I’m co-presenting next week at Forrester’s first-ever CIO/CMO Forum with my colleague Craig Symons, a VP and Principal Analyst from Forrester’s IT client group. We’re hosting a discussion around how to budget for marketing technology purchases. So it was perfect to hear Robert Stephens, the CTO of Best Buy, talk at the Exact Target Connections Conference about the role he plays in Best Buy’s marketing innovations. Stephens is the technology mastermind behind all of Best Buy’s industry-leading efforts like Twelpforce — its Twitter-based customer service organization. Here are a few sound bites from Stephens’ presentation:
“My job is to transform trends into reality for us.” Stephens talked about his close relationship with Barry Judge, Best Buy’s CMO. They meet regularly to swap ideas and co-support innovations. And Stephens doesn’t view any imbalance in the “power” either of them has over Best Buy decisions. He’s actually come up with his own share of “marketing” ideas; for example, he came up with the Geek Squad in his lean college years. In his words, “When you don’t have any money, everything is marketing.” I think this perspective makes sense even when firms *do* have money. What if every employee — including IT ones — thought about all of their moves as marketing ones? That is ways to create a product, culture, and experience that promotes your firm above all others.
Much has been made over the last two days of the Target.com crash and availability issues following its Missoni promotion that launched on Tuesday. Coming on the heels of the site’s relaunch on IBM Websphere Commerce after many years on the Amazon enterprise solution led many to speculate that there was a serious mistake made in the building of the new site. But this is not a failure of the new site, this is a failure to forecast.
When Target's marketers planned the media blitz and direct marketing around this Missoni promotion, launching the collection with great fanfare — and at the same time online and in-store— they likely planned on a web traffic response and resulting sales of 2-3x normal. That would be a terrific outcome, no doubt justifying the expense and effort of the multichannel promotion. I am sure no one forecasted a 10x normal response, and peak traffic 3x Black Friday traffic peaks. And beyond just the click-through, the consumer behavior on the site after click-through was unusual. This was not a product they were promoting, but a collection, and consumers were placing many, many items in their cart, well beyond the typical 1-2 items per cart a B2C site like Target's would expect.
Maybe you’re working for a software company that suddenly faces a free cloud-based solution (funded by advertising). Or perhaps you’re in a clothing retail chain whose market share is under attack from an offshore company using webcams to offer virtual fitting rooms and cut-to-order clothing. If you are employed by a brick-and-mortar retailer of DVD rentals, music, or books, you’ve already been disrupted and have either found a safe niche to hide in or are in the process of liquidating your stock.
Disruption cannot be avoided. Today, rapid changes in technology, customer preferences, competitive capabilities, market dynamics, even government regulations, make continual adaptation a requirement to avoid disruption, which can result in market share and even business loss. Can you help your company prepare for disruption? Even more valuable: Can you help your company be the one that has the insights to disrupt its competitors?!
For market insights professionals, the constant threat of disruption creates a new mandate: Provide the insights that help stakeholders understand where, what, how, how much, and why changes need to be made. So:
How well can you hear the voice of the customer?
How well do you understand competitive capabilities?
Have you worked through potential change scenarios with stakeholders?
Do you have the ability to spot early signs of change?
Do you have a plan for what you’ll do when change happens?
This is the second in a series of question-and-answer blog posts with the CEOs of the vendors included in my recent Forrester Wave™: Co-Creation Contest Vendors, Q3 2011 (blog and report).
Today we’re talking with Dr. Johann Fuller, CEO of Hyve AG. Hyve AG, a Munich, Germany-based firm, was identified as a "Leader" in that report.
Doug: Co-creation contests are a new opportunity for product strategy professionals to solve business challenges, but many people are unfamiliar with them. What is your “elevator pitch” to potential clients about co-creation contests and the benefits they deliver?
Budget season is upon us. With a rapidly changing media landscape, many marketers are re-evaluating how they allocate their marketing dollars. How is your budget changing for 2012? Will you take back TV dollars? Spend on social? Move more to mobile? Invest in innovation? I'm writing a new report that will take a look at marketing budget plans for 2012 to help marketing leaders understand how they should benchmark their budgets. Please take a 10-minute break from your email overload to take our survey and tell us your plans. What's in it for you? Take your choice of one of our top summer reports and a copy of the survey results — your own direct line into what your colleagues are planning.
