Why Google Buying Groupon Is a Bad Idea

So the latest rumor is that tomorrow Google will buy Groupon for $5 billion.  You're not alone if you think that's crazy.  Here’s why:

  • $5 billion is an absurd valuation for a company that is in a business with virtually no barriers to entry and is younger than my toddler. 
  • That’s more than what they paid for YouTube, which had a heck of a lot more traffic when it was acquired than Groupon has now.
  • It’s a huge chunk of the cash that Google has on hand.  That’s a lot of money. 
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How Consumers Complain About Poor Service

I am not one to suffer poor customer service in silence. Regrettably, the last week has provided me with the opportunity to be unusually prolific. I’ve written an email to the furniture retailer who didn’t deliver on time, sent several tweets while on hold with an airline, and followed up with an email to that airline about the multiple errors in my bookings. Last week’s restaurant with the wonderful chef was noted on Yelp, as well as the interminably slow service. The florist who sent me near-dead lilies was also called out on Yelp. And I’ve responded to two online surveys, offering both companies what I hope was constructive advice on how they could improve their service for future customers — of whom I am unlikely to be among.

I am not alone. According to Forrester’s North American Technographics Customer Experience Online Survey, Q4 2009 (US), 68% of North American consumers say that they've had unsatisfactory service interactions in the past 12 months. And many of us are not suffering in silence: 71% of these consumers have provided feedback directly to the company through surveys, phone calls, emails, or letters. Further, 16% of these consumers who have had bad service experiences have vented through social channels, such as online customer reviews, Facebook status updates, or blog posts.

If you haven’t already, I recommend reading my colleague Andrew McInnes’ report called “How Consumers Complain About Poor Service.”

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Amazon Follows Typical US Online Retailer Expansion Path With A New Site For Italy

Amazon today launched a localized site for Italy, its first new international offering since acquiring Joyo back in 2004 (Amazon’s UK and Germany sites were launched in 1998, France and Japan in 2000 -- the Canada site came in 2002. Full timeline available here). According to today's press release, the new offering has more categories than any new Amazon Web site has ever launched with -- not surprising given the six years that have elapsed since the last international launch.  

As part of its new offering, Amazon is pushing its selection of “hard-to-find Italian language items” to cater to local consumer needs -- indeed, Amazon has tended to excel in its localized offerings, ranging from its varied payment methods by country to its semi-localized categories (note the “Auto and Motorcycle” category on the German Web site or the “DIY” link on the UK one).  

Amazon’s choice of European markets mirrors many US online retailers’ expansion into Europe. Of the top 50 online retailers in the US, some 19 operate dedicated transactional Web sites for the UK, 14 operate sites for Germany, 12 for France and 14 in Italy. Less than 10 operate eCommerce sites localized for Spain. See the graphic from our recently published Establishing A Global Online Retail Footprint below.

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Target: Mobile Retailer Of The Year

Target was just named the "2010 Mobile Retailer of the Year" by Mobile Commerce Daily (see article). Hard to believe eBay wasn't in the top three with their anticipated $1.5B revenue on the mobile channel this year, but they won last year. This speaks to the fact that it isn't just about revenue. In fact, among companies we've surveyed, offering convenient services to customers to engage them more, improve satisfaction and loyalty, etc. top the list of near-term objectives. If the services aren't convenient (see research), consumers will not adopt and use the services. If this doesn't happen, companies won't see the revenue growth or cost savings they are anticipating.

One of the top questions I get from clients is, "Who is best in class?" Any of these three retailers could take that honor. What really impresses me about Target is their breadth of innovative services, the quality of the experience, and to top it off . . . they sell to mainstream America. My favorite service: building a shopping list with the bar-code-scanning technology. Remember that example we've all heard about the smart refrigerator? You remove and throw the empty milk carton out, and "milk" is automatically added to your shopping list. This doesn't do that exactly, but it comes closer than any other application I know. There is also tremendous consistency in experience from online to mobile Web to the applications -- at times, it is so good that it's indistinguishable.

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QuickenLoans and OpinionLab Show How Data Integration Can Solve Real-World Web Site Problems

OpinionLab hosted a Webinar today where QuickenLoans – a leading direct lender in the United States - spoke about their voice of the customer (VOC) program and how they have integrated VOC into their existing processes.

One of the most interesting elements of the presentation in my view was where QuickenLoans discussed how they had integrated OpinionLab with Tealeaf to provide an unprecedented view into Web site visitors and activity.

Before I get into that, let me first explain what each of these vendors do:

OpinionLab: OpinionLab provides functionality to capture customer feedback on Web sites. QuickenLoans uses the service in several locations on their Web site and in several points in key processes.

