“State Of Retailing Online 2011” Part Two Launched On Shop.org Today

Sucharita  Mulpuru

Forrester recently published the “State Of Retailing Online 2011: Merchandising, Headcount, And Global Strategies” report in conjunction with our friends at Shop.org. It is available on Shop.org (with a subscription) now.

Some of the reports highlights include:

  • Online retail continues to steal market share from other channels. “The State Of Retailing Online, 2011” survey shows an average growth rate of 28% for online retailers over the past year — this has been driven by improvements in retail execution including higher conversion rates, higher average order values, and strong repeat shopper revenue.
  • Investment in site merchandising drives conversion increase. While some tactics such as “ratings and reviews” are perennial merchandising investment favorites, more retailers now also are investing in merchandising through new channels, such as mobile. This report categorizes each of the 80 tactics reviewed as an industry standard, area of opportunity, investment area, or unproven tactic.
  • Headcount growth lags as overall eCommerce growth charges forward. Retailers maintain conservative growth plans — less than 10% — that largely don’t match up with the year-over-year growth of web retail overall. Focus currently is on mobile, marketing, merchandising, IT, and analytics.
  • Global expansion will be an investment focus, but not top priority. While 37% of retailers cited international commerce as very important, most global businesses still haven’t fully committed to that lofty title — remote management of global services, accepting returns shipped only to their home country, and English-only sites and customer service are still common practices for these “global” online retailers.
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Quick take on eCommerce in Brazil

Zia Daniell Wigder

I recently joined two of my analyst colleagues - Jennifer Belissent from Forrester's Vendor Strategy role and Jan Erik Aase in Sourcing & Vendor Management - in Brazil to speak with companies in our respective coverage areas. It was a fantastic trip: Well organized and incredibly useful in better understanding the business landscape.

On the eBusiness side, we had the opportunity to meet with a wide variety of companies in São Paulo and Rio, ranging from online retailers like Sacks and Comprafacil to eCommerce technology providers such as IBM and hybris to others like FedEx and Google. We also spoke at events organized by content optimization provider Arizona as well as Brazil’s eCommerce Committee.

We are working on a report that summarizes some of the key findings from those conversations – in the meantime, a handful of high-level takeaways from the trip:

Multichannel functionality has not arrived, but is coming. Multichannel came up in almost every conversation I had with companies in the online retail space in Brazil. While there are few options like in-store pickup or returns currently available on leading retailers’ eCommerce sites, the fact that many of the large traditional retailers are active in eCommerce means that multichannel functionality is poised to be a core area of investment going forward.

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Is It Time You Accepted PayPal?

Benjamin Ensor

We've just published some new research on online shoppers' payment preferences in Europe. Payment habits across Europe remain diverse, with shoppers in different countries using different, and sometimes entirely different, payment methods to shop online.

One of the findings that struck me most during our research was the growing popularity of PayPal. That PayPal is used by many online shoppers across Europe is well known, and partly explained by the success of eBay. What struck me as new is how many big European online merchants now accept PayPal, among them leading fashion retailers and airlines. Perhaps I didn't spot that sooner because the British merchants have been much slower to adopt than those in Italy, Germany, France and Spain.

The growing acceptance of PayPal raises questions for two groups of eBusiness executives: 

  1. If you work at a retailer or other merchant, is it time you accepted PayPal payments online?
  2. If you work at a bank or card issuer, what does the growing use of PayPal mean for your relationships with your customers?
  3. For both groups, what payment methods are customers likely to want as they start buying from tablets and mobile phones?

What do you think?

If you are a Forrester client, you can read the full report here.

We're Hiring! Analyst Serving eBusiness and Channel Strategy, Amsterdam

Benjamin Ensor

After six years at Forrester, Alexander Hesse has decided to leave Forrester to take on a new challenge in a different field. It's always a sad day when you lose a respected colleague and I wish Alex the very best.

