Perspectives 2012
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Welcome to Perspectives 2012, Reactive's inaugural collection of digital viewpoints from around the world
If 2011 was a year of radical change, get ready for the Year of the Dragon — where the major trends from last year reach mainstream maturity (mobile, Pinterest, the cloud) and new ideas leap into view. The topics covered within Perspectives 2012 are varied, a reflection of the breadth of the digital world we find ourselves in. We explore the creative (campaigns, search marketing), technology (Sitecore, hardware, responsive design) and strategic (eCommerce, agency evolution, social media) aspects of the ever-evolving digital landscape. With investment from marketers continuing to migrate from ‘traditional’ channels (such as radio, newspapers and TV) towards digital, it’s more important than ever to understand the relevance of emerging trends to your business (and not simply jump on the latest fad). We hope that the articles within Perspectives 2012 will spark an opinion. Please share these with us via our Twitter page @reactivemedia.
Tim O’Neill
Co-founder and Joint Managing Director
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~ Chapter One ~
Responsive design
Written by Bradley Grinlinton
Managing Director UK
The holy grail for cross-platform customer engagement?
If 2011 was the year your customers grew comfortable engaging with brands via mobile then 2012 will almost certainly be the year they do so with tablets. Over Christmas alone, tablet traffic to Web sites in the UK grew to 8% as iPads, Kindles and other tablet devices topped Christmas shopping lists across the world. At the Consumer Electronics Show (CES) in January 2011, major tech giants launched their new tablet offerings to the world with no less than eight significant new devices entering an already crowded market (currently dominated by the iPad). This tablet-boom means that you will be engaging with a more connected customer than ever before and one who now has yet another way of interacting with your brand. This customer will most likely be well experienced in connecting with brands via mobile and web channels and as a result, will be more demanding of the user experience presented to them via tablets. This increased fragmentation of devices presents some interesting challenges for your brand and how to best engage with your customers. Current thinking dictates that you would build something specific for each device used by your customers. This can be extremely costly and time consuming both to setup and maintain. Alternatively, you can simply choose the most popular devices to target and dismiss the remaining portion of your target audience to an inferior user experience. However if you use ‘responsive design’ it doesn’t have to be this black and white.
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Visit the web Chapter One ~ ~ site at: theclub.ba.com
Responsive design provides forward-thinking brands with an extremely cost-effective way of creating engagement.
So what is responsive design?
In a nutshell, responsive design involves creating a design that responds to a user’s behaviour and environment. If a user accesses a responsive Web site on their laptop and then switches to the same website on their iPad the Web site should automatically tailor itself to the screen size and technical capabilities of the iPad. The same principle holds for smart phones or any non-Apple tablet devices too. In short, you can create a Web site that is smart enough to respond to a customer’s preferences for interacting with your brand without the need to build something new for every new device that comes on the market. It’s already being used by some pretty big companies including our client British Airways.
What types of projects are suited to a responsive design approach?
Responsive design works really well for this sort of long form editorial content and allows us to bring a magazine style look to traditional web pages regardless of how a user is viewing them. It’s also great for micro sites and campaigns, especially those with a user-response component. A user who receives an email promoting a campaign via their mobile or tablet device can click straight through to an experience that’s optimised for their device, greatly increasing their likelihood of buying, signing-up or whatever the goal of the campaign may be. We’ve also been using responsive design on a number of our more traditional Web site design projects to quickly and easily add a mobile or tablet optimised site without a large increase in cost. Really, responsive design will work well for more or less all but the most complex of Web applications.
Desktop
Responsive design in action…
British Airways approached us to create a new monthly digital magazine for members of their Executive Club loyalty magazine. This is an audience of regular travellers who are very likely to be accessing content and information on the go and includes a large number of mobile and tablet users. Currently the majority of digital magazine publishing is done using platforms that rely heavily on the use of Flash which is incompatible with the majority of these devices Even the platforms that use HTML5 to address this incompatibility tend to rely on apps for delivery of content - limiting their reach to a select number of devices. Producing a monthly magazine with such a broad user device profile would have been both cost prohibitive and severely limited our reach. Using responsive design, we were able to address these issues and deliver the magazine, titled The Club, to the broadest possible number of British Airway’s members. The adjacent images show The Club across three of the most common member devices (you can check it out for yourself at ww.theclub.ba.com). Remember all of these use the same designs, code and content with the website simply responding to the capabilities of each device.
Tablets
Smart phones
Are there any downsides?
If there’s a downside to responsive design it’s that not every device in a category will display your Web site in exactly the same way. For users of some older or less common devices, this can lead to a more frustrating user experience. However, as device and browser technologies continue to improve and clear market leaders for each device establish themselves, this will become less and less of an issue.
So is it the Holy Grail or not?
It’s probably a bit too soon to say if responsive design is or isn’t the holy grail of customer engagement but as device fragmentation drives some big brands into this space in 2012; it will certainly start to become a lot more mainstream. For now though, responsive design provides forward-thinking brands with an extremely cost effective way of creating engagement with a much broader range of their customers than is facilitated by a more devicespecific approach to design.
Vertical
Landscape
Vertical
Landscape
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GETED CHATTER
VOICE
PEOPLE
SALES FUTURE
TARGETED
INSIGHTANALYTICSSERVICESCHECK
ROI
~ Chapter Two ~
TWEETS
AUDIENCES
BUZZ
TWITTER
RECOMMEND
REVIEWS SEND
ENGAGE LISTENING
TRADITIONAL
RATE DISCUSS
SHOPPING
FEED RSS
INSIGHT
CENSORSHIP
SOCIAL POLITICAL AGENDA
TWITTER
EA TING REVIEWS
BEHAVIOUR
PR
TWEETERS
TWEET
Filtering out
the noise
The FuTure oF Social liSTening
SHOPPING
ENGAGE LISTENING
Listening in the social media space can serve as a warning system or quick litmus test on how consumers are feeling about your brand.
RATE DISCUSS
PR
RSS TWEET
TWEETERS
INSIGHTS
TARGETEDAUDIENCES
E D CHATTER F E
CENSORSHIP
SOCIAL POLITICAL AGENDA
Written by Christopher Buettner Director of Operations at the Society of Digital Agencies (www.sodaspeaks.com)
Over the past few years, the number of social listening tools hitting the global marketplace has mushroomed at an incredible pace. Brand-side marketing organisations and many digital and PR agencies have jumped on the bandwagon, adding conversation analysis and social listening as new offerings within their Measurement/Analytics/Insights practices.
TARGETED
better understand their consumers. That’s a very significant percentage given that social listening is an analytics field that is still very much in a nascent state. The burgeoning interest in this area makes sense. Brands want to know what consumers are saying about their category, their competitors, their brand and/or their specific product/service offerings, and these tools hold the promise of providing a window into the prevailing thoughts and opinions of consumers. It is truly an awesome thing to be able to amass consumer conversations across hundreds of thousands of sources on a particular brand or topic. However, one thing has become clear to me when considering the onslaught of social media monitoring tools in the marketplace. There is an acute need for best practices to be defined for social listening (both from an analytics perspective and a technology perspective) for such efforts to generate strong return on investment for brands. All too often, sweeping conclusions are made from too small a volume of conversations — leading to a myopic view of how consumers think or feel about a particular brand, product, service or initiative. Additionally, the chasm between data and insights for
most social listening is immense. More consolidated efforts need to be made to tie social efforts to clear business goals. As Phil Mui, Group Product Manager, Google Analytics, mentioned during a panel discussion for The SoDA Report, “there are so many tools (and so many methodologies) for social listening that nobody knows the right way to measure anything…the best social analytics tools will be the ones that are directly tied to business efforts and ROI.” Listening is a critical life skill regardless of the forum, be it in face-to-face conversations, social media or any other vehicle for communication. And listening in the social media space can serve as a warning system or quick litmus test on how consumers are feeling about your brand. However, listening is not enough. To filter out the noise and generate strong insights that will drive decision-making, brands and agencies need to do the work of defining how their social media efforts tie to the company’s overall business goals up-front. Regardless of the technology, the role of the human analyst in this process is critical. But, if the technology
platform being used to monitor conversations in the social media space does not facilitate such linkages and analysis, then it’s time to look elsewhere. The good news… there are a few tools in the market that do have an increasingly robust analytics component built in, and that bodes well for this emerging area of analytics. However, there are countless others that struggle to provide anything more than a quick temperature check or simply a regurgitation of anything and everything being said. As a result, I have no doubt that we’ll see a great reduction in the number of social media listening tools over the next two years, coupled with an increase in the number of human analysts working in this field to generate actionable insights for agencies and brands.
Social listening initiatives essentially revolve around compiling and analysing online conversations happening across a broad range of social channels such as Twitter, Facebook Fan Pages, LinkedIn, blogs, YouTube and myriad other networks where consumers are engaging with businesses and brands. In SoDA’s 2012 Digital Marketing Outlook Survey published in The SoDA Report, over half (54% to be exact) of the client-side digital marketing leaders responding to the survey said they had added social listening to their menu of research approaches to
SoDA is an international association of respected digital marketing agency leaders and entrepreneurs with a history and a vision for the future of marketing. SoDA’s membership includes 60 leading digital companies and agencies (including Reactive) all around the world.
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~ Chapter Three ~
Mobile MØney
How tHe growtH of NeAr fIeLD CoMMUNICAtIoN tooLs Is CHANgINg tHe wAy peopLe Use MoNey
Written by Marina Kosmatos
Marketing Manager
Retailers need to ensure they turn up the volume of their mobile strategies.
