier,” said Edward Lees, a senior portfolio manager at BNP Paribas Asset Management, and a 2020 Transformer. “So this whole demographic of up-and-coming, value-led, climate-conscious people is being joined at the same time with an explosion of democratizing investment products where you can go on your mobile phone and pick a theme and press a button.”

The focus on ESG goes beyond individual millennial investors, however, as fund managers and insititutional investors are under increasing pressure to include ESG offerings for their clients and to supplement their own holdings.

A recent Transforming Business poll* of 614 business decision-makers showed that 60% of respondents their company had set formal ESG goals. Greenhouse gas emissions topped the goals set, followed by water consumption and carbon offsets. Equity and social justice, and diversity and inclusion were also among the higher priorities.

Measurement and accountability

The pressure is on to quantify ESG investment and outcomes, including at the US government level where newly confirmed SEC chairman, Gary Gensler, is expected to focus on ESG reporting. President Joe Biden’s Leaders Summit on Climate solidified this administration’s commitment to tackle global warming.

In February, Allison Herren Lee, at that time the acting chair of the SEC, released a statement signaling the admistration’s increased focus on these initiatives. “Now more than ever, investors are considering climate-related issues when making their investment decisions,” her statement read. “It is our responsibility to ensure that they have access to material information when planning for their financial future.”

In September, the World Economic Forum (WEF) and the International Business Council (IBC) partnered with major accounting firms to create the reporting framework of 21 ESG standards, and more than 60 companies have agreed to adopt the framework.

The greater the accountability from companies, the greater the potential rewards, as investor appetite for these products grows. “The truth is, being an ESG leader does not guarantee your financial and business success, says Martin Whittaker, CEO of JUST Capital. “It’s way more complicated than that. You have to be able to assess what are companies really doing across environmental, social, and governance issues, how does that really relate to company’s short term accounting and financial performance, and how can i use that as an investor?

ESG, DEI, and business transformation

As companies race to implement ESG goals and operations, progress in these areas may drive new levels of business transformation. Diversity, equity, and inclusion (DEI), which are core tenants in the “social” portion of the ESG framework, is a crucial factor for driving products and programs that fuel innovation.

“The process of innovation as it happens within companies, and the beneficiaries of innovation, i.e. the customer, are all wrapped up in the “S” of ESG,” Whittaker said. “Knowing your customer, knowing your supply chain, what your customer wants and how you are meeting those needs – all that requires a diversity of perspectives and backgrounds, and requires companies to rethink how they do that.”

“Your progress towards innovation could be stifled if you’re not pursuing a DEI strategy,” he said.

*This SurveyMonkey Audience poll targeted individuals who work in a management capacity at their company according to the Audience panel. They included respondents from Hong Kong (n=50), Singapore (n=50), The United States (n=207), Canada (n=104), France (n=52), the United Kingdom (n=51), Germany (n=50) and India (n=50), with local translations in Germany and France. Respondents are incentivized to complete surveys through charitable contributions. Generally speaking, digital polling tends to skew toward people with access to the internet. SurveyMonkey Audience doesn’t try to weight its sample based on race or income. Polling data collected total of 614 respondents March 3-4, 2021.

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TESVOLT cofounder Daniel Hannemann on how his company is changing green manufacturing

DANIEL HANNEMANN   bycompany
Daniel Hannemann, cofounder of TESVOLT

Insider: The building of Europe’s first gigafactory for battery storage systems in 2019 was clearly a decisive milestone since the foundation of the company just under seven years ago. What have been TESVOLT’s other biggest achievements in recent years?

Hannemann: Apart from that, there have been many other highlights. For instance, the many awards we have won, including the German Founder Award in 2018. However, we are above all also proud that we have created high-performance products. The useful life of our products is almost twice as long compared to other systems which are available on the market. This is a definite USP. The fact that we have created such a comprehensive and top-performing product portfolio in only a few years, is probably our biggest achievement.

Insider: What is TESVOLT’S growth strategy for the coming years?

Hannemann: We want to continue to press ahead with our dynamic growth course during the coming years and enhance our visibility further, both nationally and internationally. Our focus is to remain on energy storage in commercial and industrial environments, because this is where some of the highest environmental impacts are generated. Here we can provide obvious benefits. Our clear mission is to make available affordable green electricity anytime, anywhere. With this explicit message we want to substantially expedite the global energy turnaround.

Insider: What are some of the most recent developments and innovations?

Hannemann: One of our major innovations is the active battery management system Active Battery Optimizer (ABO). With this system we have created the only technology of this kind in the world, which optimizes all the cells within the battery. This technology is used in different applications, including for the optimization of self-consumption. Altogether we have now completed 1,500 projects with our energy storage solutions around the world, with market shares between 25 and 40% in different applications.

Insider: What are the biggest challenges right now for companies like TESVOLT and the energy industry in general?

Hannemann: We have little time. The sea levels are rising, the world climate is changing. The impact on ecosystems is enormous. The water is literally up to our neck. The decarbonization of the economic cycles must be pushed ahead much quicker to comply with the meaningful climate goals of the Paris Climate Agreement. This requires joint efforts by the business community, the policymakers, and the society. We must join our forces to save the planet. This sounds dramatic – but all scientifically recognized data confirm that the situation is actually dramatic.

