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It’s the latest craze sweeping the nation… No, I’m not talking about Fruit Ninja, I’m talking about gamification.

There's a reason "gamification" is the buzzword on the tip of so many tongues these days. It takes ideas and structures from games - the video kind and other types - to guide companies in their quest to affect consumer behavior. So should digital strategists at banks and financial institutions use gamification to meet their business objectives?

We’ll get to that, but for now let's start by clarifying what we're talking about. Forrester defines gamification as:

      The insertion of game dynamics and mechanics into non-game activities to drive a desired behavior.

These mechanics come in many shapes & sizes – SCVNGR, a mobile game developer, has a list of more than 40 – but here’s a quick list of four major ones:

·         Points. The most basic element of gamification, points is any type of virtual currency – or, in a few cases, IRL currency. Digital strategists at banks & credit card companies have used this tool for years in the form of rewards points. 

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Observations About eCommerce In Peru

To conduct our global eBusiness research at Forrester, we rely heavily on support from our multilingual group of Research Associates and Researchers. Recently, one of our Research Associates, Lily Varon — whose family originates from Peru — spent two weeks in the country and emailed us with her take on the state of eCommerce. Given that an increasing number of our clients are eyeing the online retail markets of Latin America, I thought it would be interesting to hear Lily’s observations of what’s happening in the region’s sixth-largest economy.

“Here are a few high-level findings from my travels:

Consumer adoption of online shopping in Peru remains low. The lack of online shopping is largely due to the fact that it’s just not customary, but also due slightly to the fear of putting personal financial information on the web. Retailers are encouraging consumers to overcome these barriers by prominently displaying payment and security information on the website, as well as educational information such as FAQs, step-by-step shopping, and payment instructions or YouTube videos explaining the shopping and checkout processes.

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ePrivacy Legislation Gets (Marginally) Clearer

 

The  May 26th UK deadline for compliance to the EU ePrivacy Directive has come and gone.

The result? Confusion among eBusiness executives. Some action. Some sites are informing us of what they are doing. Many aren’t. And a last minute refresh of compliance guidance from the Information Commissioners Office.

The ICO has been steering UK organizations toward compliance for a while, though this steering has been frustratingly vague. But to give credit where credit is due, it released a last-minute guide, which is actually very helpful. Rather than reproduce the content here, I encourage you to read this blog post and download the PDF linked on the page.

The ICO has been taking an admirably pragmatic approach to compliance. The latest document sets out definitions of "implied consent," "session," and "persistent" cookies (among other things) as well as delivering some useful tips on how to inform consumers, even looking at the style of language needed.  It's a real shame for UK sites that this guidance was issued at literally the eleventh hour. But as many UK sites have still yet to take any action, this guidance will still be helpful.

The situation in the rest of Europe is also beginning to become clearer.

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Inject A Human Touch Into Digital Banking

With the evolution of digital touchpoints, banks have mastered right channeling to drive customers to lower cost digital channels for self-service.  As customer adoption of digital channels is in full force and customers are calling and visiting branches less, banks are looking for innovative ways to inject a human touch into their digital channels.  Specifically, banks need to focus on identifying high value interactions and directing customers to the right channel, for the right interaction, at the right time.  In order to be successful, the strategy must be more than slapping an 800 number online and saying “here’s my number…call me, maybe”.  Bank Hapoalim, one of Israel’s largest banks, recognized the strategic implications of limited customer interaction and implemented a strategy to inject a human touch into digital banking to meet the needs of high-value digital banking customers.  The strategy focused on:  

  • Integrating Human And Digital Channels. Each customer has unique needs and communication preferences. Allow self-served customers to select preferences by providing channel options and use right-channeling to drive low-complexity tasks to digital channels and high-complexity tasks to a bank representative.
  • Adapting To Evolving Touchpoints With Agile Commerce. Agile commerce is an approach to commerce that enables businesses to optimize their people, processes, and technology to serve customers across all touchpoints. As touchpointsevolve, eBusiness and channel professionals must remain focused on making decisions that support a customer’s ability to interact across human and digital touchpoints.
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The Digital Sales Inflection Point: Online Sales Surpass Branch In The US

With all the focus and hype around mobile and payments, one major trend surfaced that has as much impact on financial service companies as anything mobile. In 2011 for the first time, consumers who opened financial products opened more of those products through digital channels (online and mobile) then they opened in a branch. 

Every year, Forrester surveys North American consumers and asks them about the products they purchased/opened in the previous 12 months and the channels they used to research and apply for the those products. In 2011 across products including checking, credit cards, mortgages, insurance and investments, 37% of US online adults that opened a product opened that product online with another 2% that opened via mobile. This compares with 36% who applied in a branch. These percentages are up significantly from 2010 where 32% applied online and 40% in a branch. The percentages for Canada are less for digital, but we expect those numbers to continue in the digital direction with the focus Canadian banks are putting on digital sales.