Move over eCommerce, mCommerce has stolen the show and is leading the way in terms of remaking the way people shop. With more consumers than ever turning smartphones into shopping aids, mobile technology is encouraging retailers to look for innovative ways to enter into a relationship with potential customers. We’re getting closer to the point where wallets become obsolete. New payment services have emerged that enable people to buy, sell and pay purely from their smart phones, and are stepping up the mobile-payment push. A record number of U.S consumers turned to their smartphone during ‘Black Friday’ in November 2011. Digital retail services provider GSI Commerce reported a 254% increase in mobile-based sales compared to 2010, while PayPal also experienced a 516% year-on-year increase in global mobile payment volume, with the number of consumers shopping via PayPal mobile services growing 371% and 148% compared with the average Friday. While PayPal mobile services can record big numbers during holiday sales, payments services
like Square and Google Wallet are doing this for new customers every day. Square is a mobile payment system that allows retailers to accept credit-card payments through a mobile phone. Created by Twitter Co-founder Jack Dorsey, Square is growing at rapid speed. In December 2011, it announced that over one million merchants are now using Square to accept credit cards. The value of Square for small business owners was obvious from inception. Square offers flat pricing, regardless of the type of transaction or size. Unlike merchant accounts, Square does not have a per-transaction fee, making it ideal for businesses like coffee shops, cab drivers and market vendors. But now, big companies like US phone carrier T Mobile and Walmart are getting on board. Even US President Barack Obama is using Square to accept fundraising donations. While the service hasn’t appeared in Australia yet, we’re eagerly awaiting its presence.
Tech sites like to proclaim a war between Square and Google Wallet but the easiest way to define both services is that Square has always been for small businesses and adds a new feature to old technology. Google Wallet is targeting already established retail giants and promoting new technology to the consumer. And unlike Square, Google Wallet hasn’t set the world on fire…yet. Google Wallet is an app that lets you pay for things using your phone, either by typing your credit card numbers or loading up gift/prepaid cards. Using an NFC enabled mobile phone (such as the Samsung Galaxy Nexus), you tap a PayPass terminal to pay. Google claims there’s a lot of security built into the NFC chip, which stores and transmits credit card information. The NFC antenna is turned off when the screen off, so it can’t be ‘scraped’, and the secure element is only turned on when the wallet is unlocked and enabled for payment. However in February 2012, a bug was discovered in the NFC chip which enabled anyone who held your phone could access your money. Google suspended the sale of new prepaid cards for a couple of days while the bug was being fixed.
This has been a PR problem that Google Wallet didn’t want, it has enough high profile partners like Citibank, MasterCard and merchants like Subway and American Eagle to weather this small storm. mCommerce is not about the channel, but about the customer. The technological advances mentioned are reflective of how control of shopping has shifted from the retailer into the hands of the customer, literally. Retailers need to ensure they turn up the volume of their mobile strategies and be in a position to offer their customer a great shopping experience whether they are at home, instore, or on the go. The time to move on mCommerce is now.
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~ Chapter Four ~
Centralised Platform
VALU HE T OF E
Multi-Site
Australia
China
PL
EMENTATI
ON
An increasing number of companies are operating in a multi-national, multi-locational or multi-brand environment.
Marketing and IT managers have to balance the demands and costs of the business while maintaining quality and service to their customers. This can be problematic and increase production, and time costs. If you are a large company with multiple, related Web sites, an option is to install a multi-site solution, which can deliver real savings of time and money in the development of your project. For some agencies (including Reactive), Sitecore’s Web Content Management system is an appealing choice for building and managing multiple Web sites. However, there are some considerations to take into account when evaluating if a multi-site solution is right for your organisation;
IM
UK
Japan
USA
This chapter was sponsored by
Benefits of a multi-site solution:
Multi-site management provides support across many sites from a single centralised platform. The ability to reuse rich content easily and across multiple sites is a time-saver for admins. CMS licensing may offer a one-time fee for multiple licenses, saving money in the long run. Easy management of the centralised platform enables content admins with a range of skill sets to engage with the CMS. Another benefit of multi-site is content security, critical for any organisation. Managers can restrict content authors to access specific content — good for when you’re managing a team spread across disciplines and/or locations. Allows you to adjust caching and site performance on a site-by-site basis. Maintains brand identity across multiple sites.
When to use multi-site?
If your sites have similar content, architecture or functionality, it is beneficial to use a multi-site solution as it saves developer time and money by replicating sites of similar content. Does your site need shared functionality? Multi-site enables information from one Web site to be easily shared with others and can also standardise design elements across multiple Web sites using a parent theme. Delivery of multi-lingual content for global brand recognition. For example, Sitecore makes it possible for editors to work with the CMS in different native languages; as a result Web sites can be built in any language. The management of the many language versions of the Web site can also be easily coordinated and managed.
Julian Gilchrist, Solutions Architect at Reactive, has worked with multi-site implementations on many projects, including most recently, Cricket Australia’s Big Bash League. Using Sitecore, Cricket Australia are able to manage 22 sites, each technically consistent yet visually distinct. The solutions has enabled Reactive and Cricket Australia to build and launch a digital presence for the new Big Bash League and team pages inside of 10 months, resulting in over three million page views in a few months. Julian says: Using a multi-site CMS has provided a structure that makes it incredibly easy to reuse content and share code across multiple league and sites. In turn, this reduces our development costs and increases our flexibility to be able to adapt to all client’s requirements. If a multi-site capable CMS such as Sitecore seems like it is the right system for your needs, Reactive can guide you to the solution for your company’s needs.
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~ Chapter Five ~
social media campaignsof2011
At Reactive, we’re always on the lookout for innovative social media campaigns that we can learn from and incorporate into solutions for our clients. We asked Grant Flannery, Account Director, his opinion on some of the best social media campaigns of 2011 and his predictions for the year ahead.
The best
2012 will be the year of the hashtag campaign for competitions and brands.
Coca–Cola “Share a Coke” Platform
FACebOOK – bRANdING ANd SALeS www.shareacoke.com.au
Corona Light Campaign
FACebOOK – bRANdING ANd AWAReNeSS (The campaign has ended and the page has been taken down)
Volkswagen Jetta campaign
TWITTeR - SOCIAL exPeRIMeNT www.anything4jetta.com
What are your predictions for 2012?
I think that 2012 will be the year of the #tag campaign, for competitions and brand launches. The level of engagement we have seen over the past year with Twitter has been phenomenal and continues to grow. I think hashtags are a nice, simple way of engaging consumers on-the-go and allowing them to download their thoughts in short time frames with low level barriers to entry. Facebook recently launched new Timelines for brands, which I believe will allow companies to become more innovative with their Facebook page and really show off their rich history. Another social media phenomenon is Pinterest, which allows you to create your own ‘pinboards’ of things you love from anything on the Web - with a click of a button. Brands have been quick to adopt this and Pinterest is on track to become one of the fastest growing social media platforms of 2012. I’m also interested in the rise of social shopping. There are a few great companies in this space like thefancy.com and nuji.com. Nuji is similar to Pinterest with rewards and discounts from stores for participation. So what did these campaigns do right? They demonstrated how a clear message coupled with creativity achieves excellent social media results. Let’s see if 2012 is just as impressive.
Coke decided the best way to sell their product this summer was to personalise for consumers. They did this by releasing 150 names on all cans and bottles of Coke so you could, ‘Share a Coke with a friend’ Coke developed a Facebook app to support the launch of their new Share a Coke with…campaign. The Facebook app includes designing a can, entering your name to be in the next batch and sending videos to friends with songs.
Corona had one goal of their 2011 strategy and it was to, “become the best light beer in America”. Suffice it to say, it’s a fairly large goal. Corona designed a Facebook page that encouraged fans to like the beer and Corona as a brand. In response to a fan’s ‘like’, Corona would put your Facebook picture in bright lights at New York Times Square, and you could win a trip to Mexico. There was big value for the fan in liking the page. The campaign received significant traffic when fans shared the page with friends. In November 2011, Corona encouraged fans to visit New York and get a photo of themselves in Times Square.
This tackles my current favourite social media platform Twitter. It’s my new Google for searching articles. Volkswagen’s strategy for the New Jetta was to launch the #anything4jetta campaign. Volkswagen asked fans to tweet what they would do for a free Jetta. They set up a Web site specifically for the #anything4jetta contest. This was the hub for tweets to be posted and updated in real time, The Web site had carefully selected tweets that were posted in real time. So you could follow the contest and see if they were named as the winner of the new Jetta.
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~ Chapter Six ~
Tracking The impacT of digiTal markeTing
Q. What effect have the following sources of information had on your business strategy in the last 12 months?
♦ Strong effect ♦ Some effect ♦ No effect
Sales still reign supreme, but the discoverability of content via search, social analytics and social listening conversation analysis are all rising in importance.
Results are from the 2011 Digital Marketing Outlook study conducted by SoDA and its research partner, Econsultancy. The survey includes budget, industry and media trends based on answers from 650+ digital marketing professionals from brands, agencies and production companies. The SoDA Report Q1 2012 – Digital Marketing Outlook
70%
65%
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Sales Data Digital Campaign Performance Reporting Web site Reporting Search Reporting Integrated Campaign Reporting (All Media Types) Social Analytics Listening Audits/ Conversation Analysis Mobile Site/ App. Reporting Tools that Measure Internet and Digital Media Audiences Online Branding Studies Tools that track your Competitors’ Traditional Marketing Activity Tools that track your Competitors’ Digital Marketing Activity Homescan Programs
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~ Chapter Seven ~
Behavioural methods
for boosting your
Case study
Thomas Jewellers
Thomas Jewellers, purveyors of exceptional quality diamond jewellery, introduced remarketing tags to their web site in November 2011. As of March 2012, the audience list now exceeds 37,000 people. Reseo recently ran a Google AdWords Campaign to promote a competition designed to help grow Thomas Jewellers' eDM list. We served ads, (both text and banners) to the remarketing audience as well as non-audience members to entice them to enter into the competition. Over a one-month campaign the results were as follows:
• Over 1.2 million ad impressions. • A conversion rate from showing ads to the remarketing
audience of 19.37% clicks to entries.
Marketing Effectiveness
Written by Chris Thomas Chief Search Engineer, Reseo
• Conversely the conversion rate from the standard
Google Ads Campaign clicks to entries was 6.7%. are experienced when people have previously been to your web site and see your advertising messages.
