This year’s Forrester CXP Forum was two days filled with provocative speakers, interesting conversations, tough questions, and inspiring ideas.
I enjoyed spending most of the two days doing analyst One-on-One sessions. For those of you who haven’t attended a Forrester forum, forum participants sign up to speak with analysts to discuss topics of their choice in 20-minute sessions. From an analyst perspective, these conversations can be rich with insight into today’s business challenges and opportunities. Here are some of the common themes that emerged in my conversations with eBusiness leaders about online customer service:
Shifting CSRs from the phone to chat. I had many conversations with forum attendees who share a common question: The percentage of customer contacts going to chat is growing, so should they shift customer service reps from the phone to chat? Many companies have done this successfully. The challenge is that there are different skills required by chat compared with the phone. Chat reps will need typing speed and impeccable grammar. These are skills that can be tested. They will also need to be comfortable with chat. I’ve spoken with customer care people who said they found the transition to be challenging because they were not accustomed to an interaction that resulted in customers having an instant transcript. eBusiness leaders should also consider guidance around tone and engagement as part of their chat training program.
A fundamental transformation of the way brands and consumers connect on the Internet is amid us. Icann, the authority responsible for Internet domains, has approved a plan to expand the 22 currently available domains (.com, .net, etc.) to allow trusted brands and organizations to apply to own and operate their own gTLDs (generic top-level domains). In just a few years, new brand gTLDs will impact the way consumers search for and find products online as recognized brands switch away from .com to their own .brand top-level domains. URL paths used today for categories, products, and marketing campaign landing pages (e.g., www.apple.com/iphone) will be replaced by new shorter, catchier URLs (e.g., iphone.apple).
eBusiness professionals must carefully evaluate this change and start the process of mapping out how owning their .brand domain will impact their eCommerce sites. I recommend that Forrester clients read our latest research report written by my colleague Jeff Ernst and myself, .Brand And The Impact For eBusiness, which outlines the reasons why eBusiness leaders and their marketing counterparts must carefully evaluate the significant opportunity that owning gTLDs for the their brand or brands presents.
In my ongoing-yet-fruitless quest to find the great social commerce success story, I’ll talk to anyone who will talk to me about the topic. I talked this week to a "venture capitalist" who shall remain nameless, and we had the following conversation:
VC: I’ve seen social commerce success. I have. I’ve seen commerce success on Facebook.
Me: Really? Are you referring to maybe one of the marketplaces on Facebook? Or ShopSocially?
VC: No, no one’s heard of this company. No one in the Valley has heard of this company. Only I know about this company.
Me: And this is a business that can scale?
VC: It’s sooooo scalable. I’ve seen it scale.
VC: They make millions and millions of dollars. I’ve seen it.
Me: Can you tell me who you’re talking about?
VC: I . . . I’m not at liberty to say the name. They want to stay under the radar. They don’t want anyone to know about their secret sauce.
Me: Really? They’ve discovered something that no one, not Silicon Valley, not Facebook’s army of developers, not any retailer in the world has yet to discover?
VC: Hey, I don’t need YOU to believe me! I’m happy to just make my money.
Mobile apps are undoubtedly cool, and executives at leading online retailers have been mandating a presence of their brand in the Apple and Android app stores, but eBusiness professionals must focus on building a cohesive mobile strategy that clearly identifies the case and role for apps within their organizations. Apps are great ways to engage with your customers, but will they deliver incremental revenue above and beyond what the mobile Web is already doing? In her recent mobile commerce forecast, Sucharita Mulpuru explains that mobile commerce is set to transform retail, despite only accounting for 2% of online web sales today. In my new report The State Of Mobile Commerce Apps, I peel back the covers on the hype and take a serious look at why, when, and how eBusiness professionals should approach their mobile app strategy. Some of the issues I explore include:
The mobile web versus app debate. The debate is irrelevant, consumers are using both in equal measures; however, developing an app for apps' sake is missing the point and will only disappoint your customers. eBusiness professionals must develop unique app experiences that deliver multichannel innovations and raise the engagement of the consumer with your brand.
Keeping up with the explosion of consumer touchpoints. Having an iPhone app was the priority back in 2010, but in 2011 many eBusinesses are adding Android, iPad, and Windows Phone 7 apps. The opportunity for apps also extends beyond the consumer. Retailers are investing in apps for store associates empowered with mobile devices, in-store kiosks, and interactive TV.
After social commerce, mobile commerce is the most heavily debated topic-du-jour among retailers these days. One thing that both social and mobile commerce have in common is that they are both small. Teeny in fact. Forrester’s Mobile Commerce Forecast, 2011 To 2016, which launched today, shows that retailers can expect 2% of their online web sales (yes, I said web sales which means a minuscule percent of overall retail) to be transacted through mobile devices in 2011. While we also expect mobile commerce sales to grow 40% each year for the next five years, we’re still talking small numbers overall (7% of web sales penetration by 2016). Why so small you may ask. After all, aren’t smartphones changing the way we consume web content? Some things to consider:
Tablets. We don’t include tablet shopping in our definition of mobile shopping, but the creation (and subsequent explosion in sales) of this device is probably the single biggest inhibitor to the growth of “mobile commerce.” Data that we gathered with Bizrate Insights (to be released separately and soon) indicates that most tablet owners also own smartphones, and many of those people naturally prefer to shop on the device that has the larger screen when given the choice.
Shopping never leads web behavior. In any list of activities that people do on the Internet, shopping nearly always ranks below things like “reading news” or “using social networks.” Even those activities are not universal among the smartphone set, so it would be premature to expect that shopping would rank high on the list (which it, of course, doesn’t).
In the interviews we just wrapped up with insurance thought leaders, one thing’s certain: Mobile is going to play a BIG role in the future of insurance. Alongside another topic (about which you’ll hear more later), mobile, and its role in enabling policyholders along with underwriters, agents, commercial underwriters, and the claim supply chain, animated virtually every conversation we had. One area in particular — mobile partnerships — spurred some great discussion on the outlook for new mobile products and collaborations that might be in the offing.
Alongside Tokio Marine’s intriguing mobile one-time insurance for sporting events and travel, we uncovered a unique life insurance purchasing model in South Africa. What was it that caught our attention? Econet Wireless and First Mutual Life in South Africa have teamed up to produce Ecolife, a life insurance product purchased by prepaid subscribers using mobile airtime. The customer only has to purchase US$3 to receive coverage, and the amount of coverage increases with every additional dollar (up to $10,000 coverage). First Mutual Life’s attempt to reach the sizable population of South Africans without a traditional bank account has seen rampant successthus far.
That’s amazing. How can I get a piece of that pie?
Call it what you will -- V-Tail, vCommerce, or just plain online video -- we are seeing some pretty bold claims around the use of video in eCommerce. Claims from platform vendors, press, and even some case studies and success stories from large retailers who are seeing some significant successes when they integrate video content into the online shopping experience.
But there’s the key. Integrate. Of course it isn’t as simple as sticking a few videos on your existing dot-com site and hey presto, conversion rates skyrocket. Video needs to support the sales process in a way that makes sense to your customers, that supports your brand values, and that enhances the shopping experience.
There are a growing number of ways to source video content, and an increasing number of players in the market who will all tell you that they have the answer. From user-generated content to automatically generated video. From content delivery networks to social media. There are a bewildering number of options out there.
Video absolutely can deliver firm benefits :
It can increase page views by driving traffic to your site.
It can enhance the time people spend lingering on your site, giving you more opportunity to market to them.
Recently two colleagues of mine, Patti Freeman Evans and Martin Gill, put their respective cities’ shopping meccas to the multichannel test. The question: To what extent were bricks and mortar retailers on Fifth Ave in New York and Oxford Street in London using their physical stores to advertise and promote their digital channels?
Eager not to be left out...and curious to see how my city of Chicago would fare…I paid a visit to our world famous “Magnificent Mile” to see if/how bricks and mortar retailers promoted a connection to their own digital channels.
As I walked both sides of Michigan Ave (home to retailers such as Northface, Macys and Gap…as well as high-end retailers such as Tiffanys, Louis Vuitton, and Chanel)…I thought to myself, would Chicago be different from London and New York? Would America’s heartland have a better feel for a large and growing number of shoppers today who may physically “be” in stores but whose shopping “attention” may reside elsewhere?
Traditional Brands Disappointed. Count among this grouphigh-end/luxury brands and more established brands (e.g. Louis Vuitton, Macys). Which is not to say that all youth-oriented brands excelled (e.g. Zara, Disney)…in fact, a surprising number of them failed to show their multichannel chops (e.g. no URLS in store, no discernable mobile presence). For example, The Disney Store was heavily promoting the “Cars 2” movie on monitors in its store, but I could not find any links anywhere to their content-rich website.
I'm excited to announce that the theme for this year's Consumer Forum, to be held from Oct. 27-28 at the Hilton Chicago, is "Delivering Optimized Product Experiences Across Customer Touchpoints." Disruptive technology, digital connectivity, and the proliferation of customer touchpoints are dramatically changing the way customers interact with products and channels. Coupled with changing consumer behavior, this means that we are seeing the eradication of traditional business models, products, and distribution tactics.
Marketing and strategy professionals must therefore adapt the physical and digital goods they sell, as well as how and where they sell them. Only those executives that become customer-obsessed, agile, and global will capitalize on new distribution models across touchpoints, delighting their customers and driving incremental revenue in this new age of the customer.
I have mixed feelings about the Groupon IPO. On one hand, we’ve just come out of a horrible economic period where there was a real fear of wealth destruction. But now just a few months after the near-collapse of our financial institutions, we actually have an extraordinary opportunity for wealth creation — how great is that! On the other hand, there is no rational math that could possibly get anyone to the valuation Groupon thinks it deserves. Yes, Groupon grew from $30 million in sales to more than $700 million between 2009 and 2010, but most of that growth was artificial. (The lack of profitability is another issue, but let's not even go there.) Here’s why:
$265 million came from its international markets, which were acquisitions.
It spent a quarter-billion dollars (!) on marketing. To put that into context, the average large eCommerce retailer spends $11 million on interactive marketing. Back of the envelope calculations from the SEC filing get us to $31 spent to acquire a customer, who then probably spends a little more than that on Groupon. That means it spent about $250 million to make another $300 million.
It launched in more than 100 new markets in 2010. I’ll conjecture that in any market in America, you can sell $500,000 of half-off manicures and teeth whitening procedures in a year just by hanging a shingle. That gets us to another $50 million in revenue.