Nearly 50% of web shoppers start their research process on Amazon or Google. Over 40% of the world’s Internet traffic constitutes daily visits to Facebook and Google. Twenty-one percent and 49% of iPhone and iPad owners respectively purchasing products via these devices. Google, Amazon, Apple, and Facebook not only absorb consumer time but are quickly becoming gateways for other eBusiness traffic. This makes the Big Four critical in the product research and sales funnel. In our recently published report, “Google, Amazon, Apple, And Facebook: What eBusiness Executives Need To Know For 2012” we help eBusiness professionals identify what’s on the horizon for these companies and what it means for them. Some key findings of the report include the following:
Google has broad ambitions to support (or displace) incumbent eBusinesses. While Google struggles to move beyond its paid search roots, eBusiness professionals will need to keep the company top of mind because it maintains a majority share of online marketing spend but promises to transform every industry from financial services to travel to health care and retail.
Amazon is disrupting retail economics. While Amazon has the smallest market cap of the four players, it is completely changing the dynamics of manufacturers and distributors.
Apps can be powerful tools to support eBusiness objectives. Companies that see apps as just extensions of web content are missing the many opportunities to enrich experiences with cameras, microphones, speakers, accelerometers, and location-sensing capabilities.
I was called a Facebook hater last week. No ambiguity. "You're such a hater!" this woman, who happened to be a social media marketer at a large retailer, told me. I will admit, I have reservations about Facebook’s role in commerce which has no doubt made her job more difficult, but I must defend myself. I’m not a hater. In fact, contrary to all the tweets and blogs questioning Facebook’s purported $100B valuation, I actually think the company is worth all of it and probably more. (To those same critics, if Facebook with $1B in profits is overvalued, what does that say about Groupon with about as much in losses? But that’s a discussion for another day.) Here are some considerations:
44% of the world’s internet traffic visits Facebook daily. As the CEO of an internet company months ago hypothetically and brilliantly asked me in response to the question of Facebook’s valuation, “What’s half the internet worth?” Whatever the right number is, it’s a lot and when framed like that, it makes $100B seem very reasonable.
Every year at Forrester we take a look ahead at the driving forces behind online retail and make some predictions about how we think things will evolve and we try and identify the key trends to watch or even act upon. This year we’ve done things a little differently.
Broadly we find similar themes – multichannel, mobile and changing consumer behavior in light of the continually depressing economic condition. But there are some notable differences in Europe. I’ve said this before, but I will continue repeating it – the national, cultural, language and regulatory differences that persist across Europe make European eBusiness a complex beast. 2012 will bring us more in the way of EU strategy papers and directives as the European Commission begins to formulate what their “Single Digital Market” looks like in reality. While we are unlikely to see many changes immediately, the EC’s vision for the future will begin to crystallize. Add to that changes to the e-privacy and distance selling directives that must be acted upon, European eBusiness executives are going to have a busy time in 2012 just keeping abreast of legislation.
Hotcakes, you've got some competition: the phrase "selling like tablets" might soon enter the global lexicon. And it's not all hype — though there is a fair bit of that as well. Tablet users in the US are estimated to grow at a compound annual growth rate (CAGR) of 51% from 2010 to 2015. That’s a fast-growing market for firms of all stripes.
As such, the tablet as a touchpoint is becoming a critical consideration for eBusiness & Channel strategists. This is especially true for executives at banks, as financial transactions benefit from the immediacy of the mobile channel, but users often struggle to make these transactions on smaller smartphone screens.
