My bearishness on F-commerce is no secret, so I may have been a little biased when I dove into my most recent research, Will Facebook Ever Drive eCommerce? Fortunately, the findings were nuanced among different types of retailers, which gave a lot to write about. Some highlights:
There are retailers (albeit small ones) seeing a double-digit percent of their sales coming through their Facebook stores. These companies often have unique demographics or marketing models (e.g., flash sales) that drive this behavior.
Facebook’s “data layer” is probably one of the most underleveraged assets that exists with respect to F-commerce. There is myriad information about fans, what products consumers are liking, and competitive insights that can be gleaned from merchant and consumer activity on and off Facebook.
Facebook Credits is a non-starter for most retailers. This is the “currency” that consumers can use to buy, say, potatoes on Farmville. Facebook, however, has little to no credibility with respect to financial services among consumers, and the same retailers reluctant to implement PayPal (which so many large merchants are) will be 10 times more resistant to a less-tried, less-reliable, newer payment mark.
This week I’ve been busy at our Marketing Forum having some amazing conversations with phenomenal market insights professionals. These conversations have centered on how we can move the piecemeal research we’re doing now to research that really helps understand consumers more completely. As consumers entrench themselves in a 360-degree experience with companies, it becomes more important that we understand them as 360-degree consumers. Anyone who deals with researching young consumers already knows how important this is, and there are lessons that youth research can teach us in general. For example:
We can’t be afraid to try new methods or meld old methods in new ways. Sometimes we wed ourselves to a particular method at a particular time and for a particular purpose. We resort to our arsenal of tried and true approaches and feel limited by the methods that others within the company have bought into. Researching young consumers forces us to think outside the box about everything from question wording and type to selecting new methodologies. There’s no reason the same can’t (and shouldn’t) be done for general consumer studies. What we need to do is step back and consider what would really help us understand the consumers we’re trying to research and then devise a research plan that matches that need. It sounds basic (and is), but oftentimes we get stuck in a rut of how research is always done and forget to take that first important step.
Blue Shield of California, an independent member of the Blue Cross Blue Shield Association, is a not-for-profit health plan with 3.3 million members and 4,800 employees and is one of the largest health provider networks in California.
Forrester: Saurabh, thanks for taking some time out to talk to us about agile commerce. We have been talking to clients about the evolution of their business from a channel-centric focus to a customer-centric focus that centers on touchpoints as the new paradigm and one that spans the Web, mobile devices, social networks, advertising, marketing, traditional channels, and other emerging touchpoints. How are you looking at this, and what do you think it means for your business?
Over the past year, we’ve worked together with the forecast team at Forrester to help eBusiness professionals understand the size of different online retail markets around the globe. Last year we published our first look at the online retail markets in some of the major markets in Asia-Pacific — this year, we’ve just published our first forecast for two of the largest online retail markets in Latin America, Brazil and Mexico. Some findings from the report include:
Brazil is — and will remain — the powerhouse in the region. With more than 40% of the online users in the region and a steadily growing economy, it’s not surprising that Brazil’s eCommerce market will outpace all others by a wide margin. Brazil’s projected 2011 sales of almost $10B put it behind other major online retail markets like France and South Korea but ahead of smaller ones such as the Netherlands and Italy.
Mexico’s online retail market is small today —but growing by a CAGR of almost 20%. With less than half of the online users of Brazil and limited online spending, Mexico’s online retail market remains a small fraction of the size of Brazil’s. Average online spending per buyer will not increase significantly over the next five years, but the sheer number of online buyers will.
1. an aptitude for making desirable discoveries by accident.
2. good fortune; luck: the serendipity of getting the first job she applied for.
Internet retailers have been struggling with a challenge since the first time a shopper clicked “Add to Cart,” and so far I don’t think anyone has really cracked it.
Recently we’ve had a number of discussions in our office (and more in the pub) about the difference between the online and offline shopping experiences, and the subject of online product discovery is one we can’t seem to get to the bottom of. It appears that many retailers are in the same place, and despite their best efforts, online retailers just can’t duplicate what we’ve termed serendipity.
That feeling of walking into your favorite bookshop and picking something up in a section you don’t normally go into just because the cover leaps out at you.
The moment when you stumble across some unutterably stylish, drop dead gorgeous dress in the store you don’t normally go into, but your friend dragged you protesting into.
That magic moment where you discover something.
Amazon has had a good go at it, and I confess I’m a huge fan of its “people like you buy stuff like this” functionality, but it does suffer from a major flaw. Like many of my Forrester colleagues, I use Amazon to buy a lot of gifts that I don’t ask to have wrapped. So Amazon thinks I’m crazily into books on vintage fashion and Waybuloo toys. Well I’m not. But my wife and 2-year-old niece are. Go figure which one likes which. So I regularly receive invites to buy more books and toys I really don’t want.
