Off the Shelf: The Retail & CPG Blog

In my last posting, I talked about the impact of requirements on performance.  Another reason for the slowness of Web sites is the number of moving parts that could be performing poorly. Let’s look at  the most important components in your customer’s Web experience:

·         Browser – The browser is the first touch point.  All browsers are not created equal, however because they multithread.  In fact, the most modern releases of browsers can open 3 to 4 times as many connections as the old ones.

·         The Internet – Like it or not, we are all at the mercy of the Internet providers that we subscribe to.  In addition, they are at the mercy of the “big pipe” owners who manage the large connections between regions and continents.  Plus, we are all at the mercy of the Internet Standards like HTTP, TCP and IP.   The combination of these creates a phenomenon sometimes call the “Internet Weather”.  This means that the Internet is slower on some days and faster on the others in a random fashion that comes and goes like the weather.

·         The Site Hosting Environment – Requests eventually arrive at the physical location of your site, passed to you by your Internet service provider.  Once within your network, response time is subject to your network traffic, firewall restrictions, security checks and load balancers.  Any of these can cause performance to degrade if not configured properly.

·         Web Server – The humble Web Server’s job is to take HTTP requests in, hand them to your site and send your responses to the user.  If configured poorly, they can be a source of slowness.

·         The Application Server – Most of the big eCommerce sites use either WebSphere Application Server or JBoss to process the request.  These components are very complex and must be tuned properly.

·         eCommerce Framework – Commercial products like WebSphere Commerce Server,  ATG,  and Microsoft Commerce server are essentially libraries of prewritten commands that you either use out-of-the-box or modify them, then use.  Needless to say, the quality of these components is critical to your performance.

·         Interfaces – Your site is interconnected to somewhere between 20 and 150 pieces of software that are outside of your control.  Many of these sites are internal, but others are services that are run by “software as a service” vendors.  Any of these can create a slowness in your response times if they respond to you slowly.

·         Your code – Finally, the code that you write has a huge impact.  Poor design and coding can ruin your chances for a good customer experience.

 

The fact is that any one of these can cause your site to perform poorly.  This can transform your job from software engineer to detective as you try to figure out where the problem lies.

Posted by Stephen Alan Potts at 8:10 PM | Permalink | Comments (0) | TrackBacks (0)

I was watching the Singapore Formula 1 Grand Prix last weekend and it got me thinking on the level of efficiencies achieved by each of the racing teams. Each Formula 1 race car has over 80,000 separate components. There are over 3000 component diagrams that the car is based on. The cars are designed, manufactured and built in 120-150 days and they are transported to 17 Grand Prix races every year in different parts of the world. Inspite of this level of complexity, you rarely see starting grid problems. This is unimaginable without the efficient PLM systems they have in place to rapidly design and share specs, manufacture and build with a large group of collaborators around the world.

The CPG industry faces similar challenges with product information fragmented across thousands of SKUs that differ in minute details such as color, labels and composition. These challenges can be addressed with innovative PLM solutions.

Well built PLM solutions help manage
1) Product Data: "Single version of truth" for all product data. Streamlined, well organized product data is a key success factor for faster NPDI leading to a competitive advantage
2) Specifications: Spec Management helps manage formulas and ingredient specifications centrally. This in turn helps in traceability and compliance screening leading to faster reaction to changing laws and regulatory requirements
3) Packaging & Art Work: Efficient management & assembly of packaging materials, label specifications and art work is important. Integrating with the product development data increases accuracy
4) Product Portfolios: Product Portfolio management is used to prioritize projects based on strategic planning initiatives. This helps align resource allocation to projects against the expected return on investment for each product

While a lot of CPG companies have embarked on a PLM initiative to drive efficiencies through the above aspects and are at various stages of implementation, I think there are bigger questions that need to be answered, especially in this recessionary economy.
·          How will you enable rapid and collaborative product design to further reduce idea to shelf cycle time?
·          What steps will you take to rationalize your product portfolio?
·          How do you improve the product assortment to drive higher sales of more profitable products?

I intend to cover these and related topics in my subsequent blogs

Posted by Vishnu Veerubhotla at 7:24 PM | Permalink | Comments (0) | TrackBacks (0)

For the last few weeks, I have been very much occupied during my weekends in trying to build my Farm and my Mafia gang. Before you start wondering about my spare time activities, let me reassure you that I’m actually referring to two of the hottest games on Facebook from a company called Zynga. The games being referred to here are “FarmVille” & “Mafia Wars”.

This led to the question - Would games from Retailers or CPG companies be an effective tool for social marketing and gathering customer feedback on new products & initiatives?

There are certainly some interesting pros to this thought. According to these statistics from the Entertainment Software Association (ESA): http://www.theesa.com/facts/salesandgenre.asp - Family Entertainment games account for around 19% of the $11.7 Billion revenue in gaming generated annually.

In-Game advertising is estimated to go up to $1 billion by 2010. As per this ESA link, http://www.theesa.com/gamesindailylife/advertising.asp, companies like Mazda & Nissan have rolled out sample car models in games like “Gran Turismo” & “NFS: Undercover” even before the actual cars are rolled out to the public.

Retailers & CPG companies can use these games to soft-launch their new products and gauge market responses. Also, given the successful penetration of mobile apps such as the ones running on iPhones, it would definitely save a lot of money which they would otherwise spend in generating market awareness and in other campaigns.

I can imagine that I would be very interested in playing a game wherein I try to build a store or a supermarket or a restaurant and try to sell food products, beverages and beer. Imagine the scope (and challenge) of trying to virtually launch or sell a chocolate for example with lavender in it to your group of friends on Facebook. Add in the complexity of actually having deliveries done from your local farm – Even FarmVille to your virtual store, we have the entire Retail, CPG & Logistics area covered.

For the more serious gamer/social networker, there are also virtual world playgrounds which are offered by the likes of “Second Life” developed by Linden Lab. However, as per this Wikipedia link http://en.wikipedia.org/wiki/Second_Life there may be issues in marketing products via second life due to issues with accuracy of statistics. I personally believe that this is more due to the issues in their technical systems and not in the concept as such. If there are systems which will give the right analytics with the necessary audits and controls, the data will be trustworthy.