Insider: How has COVID-19 impacted industry (and company) plans?

Hannemann: As challenging as the COVID-19 pandemic may be on a humanitarian level, we have hardly felt any economic impact of the pandemic. We very clearly benefit from the global megatrends of renewable energies and e-mobility and these developments have not been curbed by COVID-19. On the contrary, the environmental awareness of the society has grown once more in the middle of the pandemic. Our internal business processes have likewise almost not been influenced. Thanks to an effective and mature hygiene concept, our production has not stood still. In the areas in which this is possible, our employees also work from home. This works perfectly well thanks to our agile non-hierarchical corporate culture.

Insider: Has it provided an opportunity to increase your customer base?

Hannemann: As a globally networked company we have always strongly relied on digital tools. This has been further reinforced by the pandemic, which is a very clear advantage. On our customers’ level, this has triggered a significant change and they have likewise arrived more strongly in the digital world. Together we can act significantly more flexibly and efficiently in part. Instead of expensive business trips we now communicate mainly via digital channels with our customers or employees working for our subsidiaries in Australia and Korea. The pandemic has accelerated the digital transformation of the world of work and we definitely consider this to be an added value.

Insider: Where do you see the company in 10 years’ time (and beyond)?

Hannemann: In my wishful thinking, by 2031 e-mobility and stationary energy storage systems will no longer be exceptions, but a living reality for many. We’re doing everything possible to be one of the main players proactively driving this positive development.

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New president of Universal Robots defines his leadership style and strategy for driving innovation in manufacturing

Kim Povlsen 1200px
Kim Povlsen, President of Universal Robots

Universal Robots launched the world’s first commercially viable collaborative robot (or cobot) in 2008 and has since become the fastest-growing segment of the global robotics market. With the recent departure of Jurgen Von Hollen, the company’s new president Kim Povlsen, “the new enzyme to the UR innovation formula,” and former elite athlete talks to Insider about leadership, human ingenuity, and how COVID-19 has changed manufacturing.

Insider: How will you continue to drive innovation in your new role at Universal Robots?

Povlsen: UR is driven by ingenuity, creativity, and a genuine desire to improve workplaces and global productivity. It is my ambition to build on this heritage and bring the flexible cobots to new audiences.

I will draw on my background from The Maersk Mc Kinney Moller Institute at Syddansk Universitet. This unique environment hatched several figures from the Danish robotics community and the creativity found here is a key ingredient for future innovation. In this sense, I am the new enzyme to the UR innovation formula. I will support the boldest ideas and link them to commercial opportunities to push UR innovation forward.

Insider: What exciting new plans can we expect to see from UR?

Povlsen: The industrial world is at a crossroads. Decisions must be made for more agile and adaptable production paradigms to accommodate new consumer behaviors. This is relevant for large corporates as well as SMBs, and UR’s flexible cobots are positioned perfectly to play a pivotal role in this paradigm shift. UR’s open ecosystem and UR+ platform will play a key role in this transformation and continue to create new use cases for cobots.

Insider: How excited are you for what the next few years in robotics looks like and how does UR fit into this picture?

Povlsen: I am beyond excited to have entered the UR world at a time and place, when the manufacturing industry is reaching out for new approaches to increase productivity in a more flexible and customer-centric way. We have only just scratched the surface of potential within robotics. We see new applications, open innovation, and global developments driving flexible automation forward at an ever-increasing pace.

Insider: What’s your leadership ethos and what’s it like working with you?

Povlsen: I constantly drive myself and my colleagues mad with the “why” question. Why are we doing what we are doing and to what extent do our actions support this ethos? It is imperative to step back from time to time to reflect and to challenge. This can guide the organisation towards greater goals.

As a former elite athlete, I also believe in multifaceted talent development. You need to improve on several parameters to create sustainable growth and creative drive.

Insider: How has the pandemic impacted the industry (positive and negative) and how will the industry cope?

Povlsen: No doubt the pandemic has challenged the manufacturing industry. Restrictions disrupted supply chains and lockdowns have posed immense financial and practical urgencies on owners as well as staff and management. At the same time, we have witnessed new creativity and the adoption of new technologies – such as allowing more local and flexible production. In this light, I believe the manufacturing industry will come out on top, reinvent itself and be prepared for new global opportunities.

Insider: What lessons have you and your company learned?

Povlsen: We have witnessed, in the most challenging of circumstances, that human ingenuity and technological advancements present new and unexpected potentials. We have seen manufacturers realigning their production to Covid safety equipment assisted by flexible cobots. These examples will inspire and drive innovation forward.

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Meet the Barclays MD working to transform finance through distributed ledgers and quantum computing

Lee Braine_By Barclays
Dr. Lee Braine, director of research and engineering in Barclays’ Chief Technology Office

Dr. Lee Braine has spent the past seven years working across Barclays’ wealth management, markets, and corporate and investment banking divisions – but his job couldn’t be further from that of your typical City of London broker or trader.

