On The Certain Economics Of Relegating Paper Books To The Margins Of The Business

James McQuivey

Time to get my hands a bit dirty. Last week I posted an eBook forecast with a brief explanation of why the book business may complete its digital revolution more quickly than other media businesses have. Turns out this assertion was more difficult to hear than I anticipated and I got some very insistent (and worth reading) comments. The discussion that ensued both on the blog and outside of it was very complex, this is not a simple matter. However, there are parts of it that are very simple that I have to clarify, even though it means rolling up my sleeves a bit. Allow me to draw into this discussion John Thompson of Cambridge University who gave a very worthwhile interview to the Brooklyn Rail this month to discuss his recently published analysis of the book industry,  Merchants of Culture. I will refer to just one of his specific comments:

"There are many people who just love books and they love the ideas that are expressed in books; they love the stories that are told through books and all of it. They’re very attached to it.... They cherish the book. And they believe that this is an artifact that they want in their lives. And some of the technological commentators in this industry just completely miss this point."

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How Zappos Brought Me Back To Forrester

Kerry Bodine

In 2008, after nearly four years as an analyst on Forrester’s Customer Experience team, I left to explore the world of the Mad Men. I led the interaction design team at a top-20 advertising agency in Boston and, after a move to San Francisco, advised marketing agencies on things like their corporate strategies and go-to-marketing messaging.

While it was an exciting time for me, I kept coming back to a belief that I’ve held for years: A great customer experience is truly the best marketing.

And then I read Tony Hsieh’s Delivering Happiness, the story of Zappos’ rise to one of the best-known (and, some could argue, most successful) customer-centric companies. I devoured the entire book, cover to cover, on a flight from JFK to SFO. I dog-eared pages and highlighted passages. I even ignored a really great in-flight episode of 30 Rock in order to keep reading. And as we pulled into the gate in San Francisco, I realized that I needed to return to my passion: customer experience. Ultimately, what really makes me happy is helping companies make their customers happy.

And so here I am. (Thanks, Tony!)

I’m thrilled to be back on Harley’s team and doing a job I love. Here are the types of things I’ll be exploring through my research:

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Insights From US Hispanic Behavior Can Drive Success In The Mexican eCommerce Market

Roxana Strohmenger

In recent years, there has been an increase in the number of US-based companies entering or planning to enter into the Mexican market. For example, Best Buy has rolled out an aggressive plan to invest $400 million to open 20 stores in Mexico over a three-year period. Lowe’s announced earlier this year that it spent roughly $40 million to open two stores in Monterrey, Mexico. And Target is setting its sights on expanding into Mexico, with goals to enter into the market no later than 2013.

Without question, there are many challenges with entering into a new market, such as understanding the country and cultural norms that influence shopping habits, determining how to transfer and modify successful strategies of a winning brand in one country to another, and understanding what the current size of the new market is as well as its growth potential. However, despite these hurdles, my colleague Tamara Barber and I contend that US-based retailers can use the factors that influenced the growth of the US Hispanic eCommerce market as a guide for developing effective growth strategies in Mexico.

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The Co-operative Bank Tops Forrester's 2010 European Bank Customer Advocacy Rankings

Benjamin Ensor

A few months ago I blogged about how the UK’s Co-operative Bank had come top in our UK Bank Content & Functionality Benchmark. The bank has now done it again by coming top in our 2010 European Bank Customer Advocacy Rankings.

Customer advocacy is the perception among customers that the bank does what’s right for them, not just what’s right for its own bottom line. In every country we survey in our Consumer Technographics® research, we’ve found that customers who view their main bank as a customer advocate have more accounts at their main bank, are more likely to consider their bank for their next financial purchase, and are more likely to recommend it to others.

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The Data Digest: Forrester's Global Online Population Forecast 2009 To 2014

Reineke Reitsma

In the past five years, the global Internet population has grown from about 1 billion to 1.6 billion, and this growth isn't about to stop any time soon. However, the future growth isn't equally spread across regions. Forrester's ForecastView model shows that the Internet population will increase in every country in the world over the next five years, but emerging markets will grow at a faster pace. In 2014, one-third of Internet users will come from Brazil, Russia, India, or China (the so-called BRIC countries).

The sheer number of online buyers and the increased online spending per capita will position several emerging markets to challenge North America and Europe from an eCommerce perspective. Companies that want to capture this growing number of online users — and their growing funds spent online — will need to look beyond the markets of North America and Europe and approach their online strategies much more globally.

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This graphic comes from the Forrester report 'Global Online Population Forecast, 2009 To 2014' which is available to Forrester clients. A full model with detailed figures of Internet subscribers and penetration rates for more than 60 countries is available to our ForecastView subscribers.

Should You Bid On Competitors' Trademarks?

