In the age of the customer, firms that assume that what made them successful in the past will continue to drive competitive advantage in the future are doomed to failure. But as a counterpoint, those firms that embrace the opportunity digital technologies bring to get closer to their customers by creating contextually relevant, personalized customer experiences will thrive. That’s the theory, but what does it look like in practice?
This week, two major UK grocery firms paint opposite ends of the digital spectrum.
Consumers are embracing an increasing number of devices and touchpoints to shop – this we know and at Forrester we call this the mobile mind shift. But eBusiness professionals still need to figure out the relative influence each touchpoint has on their customers’ shopping behavior in order to determine where to focus their efforts. Should you follow the likes of House of Fraser with a mobile first web presence? How do your customers use your digital presence for research pre-purchase?
Forrester’s new retail segmentation helps eBusiness executives answer these questions by providing a framework to map out the complex ecosystem of touchpoints and devices their customers use to shop. The segmentation identifies increasingly sophisticated multi-touchpoint shopping behaviors and helps eBusiness executives to identify critical touchpoints to create the most relevant shopping experiences for customers across markets.
eCommerce revenues are soaring around the globe. This year, the US, Western Europe, and China alone will generate over $800 billion in online retail sales. Growth rates, too, remain staggering in many countries: China’s massive online retail market will more than double between 2013 and 2018, as will Brazil’s. India’s much smaller market will grow by eight-fold during this timeframe.
However, a litany of businesses have failed as they attempted to tap into shoppers outside of their home markets, with many large US and European brands factoring prominently on the list of casualties. eCommerce is no exception: Numerous eCommerce businesses have taken the plunge into new markets, only to find their offerings didn’t resonate with local consumers or they were outsmarted by much savvier local rivals.
What separates successful global eCommerce businesses from their counterparts? Which tactics have proven particularly effective for brands aiming to extend their reach into new markets? What are some of the most common challenges businesses tend to encounter? Our newly published eCommerce globalization playbook helps brands through the thorny process of global expansion. Clients can read our playbook for insights on how to:
Discover and quantify international revenue opportunities. Our playbook includes reports outlining the global opportunity and identifying how eCommerce markets typically develop with time. Our online retail forecasts for the US and Canada, Western Europe, Asia Pacific, and Latin America provide a quantitative look at market sizes and eCommerce trends in these regions.
Yuebao is a hot topic in China, and has even gotten international attention. But what is it? Yuebao is a value-added service that customers of Alipay (China’s version of PayPal) can use to earn interest and to make payments and transfers. An individual can start a Yuebao account with as little as RMB 1 (US$0.17).
The Alibaba Group launched Yuebao in June 2013. By mid-February 2014, 61 million people had invested money in Yuebao, and total fund skyrocketed to RMB 400 billion (US$65 billion) – making it the largest fund in China.
People are drawn to Yuebao because of its:
High yield. The average annualized return is around 6% — much higher than similar funds and banks’ financial products.
Good liquidity. Yuebao offers great flexibility; investors can deposit and withdrawfunds anytime. Other financial institutions require lock-in periods and much higher initial investments.
Ease of use. Yuebao offers a much easier way to invest. People can see the value of their assets anytime, anywhere on their smartphones.
This is a guest post by Lily Varon, a researcher serving eBusiness & Channel Strategy professionals.
The breakneck pace of technology innovation and changing consumer behavior is having a profound impact on business. To keep up with business growth plans, competitive threats, and consumer demands, online companies must support global markets, digitally empowered customers, and evolving sales and service channels, putting ever-more stress on the eCommerce engine.
eBusiness professionals are taking stock of their legacy or incumbent eCommerce technology and finding that the solutions aren’t tactically functional, aren’t omnichannel-ready, and/or aren’t leveraging sophisticated enough data insights to deliver on the demands in the age of the customer.
The technology powering eCommerce is becoming more complicated, too. There are more stakeholders than ever, more data, more integrations, and so on. In many cases, replatforming projects run over budget and are delivered late. Talk to any eBusiness leader who has been through the process, and you're bound to hear a war story or two. These projects are never easy, but as eCommerce technology — and the market that drives it — evolves, replatforming initiatives are inevitable.
Selecting the right commerce platform for your business is important. But a car needs more than an engine to both function and be used to its full potential. eBusiness professionals must understand the following before embarking on an eCommerce replatforming program:
Back in July 2012, I authored a post about Pitney Bowes and the company’s focus on reinventing itself. At that time, the company had a great portfolio of software assets and a good overall market message — but its market approach was fragmented, its solutions were not integrated, and it was a difficult company to figure out from the perspective of a customer or prospect. About 15 months ago, Pitney Bowes appointed Marc Lautenbach as its new CEO to address these issues.
Fast forward to today. Last week I had the opportunity to spend some time with Marc while he was in Sydney. In his brief time with the company, he has sorted out a number of the challenges I was referring to — including giving the firm a laser-sharp focus on a few key areas, bringing traditional assets into the digital world, refining its sales model, and leveraging those areas in which it has competitive advantage.
Marc sees PB’s main opportunities in the following areas:
eCommerce. PB has the ability to classify assets for all types of commerce providers and ship them anywhere around the globe.
Location-based solutions. Not only does PB have great mapping information, but it can also integrate data from any domain and apply its own algorithms to make that data valuable.
Printers, sorters, meters, and inserters. This isn’t a fast-growing business, but it’s a big one — and one that’s still important to many companies. It’s also a segment in which PB has some unique capabilities.
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.
In my post at this time last year I wrote of the changes we could expect in 2013 around the shift toward digital business. And indeed we did see a significant move toward digital business in 2013 - a transition that’s still very much just beginning.
But 2014 will be different. 2014 is when digital reality begins to sink in for CEOs around the world. And if your CEO doesn't figure out digital business this year, I predict 2015 will be a very challenging year for your organization, no matter what business you are in.
The Retail Conundrum
A recent Wall Street Journal article highlights the challenge of retailers very well. Store footfall is declining as consumers' lives become more digital. We are seeing a steady shift toward shopping online and shopping less often. So how can today’s retailers survive? The simple answer is that many will not. Retail will undergo a seismic shift in the next 10 years. And since retail is a major employer, it's a shift that will impact us all.
Time drives behavior. Digital tools extend the workplace into our private lives, allowing greater productivity while also creating fewer opportunities for large chunks of time to “go shopping.” We are increasingly using digital technologies to optimize how we fill our days for work and pleasure:
• Digital scheduling tools like Google Calendar help us plan our work and play time.
Last week, my colleague Sucharita Mulpuru published Forrester’s annual US online holiday retail forecast. In her blog, she shared that Forrester expects this year’s holiday season to generate $78.7 billion in US online sales, a 15% increase on 2012's total. This optimism is largely due to ever-increasing numbers of consumers choosing the Web over physical stores as well as the rise in mobile commerce.
To better understand consumers’ attitudes and behaviors regarding shopping during the holiday season, my team conducted a qualitative research project last year with our ConsumerVoices market research online community, starting before Thanksgiving and ending the first week of January. We found that consumers are always on the hunt for holiday deals, not just during the holiday season. Most consumers have an idea of what they are willing to spend on holiday gifts, and while most stay within their budget, they will gladly spend the extra money if it comes down to staying on budget or giving the ideal gift.