(plus a few digressions)
eCommerce – Dropping the e in eCommerce
Sep 18, 2014
From the eCommerce decade to the multichannel present: looking at the growth of online retail and social commerce plus some examples of who is innovating
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(plus a few digressions)
Dropping the e in eCommerce.
o The eCommerce decade. - The first plateau, likes & dislikes, range & recommendation engines
o eCommerce atomises. - Multichannel fragmentation & new opportunities
o Social Commerce - Everyone is a salesman
o Who are the Innovators? - Content, experience & there’s more to the product than price
ee
A forecast for eCommerce in the UKafter 10 years* of online retail development.
in online sales in 2014**, which amounts to 9.1% of all retail sales.
per annum, faster than all retail sales over the next five years.
Source: Mintel
**The world's first recorded online home shopper was Mrs Jane Snowball,72, of Gateshead,in May 1984. She bought groceries from Tesco. http://www.aldricharchive.com/snowball.html
*eCommerce actually began in the 1970s with EFT before evolving to what we now recognise as online retail in the early 1990s, but it is the last decade that saw the birth of profitability.
Market influencers.Source: M
intel
Increasing need & acceptance of being online.
Ageing population boosting numbers of older people online.
Perception that online is cheaper than offline.
Comparison culture has become a mainstream activity.
Consumer recession will be much worse in 2010/2011.
Increasing concerns about security & privacy.
Problems with delivery, fulfilment & returns.
User experience not living up to needs & expectations.
‘09‘08‘07‘06‘05‘04‘03‘02
%
40
45
50
55
60
65
70
75
80
THE NEW PLATEAU.The days of dramatic volume growth due to broadband penetration increases are over, but online buyers are spending more per person.
SOURCE: Ipsos Mori/Mintel
Percentage of people in UK buying online
Online accounts for almost 40% of all non-store retailers’ sales (i.e all mail order, pure-play internet retailers and markets). Share of store based retailing is lower, even
so, it accounts for 2.8% of food retailers sales and 3.3% of non-food retailers’ sales.
£17.8 billion
in online retail sales in ‘09.
6.6% of all retail sales with
150% growth since ’05.
‘09‘08‘07‘06‘05‘04‘03‘02
%
40
45
50
55
60
65
70
75
80
THE NEW PLATEAU.The days of dramatic volume growth due to broadband penetration increases are over, but online buyers are spending more per person.
SOURCE: Ipsos Mori/Mintel
Percentage of people in UK buying online
Online accounts for almost 40% of all non-store retailers’ sales (i.e all mail order, pure-play internet retailers and markets). Share of store based retailing is lower, even
so, it accounts for 2.8% of food retailers sales and 3.3% of non-food retailers’ sales.
£17.8 billion
in online retail sales in ‘09.
6.6% of all retail sales with
150% growth since ’05.
Maturity & Greater Competition
Off-shore retailers
23%
Other8%
Otherstore-based retailers23%
Grocers20%
eBay3%
Mail order23%
Real world retailers versus Pure Plays?Only three* of the top 10 retailers by sales are pure plays.
*Amazon, Dell, eBay
0 10 20 30 40 50 60 70
Video downloads Lingerie
Furniture and furnishingsJewellery
Children’s clothingDIY and garden productsSports and leisure goods
Mobile handset/accessoriesGifts/cards
Cosmetics/ToiletriesHome electricals
Housewares Grocery shopping
Footwear Music downloadsToys and Games
Electronic gadgets (eg iPod) Computer hardware/software
Men’s clothingWomen’s clothing
BooksCD/DVDs
%
Products bought online in last 12 months Frequency of browsing, by age and socio-economic group
SOURCE: GMI/M
INTEL (November 2009)
Aver
age
age
More Affluence Less38
39
40
41
42
43
44
45
46
47
Every day
Couple of times a year
NeverEvery couple of months
Once a monthOnce a week
Who, what & how often?
