Multi-Channel Thinking

noreply@blogger.com (Rizwan Tayabali) — Wed, 05 May 2010 01:26:38 PDT

High Street 2.0 - Understanding the Next Generation Retail High Street

Pointing Fingers Will Damage Your Credibility

noreply@blogger.com (Rizwan Tayabali) — Sat, 11 Apr 2009 11:12:42 PDT

I was recently involved in a customer service experience that reminded me just how badly a company can damage its brand by trying to pass the blame on to others. Here's the example...

On Monday I was offered a phone upgrade from O2 and accepted it. The operator I spoke to confirmed the contract agreement and the delivery dates and addresses. She told me exactly when and where the phone would arrive: Two days later to my home address. I consequently ensured I'd be working from home to receive the item.

By afternoon on Wednesday nothing had arrived, so I called the telecoms firm to check up on it because the tracking system on their website showed the delivery as "complete". After explaining that "complete" simply meant that the phone was now in DHL's hands - no really! - the guy then followed it up and came back to tell me that the phone had in fact been delivered the day before to another address altogether and no one was there to collect it. The operator I spoke to had for some reason written the wrong address on the form to DHL.

Blame Shift #1 - Me
The guy then tried to suggest that I must have given them the wrong address, and it was therefore not the fault of his delivery department that the phone hadn't turned up. No matter that few people are quite so stupid as to give their home address wrong. After a few raises in tone of voice, we agreed that it was best to move and set-up the re-delivery.

Blame Shift #2 - DHL's process
Apparently once the courier found that no one was available at the address given, he returned the item to the depot for dispatch back to O2. The sensible thing would've been to call my phone number and check before turning back round. This is a telecoms company after all and they have my number. The return cycle meant that they would not be able to deliver the phone for at least 24hrs.

Blame Shift #3 - The Rules
Having established that I could no longer get the phone that day even though there was still most of the afternoon to go, the operator insisted that it could only be sent to the address on file i.e. my home address. This was regardless of the fact that I would not be there, as I was due to be in the office the next day. The fact that they had just sent the phone to an address not on file, didn't seem to hold merit. That was the rule, and the guy refused to budge on this point, so I had to get a manager.

Blame Shift #4 - The Operator
The manager immediately blamed the operator for being obstructive and agreed to deliver it to the office as per my request, but insisted that since they had to follow DHL's rules, there was nothing that could be done to get to me any quicker than 24hrs. This is regardless of the fact that DHL was their choice of courier, for some reason they believe that the customer will understand the need for the company's cost savings and should make allowances for how the delivery is done.

Anyway, the next afternoon there was still no phone so I called up again

Blame Shift #5 - The Manager
The lady I spoke to informed me that in fact the delay cycle for DHL was 2 days and not 24hrs, and the manager should never have agreed to having it delivered the next day. She then told me that since the item was with DHL I should call them myself. Note that at this point DHL is now being treated as a fully functioning third party, almost as though the customer was responsible for arranging them to make the delivery.

So I called DHL who told me they still had the wrong address on file and had received no further instructions from the O2. I duly went back to O2 and tried again.

Blame Shift #6 - The Automated System
The new person I spoke to investigated and blamed the system. It turns out that the reason the instruction never went through was that the manager who noted my new address made a mistake with the postcode and the system thus didn't recognise it. This failure did not of course trigger any workflow to phone me and correct the problem. Again, remember this is a telecoms company who should really be using the medium they're selling. They waited for me to figure out that there was another issue, and call them back. After fixing this particular error she regretted to inform me that the earliest I could now get my phone was midway through next week.

Blame Shift #7 - Easter
My phone can't be delivered because it's the Easter weekend, so DHL now won't get the updated instructions until Saturday and then won't deliver til at least Tuesday. This means that a next day delivery agreement will not be fulfilled for at least a week. There is no good reason for this. Considering that we live a 24/7 life, and couriers work 7 days a week, the obvious logic is penny pinching on O2's part.

The cheek of the whole thing is that O2 started charging me for the new contract the day I agreed the upgrade (Monday). A full week before I'm actually likely to get the phone. By this point I was so frustrated with the quality of service that I seriously considered cancelling the entire contract and switching companies, which meant that the customer service person had to bribe me by giving me the next month free just to keep my business. The worst bit though is that I had to ask for it. You would think an appeasement would be the first thing offered to an irate customer.

The upshot of all this is that O2 have had to pay additional delivery costs to DHL, have lost revenue from me, and now have a global reputation drop through my sharing of this story.

The added delivery costs, the financial loss, and the brand damage could all have been averted with a simple phone call to me when the delivery guy turned up to the wrong address. As it turns out the error put him just 20 doors down and could've walked up the street to deliver it to me. Even if the processes and mistakes were inevitable, the brand damage to O2 could easily have been avoided by taking responsibility for the trouble, and recognising that as a customer I have an agreement with O2 alone, and not the rest of their supply chain.

For any business there is absolutely no justification for messing your customers about, or expecting them to pay for poor process and management. If you mess up, don't point fingers. Suck it up and focus on rebuilding your customer's trust. You'll save money, keep your sale, and maybe your customer will even put in a good word for your brand.

Industry, Online, Consumer and Mobile Trends in Retail 2009

noreply@blogger.com (Rizwan Tayabali) — Mon, 23 Feb 2009 03:14:15 PST

With the standard flurry of predictions at the start of every year, it's always hard to pick out the value from the vast swathes of text that fill up the multitude of published articles. To make it easier I've distilled out some pointers towards what I believe are the key trends you should be keeping an eye on for 2009.