The other aspect however which needs thinking in the case of “Second Life” is that users will need to install a separate client on their computers before they are able to enter the virtual world. I did install the client to check it out, but then realized that I would rather use a browser than running a separate client all the time as I use multiple PC’s.

So, do you think it would work if retailers or CPG companies use this gaming medium and would you be willing to play along?

Posted by Anand Ramakrishnan at 7:30 AM | Permalink | Comments (0) | TrackBacks (0)

The fashion apparel industry has a unique problem - designing and forecasting the demand for their latest collections and lines. The designers naturally base their designs on their inspirations and new innovative concepts. Which means that the seasonal lines and their associated characteristics could vary dramatically each season. While creativity drives designers, at the same time it is important to create lines, styles and collections that connect with the consumers and sell fast. One of the problem is that many of these collections /lines are increasingly required to connect with an increasingly broad audience with growing importance of the international markets, and expansion of target segments. How do designers stay in touch with the changing consumer?

Merchandisers and planners also need to figure out exactly how much they might end up selling of each line. The typical demand forecasting tools used by many consumer goods companies, including those apparel retailers with relatively standard products, don’t work so well for truly creative design houses. For instance, last season’s yacht themed summer collection might have sold out fast but the demand pattern might be very different for this year’s Hamptons-themed summer collection. How do merchandisers forecast demand accurately?

I think part of the solution is by using Web 2.0 concepts like “tagging” and then using predictive modeling using tags.

So, how exactly do you tag the past? For past collections, designers, planners, marketers, merchandisers and consumers are asked an open ended question, “What did you think of that line/ collection? What comes to your mind?” – kind of a word association test but with actual garments. The audience’s description is captured as tags, and a tag frequency map created. For instance, the yacht themed collection might end up with tags such as cool, relaxing, adventurous, sporty, white, ocean, tropics, classy, yacht, etc. This is repeated for each line from the recent past. At the end of a short exercise, there would be a tag map for each line. Then the sales data for each past line is mapped to these line tag map. Over multiple seasons, a “tag pattern” would emerge that would show the tags that are growing sales and those that are not.  

And how do you use the tag maps? When designers are in the process of designing new collections and lines, a similar tagging/ association exercise is done based on their paper designs or physical samples. Those lines that are out of sync with the hot tag trends could be discarded or reworked.  Subsequently when the designs are baselined, predictive demand forecasting using advanced statistical techniques can be done to help the merchandisers and planners come out with overall demand. This can even be taken to the next level of granularity to predict demand at store level based on past tag maps that have sold well at the store.

Of course, this approach is not a silver bullet and some truly path-breaking themes need to be excluded. For instance, concepts that aim to change the customer thinking and start a completely new fashion trend.

Do you think this approach would work? Is there applicability in segments beyond seasonal apparel?

Posted by Aditya Mittal at 10:26 PM | Permalink | Comments (1) | TrackBacks (0)

By Simon Harper and Zoe Schagrin with support from Magan Arthur

There is no doubt that new technologies are causing a permanent shift in the way companies and consumers communicate.  But what makes these new channels so attractive – low cost, ease of implementation, global reach – also makes them dangerous for companies who don’t understand their nuances or just how drastically digital marketing has evolved.  Some of the biggest names in business have entered the new digital marketing arena with good intentions only to wonder “how could it have all gone so wrong?” 

Digital marketing blunders aren’t just the domain of small firms making rookie mistakes.  Some of the biggest names in business have had recent misstep or learned lessons the hard way as outlined in these high profile examples:

Starbucks’ Twitter Campaign

Starbucks recently launched a digital campaign which involved hanging a series of posters in major cities and asking contest participants to find and photograph them.  The winners were those who first found each poster and uploaded a photo of it to Twitter using predetermined hash tags.  Unfortunately, an anti-Starbucks activist and filmmaker was launching a YouTube video the same day condemning Starbucks for its labor practices.  He read about the contest in the New York Times and made a post on his anti-Starbucks blog for users to instead post photos of themselves holding politically charged anti-Starbucks posters.[i]

Starbucks ultimately had to abandon this part of their campaign which ironically served as excellent buzz for the filmmaker, Robert Greenwald.  His video had 30,000 YouTube views and made it to the first page of Digg.  Greenwald explained, “I think that the corporations will learn very quickly that if they want to function in a social marketing arena, then they’re going to have to change some of their practices or else they’ll have to get out.”[ii]

‘Wal-Marting across America’:

In late 2006, an American couple named Jim and Laura began an RV journey to ‘Wal-Mart across America’.  They planned to take advantage of Wal-Mart’s policy allowing RVs to park overnight in store parking lots.  The couple setup a travel blog to capture their adventures, but there was no indication that Wal-Mart had any affiliation with Jim, Laura, or their blog.  However, when posts began to read like company propaganda and the couple seemed to be playing the role of corporate puppets, readers became suspicious.  One reader in particular challenged the couple to “reveal” themselves and provide information as to their financial backing.

Ultimately it was revealed that while the couple had approached Wal-Mart to seek approval to park in store parking lots, Wal-Mart had supplied the RV and was covering travel costs.  Wal-Mart even paid Laura, a writer by trade, a fee for her blog postings.  In its desperation for good press and desire to create a new connotation for the term ‘Wal-Marting’ (commonly used to describe how large retailers drive out small businesses) the company violated one of the tenets of digital marketing – be genuine and transparent. [iii]

Sony’s PSP Blog
A blog supposedly managed by Sony PSP fans was setup to help their friend get a PSP for Christmas.  However, savvy consumers recognized that the blog’s URL was registered to a marketing company and began to question the authenticity of blog posts like the following:

“...we created this site to spread the luv [sic] to those like j who want a psp! …consider us your own personal psp hype machine, here to help you wage a holiday assault on ur [sic] parents, girl, granny, boss—whoever—so they know what you really want.”[iv]

Rather than owning up to the disingenuous campaign when pressed, Sony instead tried to contain the negative buzz, employing the same hip-hop oriented language explaining, ““yo where all u hatas com from... juz cuz you aint feelin the flow of PSP dun mean its sum mad faek website or summ... youall be trippin.”[v]

However, after continued pressure the company finally owned up and posted the following on their site:  “Busted.  Nailed.  Snagged.  As many of you have figured out (maybe our speech was a little too funky fresh???), Peter isn’t a real hip-hop maven and this site was actually developed by Sony. Guess we were trying to be just a

little too clever. From this point forward, we will just stick to making cool products, and use this site to give you nothing but the facts on the PSP.”[vi]

The campaign was a huge embarrassment for both Sony and its marketing firm Zipatoni.  Ultimately, the effort was successful in creating a viral buzz, but not quite what either company had hoped for as angered consumers voiced their grievances on blogs and videos:

While traditional marketing campaigns such as TV advertising have typically required an extensive upfront investment of time and capital and have given the advertiser full control of the message, today’s digital marketing campaigns are a totally different breed.  Advertisers today don’t dictate the dialogue, they merely initiate a conversation.  Publishing a blog post, a YouTube video, a Twitter Tweet or a message across any other digital channel is simply a launching point. 

