with Allison Smith, Xiaofeng Wang and Vanessa Zeng
Chinese social platforms have started to engage in commerce via partnerships with eCommerce marketplaces, but online sales conversion rates from social traffic have been disappointing. For example, in May, 360buy (JD.com) — the second-largest B2C eCommerce marketplace — received a level-one access point on WeChat, the hottest social platform in China, but this didn’t deliver the large quantity of fulfilled mobile orders that the company expected. Haoyu Shen, CEO of JD.com, confirmed during the company’s Q3 financial earnings call that the majority of fulfilled mobile orders still originate from JD.com’s own mobile app. Forrester sees two major inhibitors of social commerce in China:
People don’t expect to see commercial promotions of products they don’t want on social media. Consumers normally blacklist friends or public accounts that push these ads, making it difficult to implement traditional B2C or C2C eCommerce models on social platforms. However, if social marketplaces can provide people a tool in those moments in which they actually want to buy a certain product, it may enable social commerce.
Customers have poor discovery and buying experiences on social commerce platforms. Social platforms in China that sell products and services online have limited search functionality, which does not make for a user-friendly customer discovery stage. Chinese consumers have gotten used to being able to compare many products and prices when making online purchases — but current social commerce platforms can’t support that.
As researchers, we can’t underestimate the power of perspective. When the Eiffel Tower was erected 125 years ago, it became the tallest manmade structure in the world and, more importantly, allowed visitors to look down over Paris for the first time; perhaps it was the first real instance of a “birds-eye view.” At the same time, artists like Picasso and Stein were pushing the limits of perspective by portraying every angle of 3-dimensional concepts in one painting or poem. In many ways, the research world today is akin to this historical period of creativity. With more data at our fingertips than ever before, we are able to observe consumer behavior from new vantage points and produce a fresh understanding of customer trends by analyzing multiple angles at the same time.
Here on the data insights innovation team at Forrester, we’ve called our multiperspective research approach Technographics 360. Officially launched this year, Technographics 360 blends Consumer Technographics® survey output, ConsumerVoices Market Research Online Community insight, social listening data, and passive mobile behavioral tracking to synthesize a 360-degree view of consumer behavior. Instead of analyzing research questions by breaking them down, we can synthesize comprehensive solutions by building our knowledge up.
In the first season of the hugely popular CBS Undercover Boss series, GSI Commerce founder and CEO Michael Rubin went undercover for a week in one of his firm’s eCommerce distribution centers to find out what it was really like to work on the front lines. Last week, SucharitaMulpuru and I were invited by eBay Enterprise to follow in Michael's footsteps and go work the floor in one of eBay Enterprise’s (formerly GSI Commerce) largest eCommerce distribution centers at the peak of the holiday shopping season. Now luckily we didn’t have to wear any stick on facial hair as we weren’t actually undercover, but we did put in a grueling four hour shift: picking, sorting and packing online orders (yes they made us work).
The experience was fascinating, humbling and a reminder that you can have the best eCommerce website in the world, but it means nothing on Cyber Monday unless you can get those orders out to your customers in time. So what did we observe from our brief career change?
CMOs historically focused narrowly on marketing and promotion. That’s not enough in the age of the customer. The CMO of 2015 must own the most important driver of business success -- the customer experience -- and represent the customer’s perspective in corporate strategy. Andy Childs at Paychex is a great example -- he owns not only traditional marketing but strategic planning and M&A.
On December 8, Alipay celebrated its 10th anniversary by launching the latest version of its digital wallet. What makes this upgrade different and notable is its “10-year statement diary” feature. The statement diary contains data like when a user first made a purchase on Taobao, opened a Yu’ebao account, created an Alipay wallet, hailed a cab using Kuaidi Taxi, and followed a service window. Not only do these 10-year statements record every Alipay customer’s consumption experience, but put together they also trace the rapid development of online payments in China.