Nate Elliott

Recently, Google changed its policies to allow European marketers to bid on other companies' trademarks — but surprisingly, the floodgates haven't opened yet. In fact, we're not seeing very much competitive keyword bidding at all in Europe — nor in the UK, where Google has allowed this type of bidding for several years. This got us thinking: What types of marketers should bid on their competitors' trademarked keywords — and which (if any) shouldn't? Is competitive bidding best used as a branding exercise or to generate leads and sales? When you bid competitively, how should you change your creative strategy and your landing page choices? And, critically, how should you respond if you find your competitors bidding on your keywords?

I'm working with my new colleague Lucilla De Sarlo on a report on these topics right now, and we would love to hear your opinions. Feel free to post thoughts in the comments below or to e-mail Lucilla at: ldesarlo@forrester.com.

Netflix Is Now Primarily A Digital Video Company

James McQuivey

Netflix announced its Q3 2010 earnings a few weeks back and the numbers were every bit as positive as people have expected. The company added nearly 2 million subscribers in the quarter, almost four times as many subs as they added the same quarter last year. Yeah, four times as many. While Comcast and Time Warner announced net subscriber losses. At the same time, the cost for Netflix to acquire a customer has fallen 26% in the past year. Funny how when you digitize the customer relationship and the product at the same time, all your costs go down.

The number I always wait for from Netflix is the percent of subscribers that used Netflix Watch Instantly in the quarter. It rose to 66% this quarter, up from 64% last quarter. And remember, this was while adding 2 million new subscribers, which means that new subscribers are adopting Watch Instantly at a rapid rate instead of waiting to get used to Netflix; in fact, they're probably joining Netflix just to watch instantly. This is, of course, why Netflix will likely offer a digital-only plan that subscribers can pay for if they don't even want to pretend to put DVDs in their queue. 

Why is this important today? Because it was just now that I finally dug through the summary financial results to find this gem of a quote, something that was briefly reported when Netflix announced it results, but was not fully understood in most of the reports I read. I want to resurface it because this is a big deal: 

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Brand-Building Web Site Best Practices From 2010

Ronald Rogowski

During 2010, my colleagues on the Customer Experience team at Forrester and I evaluated the Brand Experience at the Web sites of 14 companies across three industries (and wrote individual reports for each industry). Specifically, we reviewed five auto manufacturers (Chevrolet, Ford, Honda, Nissan, and Toyota), four hotels (Crowne Plaza, Hilton, Marriott, and Sheraton), and five skin care brands (Dove, L’Oreal Paris, Neutrogena, Nivea, and Olay). We’ve summarized our findings in my latest report, “The Best Of Web Site Brand Experiences 2010.”

Using our Web Site Brand Experience Review methodology, we set out to test 1) how well the sites supported their key brand attributes in a manner consistent with other channels (Brand Image), and 2) how well the site supported user goals (Brand Action). While none of the 14 sites Forrester reviewed with our Web Site Brand Experience Review methodology passed both dimensions of our tests (Brand Image and Brand Action), there were some good practices that companies across industries can learn from.

Results of Web Site Brand Reivews of 14 Sites Across Three Industries

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Forrester's Online Holiday Retail Forecast Projects 16% Increase Over '09

Sucharita  Mulpuru

Forrester’s "US Online Holiday Retail Forecast, 2010" launches today, reporting quite a bit of optimism this shopping season. November and December alone are expected to pull in nearly $52 billion, a 16% increase over 2009. Several key factors contribute to this projection:

  • Consumers are shifting more and more to online retail.
  • Offline retail is still a significant player.

Consumers are cooperating, too. They’re looking to spend more this season and do so through a variety of means (mobile, apps, etc.).

Retailers are responding with numerous strategies, such as larger promotional budgets, honing in on key dates, and experimenting with new shipping options.

eBooks Ready To Climb Past $1 Billion

James McQuivey

Consider it an inauguration of sorts, a celebration of the eBook industry becoming a member of the major media club just as digital music and online video have before them. When you influence a billion dollars, people have to take you seriously. In the book business, it means that traditional publishers can no longer live in deny-and-delay mode; meanwhile, digital publishers get invited to better parties and people in other media businesses like TV and magazines look over and wonder if they could cut a slice of this new pie just for them.

To honor the occasion, we have just published our five-year forecast for eBooks in the US for Forrester clients. The punchline is this: 2010 will end with $966 million in eBooks sold to consumers. By 2015, the industry will have nearly tripled to almost $3 billion, a point at which the industry will be forever altered.

Right now, the number to track – and the one that determines how many eBooks will sell – is the percent of a consumer’s books that are bought and consumed digitally. To get at this number, we have to understand how people get books today. Did you know that the two most common ways people get books today is borrowing them from a friend or getting them from the library? Evidently content – at least in the book business – is already quite free, even without the help of digital.

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