• The results show that much higher conversion rates
Remarketing, when conducted properly, is one of the most powerful online marketing methods available. Also known as behavioural advertising, Remarketing allows you to show advertisements to people who have previously been to your Web site. In many ways Retargeting is a lot like email marketing. Many of Reseo’s ‘early adopting’ customers have benefited enormously from utilising Retargeting advertising through Google’s Remarketing Platform, which is integrated with Google AdWords. Simply put, Remarketing involves placing 'audience scripts' in the source code of a Web site. When someone visits the site, a ‘cookie’ will be dropped on this visitor’s computer. This allows marketers to then show display ads across Google’s vast network of partner websites, encouraging these same visitors to return to the site. For our retail (B2C) and B2B customers we’ve seen extraordinary success from people returning from Remarketing ads; with conversion rates as high as 19.75%. But really, the key to a successful Remarketing campaign is to create highly segmented audience lists.
For example, if you have a Web site which sells different coloured widgets, you create an audience list of people who have previously visited the Blue Widgets section of the website, and another separate audience list which contains people who have previously visited the Red Widget section of the website and so on. Then it’s a simple matter of serving ads about blue widgets to the blue widget audience and ads about red widgets to the red widget audience list. Aside from tracking clicks and conversions from Remarketing ads, another key benefit of Remarketing is the ability to track what are known as ‘View Through Conversions’. These are conversions where a person has been exposed to a Remarketing ad but hasn’t clicked it, but still come back to the website to convert anyway through some other channel. Conversions allow you to see the indirect effects of Remarketing advertising in terms of recall and brand/ product/service awareness.
Reseo customers use remarketing ads for a variety of reasons including:
• eCommerce
The key benefits of remarketing are:
• Your lost customers come back. • You can offer different products to lost customers. • You can introduce new products to current customers. • Your Web site (and brand) stay top of mind. • It’s extremely economical to set up and implement. • The return on investment is very high.
Encouraging people to return and buy. Encouraging people to come back and subscribe to something. Encouraging people to buy tickets to sporting events. Reminding people about, as well as to act on a current campaign. Encouraging previous visitors to enter a competition. Telling previous visitors about a current sale. Informing people about new or updated product models. Keeping their brand top of mind for customer recall.
• Lead generation
• Ticket sales
• Campaign support
• Competitions • Sales
• Product updates
• Branding
Reseo is a full service Australian Online Marketing agency which helps clients to grow and compete through industry-leading digital solutions. We offer a full suite of services from Search Engine Optimisation (SEO), Search Engine Marketing (SEM), Social Media Marketing, Conversion Optimisation and Web Analytics auditing, configuration and reporting. www.reseo.com
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~ Chapter Eight ~
Written by Marina Kosmatos
Marketing Manager
Pinterest a visual bookmarking site that lets people collect
and share images online via a 'virtual pinboard', is growing rapidly and everyone — especially retailers — are taking notice. The appeal of Pinterest is that it’s an easy way to visually keep track of things that inspire and appeal. It connects people all around the world based on shared tastes and interests.
potential for launching new campaigns. The retailer asked Pinterest users to create boards titled ‘Spring ModCloth Wedding’ and then add pins according to various themes such as ‘Something vintage’, ‘A lovely location’ and ‘ModCloth bridesmaid dresses’. Users who participated were eligible for a cash prize. Whole Foods, a food supermarket chain in America, uses Pinterest to enhance their brand image. Their inspiration boards feature categories that are relevant and of interest to foodies. Boards like ‘Edible Celebrations’ and ‘We’re used to Reusing’ engage their audience around issues that matter to them. By community building (and not selfpromoting), Whole Foods positions itself as authentic by creating boards that are central themes for the Whole Foods brand. Retailers can use Pinterest to leverage how their brand is valued by users; the best images will instantly be re-pinned, commented on or Liked, and retailers can begin to understand the sentiment behind purchase choices. The influential data that Pinterest collects is extremely valuable to retailers as it can be used to build ʻbrand profilesʼ. experts are arguing that the site enables hyper-optimised supply chain management, essentially selling these brand profiles back to the brands. It may be another nail in the coffin for the brick-and-mortar store but offers a winning solution to online and multichannel retailers. Pinterest is a great way for consumers to engage with brands and offers a tremendous opportunity for retailers to monitor the styles and products that customers actually want. For retailers looking to take advantage of this platform, take some time get a feel for what the user responds to and what they do. By maintaining the visual cues of the site, and taking care to ‘play nice’ as sign up to Pinterest asks, you can use Pinterest to develop the image your brand wants to portray and take customer engagement to the next level. Some of my favourite brands on Pinterest are: West Elm http://pinterest.com/westelm Gap http://pinterest.com/source/gap.com Oscar PR Girl http://pinterest.com/oscarprgirl
the Power of
With Hitwise reporting that user visits from Pinterest have increased a staggering 4,000% in the past six months, the site is rising past those like Google+, driving more traffic to US eCommerce sites and becoming the next social commerce game changer. This translates into significant new opportunities for retailers who are engaging with Pinterest. It’s another threat for brick and mortar stores to deal with. While online retailers are quickly seeing its potential as internet users adopt content curation. What’s special about Pinterest in the social, commerce sense is that the act of ‘pinning’ adds a social layer to the eCommerce experience (without having to download a branded app). The best way for retailers to gather fans on the site is to maintain the visually appealing style of their ‘boards’ on Pinterest and let the products do the talking. Curate boards based on new arrivals or inspiration for the season and make sure your ‘pins’ are relevant to your audience. US department store Nordstrom is building up a sizable following on Pinterest with their catalogue-like boards and point users to their customer service team for more info www.pinterest.com/nordstrom. Online retailer ModCloth joined Pinterest in September 2011 and the site is already one of ModCloth’s top (unpaid) referral sites in terms of traffic and revenue. According to ModCloth’s Alicia Barnes, ModCloth has 7,000 pins on Pinterest and growing, and “99% of them are from advocates of the ModCloth brand and, products”. In January 2012, ModCloth was one of the first retailers to launch a themed competition on Pinterest, recognising its
for online retailers
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~ Chapter Nine ~
The savviest of marketers are already engaging with tablet users. What does CES mean for marketers?
Written by Tim O’Neill
Co-founder and Joint Managing Director
The annual Consumer Electronics Show (CES) kicked off in Vegas in 2012 and gadget obsessed digiphiles have been hotly predicting what new innovations will be unveiled to the public. These new gadgets could well be the next big things and as marketers, we should recognise the ever-growing value that technology has on the marketing landscape. Let’s take a look at how marketers can leverage certain technologies that have been unveiled at CES to reach and target consumers in new and different ways.
Opera TV Store announced.
Tobii lets users control technology with their eyes.
The standout on day one of the conference, Tobii announced revolutionary technology that allows people to stare at a computer screen, and just by looking, swipe through screens, press small buttons and change screens. They call it, “gaze interaction” and judging by the hype, it could go mainstream very quickly. It works by shooting near-infrared lights at your eyes, and uses two IR cameras to capture, “the reflective point of retina plus the glint off the cornea,” according to a CNeT report. This presents marketers with more intuitive and immersive ways to engage viewers and also provides them with useful info on how a user interacts with their Web site. View it at www.tobii.com
The line between television and the Web is blurring as Opera has unveiled a TV-based app store, promising a “completely different way to experience TV”. The app store will offer HTML5 apps, including Facebook and Vimeo and can run on internet televisions, set top boxes and Blu-ray players - and can be enabled via standard remote controls. The fact that it is all HTML5 based is important as it means that regardless of the TV, users can access the store and its apps easily, providing the user with a Web-like experience on their TV. This crossplatform technology is more valuable than creating custom apps for different systems. For developers, it provides an easy way to create and distribute apps for use on TV while for marketers it helps distribute their content to a greater audience without losing Web-like functionality. View it at dev.opera.com/tv
like it’s not available for brands yet, once they open it up, it will allow a whole new wave of opportunities for social media marketing. According to comScore data released in October 2011, 1.2 billion people watched over 200 billion online videos. There’s no doubt that online video marketing is on the rise and it looks like SnapCuts could potentially assist in making your brand’s video go viral like never before. View it at www.snapcuts.com
of Android 4.0 for marketers is the ability to scale the screen so the apps designed for mobile can still work on the tablet without losing functionality reducing development costs. This is a big win as there are new possibilities for app functionality and a wider audience of people to engage with apps. Information Week’s MDM research shows that tablets are on track to join laptops as a critical platform for telecommuting workers and the savviest of marketers are already engaging with tablet users. View it at www.android.com These four examples are some of hundreds coming out of CES, and it’s easy to become overwhelmed with this flood of information. We suggest marketers focus on the technology that is relevant to your brand today, while keeping an eye on the bleeding-edge developments which could become main-stream tomorrow.
New Android 4.0.
SnapCuts.
On a much smaller scale, but just as relevant to marketers, SnapCut debuted at CES to considerable interest. It’s a new platform taking ‘social video messaging’ to a whole new level by enabling users to create videos (with the assistance of a library of professionally edited clips) and share with their family and friends across a variety of social networks. While it looks
One of the most celebrated announcements to come out of CES is the launch of the ‘Ice Cream Sandwich’ (otherwise known as Google Android version 4.0). It delivers a refined user-interface for phones and tablets and adds powerful innovative features. In 2011, sales of Android smartphones surpassed Apple’s iPhone according to Gartner research but Apple’s iPad has Android tablets beat. The launch of this new mobile operating system looks set to shake things up. One of the main concerns of Android tablets was the shortage of tablet-optimised apps. They usually had to be stretched, effectively it was clear that they didn’t scale. One of the biggest benefits
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~ Chapter Ten ~
DIgITAL MARkeTeRS are most exCITeD ABOuT
Q. Of the technology trends that are currently or soon to be available, which are you most excited about for your marketing efforts?
● Excited ● Intrigued ● Neutral
The technologies
58
26%
15%
%
33%
52
%
15%
32%
46
HTML5
%
22%
Mobile Phone Applications
Tablet Applications
34%
40
%
25%
33%
36%
38%
31% 31%
Digital Technologies at POS
31%
experiential Technologies/Platforms
Internet Tv/enhanced Broadcast
Mobile and experiential technologies (such as HTML5) are top of marketers' minds for 2012.