A managing director in the bank’s chief technology office, London-based Braine is responsible for research and engineering across corporate, investment, and retail banking. He has a special focus on distributed ledger technology, like blockchain, as well as quantum computing.

Insider sat down for a virtual chat with Braine – who was named one of Business Insider’s 100 Transformers – to discuss what he’s working on and where the industry is going next.

Transcript has been edited for clarity and length:

Insider: You’re not an average banker. You’re a computer scientist by training. Can you tell me a bit more about your background?

Braine: I have a PhD from University College London in computer science-the particular topic was object-oriented functional programming. I used that research knowledge in banking, and that included, for example, working with financial market infrastructures when I was in my twenties to produce new architectures and new optimization algorithms. In this case, it was for securities settlement. After that, I spent quite a few years working in technology management.

Within Barclays, for these last 7 years, I’ve been working on technology innovation. The typical thing I’ve been working on is responsibility for advanced technologies that Barclays needs to be up to speed on. We work closely with a variety of stakeholders, not just [technology] vendors, but also very closely with official institutions, including central banks, regulators, and the government on the potential of these new technologies, and the risks and any issues that may lie with them.

Insider: Let’s talk about distributed ledgers-you lead Barclays’ efforts there. Why is Barclays interested in distributed ledgers like the blockchain?

Braine: Interest was initially sparked about 5-6 years ago when we were looking at bitcoin from a technology perspective. That means not as an investable asset, but at other interesting, novel technologies underlying bitcoin that could be repurposed in more traditional financial services. There are several features of bitcoin that inspire a different way of working: at the lowest level, there may be things such as consensus algorithms, hashing technique, the chain of blocks-all of those types of low-level technical things that everybody learned about in the last few years from blockchain. But higher up, there are new ways of working, almost new market models that get inspired by cryptocurrency.

For example, currently, financial market infrastructures are centralized financial institutions, and their technology is centralized-they’ve got centralized databases and centralized processing. The decentralized nature of something like bitcoin has inspired people. Could we have a different model of the market? Could we imagine decentralizing, not just the technology, but also some of the rights and obligations of participating in such a network? So to make that abstract idea a bit more concrete: imagine if you’ve got a clearing house, and currently we send all our trades to the clearing house, it performs the processing and sends us back the result. Imagine if, instead, each of the participants formed a network, they operated peer-to-peer, and that peer-to-peer model then gets translated down into the technical solution. So that’s a different way of working-you can call that a distributed financial market infrastructure.

It’s a big infrastructure change to the market-so why bother? What we see is quite a few potential benefits. These include radical simplification and rationalization. Another thread is you’re able to speed up settlement times.

Insider: Tell me about Utility Settlement Coin and the Fnality investment.

Braine: The consortium was originally called Utility Settlement Coin, and then, about 2 years ago, a group of financial institutions – so 14 banks and one exchange – strategically invested to create the new entity, which was Fnality International. They’re building a new payment system, and this is going to offer peer-to-peer settlements using an underlying blockchain platform. The money that moves on it will be one-to-one backed by funds that have been pre-deposited at a central bank, so it’s effectively a pre-funding model. It allows a number of benefits in terms of settlement.

For example, you could continue operating outside of the window when the real time gross settlement-RTGS-is closed at the central bank. You could, for example, connect to other tokenized assets to allow atomic swap between them. If you had Fnality representing the payment leg on a payment blockchain, you could imagine a security leg on a security blockchain and the two of them could do instant settlement with the appropriate interconnect between the two. A key point here is that the money being backed by funds at the central bank means that there’s lower risks associated with such payments.

Insider: You also work with the International Swaps and Derivatives Association (ISDA), right?

Braine: Yes. One of the things we’ve been progressing for a few years relates to a new standard for data and processing, and it’s called the ISDA Common Domain Model. This model effectively provides a standard industry representation for events in the lifecycle of a trade. Currently, each institution builds their own solutions, so effectively, there’s variation in how you code it-some may code in Java and others may code in C++, so different programming languages. They may store the data in different types of databases, and they may enrich the data with extra fields. So you’ve got variation there. Then, over time, each institution must manage and maintain its data stores. So across the industry, the same high-level functionality is implemented slightly differently on slightly different data sets. And each time there’s a lifecycle event, they all need to sync up and reconcile to make sure that, yes, what’s been affected in terms of an event, the before and after, is consistent.

That’s incredibly inefficient as a solution. Imagine we had a browser for the internet, and each bank built their own browser, right? Of course we don’t do that. We have a common browser, Chrome or Internet Explorer, we download it, we use it. So that same philosophy is being applied here. A distributed ledger de facto defines the common data structure that you all must use. And smart contract technology is a common process that they must all follow.

You then start getting the opportunity to transform the industry, and all the participants. And those opportunities don’t come up very often. So I think we’re living in interesting times where this technology is just reaching the right degree of maturity, and there’s also appetite from the market participants to reduce costs.

Insider: Ok, tell me more about smart contracts, which I know you also research.

Braine: There are many, many business processes that could benefit from the rigor and standardization that smart contracts would bring. To give one example, interest rate swaps. So a few years ago, about 4 years ago, my team prototyped an interest rate swap from end to end. Complete end-to-end processing naturally fits with the idea of a smart contract, meaning the data that you construct at the beginning just flows through-you don’t transform it, you don’t switch it into completely different systems.

