The business case for Web sales is made on influence, not direct sales

[Posted by Brad Strothkamp}

One area where metrics in financial services are still hard to come by is the level of influence that the Web has on sales made in a branch, by phone or via mail. This is one area where Forrester's data can help clients. Every year, we survey US and Canadian consumers on their acquisition activities in the previous year.  

I just published a brief around the topic of online-influence sales. The big find?  The influence of the Web in sales is far more extensive than most expect. Just 37% of US online adults who researched online go to apply online - that means 63% research online and apply offline. Product is the key determinant of the percentage of online influenced sales. This graphic shows the breakdown by product for some of the products I looked at.

 
So what does this mean? If you are selling brokerage accounts, focus on the online application, if you are selling mortgages, focus on the cross-channel experience, if you are selling auto insurance, focus on both.

Brad
 

 

A final snapshot of our Marketing Forum EMEA

By Zia Daniell Wigder

Forgive the long post, but I wanted to make sure I captured the final sessions of our Marketing Forum EMEA for those of you who were unable to join us in London over the past couple of days.

Four different Forrester analysts spoke during the eBusiness track sessions:

• Chad Mitchell analyzed online self-service and discussed how to increase its adoption. He showed that although there is still an overall preference for human channels the benefits of online self-service are here. Some companies are already doing a great job: For example, GEICO and Best Buy use “click to chat “, enabling real time communication. The key in online self service is to create relevance and personalized interaction. A combination of tactics from eBusiness, marketing and IT should help make this service successful overall.
• Thomas offered insights on adding a mobile dimension to a multichannel strategy. With young generations mastering mobile phones and being the future, mobility will change the way we do business. The mass market uptake of mobile services is only a question of time: by the end of the year, some 4.6 billion people will use a mobile regularly. Around 60% of Japanese consumers already access the mobile Internet today. Mobile Internet adoption in Europe will grow from 17% penetration in 2009 to 39% in 2014. Some companies have already anticipated the importance of the mobile channel, for example to enhance its brand, just as Zippo did: its iPhone app was downloaded on more than a million times and generated revenue.
• Alexander Hesse discussed what next-generation financial services sites will look like. With more and more Europeans now migrating to the Net, it’s easy to think that digitizing the bank will eliminate the human element. And it’s true to a certain extent: most of today’s financial sites don’t create an integrated experience and don’t support cross-channel behavior. However, next-generation sites will provide an experience that is as personal as the one you can get with a personal advisor, and some financial companies are already demonstrating best practices. For example, RaboDirect uses a human face on its site and as well as a blog to reassure customers about the economic crisis.
  
• Finally, Benjamin Ensor delivered a presentation on developing the next generation of sales and services. With consumer behavior changing, there is an urgent need to develop more integrated and personalized sales and services in order to support cross-channel behavior. If believing in cross-channel is one thing, making it work is much more complex: there is a need to change cultures and evangelize, understand customers, create a clear and strong vision, and align all channels that consumers need. Some companies like Argos already offer their customers a seamless cross-channel experience  

And for keynotes on the final day, we heard two speakers:

• According to the keynote by Forrester's Moira Dorsey (pictured above) on The Future of Online Experiences: Prepare Now For Recovery, online experiences have yet to find their true forms, and they will be shaped by capabilities, consumers and competition. Online experiences will be customized, aggregated, relevant, and social. Moira shared a few fascinating examples to illustrate this. For example, MIT Media Lab has been working on Sixth Sense, a portable device that works on every surface, including your hand, for only €235. Fashion company Charlotte Russe lets people co-browse and shop online. And people do care about these technologies: for example 60% of Europeans are interested in interactive features on a site.
• Conny Kalcher, Vice President Consumer Experiences at LEGO explained how LEGO managed to bounce back and become successful again by focusing on their key customer and going back to their core products, values and vision. Today, LEGO delivers a customized and personal customer experience and engages and involves its customers through many touchpoints. Their web site, for example, has 18 million unique visitors a month. LEGO drives change and excellence by focusing on its numerous communities, making them a part of the product innovation and by measuring customer satisfaction and always wanting to increase the score.
  
  

A special thanks goes out to our researcher Lauriane Camus for her help in covering these events at the conference!

On to day 2 of Forrester’s Marketing Forum EMEA

By Zia Daniell Wigder

Our events are well underway in London: We spent Monday with Forrester Leadership Board’s eBusiness Council, then on Tuesday the official Marketing Forum EMEA kicked off. You can follow some of the conversation live on our other blogs - I’ve also summarized a few of the keynotes below.

