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.

  

A CPG Company Not Afraid To Experiment

So I'm in Cincinnati right now at P&G's self-described "Digital Hack Night" where the goal is twofold: to get their brand managers to understand a bit more about digital marketing strategies and to raise money for their "Loads of Hope" charity which is tied to Tide. For the next 2 hours, nearly 100 people--P&G brand managers, bloggers, Twitterers, authors and agency folks--are trying to use every social network--Twitter, Facebook, MySpace, YouTube--we have at our disposal with the ultimate objective of getting as many Loads of Hope tshirts sold on their eCommerce site as possible. We have a big leaderboard screen, QVC-style, that shows exactly how many unique visits we've received, what our conversion rate is and how many t-shirts we've sold (5,000+, 6% and 1,000+ by the way, respectively, at the moment).  What a great way to get non-believers in the channel to see quickly, in real time, how rapidly an idea can radiate through a network and drive sales. And they did that by allowing influencers of small and large networks to go do what they do best, with the brand that is a crown jewel of the company.  Given that the biggest objection to companies engaging social networks is "What if the message is turned against us?", P&G gets extra kudos for creating a live lab that showcases the power of viral marketing with the full understanding that there are risks but that the digital channel has characteristics like speed and reach which are unmatched in other channels.  If only every company were so fearless!
Btw, if you want to buy a t-shirt to help the cause, do it by 11am ET on March 12. 

Air Canada's Holiday Baggage Policies Show Some Consideration

Home for the holidays. It has a melodic ring to it, but the idea of lost baggage can be wincing.

Air Canada has announced some customer service initiatives around baggage that are truly responsive to travelers needs.

Workers in Alberta's oil region have been carrying their tools home to Newfoundland, and then flying them back to Alberta. Air Canada has partnered with some companies to provide storage for these tools. This saves the travelers the inconvenience while freeing up cargo space. Win win.

Employees travelling during the holidays will have their bags placed on lower handling priority than paying passengers. (I appreciate this as several of the premium seats on my Thanksgiving flight were filled by airline staff, which did nothing to enhance my impression of the carrier — if, for nothing else, because they didn�t bother to tell employees not to wear their uniforms. But that is another rant)

If Air Canada bags do not arrive, passengers can park for free in short term parking to retrieve their bags. This may seem small, but it is like lemon juice in a papercut to have to hand over dollars to pick up something that should have left the airport with you the first time.

There is a lot of talk about improving airlines brand favourability, providing responsive service, and demonstrating customer care. It was only a decade ago that Air Canada's baggage service was so deplorable that the CEO took out a full page newspaper ad apologizing. My, how times have changed. US carriers — look north.

Will Travel For Turkey

For the first time in more than five years, fewer Americans will be traveling this holiday - 41 million, down 600,000 from last Thanksgiving, according to the Automobile Association of America.

According to the AAA, 4.54 million people are expected to fly during the long holiday weekend, which is down 7.2 percent less than the 4.89 million who did the same last year.

The economy is largely attributed to this slowdown, with relatively higher airfares along with fees and surcharges.

While there is a lot of focus on the media, I think another deterrent is simply that it is unpleasant to travel by air with frustrated passengers lending an air of hostility to jam-packed, food-less, possibly-delayed flights.

I shouldn't sound negative. Because I am, after all, prepared to travel for turkey.

Whether you're hitting the road, rails, air or simply walking into your dining room, have a very happy Thanksgiving.

Cheap + travel. Search.

In a report we published last month called "Traveler Behavior in a Slowing Economy", we discussed how the current economic environment is forcing travelers to reduce their travel frequency and spending.

We found that 33% of people who took a leisure trip in the summer say they will be more price sensitive than usual in their travel plans. Considering this is already an intensely price sensitive group with the average person researching 3 websites per product, More Price Sensitive is an important shift. In addition, 28% say they will research their travel even more intensely than they have before.

There are two trends whose implications I've been thinking about.

Last year, we�d seen an increase in branded search terms. I suspect going forward, words like "cheap", "discount" and "deal" will creep back into top searches.

I also think we're going to see travelers start researching earlier. That doesn't mean they will purchase earlier. But they will be scanning, researching more intensely, and aware to pricing options to their desired destinations.

The combination of these two behavioral shifts could have a profound affect on all areas of online travel marketing. Search marketers will need to analyze their SEM robustly to determine if, in fact, they are affected by an increase in generic search terms. Promotions may need to start earlier and last longer. Website features will need to support longer planning windows.

The list will go on. "new economic reality" + "travel marketing". Search.

Online travel agencies, the economy and Velveeta

To say Q3 was a tough one for online travel agencies would be an understatement. Expedia and Priceline shares lost more than 50 percent each since the beginning of the third quarter, while Orbitz is down 40 percent in that period.

During Q3, it became abundantly clear that the economic slowdown was driving a serious contraction in demand.

At that time, there was an opportunity to come forward with a fresh and responsive marketing message to acknowledge the new financial reality.

Look to retail. Target has a stylish and amusing television campaign based on their "Brand new day" theme that shows how their products can help people save money as a substitute for activities they are likely to give up due to cost (i.e. a coffee maker instead of going to a coffee shop, an exercise ball to replace gym fees). Walmart has a more direct savings-focused television ad demonstrating that replacing cereal for take-out breakfast can save $900 per year.

Economy-relevant advertising in not restricted to retailers. For example, Velveeta cheese has addressed its customers' new economic reality with a television ad showing a woman sawing groceries in half to save money but keeping a full block of Velveeta in her cart, along with a web promotion based on Velveeta helping consumers stretch their dinner budgets.