The way I like to view it is, smart means automatable, and contract means enforceable. Other good use-cases include trade finance, loans, bonds, and syndicated loans. It’s easy to identify 101 use cases for smart contracts; the challenge is identifying viable business cases where the industry can move together in concert, given that these are consortium plays, so you need your peers to be similarly motivated at the same time to grasp at the same propositions.

Insider: What sort of work are you doing in quantum computing?

Braine: Barclays started exploring quantum computing back in summer 2017. We did that by partnering with IBM. We set up a joint development project, and our goal initially was to learn more about quantum computing. It’s a phenomenally complex topic, where even those that have quantitative research backgrounds find it challenging to understand the details.

We decided for our first proof of concept that we would look at a settlement optimization problem. This is a particular challenge where a market infrastructure looks to optimize the settlement of a batch of securities transactions. A typical batch may have 50,000 transactions, you’ve got many potential combinations that you could settle, and you need to work out what is the best combination. It’s a problem that you typically can’t solve perfectly, so you often run an optimization algorithm for long enough in order to solve it well enough, and then you repeat the batch later.

We were inspired by [the question]: could a quantum algorithm on a quantum computer solve that problem perfectly, or perhaps better than the classical ones? We looked at candidate quantum algorithms, we worked with IBM to implement an algorithm, we constructed candidate scenarios to run through test data, and we got the results. The key takeaway is that, for the first time, an algorithm has been run for settling securities transactions on a quantum computer. Obviously, it’s only just test data and very small scale, so it’s more of a proof of concept, but we’ve demonstrated that the proof of concept works.

In terms of next steps, we’re currently exploring quantum machine learning. How many more buzzwords could you get into one conversation, right? We’ve run our first experiment comparing quantum and classical versions, and in the next couple of months, we’ll be looking to publicly release our initial findings.

Insider: In real terms, what benefits might quantum computing bring to Barclays? And when?

Braine: We need to extrapolate for when we think the hardware will be sufficiently mature to be able to run real-world use cases. For perspective, we think that will be in the range of 4-8 years from now.

In terms of the type of benefits, it’s almost like adding a special maths co-processor, and it’s able to perform a number of functions-it’s able to perform an optimization process faster than a traditional classical computer, or it’s able to perform the process and get a higher-quality result. So this could be optimizing which assets you put in a portfolio, or running a number of Monte Carlo optimizations as part of a risk model. These types of things often require huge compute resources.

And that’s why we’re exploring this for research-not because we think it could be perfectly used in the next year or two, but because we’re learning, building a foundation. I would almost call it quantum awareness, where we’re raising our awareness so that we could leverage it when the powerful machines come along in a few years’ time that we could use for real world use cases.

Insider: Where is financial technology going next? How does that fit with traditional banking?

Braine: There are a number of key themes, one being machine learning and artificial intelligence. So the application of that technology, we’ve seen it deployed with fantastic effect, whether that’s search or shopping or similar. There’s great opportunity for those technologies to also be applied within financial services, particularly to further improve the customer experience.

Other key technologies include cloud computing.

Insider: Are you worried about disruption from tech startups?

Disruption is at the heart of my day job. We’re often looking to see what technologies have potential for disruption, and to see how we could leverage or partner with third parties that have such potentially disruptive technologies-and also to understand the risks and potential issues that are associated with them-so that we’re able to have a sensible position in order to be able to advise the business.

Often if we’re going to pick certain technologies, it may well be the case that what’s viewed as a potential disruptor to Barclays could also be viewed as a potential partnership opportunity in terms of optimizing and improving some of our own internal processes.

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Transforming Business poll shows that talent is a driver, and a product, of innovation

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  • Talent recruitment was cited as a top priority for innovation investment among companies polled for the Transforming Business series.
  • Companies are assimilating new approaches to talent in the pandemic.
  • Focus on social injustice and racial inequity have driven new commitments to DEI.
  • Visit Insider’s Transforming Business homepage for more stories.

Innovation depends on talent, and also attracts it. Business decision-makers polled by Insider report that talent is a top investment priority, and also that a major benefit of digital transformation is recruiting top talent.

Digital transformation has also made the talent picture in companies more complex. AI and other applications change the nature of some roles, and creates uncertainty in individuals unsure about how automation might impact them.

A new sense of urgency around DEI is also redefining priorities for many companies.

Culture of innovation

To drive transformation, business leaders have to source and keep the right talent, and to create a culture of innovation. The global pandemic changed, possibly for good, the way companies viewed remote work, and potential hires who might not be local. Chris Greenough, chief marketing officer at Everise, a Singapore-based company, said in an Insider interview that the pandemic had given the company access to a new range of talent.

“As work shifted to at-home, we were able to attract a different kind of worker,” he said. “We gained access to people who wanted a lifestyle change that didn’t involve office politics; older people who wanted a secondary income; people who wanted flexible hours; and disabled people who couldn’t commute and had previously been marginalized.”