25-44 years-olds are the most active users of eCommerce, with books, CDs and DVDs being the most frequently bought products (the Amazon legacy). Despite press coverage music downloads are less common and concentrated among the young. Fashion is the biggest recent success.
What do people like (& dislike)about eCommerce offerings?
Convenience“you can shop at any time
and expect delivery within 36 hours – if you are prepared
to pay for it.” Immediacy“Latest products at the latest prices.”
Navigation“It’s hard to browse & find what you’re looking for.”
Product Display“Colour, picture quality
and size can be bad.”
Experience“You can’t try on or try out the goods.”
Comparison“Ability to compare
products and prices.”
Low Prices“Sometimes, not all the time,
people are wising-up.”
Range“Far more than any store, esp. ASOS & Tesco Direct.”
Like Dislike
A decade of dominance.
Since 2000 Amazon.com and eBay have dominated the online retail market in the United States and
influence how many eCommerce site owners think...
...1-Click,RANGE &Recommendation.
#1
#2
#3
U.S. patent no. 7,222,0871-Click ordering.
Ease of use and speed to task completion are key eCommerce competition areas, Amazon’s patent has given it a unique advantage over competitors (like Barnes & Noble) and been licensed to Apple.
Enable Single-Action Ordering
Done
Retrieve client ID
Set client ID/customer mapping
Return confirming web page
Set single action ordering for client
ID/customer
301
302
303
304
A broad business method patent governing the process by which online shoppers make purchases with a single click, having previously entered their payment and shipping information.
#1
UE, forms & baskets became battlegrounds.
Top alignedFor reduced completion times & familiar data input Right alignedWhen vertical screen space is a constraintLeft alignedFor unfamiliar, or advanced data entryR
EF
ININ
G
the
det
ail
s.
•Minimize the pain•No one likes filing in forms•Smart defaults, inline validation•Illuminate a path to completion
•Familiar vs. foreign info•Frequently used vs. rarely used•Progressive disclosure•Errors, Help, Success
Source: Luke Wroblewski
Expanding the range & consumer choice.
Pure-plays first drove attention by offering a range of books, CDs & DVDs that no store could physically stock at lower prices.
£9.7 million
is what it would cost to
buy everything on iTunes.
Retailers responded by using eCommerce to extend their reach and protect market share – a cost rather than an opportunity.
Now it is about integrating stores & a multi-channel experience to offer the widest range in best of both worlds.
#2
Range is still a USP.*
Traditional food retailers like Tesco & Waitrose and even catalogue retailers like Argos have used online to expand their range and category offering.
Tesco Direct >11,000 linesOcado >21,000 SKUs
*But increasingly a consumer expectation & a user experience challenge. eBay’s early work on category taxonomy and aspect tagging influenced many site structures.
Web
Excl
usi
ve R
an
ges
FO
R D
EA
L F
OC
US
ED
PE
OP
LE
.
Supports the belief
that online is “cheaper”.
Cross-sell & competitive advantage through recommendation systems.OPPORTUNITY TO MOVE PEOPLE’S MINDSETS FROM:
SEARCH & BUY. BROWSE & DISCOVER.
Repeat relationships are built during browsing.
Single transactions are harvested by search.
A consumer knows what they are looking for & use keywords to
search for it. Speed, ease of use, result accuracy & price are the key
influencers leading to purchase.
A consumer knows generally what they are interested in or has
purchased but not left the site. Relevance & engagement create
opportunities to up-sell.
#3
Browsing history Purchase history
Items viewed
Related Items (Item recommendation)
Other people viewed.... (Social)
New releases (for you)
Related Items (Item recommendation)
Other people purchased.... (Social)
4 recommendation systems.
4th? Amazon Approach; combine all 3 with browsing & purchase history.
Personalised recommendation
Social recommendation
Item recommendation
Recommend based on the individual's past behavior
Recommend based on the past behavior of similar users
Recommend based on the item itself
Amazon are keen to involve visitors in refining recommendations...
...the aim of it all is to get you to add more things to your shopping cart.
eCommerceATOMISES.