35% 28%
Near-Field Communications
37%
34% 28%
Social gaming Applications
39%
31% 27%
gesture-Based Computing
42
%
Results are from the 2011 Digital Marketing Outlook study conducted by SoDA and its research partner, Econsultancy. The survey includes budget, industry and media trends based on answers from 650+ digital marketing professionals from brands, agencies and production companies. The SoDA Report Q1 2012 – Digital Marketing Outlook
47
%
41
34%
%
27% 27%
Location Based Technology
25%
36%
39%
25%
43
35%
%
22%
Large-Scale Digital Installations
Micro Transactions
Augmented Reality
22
23
~ Chapter Eleven ~
West End, London United Kingdom
Brooklyn, New York United States of America
Auckland New Zealand
Written by Tim O’Neill
Co-founder and Joint Managing Director
Fitzroy, Melbourne Australia Surry Hills, Sydney Australia
As the world of digital advances daily, it’s interesting to consider how digital agencies from down Under are evolving compared to those from the UK and US. Melbourne (Australia, not Florida!) is where Reactive was born, and we’ve been in business here for over 14 years. We have since opened offices in Sydney, Auckland, London and New York. The Global Financial Crisis in Australia was mild compared to the rest of the world, with a short, sharp downturn that rebounded quickly thanks to Government stimulus and a fortunate mining boom. As a result, spend on marketing services recovered within a year and the focus on digital continued apace. It would be no exaggeration to say the past two years have seen a digital boom in Australia, with several of the larger digital agencies doubling in size over this time. Naturally Melbourne’s hot-bed of demand has led to a digital skills shortage, which is one of the biggest challenges facing agencies of all kinds.
In a tough recruitment market, agencies are increasingly looking abroad. Many agencies are actively recruiting staff from the UK and NZ, whose weaker economies make a move to Australia attractive. There is also an increasing appetite for building dedicated off-shore teams in Asia (China, India and Indonesia are popular). We opened our Sydney office six years ago, and have since grown the team to 20 staff. Advertising agencies in Sydney tend to have larger digital teams than those in Melbourne, and are fiercely competitive — with each other and with specialist digital agencies. The battle for good talent is on. Perhaps there’s something in the Bondi water, as Sydney agencies are usually the big winners at awards shows. I recently judged a digital awards show, and the best work was from Sydney agencies. This can be attributed to scale and budgets, rather than creative talent — the majority of large brands with the healthiest digital budgets live in The Harbour City.
My business partner (Tim Fouhy) and I are Kiwis, and this was a driving force behind opening an office in Auckland, New Zealand in 2009. The NZ agency world is small and close-knit, with many companies employing less than 10 staff. This (and the Kiwi culture) leads to a lot of collaboration, and ultimately allows some of these smaller agencies to be true creative hotshops, creating amazing work that punches above its weight. NZ has an interesting cultural heritage, which often shines through in creative ideas — ideas of small scale but large ambition. Services offered by digital agencies down-under are a close match to our International friends, as goes the growth areas (such as mobile and social). The smaller budgets of Australian and New Zealand marketers may hurt local agencies’ chances in the International award shows such as Cannes and the Webbys, but does ensure a stringent focus on effectiveness — with the best agencies ensuring every dollar is well spent. As such, agencies from down Under are well positioned to bring this rigorous and disciplined approach to US and UK brands.
I believe that over the next two years, as budgets continue to move from traditional media to digital, Australian and New Zealand digital agencies will continue to thrive and take a more prominent role on the global stage. I also expect more local digital agencies will expand into the US and UK markets, and also into Asia. As this happens, no doubt the gap in cultures will close, but with luck the uniqueness of each region will stay intact and shine through in creative and innovative work.
24
25
~ Chapter Twelve ~
2012 represents a turning point for Australian retailers with companies needing to genuinely understand the business of online retail in order win the battle for the retail shopper.
The role of research and development: Lessons from Tesco
In the UK, Tesco is another leader in multichannel retail. Tesco have been client of Reactive’s for over five years, so when Nick Lansley, Head of R&d for Tesco.com visited Australia for the Online Retailer Conference last year, we took the opportunity to chat with him about the challenges of shaping a multichannel strategy for a major global retailer. Lansley’s lesson was about the role research and development takes in a truly world-class retailer. His remit is to identify the opportunities that technology, new user behaviour and customer research bring, and then to develop projects that investigate solutions that would improve the customer experience, efficiency or intelligence of the organisation. But this isn’t innovation for innovation’s sake. “A lot of the project work I do in R&d is testing unknowns, or trying out new ideas that fulfil one or ideally all of those three words – better, Simpler, Cheaper” says Lansley, “better for customers, simpler for staff, and cheaper for Tesco.” The results of this approach yield competitive advantages for Tesco that other retailers can only admire and emulate. It’s a pure R&d role that spans the entire business. Some of the challenges Lansley faces daily are dealing with the terabytes of customer and sales data flooding into Tesco, the expanding role of mobile and new devices, and entirely new platforms such as connected TV.
Walmart set up their eCommerce division in the heady days of the ‘dot com boom’ in December, 1999.
“Rather than having a few guys in a room down the hall from the people who are running the stores business… Walmart formed an eCommerce division out in Silicon Valley. A true start-up in every sense, except we had the backing of Walmart” says Steve Nave, the recently departed head of Walmart’s, eCommerce and multichannel business who was instrumental in the launch, growth and development of the unit. A key advantage of this approach was the ability to create a new culture of innovation that operates outside of the constraints of the existing IT infrastructure, systems and processes of the larger retail organisation, while still being able to draw on the buying, pricing and merchandising experience of the parent. The disadvantage of this approach is the typical ‘silo’ approach to online that most retailers know only too well – with the Web site being a completely separate unit leading to customer service issues, such as a lack of integration between online and in-store capabilities. This is an issue still facing most Australian retailers. Walmart’s experience is instructive to Australian retailers embarking on more full-featured eCommerce – the aspiration for Walmart is now “One continuous channel”, this is possible because the rapid growth of sales and revenue now justifies the investment in integration. “There’s an important word in that statement, and that is aspiration. because I firmly believe you will never get there,” says Nave, “If you think about a world where you can shop wherever you want, whenever you want, and
Written by Stephen Foxworthy
Strategy Director
Walmart and Tesco, two of the largest retail behemoths in the world, contrast sharply with the approaches taken by Australian retailers in developing world-class multichannel experiences. How can Australian retailers accelerate the growth of their online sales by learning from the long experience of retailers such as these from overseas? The approaches that Walmart and Tesco took in developing their eCommerce capabilities in the early days of online are still instructive for Australian retailers. Both established separate divisions and ran them as start-up businesses – hiring in the new skills and resources required to build up experience and capability rather than burdening existing employees
with new responsibilities. Once the online businesses had launched and grown, they then integrated the units and worked towards building a true multichannel retail business. This approach of creating new units, investing in them as lean start-ups, running them with appropriate skills (that may not have existed internally), and effectively letting them ‘off the leash’ to develop as quickly as possible has many advantages. The most important being speed-to-market, an acknowledgement that ecommerce requires new skills, and the freedom to grow without the constraints of the broader business.
26
27
Short-term objectives or limited resources guarantees a slow road to profitability and growth.
however you want - you will never finish that journey. But it’s a great path to be on and that’s what Walmart’s focus is.” Walmart has now embedded online at the heart of their retail strategy. Creating initiatives such as Walmart Labs, tasked with developing innovative retail concepts across the whole organisation, and launching entirely new store models, such as Walmart Express small format stores, with online services at their core. Walmart.com is now the largest business to consumer multichannel business in the USA. for many Australian consumers as to what an online retailer should be. And most Australian retailers are failing to come even close to those expectations.
Catching-Up: Approaches for Australian Retailers
For Australian retailers to become truly world-class, a number of pieces need to be in place. Retailers need to invest for the future – Funding an eCommerce team with limited budgets, short-term objectives or limited resources guarantees a slow road to profitability and growth, (as every future decision by management is coloured by underwhelming historical sales performance). It's better to plan for longer-term results and invest accordingly, there’s no avoiding selling online so ask yourself what would you invest to make your Web site your highest performing store? eCommerce is different to retail – Selling things online is very different to selling things on the High street. The pace of retail decision-making increases enormously, as does the threat of competition and price comparison. The use of data, personalisation and technology is highly specific. don’t expect your existing team to be overnight experts - make sure your online retail team is experienced at selling online and has learned tough lessons elsewhere, not on your time. Technology moves fast, so be flexible – Continuous improvement is the key to eCommerce success, rather than out-of-the-box solutions that promises to do everything. It’s important to build the flexibility into your technology and team to adapt to new directions quickly, and cheaply.
Learning from the pure-players: Lessons from Amazon
For any traditional retailer, the threat of pure-play online retailers has become very real, very quickly. Amazon. com is a great example of a business with a singleminded focus on the customer experience - yielding growth and profits traditional retailers can only dream of. The biggest lesson from Amazon is about the level of investment it takes to become a leader in eCommerce. Amazon in its early guise was funded to win and grow market share, not to generate short-term profits, and it now invests billions of dollars on ensuring they remain in a leadership position. “We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations” said Jeff Bezos in his famous letter to shareholders of 1997. The message remains as valid today. Amazon typically plan in five-to-seven-year timeframes, and reject short-term views of their business coming from financial analysts. This is a crucial difference between Amazon’s success and the failure of many major Australian retailers online. A lack of investment from local retailers in developing world-class online solutions has encouraged Australians to shop overseas, simultaneously bruising the bottom lines of local retailers, and raising the bar for the customer experience. The relentless focus on delivering convenience, service and value to consumers from online retailers such as Amazon has set the benchmark
Thoughts?
Tweet us @reactivemedia or find us on facebook
What should retaliers expect for the coming year?
2012 represents a turning point for Australian retailers with companies needing to genuinely understand the business of online retail in order win the battle for the retail shopper. With brand recognition and physical distribution already giving Australian large scale retailers a natural advantage, it is time to invest in online capabilities and even rethink pricing strategies, in order to compete for the online shopper.
