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.
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.
As you probably know by now, I really enjoy engaging with all of you through social media like this blog or via Twitter. Of course, I like doing research and writing reports, but that's very much an academic exercise. The blog and Twitter are about direct communication and instant feedback (and, in a way, instant gratification). However, these are still all virtual contacts. So, I thought I would share with you where you can find me, and my team, in the next couple of months so that you can meet us in person.
I will be speaking at Forrester’s upcoming Consumer Forum in Chicago, October 28-29, and our Marketing & Strategy Forum EMEA in London, November 18-19. The theme of Forrester’s Consumer Forum 2010 is “Unleash Your Organization To Serve Empowered Customers.” Lots of the content will be related to the new book Empowered, by Forrester analysts Josh Bernoff and Ted Schadler.
The market research track will show why the ability to understand customers’ needs and wants from several data sources is the key to supporting the organization with actionable insights. It will include the following presentations:
“If The Company Only Knew What The Company Knows: How The Introduction Of A Knowledge Center Can Empower Market Research Professionals,” Reineke Reitsma.
“Trends And Best Practices In Social Market Research,” Tamara Barber.
“Understand Influential Young Online Consumers: A Global Perspective,” Jacqueline Anderson.
I recently talked to a business analyst at Gaylord Hotels who shared how the company is changing its customer interactions using sentiment analysis derived from its Clarabridge software. Three points were particularly illustrative of a company maturing in its delivery of customer experience:
Success is about being great at key interactions, not every one. Originally the hotel believed that during a stay, guests experienced 100 different things — 80 that staff needed to do great and 20 that staff needed to do satisfactorily to satisfy customers. After watching sentiment data for the past couple years, the company realized that in fact only five activities most strongly correlate with guests recommending the hotel to others. For example, the first 20 minutes is absolutely essential, a period that the hotel had broken into several discreet steps but that guests viewed as a single experience. Hotel management now works with staff on executing on these five critical activities perfectly, while on the other 95, they only need to perform adequately.
Prioritizing investments based on target customer needs saves misspent money. While some managers felt that it was necessary to renovate rooms in a wing of the hotel to transform the property and improve customer satisfaction, analysis showed that the hotel was getting no negative comments about it, particularly from its most important segment of guests. Based on the findings, the hotel decided to invest that large sum of money in other areas, such as a technology solution that helped people find their way through the hotel, which was generating more negative sentiment.
I am attending Nokia World in London. For those of you not familiar with this event, that’s usually the conference where Nokia shares its vision and strategy, announces new products and services, and demonstrates its latest innovation. This is also an interesting opportunity to hear thought leaders share their vision of the mobile industry (this year, Sir Tim Berners-Lee). See the agenda here.
The 2010 edition is already unique in Nokia’s history due to the recent appointment of Stephen Elop as the new CEO and yesterday’s resignation of Anssi Vanjoki, currently EVP of Nokia's Mobile Solutions unit. Needless to say there is lots of speculation about Nokia’s future. Let me wrap up some thoughts:
It’s precisely all about organizational and cultural issues. No one should be surprised to see other departures as well as the arrival of new executives close to the newly appointed CEO. Nokia’s real challenge is to make sure these changes are implemented quickly enough -- without totally disrupting existing processes -- to keep pace with innovation. The simple fact that Nokia appointed a non-Finnish CEO, coming from the US and from Microsoft and the software industry, is another acknowledgment that Silicon Valley has become the new mobile innovation hub. Nokia’s cultural heritage is precisely to constantly reinvent itself. Tectonic shifts are shaking up the traditional mobile ecosystem, and Nokia needs to be much more agile to compete with the likes of Google and Apple.
When will customers be ready to spend on [insert product or service]? As CMOs and senior marketing leaders, you are often business leaders first and marketers second and have a strong interest in the state of consumer confidence as it relates to your industry. How can marketers predict when consumers will be ready to spend more, whether on travel, devices, or premium content? The short answer is . . . nobody really knows. This economy’s challenges are blazing a new and unfamiliar trail.
What marketers can do is look to tangential indicators to try to accurately gauge when, exactly, consumers might be willing to part with their hard-earned dollars and understand what will compel them to do so. The US private sector added 67,000 jobs in August, but while “added” has positive connotations, the fine print has anything but. Columnist Gerald F. Seib, writing in last week’s Wall Street Journal on the jobs prognosis, hardly painted a picture of optimism. Yet 90.4% of Americans are broadly defined as “employed,” and many within that huge cohort still have significant spending power.
The iPad has been a huge hit with consumers: Only a couple of months after the launch, Forrester’s Technographics data shows that 1.3%, or 2.5 million, US online consumers report that they already own an Apple iPad, and an additional 3.8% (7.4 million) say they intend to buy one. The success of the Apple iPad has created a halo around tablets in general: About 14%, or 27 million, US online consumers say they intend to buy some kind of tablet in the next 12 months — more than any other type of device we’ve asked about.
A recent Forrester report “US Tablet Buyers Are Multi-PC Consumers” shows that it’s not all good news for PC manufacturers. Because, although consumers are getting excited about tablets in general, they're confused about what they actually are. This confusion probably means that not everybody that shows an interest will actually buy a tablet, but we do think it shows that there's interest in the category that goes beyond the iPad. PC manufacturers like Dell, HP, Samsung, Sony, and Toshiba need to offer consumers a bit of guidance on what a tablet is, what it can do, and how it complements the extensive range of devices they already own.