• Forrester’s Mary Beth Kemp delivered a keynote on Connect the Dots to Transform Marketing. In her talk, she outlined how marketers can integrate a large number of moving pieces in order to create a compelling brand experience. She compared consumers to actors and highlighted how they could deliver searing commentary (Example: French anti-cable site Misericable) as well as positive stories (Nutella’s 3 million fans on Facebook). Her steps to overcome the cacophony that exists today include aligning along consumer groups, synchronizing the customer life cycle, defining visible value for the consumer and directing the business with consumer insights. She pulled in some great examples from Europe and the US, including TGV’s campaign to entice different types of train passengers (for adults, the train offers a quiet, stress-reducing experience - for younger passengers, a social one) and Virgin’s Flying without Fear lessons. 
  

• P&G's Bernhard Glock followed with a talk on effective media and communication and his key “actions for a thriving future” which include trust in advertising, understanding consumers, great ideas and tailored communication. He highlighted several campaigns, including one for Gillette in India in which the company helped drive a national debate on shaving (the upshot: women in India preferred a clean-shaven look and sales for Gillette increased by 40% following the campaign).

• We also heard from on demand digital marketing company Magiq’s CEO Malcolm Duckett who discussed the move toward “everything as a service”. He also described how traditional channels provide very limited customer data -  purchase data, but nothing about audience, interests or browsing behavior.  The online channel has all of these core elements - behavior, intent, aspiration, demographics and history - as well as the key, attribution.

• ING’s CMO Diederick van Thiel (pictured above with Forrester analyst JP Gownder) described today’s challenge as all about understanding and trust. He discussed the high profitability of the consumer as opposed to business banking offerings, and highlighted savings and mortgages as the focus of ING’s efforts. A combination of the Internet and mobile devices will help shape these offerings and serve as the basis of the bank of the future. ING’s strategy to succeed in their rapidly evolving, increasingly Internet-centric world includes focusing on back to basics with a customer experience built around their strong brand, a continued focus on Internet with a reduction of branch staff, and speedy innovation.

Some highlights from the eBusiness track conversations to come.

 

An eBusiness Guide To Surviving the Holidays: Keeping the Lights On

By Brian K. Walker

The holidays are now squarely upon us. While trying not to watch the Oregon State Beavers ransack my beloved Washington Huskies on television this weekend the holiday commercials were inescapable. And this was only November 16th.

For many online retail teams, however, it probably feels like they have been thinking about the holidays forever. For months they have been planning and developing the content; launching features on the site; planning marketing campaigns; meeting with managers of other channels; and working with their operations colleagues to ensure everything goes smoothly in the fulfillment centers and call centers.

All this is aimed at driving the largest holiday sales season online yet. My colleague Sucharita Mulpuru recently released her US Online Holiday Retail Forecast, projecting an 8% increase in US online sales over 2008, for a total of $44.7 billion during the months of November and December 2009.

But every year all these great efforts result in a few very anxious and upset eCommerce departments who discover their site is down or incredibly slow during the peak sales days — generally starting with “Cyber Monday” (the Monday after Thanksgiving) and running through December 12th or 13th. It is as if you can hear the sound of lost sales slipping out the door, or maybe that's up the chimney.

But isn’t it too late to do something about it, given that we are on the verge of Thanksgiving? Well, maybe not. Here are a few last minute tips that can help minimize the risk of a disaster:

• Share your marketing calendar with the network operations team. Whether this is in house, or you use a vendor for hosting (or network and server operations), share your email marketing, search marketing, and other campaign schedules with this network operation team (NOC). Share your projected traffic from your campaigns and bump it up another 50-75%. Ask if the infrastructure is prepared for the traffic and has it been tested?
• Make sure the NOC and technology resources are clear on the business goals and what's riding on this. Gain buy-in and have a game plan agreed to if things get rocky.
• Have monitoring in place. If you do not have a service providing you with monitoring it may not be too late to get some put in place. (Akamai, Keynote and Gomez are all companies that provide these services - and worth a note - Gomez is offering a deal you might check out)
• Review the failover and recovery plans and test them. This can be done in the middle of the night (or whenever your lowest traffic time is) to ensure you minimize any business disruption.
• Review your content and technology teams’ back-up processes to ensure that databases and content repositories are backed up routinely in case you need to recover the site.
• Stay in close communication with the NOC. Share phone numbers and agree on escalation plans. Be sure you have decision-makers for marketing and promotions available to work with the technology and networks teams.
• Have a standing call for 15 minutes every morning to review the site performance, identify risks, discuss the day's marketing plans and expected traffic and order volumes. Develop communication and action plans to monitor and resolve issues as they arise.

These are simple steps to help ease the worry and mitigate the risk, and are practiced by many leading organizations this time of year. If you have other tips, please comment and share.

Have a great holiday season, may it be your best yet.

