Social shopping -- and service -- has become a reality: The percent of US online consumers opting out of social media -- Inactives -- has fallen dramatically, from 52% in 2006 to just 17% in 2009 while all of the categories of social media usage have increased. In response, eBusiness executives are doing the best they can -- as fast as they can -- to experiment with social media and create solid strategies.
The challenge? Most social initiatives originate in interactive marketing departments with marketing goals like awareness and branding, while eBusiness executives must tie their efforts to increased sales and decreased service costs.
Social then tends to raise more questions than it answers: Who owns social? What is the role of eBusiness in setting the social strategy? How do we create a strategy that helps our online sales while coordinating with other departments? Our new report The Building Blocks For Social Success in eBusiness explores how some firms are dipping their toes in the water -- we call them “experimenting” eBusiness groups -- and how others are in the “directing and governing” phases with social -- owning not just the templates and process for social, but the execution as well, for their entire companies.
Where are you on the social spectrum? Does your company host a Facebook fan page? Do you offer customer ratings and reviews? Are your social efforts focused on increasing sales or increasing brand awareness? Is social integrated into your online sales experiences? I told you social raises more questions than answers! I’d love to hear your thoughts on the role that social can play in driving online sales.
The past couple of months have seen a number of new initiatives and shifts on the global online retail front: Zara went live with a series of eCommerce sites (in five languages in Spain alone) while Gap started selling to an international online audience. At the same time, eBay conceded the market in China and looked to partner with market leader Alibaba. More companies have started coming to us asking about eCommerce in less traditional markets, with markets like Russia and Saudi Arabia being brought up with increasing frequency in our calls with clients.
When I was kid, when we thought someone was overreacting, we used to say “don’t make a Federal case out of it!” Maybe people still say this, but I haven’t heard it in a while. I suspect that it went into the Museum of Way-Historical Sayings. Still, I’m sure you get the idea: If the Federal Government is involved, it’s a big deal.
I thought of this expression this morning when I read an article in The Wall Street Journal. There is quite a battle going on over an attempt to make mortgage-disclosure documents easier to understand. On the one side, we find our Federal Government in the persons of Elizabeth Warren and Treasury Secretary Timothy Geithner. On the other side, you find the mortgage industry (or at least a big chunk of it — the article could have offered some more details IMHO).
Now if you’ve ever taken out a mortgage, you know that the documentation you received was close to the polar opposite of “easy to understand.” You may have thought (as I did) that the difficulty stemmed from a failed attempt by lawyers and bankers to communicate effectively. But apparently not! (Or at least that’s not the only reason — I’m pretty sure that most lawyers don’t have John Grisham potential).
After almost 10 years at Forrester, I'm incredibly lucky to now lead the team dedicated to making eBusiness & Channel Strategy Professionals successful every day. And, more than ever, senior executives leading eBusiness efforts need help. Ubiquitous connectivity, new devices, and empowered consumers translate into very specific challenges. How do I drive commerce effectively anytime and anywhere my customers demand? How can I ensure a seamless and productive experience regardless of the channel employed? And, how do I align my people, processes, technology, metrics, and culture to support my customers?
If you or someone you know is interested in helping eBusiness & Channel Strategy professionals with these and other challenges, please consider the following open positions for which we are hiring:
Forrester just kicked-off our 2010 Retail Executive Survey, and we want your input. We partnered with Pricegrabber, PayPal, Commission Junction, and StoreFrontBackTalk to create a survey which looks at multichannel retailers' organizations and topics relevant to the challenges currently facing their roles including:
eBusiness technology decisions
Social media and mobile trends
Online customer service
Customer loyalty programs
The survey takes just about 15 minutes to complete and all of the data will be used anonymously and in aggregate. As a thank you for completing this survey and once it is closed, you will be able to access the data to help benchmark against your peers.
The results from the survey will serve Forrester's eBusiness and retail research agenda; we look forward to gaining insight from your responses.
Okay, so it’s no Brown v. Board of Education, but for those in retail, the 1992 U.S. Supreme Court case of Quill v. North Dakota could be considered just as landmark. For the uninitiated, it spelled out the regulations surrounding collecting sales tax for states in which they have no physical presence – in short, that they weren’t allowed to do it.
With elections around the corner, many politicians and associations are stumping on this very issue. They believe that many retailers are exempting themselves from paying the sales tax that the state ultimately deserves. After all, 45 states in total collect sales tax from brick and mortar stores, which end up accounting for roughly 25 percent of their total income. Sensationalism abounds in the discussion of this lost revenue: "Some of the things that have gone on in this recession would not have happened if sales taxes had not gone uncollected," said Scott Peterson, executive director of Streamlined Sales Tax Governing Board.