General Retail Industry Trends

The credit crunch will continue to get worse
The e-channel is still growing fast
Experience is everything – Compelling cross-channel experiences are driving product sales and loyalty
Outsourcing is maturing
Customer-centricity is driving business transformation
Business innovation is being driven by creativity and design
Disruptive innovations are lowering barriers to entry
Buyer niches are changing (gender, age, generations 'Y' and ‘Z’)
Trial before purchase is becoming expected"
Social credentials are defining brands (eco, green, CSR & PSR)

Online and Ecommerce Trends

User participation e.g. reviews and ratings is taken for granted
RSS syndication and sharing capabilities have become the norm
Price comparison is a de-facto expectation
Businesses are increasing their spend on digital advertising
Businesses are leveraging social media and networking for strategic marketing
Revenue sharing advertising and affiliation models are becoming the norm
Virtual payments are taking off e.g. Paypal Secure Card, Google Checkout
Branded prepaid payment cards are becoming more common e.g. Payoneer
Local and Hyper-local social networks are gaining traction e.g. Ning
Virtual worlds are expanding
Internet TV and Video streaming are becoming mainstream
Make it yourself media has exploded – collaboration, pictures, blogs, music, video, games

Consumer Trends

Customers are becoming more demanding as web2.0 is giving them a voice
Customers are expecting convenience and collaboration
Group buying is taking off - Crowdstorm, Yub.com
Social Shopping is becoming popular - Kaboodle, Wists, ThisNext
Crowd-sourcing is becoming normal in both decision making and purchasing behaviour (starting with reviews)
Social Media online is exploding
Premium products and services still sell well
Green is becoming iconic and a brand differentiator
Personal Social Responsibility is beginning to supplement Corporate Social Responsibility
Peer to peer selling of second hand items is increasing

Mobile Trends

Mobile notifications are becoming standard
Mobile payments are becoming viable
Mobile marketing is still under-utilised
Mobile games are gaining popularity
Location and Bluetooth based mobile social networks are increasing
Downloadable and Developer applications are becoming popular
Open source platforms are being released

[Trends originally posted by me on my work blog]

Could The Retail Industry Save Itself Using Game Theory?

noreply@blogger.com (Rizwan Tayabali) — Fri, 30 Jan 2009 07:24:46 PST

In my previous post on whether the Christmas Sales have destroyed hopes of a retail recovery, I discussed how retailers have exhibited classic non-cooperative behaviour. By focusing only on individual interest and survival, their collective actions have likely damaged their entire industry's market size. By encouraging people to spend their liquidity faster through low prices in over-competitive price wars, people now facing redundancies will run out of spending ability much quicker, and retailers give themselves no time to be able to adapt to reducing market sizes and changing consumer need.

Retailer actions thus suggest a basic lack of understanding of collective strategic options. Even just a basic group recognition of Game Theory might have helped. Game theory attempts to model behavior in strategic situations, where players interact and make decisions to maximise their returns based on each others choices - arguably leading to optimal behaviour for all. The classic example is the 'Prisoner's Dilemma' which involves two participants who can either benefit together or suffer together. However this is a zero sum game and rational behaviour in this model is self-interest, so consequently the optimal solution is never chosen.

In a normal situation the retail space would probably be modelled as a non-zero sum game. One firm's success does not necessarily mean losses for everyone else, because that success may increase the general size of the market to mean success for all players. However in the current economic climate, it looks more like there is a finite and decreasing amount of money that people have to spend, and therefore a limited resource available to all players, bringing the situation closer to a zero sum game.

For retailers, what Game Theory therefore suggests is that the players can either try and maximise their own gain, in which case some will come out well while others do badly, involving high risk for everyone; or they can all cooperate strategically to all do a little less well but significantly minimise each player's risk of severe failure.

What retailers should have done, is considered working together to keep prices sensible, and thus manage both the market and their ability to stay alive long enough to change with the environment. On balance, all companies who aren't over-leveraged, would benefit and be better off as a group.

Trying to gain maximum benefit for themselves however, probably means that many will end up with little or no benefit at all as their behaviour helps ensure the market collapses. Unfortunately we must accept that historical competitive and non-collaborative behaviour means that there's very little realistic chance of retailers co-operating like this even now, so we should probably start preparing for further insolvencies and more job losses.

Have the Christmas Sales Destroyed Hopes of a Retail Recovery?

noreply@blogger.com (Rizwan Tayabali) — Tue, 27 Jan 2009 03:27:49 PST

It is finally January and the industry is slowly recovering from the Christmas frenzy. The smoke is clearing to leave retailers facing the start realities of 2009, and the January slowdown is giving businesses time to reflect on the follies of collective price-slashing hysteria.

Personally, I have a feeling that the unprecedented reductions in the 2008 Christmas sales are going to accelerate the bankruptcy of most retailers, rather than saving them. I believe this for two reasons.

Slashing prices might mean that stock continued to be shifted even under the heavy shadow of the credit crunch, but there were no margins to be made, and consequently most retailers suffered heavy losses. When the next quarterly rent comes round, many of these retailers are now going to have even fewer funds to cover their payments. With the banks still not lending, we should expect an explosion in businesses going into administration.

The crazy prices encouraged people to throw their money at all sorts of products they didn't need, and will thus have significantly reduced consumer liquidity. In early December, the credit crunch was only just beginning to effect people outside the financial industry. After a few years of boom time, with life carrying as usual for most people, the buying figures show a distinct lack of prudence on consumer behalf. As the above businesses go under, many more 'common' people are going to lose their jobs. When they do, any spending buffers they might have had will have disappeared with their Christmas extravaganzas. For the retailers that survive the next quarterly rents, this means that their sales are going to drop even worse than they could normally have expected. This in turn could see many of the early survivors go down too.

Long and short of it is that by indulging in short termist price wars, retailers have simply dug their own graves.

Is The Future Of Business Going To Be Telepathic Technology?

noreply@blogger.com (Rizwan Tayabali) — Thu, 01 Jan 2009 05:30:01 PST

Let's kick off 2009 with a bit of exciting futurism! Here's an interesting talk on advances in cyborg technology and what it might mean for business.

Is the future of business going to be telepathic technology? Will people be able to pay for stuff simply by connecting electrodes? Are we going to need computer screens or will we shift to 3D or sensory electronic shopping? What will it mean for web or ecommerce design? Will it mean the end of the mobile phone if we can simply receive signals internally? Have a listen and see what Kevin Warwick thinks...