“People will interact with any channel they want,
when they want.”
OF
FL
INE
.O
NL
INE
.AWARENESS
& ACQUISITION.ENGAGEMENT & RESEARCH.
CONVERSION & PURCHASE.
Chat with partner
Chat with partner
See a TV Advert
Search Ad
Price Comparison
Website
Visit toconsideration
set retailer
Search on Google
Higher-endbrand site
Return to Higher-endbrand site
View alternatives at discount store
Discount retailer site
Refine search terms after bad search results
Basket - BUY
Configurator
Affiliate offers based site
From the eCommerce decade...
OF
FL
INE
.O
NL
INE
.M
OB
ILE
.NEED
TRIGGERED.GATHER
& LEARN.ACTIVE
EVALUATION.SUPPORT
PURCHASE.POST-PURCHASE
EXPERIENCE.
Basket - BUY
Applies for store card with a better online discount offer
Product News Article
Search on Google
Buy review magazines
Talk to co-workers
Tells co-workers
Writes a review & tweets it
Customer service
@replies
Tries the options in-store
Sees TV Ad with a URL
“First thought”, brand site
UnlocksGeo-targeted
coupon
APP Store to download the APP for free
Another friend comments &
mentions an APP
Hits “Like” Btn.
BBaasskkeett BBUUYConfigurator
Discount retailer site
Affiliate offers based site
Price comparison site
CCoonnffiigggguurraattoorrExperience Microsite
Refine search terms after bad search results
e-mail alert
Read a Twitter feed post
Post status on Facebook
Uploads cameraphone
photo of purchase to FB
IM chat with friend who comments
Chat with partner Visit to
consideration set retailer
...to the Multi-channel present.
Online-to-Store (O2S):The New Default.
45% of in-store
purchases are influenced by
online research.
Source: Forrester 200987% of internet
users used the internet to
browse, research and compare
products last year.
Source: eMarketer
The number of Product/brand queries using
Google Maps, rather
than Google Search,
are increasing: shoppers transition from the
digital to the real world.
Online advertising increases
in-store footfall:
Google adding “in-stock
nearby” to mobile searches.
Ret
ail
ers
resp
on
d w
ith
CL
ICK
&
CO
LL
EC
T.
...O2S & back again.
Moms with teens said the internet...
Reflecting increasedonline confidence.
Helped me save money through access to easier price comparisons, coupons, and deal alerts.
Helped me become a smarter shopper; product reviews and ratings, blogs and product information has helped me make more informed purchases.
Source: BIGresearch and Resource Interactive, August 2009
61% want to be
able to scan bar codes and
access information on other
stores’ prices.
9% used a cellphone
to text message a friend about
a product while shopping.
Coupon sites have been the second-most-visited category on the Internet, behind job sites, for a year.
eMarketer May, 2009
Source: Business Week, HitW
ise, Quidco/YouGov, BIGresearch and Resource Interactive, August 2009
34% have looked
at an online review at least once
before making a purchase. 62% of UK
shoppers consult online
communities before buying.
Online is projected to influence 50% of offline sales by 2012 & by 2020, more content will be consumed by mobile devices than all other platforms – PC included.
MEANING MORE ENGAGING OPPORTUNITIES AVAILABLE FOR DIGITALLY ENABLED RETAILERS.
Sources: Jupiter US Online Retail Forecast, 2007 - 2012, Pew Internet & American Life Report
“Even before the site has launched, hundreds of thousands of customers are already shopping with us on their mobile phones and market data is telling us that this will soon be millions.”
Dave Hughes, Director of M&S Direct
mCommerce.DYNAMIC PROXY TRANSCODING.
M&S “Shop your way” strategy,
DETECT DEVICE.DETECT CONNECTION.RENDER SPECIFIC SITE.
one login across web & mobile.
Amazon provides eCommerce platform, with Usablenet providing the mobile platform & Mobile Interactive Group doing the design.
What services and content can we deliver at the
content/context cross-section?