We're looking for a new senior analyst to join our eBusiness and channel strategy team, preferably based in Amsterdam. We're looking for someone with strong views on eBusiness and channel strategy, an analytical mind, and experience of the complexities of retail financial services and of different European markets to help our clients make the right business decisions and shape their firms' strategies. 

If this sounds like you, or like someone you know, please contact me at bensor@forrester.com or you can apply directly from the job description.

Navigating The Maze Of Mobile Commerce Solutions

Peter Sheldon

Have you been sitting on the mobile commerce fence? Ready to make the jump? Good for you, but you may not be prepared for the maze of solutions and vendors at hand to help you implement your mCommerce strategy. The number of vendors and diversity of solutions in the market is quite staggering, and the search for the right solution may feel like shopping in a busy Moroccan market, with an overwhelming choice of wares and vendors bargaining hard for your dollars. Leaving with the right purchase is a daunting task.

However, before you rush into evaluating solutions and signing contracts, eBusiness professionals must take a step back and look at the different implementation paths open to them for mobile commerce. These are:

  1. Using technology from your existing eCommerce platform vendor.
  2. Outsourcing to your interactive agency or systems integration firm.
  3. Building it all in-house.
  4. Leveraging a mobile commerce point solution.

In my latest report, a market overview of mobile commerce solutions for retail, I look at 14 established mobile commerce point solutions that have particular strengths and a proven record of accomplishment in the retail sector. These vendors between them empower the mobile commerce sites and apps for an exhaustive list of who’s who in US and European retail. The report focuses on the respective strengths of the solutions with respect to the needs of retailers. The vendors we looked at were:

  • Branding Brand
  • Digby
  • Endeca Technologies
  • Global Bay Mobile Technologies
  • Kony Solutions
  • Moovweb
  • Netbiscuits
  • No Need 4 Mirrors
  • Sevenval
  • Siteminis
  • Skava
  • Unbound Commerce
  • Usablenet
  • Worklight
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Ever Buy Your Cornflakes Online? If You Live In The UK You Might.

Martin Gill

Following my blog post from a couple of weeks ago where I wrote about the need to take a local approach in Europe, I’d like to take a few minutes to say something about the first of our country-specific reports.

It was natural to start with the UK Online Retail Overview, 2011, for two reasons. The first is that I live in the UK, so it’s the market and retail environment that I’m most familiar with, but secondly and more importantly, it’s the largest online market in Europe. Based on the figures in our European Online Retail Forecast, the UK online retail market will be worth £28.6 billion in 2011; this represents 9.4% of the overall national retail market, almost double the online penetration of any other European country.

So there are some big numbers but also some interesting trends to examine.

The UK market is increasingly dominated by multichannel retailers. While there are a range of notable online pure play success stories (Amazon.com, Asos, Net a Porter, and Play, to name a few), we are seeing an increasing level of sophistication in how the major high-street retailers are integrating their on- and offline properties. Initiatives like Click and Collect are now commonplace, and the pace of innovation isn’t slowing, with new initiatives such as Argos’ 90 minute Shutl delivery service being a prime example. So there are plenty of examples here to be inspired by.

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3 Questions For TheFind's CEO On Tablet Shopping

Sucharita  Mulpuru

We discovered some interesting information about how consumers are using tablets in recent research with Bizrate Insights: that shoppers who have tablets often prefer to browse and buy on those devices and that tablet ownership increases the amount of time that people spend online altogether.  One company that caught onto that trend even before we fielded our data was Siva Kumar, CEO of the shopping aggregator TheFind.  I ran into Siva several months ago at Channel Advisor's Catalyst summit where he showed me an impressive demo (on his iPad, natch) of Catalogue, a magazine-like compendium of all my favorite store catalogs (see below).  Given his hands-on experience bringing a multiretailer tablet experience to life, I thought it would be interesting to get a t-commerce pioneer's POV:

Siva, do you think tablet commerce will be something retailers need to explicitly watch?