Facilitating Innovation Through Knowledge

noreply@blogger.com (Rizwan Tayabali) — Fri, 02 Jan 2009 03:42:50 PST

A key element in the success of organisations is their ability to capture, manage and share knowledge, learning and best practice amongst the workforce. However knowledge is often confused with information, and thus organisations typically address the issue by implementing mechanisms for collating documented information and making it available for people to access. (See my earlier post on Developing Knowledge Sharing Communities for Business)

What this usually results in is some form of electronic library available through intranet or shared folder access, but little or no attempt to encourage discussion and evolution of that information for wider organisational use. People are left with the responsibility of connecting disparate bits of information into appliable knowledge. The amount of effort needed to do this is often prohibitive and the result is that people typically ignore the majority of information available to them and organisations are unable to leverage the pools of knowledge they hold.

Studies show that innovation arises at the confluence of knowledge from different fields, so in economic downturns like this, surfacing and sharing knowledge could be a crucial factor in survival.

In light of that, here's a quick look at the different avenues that people use to find and engage with information.

5 Tools To Track Social Conversations

noreply@blogger.com (Rizwan Tayabali) — Thu, 11 Dec 2008 08:13:33 PST

As more and more business begin to appreciate the value of managing and monitoring social conversations to build their brand and reputation, marketers are beginning to move away from focusing manual search, monitoring, trafficking, and tracking. Instead, many aggregation and tracking tools, in addition to stealth services not yet launched, are not only helping track keywords, but also monitor conversations across the networks and communities that you know and don't know. They effectively map, engage, and manage participation efforts allowing businesses to start to implement and benefit from CRM-style (customer relationship management) dashboards and hubs to streamline internal and outbound communications.

Here's 5 tools you should be looking at as you develop your own social marketing strategies

BuzzLogic
Radian6
BuzzGain
BrandsEye
Brandwatch

(Taken from Brian Solis' post on the state of social media - http://www.briansolis.com/2008/09/state-of-social-media-2008.html)

Financial Sustainability

noreply@blogger.com (Rizwan Tayabali) — Mon, 17 Nov 2008 04:05:25 PST

If you're wondering why there hasn't been much posting activity for the past week or so, it's not because I've hit writer's block. The past few weeks have been a whirlwind of activity, between deadlines at work and trying everything possible to ward off insolvency for one of the charities I'm involved with. I'll put up some of the things we've learnt once things ease up. Hopefully find out this week if my efforts have come to anything.

The credit crunch is playing its part here, and safe bets suddenly look like big risks when there's no margin for error. The real challenge has been trying to create viable commercial revenue streams for a charity that traditionally hasn't had any. A lot of lateral thinking later, we might be getting somewhere. The difficulties lie in financial modeling for a space that hasn't really got much else to use as reference.

Moving a charity from being grant dependent to becoming financially sustainable requires more than just identifying revenue streams. It requires a change of focus and ways of working. It requires new management skills, and new engagement skills. Dealing with corporations is a whole different exercise to dealing with government or third sector bodies. Lots of challenges but exciting nevertheless. Where there's a will there's a way... and in this case there definitely is a will!!

Watch this space for an overview of what I'm learning about the realities of financial sustainability and business remodelling in the third sector...

Life After The Credit Crunch

noreply@blogger.com (Rizwan Tayabali) — Sat, 18 Oct 2008 08:30:34 PDT

Here's a presentation with some great observations on life after the credit crunch, collated by Ines Seidel.

Life After the Crunch

View SlideShare presentation or Upload your own. (tags: social life)

In summary, there's the things we already know like there are more fears, and people are cutting down and shopping more frugally, but what I really like is that she has drawn out some personal things like the fact that people are discovering family as they look for more free things to do, and kids are learning to accept no for an answer.

For fashion retailers however, there's a great point in here about the need for clothing that will survive trends and frequent use over the next couple of years.

Customer-centric Innovation

noreply@blogger.com (Rizwan Tayabali) — Thu, 09 Oct 2008 07:38:53 PDT

Great presentation on customer-centric innovation. The drivers for this are that traditional innovation is broken and the nature of competition is changing. Think left-wing rather than direct.

Customer Centric Retail Innovation - Bucharest May 29, 2008

View SlideShare presentation or Upload your own. (tags: horizon centricity)

Your Essential Guide To Social Media

noreply@blogger.com (Rizwan Tayabali) — Thu, 09 Oct 2008 07:39:14 PDT

As a business you still probably don't care about Social Media. Your marketing department is still churning out brochures and adverts and telling you that this is all far future stuff. Only kids mess around with the internet. If so, they're killing your business. The UK alone has 17.1 million active internet users in the 16-54 age bracket - that's your primary consumer base. Worse still, Universal McCann research shows that 1 million of them have shared an opinion about a brand or product within their social networks. Trusted opinions are the number 1 factor in the purchasing decision-making process. Do you have any idea what they're saying about you, let alone any clue about how to manage that conversation?

Well for starters, you really need some idea about what Social Media is, and while I put together something simple that's specific to businesses, here's a decent guide.

The Essential Guide to Social Media - Upload a Document to Scribd

Developing Knowledge Sharing Communities For Businesses

noreply@blogger.com (Rizwan Tayabali) — Tue, 23 Dec 2008 04:15:21 PST

One of the biggest problems facing most organisations is a combination of poor internal information sharing mechanisms and a lack of a collaboration culture. Since both are key foundations of innovation, this issue has serious consequences for organisational growth and success.

In my experience I've found that this problem is tackled one of two ways...

Primarily through chucking technology at it - usually some kind of intranet with out of the box functionality, and
Occasionally through culture change programmes.

There is often a belief amongst those implementing culture and business change that the change is technology independent. Conversely a lot of user experience professionals believe that behavioural issues can simply be addressed by making sure the interface and functionality of systems are compelling. Fact is that in this context, neither works without the other.

Driving highly collaborative and social sharing behaviours is pointless if the mechanisms for capturing and disseminating collective knowledge do not exist satisfactorily; and it is similarly pointless providing document sharing capability without a culture that encourages and rewards participating and interaction.