I'm packing to leave Paris and it's a hard town to leave. Not only because I managed to catch a glimpse of a Paris sunset last night from the top of Notre Dame, but because I'm leaving LeWeb Paris 2014 while it's still in full swing. There's no denying LeWeb is one of the most invigorating events I've attended. Highlights in the first two days included a candid discussion on Uber with celebrity venture capitalist Fred Wilson and amazing comments from Web founder Tim Berners-Lee on everything from robots to net neutrality to Europe's "right to be forgottten" laws. Most invigorating for me personally was the day one session on wearables. LeWeb invited me to curate this hour-long track as part of its new format, tackling multiple themes in short bursts over several days. Curation required pulling together experts on the topic which was both simple and difficult. Simple because there are some great ones to choose from, difficult because I would have had 10 people on stage if I could have managed it. But that's where the hard task of curation comes in.
Chinese businesses have been in a state of digital transformation for the past two decades. Since the early 1990s, many enterprises owned by national or local governments have been privatized, and many of those realized that they could make information technology their key competency. However, traditional retail and manufacturing brands in China are very fragmented. The country lacks a local version of Wal-Mart or Macy’s — large organizations that dominate specific sectors.
The rise of Internet companies and their new business models is digitally disrupting already struggling traditional brands. Internet companies in China are using their strong capital resources to take center stage in many markets, creating new service delivery models, bringing online experiences offline, and making transactions through online marketplaces instead of in physical stores.
Most of the traditional brands that I spoke with in the course of the research for my most recent report were unable to react properly, as they were using immature digital intelligence to understand online users. But traditional brands have now realized the value of doing business online and intend to apply advanced digital analytics to understand customer behavior across the multitude of digital channels — web, social, and mobile. For instance, Chinese banks are starting to employ digital analytics to understand how people use Internet financing.One of the four largest Chinese banksis accustomed to analyzing transactional data but has limited experience in online user behavior analysis; to offset this, the bank recently announced a plan to implement web analytics tools to understand how customers interact with its website, search engine, and social platforms.
What is the secret recipe for creating an app that users open day after day? We used our Technographics® 360 methodology, which combines data sourced from the same group of individuals via behavioral tracking, online surveys, and our market research online community to answer this frequently asked question.
What did we do?
First, we asked participants questions about a randomly selected app they use, including how they discovered the app and how strongly they agreed with statements regarding specific app attributes, such as whether it was easy to navigate. Next, we took the responses for each participant and merged them with their behavior on that particular app. Finally, we engaged our participants in a qualitative project to expose the reasons behind our results.
This powerful approach allowed us to align a single participant’s behavior, personal characteristics, and attitudes to uncover the key attributes that lead to increased app usage. Perhaps not surprisingly, we found that apps generate varying levels of engagement simply due to the type of app they are: Consumers access gaming apps more frequently than they access travel apps, for example. So we quantified and removed the effects of app type and other static characteristics that influence usage. This allowed us to isolate the relationship between users’ opinions of app features and their engagement with that app.
Every week I get calls from Forrester clients asking how they can measure engagement on Facebook and Twitter. And every time, I tell these marketers the same thing: You must stop measuring social engagement.
I understand that it’s hard to measure social success: Marketers tell us measurement is their single biggest social challenge. And I know that tracking engagement feels like an easy option. But the simple fact is, engagement is not a useful social marketing success metric.
We’ve spoken with scores of social vendors who measure engagement, and none has proven if — or how strongly — engagement correlates to business success metrics like loyalty or sales. Even Facebook itself says engagement doesn’t prove success: In its marketing collateral, Facebook warns that engagement metrics are “not a reliable indicator” of whether social marketing improved your business.
Some say that engagement matters because when people like or share your posts, they reach a broader audience. And your social posts’ reach will go up slightly if people engage. But engagement can’t overcome declining organic reach. Brands’ Facebook reach is already low, and heading lower still. And data from Socialbakers shows that even the Facebook posts that receive the highest level of engagement still get 99% of their reach from paid, not organic, impressions.
I had great fun presenting our sales enablement (SE) execution landscape to Forrester clients last week in a regular client webinar. The SE execution landscape is an idea partly based on a report we published in September. That report introduced the concept of “the supply chain for successful sales conversations” and categorized about 45 different vendors and service providers in terms of six SE business goals, as shown below. We see these goals as the bridge between marketing automation and sales operations processes. The vendor list was the state of our knowledge when we submitted the report to our publishing team in July. But since then, we’ve become aware of so many more vendors in the space; either they’ve briefed us or we’ve come across them in client discussions. So as of last week, Forrester is tracking a SE landscape numbering some 112 companies. This area of technology is positively exploding!!!