The same audience that stands to make your message the next big thing can also use the same channels to launch a viral campaign condemning your business or brand for its customer service, poor labor practices, or product quality.  Just ask Dell, where a single active blogger preaching about what he described as “Dell Hell” ultimately caused the company to revamp their entire customer service methodology.[vii]

In the examples highlighted and in our additional research, we have identified that digital marketing missteps are often due to one of the following:

·         A lack of transparency or authenticity

·         A hastily assembled campaign due to the easy ability to create and distribute digital content

·         The digital campaign is a ‘one off’ and not integrated with the larger brand message

·         Failure to monitor the message after launch  and/or the lack of a mitigation strategy

·         An inability to balance controlling and protecting the brand while providing consumers a voice

We believe that implementing a governance structure and program can be critical to playing ball in the new digital marketing arena and can help mitigate many of these common missteps.   An appropriate governance structure won’t guarantee that your firm will launch the next viral YouTube hit , but it will help you to ask the right questions going into a campaign and to get it back on track when it begins to take on a life of its own.  

Governance is certainly a vogue concept, applied to everything from data management to corporate portals.  Yet governance is curiously only modestly applied to the area of digital marketing.  So what is governance and why does it need to be applied to yet another domain?  Governance implies general oversight and broad program management – it involves clear and consistent policies as well as defined processes for decision making.  It goes beyond simply developing a one-off campaign to actually formalizing a structure and approach to the channel.  In the context of digital marketing, we have identified four primary components for a successful governance program:

1)       Develop and promote a clear and consistent strategy

2)       Define and track metrics for ongoing value tracking

3)       Develop a mitigation / response strategy for undesired feedback or unsuccessful campaigns

4)       Develop a strong, cross-departmental governance team 

Focusing on these areas can ensure a well-planned, long-term DM strategy and can help to prevent many of these common mistakes from being made.  Furthermore, a well-planned governance team and program can ensure if a mistake or issue occurs in a DM campaign it is quickly dealt with and resolved.

DM campaigns are commonly flawed by their design in isolation of other organizational initiatives.  Developing a clear and consistent digital marketing strategy to be applied to all digital marketing channels can ensure that the programs are consistent, in-line with brand images, and convey the desired message.  This will allow campaigns to build upon one another, strengthening the company image and voice rather than delivering inconsistent or competing messages to the consumer. 

While defining the DM strategy, it is critical to remain true to company values and behaviors.  One must keep in mind that the digital age swings both ways.  Consumers are smart and messages spread quickly.  The same viral power that can help a new commercial take off can also empower a campaign detractor.  Consumers can see through transparent or dishonest campaigns, as demonstrated by the Walmart and Sony examples, and they will surely make their protests heard.  As such, it is important for all campaigns to remain true to the company values and to represent the organization honestly.

Strong governance necessitates the definition of clear and consistent metrics tracking.  Digital channels allow for rapid changes in campaigns and the continued tweaking of message.  Therefore, it is imperative to continuously monitor campaigns and react rapidly if they are proving ineffective.  The benefit of DM channels is that rapid changes are possible, as opposed to traditional channels which require months of planning and cannot be altered after launch.  This advantage should be leveraged in campaigns.  Feedback from consumers should be monitored and responded to as necessary.  A number of software programs from Webtrends to Salesforce.com exist to allow for DM monitoring of Twitter, Facebook, and other online applications, and this information should be taken advantage of in understanding the effects of a campaign.  Additionally, monitoring the success of each channel and campaign can help to determine proper resource and funding allocations. 

Integrating social networking tracking techniques can help identify a failed campaign or potential issue early on.  A mitigation and response strategy must, in turn, be defined well in-advance to address these problems once they are identified.  Having an action plan in place can help to 1) react quickly and definitively 2) adapt the campaign as necessary and 3) ensure that the same mistakes are not made going forward.  In the PSP example above, Sony responded poorly to the accusations of insincerity and in-genuineness by continuing to hide behind their character front, and the language used in their response “yo where all u hatas com from…” seemed to simply aggravate the situation even further.[viii]

Another component of strong governance is developing a governance team.  This team should oversee DM campaigns and provide strategic guidance for new projects.  As such, the governance team should monitor program metrics and consumer feedback.  It is important for this team to include a mix of cross-department resources.  Proper staffing of this group can bring knowledge and representation to DM from a number of different background and areas.  A diverse team can both offer new perspectives as well as prevent a single department from laying claim to Digital Marketing channels within an organization. 

Governance can also help provide the structure and funding for centralizing DM programs and applications, initiatives leading to greater efficiencies and reduced costs.  One such approach is the new ‘digital workbench solution’ Infosys Technologies is currently developing.  The solution offers an integrated platform for developing, sharing, and reusing content across multiple advertising agencies and portals, thereby providing reduced time to publication and lower creative development costs.  Infosys Technologies has developed a number of solutions to centralize digital resources and make digital campaigns more effective.  Organizations investing in large DM initiatives should consider similar solutions in order to make their programs more efficient and retain DM materials for future use.

As companies allocate additional funding for digital channels, it becomes increasingly important to go in with the ‘right’ approach.  Mistakes can result in major and unforeseen consequences, as seen here.  Applying a governance framework and developing a strong governance team can help to ensure that digital marketing and social media programs are undertaken and maintained successfully.  While digital channels continue to evolve, they no longer represent new territory.  Companies must be smart about how they play the game, as savvy consumers often leave little room for mistakes.

