Over the past few months, we’ve fielded multiple requests related to the online shopping market in Asia. Retailers and vendors alike are looking to position themselves for long-term success given the rapid online growth rates in the region: By 2013, for example, close to half of the global online population will live in Asia, with some 17% of the global total coming from China alone. To see how US online retailers are taking advantage of this shift, we took a look at the top 50 online retailers on the Internet Retailer Top 500 list and mapped their transactional sites in Asia. A few observations follow.
Japan tops the list, especially for companies with only one web site in Asia. What was interesting as we worked through the list was that relatively few of leading online retailers in the US operate transactional sites in Asia, and far fewer operate in multiple countries. Several top online apparel retailers, for example, operate a web site for Japan only: Lands’ End, L.L. Bean and Cabela’s have all taken this approach.
Consumer technology companies have the broadest regional reach. By contrast, online retailers in the consumer technology arena tend to have a broader regional presence. Dell, Apple and SonyStyle operate in multiple Asian markets, with Dell and Apple having the most transactional web sites in the region despite Sony's Asian roots. Office Depot also has a strong commitment to the region with eCommerce sites in Japan and China, as well as in South Korea.
I thought I would expand a little on my aside comment in last week's blog which was actually about HP. In the introduction to the blog I noted that we analysts seem to be abusing Twitter. I was so provocative that I named my colleagues “adolescent journalists” because they broadcast tweets ad verbatim as the HP speakers went through their presentations. I have noticed this has gotten progressively more (as far as I am concerned, worse and worse) over the last 12 months at various analyst retreats.
Many of these colleagues have responded to my blog and basically asked “What’s your problem with this?” Well, I certainly do not want to be seen as a “grumpy old man” (though I love those books) - ie. Someone who is not up to the times. While I am turning 54 years of age today, I think I do understand Twitter, and use it; and I think I can blog adequately as well. Then again, we analysts at Forrester have been well trained by our Marketing analyst colleagues who are at the forefront of all these developments. Our latest research on “Using Twitter for eBusiness” discusses how companies use Twitter but it doesn’t address the usage I am on about here. So, the issues I have with our just typing in every 140 characters of whatever the person on the stage is saying is as follows:
A number of clients ask me "how many people do you think use BI". Not an easy question to answer, will not be an exact science, and will have many caveats. But here we go:
First, let's assume that we are only talking about what we all consider "traditional BI" apps. Let's exclude home grown apps built using spreadsheets and desktop databases. Let's also exclude operational reporting apps that are embedded in ERP, CRM and other applications.
Then, let's cut out everyone who only gets the results of a BI report/analysis in a static form, such as a hardcopy or a non interactive PDF file. So if you're not creating, modifying, viewing via a portal, sorting, filtering, ranking, drilling, etc, you probably do not require a BI product license and I am not counting you.
I'll just attempt to do this for the US for now. If the approach works, we'll try it for other major regions and countries.
Number of businesses with over 100 employees (a reasonable cut off for a business size that would consider using what we define as traditional BI) in the US in 2004 was 107,119
US Dept of Labor provides ranges as in "firms with 500-749 employees". For each range I take a middle number. For the last range "firms with over 10,000" I use an average of 15,000 employees.
This gives us 66 million (66,595,553) workers employed by US firms who could potentially use BI
Next we take the data from our latest BDS numbers on BI which tell us that 54% of the firms are using BI which gives us 35 million (35,961,598) workers employed by US firms that use BI
My colleague Julie Ask just published a piece on the reality of mobile coupons in response to questions like “do consumers use mobile coupons?” “should we be developing a mobile coupon offering?” and “what technologies should I adopt to support mobile couponing efforts?” – questions that she and I get asked with some frequency.
I was involved in some of the initial structuring of this report and then also involved in the editing phase. And I would love to recommend it to interactive marketers. Here are the most important takeaways:
Consumers like the promise of mobile coupons, but there is not yet mass adoption. Mobile coupons promise to be a convenient way to aggregate customized discounts all in a single place (your mobile phone) that is much easier for storage than say an envelope of clipped paper coupons.
Mobile coupons appeal to advertisers too, but technology hurdles prevent mass utilization. Advertisers love the idea of being able to offer targeted promotions that are cheaper to deliver and redeem than traditional coupons. But the reality is that scaling redemption technologies and processes at check out is pricey for the limited coupon-using audience today.
Advertisers should start small mobile coupon trials now. Mobile coupons don’t need to be your top marketing priority for 2010 (that honor goes to paid search, display ad, advanced email and social media) but we do recommend now as a good time to start a trial. Vendors like cellfire can outsource the management and distribution of mobile coupons and offer flexible terms in an effort to sign up new advertisers.
Identified the 10 highest-ranked public companies (CXP Leaders) and the 10 lowest-ranked public companies (CXP Laggards).
Calculated the average annual total returns of the Leader group and the Laggard group
Compared the results for each group to the S&P 500 index for years 2007 – 2009.
Andrew’s analysis confirmed Watermark’s findings: The customer experience leaders consistently outperformed the other two groups; the customer experience laggards consistently fell short.
Does this prove that good customer experience leads to good stock performance (or that the CxPi picks hot stocks)? No. Stock performance relies on many factors, including human irrationality.
However, the correlation does highlight a relationship we all intuitively understand: Companies that treat their customers well perform better than companies that don’t. (And it sure looks like treating your customers poorly is a very bad idea, especially in an economic downturn.)