Chain-wide localised, product-specific and cost effective marketing when the inventory in more than 70 Adidas Outlet Stores varies from store to store – and so do the special offers. Or Tesco porting its Clubcard to phones and starting to make them smarter.
Promotional mCommerce:Piloting mobile coupons & incentives.
Light data capture
Mobile site
TXT to Opt in Redeem MMS Coupon
in store
Purchase
TXT
Light data capture
Mobile site
On deck/mobile
Banner & Mobile App
Advertising
Redeem MMS Coupon
in store
Purchase
Light data capture
Mobile site
Bounce Back TXT
TXT Message Redeem MMS Coupon
in store
In-store leaflets
and OOBE
TXT
Purchase
Crocs recently extended the limited one month trial across all its 180 US stores, after customers made 94,000 requests for the 15% off offer.
Deliver a location based service to iPhone users that wish to receive temporary retail and service-based apps. The minute you leave the vicinity the app disappears so that you don't clog up your iPhone with hundreds of local business apps.
WH
AT
IS
IN
T
HE
PIP
EL
INE
?
“The majority of the real-time search boom will be in its convergence with another rapidly growing industry, mobile computing.
[Offering people] real-time recommendations based on your current location using an application that aggregates information from real-time searches as well as social sites like Yelp and Urban Spoon...... local advertisements and “limited time” discounts on your mobile.”*
Social Periphery*Rob Diana
Physical objects in intelligent
environments
Brands as the filter and the enabler.
Ideas must be “good enough to share”
On is off/Off is onas physical and
digital worlds fuse
Social networks
Blogs, UGC & niche sites
Global Services and Communities
Communities & forumsRFID &
NearField
Barcodes, QR codes and markers
Local networks of sensors and devices
GPS, location & bespoke
sensors
Dynamic communication based on action and relevance (Ambient awareness/Social Peripheral Vision)
Mobile & mixed media applications/tools
Social Periphery & Mobile Social Networks
Context & Location as filter
Content & relationships
as intelligence
by David J. Carr davidjcarr.wordpress.comBased on Nokia’s Mobile Gateway & Jyri Engestrom
Helping us plan for now and what’s next.
SOCIAL COMMERCE.
THREE ASPECTS OFSocial Commerce.
Personal online selling evolving to networks of people producing for, and selling to each other.
Brands using social network platforms to “fish where the fish are” thus gaining incremental revenue and network exposure.
Directly & publicly harness the heuristics shoppers use to make intuitive decisions to make purchase actions more likely.
#1 #2 #3
Heuristic #1: Social Proof‘Follow the Crowd’
Heuristic #2: Authority‘Follow the Authority’
Heuristic #3: Scarcity‘Scarce Stuff is Good Stuff ’
Heuristic #4: Liking‘Follow those You Like’
Heuristic #5: Consistency‘Groundwork for future’
Heuristic #6: Reciprocity‘Repay Favours’
universal heuristics of shopping.
Source: Paul Marsden
Heuristic #1: Social Proof‘Follow the Crowd’To resolve the uncertainty of what to do or buy, we often look to what others are doing or have done, and take our cue from them. ‘Most popular’ & ‘most viewed’ lists, testimonials provide social proof with a human-interest angle and shared wishlists give us confidence about what people want, while shopping together offers reinforcement.
Enable our commercial relationships in the context of their real relationships and help them to connect.
Heuristic #2: Authority‘Follow the authority’People have a natural tendancy to defer to the conclusions of a recognised or accepted authority, regardless of what they say. Recommendations, reviews and even referral programs use shoppers’ trust and need for decision reinforcement to increase conversion. People are willing to pay +20% more for a 5 star product than a 4 star one.
Full-length product reviews and user ratings from participating retailers and manufacturers wherever it will help users with their shopping, including in Product Search results and advertising programs.
Google Product Reviews Program.
Juicy Couture increased conversion rates by 162% using CreateTheGroup’s recommendations & referrals software.
