Quick take on eCommerce in Brazil

I recently joined two of my analyst colleagues - Jennifer Belissent from Forrester's Vendor Strategy role and Jan Erik Aase in Sourcing & Vendor Management - in Brazil to speak with companies in our respective coverage areas. It was a fantastic trip: Well organized and incredibly useful in better understanding the business landscape.

On the eBusiness side, we had the opportunity to meet with a wide variety of companies in São Paulo and Rio, ranging from online retailers like Sacks and Comprafacil to eCommerce technology providers such as IBM and hybris to others like FedEx and Google. We also spoke at events organized by content optimization provider Arizona as well as Brazil’s eCommerce Committee.

We are working on a report that summarizes some of the key findings from those conversations – in the meantime, a handful of high-level takeaways from the trip:

Multichannel functionality has not arrived, but is coming. Multichannel came up in almost every conversation I had with companies in the online retail space in Brazil. While there are few options like in-store pickup or returns currently available on leading retailers’ eCommerce sites, the fact that many of the large traditional retailers are active in eCommerce means that multichannel functionality is poised to be a core area of investment going forward.

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With Or Without Bartz, Yahoo! Lacks Vision

Carol Bartz was fired by phone from her post as CEO of Yahoo! in what must have been a Trump-worthy conversation with Roy Boystock, Yahoo!'s Chairman of the Board. Tim Morse, Yahoo!'s current CFO will act as interim CEO and part of a larger executive committee to manage Yahoo! operations until a replacement CEO is found.

I like Yahoo! And I was optimistic about Bartz taking the reins from Yahoo!'s founder Jerry Yang, as I thought it signaled an desire by Yahoo! to aggressively course correct its languishing strategy.  But now I'm just disappointed. Three more years have passed and Yahoo! is the same sinking ship it was when Bartz took the reins.  Here is my take on Yahoo!'s situation.  Yahoo!:

  1. Has terrific online advertising capabilities.  The online opportunity is *still* a huge and growing one; we project interactive marketing will near $77 billion by 2016.  Yahoo! has tremendous traffic and user engagement globally which populates its monster user database that it is a pro at mining on advertisers' behalfs.  It's ad labs scale testing and optimization.  Its reach and available inventory is massive.  And its ad marketplace is making real-time ad buying mainstream.
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Ascentium, Cactus Commerce, And The Evolution Of Commerce Systems Integrators & Agencies

Today Ascentium, a US-based independent digital agency announced its acquisition of eCommerce services provider Cactus Commerce. In the past, Cactus specialized in Microsoft Commerce Server solutions, often paired with SharePoint and its CommerceLive framework. The newly combined company with 500+ staff, offices in the US, Canada, and United Kingdom, and more than $65 million in annual revenue will focus on the design and delivery of commerce and content solutions. Among the many other acquisitions over the past year, this deal stands out as a bit unusual. It brings together a creative agency and a commerce and marketing systems integrator (though arguably Cactus has been more than that to many of its clients). In some ways, this marks the beginning of something we will see more of in the near future — the combining of agency and integrator to become commerce solution providers. 

This is the evolution of system integrators, consultancies, and agencies into something a bit different. We are now calling these firms global commerce service providers (GCSPs). These firms are adapting to the changing needs of clients for integrated services across channel strategy, interactive design, and technology capabilities in order to support the changing business needs in the era of agile commerce. Future services providers like the new Ascentium will combine:

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Crowdsourcing Uses For Google's Forthcoming FTTH Networks

As you might recall, Google is building Fiber-To-The-Home (FTTH) networks in Kansas City, MO and at Stanford University. Google claims it will offer 1 Gbps broadband at a price consistent with services offered by other broadband providers. (The service is currently offered at $49/month to a handful of customers in Palo Alto.) But what will consumers actually do with such a fat pipe? Most assume that question can't be answered until the service is launched.

But Kansas City-based Think Big Partners is impatient. The early-stage business incubator has launched a crowdsourcing contest of sorts to identify apps or services that have the potential to advantage of all that bandwidth. The Gigabit Challenge will award a total of $200,000 in cash and services to the top ideas, with $100,000 going to the winner. Entries must be submitted between October 3 and October 31; a round of 25 finalists will be announced in mid-November; follow-up business plans are to be submitted by mid-December; and the winners will be announced in mid- to late-January 2012 -- right about the time when the Google network should be up and running.