Brian

Follow me on twitter at twitter.com/bkwalker

A Look at Next Week's Marketing Forum EMEA

By Zia Daniell Wigder

Next week several of us will head to Forrester’s Marketing Forum EMEA which will be held on November 17-18 in London. At this event, leading Forrester analysts will present on how companies can surpass competitors as the recession begins to recede, how companies can increase online engagement with customers, and which product and service innovations they must prepare for. This event provides a platform where marketing and eBusiness professionals can share innovative best practices, network with peers, benefit from keynotes and track sessions, and pose direct questions to top Forrester analysts during one-on-one meetings.

 We have great speakers this year, with keynotes from:

Guest Keynote Speakers

·        Bernhard Glock, Former Vice President Global Media Purchases & President World Advertising Federation, P&G

·        Diederick van Thiel, Chief Consumer Marketing Officer, ING Group

·        Conny Kalcher, Vice President Consumer Experiences, LEGO

·        Malcolm Duckett, VP Marketing, Magiq

·        Mike Cripps, Customer Experience Manager, Service Operations, Capital One Financial Services Inc.

·        Kamel Ouadi, Global Digital Media Director, Louis Vuitton

·        Alexandra Wheeler, Director Of Digital Strategy, Starbucks

Forrester Keynote Speakers

·        Moira Dorsey, Vice President, Research Director

·        Mary Beth Kemp, Vice President, Principal Analyst

Here are some ways to maximize your experience:

·        Check this blog for our event updates.

·        Follow us on Twitter as we plan and launch the Event.

·        Tag your photos and tweets with #FMFE09 to contribute to the conversation.

·        RSVP on our Facebook Event page, and network with attendees.

Take the conversation offline:

On Tuesday, November 17, 2009, Forrester will host a London Tweetup. Tweetups are low-key social events where Twitterers can network and meet the people they tweet with. Anyone can attend; it is an informal atmosphere that allows casual conversations.

This tweetup is for anyone who's attending the Forum or lives in the London area. There is no charge for attending the Tweetup, so come meet and mingle with @forrester, @jgownder, @bsimm, @Mark_Mulligan, Alexander Hesse, Peter O'Neill, and others.

We hope to see you many of you there!

Apple Testing iPhones with RFID Chip--A New Dawn for Mobile Payments?

[Posted by Ed Kountz]

 

Buzz in the mobile device world this week, as the Apple Insider reports that Apple is testing iPhones embedded with an RFID chip. As regular readers of my research know, such a step would open the iPhone up to contactless POS interactions, including the ability to make payments at the point of sale.  Read about it here  

The news is positive support for proponents of contactless, and eventually mobile, payment systems. I recently took another look at the US market for contactless payments (Here) , and the news from the contactless cards front remains mixed. While early adopters report “getting” the concept, with a significant number becoming repeat users, the industry is still stymied by the overall lack of awareness of contactless payments as a concept.

This lack of understanding has been sustained by a lack of broad-based, coordinated marketing or efforts, such as POS rewards, that can help to drive try-me and repeat usage among consumers who may not otherwise see the need to convert from mag-stripe. Among my findings—without a broader effort to enlist the universal contactless acceptance symbol in industry marketing, we’rem issing a chance to offset this. And keep in mind, eBusiness executives, that the series of concentric waves is a symbol…and very difficult to Google.  In creating understanding and usage, visibility and context are everything.

So what of mobile proximity payments? In addition to device availability, which remains a problem throughout most markets, the NFC ecosystem is still evolving. I’ll give mobile-centric e-Business professionals a look at one aspect of this—the evolution of the Trusted Service Manager (TSM)—in an upcoming research report.

Outside of Asia, where de facto TSM functionality for mobile operator-driven payment services has traditionally been handled by individual operators, themselves, TSMs have traditionally fallen into one of two camps:

--Mobile operator-centered TSMs, such as Cassis, Gemalto or arguably Venyon.

--Bank-centered TSMs (including Vivotech or First Data).

--But now, a number of partnership based TSMs are emerging, notably in France and Spain. One example is France’s Pegasus, which (under the auspices of the department Basse Normandie) unites leading banks, including BNP Paribas, Crédit Agricole, LCL, Crédit Mutuel-CIC, and others, with regional telcos including Bouygues Telecom, and Orange.

So while it’s too early to argue that the TSM question has been answered, this partnership-based approach offers an intriguing model for the future evolution of the TSM, particularly in markets where competition can be channeled in ways that leverage this partnership approach for a greater good.

What do you think? Is the partnership approach one that will ever translate to the US? Email me at ekountz@forrester.com

This Year, US Online Holiday Retail Sales Will Be Up 8%

 

By Sucharita Mulpuru

 

Today, Forrester releases its 2009 US Online Holiday Retail Forecast, a deep dive into our projections for the crucial retail months of November and December.

