In our research, we’ve talked about some of the trends that mark early-stage eCommerce markets. This year I’ve been to a few events to talk about how different eCommerce markets are evolving – today we see that:
Retailers’ ownership of logistics networks is now widespread. The model of online retailers owning and operating logistics networks in emerging markets is well established. While there used to be a handful of examples to point to, it’s becoming increasingly common for a number of the top eCommerce players to operate their own logistics networks - Amazon in India is just one recent headline-maker in this area. Indeed, in the BRIC countries today, only Brazil does not currently see many of the leading online retailers operating their own networks.
For consumers, there are two key insurance moments: when coverage is bought and then when it’s used, with hopefully a long span of time between the two. And if there is a claim, then it’s up to the insurer to react to help the claimant recover. But too often, the claims experience spurs policyholders to consider changing insurers, especially among policyholders who’ve been customers longer (and have been paying premiums longer).[i] What else happens when there’s a policyholder unhappy about a claim? Claimants readily take to social bully pulpits with their claims grievances, effectively using Twitter and Facebook to “regulate” insurers into action.
In addition, they also file complaints with state insurance regulators, an activity that about 34,000 US consumers did in 2013.What’s their biggest gripe? A look at the National Association of Insurance Commissioners (NAIC) stats reveals that 56% of consumer complaints filed in 2013 were issues related to claims handling, with the biggest chunk, 24%, because of perceived delays. And that’s not counting delays associated with getting referrals, pre-authorizations, and finding willing providers.[ii]
Over the past year, I’ve been involved in a variety of client advisories focused on the claims experience for both consumers as well as insurer work teams responsible for getting claims paid. Why is the claim experience so easy to go off track? For starters:
It’s only crumbling, archaic companies that have to worry about digital disruption, right? Companies that cling to out-moded ways of operating, where out-of-touch, besuited executives languish in mahogany-paneled boardrooms pondering strategy over cigars and brandy.
Oh no. Digital disruption impacts every business and every company.
No matter how “born digital” you may think your firm is, there’s always room to get leaner, meaner and closer to your customers. Take this as an example.
You might think that Satya Nadella, recently appointed Chief Exec of software powerhouse Microsoft, has nothing to worry about. While Microsoft wasn’t strictly “born digital”, it isn’t far off. It boasts an impressive array of digital services in its suite of products – Hotmail, Xbox Live and MSN to name just a few. But Nadella is only too aware that what’s made Microsoft successful in the past will not continue to differentiate it in this uncertain future.
In a recent New York Times interview Nadella was asked about how he wanted to change the culture of Microsoft. He succinctly sums up exactly why every firm must become a digital business:
3. 70% of MAU use the service daily (Source: TechCrunch)
4. WhatsApp offers users in Europe, Brazil and other emerging markets (= net new audience) (Source: Gravity/Techcrunch)
5. Nearly 200 minutes of usage each week (Source: Mobidia)
6. Facebook gets how to monetize mobile through paid advertising without wrecking the user experience. (In Q4 2013 they crossed over from 49% of revenue from mobile to 53% from a base of 945M mobile monthly active users) Source: Facebook, TechCrunch
Why $16B to $19B? I am not a financial analyst, but here are a few thoughts:
- Facebook generated $1.37B in mobile revenue in Q4 2013 on a base of 945M users ... annualized that is $5.80/MAU (monthly active user)
- WhatsApp already generates $1/user for a chunk of their users through a subscription fee (less fee to app store?)
- If WhatsApp users can be monetized at the same value, that adds another 50% approximately in mobile ad revenue
- Facebook reported 914 minutes of use on mobile per month in 2013 (Source: allthingsd.com)
It’s one thing to say where you want to go, but you still have to know how to get there. If it’s a physical journey like a quick trip to the local store, a meandering trek across Europe, or a digital or business technology initiative that your company is after, getting to the destination or end state demands a road map. Maps show all the options to get a traveler to the destination; routes are a subset of options to get the mobile traveler there In a hurry? You’ll take the efficient and direct interstate. Want to explore and learn? Your route will take you on back and scenic roads.
We wanted to learn just how mobile insurance executives took to the mobile road after their strategic plans were approved. Throughout Q4 2013, we talked to insurance executives in the US, UK, France, Italy, Israel, the Netherlands, and Turkey who were responsible for turning that mobile strategy into solutions that engaged with consumers and agents. Crafting a roadmap to guide the mobile journey, stood out as especially key because mobile initiatives are hampered if the execution teams fail to consider the myriad internal and external factors that impact delivery time lines.
One European carrier we spoke with put it best: “There’s lack of vision, a lack of focus, and too many people are playing around the edges. That’s giving mobile a bad name in terms of costing money and not giving any benefit for it. List out and create a road map, so you’re clear about what you’re focused on and why.”