From the interviews with more than 50 marketing leaders, we have learned that more than 40% of chief marketing officers (CMOs) admit that their brand loyalty programs underperform or produce erratic results, or they simply do not know how the programs are performing. The survey also shows that for most CMOs, loyalty marketing is often seen as a means to an end, not a strategy, and that their approach, while necessary, has unclear objectives and focuses too much on short-term financial goals.
Other key findings from the report:
Marketers are primarily focused on customer acquisition (65%), increased brand awareness (40%), and marketing return on investment (39%), as opposed to initiatives addressing customer loyalty, such as increasing customer retention (31%) and customer lifetime value.
The majority of respondents indicate that customer retention (79%) and revenue growth (53%) are the key metrics used by senior management to evaluate loyalty marketing initiatives, as opposed to Net Promoter Score (24%) and customer satisfaction (24%).
Lack of differentiation (91%) and promotional clutter (73%) are seen as the main reasons why loyalty initiatives are often not delivering the goods. For more than half of the respondents, loyalty marketing initiatives are not aligned with the brand they are promoting.
On April 1, 2011, Epsilon announced that it had detected an unauthorized entry into its email system, and that, as a result, a subset of its email clients’ customer data was exposed to an external party. The company indicates that the information was limited to email addresses and/or customer names only. The company is also limited in the information that it can share due to an ongoing investigation.
Epsilon plays in the “permission email” game — it is a legitimate player and certainly not a spammer. It has big and significant email customers — this weekend, I received emails from Disney, Best Buy, and Brookstone, and I’ve read about other notifications from Chase, Citigroup, Barclays, and Kroger. On the one hand, some of the press headlines would lead to a big shoulder shrug — the fact that a spammer might now have my name as well as my email address really doesn’t raise that much concern for me.
But I like to think I’m relatively tech savvy. What about others that might receive an email — addressed correctly apparently from a marketer that they trust that asks for more information or asks for them to take specific action? The emails that I’ve seen from the companies above have been well written and designed to offset some of that concern.
My bigger question is the long-term impact for marketers and service providers. Specifically:
You may have already noticed a new theme on the lips of Forrester's Interactive Marketing role analysts. Tomorrow morning, I will be inviting the Forrester Marketing Forum audience to accept a new mission called CORE. CORE is a four part mission that challenges marketers to embrace interactivity. To compete in the next digital decade, the CORE mission states that you must customize, optimize, respond, and empower. CORE is also the theme of the Interactive Marketing track session at the forum, as Joanna O'Connell mentioned in her blog. Not only that, we recently published The Future Of Interactive Marketing, which lays out the CORE mission in detail. In it, we offer a survey for you to take that will show you how far along you and your organization are at accomplishing the CORE mission. I also encourage you to check out Ad Age's CMO Strategy Profile for a glimpse of how CMOs are affected by interactivity and how the CORE mission is relevant for their future success.
What does all of this mean for interactive marketers? It means that today we are at a pivotal moment, one where the customer has gained enormous power and where technology advances have surged out of our control. Interactive marketers can either be courageous and lead their organizations into the future of interactivity or remain in a digital ghetto and quickly become irrelevant. I encourage you to reach out to IM analysts to talk about how the CORE mission applies to your business. It's a long road ahead and there is a lot of work to be done.
We use mobile devices throughout the day to communicate with each other, get timely information, and entertain ourselves. And, because they’re almost always within a few feet of us, these devices offer myriad opportunities for brands to insert themselves into our lives in meaningful ways. But brands have been slow to realize this opportunity.
Whenever I browse the Apple app store, I’m always shocked by the small number of apps that have been commissioned by big brands — and this holds true for the Android and BlackBerry app stores, too. The app landscape is absolutely dominated by new startups — and big brands are getting left in their dust.
Take, for example, Apple’s list of top free iPhone apps from 2010. Big brands were noticeably missing from the following categories, where only one of the top 10 apps was from a big brand:
Education (kudos to NASA, which was the only big brand)
I’m often asked how I went from marketing women’s skincare at Neutrogena to Timberland boots for outdoor guys, as they seem to be such different businesses. But for me, they have more in common than you might think. They are both strong global brands, with products you can trust and passionate, involved consumers. My passion is for figuring out what is at the heart of a brand, how consumers connect with it, and how to connect with them — understanding what those consumers have in common and where their needs are different, whether they are in Milan, Minneapolis, or Mumbai or whether they are an outdoor guy or a city woman.
At Forrester, I’m going to delve into these areas: harnessing the consumers’ voice in the marketing process; when you should listen and when you should not; the similarities — how global brands can stay true to what they are, while embracing local consumers' needs; and what this looks like in the virtual age, when global walls separating consumers in different countries have fallen down. What’s the butterfly effect of a marketing program in Shanghai on a consumer in San Francisco? What are the differences — for example, how women consume media differently than men, particularly interactive and social media, and how that affects the media mix. Finally, with so many choices, and so few dollars (or pounds or RMB), how can marketing leaders identify what return they are getting on their spend?
So here’s where I need your help. What are your brand-building challenges? What would you like to learn more about that will help you and your team connect with your consumer?