Posted by Simon Harper at 11:23 PM | Permalink | Comments (3) | TrackBacks (0)

From ideation to making the product available on the shelf, a typical CPG company spends majority of their promotion and advertising dollars on traditional channels- TV, radio and newspapers. Now pause for a moment and consider this:

• Close to 300 million Facebook users- a potential consumer base equivalent to the size of the US population!
• More than 100 million users log into Facebook at least once a day.
• 7 million unique visitors in Twitter in Feb 2009 – that’s a growth of 1382% over last year

With such exponential growth of digital traffic, are the rules of engagement beginning to change? Can CPG companies afford to ignore this new ‘emerging digital market’ and its potential purchasing and influencing power?

Let’s take a look at how companies are reacting to this new awakening. In 2009, the first sighting of Britney Spears’ new back-to-school commercial for Candie’s wasn’t on TV. In fact, it was on Facebook and Twitter. Recently, Bebe launched its new jeans on a friendly blogger’s site where chatter was positive. They used this as a ‘test platform’ before showing them elsewhere. PepsiCo ran their AMP Energy drinks promotion on Facebook and so did Coca-Cola with their primetime Vitaminwater promotion. Dozens of other companies are active in such social media- P&G, Nestle, Unilever you name it. One thing is for sure- CPG companies are realizing that they cannot afford to ignore this world. So what are the drivers?

• Opportunity to directly engage with consumers
• Collective purchasing power
• Best form of advertising- word of mouth in social circles; recommendations from someone you know

Well you would think that the CPG companies are reallocating a substantial portion of their budgets to focus on the digital world. Trended data show that TV spend accounts for about 58% of total ad spend and this has been a consistent share of total ad spend since 2005. However, we see that so far in 2009, internet ad spend has increased from about 2% to 4%, but these ad dollars were reallocated from newspaper and radio (source: TNS Media Intelligence). The defining moment will be a shift from TV- that in my mind will be a clear metric on how serious the CPG companies are towards internet and social media.

Research data is encouraging- $455 million that companies spent on social networking in 2008 will balloon to more than $3.1 billion by 2014 (source: Forrester Research). The latest data shows that 81% of US consumers use the internet for product research and 71% purchase online (source: Pew Internet Study). From a CPG company’s perspective, this warrants a reexamination of their go to market strategy and increasingly digital is the winning choice.

Posted by Anindya Trivedi at 1:38 AM | Permalink | Comments (0) | TrackBacks (0)

Mobile marketing 2.0 wave is here and it is now. However one of the dilemmas confronting retailers is whether to build branded applications vs. create syndicate (generic) applications. Retailers need to consider the decision of creating their own branded mobile services e.g Whole Foods, Market Recipes vs. creating a digital brand as part of generic mobile services e.g Kroger Mobile Coupons on Cell Fire.  This is a strategic decision with multiple critical implications. 
·         Convenience to Digital Shopper: For example, in case of digital offers and coupons that can be clipped into a digital wallet and electronically redeemed at the POS through a loyalty card, syndicated services provide a greater convenience vs. consumers  having to work with 10 different applications from 10 different retailers.   One stop applications that consolidate mobile services across brands and retailers have the advantage of providing more convenience to digital shoppers.
·         Market Reach: Syndicated applications also have the advantage over branded applications in terms of reaching out to larger consumer markets. This is simply due to utilization of more distribution channels including all participating retailers’ and brands’ marketing channels as well as their own channels. 
·         1:1 Marketing: Most generic mobile marketing applications today do not have capabilities to target consumers based on demographics, shopping history or geography.  For example, Cellfire, which is a mobile coupon service offers same coupons to all shoppers located anywhere in the US.  Several large retailers on the other hand are developing their own branded applications for enabling more targeted 1:1 marketing. 
·         Total Cost of Ownership & Time to Market: Every marketer has a “cool” idea to take into the digital world but time-to-market and cost of entry can be overwhelming.  Generic applications have a significant advantage over branded applications in terms of lower cost and faster time-to-market; however, out of the box functionality of generic applications may not fit the requirements in many cases. 
·         Custom Widget and Functionality Development: Ability to create unique functionality based on each retailers go-to-market strategy and business model is crucial but most generic mobile applications do not support this capability.  
·         Intellectual Property (IP) & Customer Data Privacy: The way retailers cluster their consumers and unique marketing strategies targeted to these segments or “personas” are important pieces of a retailers’ intellectual property and therefore it is extremely confidential.  While internally developed (branded) applications ensure the protection of strategic assets, generic application providers need to find out creative ways of addressing this issue.  
·         Large Integration Capability: Mobile marketing strategy should be in sync with overall digital and traditional marketing strategies and events and the efficient management of this process requires mobile applications to be integrated in larger CRM systems.  However, most application providers lack large integration capabilities. 
·         Shopper Loyalty: Several factors mentioned above such as convenience, 1:1 marketing and custom functionalities (widgets) are key drivers to create shopper loyalty and no branded or generic application provide the best approach across these areas for creating shopper loyalty. Branded applications can drive more loyalty however lack the larger market reach as mentioned above.    
Both Sinan and I would like to hear what you think?
Sources:
¹: Media Brands, Magna, Mobile Advertising Forecast, May 2009
²: eMarketer, Geoff Ramsey, CEO, 7 Predictions for 2009, January 2009
³: Mobile Digital Marketing – Ride the Wave, Avoid the Wipeout , Sinan Gurman & Joydeep Haldar, In press

 

Posted by Joydeep K Haldar at 5:35 AM | Permalink | Comments (0) | TrackBacks (0)

I purchased a digital camera from Amazon recently, and was thrilled with my shopping experience. The site not only helped my buying decision by providing detailed product information, reviews and competing products; it also all recommended items that are frequently bought together with the digital camera (4GB memory, camera case) and informed me about what other buyers have typically viewed and bought while shopping for a digital camera. I spent a good 30 minutes to make my purchase and was left with a feeling that the website is very interesting and a ‘must visit’ for future purchase.

Compare this to my typical grocery store visit, which happens at least twice a week. I go in with a shopping list and broadly know the aisles I need to go. I have a few coupons from the Sunday newspaper.  I pick up items from the list, preferring the brands for which I have coupons. I pay attention to the calorie, fat, sugar and sodium content and opt for healthier option if the difference in price is not very high. In the last 1 year, I have seen that the store brands (private label) provide me much better value compared to the National brands and my shopping basket has more and more of the store brand items. Once I am ready to check out, I look for the cash register with the shortest queue. Many times, this is the self check-out counter. On checking out, I get a coupon for an item that the store is promoting. I end up throwing this away most of the time as it is not something I am interested in purchasing.

The difference is very stark; mainly because one is an online experience for a high value item compared to the other which is a brick & mortar experience for low priced grocery items. I am still intrigued by the Amazon experience and wonder what it will take for Grocers to provide such experience to shoppers. Will it be worthwhile for them to do this? Most of the grocery stores have tried to develop a competitive advantage by focusing on low cost leading to low prices, store locations or product features (breadth & depth of assortments, availability, quality, etc.). Some have also attempted to differentiate themselves by improving the in-store experience of the shopper by having better store layouts, shorter check-out times and offering services like Video
Rental, Bank, Bill payments, etc. I do not believe many have attempted to use end to end customer experience as a differentiation strategy.

What do I mean by end to end customer experience? It starts from the time the shopper start preparing for her shopping trip. She makes a grocery list, looks for coupons and specials, chooses the store she wants to go to, goes and shops at the store, makes product choices based on things important to her (health, lifestyle, convenience, brand, price, etc.).  I believe there is an opportunity for grocery stores to provide a unique customer experience across all stages
of this end to end shopping trip. What if the shopper has a tool to:

- Prepare the grocery list
- Provide her with the product alternatives for items on her list with value added information like nutrition facts
- Bring up the coupons and specials in her home store
- Provide the aisles / locations for the items on the grocery list
- Provide suggestions for additional items based on the grocery list (‘Most of the people who bought this salad mix also bought Kraft’s Ceaser Salad Dressing’)

This is just an example but my point is that it is possible to create a unique shopping experience for grocery shoppers in the brick & mortar world. I believe this will create a unique differentiation in the minds of shoppers who are looking for a better shopping experience in the grocery stores. This will create loyalty resulting in the Grocers ability to command higher prices leading to better profitability in the long run.

Posted by Rahul Bindlish at 5:33 AM | Permalink | Comments (3) | TrackBacks (0)

Five years back, many organizations would have considered investing in their Enterprise Data Warehouse (EDW) as a more 'nice-to-have' rather than a 'must-to-have'. Even organizations who ventured into an EDW initiative had a mindset of creating a data repository and didn’t think of creating a Business Intelligence (BI) capability. There were lot of pitfalls in this approach where the IT organization didn’t have much idea of the usefulness of the data and the business users had no knowledge of the data in the EDW and how they could affect their decision making processes. In effect, EDW was not given the right focus till few years back.

Times have changed and there has been a paradigm shift in the thinking of organizations. From the days of creating an EDW, which was a monolithic dump of data, today companies are creating strong and robust business intelligence capabilities. BI is more a business driven initiative where the starting point is for business to identify the Key Performance Indicators (KPIs) which will help them make fact-based decisions and move away from gut-based decisions. In essence BI is the tool for performance management.

Compared to Retail or CPG industries, food distribution industry is lagging behind in terms of realizing the benefits of BI. The realization has dawned on them, particularly during the current economic crisis, since BI helps them realize the potential areas for reducing cost. BI has become a powerful tool to measure the business growth and also to rationalize cost.

The challenge doesn’t end when you realize the need for measuring your business. The biggest challenge is to identify the KPIs that need to be measured, tracked and reported. Gartner rightly puts it "To drive real business improvement, you have to keep score. But reaching consensus on what will be measured, how and when, is easier said than done".

A typical look at different functional areas in the food distribution industry will be sourcing/procurement, inbound and outbound transportation, warehouse operations, sales & marketing, and of course support functions such as HR and finance. Business intelligence can be used by companies in the food distribution industry to improve five key issues:
    1. Improving customer satisfaction and profitability
    2. Streamlining logistics/supply chain management to cut costs
    3. Improving relationship with suppliers
    4. Sharing corporate information across the company to help decision-making
    5. Reducing reporting cycles and the burden on IT

I intend to cover the above 5 issues in detail in my subsequent blogs

Posted by Prasanna Ramaswamy at 3:50 AM | Permalink | Comments (0) | TrackBacks (0)

A recent blog by Sandeep Dadlani talked about how companies have started becoming more savvy about increasing usage of rich mobile platforms like iPhones.  This was quite thought provoking. I believe we are reaching a tipping point on rich mobile phone usage with high network bandwidth. The competition and provider economies of scale would start a explosive spiral of increased usage and lower costs, similar to what happened with laptops, broadband and GPS.  That means a major expansion in reach for companies- both CPG and Retailers, big changes in customer research and buying behavior, and massive reduction in costs to reach the consumers.

However, I also believe that while many have started having a "iPhone strategy" or a "digital marketing strategy", only a few have a truly strategic understanding of the impact, why this is a big threat & opportunity at the same time, and the capabilities they have to build and more importantly integrate .

Why a threat? As an example, many retailers still rely on imperfect information available with them, and with their consumers, to price and position their goods and services. E.g., when you like something at a specialized store, that retailer quickly loses its traditional premium pricing power if you know that the store next door (or your favorite warehouse like Costco or online stores like Amazon) is selling it for much less or offering another form of value – be it better return, service or warranty. Or if you can quickly find product reviews and comparisons, CPG companies are at significant risk if their online web 2.0 presence is not well managed, or product perceived shortcomings are not fixed quickly.

One can argue this information has been available to us since many years, so why worry now. This information is available quickly (think 3G and 4G) and easily (think iPhone or blackberry apps targeted for this need) and more widely (many devices) even in a B&M setting now. With universal rich mobile connectivity, information flow with consumers is going to be more ‘perfect’. The question really is whether companies would have more 'perfect' information with them!

Of course, on the companies have an opportunity too - to become that disruptive force that benefits from the change!

What would this entail? Companies can benefit only if they become much more competition and customer behavior savvy. And are able to create new capabilities in “Analyze to Market & Sell” and “Concept to Build & Fine-tune” processes and integrate them well with each other.  For instance, I believe creating and integrating the following real time analytics capabilities is an important foundation

1.  Customer Analytics - who is buying what, where, why?

2.  Sales analytics - what product is selling in which region/ store, where are the sudden drops and pops, and why? Why are the conversion rates dropping?

3.  Competitive intelligence - What are my competitors selling with what positioning and value adds, at what cost today?

4.  Marketing analytics - the response to digital, mobile, social marketing - how are customers responding to our messages, and what is being said about us in the social networking space?

5. Promotion & intervention analytics- what intervention worked, what didn’t?

A clear step by step framework to link the learning from above analytics to concrete decision making and next steps would be required, for instance, in the following areas

1.       Defining and refining the Social, mobile and digital marketing campaigns– closing the loop
2.       Promotion and pricing plans- dynamic pricing as a tactical tool to increase sales.
3.       S&OP plans– to be able to sense and respond to demand changes
4.       Product design and development plans- including the ability to fix any user reported issues quickly.

What has been your and your organization’ thinking in this area? Are your initiatives integrated? Has this linkage between information and actions been difficult to achieve?

Posted by Aditya Mittal at 7:58 PM | Permalink | Comments (0) | TrackBacks (0)

We will remember last year as a very difficult year for the global economy and for retailers around the world. Many big retailers like Circuit City, Mervin, Linen n Things, Fortunoff etc filed for bankruptcy. Credit crunch and consumer distress has put off the plans of other retailers to grow.

Indeed, the times have been tough though we are seeing signs of recovery or having hit the bottom, there is a lesson for us. Economic stress is transforming retail business in many senses. Inefficiencies in the processes, systems and the organizations have been weeded out. On one side, the CPG companies and national brands are building capabilities for increase in market share. On the other side, the retailers are focusing on growing private label business at the cost of national labels. What is the future of this tussle and what factors will determine the survival of either one?

The current scenario calls for a state of harmonization, where the share of the private labels and the national brands is in a state of equilibrium. This will continue to evolve for some time to come. The critical factors in my mind, which will define this delicate equilibrium of private label vs. national brand share of customer wallet are:

 a) Pricing: Economic recession has hit where it hurts the most. National brands have reduced the prices. Private labels in fashion and lifestyle business have reciprocated with the same effect, counting on market share and volumes, rather than profitability. Designer labels, national brands and private labels have all reduced their prices - in the form of price reductions, rollbacks or discounts and promotions. Reduction in price comes at the cost of profitability and in some cases, sustainability.
 On the other hand, for grocery, retailer brands have slightly upped the prices, leaving them still lower than the leading national brands, to compensate margins against the low sales.
 We are yet to witness how the overall pricing game evolves but I believe this alone could be a critical factor in defining the equilibrium. Lower prices may help generate traffic in the short term but may not be so for long term. Retailers may have to be cautious on pricing and provide add on benefits rather than playing only the pricing card.

 b) Channel Planning: We are seeing many premium brands and designer-wear labels struggling with inventory. While they have come down on pricing, many still struggle for channels for liquidation of their last reason merchandise. This has given invitation only - designer discount web outlets like Gilt Groupe, Haute look etc, a chance to flourish.
 Grocery retailers on the other hand, are leveraging the multichannel capabilities to reach out to the customers. Customer avoids going to the store and grocery retailers offer customers, convenience of shopping through the web. National brands will have to become more and more aggressive on customer connect.

 c) Social Commerce: National brands have always felt less privileged when it comes to customer contact. Retailers have direct contact with the customers but now, the national brands can harness the power of web. Social networking sites today are playing a major role in shaping up interests and loyalties. Brands need to be more than active to be able to build and harness customer loyalty.
 
 d) Costing: While there is a decrease in demand, apparel manufacturing hubs across the world - India, China, Rest of Asia, Eastern Europe - are facing acute problem of overcapacity. It is easier for national brands to negotiate, hedge their production and quality, and adjust to the demand, it becomes challenging for the retailers to manage private labels. Therefore collaborating with suppliers will become a key for costing and predictability.

These, in my mind are key tenets for the struggle of power between the national brands and private labels. Do you think the recession has redefined the equilibrium between the national brands and private labels?

Posted by Mayank Jain at 12:47 PM | Permalink | Comments (0) | TrackBacks (0)

Clean and perfect master data is a dream for almost all retailers. But it is a dream that is unfulfilled for many. Product, vendor, product hierarchy, location and any relationship between these entities are typically referred as master data in a retailers’ context. These are the fundamental data based on which all of their category management, supply-chain, merchandising, retail operations and many other processes and systems are designed and built upon. Operational issues and internal inefficiencies due to bad quality master data will lead to increased operational cost. This fact makes master data integrity that much closer to the retailer’s heart. It is more than likely that the data integrity is to be blamed for many unsuccessful initiatives.

For example, in-bound transportation optimization for LTL (Less than Truck Load) is primarily based on vendor ‘Ship From location’ information. Inaccuracy in shipping point data is will make it difficult to optimize the LTLs. Another classic example is - inaccurate item-store authorization data will create enormous issues in pricing, assortment and store replenishment. I can give many such examples illustrating how master data integrity can create issues for retailers.
I am sure, more than likely most of the retailers are the victims of bad data quality. Then why have they failed to solve an age old problem? Simple answer is they don’t know where to fix it. Developing a clear understandings of what are the internal/external systems that have master data, how are they interlinked, what are the discrete business rules governing master data and who is the actual owner of the business rules is an essential first step to shore up the master data integrity. Once this understanding is established, then data integrity problem can be addressed in three parts:
1. One time clean up of existing data
2. Correcting internal/external processes causing data integrity issues
3. Decommission old or satellite systems if in case new MDM system is implemented

One time data clean up can be a very huge task based on extent of data quality. Assessment or data profiling will identify the extent and the nature of clean-up required. Data enrichment and correction could be broadly classified in to two categories.
a. Clean-up based public domain understanding: for example – address verification, making field value  uniform across systems etc
b. Clean-up based on business rules: here in this case business owners need to be involved in the data correction
One should adopt iterative enrichment/correction process for achieving better data accuracy and integrity. Technology can be adopted to do most of the steps but significant involvement from the business owners is crucial for the success.
 
Retailers have to approach strategically to fix/correct master data management (MDM) related processes. Naturally MDM process will span across business operation of a retailer with multiple inputs and output points. It is important to bring all such entry points (or at-least as much as possible) along with the validation rules into one single place to create a single version of truth for master data. Then create a wrapper around master data repository to services the data needs of other systems in the organization. This will ensure there is no direct manipulation of data by the other systems. It may be easier to implement a new MDM system than correcting existing systems. While doing this one can get over ambitious and over engineer MDM processes. Caution should be taken to keep it simple, efficient and flexible. Simplicity is important to maintenance, since significant amount of effort is spent on data management efficiency is key and it should be flexible to integrate with external systems such as Global Data Synchronization.
It is extremely important to remove the old systems in the case where a new MDM is implemented. Co-existence of old and new systems and database can cause even more confusion and issues.
As always, success of creating and maintaining a clean master data is greatly dependent on long term focus and sustained energy through the initiative. Because it can take a while to create a clean and perfect Master Data!

Posted by Mahabaleshwar Bhat at 9:49 PM | Permalink | Comments (0) | TrackBacks (0)

A plethora of recent media articles on consumer shopping behavior in recessionary times are beginning to reflect some of the conversations that I have had with Retail and Consumer Brand CXOs in recent times. For example we all knew that in a recession the following facts about consumers & retailers were bound to come true

1. Restaurants will see a dip in sales as consumers prefer eating in
2. Grocery coupon usage and redemption will increase as consumers look for deals to maximize the value of their grocery shopping trips
3. Retailers will cut back store expansion and focus on less expensive channels like online for marketing and sales
4. Brands will reduce their advertising spend significantly (most estimates predict an unprecedented 5-9% drop this year in ad-spending)
 

But the more intriguing and unexpected trend is how consumers are becoming more internet and  mobile-savvy and how retail and consumer product companies are reacting and keeping pace with the consumer.

Consider this:

1.Smartphones (data/internet enabled phones) account now for 23% of the phone market globally growing 4% year on year which means many more consumers decided to pay more and pick up data/internet enabled phones than last year (even as handset sales overall plunged by 13%). Source: IDC
2.Social networks and blogs are now the 4th most popular online activity ahead of personal email. The average amount of time spent on Facebook increased by 566% this year compared to last year.
3.Linkedin apparently has reportedly crossed over 35 million members and is registering a member every second and Twitter had over 4 million unique visitors just in December 2008
 

So is their cause and effect here. “Ofcourse”, says one of my colleagues. “Unemployment has increased, business is slack and so people have more time to spend playing around with their phones”.  I think about it for a moment and hurriedly ask  “So once we recover from this recession, do you think the numbers will reverse and we will see a dramatic drop in iPhone traffic”. I do not get a coherent answer.
 

What appears to be a logical explanation is that while the recession is certainly helping,  there is a strong irreversible trend towards adoption of the internet, social media and mobile telephony. Are corporations responding:
1.Target, Sears ,Kraft Foods, others have created reasonably successful iPhone apps in the last 6 months to target this segment
2.Many large consumer product and retail companies have signed up for exciting mobile marketing campaigns in the last 6-12 months
3.Krogers has started cellphone based coupons in select markets
4.A few have signed up with Infosys for mobile marketing pilots with in-store context-aware &  location-aware capabilities
 

Do you think the recession has helped us and our respective corporations become more internet and mobile savvy?

Posted by Sandeep Dadlani at 8:06 PM | Permalink | Comments (1) | TrackBacks (0)

Below are just two examples of the “random” messages you will find on Twitter:

“The hulk has prefect teeth”

“Don’t you just “love” the inevitable heavy breathing you hear on conference calls, with mics too close to noses?”

Twitter, which can be defined as a micro-blogging service, is often dismissed by mainstream media; however a study by the Altimeter Group finds that brands using social media have seen recent increases in revenue by 20% on average.

Twitter and other social media tools such as Facebook give merchants a more human like feel. To customers, we become something besides just nameless faceless online stores. We have husbands, wives, children and we go on vacations. Social media also allows you to show customers why you are passionate about what you sell, and that has been a missing element in commerce for a while.

Because you are a human and not a website without a name and face, you are also held more accountable to your mistakes, and are thus more inclined to hear feedback about your products. Customers on Twitter will tell you the positives and negatives about your products and your website. As you can imagine, some merchants aren’t particularly fond of this, but those who embrace it tend to have a very loyal fan base.

The big question people ask is, “Now that I’m all setup on Twitter. What comes next?”

Here are a few tips on getting targeted followers who can then help spread your brand like its the next best thing since sliced bread:

1.     Inform your current customers that you are on Twitter. You would be surprised to see how many people you find who are on Twitter if you just say something about it. Try something like sending out a newsletter about it and putting up a link on your website. Simple no?

2.     Visit  wefollow.com, and search for Twitter users who have strategically tagged themselves with topics related to your products. You can also tweet that you follow those topics too for extra exposure.

3.     Try using a Twitter client such as TweetDeck or Seesmic Desktop to pull searches on keywords related to your products. Follow people who tend to like the merchandise you sell, as well as people who offer useful information that you can re-tweet to share to your followers.

4.      Go to hashtags.org and search for tags that pertain to what you sell on your store.

5.     Send tweets that are fascinating, and try to engage your followers as much as possible by using @replies. You aren’t just tweeting to someone. You can actually use @replies to “introduce” your followers to each other. They will use @replies to introduce their followers to you. In this respect, you aren’t just sending tweets, you are building a community around your brand.

Twitter, like a mobile phone or PDA, is a communication tool. Its uses are only limited by your imagination. Using it judiciously can connect you to a gamut of people who just might be looking for what you sell for a fraction of the cost of other advertising methods.

 

 

Posted by Gaurav Dhir at 4:24 PM | Permalink | Comments (3) | TrackBacks (0)

Government, people, and companies have been discussing and hearing a lot about going green. Everyone from President Obama to your local coffee store is talking about it. Broadly, there is an agreement on the need to do something but a lot of disagreements on what should be done, how it should be done, who should do it, and most importantly who pays for it. For instance, countries are asking others to do more in climate meets. In this entire debate, companies are caught in the middle with the question “Should we go green at all? If yes, what is the business case? Should we be proactive or reactive?”

 

To be able to answer these questions, I believe executives need to understand the four underlying key drivers for change. Depending on the applicability of the driver to their industry and business situation, the go/ no go would become clear. I also believe that each driver leads to different challenges, different groups driving change, different groups of internal resistance and hence a need for  different strategies to overcome resistance.

 

In order of priority, the key change drivers are as follows. These are ranked in the decreasing order of compulsion to change.