One of our ace researchers on the CMO and marketing leadership team, Mike Glantz, pulled together this blog post to follow up on a report we collaborated on a few months back, "TV's Currency Conversion" (client access required), which discussed the merging of Nielsen data and set-top box and other census-level data. Although television is the overall dominant advertising medium in US, marketers are seeing audience fragmentation across the spectrum of broadcast and cable networks. In the digital world, online video viewership continues to grow and enables marketers to target niche audiences with relative precision, compared with TV. However, marketers have been hesitant to see online video and TV as two sides of the same coin because there has not been a common measurement to link the two media, and digital video is perceived to lack the massive reach that TV currently enjoys.
An article in yesterday’s Ad Age led with a fascinating premise — that investments in technology and innovation may provide future breakthrough for Wal-Mart. That’s Wal-Mart. Not Apple, or Google, or Samsung, but Wal-Mart — the world’s biggest retailer.
Forrester has been writing for some time about how technology management must change to deliver business results, a phenomenon we call business technology (BT). The implications for Customer Intelligence professionals are immense. CI teams are often among the more technically oriented of their marketing brethren, and they are steeped in data and analytics, but the best CI pros also act as customer strategists — helping the company to better understand the customer and to put the customer squarely at the core of the business.
To do so requires a lot of BT involvement. For too long, we’ve heard that IT is from Mars, and marketing is from Venus, but to harness the full power of Customer Intelligence, BT and CI must form a deep bond and learn to collaborate. To help CI professionals on this journey, Rob Brosnan will soon publish a report introducing the idea of a Marketing Technology Office.
And to help CI pros, CMOs, and CIOs figure out how to emulsify marketing and technology, Forrester will be hosting its first CIO-CMO Forum next week on 9/22 in Boston. I’ll be co-moderating a session with my colleague Gene Leganza — we hope to see many of you there!
In the US alone, Forrester is forecasting nearly 100 million smartphones by the end of 2011. And digital customer experience professionals are meeting the new mobile demand by creating or redesigning mobile experiences: 34 of the 48 customer experience professionals we surveyed at the end of last year said that they’re planning major mobile design projects in 2011.
In the rush to create great mobile experiences, most end up focused only on what occurs within the browser/app experience. But we know that consumers often call the call center when they can’t accomplish their goal on the Web. And that transition isn’t always seamless.
Let’s say we have a customer using a mobile banking app to look up the balance on his mortgage. Once he sees how much is left, he wonders what his options are to refinance at a better interest rate. He can get some basic refi rates in the app, but he wants to know whether, as a longtime customer, he can get a better rate. He goes to the "Contact Us" screen in the app and clicks on the phone number.
What happens next? He starts at the top of the IVR. He has to identify himself all over again and route to an appropriate agent. Talk about a frustrating experience for the customer and a waste of time for the agent to recapture what he was doing!
Remember: A smartphone is also a phone.
If the browser or app experiences are built for seamless transitions to phone agents, they should:
Forrester recently published the “State Of Retailing Online 2011: Merchandising, Headcount, And Global Strategies” report in conjunction with our friends at Shop.org. It is available on Shop.org (with a subscription) now.
Some of the reports highlights include:
Online retail continues to steal market share from other channels. “The State Of Retailing Online, 2011” survey shows an average growth rate of 28% for online retailers over the past year — this has been driven by improvements in retail execution including higher conversion rates, higher average order values, and strong repeat shopper revenue.
Investment in site merchandising drives conversion increase. While some tactics such as “ratings and reviews” are perennial merchandising investment favorites, more retailers now also are investing in merchandising through new channels, such as mobile. This report categorizes each of the 80 tactics reviewed as an industry standard, area of opportunity, investment area, or unproven tactic.
Headcount growth lags as overall eCommerce growth charges forward. Retailers maintain conservative growth plans — less than 10% — that largely don’t match up with the year-over-year growth of web retail overall. Focus currently is on mobile, marketing, merchandising, IT, and analytics.
Global expansion will be an investment focus, but not top priority. While 37% of retailers cited international commerce as very important, most global businesses still haven’t fully committed to that lofty title — remote management of global services, accepting returns shipped only to their home country, and English-only sites and customer service are still common practices for these “global” online retailers.