Here at Forrester we’ve spend a lot of time this year evangelizing a new approach to multichannel commerce – one that we call agile commerce. The fundamentals are outlined here in Brian Walker’s excellent doc, “Welcome to the Era of Agile Commerce.” But in short, and to quote Brian . . .
“Traditional ways of describing multichannel commerce no longer work because customers don't interact with companies from a 'channel' perspective. Customers now use a rapidly evolving set of devices as a means of engaging across touchpoints, which they don't distinguish from the brand or business.”
What this means to most eBusiness execs across Europe is an explosion in the number of touchpoints they now have to consider in their customer interactions. It’s no longer just about managing a store chain and a website as two separate entities. Increasingly shoppers are turning to social networks, mobile price comparison applications, tablets, and more and they are demanding an increasing level of cross touchpoint flexibility as they browse, choose, shop, and even return products.
Alongside our latest eBusiness Maturity Model, I’ve been speaking to eBusiness executives across Europe to gauge where their organizations are in the evolution toward agile commerce.
With the holidays rapidly approaching, eBusiness executives face many a sleepless night as their eCommerce infrastructure comes under attack from hordes of festive online shoppers. These customers are buying online to avoid the crowds, queues and stress of the mall and they demand nothing short of an exemplary online experience. Slow pages, site outages, and checkout problems will at best cause frustration as loyal customers switch channel to the call center or brick and mortar stores, however most customers will simply take their business elsewhere. These customers will end up buying online from your competitors, but before they do, you can bet they will express their dismay on Twitter, Facebook, blogs and even through your own online reviews. The damage will extend beyond the online channel and the impact on brand reputation will be widespread and long lasting.
No more aware of this than anyone are eBusiness executives. Q4 sales will either make or break entire annual revenue goals and the c-suite have zero tolerance whatsoever for site outages or transactional problems online during the holidays. Jobs are on the line.
Only last week Targets head of online retailing, Steve Eastman left the company after a high profile site outage back in September left shoppers staring at this screen all day long as they frantically tried to get their hands on an exclusive and limited range of luggage, clothes and house wares from Italian designer Missoni.
When it comes to the top business strategies for North American insurance carriers (and agents), selling more to the same customer is a top initiative. Because, what's a better way to grow revenue and profit in a tough market than to sell more insurance to your proven customers? And thanks to big media budgets, it’s easy to see lots of these cross-selling campaigns in action, from the practical take of Allstate’s Shop Less, Get More campaign to more humorous approaches with Progressive’s Flo and Nationwide’s World’s Greatest Spokesman (among others), duking it out over insurance bundles and multi-product discounts.
With all this enthusiasm, just how successful are insurance ebusiness at cross-selling? In our report, “Making Online Insurance Cross-Sell Initiatives Work”, that went live on the Forrester website today, it turn out that sales performance varies wildly between the ten US insurance companies evaluated, with the best cross-sellers sharing four key characteristics. And it’s not just the best performing carriers that share traits—consumers likely to purchase multiple insurance coverages from a single carrier have their own set of common characteristics around income, age, and even where they live in the US.
So, what can insurance ebusiness teams do to improve their cross-selling performance? We outline nine tactics such as including leveraging opportunities to promote insurance when using interactive tools to when and how the cross-sale offer is made during the online experience. Along with auditing internal practices against our checklist, a roadmap for the remainder of 2011 is offered that, if followed, will let insurance providers start 2012 with an effective cross selling strategy.
Following on from my European eCommerce overview a couple of months ago, I’m continuing to build a deeper view of how the online retail markets are evolving in the major European markets.
This month I turn to Germany, the second-largest online retail market in Europe, and one with a number of interesting characteristics. When we compare Germany to other European markets we see that:
· eBay and Amazon.de are hugely influential. While eBay and Amazon see strong sales in Germany, their influence extends beyond their direct sales as many German web shoppers turn to these sites ahead of search engines to research products. Major retailers such as Conrad are trying to leverage this consumer behavior.
Last week I joined a few of my colleagues in China to meet with a variety of eBusinesses in both Beijing and Shanghai. We met with online retailers, technology companies, and other players in industry. For those used to selling online in countries other than China, some of the takeaways included:
Multichannel remains in its infancy. With the leading online retailers in China being pureplays, multichannel remains at very early stages. In-store pickup or returns are not widespread – however, there are emerging multichannel initiatives. In a recent, high-profile online-to-offline expansion, for example, Taobao opened a new furniture showroom in Beijing to enable consumers to experience different furniture brands sold on the site. The furniture sellers rent out space in the showroom to display their products. We had an opportunity to visit the huge showroom, which was somewhat quiet when we were there – terminals stationed throughout the showroom (see below) enabled consumers to insert a card and select products online, then proceed to checkout to pay.
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.
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.
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:
If you work at a retailer or other merchant, is it time you accepted PayPal payments online?
If you work at a bank or card issuer, what does the growing use of PayPal mean for your relationships with your customers?
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.
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.
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:
Using technology from your existing eCommerce platform vendor.
Outsourcing to your interactive agency or systems integration firm.
Building it all in-house.
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: