Our Mediocre Multichannel Mission

Martin Gill

In celebration of the fact that my Forrester Boss, Patti Freeman Evans, was over this week in London, we thought we’d go on a multichannel retail shopping tour of London to see just how well some major UK retailers are integrating their on- and offline channels and enticing their shoppers into engaging with them online.

The answer is sadly, not very well at all.

Hitting Oxford Street on a sunny Friday at lunch time, we performed an eyes-on tour of a rough cross-section of some of the better-known UK brands. We went looking for exciting new uses of technology disrupting the in-store environment. Examples of beautifully integrated online/offline/mobile channels placing the customer at the heart of the brand experience. Innovative applications of technology that seamlessly blended the digital and physical brands, enticing shoppers into engaging with these premier retailers both now, and later when they got home. Or even, how excitingly, via their mobile phones.

So while a hungry band of devotees of the fruit-flavored tech-god gathered outside the Apple Store, not realizing that just round the corner they could get their paws on a new iPad 2, sans queue, we started our shopping trip.

Flippancy aside, we were looking specifically for how well multichannel retailers are integrating physical and digital channels.

The results were (depressing) surprising :

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Can an Old Dog Learn New Tricks ?

Martin Gill

Hot off the press from last week’s Retail Week conference, “HMV will still have a portfolio of hundreds of stores on the high street in five years, HMV CEO Simon Fox told delegates”

And so they should.

But in my opinion, some careful thought is needed to position the store chain alongside HMV’s evolving digital persona.  HMVDigital, launched last July, is their take on iTunes. As a digital destination for downloading music it seems to stand on its own two feet. Product scope is a little limited in that it’s music only (no videos), but I can only assume that they have a roadmap to open up new product categories over time.

They are clearly set on taking on iTunes at their own game, a fact that is evident from the site’s logo when you link to it from HMV.com – the old familiar, faithful HMV hound listening to a gramophone, sat right in the middle of a now familiar iPod control wheel.  An interesting choice.

It would be a shame if all HMV did here was attempt to mimic iTunes, as they have one ace up their sleeve that iTunes can’t (yet) mimic; a nationwide chain of high street stores staffed with music loving store colleagues. Although the products may become digital, I believe that there is a place for human interaction that multichannel retailers such as HMV can capitalise on. And interestingly, from the tone of his Retail Week address, Fox believes this too.

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Time for a local focus. Well, local if you live in Europe, that is

Martin Gill

My first Blog post as a Forrester Analyst and I was going to go little further than saying “hey, hello!” but I figure why not take a few minutes to dig into a couple of subjects that I’m looking at.

Forrester have a large and growing body of research and a dedicated team of Analysts and Researchers serving eBusiness and Channel strategy professionals, and our research plan for the next year covers some bold topics like Agile Commerce, the future of Mobile as a channel and the growing power of Social Media.  While I’ll be looking at these topics and more, I’ve joined Forrester with a specific brief, and that is to bring some focus to the European Retail arena. 

I’ve come to Forrester from Boots, where I worked for the last 4 years in the Enterprise Architecture group leading the architecture strategy across both on-line and stores, and my move to Forrester is, in my opinion, a sign of Forrester’s commitment to do what we repeatedly tell you to do with your Retail efforts. 

Make them Relevant and Contextual.

So that’s my primary mission, at least to begin with.  Making what we do here at Forrester relevant and contextual to the challenges and opportunities of the European market.  That isn’t to say I won’t be looking at broader global eCommerce trends, and in fact one of the first pieces of work I’m doing is on the evolution of video in eCommerce (more on that soon).  But to support those of you who are either focusing on or are looking to move into the European market, I’m working on a broader piece looking into the state of Multichannel Retail in Europe.

If there is anything I can help you with, or if there are any burning topics you would like to see us focus on, then please reach out to me at mgill@forrester.com or get engaged in our community.

The Next Generation Of Digital Financial Services

Benjamin Ensor

[With apologies to all those of you who had already read this, I'm re-publishing this as the Forrester gremlins ate my previous post.]