My advice is to develop and evolve your technology and culture together, with technology just preceding culture change activity in order to facilitate the human journey from hoarding documents and content, to sharing, to evolving it, to interacting socially around it.

I've created a 3 step Knowledge Management maturity model to show you how you might set this up for your business by increasing the richness of technological and social interaction over time.

Information Management - The journey starts with Information Management through using fixed and free tags along with decent search capability to surface content. Fixed tagging helps structure content. Encouraging free tagging begins to make people feel they can interact with the content, which sets them up nicely for the next stage.
Knowledge Management - Adding rating and commenting begins to allow qualitative evolution of information, which is essentially the core of knowledge management and also embeds the rudiments of inter-personal interaction around knowledge that facilitates off-line niche or special interest interaction.
Social Interaction - Finally adding presence information and real time discussion (chat) capability combined with offline community days begins to drive widespread and cross-functional social interaction around information and knowledge sharing, which is really where you want to be as an organisation.

Hope it helps!

6 Deepening Consumer and Retail Industry Trends For 2008 into 2009

noreply@blogger.com (Rizwan Tayabali) — Thu, 25 Sep 2008 04:50:11 PDT

Let’s start with a quick look at some of the key trends in consumer behaviour and the retail industry. I’ll pick out 3 each.

3 Deepening Trends in Consumer Behaviour:

Customers are becoming more demanding – the Web 2.0 revolution has provided a forum for sharing opinions to the point where consumers really do call the shots. They expect choice and convenience or will go elsewhere.
Social Media online is exploding – and is becoming a key vehicle for both strategic marketing and customer engagement.
Premium products and services still sell well and Green is becoming iconic – many of the less price sensitive consumers are still highly style and status conscious, and consumers are going to increasingly great lengths to boycott brands that have poor eco-credentials

Ok, so that’s 3 consumer trends. How about the Retail Industry in general?

3 Deepening Trends in the Retail Industry:

The credit crunch is getting worse – and negatively impacting retailer profits
The e-channel is still growing fast – online spending in July for example reached £4.8 billion, up 80% on last year to a new all-time high. Retailers are expecting a major shift to online this Christmas.
The leaders are merging channels – and providing seamless brand and customer experiences across them all. Consumers in return are becoming rapidly less tolerant of pricing, availability or service differentials online and offline.

(Originally posted by me on the Charteris Business Blog)

Cross-Channel Retailing - ARC Retail Presentation 2008

noreply@blogger.com (Rizwan Tayabali) — Thu, 09 Oct 2008 07:37:52 PDT

I attended the ARC Retail Conference this morning and gave a breakfast briefing with some of my Charteris colleagues on Cross-Channel Retailing - see slides below.

It covers 3 critical challenges that retailers are facing right now and how they could start to address them by developing low cost, high benefit customer propositions through leveraging the channel assets they already have. Here's the slides. If you want to know more just drop me an email and we'll be more than happy to have a chat.

Cross-Channel Retailing: Leveraging Multi-Channel Assets V1

View SlideShare presentation or Upload your own. (tags: multi-channel retail)

Successful Cross-Channel Retailing Is All About The Experience

noreply@blogger.com (Rizwan Tayabali) — Mon, 22 Sep 2008 16:56:32 PDT

By merging physical and digital sales channels, retailers essentially hope that shoppers never leave without making a purchase because the experience was lacking or because items they wanted are not on the shelves. As online retail continues into its second decade, business strategies like customer relationship programmes and multichannel integration, that were once perceived as too complicated to integrate successfully, are now working in sync.

Multiple channels to market are therefore fast becoming the norm and the lines between these channels are blurring – particularly in terms of consumer expectation. Forward thinking retailers are moving towards a seamless customer experience across all channels. It is becoming less and less acceptable to have differential pricing, branding or experience across different channels, and successful retailers are rethinking both their organisational design and also their customer engagement strategies to ensure that their routes to market are cohesive.

The common perception is that the major driver for cross-channel retailing is cost saving through efficiency and effectiveness. Managing channels separately results in cost increases resulting from running separate order-management and customer service operations, multiple warehouses and fulfilment systems, and buyers and merchandisers duplicating effort across the different channels.

However, although emerging integration technology allowing cross-channel integration has been a key enabler, multi-channel growth is essentially driven by consumers. According to Shop.org, 34% of consumers today use at least three channels when shopping. Research has also found cross-channel shoppers to spend up to 10 times more, to generate 25 to 50% more profit and demonstrate greater loyalty than their single-channel counterparts.

The core driver behind channel convergence then is customer demand.

So where do you start?

Well, Recent McKinsey research shows that only 15% of loyalty is gained from perceived product quality and promotional strategies, leaving 85% to the actual purchasing and post-sales experiences of customers. Point being that whilst establishing clear and consistent products and services is essential, the experience is what makes all the difference.

So one good place to start is to get your people culturally ready to make the most of all the channels your business takes to market. Whilst optimizing content, applications, pricing and product selection across all channels is important, the basic human experience at least should be seamless across channels. The person who answers the phone at your call centre should be equally as knowledgeable about your products and services as your store staff, consumers should be able to find out when and where items are in stock, and have you deliver or let them pick up their purchases as per their convenience. The returns processes, checkout processes, and customer journeys through your store, should be synchronised with and as easy as they are on the web. All this can be successfully done through human facilitation.

In summary, we’re talking about developing a cross-channel customer-facing culture that ensures your staff are making your customer’s journey as enjoyable as possible, with a view to building loyalty through experience and thus competitive advantage.

Customer Centricity: The Basics Are Not Always Enough (Part 2)

noreply@blogger.com (Rizwan Tayabali) — Thu, 11 Sep 2008 00:30:00 PDT

Following on from Part 1, the principle of recognising that value-adds become basic needs in mature markets applies even if you're a big brand entering a new space. Lets use Google's new browser Chrome as an example.

It's simple, fast and neat and provides all the basic browsing capability that it needs to, but I bet Google didn't do any Voice of the Customer analysis around lay users before release. If they had, they would've realised that a host of conveniences they haven't included are now considered as basic functionality.