Since 2003, a majority of the remaining retailers have followed suit in collecting tax, leaving pureplays, many of whom are mom and pops who in this economy are at least earning income. Assessing taxes on these businesses won’t really help anyone except Walmart. And let’s be realistic here: Even studies like the one by the University of Tennessee say only 25% of eCommerce sales taxes that are “due” go uncollected. And we know from our surveys that 65% of people say that Web sales taxes (if increased) would cause them to decrease their online spend. With these facts that chip away at the supposed billions that supposedly go uncollected, this appears to be a much less pervasive issue than once put forth.
To understand how consumers migrate across channels, we analyzed Forrester's European Technographics® Benchmark Survey to determine where they start their purchasing journey and where they end up buying the product. In general, shoppers tend to ultimately purchase in the channel in which they started their research. This inclination is stronger among shoppers who began their research offline: 91% of European shoppers who began their research offline also purchased offline. Meanwhile, 58% of those who started to look for information on the Internet eventually made the purchase online.
However, this purchasing journey differs by product. For example, when we look at leisure travel, about two-thirds of European consumers start researching online. And only one-fifth don’t involve the Internet at all in the researching phase. However, about one-third of consumers who start their research online purchase their travel offline.
Summarizing, European online adults use a mix of channels to research and buy products, and the Internet is a key channel in the purchasing path. Yet deals are still mostly closed in the store. A seamless customer experience in which consumers can achieve goals like returning products across channels is key to driving multichannel success.
Dean Davison, whom I trust some of you know from his time as the head of the outsourcing practice at Meta Group or Customer Intelligence at EDS, has joined the Forrester team supporting Tech Sales Enablement professionals, and we are launching new research as a result. Dean is going through some big life changes (check out his blog here) among which is the realization that the old ways of selling have to change and, well, so does his research to keep up. Now that is all good, and Dean needs your input. To start, he is asking you to help him home in on the right research around how you manage a portfolio to support the delivery of business outcomes to your customers. Please take a moment to vote in the Client Choice panel to the right of this post, and please also visit Dean's blog and give him your comments and input on this important area of our research, and you can be sure he will get back to you.
On Wednesday of last week, Ann Zimmerman of The Wall Street Journalreported on my former employer, Toys “R” Us, which is planning to open up 600 temporary “pop-up stores” in anticipation of the holiday shopping season. The WSJ describes it as a super-sized bet while the company maintains it is a proven strategy. Like most prospective retail decisions in this uncertain economic period, it is likely a mixture of both.
Ann certainly has some legitimate weight behind her assertions:
The space in which the pop-up stores will reside is distressed for a reason. Who can guarantee that a watered-down version of Toys “R” Us will be able to overcome inherent issues such as poor foot traffic or a bad location?
Toys “R” Us has historically experienced issues with inventory; the majority of it never turns and Toys "R" Us often sells out of its best sellers before the season comes to a close.
While trends show improvement, there is no guarantee of economic rebound for the holiday seasons. This could spell disaster if Toys “R” Us moves forward with 600 new shops.
It's a shame to get old! My oldest child recently announced that he and his wife are having a child themselves. On one hand, I am thrilled at the prospects of having a smiling infant in the family - that I can hand off for unpleasant tasks. On the other hand, I am in complete, 100% denial about the word that will define my relationship with this child - the "G" word - shhhh, don't say it!
This made me reminisce about work. I remember my years in marketing at Sequent Computer Systems. The sales organization sold products based on "feeds and speeds" that became possible from "symmetric multi-processing." It was exciting stuff. We lived on the cutting edge of technology. Customers bought "products."
My next move placed me in the outsourcing industry. Rather than buying products, customers looked for solutions - usually a functional combination of hardware and software to solve a technical problem. Acronyms such as ERP and CRM were common, and the services industry exploded. Customers bought "solutions."
Now I am at Forrester and witnessing another fundamental change in the market. The financial pressures of the recent (and continuing?) recession changed customers. They now align business investments with technology costs. Customers want "outcomes."
The problem is that tech vendors are going to market the same way that we did 20+ years ago. In today's market, vendors must understand the customer - not in the abstract - but understand current problems and desired outcomes. Adapting your products and messaging to a customer point of view is called "portfolio management." Forrester's sales enablement team would love to hear about your experiences, perspectives, or insights.