A greater desier for flexibility has also driven hiring policy. “Talent, and in particular innovators, wants to shape their work environment around their life; offering a compelling place to work sometimes requires new strategies and added flexibility to respond to the needs of our employees,” said Karin Raguin, VP of talent management and corporate responsibility at LVMH. “This is what creates a genuine sense of safety and belonging where innovation and creativity can flourish.”

Raguin also says transformational talent needs to feel they can try new things without fearing dire consequences for failure. “Trial, testing, and sometimes failure are all key to developing innovative ideas,” she said, “so it must be clear to employees that they should aim for excellence, rather than perfection.”

Automation and upskilling

The global pandemic has increased the pace of automation, which creates uncertainty for some workers who might not see their skills translating to this new future. James Smith, UK managing director of AutoStore, a robotics company whose CEO, Karl Johan Lier was featured as a Transformer, told Insider that companies have a huge opportunity to upskill more traditional workers to keep the jobs, and maintain their company culture.

“Whether we like it or not, demand for businesses to be able to operate on multiple channels and platforms is increasing dramatically, and traditional ways of working and fulfilling demand can no longer keep up with this growth,” he said, adding that upskilling is central to this. “You can either follow the inevitable growth and evolution of technology or you risk becoming redundant as a business and as a professional.”

Increased urgency around DEI

The global focus on social justice and racial inequity has sparked a sense of increased urgency and focus around DEI practices and leadership. Kara Helander is the chief inclusion and diversity officer at the Carlyle Group, and one of this year’s Transformers, told Insider that the focus on these issues right now presents companies with an opportunity to drive meaningful change.

One of the initiatives rolled out by the Carlyle Group focuses on hwlping employees mitigage unconscous bias. “It’s not so much where you start, but are you taking concerted, tangible action to make change around it? That applies to us and it applies to the companies in our portfolio,” Helander said. “You don’t want people to not take action because they aren’t where they should be.”

With global vaccinations increasing, companies are beginning to look ahead and figure out their new normal, and ensure they have the right talent to drive growth in a changed world. “In the year ahead,” Ranguin said. “Whether businesses recover will be dependent on their talent and that talent’s ability to navigate uncertainty and drive innovation needed to rise beyond incremental challenges.”

This SurveyMonkey Audience poll targeted individuals who work in a management capacity at their company according to the Audience panel. They included respondents from Hong Kong (n=50), Singapore (n=50), The United States (n=207), Canada (n=104), France (n=52), the United Kingdom (n=51), Germany (n=50) and India (n=50), with local translations in Germany and France. Respondents are incentivized to complete surveys through charitable contributions. Generally speaking, digital polling tends to skew toward people with access to the internet. SurveyMonkey Audience doesn’t try to weight its sample based on race or income. Polling data collected total of 614 respondents March 3-4, 2021.

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Companies continue to prioritize AI and cloud for innovation investment, according to the latest Transforming Business poll

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Contactless payment with facial recognition technology.

  • Cloud and AI top the list of innovation investments by companies according to the latest Transforming Business poll.
  • Companies are still figuring out all the applications of these technologies.
  • Racial and gender biases in AI applications are issues no company can ignore.
  • Visit Insider’s Transforming Business homepage for more stories.

Companies continue to prioritize AI and cloud as key investment targets as they strive to innovate and drive growth into the future, according to the most recent Transforming Business poll.

Actionable data insights are a key outcome for these applications. “Many businesses are looking to streamline their operations and make them more efficient, as well as find new insights and connections in their data,” said Victoria Petrock, principal analyst at eMarketer. “They are turning to AI to help them achieve competitive advantage.”

While it might seem like AI and cloud are ubiquitous and widely utilized, companies are still figuring out all the ways it can change their business. Laura Urquizu, CEO of Red Points and one of the 100 People Transforming Business in Europe, wrote in an article for Insider that AI and machine learning had vastly improved customer experience by creating more personalized shopping experiences and increasing brand loyalty.

But the insights available via tools like AI and the cloud can do much more than some companies have figured out. “No matter how important customer experience is, however, it is a mistake to believe it is the only operational area that can (and should) be transformed using technologies like these,” Urquizu wrote. “The efficiency of your internal operations – your support team, supply chain, production, inventory, quality control, human resources, and so on – can all benefit from applying AI and ML technologies.”

The opportunities vary by industry, of course, and the global pandemic has created opportunities to put AI to the test as never before. BenevolentAI, whose CEO Joanna Shields is one of this year’s Transformers, used its technology to analyze vast quantities of scientific research, ultimately surfacing a drug treatment that has been used to treat moderate-to-severe COVID patients.

“One positive outcome of COVID-19 is that it has united science and tech for good, accelerating data-sharing agreements and encouraging the open publication of research results.” Shields told Insider. “This new environment of collaboration has provided a glimpse of the beginnings of a more open and adaptable R&D model that can accelerate the delivery of innovative and life-changing outcomes for patients.”

Innovation has not come without problems, however. AI applications have come under fire, demonstrably shown in some cases to reflect racial and gender bias in hiring tools, and voice and facial recognition.

Tech companies and their customers are under pressure to address these injustices with a appropriate urgency.