They'd have known that their early adopters outside the tech-community would be young to mid-adult. People who use Gmail and Facebook and Hotmail and Yahoo and Youtube and Del.ic.io.us, and have grown used to toolbars that connect them directly to the sites they visit often. Chrome is not yet compatible with any toolbars, so it misses all those conveniences that your average Joe is used to. Even worse, Hotmail asks you to upgrade your browser and Facebook's edit and auto update features don't work perfectly - these small things are major barriers when they affect core browsing activity. Many will also just be irrationally (?) worried about their browsing habits being monitored to learn more about them to help Google's targeted advertising, and nothing in the user experience or messaging does anything to alleviate this.

Point being that most of the people who get past the privacy issue and then bother to download the browser will find that it lacks the 'basics' and thus provides no compelling reason for learning a new interface. The hype is great. Many will download it. This could have been a fantastic opportunity for Google, but I suspect most people will go straight back to the browser they use - probably IE, resulting in Google having to come back and do a whole lot more work to drive take-up, and thus in them missing out on a golden opportunity to get the jump on Microsoft in their main domain, i.e. the desktop.

Customer Centricity: The Basics Are Not Always Enough (Part 1)

noreply@blogger.com (Rizwan Tayabali) — Wed, 10 Sep 2008 00:30:00 PDT

Customer-centricity at its basic is about ensuring the customer gets what they need rather than simply what you want to offer. This is still an improvement on what most companies provide, because it involves at least listening to the voice of the customer. Better however is to give the customer what they want, over and above what they need. This is usually costlier to provide because we're talking about value-adds. Getting the details right. Caring about your customer. The really successful brands and companies do this repeatedly. They get the basics right and then pile on the value-adds. Like Apple.

Fig. What The Customer Wanted...

Ref: http://www.uoregon.edu/~ftepfer/SchlFacilities/TireSwingTable.html

In emerging markets just addressing needs is enough to get ahead.

In evolving markets, effectively meeting functional needs is often enough for competitive advantage, but value-adds start to become differentiators.

In mature markets however, basic needs themselves become redefined to include what once were value-adds. This means that if you don't already have embedded market share, at the very least you have to match the value-adds that people have gotten used to or you don't even stay in the game.

In part 2 tomorrow, we'll look at Google's new browser 'Chrome' as an example.

High Street 2.0 - Understanding The Next Generation High Street

noreply@blogger.com (Rizwan Tayabali) — Thu, 09 Oct 2008 07:38:07 PDT

Overview:

Online and offline channels have complementary but currently exclusive benefits. On the internet, consumers can access related products, accessories, comparative price options, product information, communities, social interaction, reviews, simplified purchase, and delivery, while also being able to feedback to others about the experience. Consumers are therefore becoming used to a richer, faster, and more socially interactive shopping experience. What they cannot do is try out products for fit, look, feel, appropriateness and ease of use before buying, or even benefit from the immediacy of collecting the item at time of purchase, which are the core benefits of buying in-store.

In-store benefits unfortunately cannot practically be transferred to the online environment, or at least not until virtual reality goes a whole lot further than secondlife.com. However, there is no reason why online benefits cannot be brought in-store today. And that in a nutshell, is what I'm talking about in terms of a vision of the High Street 2.0. To stay competitive against online competition i.e. the pure plays, retailers must start developing a new generation of information and experience rich high street stores.

Download this discussion paper in pdf as below or read on for the full article

----------------------------------

The High Street 2.0 in a nutshell.
The offline-online consumer conundrum.
Why should retailers care?
What is the Key to Success?
How do you develop your Next-Generation Store?
Summary.

The High Street 2.0 in a nutshell

Jargon aside, this is primarily a discussion around cross-channel symbiosis, and the evolution of high street stores from one-dimensional product pushers into broader experience focused outlets. Somewhat in the way that the static ‘dial-up generation’ websites are now evolving along the rich experience web 2.0 route.

Some are doing this already, but more from the web-space into the offline world, like Etsy, who have just opened a real world store in Brooklyn; or ZoZa who tried a physical store for customers to try before buying online only (and failed); or former cosmetics pure play Bluemercury.com who've now set up physical outlets for customers who want to sample before buying. This shift of bringing the online experience offline is what I believe could be the start of the next generation high street – or as we call it, the High Street 2.0

The Offline-Online Consumer Conundrum

To start with let’s look a little closer at the reasons that drive customers to browse offline, only to then buy online (usually somewhere else) instead of in-store. This is hugely relevant to retailers whose primary revenue channels are their real world high street shops, not just because of the impact on conversion rates, but because the trend implies that their offline customer experience needs to be improved to provide customers with in-store access to the benefits of buying online.

Here are 10 reasons why I believe consumers browse offline but then buy online instead of closing the sale in-store

Functional Reasons for Buying Online instead of Offline

Bargains and cheaper prices (through general search and via shopping bots):
If you just want to consider one primary driver for this trend, then I'd suggest this is it. Consumers want to know not just that they're getting the best deal, but also that they aren't being ripped off in any way. The proliferation of shopping bots (price comparison sites) like Bizrate and Kelkoo are making this so much easier that it is a real threat to any retailer whose customer goes online. It probably outweighs all the others to the point of making them little more than value-add considerations. For any product that is sold by multiple retailers, this is a major risk to consider, especially now that consumers have the internet on their mobiles and can pretty compare products while actually in-store.
Validate product quality and function (via online information and reviews before buying)
For functional products, particularly electronics, I prefer to be sure I'm not wasting my money, particularly on items I can't really test out. I want to know the realities behind the sales blurb and the knockdown price, and right now there's no way of finding this or comparing against equivalents, except online at review sites like CNET.
Avoid in-store cashier queues:
I hate queuing and unless I absolutely need the product then and there, I am very likely to just go back home and order it online from somewhere.
Delivery rather than carry home on buses or trains (convenience):
If it's a hot day, or I've already got things with me, or I'm on my way to somewhere else, or I just generally am not feeling like trekking around laden with shopping bags, I'm very likely to head home and make the order online. Ideally from somewhere with free or cheap delivery/postage, or even somewhere that lets me pick-up in store at some later more convenient time.
Search for variant availability in other stores:
If the store doesn't have my size, or the colour I want, or the specific variant of the product that's customised the way I want it, I'm most likely going to leave the store and go online to see if any other branches have it, or if another shop stocks it instead. As with all the other drivers to online browsing, the problem is that I may never actually bother with the product any further, or even bother to go that particular retailer's website instead of someone else's.
Leverage online promotions / vouchers:
I know that retailers set these up to encourage people to go online, but essentially all this does is cannibalise offline sales, because the vouchers are not redeemable in-store. Personally I feel this is a major inhibitor to developing symbiotic revenue channels.