Absolutely yes. Online shopping today is very much a chore. It is search-driven, and while search is useful, expedient, and powerful, it is not particularly fun or exciting. More importantly, search leaves little room for retailers to do what they do best, which is to merchandise their wares to consumers.  Conversely, tablet shopping, with its high-resolution graphics, touchscreens, and more tactile interactivity offer game changing potential that may create the means by which eCommerce could grow to be as much as 20% of retail commerce by 2020. 

What are the most important things to watch in developing content for a tablet device?

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Fake Apple Stores - Is This The Tip Of A Counterfeit Iceberg?

Martin Gill

Last week a lone blogger broke the news that not one but three fake Apple stores had sprung up in the city of Kunming in China, though it appears the problem is fast becoming a worldwide one for Apple to deal with.

It’s no secret that counterfeit goods are commonplace in China, and there are moves afoot to attempt to tackle this issue, at least online. However, this is a very different beast. There has been an explosion of commentary in the press about these fake stores, mostly focusing on the fact that they exist, and mostly failing to draw any comment for Apple.

Action has been taken. According to China Daily, “A local authority had previously said that two of the stores were suspended for not having business licenses. But the local industrial and commercial bureau confirmed to the Shanghai Morning Post on Tuesday that one of them had in fact obtained a license on June 22 and thus could stay open.”

The general tone of the various reports is that the stores are selling genuine Apple products bought wholesale through genuine channels, and that the only reason they would be closed down is because they didn’t follow local laws to obtain a retail license. Not because of any IPR infringement. This will be an interesting story to watch play out -- because if that turns out to be true, it sets a gloomy precedent for other retailers who may be suffering the same challenge.

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Why Tablet Commerce May Trump Mobile Commerce

Sucharita  Mulpuru

While all eyes in the online retail space seem to be on social networks and smartphones these days, we’re seeing an emerging trend with tablets that could be the most interesting of all. Only 9% of web shoppers now have tablet devices, but here’s the big deal — most of those people already own smartphones (as well as PCs, of course), and they are saying that they actually prefer to use their tablets for shopping. Not only that, but the ownership of the tablet device itself actually increases the amount of time that people spend online. And we’re anticipating a hockey stick in tablet adoption in the next five years on top of all that. You can read more about these findings in the report my colleague Sarah Rotman Epps and I just wrote titled, “Why Tablet Commerce May Trump Mobile Commerce,” which is based on findings from our joint research on online shoppers with Bizrate Insights. Some of the most compelling aspects that are helping to drive the shopping experience on the device:

  • The larger screen. Not surprising, given the choice between a smartphone and a tablet, consumers find it a lot easier to use the latter to surf the net, click on links, and type in the critical biodata to purchase something online, especially since PayPal Express doesn’t seem to be integrated onto most mobile commerce sites yet.
  • The portability. Consumers love taking their tablets around the house and on the go. The living room is the most common room where the tablet is used, but out of the home is also popular, particularly at restaurants and in airports.
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European Online Retail : Adopt A Local Approach

Martin Gill

I have a great interest in history. I always have.

I grew up in the North of England very close to Hadrian’s Wall. In fact, the remains of the Vallum (the defensive ditch dug behind the wall to keep out marauding Pictish warbands) ran through the playing fields of my high school. I grew up wondering what far-flung Legionaries had stood on that wall on cold northern nights. Imperial citizens from Rome itself. Germanic mercenaries from the Rhine. Gaulish Auxiliaries from France. A constant reminder of the diversity of people, cultures, and beliefs that made up the Roman Empire.

So history has wound on, through war and peace, trade and intrigue, to bring us to 21st century Europe. We have a European Union. A single currency. We even have a flag. So Europe is well, Europe, right?

Erm…no.

If history has taught us one thing, it is that a massive diversity of language, currency, habits, attitudes, and beliefs thrives in Europe, and this directly affects the way in which Europeans (or rather British, German, French, Italian people, etc. -- because we are all different) use the Internet to shop. What they buy online, how they pay for it, how it’s delivered, and what their service expectations are, are to some extent shaped by the eCommerce offerings of retailers within their respective countries, but in a large part are led by national culture and behavioral norms.

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