Forrester's first European Mobile Commerce Forecast

Martin Gill

 

Mobile commerce is a HOT topic!

Over the last three months I’ve presented at 4 different European events on the subject of Mobile Commerce in retail, and in every other speech I’m called on to do, mobile is increasingly at the heart of what I talk about when I discuss the key trends impacting European eCommerce. Its unavoidable.

So I’m delighted to say that Forrester has launched its first European Mobile Commerce forecast.

The growth assumptions are based on the existing Forrester Research Online Retail Forecast, 2011 To 2016 (Western Europe), with simplified category groupings to reflect mobile characteristics. Mobile purchasing behavior and mobile Technographics sophistication are overlaid onto the country-by-country eCommerce growth forecasts to reflect the way in which mobile commerce will grow differently from online commerce across Europe. What this gives us is a picture of how we believe that mobile commerce will evolve for some of the key European markets.

So what are we forecasting?

·         Mobile Growth Will Be Rapid, But Adoption Will Be Niche For Some Time Yet. Mobile commerce will represent 6.8% of all online eCommerce sales across Europe by 2017 (mobile only – we exclude Tablets from this figure). This is a significant portion of online sales, with the most rapid growth in the south of Europe.

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Moving eBusiness Into The C-Suite (Or Close To It)

Carrie Johnson

After years of fighting for a voice in the organization, eBusiness leaders are finding themselves in the spotlight. Some all-stars command total compensation packages of more than $1 million and others -- like this example from retailer FinishLine -- step into new roles like Chief Digital Officer. We believe that in the next few years many eBusiness professionals will graduate to titles like VP of Digital Strategy and VP of Multichannel Strategy, reporting directly into CEOs or to VPs of Distribution/Channels. 

What's driving the graduation of eBusiness out of the halls of IT and marketing and into the C-Suite? Two words -- mobile and multichannel. This is about so much more than apps and in-store inventory lookup. Mobile is finally enabling many of the multichannel programs that eBusiness professionals have evangelized for years. Some eBusiness teams were already serving as digital centers of excellence for business units and product lines and taking ownership of mobile strategies: In a survey of eBusiness professionals, the majority -- more than 70% -- reported that they have responsibility for the mobile channel. But suddenly, all eyes are on eBusiness teams to develop the firms' digital strategies for what were traditionally considered offline channels as well.  

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Inhibitors And Drivers In Japan’s Retail Market

Patti Freeman Evans

I spent last week in Tokyo, Japan.  Given that an increasing number of our clients are eyeing Japan’s eCommerce market, I thought it would be interesting to share some observations from my trip. Local business perception is that the economy is struggling and will persist to struggle, but robust activity on the street and our most recent Asia Pacific Forecast belie that. There is clearly potential for growth in the market, but changes need to be made before that can happen. Based on my observations, the key inhibitors are:

  • Low adoption of English in the business world. Japanese is the primary language used to conduct business in Japan. Understandable in the world’s third-largest economy. Many understand English, few are comfortable using it in a professional setting. This issue makes it hard for broader penetration globally across eBusiness. A notable exception is maverick Rakuten where employees are required to have strong English language skills.
  • Retail is aggressive but mostly single channel in focus. Companies I talked to are trying to understand cross-touchpoint attribution, but there is little evidence of multichannel sales in those stores. BIC Camera, one of the largest consumer electronics chains in Tokyo, for example, offers an enormous selection without the option to purchase across different channels.
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Our Cross-Channel Numbers Show ‘Showrooming’ Could Be Overblown

Sucharita  Mulpuru

Consumers are now in control, especially when it comes time to buy. Ubiquitous connectivity allows consumers to easily check prices and buy on the go, which should worry (not terrify) traditional retailers in competitive categories. This “showrooming effect,” which has been encouraged by Amazon, would enable web retailers to snatch some sales from the hands of their brick-and-mortar competition. A majority of sales are still happening offline, so the fear of showrooming — that most people are finding screaming deals online — is largely exaggerated. In fact, the majority of transactions still happen in stores, even when shoppers research online (yes, even when they’ve got their mobile devices in hand in a store).  Forrester’s US Cross-Channel Retail Forecast, 2011 To 2016, which launches today makes it clear just how influential and critical the web channel will be to eBusiness professionals in retail. By 2016 Forrester predicts that more than half of the dollars spent in US retail will be influenced by the Web. Already in 2011, $1.3 billion dollars in the US fall into this category.

It is imperative for eBusiness professionals in retail to adopt cross-channel best practices, including:

  • Pricing more consistently to reduce vulnerability to showrooming. The ability of shoppers to comparison-price shop and demand price matches requires retailers (and manufacturers) to reduce price discrepancies across all channels. With comparable pricing in place, this forecast suggests that many consumers may in fact nonetheless choose to purchase products in stores because of the immediate availability, service levels, or simply because products online do not have significant benefit over those in stores. 
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European eCommerce Gets A Collective Voice. Can It Grow Teeth?

Martin Gill

I've written about the European Union's grand plans for eCommerce in the past. Much of what the European Commission wants to achieve is laudable and would be fantastic to see. After all, who amongst us doesn't want to see eCommerce thrive? However, recent initiatives such as the much debated "Cookie Law" suggests that the good intent is often diluted by the time directives become in-country legislation. So there is a very real risk that further plans to tinker with national laws regarding things like tax, delivery charges, and returns could wind up making the world more, not less complex.

Each country in Europe has an eCommerce industry body. The IMRG in the UK, Fevad in France, BVH in Germany. The list goes on. But the challenge with these bodies is that they are all country-specific, and as such don't really think too deeply about cross-border issues and also lack the power to effectively lobby the EC when it comes to influencing legislation.

One of the things that Europe really needs to help drive a more effective cross-border e-economy is an effective cross-border "user group." A group that can operate in the way that shop.org does in the US.

We have EMOTA, which is essentially an umbrella organization for the various industry groups, but feels a little detached from the actual retailers.

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Impact Of Real-Time Decision-Making With Mobile

Julie Ask

I saw this article today on augmented reality. It doesn't use the phone — it uses Google Goggles, but you can imagine it as an application on a mobile phone.

The AR glasses makes the food products you see look bigger through the lenses so users eat less. [See article.] You can imagine more scenarios, though, with a mobile phone along with its processing power and contextual information about the user. If I walk in to a sandwich shop, for example, I can scan the options with my phone to find a sandwich that fits my calorie and nutritional requirements. (I spend a lot of time in airports so would love this). Certainly if I pick up a candy bar, I can read the nutritional information or calorie count.

I go back to trying to answer this question, "how does access to real-time information improve our lives — and not simply addict me to accessing information constantly like checking email or Facebook updates?" Health, wellness, and financial services among others are where I see some bigger opportunities.

Read This Blog, Win A Prize!!!

Peter Wannemacher

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

Zia Daniell Wigder

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

Martin Gill

 

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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Selling Luxury Goods To Online Shoppers In China

Zia Daniell Wigder

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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