CIO job tenure is now averaging 4.6 years, according to the Society for Information Management. That’s up – way up -- from the 2-3 year average that we saw just a few years ago. How do you explain the lengthening time in job? Is it just because CIOs are better at their jobs than CEOs or CFOs who have higher churn rates? Probably not.
My guess is that the post dot-com bust and post 9/11 recession triggered CIOs to hunker down and be a bit more risk-adverse. They stayed put for a few years, then facing the more recent economic slump, stayed put even longer. They stayed busy doing what they unfortunately are known for -- helping with enterprise cost cutting. More reactive, more cost conscious, and less innovative CIOs are less likely to take risks and less likely to be fired for risk-taking.
But I suspect the trend towards longer tenure is rapidly coming to an end. The CIOs I speak with are eagerly waking up to tackle innovation and new investments in 2010. And we’re seeing more and more ex-consultant hot shots and business execs from elsewhere in the company recently hired on to “fix IT” join the CIO ranks. More proactive, innovative, and impactful CIOs are more likely to follow ambitious career paths – or (if your a glass-half-empty kind of guy or girl) get fired for risk-taking.
I've been analyzing consumer technology uptake for years — helping retailers, for example, understand the barriers to and drivers of online buying behavior. Forrester's Technographics® research shows that preferred online payment methods differ greatly between countries, and companies need to understand this complexity of payment options and how that affects consumer behavior.
Unlike in North America, where the top payment methods tend to be similar in the countries surveyed (the US and Canada), the payment preferences of online buyers in Europe differ both between countries and from their North American counterparts. For example, the popularity of prepaid cards is unique to Italy: Roughly a third of Italian online users have taken advantage of prepaid cards. Global organizations need this detailed understanding of consumer payment preferences across markets in order to be successful internationally.
Microsoft announced on Friday that it will stop selling new Select licenses from 1 July, 2011. Customers with existing agreements can renew them for another 36 months, as per their agreements, but the replacement Select Plus program is likely to be a better option. Microsoft launched Select Plus on 1 July 2008, and I wrote at the time that it was an improvement on the basic Select structure: Microsoft Simplifies Its Volume Licensing.
However, Microsoft's pricing team struggled to persuade its LARs to promote Select Plus over the more familiar Select agreement, and customer adoption was disappointing. So the decision to drop the older program makes sense for Microsoft, because it will force its channel partners to embrace the new model. And its no bad thing for buyers - you've one less choice to make, and there's little negative impact.
The biggest advantage of Select Plus for sourcing managers is that they no longer need to submit a three-year spending forecast - this is extremely difficult for central teams buying on behalf of autonomous business units that won't havent planned Microsoft technology adoption that far out. Instead, pricing works like an airline loyalty program, on the current and previous years' actual transactions, as the figure below from my report illustrates. My report explains some more advantages, such as the flexibility to opt tactically for software assurance on individual purchases.
Hopefully you’ve all read SAP’s co-CEO’s open letter to you (http://ceos.blogs-sap.com), and also some of the great responses such as this one: http://bit.ly/b5foPD . With all these open letters flying around, I thought I’d write a slightly different one. Unlike most of my fellow commentators, I’m not going to tell SAP how to run its business. Instead, I’m going to give you, its customers, a suggestion on how you can cut the cost of your SAP environment. You ready? The answer is “buy less stuff from them”.
Actually, it is not as facile as it sounds. Many companies that I speak with automatically favour their incumbent vendors for new projects, while their IT vendor managers complain to me about their negotiation impotence. You won’t be able to get the contractual protection you need, such as limits on CPI maintenance increases, unless you make them a condition of future purchases. Large software companies such as IBM, Oracle and SAP focus predominantly on license sales. It wasn’t customers’ unhappiness, resulting from the Enterprise Support blunder, that caused SAP to fire its CEO and rethink its approach. It was the fact that you showed that unhappiness by voting with your purchase orders, delaying projects, going to competing vendors, and causing SAP’s license revenue to plummet. When Jim and Bill promise to “accelerate the pace of the innovation we deliver to you”, the d word is a euphemism for ‘sell’.
The SAP services market is undergoing significant change: provider consolidation, changes in pricing models, new delivery options, and cloud-based deployment. At the same time, firms are entering 2010 with an eye to growth and business strategy enablement, after significant focus on cost-cutting during the recession. Firms struggle with finding the best services provider for their SAP project and the best delivery, pricing, and deployment models to ensure value, ROI, and success in achieving business goals,. Increasingly, firms are also considering Cloud and SaaS delivery models.
SAP users wondering about the latest trends in SAP services – from pricing models to multi-sourcing to cloud – are welcome to join us for an interactive session next Thursday March 25th. Moderated by Forrester’s George Lawrie, Bill Martorelli, Euan Davis, Stefan Ried and I will lead an interactive discussion around:
- SAP services provider landscape. The market has undergone significant consolidation, with major acquisitions by firms like PwC (BearingPoint), Xerox(ACS), and Dell(Perot) as well as numerous smaller acquisitions. Leading India-based firms have rapidly built their strategy consulting capabilities and now challenge the MNCs in higher value project work.
- Offshore delivery. Offshore ratios have grown extremely high. Implementation and project work is commonly 60% or more offshore; support and maintenance work surpasses 90%. Firms’ offshore strategy is broadening beyond India into geographies such as Latin America, China, and Philippines.
- Outsourcing and AMS work. Firms weigh the trade-offs between single-sourcing their project across implementation, AMS, and hosting versus using multiple providers. Firms also struggle with pricing models and SLAs, with many firms exploring outcome-based pricing models that shift risk to their provide. Outcome-based pricing also provides a potential foundation for innovation and savings beyond labor arbitrage.