So why the big move?  In general more products were opened in 2011. In the US in 2011, 38% of online adults opened a product versus 32% in 2010. Other reasons for the move in digital sales include:

  • More digital bankers. Survey data has consistently shown that online bankers, mobile bakers and bill payers are more likely to apply through digital channels then those who are not digitally savvy. Those groups continue to grow. In fact, Bank of America announced today that they reached 10 million mobile bankers.
  • Greater familiarity. Applying for financial products online is no longer a new activity. Most consumers have opened at least one financial product online at this point. 
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Selling Luxury Goods To Online Shoppers In China

We just published a report on the online luxury shopper in China, Selling Luxury Goods To Online Shoppers In China. The report looks at the demographic of the online luxury shopper in China and the nature of the online luxury marketplace in China — it also provides advice for brands looking to succeed in this rapidly evolving market.

In this report we note that:

Like all categories online in China, luxury is growing rapidly. According to the World Luxury Association, China is currently the second largest luxury market in the world — it is already clear that part of the demand is coming from online shoppers. In the past few years, a number of the world’s most elite brands have gone online in China. Going online now with a strategic approach will be key to securing long-term market share. 

There are many types of luxury shoppers in China. The online luxury shopper in China spans multiple income brackets and age ranges and lives in both tier 1 and tier 2 cities. Success in this space will mean being considerate of what each of these shoppers is looking for. 

The needs of the luxury shoppers with the most purchasing power are not being met.While a handful of luxury brands have gone live in China with localized sites, today’s online luxury experience is rarely compelling. Additionally, domestic online retailers primarily target online shoppers looking for a deal, with few websites offering sophisticated interfaces. In this report, we look at what is and isn’t being done and what changes will offer the luxury shopper a satisfying online experience.

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Where Does Commerce Technology Investment Stand Today?

As customer behavior continues to evolve, and digital channels become ever more important to businesses, eBusiness budgets have been steadily rising since 2008. In 2010, the average company invested $34.4 million on their customer-facing online presence, and the average mobile and social spending both passed the $2 million per year mark. There has also strong growth is spending in eCommerce technology, with nearly two-thirds of eBusiness professionals citing an increase in eCommerce technology investment in 2011.

So where do firms stand today? Help us find out by taking our latest eBusiness & Channel Strategy Panel Survey on eBusiness budgets and commerce technology investment. It will take only about 10-15 minutes to complete. We invite Forrester clients and non-clients alike to participate in the survey. For non-clients, as a thank you for completing the survey you will be given a choice of one of three complimentary Forrester reports.

I really appreciate your help in understanding the state of eBusiness budgets and spending and we look forward to putting that research together for you. 

Click here to take the eBusiness survey

We're Hiring: Analyst Serving eBusiness & Channel Strategy, Amsterdam Or London

We're looking for a new analyst or senior analyst to join our eBusiness and channel strategy team, based in either Amsterdam or London. We're looking for someone with an analytical mind, good communication skills (listening, not just talking!), strong views on the impact of digital technologies on eBusiness and channel strategy, and experience of the complexities of retail financial services and of different European markets to help our clients make great business decisions and shape their firms' strategies. 

If this sounds like you, or like someone you know, please contact me at bensor@forrester.com or see the full details in the job description.

What Can Bank eBusiness Executives Do About The Euro Crisis?

These are worrying times for people across Europe as the euro lurches towards another crisis, with leaders talking openly about the possibility of Greece leaving the euro and reports of customers starting to withdraw deposits from banks in Greece and Bankia in Spain.

It's easy to feel powerless in the face of such powerful forces, but fundamentally the repeated euro crises are about two things: debt and confidence. Lots of individuals, small companies, banks and governments across Europe have a large amount of debt, and lenders -- depositors, investors and other banks -- aren't completely confident that all of them will be able to pay it back. It's critical to avoid a vicious spiral of declining confidence that will harm Europe's economic prospects and the livelihoods of its peoples.

What can bank eBusiness executives do about it? Remember that you control two of your bank's critical communication channels:  the website and email. Use them to reassure customers. How?

  • Help customers understand what the crisis is about. Banks aren't just about products. Your purpose is to help customers manage their money. Help your customers understand the causes of the crisis and the reality of the hard choices facing Europe. Nobody likes realizing that they are poorer than they thought they were. Without getting political, help customers understand the situation and what it means to them.
  • Spell out why your firm is safe. My bank emailed me on Thursday to remind me that it's covered by the British government's Financial Services Compenstation Scheme, covering up to £85,000. Put a similar message on your home page and onto the secure site, where online banking customers are most likely to see it.
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How to Start Your eCommerce Business in China

China has become the leading emerging market for many Western brands and retailers. For many businesses, the growing spending power of high-income consumers and the middle class in China has become a compelling growth engine. For luxury brands, China is already a huge growth market, and many Western companies have had a brand presence in China for many years, albeit often with counterfeit products and even whole counterfeit stores. But as the economy grows in China and consumer thirst for foreign brands increases, companies will be compelled to consider an online direct-to-consumer presence due in-part to the following factors:

  • The scope of the Chinese market is immense. Not only is China one of the largest in the world by area, it already had more than 171 cities with more than 1 million inhabitants as of the country’s last census, which has likely increased markedly in the last 10 years. While launching physical stores in core markets such as Beijing, Shanghai, Chengdu, Guangzhou, and Shenzhen may be feasible, reaching even just the top-tier cities is extremely challenging operationally, particularly for a Western brand or retailer. eCommerce presents an important way to reach consumers across the entire country while complementing any decision to invest in core physical retail operations.
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