For the past few years, many eBusiness and channel strategy executives in financial services have had a nagging sense that today's websites would be rendered obsolete as new technologies emerged or younger consumers developed radically different behaviour patterns. We think that time if fast coming upon us. 

For the past six months we've been working on our vision of the Next Generation of Digital Financial Services, led by my colleague Alexander Hesse and inspired by the work of leading eBusiness teams worldwide. Although our vision is not an exact description of how all digital financial services will evolve, given the wide variety of markets that eBusiness executives operate in and the different strategies of their firms, we think the next generation of digital financial services will be characterized by five things:

  • Simplicity. Making it easy for customers to achieve their goals.
  • Ubiquity. Interacting with customers wherever they want.
  • Personalization. Making the entire experience relevant to individual needs.
  • Empowerment. Enabling customers to take action by themselves.
  • Reassurance. Providing human help whenever it adds value.
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The Secret To Loyal Financial Services Customers

Bill Doyle

Eight years ago, Forrester set out to find the corporate trait that does the most to create loyalty among financial services consumers. Loyalty, of course, is about more than simply retaining customers: Loyal customers are willing to buy more, borrow more, save more, and invest more with the firms they already use. We tested dozens of variables, including the length of the customer’s relationship with the firm, the quality of the firm’s customer service, and the firm’s money management skills. One trait emerged above all others: the perception on the part of customers that the firm does what’s best for them, not just what’s best for the firm’s own bottom line. We call it customer advocacy.

Our research continues to show that customers who rate their firm highest on customer advocacy are most likely to stay at and do more business with the firms they use. In the just-published “Customer Advocacy 2011: How Customers Rate US Banks, Investment Firms, and Insurers,” we show which firms are ranked highest by their customers – and which ones bring up the rear. 

The Big US banks dominate the bottom of our rankings of 47 firms. Thirteen of the bottom 14 firms are banks, including all of the nation’s 10 largest banks. Fewer than one-in-four customers of Citibank and Capital One Bank believe that the firm has their best interests at heart.  Small banking institutions, on the other hand, are among the customer advocacy leaders – and are winning market share in the process. Two-thirds of the customers of credit unions and well over half of the customers of regional and local banks rate their firms high on customer advocacy.

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Clamoring For Answers Around Your Insurance Claims Strategy? You’re Not Alone

Ellen Carney

Without a doubt, the hottest inquiry category for insurance ebusiness and channel execs (and insurance IT, for that matter) has been anything to do with claims.  And why not, since as one insurance ebiz executive we talked with pointed out, isn’t claim handling the real business of insurance?   We also saw the big interest in both customer experience and claims processing when we surveyed 75 or so US and Canadian insurers a little less than a year ago, with both appearing in the top three insurance business priorities into 2011.

The claim is the real moment of truth in the insurer-policyholder relationship, and that experience is a big factor in whether that policyholder decides to stick around when the claim gets settled.  Just what’s on the minds of insurance roles when it comes to claims this year?   For starters, here’s a sampling of claim-related inquiry topics I’ve fielded:

  • What’s the business value of claims concierge services?  (and check this out—three inquiries about claims concierge services in two days!)
  • Why do policyholders still want to file claims with their agents?
  • How is document scanning and imaging being used for claims?
  • What role is streaming video playing in claims?
  • What’s the state of mobile claims applications for field adjusters?
  • And many, many questions on the vendor landscape for claims applications, including an interesting one on  integrating legal matter management into the claims system for asbestos-related workers’ comp claims

I’m just wrapping up a report on how carriers can tame the claims beast, but in the meantime, if you’d like to learn our thinking and what else is simmering around the topic of claims, that’s just an inquiry away.

The Expanding Community Of Web Buyers Boosts EU And US Online Retail Growth In 2011

Patti Freeman Evans

Forrester has just released its US Online Retail Forecast, 2010 to 2015, and EU Online Retail Forecast, 2010 to 2015. It is clear from our forecast data that online sales in the US and EU will continue to rise as users become increasingly comfortable buying in the online space. In 2010, US online retail sales grew 12.6% to a total of $176 billion. Similarly, EU online retails sales grew 18% in 2010 to a total of $81 billion. The US and EU markets are projected to grow 12% and 13%, respectively, in 2011.

Why is retail eCommerce continuing to grow?

  • There is an increase in overall web buyers. There were 5.5 million new US online shoppers who accounted for 30% of the total eCommerce sales. The EU online population grew by 13.4 million users in 2010.
  • Web buyers are spending more online. 70% of growth in US retail eCommerce sales came from existing shoppers spending more. Similarly, EU average online spend has increased 8% from 2010.
  • There is an increased level of penetration for online retail. Mobile devices and the proliferation of touchpoints have contributed to the US online retail penetration growing to 8% in 2010. The EU is also seeing steady growth; Forrester is estimating 10% penetration in the UK by 2012.
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Forrester’s US Online Retail Forecast Reports 12.6% Growth In 2010

Sucharita  Mulpuru

Forrester’s US Online Retail Forecast, 2010 To 2015, launches today, reporting strong growth in the last year. “The Great Recession” appears to have ended as sales charge ahead, driven by ubiquitous connectivity and an increasing familiarity with the Web. Growth was driven by a few key factors:

  • Several million new web buyers. In 2010, 5.5 million shopped online for the first time.
  • Greater spend per buyer online. 70% of the overall growth came from existing shoppers simply buying more.
  • Online penetration of total retail sales. This rose to 8% during 2010.

According to our forecast, the web channel will grow steadily through 2015, with an emphasis on customer empowerment. Bricks-and-mortar stores will continue to be hampered by this web growth as people become more in tune with the Web and less interested in traffic and long lines. We’ll be continuing our online retail research with our long-standing partnership with Shop.org this year. Next up: The State of Retailing Online report in Q2.  If you’re an online retailer, contact me at smulpuru@forrester.com to participate in the survey and receive the report. 

 Want more details? US Online Retail Forecast, 2010 To 2015

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The Eerie Similarities Between Groupon And Priceline

Sucharita  Mulpuru

At the risk of someone saying I can’t let this Groupon thing go (I can’t), I saw a fascinating graphic the other day. Groupon has, as its proponents like to tell everyone they meet, the dubious distinction of being the fastest company to get to $1B in sales. Why I say dubious (and what I found fascinating about the graphic) is that the second-fastest ever to achieve the same milestone was none other than Priceline. How apropos because I can’t resist pointing out the similarities:

  • Both used tacky and expensive celebrity ads to promote their quirky brands (let’s call Timothy Hutton the William Shatner of this bubble).
  • Both thrive on the thrill of finding an outrageous deal (sales and scarcity go together like a horse and carriage; they’re two of the most effective merchandising tactics that exist).
  • Both are called disruptive models (Priceline lets travel buyers name their price; whereas, Groupon essentially lets companies split marketing costs directly with customers rather than with media companies).
  • Both have a “gross merchandise value” model (that basically means a lot of mystery around what customers pay and what the company actually earns).   
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Mobile Investing Heats Up

Bill Doyle

Most wealth management firms have gotten a pass on mobile, because the people with the most money – older Boomers and Seniors – are the ones least likely to use the mobile Web or mobile apps.

But that pass is expiring. Mobile is exploding, and even the older investors are part of the surge. As we show in the just-published The State of Mobile Investing, 11% of online adults with investment accounts are now mobile investors, up from 8% six months ago (see Figure 1). Two thirds of these mobile investors use their mobile devices to check investment account balances. Half get stock quotes or other market information via mobile. A quarter are mobile traders.

Figure 1: More Than One In 10 Investors Is A Mobile Investor

As channel managers at investment firms scramble to map out a mobile strategy, they face one particular dilemma:  mobile apps or Mobile Web sites? While downloadable apps command lots of attention today, we believes that the mobile Web will remain a critical delivery method for the foreseeable future. The simple answer to the app versus mobile Web debate is: both.  We recommend that firms develop a high-quality dedicated mobile Web to get the broadest possible reach, and choose a single platform on which to pilot downloadable apps. Then buckle your seat belts! The pace of mobile market innovation won’t slow down for the next few years.

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