Finally - some sensible entrepreneurs. I love it. Viber draws a stark comparison to the owners of SnapChat that turned down $3B not long ago ... and they had far fewer users. With $900M for 300M subscribers, perhaps we are now seeing the market price. (Viber brings Rakuten 300M subscribers according to this Reuters article.)
Why did Rakuten want the platform? I'll offer a few ideas:
- Companies need to embrace the mobile mind shift and engage consumers where they are and how they want to be engaged. Today and increasingly so - consumers expect engagement on their mobile devices, whether they are shopping or seeking customer service. Companies need to be present in those moments when consumers reach for their phones.
- Viber isn't simply an app. It may have started as an app, but like so many others with aspirations ... it has transformed from an app to a platform. I may not need 200 apps on my phone. I may not want 50. Not every brand will earn a spot or be able to manufacture a mobile moment with me through an app on my phone. Brands are going to have to "borrow mobile moments" by engaging with consumers on third party platforms. Consumers need a messaging or communication app, a mapping app, and what else? The question is: how long will this list be.
- Audience size matters. Everyone says, "oh, we could just go build this ourselves." But it takes a special app to get several hundred million users. I can't even count the number of social media/messaging apps that I have downloaded, used 2-3 times and abandoned because the size of the community was too small. Consider also that these apps draw up to a couple of hundred minutes of usage a week.
The prospect of remote collection lockers and click & collect points replacing London Underground ticket offices sparked a round of strikes last week, creating havoc for commuters. The second round of planned strikes was only narrowly averted this week.
Transport for London’s (TFL) proposal to close 240 underground ticket offices and replace them with automatic ticket machines will result in a proportion of job losses for station staff but present an opportunity for TFL and UK retailers alike, by:
Responding to the popularity of click and collect in the UK. Forrester’s Consumer Technographics® Retail Survey data shows that UK shoppers are responding to retailers’ omnichannel fulfillment capabilities, readily adopting click & collect services. UK grocery stores Asda, Waitrose and Tesco are not waiting for the closure of ticket offices. They are already setting up trials for click & collect services at selected stations across the London Underground network. The click and collect service will allow shoppers to order their food online before a cut-off point during the day, for collection at their local station on their way home in the evening.
Consider this. The iPad is not yet four years old...and 69% of B2B companies expect to stop publishing print catalogs entirely within the next three to five years. In a world driven by such profound change, one cannot help but ask, “What will B2B eCommerce look like in the years to come?”
Today, I’m pleased to announce the release of a report that peers over the horizon and begins to address the important question of where B2B eCommerce is heading in the next few years. In “The New And Emerging World Of B2B Commerce,” Forrester finds that B2B companies are:
Calibrating for a shift in B2B buyer behavior. B2B companies are responding to B2B customers researching and buying online and on mobile devices by creating digital assets where they once only had print and human assets. Further, they are actively preparing for a reality where 50% or more of their total customer base will be buying online from them within three years.
Developing content-enabled commerce. B2B buyers are looking for detailed product specifications, how-to videos, deep and broad FAQs, etc. to satisfy their insatiable appetite for content. In response, B2B companies are increasingly producing and syndicating targeted content aimed at driving purchase interest across multiple channels and preventing B2B customers from abandoning shopping carts.
I have recently joined the eBusiness & Channel Strategy group as an Analyst, from a role as Senior Consultant within Forrester. I have spent the past few years working with Analysts, across the eBusiness & Channel Strategy and Marketing Leadership role teams in Europe, on custom consulting projects for a variety of clients. These projects focused on a wide range of topics and objectives, including vendor selection support for an Italian fashion brand, multi-market digital maturity assessments for a global CPG organization and an eCommerce strategy review for a global multi-brand corporation, to name a few. I very much look forward to continuing to work to provide guidance and insight, now as an Analyst, to help our eBusiness clients to succeed in the Age of the Customer.
I’ve spent the past two days at Finovate Europe in London, which must be one of the more thought-provoking ways anyone in digital financial services can spend two days.
Here’s my perspective on the lessons from the event for digital financial services executives:
More people are focusing on the small business opportunity. There were far more companies proposing to help small businesses manage their finances this year, in numerous ways from access to capital through to document storage and expense management. I was particularly impressed by the work that Efigence and Idea Bank have done to help Idea Bank’s small business customers manage their finances.
Automated financial advice for mainstream customers is edging closer. For years, Forrester has talked to its clients about the huge opportunity, and pressing need, for financial firms to use software to automate the production of financial advice. A growing number of firms are trying to solve this problem from one angle or another, including Money On Toast, Vaamo, Your Wealth and Yseop. Perhaps the best quotation of the event came from Elizabeth Farabee at Yseop: “A banker doesn’t sell the customer the best product, but the product he knows best.” Automating the manufacture of advice can fix that.