“[Businesses] must find a way to provide AI with the right data inputs, and give it instructions to behave in the most ethical way possible, ignoring and unfolding historical biases and to be confident in leaving the business’ past behaviors behind,” Michael Feindt, a 2020 Transformer and strategic advisor at Blue Yonder, a digital fulfillment and supply chain solutions provider, wrote for Insider.

It is possible, Feindt said, to apply these tools to actually combatting discrimination and inequity.

“Simply put, it’s down to us whether AI is a force for good or a force for bad. If you can provide it with data and instructions that are designed to shape the world in a certain way, AI will do that,” Feindt wrote. “So if businesses are willing to put in the time and effort to set things on a fairer course, AI can set about fighting discrimination and injustice.

This SurveyMonkey Audience poll targeted individuals who work in a management capacity at their company according to the Audience panel. They included respondents from Hong Kong (n=50), Singapore (n=50), The United States (n=207), Canada (n=104), France (n=52), the United Kingdom (n=51), Germany (n=50) and India (n=50), with local translations in Germany and France. Respondents are incentivized to complete surveys through charitable contributions. Generally speaking, digital polling tends to skew toward people with access to the internet. SurveyMonkey Audience doesn’t try to weight its sample based on race or income. Polling data collected total of 614 respondents March 3-4, 2021.

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Cruise’s head of artificial intelligence wants the autonomous-car startup to be defined by its AI innovation

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A Cruise AV in the Bay Area.

For autonomous vehicle startup Cruise, the future isn’t just about artificial intelligence. It’s about machine learning, and that’s why Cruise is teaching its electric vehicles to drive themselves in San Francisco – one of the most complicated urban environments for self-driving cars to operate in.

“Learning how to drive in San Francisco is amazing for AI,” said Hussein Mehanna, the company’s head of AI, noting that the dense and unpredictable streets are ultimately an advantage. “The more interesting the data, the more the machine can learn.”

Mehanna hopes that learning will not only revolutionize autonomous driving, but also plant Cruise at the forefront of the next big thing: AI-based companies.

Taking machine learning to a new level

General Motors bought Cruise back in 2016 for around $1 billion, and through subsequent investment rounds, it’s grown to a nearly $30 billion valuation. The company’s goals are spectacularly ambitious, with CEO Dan Ammann effectively calling for the end of personal-car ownership and spurring Cruise to go after a multi-trillion-dollar future global ride-hailing opportunity.

In order to get there, Cruise needs game-changing hardware and software – a quest overseen by Kyle Vogt, its cofounder and chief technology officer – and high-profile partners, including ones it already has like GM and Honda. But Cruise also needs artificial intelligence and machine learning at a level that, frankly, nobody has seen before.

Hussein Mehanna Headshot
Hussein Mehanna.

As powerful as 21st-century AI sounds, Mehanna said it’s only recently that its full capabilities have been unleashed. Advancements in robotics and machine learning have made that possible.

“I always had a fascination with AI,” Mehanna, whose career path to Cruise included stints at Facebook and Google, told Insider in an interview. But where are all the robots we might have expected to see by now?

Mehanna said the kind of AI we see in demonstrations – dancing humanoids robots on YouTube, for example – doesn’t scale.

“They’re scripted to handle a certain number of use cases,” he said.

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A Cruise vehicle in San Francisco in May 2019.

Enter machine learning, which he said has the critical power to generalize.

This is, to put it mildly, huge. At Cruise, Mehnna’s team is tackling a whole new way of undertaking computer science, led by those autonomous EVs cruising through San Francisco.

If it all comes together and Cruise is able to successfully commercialize its service, then Mehanna said that the company could notch an unprecedented achievement: becoming what he termed the first “AI-native company.”

Dreaming of robots that can do much, much more

“It’s a new concept, and we’re inventing it,” he said. The analogy that leaped to mind for him was being able to handle HTML coding for the internet of the late 1990s.

“If you knew HTML, you were a rocket scientist,” he said. The skillset led to internet-native companies such as Google. That history is now staged to repeat with Cruise.

“In five to 10 years, AI natives will be the status quo,” he said.

The endgame of this process should be what he called a “general-purpose robot,” able to learn as humans now learn. It could drive a car, fly a plane, or attend to more mundane tasks.

“My dream,” he said, “is to get my laundry folded by a robot.”

Walmart Cruise self driving car

Talking to Mehanna, one gets that sense that we’re just at the beginning of something radical in changing how the world operates. Cruise has already made huge leaps in teaching a car to drive itself, once the stuff of science-fiction movies. But for Mehanna, those apparent leaps are but small steps toward robotic applications and machine learning remaking numerous aspects of everyday life – aspects that we take for granted or have long assumed would always have to involve natural, rather than artificial intelligence.

In the short term, however, he’s simply contemplating machine learning as a prerequisite to Cruise accomplishing what it set out to do five years ago.

“At Cruise, you can’t have a company without AI,” he said.

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Experts lay out how the chaos caused by pandemic-era panic buying could revolutionize our global supply chain

Stockpiling toilet paper
In the US, one of the earliest stories of the pandemic was the toilet paper shortage.

A year-long struggle with the COVID-19 pandemic has brought more headlines than we as a society – as well as the people writing those headlines – can really handle. There’s been speculation, sadness, chaos, fear, isolation, data, and graphs. So many graphs.

But one of the earliest headlines of the pandemic wasn’t about any of that. It was about supply, and the supply of one product in particular: toilet paper.

When Insider mentioned the great toilet paper crisis of 2020 in a virtual roundtable with Hannah Kain, founder and CEO of California-headquartered supply chain management supplier ALOM Technologies, she laughed.

“Yes, we can talk about the toilet paper,” she said. “I never thought I would be interviewed so much about toilet paper.”

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A shopper at a Target store in Brooklyn reaches for disinfectant wipes in March 2020.

When much of the US shifted to quarantine overnight last March, the world’s supply chain was forced into the spotlight. Suddenly, we were ordering more online: our groceries, our home office setups, our bread ingredients, our puzzles. When we did face this new, mysterious virus to go into a store, we were met with empty shelves and freshly printed signs telling us we couldn’t buy more than two jugs of milk. Sales of toilet paper in the US shot up 845%, demand for Clorox products spiked by 500%, and treadmill sales more than doubled.

As we depended on our supply chain more, we criticized it more. After all, how hard could it be to just make some more toilet paper?

As consumers, we focused on the supply side of the equation. But Kain said for the professionals, supply problems haven’t been the story for much of the pandemic – demand shift has.

“Demand shifted so dramatically, sometimes 50% or 100% compared to forecast,” Kain said. “The supply really got constrained, right? If the demand had not shifted, the supply side would have been difficult, but it would still have been flowing really, really well.

“Many [journalists] say, ‘But why don’t they just make more?’ I’m like, ‘Well, guess what, you need equipment to make more toilet tissue, and where do you get the equipment from?’ A lot of times, from China. But even if you use a local equipment maker, they need spare parts from all over the world and it just takes time to deploy it.”

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The US saw demand spikes as the pandemic took hold, and toilet paper sales shot up 845%.

Kain said demand changed in two important ways: which products people bought and, as people shifted even more of their purchasing online, which channels they bought them through.

Mei Yee Pang, the Singapore-based head of DHL Asia Pacific Innovation, saw similar patterns, illustrating a common theme of the pandemic: how intertwined supply chains are, for better and for worse.

“Supply chains today are so global, you see pretty much the same phenomena everywhere we go,” Pang told Insider. “We too had our toilet paper issues. There was, at some point in time, a global shortage of glassware because everybody started making jams at home and needed glass jars.

“So we do see very interesting demand shapes, and a lot of them, looking back, are something that we can expect. That’s where big data potentially in the future can come in more, better forecasting some of these effects that we normally wouldn’t have expected.”

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The production of toilet paper came into the spotlight during the shortages, with many asking why companies couldn’t just make more. Experts told Insider it wasn’t that easy.

Changing demand isn’t the only issue the pandemic highlighted. More online ordering didn’t just mean more convenience for the buyer – it meant more waste, too.

“Every time I receive a parcel, I feel bad about it because I’m contributing to waste,” Pang said. “I think this is something that needs to change. We can’t be sending individual shipments using partially utilized vehicles to send stuff around to individual homes.

“It’s not easy, but I think as we go more and more from a less than 20% e-commerce channel to now, some companies are having that switch around to e-commerce as a major channel, we are going to see a lot of waste coming into play and it’s not sustainable.”

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As many places shifted to quarantine, consumers’ online ordering habits expanded.

Kain thinks the switch to e-commerce is here to stay, but said there’s “no easy solution” to making the change more sustainable from a packaging perspective.

“If we go to things like consumer electronics, everything was packaged for the retail shelves,” Kain said. “Maybe now you have a shippable box, and you don’t have a box inside a box.

“We are a little bit in a tough spot right now because recycling and return packaging is of course a big issue because of the risk of infection. I think this is something that we’ve got to develop over time, but I do think that the big carriers are going to come out with support in this area.”

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A stack of delivered packages and boxes sit outside a front door.

Pang, whose employer DHL is one of those big carriers with more than 350,000 employees worldwide, said analytics will help.

“In our organization, we start looking at how we can help our customers look at packaging and use data information to optimize the way we pack, the way we pelletize,” Pang said. “Every small bit counts to really reducing our footprint, and at the same time, lowers cost. So what’s not to like about this sort of solution?”

Peter Evans, CEO of the UK-based sustainable supply chain technology company Orderly, told Insider his company’s main product is something called a “scorecard.” Its goals include reducing waste of both products and packaging.

“It rates everyone who manages supply chain operations, from someone in a warehouse to the CEO, on a scale of zero to five,” Evans said. “Zero being ‘You’re wrecking the planet and you’re wrecking your business,’ five being ‘You’re really making some decent change here.’ We use AI against all this data we pull in to give each person two recommendations each week on what they can do to provide the biggest, most sustainable impact to their supply chain.

“For us, it’s changing people’s mindsets on an individual level, showing them what can be done in the world as well – what can create the biggest benefit.”

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A UPS employee delivers packages.

