For the first time, Shop.org attendees from global markets kicked off the Annual Summit with a relaxed breakfast gathering focused on networking and a discussion of online retailing.
This series of posts from the Annual Summit will focus on some of the global e-commerce issues we discussed at the breakfast and throughout the Summit.
We’ll chew on some of the issues and interests shared among attendees from Europe, Asia and other global markets - in part for fun and in part to better understand the insights and best practices that they’ll take away from industry colleagues.
We’ll circle back during the conference (and afterwards) to see if existing questions are answered and to explore new questions that emerge.
Going Global
As I watched the gent from Paris sitting next to me spread honey on his bagel and then dip it into his coffee, I knew the learn-about-new-things process had already begun.
Scott Silverman welcomed the thirty plus guests with an invitation to the Global e-Commerce Summit and introduced the team co-hosting the event, emota (a.k.a. The Dutch Shop.org) and its managing director, Paul Petermeijer (the Dutch Scott Silverman?)
The breakfast host, Jim Okamura from the J. C. Williams Group, expanded on the global theme of the morning’s meet and greet and touched on the steady uptick in interest he has seen from U. S. retail brands that want to expand their e-commerce strategy and operations beyond the U.S. market. So it began.
Getting Social
So what did we talk about? Perhaps not surprisingly given the social setting, we started with social media and social networking. Also not surprisingly, the first question was “How do you make money off social networking?”
All agreed that the promise of social networking sounds great and that the technology is relatively “easy” … but what about the returns one can promise the senior management team? Too often talk of “communities” sounds likebuzz and hype ... and eerily similar to the portals of the late 90s.
What gives?
The back-n-forth at the roundtable can be summed up like this. There is no magic formula yet, but social media is sticky and provides incremental low cost opportunities to engage consumers. In the end, the game is still about finding new customers at a low CPM. And indirect returns will be easier to find than the direct returns.
So … what’s working for our breakfast guests when it comes to social media?
Bow.it sells consumer electronics in Italy. The company had mixed results with a campaign on Facebook. Their take-away? No brand, perhaps with the exception of Apple, is strong enough to overcome the sense of intrusiveness that advertisers can expect to encounter at a social networking site. At least this reality appears to be the case today.
On the other hand, Bow.it has had success with blog platform Skyrock. But achieving that success took a good bit of work. They found that about 85% of the blog inventory was of little or no use. But the other 15% offered some really cost-effective opportunities to connect with new customers.
Social Media and the Customer Experience
We also discussed how investments in social media could improve the online customer experience.
The learning? Social media and social networking sites can be cheaper than focus groups and other classic methods for getting consumer feedback about the pros and cons of a site. Some guests spoke about their attempts to use social media to test the site experience. To date results have been inconclusive.
In general, the feeling was that even if they had no idea today about just what social media could deliver, it would be important in 3 to 5 years. So they had to be there.
Reviews? It’s Still Early ….
What about customer reviews, arguably the only social media to deliver returns to date? The consensus was that reviews can be effective but reaching a critical mass of reviews is the key hurdle they all face. Most were exploring launching reviews with either BazaarVoice and Power Reviews, but the same concerns that initially held back U.S. retailers ― namely negative reviews, fake and/or biased reviews ― have slowed adoption.
All agreed however that they are now seeing a change in executives’ attitudes.
A related conversation thread centered on how a retailer could take advantage of the customer feedback captured via social media and reviews. That led to the questions, “What do you guys do with the feedback? And how much feedback is enough feedback to drive process improvement, especially when making those changes requires time and real resources?” As one guest put it, “We want to be responsive, but we also want to be sure.”
So what is the sure thing? Heads nodded when one guest said “You have to realize that it will be time-consuming to review and react to customer feedback … but in the end it is worth it.”
Retaining Customers
In the U.S. the pool of new-to-the-Web customers is drying up. Yet many online retailers still spend a lot of time and money chasing new customers, often at the expense of ensuring that existing customers keep buying.
I asked, “Is this the case in the global markets you serve?”
Generally speaking, the answer was yes. Although e-commerce is not as mature a market in most countries as it is in the U.S., the focus “over there” remains on customer acquisition.
One comment summed it up nicely, “Customer acquisition is where the budgets are really big. Yet there is a lot of waste involved in our customer acquisition practices today, so we remain focused on getting customer acquisition right, often at the expense of dedicating resources to customer retention initiatives.”
Technology Investment Issue
All agreed that the days when “it took 6 to 12 months and $2 million” to build or upgrade a site were over. However, today’s lower costs and quicker time frames have created new issues, challenges such as sourcing new technologies effectively and conducting the appropriate due diligence. We also discussed the limitations of old commerce platforms and how to prioritize where and what to improve.
Then we collectively yawned and refilled our coffee. My friend finished off his honey coffee bagel.
Organizational Issues a Common Denominator
Re-energized, we wrapped up our roundtable by discussing how larger retailers manage change. If you haven’t read the J C Williams/Shop.org study on multichannel organizational design, know that it provides a nice context for global discussions of this topic. Check it out.
We touched on two primary threads. First that big retail brands in Europe do have e-commerce strategies but many are seeing growing pressure to innovate in order to deal with competition from online retail start-ups. As Nicolas Clairembauly from agorad put it, “To be big and to be able to move fast is a very big issue.”
On the other hand, organizational issues are complicated by the reality that online retail is still a comparatively small market ― one that many senior executives don’t focus on even though they may understand the importance of e-commerce.
In some global markets, the bottom-line is that the demand for products sold online still needs to grow to deliver the critical mass of consumers necessary to bring about organizational re-shuffling.
But the growth is coming. And coming fast.
Are you ready?
Until next time,
Kent Allen