28
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Welcome to Perspectives 2012, Reactive's inaugural collection of digital viewpoints from around the world
If 2011 was a year of radical change, get ready for the Year of the Dragon — where the major trends from last year reach mainstream maturity (mobile, Pinterest, the cloud) and new ideas leap into view. The topics covered within Perspectives 2012 are varied, a reflection of the breadth of the digital world we find ourselves in. We explore the creative (campaigns, search marketing), technology (Sitecore, hardware, responsive design) and strategic (eCommerce, agency evolution, social media) aspects of the ever-evolving digital landscape. With investment from marketers continuing to migrate from ‘traditional’ channels (such as radio, newspapers and TV) towards digital, it’s more important than ever to understand the relevance of emerging trends to your business (and not simply jump on the latest fad). We hope that the articles within Perspectives 2012 will spark an opinion. Please share these with us via our Twitter page @reactivemedia.
Tim O’Neill
Co-founder and Joint Managing Director
01
~ Chapter One ~
Responsive design
Written by Bradley Grinlinton
Managing Director UK
The holy grail for cross-platform customer engagement?
If 2011 was the year your customers grew comfortable engaging with brands via mobile then 2012 will almost certainly be the year they do so with tablets. Over Christmas alone, tablet traffic to Web sites in the UK grew to 8% as iPads, Kindles and other tablet devices topped Christmas shopping lists across the world. At the Consumer Electronics Show (CES) in January 2011, major tech giants launched their new tablet offerings to the world with no less than eight significant new devices entering an already crowded market (currently dominated by the iPad). This tablet-boom means that you will be engaging with a more connected customer than ever before and one who now has yet another way of interacting with your brand. This customer will most likely be well experienced in connecting with brands via mobile and web channels and as a result, will be more demanding of the user experience presented to them via tablets. This increased fragmentation of devices presents some interesting challenges for your brand and how to best engage with your customers. Current thinking dictates that you would build something specific for each device used by your customers. This can be extremely costly and time consuming both to setup and maintain. Alternatively, you can simply choose the most popular devices to target and dismiss the remaining portion of your target audience to an inferior user experience. However if you use ‘responsive design’ it doesn’t have to be this black and white.
02
03
Visit the web Chapter One ~ ~ site at: theclub.ba.com
Responsive design provides forward-thinking brands with an extremely cost-effective way of creating engagement.
So what is responsive design?
In a nutshell, responsive design involves creating a design that responds to a user’s behaviour and environment. If a user accesses a responsive Web site on their laptop and then switches to the same website on their iPad the Web site should automatically tailor itself to the screen size and technical capabilities of the iPad. The same principle holds for smart phones or any non-Apple tablet devices too. In short, you can create a Web site that is smart enough to respond to a customer’s preferences for interacting with your brand without the need to build something new for every new device that comes on the market. It’s already being used by some pretty big companies including our client British Airways.
What types of projects are suited to a responsive design approach?
Responsive design works really well for this sort of long form editorial content and allows us to bring a magazine style look to traditional web pages regardless of how a user is viewing them. It’s also great for micro sites and campaigns, especially those with a user-response component. A user who receives an email promoting a campaign via their mobile or tablet device can click straight through to an experience that’s optimised for their device, greatly increasing their likelihood of buying, signing-up or whatever the goal of the campaign may be. We’ve also been using responsive design on a number of our more traditional Web site design projects to quickly and easily add a mobile or tablet optimised site without a large increase in cost. Really, responsive design will work well for more or less all but the most complex of Web applications.
Desktop
Responsive design in action…
British Airways approached us to create a new monthly digital magazine for members of their Executive Club loyalty magazine. This is an audience of regular travellers who are very likely to be accessing content and information on the go and includes a large number of mobile and tablet users. Currently the majority of digital magazine publishing is done using platforms that rely heavily on the use of Flash which is incompatible with the majority of these devices Even the platforms that use HTML5 to address this incompatibility tend to rely on apps for delivery of content - limiting their reach to a select number of devices. Producing a monthly magazine with such a broad user device profile would have been both cost prohibitive and severely limited our reach. Using responsive design, we were able to address these issues and deliver the magazine, titled The Club, to the broadest possible number of British Airway’s members. The adjacent images show The Club across three of the most common member devices (you can check it out for yourself at ww.theclub.ba.com). Remember all of these use the same designs, code and content with the website simply responding to the capabilities of each device.
Tablets
Smart phones
Are there any downsides?
If there’s a downside to responsive design it’s that not every device in a category will display your Web site in exactly the same way. For users of some older or less common devices, this can lead to a more frustrating user experience. However, as device and browser technologies continue to improve and clear market leaders for each device establish themselves, this will become less and less of an issue.
So is it the Holy Grail or not?
It’s probably a bit too soon to say if responsive design is or isn’t the holy grail of customer engagement but as device fragmentation drives some big brands into this space in 2012; it will certainly start to become a lot more mainstream. For now though, responsive design provides forward-thinking brands with an extremely cost effective way of creating engagement with a much broader range of their customers than is facilitated by a more devicespecific approach to design.
Vertical
Landscape
Vertical
Landscape
04
05
GETED CHATTER
VOICE
PEOPLE
SALES FUTURE
TARGETED
INSIGHTANALYTICSSERVICESCHECK
ROI
~ Chapter Two ~
TWEETS
AUDIENCES
BUZZ
RECOMMEND
REVIEWS SEND
ENGAGE LISTENING
TRADITIONAL
RATE DISCUSS
SHOPPING
FEED RSS
INSIGHT
CENSORSHIP
SOCIAL POLITICAL AGENDA
EA TING REVIEWS
BEHAVIOUR
PR
TWEETERS
TWEET
Filtering out
the noise
The FuTure oF Social liSTening
SHOPPING
ENGAGE LISTENING
Listening in the social media space can serve as a warning system or quick litmus test on how consumers are feeling about your brand.
RATE DISCUSS
PR
RSS TWEET
TWEETERS
INSIGHTS
TARGETEDAUDIENCES
E D CHATTER F E
CENSORSHIP
SOCIAL POLITICAL AGENDA
Written by Christopher Buettner Director of Operations at the Society of Digital Agencies (www.sodaspeaks.com)
Over the past few years, the number of social listening tools hitting the global marketplace has mushroomed at an incredible pace. Brand-side marketing organisations and many digital and PR agencies have jumped on the bandwagon, adding conversation analysis and social listening as new offerings within their Measurement/Analytics/Insights practices.
TARGETED
better understand their consumers. That’s a very significant percentage given that social listening is an analytics field that is still very much in a nascent state. The burgeoning interest in this area makes sense. Brands want to know what consumers are saying about their category, their competitors, their brand and/or their specific product/service offerings, and these tools hold the promise of providing a window into the prevailing thoughts and opinions of consumers. It is truly an awesome thing to be able to amass consumer conversations across hundreds of thousands of sources on a particular brand or topic. However, one thing has become clear to me when considering the onslaught of social media monitoring tools in the marketplace. There is an acute need for best practices to be defined for social listening (both from an analytics perspective and a technology perspective) for such efforts to generate strong return on investment for brands. All too often, sweeping conclusions are made from too small a volume of conversations — leading to a myopic view of how consumers think or feel about a particular brand, product, service or initiative. Additionally, the chasm between data and insights for
most social listening is immense. More consolidated efforts need to be made to tie social efforts to clear business goals. As Phil Mui, Group Product Manager, Google Analytics, mentioned during a panel discussion for The SoDA Report, “there are so many tools (and so many methodologies) for social listening that nobody knows the right way to measure anything…the best social analytics tools will be the ones that are directly tied to business efforts and ROI.” Listening is a critical life skill regardless of the forum, be it in face-to-face conversations, social media or any other vehicle for communication. And listening in the social media space can serve as a warning system or quick litmus test on how consumers are feeling about your brand. However, listening is not enough. To filter out the noise and generate strong insights that will drive decision-making, brands and agencies need to do the work of defining how their social media efforts tie to the company’s overall business goals up-front. Regardless of the technology, the role of the human analyst in this process is critical. But, if the technology
platform being used to monitor conversations in the social media space does not facilitate such linkages and analysis, then it’s time to look elsewhere. The good news… there are a few tools in the market that do have an increasingly robust analytics component built in, and that bodes well for this emerging area of analytics. However, there are countless others that struggle to provide anything more than a quick temperature check or simply a regurgitation of anything and everything being said. As a result, I have no doubt that we’ll see a great reduction in the number of social media listening tools over the next two years, coupled with an increase in the number of human analysts working in this field to generate actionable insights for agencies and brands.
Social listening initiatives essentially revolve around compiling and analysing online conversations happening across a broad range of social channels such as Twitter, Facebook Fan Pages, LinkedIn, blogs, YouTube and myriad other networks where consumers are engaging with businesses and brands. In SoDA’s 2012 Digital Marketing Outlook Survey published in The SoDA Report, over half (54% to be exact) of the client-side digital marketing leaders responding to the survey said they had added social listening to their menu of research approaches to
SoDA is an international association of respected digital marketing agency leaders and entrepreneurs with a history and a vision for the future of marketing. SoDA’s membership includes 60 leading digital companies and agencies (including Reactive) all around the world.
06
07
~ Chapter Three ~
Mobile MØney
How tHe growtH of NeAr fIeLD CoMMUNICAtIoN tooLs Is CHANgINg tHe wAy peopLe Use MoNey
Written by Marina Kosmatos
Marketing Manager
Retailers need to ensure they turn up the volume of their mobile strategies.