But this is not all. There are other compelling reasons for buying online rather than in-store, related to usability and social interaction. These are the new behaviours that consumers are taking for granted as an integral part of the shopping experience and one that offline stores are completely failing to replicate

Experiential Reasons for Buying Online instead of Offline

Easier payment through one-click accounts (e.g. Amazon):
Who wants go through the whole business of queuing, waiting for someone else to scan and pack your product, handing cards over and waiting for it to register chip and pin and so on, when you can simply select the item, click once and then sit back and wait for it to turn up? Why don't stores have this facility?
Accessories for product listings:
I find this very useful online. If I buy a camera in-store at PC World, I get a camera, but absolutely no information to help me consider useful accessories. If I buy the same product on their website I get a list of accessories that supplement that product – appropriate lenses, cases, leads, cards etc.
Related product listings and “Other people bought this” type information:
Similar to above, I like shopping for things in spaces where I'm provided with ideas for complementary items. If I'm buying a badminton racket, then what about related bags, shoes, apparel, shuttles etc. I don't want to have to walk around some sports super-store to find the matching bag in the bag section, or shoes in the shoe section etc. If I'm buying jeans I want to see shoes or t-shirts that might go well – ok so I personally am not enough of a shopper to care about this on a clothes front, but I can imagine a whole bunch of people who do, and sometimes knowing what other people bought is excellent fodder for shopping ideas.
Auto-history of purchases – leading to seller recommendations:
The problem with buying in-store, even from the same store, is that there is no history of what you bought. What if you wanted the same item you bought two years ago, but can't remember what it's called? What if you don't really know what you want to buy, but just feel like a quick bit of retail therapy? Isn't it great to be able to go onto your Amazon store and see lists of items that might just be interesting based on things you've bought before? Buying on a website like this is the equivalent of walking into a shop to buy an iPod, and the shop floor assistant suggesting an iRiver because it's more compatible with the speaker system you bought last week, and then handing you a selection of music that you just might like. How convenient, and how much more of an incentive to check the product out online after seeing it in-store?

Why Should Retailers Care?

The major issue for high street retailers here, is that once the consumer leaves the store and goes online, the only reason for them to visit the same store's website would be if the product identified is completely specific to that brand, for e.g. a particular clothing item. In any other case, the user's online journey will very likely lead them elsewhere… somewhere cheaper, with a more fulfilling retail experience. So understanding and countering these drivers will be key success criteria against online competition.

By highlighting the above drivers behind the trend of customers browsing in stores but then going online to purchase their items, what I'm alluding to is the need for cross-channel symbiosis rather than revenue cannibalisation as we currently have it, achieved by improving the offline experience to provide customers with in-store access to the benefits of buying online.

In other words, a shift towards physical stores offering the customer access to the benefits of browsing and purchasing online, and vice-versa, rather than developing more avenues for making each channel independently attractive to the consumer in ways that simply result in cross-channel competition.

I believe that at some point in the near future, forward thinking retailers must recognise the fact that the existing model of shops as one-dimensional rooms for showcasing products by category is fast becoming outdated by consumer familiarity with the online shopping experience. On the internet, consumers can access related products, accessories, comparative price options, product information, reviews, simplified purchasing, delivery, and bargains, while also being able to feedback to others about the experience. What they cannot do is try out products for fit, look, appropriateness, or ease of use before buying, or even benefit from the immediacy of collecting the item at time of purchase; so it is clear that both channels are not just relevant but highly complementary, and should be treated as such.

However, as far as I'm aware no one has made this leap towards a truly symbiotic, holistic online-offline customer experience. There is absolutely no reason why customers shouldn't be able to shop in-store with the same benefits as online. It just needs a little lateral thinking, starting with recognising that while the Web started out as a separate and independent commerce stream in order that companies could minimise risk while still learning about its capabilities and user models, it is now a well established and experience-driven business and usability model that can and should be leveraged to improve customer experience across channels in the physical world.

What is the Key to Success?

The key here is customer experience. Branding online is primarily about the experience, and it is making the passive, push marketing approach we've lived with since the start of capitalism obsolete. With price and quality becoming more and more homogenous on the high street, retailers must start moving towards experience focused outlets that are built around impressing and engaging their customers, rather than the traditional model of simply cataloguing or showcasing the products or services they can offer.

I feel there is significant scope to achieve this by making the in-store customer experience richer and more fulfilling by learning from the web experience.

Like Web 2.0 web-sites, the next generation high street store must demonstrate a better appreciation of the target consumer as a person rather than a product buyer. In other words it must make the shopping experience person-centric by providing space, comfort, information and social engagement, with easy points to call for help, and valid reasons to come in and enjoy the in-store experience for browsers; whilst also providing efficient entry and exit routes for shoppers who know what they want.

Retailers must conversely also appreciate the elements of the shopping experience that make store customers uncomfortable and look for avenues to cut them out, for e.g. not enough browsing space; product overcrowding; help not unavailable at the right time and place; and lengthy purchase queues.

So what could the High Street 2.0 physically look like? Well, one route might be where large stores evolve into experience-focused social spaces with products as a backdrop, while small stores leverage user computing and web technology to shift towards becoming product information hubs where consumers use touch screens to choose what they want to see, try, and buy.

How do you develop your Next-Generation Store?

Anyway, regardless of the avenue of evolution, the following are some high-level ideas that retailers could start exploring in the battle for effective channel-independent competitive advantage.