Here is the QuickenLoans home page with a link to a customer feedback form:

The feedback form is powered by OpinionLab:

Tealeaf: Tealeaf provides a solution that records the activities and movement of Web site visitors in a way that allows clients to “playback” visitor sessions to better understand why a particular problem occurred.

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American Airlines Cleans Up AA.com’s Home Page, But Buries A Big Point Of Differentiation

Having not updated its AA.com Web site since 2002, on November 14, 2010, American Airlines launched a new home page. Compared to the previous version of the home page, the new design is cleaner; all essential content appears above the fold. The site uses a brighter color palette as well. Site navigation has been greatly improved. Key tasks, like flight booking, account log-in, and flight check-in, now appear in the same navigation menu. The “Book Travel” tab consolidates non-air product sales, including third-party ancillary services like hotels and cruises, with flight booking. The result is a home page that looks more like a travel retailer than “just” an airline Web site.

Even so, given the long time since American last updated AA.com, it’s disappointing that American didn’t push its new home page concept further. For example, American could have used this opportunity to launch a truly pacesetting home page, allowing users to personalize both content and placement of modules. As Forrester noted in a 2009 report, more than 7 in 10 US online consumers use a personalized portal site like iGoogle or My Yahoo! A flexible, “modular” home page would have helped American further increase AA.com’s utility to its customers and allow the airline to use analytics to better understand what is important to its travelers. That insight could, in theory, be used for everything from targeting offers to product or route network development.

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Gogobot Leverages Social To Enhance Travel

Forrester estimates that in 2010, $80 billion of leisure and personal travel will be bought online – an amount that will increase to $110.7 billion by the end of 2014. Our research also shows that more than 7 in 10 online leisure travelers in the US use social media. Naturally, we’re seeing many firms begin to offer social trip planning solutions. The latest group looking to make a run at the prize is “Gogobot,” a self-described “social recommendation platform for travel” scheduled to launch in beta test on Tuesday, November 16.

Gogobot recently briefed Forrester. In opening up the conversation, Gogobot’s CEO Travis Katz (a MySpace alumnus) stated that “friends, not strangers” are what help to make a trip enjoyable. Hokey, but he has a point: we value advice from people we know. Gogobot allows us to leverage not only the wisdom of the crowd, but also our existing social networks in order help with the discovery and inspiration we value, but is often lacking from most mainstream travel sites, including those belonging to major online travel agencies and travel suppliers.

The key to Gogobot is its ability to help a user find not just advice and content, but relevant advice and content. Gogobot users can sign in via their Facebook account – making Gogobot convenient – and discover which of their friends have recommended a particular restaurant or hotel in one of thousands of locations. Yes, I know –pass the popcorn, we’ve seen this movie before.  Where Gogobot’s true benefit becomes apparent is the control it extends to its users.

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The Co-operative Bank Tops Forrester's 2010 European Bank Customer Advocacy Rankings

A few months ago I blogged about how the UK’s Co-operative Bank had come top in our UK Bank Content & Functionality Benchmark. The bank has now done it again by coming top in our 2010 European Bank Customer Advocacy Rankings.

Customer advocacy is the perception among customers that the bank does what’s right for them, not just what’s right for its own bottom line. In every country we survey in our Consumer Technographics® research, we’ve found that customers who view their main bank as a customer advocate have more accounts at their main bank, are more likely to consider their bank for their next financial purchase, and are more likely to recommend it to others.

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Forrester's Online Holiday Retail Forecast Projects 16% Increase Over '09

Forrester’s "US Online Holiday Retail Forecast, 2010" launches today, reporting quite a bit of optimism this shopping season. November and December alone are expected to pull in nearly $52 billion, a 16% increase over 2009. Several key factors contribute to this projection:

  • Consumers are shifting more and more to online retail.
  • Offline retail is still a significant player.

Consumers are cooperating, too. They’re looking to spend more this season and do so through a variety of means (mobile, apps, etc.).

Retailers are responding with numerous strategies, such as larger promotional budgets, honing in on key dates, and experimenting with new shipping options.

Participate In The Next-Generation Multichannel Research: We Need Your Help!

Customers have changed. They are more than ever connected, informed, and in control — their mode of operating and the ways they want to engage continue to change rapidly. They expect to find information, make a purchase, and get service when and where they want it, across touchpoints. Yet businesses are struggling to deliver well in even one channel. They are not organized to meet the changing customer needs and struggle to empower their employees and partners through enabling technology and operations. Businesses across verticals are faced with the pressure to revamp tired business processes, hierarchies, and technology road maps and innovate to meet the stream of innovation and market transformations they face.

This is a topic we are working on now. But we need your help. If you are an eBusiness leader, please help us by participating in our research through this survey. You are not alone in facing these challenges, and the more information we collect, the clearer the insights we can share back with you.

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