Move over eCommerce, mCommerce has stolen the show and is leading the way in terms of remaking the way people shop. With more consumers than ever turning smartphones into shopping aids, mobile technology is encouraging retailers to look for innovative ways to enter into a relationship with potential customers. We’re getting closer to the point where wallets become obsolete. New payment services have emerged that enable people to buy, sell and pay purely from their smart phones, and are stepping up the mobile-payment push. A record number of U.S consumers turned to their smartphone during ‘Black Friday’ in November 2011. Digital retail services provider GSI Commerce reported a 254% increase in mobile-based sales compared to 2010, while PayPal also experienced a 516% year-on-year increase in global mobile payment volume, with the number of consumers shopping via PayPal mobile services growing 371% and 148% compared with the average Friday. While PayPal mobile services can record big numbers during holiday sales, payments services
like Square and Google Wallet are doing this for new customers every day. Square is a mobile payment system that allows retailers to accept credit-card payments through a mobile phone. Created by Twitter Co-founder Jack Dorsey, Square is growing at rapid speed. In December 2011, it announced that over one million merchants are now using Square to accept credit cards. The value of Square for small business owners was obvious from inception. Square offers flat pricing, regardless of the type of transaction or size. Unlike merchant accounts, Square does not have a per-transaction fee, making it ideal for businesses like coffee shops, cab drivers and market vendors. But now, big companies like US phone carrier T Mobile and Walmart are getting on board. Even US President Barack Obama is using Square to accept fundraising donations. While the service hasn’t appeared in Australia yet, we’re eagerly awaiting its presence.
Tech sites like to proclaim a war between Square and Google Wallet but the easiest way to define both services is that Square has always been for small businesses and adds a new feature to old technology. Google Wallet is targeting already established retail giants and promoting new technology to the consumer. And unlike Square, Google Wallet hasn’t set the world on fire…yet. Google Wallet is an app that lets you pay for things using your phone, either by typing your credit card numbers or loading up gift/prepaid cards. Using an NFC enabled mobile phone (such as the Samsung Galaxy Nexus), you tap a PayPass terminal to pay. Google claims there’s a lot of security built into the NFC chip, which stores and transmits credit card information. The NFC antenna is turned off when the screen off, so it can’t be ‘scraped’, and the secure element is only turned on when the wallet is unlocked and enabled for payment. However in February 2012, a bug was discovered in the NFC chip which enabled anyone who held your phone could access your money. Google suspended the sale of new prepaid cards for a couple of days while the bug was being fixed.
This has been a PR problem that Google Wallet didn’t want, it has enough high profile partners like Citibank, MasterCard and merchants like Subway and American Eagle to weather this small storm. mCommerce is not about the channel, but about the customer. The technological advances mentioned are reflective of how control of shopping has shifted from the retailer into the hands of the customer, literally. Retailers need to ensure they turn up the volume of their mobile strategies and be in a position to offer their customer a great shopping experience whether they are at home, instore, or on the go. The time to move on mCommerce is now.
8
09
~ Chapter Four ~
Centralised Platform
VALU HE T OF E
Multi-Site
Australia
China
PL
EMENTATI
ON
An increasing number of companies are operating in a multi-national, multi-locational or multi-brand environment.
Marketing and IT managers have to balance the demands and costs of the business while maintaining quality and service to their customers. This can be problematic and increase production, and time costs. If you are a large company with multiple, related Web sites, an option is to install a multi-site solution, which can deliver real savings of time and money in the development of your project. For some agencies (including Reactive), Sitecore’s Web Content Management system is an appealing choice for building and managing multiple Web sites. However, there are some considerations to take into account when evaluating if a multi-site solution is right for your organisation;
IM
UK
Japan
USA
This chapter was sponsored by
Benefits of a multi-site solution:
Multi-site management provides support across many sites from a single centralised platform. The ability to reuse rich content easily and across multiple sites is a time-saver for admins. CMS licensing may offer a one-time fee for multiple licenses, saving money in the long run. Easy management of the centralised platform enables content admins with a range of skill sets to engage with the CMS. Another benefit of multi-site is content security, critical for any organisation. Managers can restrict content authors to access specific content — good for when you’re managing a team spread across disciplines and/or locations. Allows you to adjust caching and site performance on a site-by-site basis. Maintains brand identity across multiple sites.
When to use multi-site?
If your sites have similar content, architecture or functionality, it is beneficial to use a multi-site solution as it saves developer time and money by replicating sites of similar content. Does your site need shared functionality? Multi-site enables information from one Web site to be easily shared with others and can also standardise design elements across multiple Web sites using a parent theme. Delivery of multi-lingual content for global brand recognition. For example, Sitecore makes it possible for editors to work with the CMS in different native languages; as a result Web sites can be built in any language. The management of the many language versions of the Web site can also be easily coordinated and managed.
Julian Gilchrist, Solutions Architect at Reactive, has worked with multi-site implementations on many projects, including most recently, Cricket Australia’s Big Bash League. Using Sitecore, Cricket Australia are able to manage 22 sites, each technically consistent yet visually distinct. The solutions has enabled Reactive and Cricket Australia to build and launch a digital presence for the new Big Bash League and team pages inside of 10 months, resulting in over three million page views in a few months. Julian says: Using a multi-site CMS has provided a structure that makes it incredibly easy to reuse content and share code across multiple league and sites. In turn, this reduces our development costs and increases our flexibility to be able to adapt to all client’s requirements. If a multi-site capable CMS such as Sitecore seems like it is the right system for your needs, Reactive can guide you to the solution for your company’s needs.
10
11
~ Chapter Five ~
social media campaignsof2011
At Reactive, we’re always on the lookout for innovative social media campaigns that we can learn from and incorporate into solutions for our clients. We asked Grant Flannery, Account Director, his opinion on some of the best social media campaigns of 2011 and his predictions for the year ahead.
The best
2012 will be the year of the hashtag campaign for competitions and brands.
Coca–Cola “Share a Coke” Platform
FACebOOK – bRANdING ANd SALeS www.shareacoke.com.au
Corona Light Campaign
FACebOOK – bRANdING ANd AWAReNeSS (The campaign has ended and the page has been taken down)
Volkswagen Jetta campaign
TWITTeR - SOCIAL exPeRIMeNT www.anything4jetta.com
What are your predictions for 2012?
I think that 2012 will be the year of the #tag campaign, for competitions and brand launches. The level of engagement we have seen over the past year with Twitter has been phenomenal and continues to grow. I think hashtags are a nice, simple way of engaging consumers on-the-go and allowing them to download their thoughts in short time frames with low level barriers to entry. Facebook recently launched new Timelines for brands, which I believe will allow companies to become more innovative with their Facebook page and really show off their rich history. Another social media phenomenon is Pinterest, which allows you to create your own ‘pinboards’ of things you love from anything on the Web - with a click of a button. Brands have been quick to adopt this and Pinterest is on track to become one of the fastest growing social media platforms of 2012. I’m also interested in the rise of social shopping. There are a few great companies in this space like thefancy.com and nuji.com. Nuji is similar to Pinterest with rewards and discounts from stores for participation. So what did these campaigns do right? They demonstrated how a clear message coupled with creativity achieves excellent social media results. Let’s see if 2012 is just as impressive.
Coke decided the best way to sell their product this summer was to personalise for consumers. They did this by releasing 150 names on all cans and bottles of Coke so you could, ‘Share a Coke with a friend’ Coke developed a Facebook app to support the launch of their new Share a Coke with…campaign. The Facebook app includes designing a can, entering your name to be in the next batch and sending videos to friends with songs.
Corona had one goal of their 2011 strategy and it was to, “become the best light beer in America”. Suffice it to say, it’s a fairly large goal. Corona designed a Facebook page that encouraged fans to like the beer and Corona as a brand. In response to a fan’s ‘like’, Corona would put your Facebook picture in bright lights at New York Times Square, and you could win a trip to Mexico. There was big value for the fan in liking the page. The campaign received significant traffic when fans shared the page with friends. In November 2011, Corona encouraged fans to visit New York and get a photo of themselves in Times Square.
This tackles my current favourite social media platform Twitter. It’s my new Google for searching articles. Volkswagen’s strategy for the New Jetta was to launch the #anything4jetta campaign. Volkswagen asked fans to tweet what they would do for a free Jetta. They set up a Web site specifically for the #anything4jetta contest. This was the hub for tweets to be posted and updated in real time, The Web site had carefully selected tweets that were posted in real time. So you could follow the contest and see if they were named as the winner of the new Jetta.
12
13
~ Chapter Six ~
Tracking The impacT of digiTal markeTing
Q. What effect have the following sources of information had on your business strategy in the last 12 months?
♦ Strong effect ♦ Some effect ♦ No effect
Sales still reign supreme, but the discoverability of content via search, social analytics and social listening conversation analysis are all rising in importance.
Results are from the 2011 Digital Marketing Outlook study conducted by SoDA and its research partner, Econsultancy. The survey includes budget, industry and media trends based on answers from 650+ digital marketing professionals from brands, agencies and production companies. The SoDA Report Q1 2012 – Digital Marketing Outlook
70%
65%
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Sales Data Digital Campaign Performance Reporting Web site Reporting Search Reporting Integrated Campaign Reporting (All Media Types) Social Analytics Listening Audits/ Conversation Analysis Mobile Site/ App. Reporting Tools that Measure Internet and Digital Media Audiences Online Branding Studies Tools that track your Competitors’ Traditional Marketing Activity Tools that track your Competitors’ Digital Marketing Activity Homescan Programs
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~ Chapter Seven ~
Behavioural methods
for boosting your
Case study
Thomas Jewellers
Thomas Jewellers, purveyors of exceptional quality diamond jewellery, introduced remarketing tags to their web site in November 2011. As of March 2012, the audience list now exceeds 37,000 people. Reseo recently ran a Google AdWords Campaign to promote a competition designed to help grow Thomas Jewellers' eDM list. We served ads, (both text and banners) to the remarketing audience as well as non-audience members to entice them to enter into the competition. Over a one-month campaign the results were as follows:
• Over 1.2 million ad impressions. • A conversion rate from showing ads to the remarketing
audience of 19.37% clicks to entries.
Marketing Effectiveness
Written by Chris Thomas Chief Search Engineer, Reseo
• Conversely the conversion rate from the standard
Google Ads Campaign clicks to entries was 6.7%. are experienced when people have previously been to your web site and see your advertising messages.