Shop Design and Layout

Support the social experience. Create shops as places to relax and engage while browsing. Widen out browsing space by reducing products on display but still allowing consumers to view more items via screens and have these brought to them on request.
How about providing comfy sofa seats for customers to relax with built-in pull out touch screens to browse product listings, or read reviews, or order and pay for items etc. in shop? Or even free lavatory facilities with interactive product information to capture interest?
Why not provide changing room tickets so customers don't have to stand around with their items at busy times?
Provide non-product specific reasons for consumers to enter and walk around. Collaborate with social networking enablers like coffee shops or bars, and design the space around this, rather than shoe-horning a coffee point into some corner of a shop as we see with Costa.
For multi-brand retailers, make shopping easier by mixing brands together by product category rather than cordoning off areas by brand as is the current norm.
Place directly related product families together e.g. A Canon camera plus its case, plus leads, lenses, memory card and batteries displayed as a group next to each other, or via a touch screen or at least a printed card next to each major product item displaying accessories available in-store and where to find them.

Self Service Information

Provide self service capability through touch screens, kiosks, or even actual PCs if you want to make the experience familiar for the customer
Provide customisation capability for customers select size, colour etc, with order and payment capability for immediate collection or delivery, or even simply to find which store has the required version and the option to place it on hold
Provide review capability for consumers to browse store and/or product ratings and reviews
Provide browsing capability for customers to interactively scan through products available, related to an interactive map to find the item in-store
Allow customers to use these screens to select and request items to try, with in-store sales assistants tasked to put the selection together at changing rooms or tryout points
Allow customers to create visualisations of outfits, with workflow that suggests other options, and then be able to select to get the whole ensemble provided by a sales assistant for them to try on directly at the changing rooms
If you are really brave and/or price competitive, why not be open and allow direct in-store price comparison against competitors. Frankly this could even be a business idea in itself to set up stop off points on the high street where shoppers can pop in and run quick price comparisons or read product reviews of things they're about to buy in a nearby shop. Maybe this could be combined with a bar or sandwich space, with this service as a free value-add and supported with revenue through the advertising opportunities it would create.

Simpler Purchasing Options

Provide self checkout terminals
Allow customers to create ‘one-click' style accounts in-store using self-type pin or password verification synchronised with online services and vice-versa, i.e. recognise one-click accounts created online.
Incentivise buyers to go online and register one-click accounts and credit cards, like Amazon have online. Maybe provide offers or free credits that are only validated once this is complete, but which are redeemable across any channel
Use these accounts to create and maintain purchase histories that can be accessed in-store and leveraged to create value for the consumer.

Relevance

Ensure one consistent view of each registered customer with seamless multi-channel integration across both billing accounts and product history
Use buyer history to recommend other items worth looking at, or suggest items other people bought – maybe even provide these as a printout when handing over purchased items?
Recommend complementary products when making a sale – again this could automatically be printed out on item scan and handed to the buyer
As with the previous point, consider suggesting related accessories for products being purchased. Complementary and accessory products could alternatively be highlighted at point of display through item grouping, touch screens, flip-cards etc.

Value-Adds

Allow online vouchers to be used in-store and vice-versa. Avoid promotions that result in one channel cannibalising sales from another, for e.g. single channel discounts
Ensure that online and offline prices are consistent for the same type of purchase, for e.g. if ordering for home delivery in store, the consumer should be able to pay online prices. This could be made viable by ensuring that the item will be delivered from a warehouse with cheaper overheads allocated to it.
Allow customers to specify delivery, and ideally time-slots, while paying for items in-store
Provide try and return policies with free return postage or easy access PUDOs (pick up and drop off points)

Leverage Email and the Web

Capture email address at point of purchase and use it to auto-create user accounts on the store website. Email log-in details straight to the user, along with purchase, receipt and product guarantee details. Auto link product details in the email to review capability.
Design the website to support the in-store experience, rather to compete as a separate and unique online entity
Collaborate/tie-up with online social networking sites and bring elements of these in-store – e.g. say Zara advertising on MySpace online, while creating a range of MySpace branded clothing for sale in-store
Create and develop free but branded popular culture spaces to embed brand and create new target audiences – e.g. Gap creating a free and open clothing review and discussion site that is only minimally branded to Gap, but effectively creates a new audience.

Summary

To summarise then, I see the High Street 2.0 comprising information and experience rich stores, where consumers can enjoy the benefits of both web and in-store shopping; developed by retailers with a channel-unified approach to pricing, marketing and consumer relationship management, and supported by seamlessly integrated information about target audiences across both online and offline channels.

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Download this article (pdf).

The Future Is Chrome... Or Is It?

noreply@blogger.com (Rizwan Tayabali) — Mon, 08 Sep 2008 08:02:40 PDT

So Google has released their new browser called Chrome (read about it in my post... Google's new browser muscles in on Microsoft) and everything I've read since then is proclaiming it as the future. Well, I'm not so sure.

Beta Problems

Let's start with the immediate stuff. The problem with releasing a beta version of course is that it doesn't yet have all the functionality of its established competitors. Chrome is in Beta and isn't functionally integrated with all the conveniences we've gotten used to. Here's an example - It is probably going to be a while before you can get toolbars for Chrome, which is very limiting. I use Del.ic.io.us, Google and Zemanta's toolbars. You probably use Yahoo or whatever. Until we can get versions of them for Chrome, there's really no sense in switching over.

Of course knowing Google they will learn very fast, but the speed at which the message about Chrome will spread means that a lot of people will download the beta, find that it is missing conveniences they're used to and give up on it right there. People hate stumbling over obstacles if they have working alternatives.

The main sell is that there's also lots of exciting tech stuff. A new javascript engine - do you know what javascript is? Runs Ajax faster. Do you care? Apparently this makes it the fastest browser ever... in microseconds for developer applications. To me it seems about the same as IE from a normal browsing perspective. I doubt you'll notice the difference.

So Is the Future Really Chrome?

Short answer is No.

Everyone's expecting this to be huge, but they're really they're all tech-savvy types, and not your average Joe. Personally I'm not so sure.