In my new report, I outline the process Citibank went through in building its own tablet banking strategy, developing an iPad app, rolling it out to customers, and continually improving the service. We outline how Citi:
I received a curious email from one of the founders of eBags the other day. In it, he said that by bringing customer service back to the US and away from an offshore vendor, the company actually reduced customer service costs by 34% (yes, reduced!) while still growing sales by double digits in Q4. It reminded me of another article not too long ago from the Wall Street Journalthat cited Qantas as having one of the world’s best check-in experiences because the airline invested in RFID tags for passengers, a decision that the article pointed out no other airline has yet copied. These examples stood out to me because these companies managed to pull off a very difficult trick: to make contrarian investments that industry peers would consider hogwash that nonetheless pay off in spades. It’s more likely that such investments would backfire, but when they work, they succeed beautifully. Three cases in point:
As the Facebook IPO nears, all eyes are on the valuation the company will command. The vast majority of that valuation will come from the company’s digital advertising business. As for commerce, don’t expect much. About a year ago, I asked the question Will Facebook Ever Drive eCommerce? and the answer hasn’t significantly changed in the time since. Not only has Facebook seemingly been much more focused on the display ad side of the business all but dismissing retail (they rejected a keynote slot at the annual Shop.org summit last year and rumor has it that they turned down the slot following Bill Clinton at this year’s National Retail Federation big show, the trade show in all of retail), but the numbers that retailers have shared with us are no more encouraging:
Stores or fan pages on Facebook have yet to generate any significant revenue for companies as few shoppers visit brand pages or Facebook stores after becoming a fan
Few shoppers buy after seeing information posted on Facebook; a holiday study we did with GSI Commerce showed that less than 1% of revenue from retailers was attributable to social networks
In a keyword-driven Web world, brand manufacturers get more than their fair share of Web shopping traffic. But because most manufacturers maintain a relatively small direct-to-consumer business, they largely rely on online retail partners to convert leads that originate on their websites. Disintermediated from the final sale, manufacturers often know little about how to optimize the lead referral process that begins on their own websites.
To gain some valuable insight into how manufacturers can help optimize sales conversions downstream, Forrester teamed up with Channel Intelligence, a company that tracks the purchase path of leads from manufacturers’ websites to online retailers’ websites. Forrester and Channel Intelligence analyzed over 44 million clicks across 150 manufacturer websites spanning two full years of closed-loop sales data (2010-2011). In our new report, “Top Three Ways Manufacturers Can Drive Higher Conversion Rates Through the Online Retail Channel,” we identify clear best practices from the clickstream analysis. A sample of key findings:
Be direct and aggressive with “Buy” button language and placement. For example, manufacturers that put the word “buy” first on a purchase button see 53% higher average conversion rates downstream at online retail websites than those that display the word “buy” as the second or third word (e.g. Where To Buy).
Be maximally transparent on price. Manufacturers that display both MSRP and actual retail prices experience a 111% higher conversion rate downstream on online retail websites than those manufacturers that show an MSRP but no actual online retail prices.
I love video as a communication media. The combination of sound and moving pictures so much more engaging and more memorable than text.
We wrote in our research last year about how we're starting to see video being used more and more by eBusiness teams as an efficient and effective way to educate customers about products, encourage sales and deliver customer service.
With the Academy Awards coming up, we thought it would be both fun and helpful to highlight some of the best examples we've seen of online video in retail financial services in the past year. With the help of the rest of team, I've drawn up a list of our favourites in five categories:
Brands rarely enter a market by selling direct on their websites. Most brands enabling eCommerce on their global websites today already sell in these markets through traditional retail channels — the online sales channel simply becomes a new way to reach consumers.
Country selection is not always dictated by market size. Brands expanding their online offerings in Europe, for example, often focus first on the UK, France, and Germany. After the big three, however, the ease and convenience of serving other markets often trumps market size.
Online sales strategies differ by market. Rare is the brand that has an identical offering in every international market. Most brands that offer eCommerce-enabled sites also provide informational sites in other markets, with little consistency in how the informational sites direct online shoppers to the brands’ retail partners.
Ron Johnson, the new CEO of JCPenney, had a dog-and-pony show in New York this morning to discuss the company’s go-forward strategy. The major change: fewer sales and a move toward an everyday low price (EDLP) program. He also mentioned some store redesigns that would create boutiques to make JCPenney more akin to European department stores. There was also an allusion to services (similar to Genius Bar). While that should help to weed out cherry-picking shoppers and improve JCP’s assortment and experience (which already has significantly improved before Mr. Johnson thanks to partnerships with Mango and Sephora), it is unlikely to reverse JCPenney’s downward revenue slide or to grow the challenged mid-tier department store sector. This is because the biggest problem with JCP is something that is very difficult to fix (the same challenge that Sears has, by the way) which is that it has over 1,000 stores mostly located in bad malls with declining foot traffic. The question I have isn’t so much, can JCP reinvent its stores or the store experience, but how will it drive traffic back to those stores? Only the small fraction of its stores located in prime locations will even have the opportunity to re-engage shoppers; in fact, by our count, only 84 of JCPenney’s 1,100 stores are co-tenants of Ron Johnson’s old employer and the premier retailer today, the Apple Stores.