Connecting online reviews with the real world & back.
Reviews & social content as part of NPD & community engagement.
You’d be surprised what people are willing to review....
Heuristic #3: Scarcity‘Scarce stuff is good stuff ’Time-sensitive, limited access, limited editions increase the perceived worth of products and services, create a sense of competition to get them, and even generate a feeling of act now or risk missing out. Deal/Newsfeeds optimised for lifestreams and Social Apps with exclusives for Fans/Advocates ONLY combine social networking with exclusivity.
Time sensitive offers designed for life-streams. o Integrated into real-time experience with a sense of NOW.
o Urgency because traditional marketing campaigns (like TV progs) now can be filtered and time shifted (and even forgotten as our content collection piles up).
NB: Facebook have changed the rules...again.
Time sensitive offers designed for life-streams? ?
o Integrated into real-time experience with a sense of NOW.
o Urgency because traditional marketing campaigns (like TV progs) now can be filtered and time shifted (and even forgotten as our content collection piles up).
NB: Facebook have changed the rules...again.
Time sensidesigned fo?ddo Integrated into real-ti
o Urgency because trad(like TV progs) now can(and even forgotten as o
NB: Facebook have changed th
But value needs to be long-term or we create “a community of jaded fans who are only interested in the next coupon”.
iimmmmmmmmmmmmmmmee experience with a sense of NOW.
iitttttttiiiiiiiooonal marketing campaigns n bbbbbbbbbbbbeee filtered and time shifted oouuuuuuuuuuuurrrrr content collection piles up).
heee rrrrrrrrrruuuuuuuuuulllllllllleeeeeeeessssssss.........aaaaaaaagggggggggaaaaaaaaiiiiiiiiiinnnnnnn...
Peak of interest with a sharp fall.
Heuristic #4: Liking‘Follow those you like’We have a natural inclination to emulate and agree with people we like, admire or find attractive, partly because it builds social bonds and trust (saying yes is a form of social grooming) and partly because it acts as a way of pre-filtering our choices.
Is there any real value to RETAIL EXHIBITIONISM?Increasing opportunities and tools are now available to broadcast all your commercial actions to your followers.
Heuristic #5: Consistency‘Groundwork for the future’When faced with uncertainty, we’ll opt for the one that is consistent with our beliefs and past behaviour. Free trials or low risk commitments can lay the groundwork for future larger conversions. People are more willing to make a commitment to a brand if it is consistent with ongoing custom or a previous public gesture or interaction.
From fans to customersOFF THE WALLEnd to end eCommerce within Facebook.
o Brand posts an product for sale as a status update & fans can purchase directly from their live feed, news feed or the brand’s wall.
o Complete in-wall checkout process (product details, customer information, shipping options).
o Maintains commerce functionality when shared with friends.
o ECommerce platform independent & Verisign Certified, Level 1 PCI-compliant.
AN OPPORTUNITY FOR:Use social content to establish a low-risk relationship pre-sale, seed special (or early) “fan only” offers, product introductions, limited editions or limited inventory campaigns, coupons, event support & media rich demonstrations with video, product selectors, etc.
Contributions to user galleries can create a sense of public commitment to a brand making it consistent with ongoing custom.
CONSISTENCY &Repeat Behaviour.
Feedback & social pressure combine to reinforce behaviour change &
commercial relationships.
Heuristic #6: Reciprocity‘Repay favours’We feel good when we reciprocate favours, partly because reciprocity is socially rewarded as the social glue that makes cooperation, relationships, community and society possible. Sampling (reciprocating to uninvited gift with purchase), rewards, local CSR, causal marketing and sponsorship create a sense of relationship that underpins commerciality.
DIRECTLY REWARDING CONSUMER BEHAVIOR.Using engaged consumer communities to spread the word and perform eCommerce business functions.
...thrive when “reputation (of participants) is a critical component of the service mechanism.
The reputation of participants will derive from the quantity (how much, how often) and quality (how useful) of their contributions.