My main issue is that I don't see the mass market. The fact is that in any given space, once products, services or applications have matured enough to become fit for purpose, until the purpose fundamentally changes, there really is no gap to exploit.

In the computing space, operating systems, browsers, and office applications come free with the hardware. They are now sophisticated enough in functionality and user experience to do pretty much what any layman wants to do, and well enough to ensure complete satisfaction. Our computers don't crash often; existing browsers render text and multimedia fast and accurately; and there really isn't much else that most people need out of Word.

So what's the incentive? Brand? Google isn't Apple, and even if it was, how many people have ever downloaded Safari to their non-Apple machines? Do you even know what Safari is?

In a Nutshell

Point I'm making is that until the way we browse fundamentally changes, new entrants really have nothing to add for the majority of users. The future is touch screen and voice commands. When these start to become ubiquitous, what the mass market needs from browsers will change. At that point there will be a big gap for new entrants.

If Chrome was setting itself up to exploit that change, we'd be looking at the early rumblings of a browsing revolution. But it isn't. - The browser is not finger touch oriented in anyway, and in fact the functionality has become more mouse based, fiddly and precision oriented. There isn't even the 'alt' functionality needed for disabled access technologies.

So no, for the moment I don't really see Chrome taking over the world. I suspect it will be just another player like Firefox. I'll be keeping an eye on it anyway from the perspective of USP development, so if anything new comes to light that changes my view, I'll be sure to keep you posted!

Everything is perfect until people get involved!

noreply@blogger.com (Rizwan Tayabali) — Tue, 02 Sep 2008 05:00:02 PDT

Does this sound familiar? You've had a genius vision for a service or product or campaign. Worked out the revenue streams and ROI model. Got decision maker buy-in. Planned it out. Branded it. Built it. Executed every detail perfectly. Launched it. And then found that people don't use it the way you expected!

This happens all the time. Some great examples at the failblog.org website. People either don't get what you were trying to achieve, or they use it for some other purpose, or they ignore you altogether and go right ahead doing what they always did. Sometimes even other members or departments in your own organisation don't deliver it the way you expected.

You wonder what happened. And then someone asks whether you tested any of your ideas on your audience before getting it out there?

This is a classic mistake that organisations traditionally make. As creators of products and services we think we know best. We think we understand our market because we've been in business a long time, or because we imagine our audience to fit some imaginary persona, or simply because we expect our audience to be the same as us.

Here's 3 ways of making sure you don't have any unpleasant surprises when you go to market with your new offering.

Identify Target Audience
Identify your target audiences and create focus groups that cover both the people who are the target audience and also the people who will be expected to deliver the service or product. Incentivise these groups so that they have enough reason to care about what you're trying to achieve.
Create Focus Groups
Run your generic ideas past the focus group. Remember that users can only tell you what they do or don't like. They rarely help you innovate, so you'll probably still have to craft the product or service yourself and make judgement calls. Rest assured you'll learn a lot though.
User Test Your Offering
Involve the focus group in the detailed development of the product, system or service. In other words ensure you have sufficient user testing before you go live. These are costs that most organisations skimp on, but its the best money you'll spend in terms of return on investment.

The 3 Most Critical Trends Retailers Should Be Focusing On For 2009

noreply@blogger.com (Rizwan Tayabali) — Mon, 01 Sep 2008 03:06:04 PDT

Credit Crunch
The subprime mortgage crisis in 2007 has had a major ongoing global financial impact, not just on consumers but on businesses too. The effect of the global credit crunch on business and consumer spending means that retailers will have to find ways of innovating without the luxury of growing profit margins and flexible budgets in order to create / maintain competitive advantage.
Social consumer behaviour
With the ubiquity of digital technologies and associated social trends, consumers are becoming used to faster, easier and more collaborative ways of shopping. Competition in the digital space is non-local, rapidly expanding, and thus much greater than in the physical space. Firms that are not part of the social conversation or which do not go out of their way to make it easy for consumers to find, engage and purchase their products will struggle to compete.
Channel convergence
Multiple channels to market are fast becoming the norm, and the leaders are moving towards a seamless customer experience across all channels, underpinned by a single data view of their customers regardless of channel. It is no longer acceptable to have differential pricing, branding or experience across different channels, and successful retailers will be rethinking both their organisational design and also their customer engagement strategies to ensure that their routes to market are cohesive.

We've been developing an understanding of these challenges along with recommendations and solutions for addressing them at Charteris, which is the management consultancy I currently work for. If you're a retailer and want to know more, feel free to get in touch.

5 Presentations on Business Model Innovation

noreply@blogger.com (Rizwan Tayabali) — Mon, 01 Sep 2008 03:06:25 PDT

Business model innovation is crucial during times of economic crisis. It's about new ways of monetising existing services to minimise cost to market, and of finding new and innovative ways of engaging with your customers. Here are some useful presentations on this topic.

Trendspotting For The Next Decade: 2011 and beyond

noreply@blogger.com (Rizwan Tayabali) — Mon, 01 Sep 2008 03:06:49 PDT

Richard Laermer has just published a book on trendspotting called "2011: Trendspotting for the Next Decade". It's about how you can learn to pick out useful signals from all the noise around you, and what to watch out for over the next few years. One particular reason for highlighting it is that it's free. Laermer believes the future is about information openness and has convinced McGraw Hill to publish it free online.

You can download it free from www.freebabyfree.com

I'll be reading it over the next few days and will put up a review when I get a chance. In the meantime here's a video of Richard being interviewed by the guys at Mashable, discussing his ideas and future trends.

7 Ethical Ways To Persuade People To Buy

noreply@blogger.com (Rizwan Tayabali) — Tue, 29 Jul 2008 08:24:51 PDT

Persuasion is not about manipulation. Here's 7 tips based on tapping into human pyschology.

Show what others are doing
Show user generated reviews
Show scarcity of products
Persuade with pictures and videos
Cross and Up Sell
Show authority
Allay people's fears

For more detail see the original post by Lisa Halabi on the Usability News site.