 

We project online retail sales to reach $44.7 billion during November and December, a year-over-year increase of 8% -- evidence of the online space’s proven status as the retail industry’s growth engine. We expect this growth to be driven by the increasing number of online holiday buyers and by the large retailers gaining market share from their smaller counterparts.

 

The Index of Consumer Sentiment, as well as our own pre-holiday survey show that consumers will be shopping, but will also hold a tight grip on their purse strings. For example, 39% of online consumers plan to wait before making a purchase to see if the items they want will go on sale and 24% of online holiday buyers intend to try lower-cost alternatives to the brands they typically purchase.

 

The current economic environment makes this holiday season especially unique. Unlike previous holiday seasons, online retailers will manage to the bottom line, rather than chase sales. To this end, they plan to implement tactics like keeping leaner inventories, increasing customer engagement, or enhancing their online merchandising and social shopping tools.

 

Look to Forrester to provide you with updates and further consumer data as we roll into the holiday season. Happy selling!

Globalization among the top 50 US online retailers

By Zia Daniell Wigder

The past week has seen two significant online retailers make announcements about their global plans: last week Gap indicated its intention to expand into Canada and the UK and yesterday Buy.com launched sites for Canada, the UK, France and Germany, with Italy and Spain to come.

One-third of the top 50 already global. Both online retailers mentioned above rank in the top 50 on the Internet Retailer list (Gap at #25 and Buy.com at #33). They join a growing number of retailers with international operations in the top 50: according to a webtrack we did last year, some 34% of the top 50 online retailers were operating international versions of their websites. Among the top 10, the percentage is 100%.

Globalization of the top 10 varies greatly. There’s a big dichotomy, however, in terms of the global expansion rates of the top 10 online retailers. Six of the top 10 operate a half-dozen or fewer transactional sites outside the US: Amazon, Sears, CDW, OfficeMax, Newegg and Best Buy. By contrast, the remaining four operate 20 or more non-US transactional sites: Staples, Dell, Office Depot and Apple.

Revenues come through depth as well as breadth. The number of global sites does not necessarily correlate with global revenues, however. Retailer/manufacturers such as Dell and Apple often operate dozens of international sites. Both companies see about 10% of sales through the online channel and take in around half of their overall revenues from international markets. Yet with just six international sites, Amazon boasts a similar percentage of revenues from global markets. And Sears, with only one majority-owned international operation (Sears Canada), sees its Canadian operations generating almost 20% of the revenues of Sears’ domestic business. While breadth is likely to be a strategy taken by some online retailers – often manufacturers mapping their online footprint to their offline presence – depth in certain markets can also yield significant returns.

Retail won’t imitate media or travel. While leaders in some online sectors such as media and travel have established extensive global reach  (Yahoo and MSN both offer over 40 localized sites, US airlines such as American and Delta operate over 20), most retailers are likely to continue their slower approach to international markets. Indeed, the numerous distribution challenges and regulatory hurdles that come with global retail expansion will result in many retailers continuing to take a cautious approach to new global markets.

Take The Conversation Offline At Forrester’s Chicago Tweetup

Are you attending Forrester's Consumer Forum 2009? Do you live in the

Chicago area? Do you ever wonder who you are talking to on Twitter?

On October 26, the night before Forrester’s Consumer Forum, Forrester will be hosting an Chicago Tweetup. Tweetups are low-key social events where Twitterers can network and meet the people they tweet with. Anyone can attend; it is an informal atmosphere that allows casual conversations.

The Forrester Chicago Tweetup is for anyone who's attending the Forum or lives in the Chicago area. There is no charge for attending the Tweetup, so come meet and mingle with me (@CarrieJohnson), @nate_elliott, @jsymons, @jgownder, @drnatalie, @forrester, and others.

Hope to see you there!

Calling All Online Retailers! We Want To Hear From You!

[Posted by Patti Freeman Evans]

Forrester just kicked-off our 2009 Retail Executive Survey, and we want your input.

This survey looks at online retailers' organizations and topics relevant to the challenges currently facing their roles including:

 

·     eBusiness technology decisions

·     Globalization

·     Social media and mobile trends

·     Online customer service

·     Online merchandizing tactics

·     And more!

The survey takes just about 15 minutes to complete and all of the data will be used anonymously and in aggregate. And as a thank you for completing this survey, you will be able to access the data to help benchmark against your peers once the survey is closed.

 

The results from the survey will serve Forrester's eBusiness and retail research agenda; we look forward to gaining insight from your responses!

 

Click here to take the survey.