Accreditation (of content) is provided by experts and by the community. Recent, relevant content regarded highly by participants with a good reputation becomes the most visible.”
Made by Many
Collaborative Platforms...
Combine community and commerce to convert using
“helpful suggestions”.
Widget-powered affiliate programs for “long-tail”social commerce.
RECIPROCITY OR STRAIGHTPEER TO PEER AFFILATE SELLING?
Using helpful content to stimulate consumer feedback & community spread.
Halfof British consumers now buy on promotionbut it is not all about money off and discounts,
it’s about value.
Source: Mintel
includes help with making purchase decisions and rediscovering lost skills so you don’t have to pay someone else to do it.
WHO ISinnovating?
CONTENT &EXPERIENCE.
The Camera Selector was created through a partnership between
Jessops and PrismaStar Software, and uses PrismaStar‘s AnswerOil
solution. AnswerOil provides patent-pending consumer product
research data and decision making technology and prioritises the
importance of any product feature and gives highly accurate and
unbiased results.
Jessops & PrismaStar Product search tool.
Lastminute.comPronto search.
Drop-down lists appear for each search item, helping the user to make their search as precise as possible, by enabling them to specify different attributes of what they are looking for.
INTEGRATING
VIDEO.
OPTIMISING ECOMMERCE
WITH VIDEO.Incorporating product descriptions, reviews, ratings, & the ability to purchase directly into video content both for search (meta info) & up to 70% increase in conversion.
Direct video integration as product image.
Combining Brand & Retail in video.
Linked to large scale, impactful product display.
Sharing & use of third party option for registration.
CustomerSERVICE.
Social Commerce & customer
service
o Visible staff involvement in problem resolution.
o Reacting and responding to questions and issues quickly and transparently, #twelpforce: 13,000 queries in the first two months.
o Engaging in real human conversations.
“Please hide/remove the customer-service number.”
“Our requirement is the reduce calls to the call-centre.”
“We want people to self-serve.”
a digression
And yet
@Corp
@Someone
DM @Someone
0800 000 000
Immediate/auto response & then hand-over aknowledgement
Inquiry/monitoring
TechSupportHR
CEO
Marketing Customer Service
ROUTE TO CORRECT DEPARTM
ENT
ASS
IGN TO NAMED HANDLER TO RESPOND IN APPROPRIATE M
EDIU
M
Empowered decision-making,training & investment.
Things happen in real-time but can stick around for a long time.
Over a month later the SERP results for “Vodafone & Twitter” are dominated by the news story, not product information.
GROUPCommerce.
Real-time eCommerce
o Retailers move closer to real-time inventory management increasing the possibility of more widespread dynamic demand led pricing.
o Consumers can be alerted about price changes as they happen.
o They can even group together to negotiate bulk discounts.
o Or use ShopSavy and Compare Everywhere to find a better price when out and about.
GROUP-BUY DEAL AGGREGATORS.One deal feed to rule them all?
Dell Swarm Singaporebuy in a group and save!
“a clothing retailer could identify a spike in positive chat about a celebrity that is wearing one of their apparel items, and could immediately feature that piece of clothing on their homepage and launch campaigns to a targeted audience interested in that celebrity and lifestyle. This allows the retailer to immediately maximize the new revenue opportunity, and deliver more engaging, relevant content to its customer base.”
Real-timeinsight.
The e-commerce opportunity?
Engaging & involving USER COMMUNITIES.
Heriarchy of feature posts with imagery.
Prominent calls to “Get Involved”.
Interactive content and feedback tool.
Integrated forum and member posts.
User generated and member curated interest groups.
Customer feedback and suggestions
built into the community.
Recruit membersof the forum or external bloggersto generate content.
Advertising or cross-selling blog content
and signalling different
categories.
Campaigning features.
Using tags to generate
additional navigation.
Infographics,multimedia guides and how to content.
Campaigning features.
Aggregating and curating
content to create a
resource.
Two-way email channels.
Commenting and social media content sharing. Signals community involvement.
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