This is another example of the creative use of crowdsourcing, which provides benefits all around:

  • Bright, creative people are incentivized to think twice about the use cases for a 1 Gbps broadband connection -- even those who are not directly linked to this market;
  • Developers who have already crafted ideas on how to leverage this asset have a chance at some early capital and promotional opportunities that could get them up and running quicker;
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On Marketing Technology, Castles, And Moats

Over the weekend, an experience with Apple prompted me to think about marketing technology’s role in creating economic moats. According to Warren Buffet:

In days of old, a castle was protected by the moat that circled it. The wider the moat, the more easily a castle could be defended, as a wide moat made it very difficult for enemies to approach. A narrow moat did not offer much protection and allowed enemies easy access to the castle. To Buffett, the castle is the business and the moat is the competitive advantage the company has. He wants his managers to continually increase the size of the moats around their castles.

The moat around Bodlam Castle, a medieval castle built in 1385.

Apple’s retail presence is both a revenue engine and a cornerstone of its customer experience strategy. Retail pulls in average revenue of $10.8 million per store for Q3, 2011, generating the highest retail sales per square foot of all US retailers. Importantly, the stores guarantee the company a beachhead from which the company can educate consumers and resolve problems directly. For the quarter, 73.7 million people visited Apple stores.

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What's Happening With Forrester's Battle Card Standards?

For those of you following Forrester’s project to create industry standards for battle cards, I want to give you a glimpse into the group’s progress and remind you about Forrester’s public webinar on September 7, where I’ll touch on battle card standards in more depth.

Each member of the standards group has success stories with their battle cards, but each member also struggles to change battle cards from being “random acts of sales support” to providing consistent, reliable support that helps sales reps win more deals. The purpose of our standards initiative is to do just that – identify and repeat how battle cards help sales reps win competitive deals.

Last week, the standards group reviewed the first draft of specifications for battle cards. Getting these definitions correct is important because all the downstream work we will do depends on these specifications. Our working document defines for battle cards the:

  • Purpose. Battle cards help sales reps anticipate and respond to competitive obstacles in the later stages of competitive deals.
  • Scope. Battle cards build on a point-counterpoint structure by identifying the competitor’s claims and equipping sales reps with responses.
  • Intersections. Battle cards must be consistent with competitive positions established in market overviews, pitch decks, and “marketectures,” RFP responses, and other sales tools.
  • Design point. Battle cards fuel customer conversations by addressing competitive issues through the lens of solving the customer’s problem, focusing topics that are core to the customers purchase decision.
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Voice Of The Customer Programs Need Better Understanding, Not Just Better Analytics

Voice of the customer (VoC) leaders are constantly on the hunt for better analytics to identify what customers are saying and doing and, in turn, where companies should focus their attention. For the most part, the hunt is worthwhile. Just think about the value that text mining has delivered during the past few years. However, this focus becomes a problem when it turns into tunnel vision, leading VoC pros to ignore other research tools that yield deep customer understanding.

Analytics based on customer feedback and interaction data can determine important things like which known experience attributes drive customer loyalty and where customers encounter problems, and these insights can lead to a variety of operational improvements. But big changes require deeper understanding. As we were all reminded recently, customers didn’t tell Steve Jobs to build an iPod, nor did any sophisticated analytics.

Fortunately, other customer understanding tools are well suited to fill gaps in traditional VoC activities. Qualitative research methods like ethnography and related tools like personas and customer journey maps dig into what customers really need on both emotional and functional levels. As a result, they can help VoC leaders figure out:

  • What to look for in feedback and interaction data. On the front end of VoC efforts, personas and journey maps can help identify the things that really matter to customers. VoC leaders can then ask about and look for those things in customer feedback and interaction data, leading to more relevant insights.
  • What to do based on the findings. On the back end of VoC efforts, these tools can help firms figure out what they should do in response to issues or trends identified through analytics, leading to more valuable solutions.
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Is It Time You Accepted PayPal?

We've just published some new research on online shoppers' payment preferences in Europe. Payment habits across Europe remain diverse, with shoppers in different countries using different, and sometimes entirely different, payment methods to shop online.

One of the findings that struck me most during our research was the growing popularity of PayPal. That PayPal is used by many online shoppers across Europe is well known, and partly explained by the success of eBay. What struck me as new is how many big European online merchants now accept PayPal, among them leading fashion retailers and airlines. Perhaps I didn't spot that sooner because the British merchants have been much slower to adopt than those in Italy, Germany, France and Spain.

The growing acceptance of PayPal raises questions for two groups of eBusiness executives: 

  1. If you work at a retailer or other merchant, is it time you accepted PayPal payments online?
  2. If you work at a bank or card issuer, what does the growing use of PayPal mean for your relationships with your customers?
  3. For both groups, what payment methods are customers likely to want as they start buying from tablets and mobile phones?

What do you think?

If you are a Forrester client, you can read the full report here.