• The results show that much higher conversion rates
Remarketing, when conducted properly, is one of the most powerful online marketing methods available. Also known as behavioural advertising, Remarketing allows you to show advertisements to people who have previously been to your Web site. In many ways Retargeting is a lot like email marketing. Many of Reseo’s ‘early adopting’ customers have benefited enormously from utilising Retargeting advertising through Google’s Remarketing Platform, which is integrated with Google AdWords. Simply put, Remarketing involves placing 'audience scripts' in the source code of a Web site. When someone visits the site, a ‘cookie’ will be dropped on this visitor’s computer. This allows marketers to then show display ads across Google’s vast network of partner websites, encouraging these same visitors to return to the site. For our retail (B2C) and B2B customers we’ve seen extraordinary success from people returning from Remarketing ads; with conversion rates as high as 19.75%. But really, the key to a successful Remarketing campaign is to create highly segmented audience lists.
For example, if you have a Web site which sells different coloured widgets, you create an audience list of people who have previously visited the Blue Widgets section of the website, and another separate audience list which contains people who have previously visited the Red Widget section of the website and so on. Then it’s a simple matter of serving ads about blue widgets to the blue widget audience and ads about red widgets to the red widget audience list. Aside from tracking clicks and conversions from Remarketing ads, another key benefit of Remarketing is the ability to track what are known as ‘View Through Conversions’. These are conversions where a person has been exposed to a Remarketing ad but hasn’t clicked it, but still come back to the website to convert anyway through some other channel. Conversions allow you to see the indirect effects of Remarketing advertising in terms of recall and brand/ product/service awareness.
Reseo customers use remarketing ads for a variety of reasons including:
• eCommerce
The key benefits of remarketing are:
• Your lost customers come back. • You can offer different products to lost customers. • You can introduce new products to current customers. • Your Web site (and brand) stay top of mind. • It’s extremely economical to set up and implement. • The return on investment is very high.
Encouraging people to return and buy. Encouraging people to come back and subscribe to something. Encouraging people to buy tickets to sporting events. Reminding people about, as well as to act on a current campaign. Encouraging previous visitors to enter a competition. Telling previous visitors about a current sale. Informing people about new or updated product models. Keeping their brand top of mind for customer recall.
• Lead generation
• Ticket sales
• Campaign support
• Competitions • Sales
• Product updates
• Branding
Reseo is a full service Australian Online Marketing agency which helps clients to grow and compete through industry-leading digital solutions. We offer a full suite of services from Search Engine Optimisation (SEO), Search Engine Marketing (SEM), Social Media Marketing, Conversion Optimisation and Web Analytics auditing, configuration and reporting. www.reseo.com
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~ Chapter Eight ~
Written by Marina Kosmatos
Marketing Manager
Pinterest a visual bookmarking site that lets people collect
and share images online via a 'virtual pinboard', is growing rapidly and everyone — especially retailers — are taking notice. The appeal of Pinterest is that it’s an easy way to visually keep track of things that inspire and appeal. It connects people all around the world based on shared tastes and interests.
potential for launching new campaigns. The retailer asked Pinterest users to create boards titled ‘Spring ModCloth Wedding’ and then add pins according to various themes such as ‘Something vintage’, ‘A lovely location’ and ‘ModCloth bridesmaid dresses’. Users who participated were eligible for a cash prize. Whole Foods, a food supermarket chain in America, uses Pinterest to enhance their brand image. Their inspiration boards feature categories that are relevant and of interest to foodies. Boards like ‘Edible Celebrations’ and ‘We’re used to Reusing’ engage their audience around issues that matter to them. By community building (and not selfpromoting), Whole Foods positions itself as authentic by creating boards that are central themes for the Whole Foods brand. Retailers can use Pinterest to leverage how their brand is valued by users; the best images will instantly be re-pinned, commented on or Liked, and retailers can begin to understand the sentiment behind purchase choices. The influential data that Pinterest collects is extremely valuable to retailers as it can be used to build ʻbrand profilesʼ. experts are arguing that the site enables hyper-optimised supply chain management, essentially selling these brand profiles back to the brands. It may be another nail in the coffin for the brick-and-mortar store but offers a winning solution to online and multichannel retailers. Pinterest is a great way for consumers to engage with brands and offers a tremendous opportunity for retailers to monitor the styles and products that customers actually want. For retailers looking to take advantage of this platform, take some time get a feel for what the user responds to and what they do. By maintaining the visual cues of the site, and taking care to ‘play nice’ as sign up to Pinterest asks, you can use Pinterest to develop the image your brand wants to portray and take customer engagement to the next level. Some of my favourite brands on Pinterest are: West Elm http://pinterest.com/westelm Gap http://pinterest.com/source/gap.com Oscar PR Girl http://pinterest.com/oscarprgirl
the Power of
With Hitwise reporting that user visits from Pinterest have increased a staggering 4,000% in the past six months, the site is rising past those like Google+, driving more traffic to US eCommerce sites and becoming the next social commerce game changer. This translates into significant new opportunities for retailers who are engaging with Pinterest. It’s another threat for brick and mortar stores to deal with. While online retailers are quickly seeing its potential as internet users adopt content curation. What’s special about Pinterest in the social, commerce sense is that the act of ‘pinning’ adds a social layer to the eCommerce experience (without having to download a branded app). The best way for retailers to gather fans on the site is to maintain the visually appealing style of their ‘boards’ on Pinterest and let the products do the talking. Curate boards based on new arrivals or inspiration for the season and make sure your ‘pins’ are relevant to your audience. US department store Nordstrom is building up a sizable following on Pinterest with their catalogue-like boards and point users to their customer service team for more info www.pinterest.com/nordstrom. Online retailer ModCloth joined Pinterest in September 2011 and the site is already one of ModCloth’s top (unpaid) referral sites in terms of traffic and revenue. According to ModCloth’s Alicia Barnes, ModCloth has 7,000 pins on Pinterest and growing, and “99% of them are from advocates of the ModCloth brand and, products”. In January 2012, ModCloth was one of the first retailers to launch a themed competition on Pinterest, recognising its
for online retailers
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~ Chapter Nine ~
The savviest of marketers are already engaging with tablet users. What does CES mean for marketers?
Written by Tim O’Neill
Co-founder and Joint Managing Director
The annual Consumer Electronics Show (CES) kicked off in Vegas in 2012 and gadget obsessed digiphiles have been hotly predicting what new innovations will be unveiled to the public. These new gadgets could well be the next big things and as marketers, we should recognise the ever-growing value that technology has on the marketing landscape. Let’s take a look at how marketers can leverage certain technologies that have been unveiled at CES to reach and target consumers in new and different ways.
Opera TV Store announced.
Tobii lets users control technology with their eyes.
The standout on day one of the conference, Tobii announced revolutionary technology that allows people to stare at a computer screen, and just by looking, swipe through screens, press small buttons and change screens. They call it, “gaze interaction” and judging by the hype, it could go mainstream very quickly. It works by shooting near-infrared lights at your eyes, and uses two IR cameras to capture, “the reflective point of retina plus the glint off the cornea,” according to a CNeT report. This presents marketers with more intuitive and immersive ways to engage viewers and also provides them with useful info on how a user interacts with their Web site. View it at www.tobii.com
The line between television and the Web is blurring as Opera has unveiled a TV-based app store, promising a “completely different way to experience TV”. The app store will offer HTML5 apps, including Facebook and Vimeo and can run on internet televisions, set top boxes and Blu-ray players - and can be enabled via standard remote controls. The fact that it is all HTML5 based is important as it means that regardless of the TV, users can access the store and its apps easily, providing the user with a Web-like experience on their TV. This crossplatform technology is more valuable than creating custom apps for different systems. For developers, it provides an easy way to create and distribute apps for use on TV while for marketers it helps distribute their content to a greater audience without losing Web-like functionality. View it at dev.opera.com/tv
like it’s not available for brands yet, once they open it up, it will allow a whole new wave of opportunities for social media marketing. According to comScore data released in October 2011, 1.2 billion people watched over 200 billion online videos. There’s no doubt that online video marketing is on the rise and it looks like SnapCuts could potentially assist in making your brand’s video go viral like never before. View it at www.snapcuts.com
of Android 4.0 for marketers is the ability to scale the screen so the apps designed for mobile can still work on the tablet without losing functionality reducing development costs. This is a big win as there are new possibilities for app functionality and a wider audience of people to engage with apps. Information Week’s MDM research shows that tablets are on track to join laptops as a critical platform for telecommuting workers and the savviest of marketers are already engaging with tablet users. View it at www.android.com These four examples are some of hundreds coming out of CES, and it’s easy to become overwhelmed with this flood of information. We suggest marketers focus on the technology that is relevant to your brand today, while keeping an eye on the bleeding-edge developments which could become main-stream tomorrow.
New Android 4.0.
SnapCuts.
On a much smaller scale, but just as relevant to marketers, SnapCut debuted at CES to considerable interest. It’s a new platform taking ‘social video messaging’ to a whole new level by enabling users to create videos (with the assistance of a library of professionally edited clips) and share with their family and friends across a variety of social networks. While it looks
One of the most celebrated announcements to come out of CES is the launch of the ‘Ice Cream Sandwich’ (otherwise known as Google Android version 4.0). It delivers a refined user-interface for phones and tablets and adds powerful innovative features. In 2011, sales of Android smartphones surpassed Apple’s iPhone according to Gartner research but Apple’s iPad has Android tablets beat. The launch of this new mobile operating system looks set to shake things up. One of the main concerns of Android tablets was the shortage of tablet-optimised apps. They usually had to be stretched, effectively it was clear that they didn’t scale. One of the biggest benefits
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~ Chapter Ten ~
DIgITAL MARkeTeRS are most exCITeD ABOuT
Q. Of the technology trends that are currently or soon to be available, which are you most excited about for your marketing efforts?
● Excited ● Intrigued ● Neutral
The technologies
58
26%
15%
%
33%
52
%
15%
32%
46
HTML5
%
22%
Mobile Phone Applications
Tablet Applications
34%
40
%
25%
33%
36%
38%
31% 31%
Digital Technologies at POS
31%
experiential Technologies/Platforms
Internet Tv/enhanced Broadcast
Mobile and experiential technologies (such as HTML5) are top of marketers' minds for 2012.