Kain said that’s important, both in terms of sustainability and social responsibility, as more people think about their relationships with companies.

“Corporate social responsibility has become way more important for decision makers,” Kain said. “It’s driven by consumers. We want companies to be in sync with our values. We don’t want them to be out of sync.

“For instance, early in the pandemic, there was a survey done in the US showing 87% of consumers did not want to buy product from companies that did not keep their workers safe. We’ve never seen sentiments like this before, and it’s very healthy and good. It’s forcing the corporations to think differently about their supply chain in a very healthy manner. In any crisis, there’s a silver lining, and I think that’s it.”

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A worker loads a truck with packages at an Amazon packaging center in Germany.

Another silver lining might be that when or if this kind of global crisis happens again, the supply chain will be a bit more prepared for what’s coming – thanks, in part, to how big of a spotlight its struggles received when the pandemic hit.

“I think there’s a newfound respect for the sector, from the boardroom to the individual consumers at home,” Pang said. “There’s a newfound priority placed on the sector to put in more technology, to put in more innovation, to put in more R&D into making it more agile and more prepared for situations like this, so I’m quite optimistic about what we can see from the sector in the next few years.”

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L’Oreal’s chief digital officer explains how the quick adoption of e-commerce saved the company’s 2020 earnings

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Lubomira Rochet speaks onstage during the Youtube session at the Cannes Lions Festival 2018 on June 19, 2018 in Cannes, France.

As vaccination programs across the globe begin to bite into the spread of Covid-19, retail businesses are starting to think about how they’re going to welcome back customers who have saved cash during the last year’s crisis.

One of the sectors looking for a new path out of the crisis is the cosmetics industry. While some sectors – like medicine, household cleaners and soap, and vitamins and supplements all saw increases in purchases during the pandemic, according to JP Morgan, the world cut back on cosmetics.

There are several reasons for this: as nationwide lockdowns have disrupted normal life, many people have been spending less time in front of others, and when they do, masks have made it impracticle to spend the same amount of time on facial cosmetics. Another reason is that the cosmetics industry traditionally relies on tangible, in-person sales. This is why staffed cosmetics counters are a staple of many department stores.

L’Oreal is one of the largest cosmetics companies in the world, and Lubomira Rochet – who made Insider’s list of 100 people transforming business in Europe last year – has been tasked with navigating the firm through the pandemic. Rochet is the firm’s chief digital officer, and based on widespread industry trends, the last 12 months should have been a sure-fire path to decreased profits for the company. Yet L’Oreal’s full-year financial results for 2020, published in late February, saw things staying steady.

“L’Oréal has traversed this crisis in the best possible condition and has even grown stronger,” Jean-Paul Agon, the company’s chairman and CEO, said when revealing the results. The reason? L’Oreal’s forward-looking bet on e-commerce sales. “Thanks to its strength in digital and e-commerce, which has again increased considerably during the crisis, L’Oréal has been able to maintain a close relationship with all its consumers and compensate to a large extent for the closure of points of sale,” added Agon. In all, e-commerce sales rose at L’Oreal by 62% in 2020, and accounted for one dollar in every four spent with the company.

The bumper results are the payoff for a decade of work. “The matter of fact is L’Oreal started its transformation 10 years ago which served us well when covid hit, because we were ready,” Rochet told Insider in mid-2020. The digitialization of the operating model for the company was crucial to making sure the firm managed to weather the crisis, but it was also one that Rochet had seen as a key area long before that.

“We spent a lot adapting our marketing to the digital age,” Rochet said. “Investing new formats and platforms from YouTube to TikTok to Instagram to WeChat, and really completely changing our formats for faster and more interactive formats. That has been quite a journey.”

But it’s the way that people tend to buy their makeup that has seen the most significant transformation. “We have invested in technology such as AR or VR to give [customers] an extra experience when they shop our products,” said Rochet. “Those are things like virtual make-up or hair colour try-ons. It’s about teleconsultations that were big during covid. Those are service we propose to our consumers to enrich the experience.”

Like many things, the coronavirus pandemic simply accelerated existing trends that had been in train for years. Rochet points to the rise of livestreaming sales in China as an example of how the pandemic has amplified what was already there, making it more important and significant for consumers battling the challenges of coronavirus.

And as stores and businesses begin to reopen, Rochet feels L’Oreal is in a position of power. “We’re moving to an interesting moment where more people in a low-touch economy don’t want to touch products in the store,” she explained. “They don’t want physical testers. So we’re introducing services like virtual make-up try on, through a QR code people can experience the colours and the looks, but virtually.”

It’s something her CEO and chairman also agrees with. Setting out 2020’s financial results, Agon looked forward to 2021 with positivity. “Driven by the strength of its strategic choices and a determined dynamic across the year, L’Oréal has adapted to this unprecedented context and terrible pandemic with speed and agility, accelerated all of its transformations and will emerge stronger,” he said.

“At the beginning of this new year, which remains marked by uncertainty regarding the evolution of the pandemic, but also by consumer’s appetite for beauty that remains intact across the world, we are confident in our capacity to outperform the market again this year and, subject to the evolution of the sanitary crisis, achieve a year of growth in sales and profits.”

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