Over the last few months, online travel agencies have taken a different tack. Most didn't change their destination marketing strategies to focus on more affordable locations, offer shorter vacation packages or alternative accommodation. Fare alerts remained largely buried. Social media wasn't leveraged. Instead, there were co-promotions: the last installment of the Raiders of the Lost Ark series and The Amazing Race occupied key homepage real estate for Expedia and Travelocity. More recently, Orbitz has partnered with the latest James Bond movie, focusing on Vienna, Tuscany and Brazil. Not that these aren't creative joint promotions. They would have been great brand awareness campaigns in 2007. But this is 2008 and the world is very different.

Vouchers for future travel when savings are required now or discounts on luxury hotels are ignoring the elephant in the room. Suppliers or other marketers offering joint promotion in exchange for travel agency homepage exposure can be a major distraction from what travelers what to hear:

I understand that you want to travel and that you need to save money. I will help you.

Paperless at LGA

The TSA and Continental Airlines launched paperless boarding pass capabilities at LaGuardia Airport this week, bringing the number of airports to host the service to ten. Alaska Airlines, Delta and Northwest are also trialing mobile boarding pass technology.

There are a host of technical considerations behind the scenes for bar-code boarding passes, including the global encryption standards that were adopted last year by IATA — the International Air Transport Association. IATA expects all airlines to be bar-code-boarding-pass capable by the end of the year and the TSA has stated it sees tremendous potential for paperless boarding passes.

In a survey we conducted at JupiterResearch earlier this year, we found that 18% of online travelers are interested in being able to check in for a flight using their mobile device. This number increases to 27 percent among business travelers.

Certainly the airlines see value in establishing their brand as innovative as well as realizing some airport traffic flow benefit. But that won't be what drives traveler adoption. Travelers will adopt technology where they see its value. And while there is some value in not having to obtain or produce a piece of paper, that alone is not a compelling force to try something new. The value of so-called paperless boarding will be speed and convenience, which will require confidence in the technology, the ability to make fees payments via mobile or phone, and seamless support from airline staff. At least, that is what customer-centric value is. But that�s not something we hear a lot from the beleaguered airlines these days.

American Airlines Unbundling?

According to the Associated Press, American Airlines is planning to follow the Air Canada a la carte pricing structure as early as next year.

Air Canada�s so-called unbundled approach is tiered to allow travelers to select different airfare structures. Tango is the no-frills, with only a portion of frequent flyer miles offered, higher change fees and a fee for advance seat selection. Tango Plus gives 100% status miles, complimentary seat selection, and lower change fees. Latitude and Executive Class follow this pattern with more flexibility and higher prices.

Once an Air Canada traveler selects the fare, they have the option to pay for additional features or, as Air Canada's cleverly markets, to "customize your flight". This includes baggage check in, prepaid food vouchers, and seat selection.

When Air Canada launched this pricing structure five years ago, they were rebuilding their brand after entering bankruptcy and having some serious service issues that opened the door for their competitor WestJet to gain share.

And, while Air Canada passengers certainly recognized that previously free items were now charged essentially the unbundled structure was transparent and gave travelers choices. Air Canada met the challenge with what I believe is a best practice website in terms of conveying information to help travelers choose.

If, in fact, American Airlines is planning to un-bundle fares, I expect it won't be long before we see this across US carriers (assuming Air Canada's GDS issues with their pricing structure won't be duplicated).

Unbundling in the US would happen in more challenging marketing environment; driven by cynicism and frustration after months of fare and fee increases, it will be a tougher — though imperative — marketing message to communicate this is about traveler choice.

Online travel gets greener

There are undoubtedly varying shades of green. We discussed this in a recent report called "Green Online Travelers
Assessing the Brand Impact of Travelers' Environmental Concerns" in which we determined that, while 42 percent of online travelers agree with the statement that they are concerned about the environment, those "dark green travelers" who have actively consider sustainability in their travel decisions is more of a niche at 7%.

Two new websites have launched aimed squarely at that 7 percent.

Vroom Vroom Vroom offers car rentals offers car rental through major companies and will purchase carbon offset programs for each rental. (Ok, I admit it: I was tempted to telephone directly just to hear someone answer the phone making cartoon car noises.) Green without costing more will certainly appeal.

We also saw the launch of Whole Travel this week, which lets travelers undertake open-ended destination and accommodation searches of sustainable hotels. Hotels have a �whole ranking� based on their (1) Environmental practices, (2) Economic management, (3) Social and cultural support, and (4) Customer interaction.

Both sites will have to establish credibility. Vroom Vroom Vroom will need to establish credible carbon offset information (see our upcoming report on "Identifying Best Practices Promoting Carbon Offset Programs". Whole Travel's rankings are self-reported with plans to use local organizations for verification.

At the same time, both sites offer potential benefits that can extend beyond their green offerings. Vroom Vroom Vroom's lowest rates. Whole Travel has an inventory of unique properties that will appeal to people looking for a different accommodation experience.

Airlines Getting Stricter On Business Travel

Reuters reported yesterday that airlines are going to be cutting corporate discounts or pulling contracts if businesses fail to meet their air travel commitments.

Preferred rates are negotiated with the expectation of a certain level of sales delivered. Aggressively pulling back on the discounts or contracts is new, but reflects the imperatives of today's economic environment.

For businesses, this will create a challenge. Cutting back travel will save money on travel expenses yet compromise preferred contracts. Robbing Peter to pay Paul, so to speak. Corporate travel will increasingly be viewed with more scrutiny, heightening the importance of reporting tools.

At Jupiter, we are spending a lot of time talking about the impact of the economy on travel. This impact will be discussed in our upcoming US Travel Forecast. We�re also fielding the Frequent Business Traveler Survey in the next couple of weeks with the report scheduled for November. I suspect we'll see an increase in compliance policies, both for booking with the selected provider and preferred airline.