35% 28%
Near-Field Communications
37%
34% 28%
Social gaming Applications
39%
31% 27%
gesture-Based Computing
42
%
Results are from the 2011 Digital Marketing Outlook study conducted by SoDA and its research partner, Econsultancy. The survey includes budget, industry and media trends based on answers from 650+ digital marketing professionals from brands, agencies and production companies. The SoDA Report Q1 2012 – Digital Marketing Outlook
47
%
41
34%
%
27% 27%
Location Based Technology
25%
36%
39%
25%
43
35%
%
22%
Large-Scale Digital Installations
Micro Transactions
Augmented Reality
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~ Chapter Eleven ~
West End, London United Kingdom
Brooklyn, New York United States of America
Auckland New Zealand
Written by Tim O’Neill
Co-founder and Joint Managing Director
Fitzroy, Melbourne Australia Surry Hills, Sydney Australia
As the world of digital advances daily, it’s interesting to consider how digital agencies from down Under are evolving compared to those from the UK and US. Melbourne (Australia, not Florida!) is where Reactive was born, and we’ve been in business here for over 14 years. We have since opened offices in Sydney, Auckland, London and New York. The Global Financial Crisis in Australia was mild compared to the rest of the world, with a short, sharp downturn that rebounded quickly thanks to Government stimulus and a fortunate mining boom. As a result, spend on marketing services recovered within a year and the focus on digital continued apace. It would be no exaggeration to say the past two years have seen a digital boom in Australia, with several of the larger digital agencies doubling in size over this time. Naturally Melbourne’s hot-bed of demand has led to a digital skills shortage, which is one of the biggest challenges facing agencies of all kinds.
In a tough recruitment market, agencies are increasingly looking abroad. Many agencies are actively recruiting staff from the UK and NZ, whose weaker economies make a move to Australia attractive. There is also an increasing appetite for building dedicated off-shore teams in Asia (China, India and Indonesia are popular). We opened our Sydney office six years ago, and have since grown the team to 20 staff. Advertising agencies in Sydney tend to have larger digital teams than those in Melbourne, and are fiercely competitive — with each other and with specialist digital agencies. The battle for good talent is on. Perhaps there’s something in the Bondi water, as Sydney agencies are usually the big winners at awards shows. I recently judged a digital awards show, and the best work was from Sydney agencies. This can be attributed to scale and budgets, rather than creative talent — the majority of large brands with the healthiest digital budgets live in The Harbour City.
My business partner (Tim Fouhy) and I are Kiwis, and this was a driving force behind opening an office in Auckland, New Zealand in 2009. The NZ agency world is small and close-knit, with many companies employing less than 10 staff. This (and the Kiwi culture) leads to a lot of collaboration, and ultimately allows some of these smaller agencies to be true creative hotshops, creating amazing work that punches above its weight. NZ has an interesting cultural heritage, which often shines through in creative ideas — ideas of small scale but large ambition. Services offered by digital agencies down-under are a close match to our International friends, as goes the growth areas (such as mobile and social). The smaller budgets of Australian and New Zealand marketers may hurt local agencies’ chances in the International award shows such as Cannes and the Webbys, but does ensure a stringent focus on effectiveness — with the best agencies ensuring every dollar is well spent. As such, agencies from down Under are well positioned to bring this rigorous and disciplined approach to US and UK brands.
I believe that over the next two years, as budgets continue to move from traditional media to digital, Australian and New Zealand digital agencies will continue to thrive and take a more prominent role on the global stage. I also expect more local digital agencies will expand into the US and UK markets, and also into Asia. As this happens, no doubt the gap in cultures will close, but with luck the uniqueness of each region will stay intact and shine through in creative and innovative work.
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~ Chapter Twelve ~
2012 represents a turning point for Australian retailers with companies needing to genuinely understand the business of online retail in order win the battle for the retail shopper.
The role of research and development: Lessons from Tesco
In the UK, Tesco is another leader in multichannel retail. Tesco have been client of Reactive’s for over five years, so when Nick Lansley, Head of R&d for Tesco.com visited Australia for the Online Retailer Conference last year, we took the opportunity to chat with him about the challenges of shaping a multichannel strategy for a major global retailer. Lansley’s lesson was about the role research and development takes in a truly world-class retailer. His remit is to identify the opportunities that technology, new user behaviour and customer research bring, and then to develop projects that investigate solutions that would improve the customer experience, efficiency or intelligence of the organisation. But this isn’t innovation for innovation’s sake. “A lot of the project work I do in R&d is testing unknowns, or trying out new ideas that fulfil one or ideally all of those three words – better, Simpler, Cheaper” says Lansley, “better for customers, simpler for staff, and cheaper for Tesco.” The results of this approach yield competitive advantages for Tesco that other retailers can only admire and emulate. It’s a pure R&d role that spans the entire business. Some of the challenges Lansley faces daily are dealing with the terabytes of customer and sales data flooding into Tesco, the expanding role of mobile and new devices, and entirely new platforms such as connected TV.
Walmart set up their eCommerce division in the heady days of the ‘dot com boom’ in December, 1999.
“Rather than having a few guys in a room down the hall from the people who are running the stores business… Walmart formed an eCommerce division out in Silicon Valley. A true start-up in every sense, except we had the backing of Walmart” says Steve Nave, the recently departed head of Walmart’s, eCommerce and multichannel business who was instrumental in the launch, growth and development of the unit. A key advantage of this approach was the ability to create a new culture of innovation that operates outside of the constraints of the existing IT infrastructure, systems and processes of the larger retail organisation, while still being able to draw on the buying, pricing and merchandising experience of the parent. The disadvantage of this approach is the typical ‘silo’ approach to online that most retailers know only too well – with the Web site being a completely separate unit leading to customer service issues, such as a lack of integration between online and in-store capabilities. This is an issue still facing most Australian retailers. Walmart’s experience is instructive to Australian retailers embarking on more full-featured eCommerce – the aspiration for Walmart is now “One continuous channel”, this is possible because the rapid growth of sales and revenue now justifies the investment in integration. “There’s an important word in that statement, and that is aspiration. because I firmly believe you will never get there,” says Nave, “If you think about a world where you can shop wherever you want, whenever you want, and
Written by Stephen Foxworthy
Strategy Director
Walmart and Tesco, two of the largest retail behemoths in the world, contrast sharply with the approaches taken by Australian retailers in developing world-class multichannel experiences. How can Australian retailers accelerate the growth of their online sales by learning from the long experience of retailers such as these from overseas? The approaches that Walmart and Tesco took in developing their eCommerce capabilities in the early days of online are still instructive for Australian retailers. Both established separate divisions and ran them as start-up businesses – hiring in the new skills and resources required to build up experience and capability rather than burdening existing employees
with new responsibilities. Once the online businesses had launched and grown, they then integrated the units and worked towards building a true multichannel retail business. This approach of creating new units, investing in them as lean start-ups, running them with appropriate skills (that may not have existed internally), and effectively letting them ‘off the leash’ to develop as quickly as possible has many advantages. The most important being speed-to-market, an acknowledgement that ecommerce requires new skills, and the freedom to grow without the constraints of the broader business.
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Short-term objectives or limited resources guarantees a slow road to profitability and growth.
however you want - you will never finish that journey. But it’s a great path to be on and that’s what Walmart’s focus is.” Walmart has now embedded online at the heart of their retail strategy. Creating initiatives such as Walmart Labs, tasked with developing innovative retail concepts across the whole organisation, and launching entirely new store models, such as Walmart Express small format stores, with online services at their core. Walmart.com is now the largest business to consumer multichannel business in the USA. for many Australian consumers as to what an online retailer should be. And most Australian retailers are failing to come even close to those expectations.
Catching-Up: Approaches for Australian Retailers
For Australian retailers to become truly world-class, a number of pieces need to be in place. Retailers need to invest for the future – Funding an eCommerce team with limited budgets, short-term objectives or limited resources guarantees a slow road to profitability and growth, (as every future decision by management is coloured by underwhelming historical sales performance). It's better to plan for longer-term results and invest accordingly, there’s no avoiding selling online so ask yourself what would you invest to make your Web site your highest performing store? eCommerce is different to retail – Selling things online is very different to selling things on the High street. The pace of retail decision-making increases enormously, as does the threat of competition and price comparison. The use of data, personalisation and technology is highly specific. don’t expect your existing team to be overnight experts - make sure your online retail team is experienced at selling online and has learned tough lessons elsewhere, not on your time. Technology moves fast, so be flexible – Continuous improvement is the key to eCommerce success, rather than out-of-the-box solutions that promises to do everything. It’s important to build the flexibility into your technology and team to adapt to new directions quickly, and cheaply.
Learning from the pure-players: Lessons from Amazon
For any traditional retailer, the threat of pure-play online retailers has become very real, very quickly. Amazon. com is a great example of a business with a singleminded focus on the customer experience - yielding growth and profits traditional retailers can only dream of. The biggest lesson from Amazon is about the level of investment it takes to become a leader in eCommerce. Amazon in its early guise was funded to win and grow market share, not to generate short-term profits, and it now invests billions of dollars on ensuring they remain in a leadership position. “We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations” said Jeff Bezos in his famous letter to shareholders of 1997. The message remains as valid today. Amazon typically plan in five-to-seven-year timeframes, and reject short-term views of their business coming from financial analysts. This is a crucial difference between Amazon’s success and the failure of many major Australian retailers online. A lack of investment from local retailers in developing world-class online solutions has encouraged Australians to shop overseas, simultaneously bruising the bottom lines of local retailers, and raising the bar for the customer experience. The relentless focus on delivering convenience, service and value to consumers from online retailers such as Amazon has set the benchmark
Thoughts?
Tweet us @reactivemedia or find us on facebook
What should retaliers expect for the coming year?
2012 represents a turning point for Australian retailers with companies needing to genuinely understand the business of online retail in order win the battle for the retail shopper. With brand recognition and physical distribution already giving Australian large scale retailers a natural advantage, it is time to invest in online capabilities and even rethink pricing strategies, in order to compete for the online shopper.
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