 

Driver 1: Government / regulations – “do we have a choice really?” E.g., carbon tax, EPA regulations, car manufacturers having to conform to California emission requirements, etc. If regulations are likely to change, companies have to adapt to it. It is in their best interest to plan for it while they can still do it as this often requires fundamental changes in manufacturing, product development and supply chain processes. Within organizations, this kind of driver for change is best identified by the legal/ risk / compliance departments, and face the most resistance from Operations/ Manufacturing which are impacted the most. The question then is how to best manage this forced change.

 

Driver 2: Shareholders- This driver indicates that there is a good business case to go green, likely due to associated cost savings. E.g., lean manufacturing initiatives that might cut waste (Toyota), or use of more efficient trucks (e.g.  hybrids truck pilot for courier companies). Companies benefit, so does the environment. The problem is that even though the initiative pays for itself eventually and gets potentially good press, practically this kind of change is constrained by limited management focus, limited investment dollars to implement the change and limited organizational change management capability. Only a small percentage - early adopters - would end up doing anything in the next 3-5 years. This kind of change is best identified by internal groups, consultants, and face the most resistance in investment committees. The best approach perhaps is to start by picking the “easy to implement” quick wins- save electricity, water, paper, gas, etc.

 

Driver 3: Customers- This driver presents itself as an opportunity, likely due to a new market / revenue opportunity.  E.g., Toyota and Honda’s success with Prius and Civic hybrids, organic foods, green cleaning products, home water purifier systems, and many more such examples where customers are now demanding green products. Sales and Marketing departments are supposed to recognize the changing preferences of the customers and drive change. Practically, my belief is that this kind of change is constrained by low organizational ability to even sense demand changes, or agility to react to these changes, or the Product development or manufacturing changes required to effect this change quickly enough.

 

Driver 4: Competitors- Finally the driver that is recognized last by organizations is when competitors have already reaped the benefits and thus taken a lead that is difficult to bridge. To continue with the auto industry references, auto companies who concentrated on selling gas guzzlers while others designed and launched hybrid fuel cars is the strongest example that comes to mind.

 

My point of view is that companies, including retailers and manufacturers alike, need to assess if they are in an industry or segments that have some or all of the above drivers. If yes, they should have a clearly defined framework to holistically address these drivers and plan proactively for change detection, change capability and change management. Retailers, for instance, need to understand that many of the products they sell would have different characteristics, and there are possibly multiple drivers for multiple categories they would need to think through simultaneously.

 

Finally, my view is that for companies where there are no such drivers, going green can still become a part of the greater corporate social responsibility initiative, but only if those companies have a demonstrated track record of putting real dollars behind their CSR initiatives. Those companies that don’t fit any of these criteria- my hypothesis is that going green will not be a sustainable initiative, and should not occupy management bandwidth till such time it becomes sustainable. A half-hearted attempt with no real driver would only kill future real initiatives.

 

Are you facing the question of whether to go green within your organization? If yes, what has been the thought process, including for scoping and timing this right?

 

Posted by Aditya Mittal at 6:50 AM | Permalink | Comments (1) | TrackBacks (0)

This is a question that I hear frequently.  Everyone seems to recognize that a quick response time is the ultimate feature, but very few people understand all of the factors that can harm performance.  In this series of blogs, I will try and shed some light on the different factory that combine to determine your site’s ability to perform.  In this blog, we will discuss the impact of requirements on the overall performance of the site. 

 

I saw a cartoon some years ago that showed a businessman frantically searching for a lost item in a room labeled “Testing”.  Another character walks up and asks, “What are you looking for?”  “Site performance”, the searcher answered.  “Where did you lose it?”, asked the visitor.  “In Requirements”, he answered.  “Then why are you looking for it in “Testing?”  He answered back, “The light is better here”.

This would be funny if it weren’t so sad.  We proceed with a multi-million dollar site construction projects while deferring consideration of the system’s performance until the site is completed and tested for correctness.  We allocate 2-4 weeks to validate that the performance is good; but it almost never is.  Then we spend the next 6 months tuning the system until it barely passes, all the while operating under the suspicion that we don’t know what we are doing. Finally, the business gives up and released a site that is 3 seconds slower than originally specified.   But it doesn’t have to be this way.  There is a process to follow that will greatly improve the chances that you will be fast enough to go live on schedule.  The first part of that process involves the requirements.

 

Like the searcher in the proverb above, we often lose all chance of performing well before the first line of code is written.  The eCommerce business is filled with creative people because that is what is required.  Web commerce is a moving target and people who lack vision rarely last long.  Creative agencies are also filled with creative people.  Their mission is to create a compelling Web presence.  This means that they need to “push the envelope” and bring features to their designs that are above and beyond.   So putting these two groups in the same room will produce a “violent agreement” that this site redesign will be the most feature-rich, coolest, most advanced whiz-bang site on the Web.  They create screens are a marvel, filled with every possible up-sell, cross-sell, top-ten, also-bought, new-product pages know to man.  Then they toss it over the wall to some programmers and shout, “Make it respond in less than one second”.  If the poor programmer dares to protest that they pages are too fat, he gets that “a real programmer wouldn’t complain, he would figure out how to make it work” treatment.

 

So our hapless programmer concludes that “mine is not to reason why”.  He gets busy and creates pages that he doesn’t believe will ever perform.  Six months later, he delivers the code.  The performance test shows that the new system will be “dog-slow” and the business expresses disappointment that the programmer let them down.

 

But it doesn’t have to be this way.  Instead of starting with all the creative people operating in a party mode, invite one party-pooper, the program architect.  Architects are famously lacking in creativity and diplomacy. (They admire the Google home page for its quick response) They will ask you questions like, “What response time are you expecting for this page?”  They will then, rudely, tell you that you can only have one .JSP file, one style sheet, one javascript file and 45 graphics object like screen-trim and pictures.  In addition, they will tell you that the total size of the page and all of its objects must be under 400k.  They will veto all third party-calls, Flash, and dynamic content generation. (No wonder they don’t often get invited).  The creative types will then decide to have the meeting over with out these “kill-joys”.  If you do that, you will live to regret it.

 

The right response is to find the balance.  Challenge the creative people to use restraint.  Challenge the architect to accept a few creative elements and to create a proof-of –concept that will prove whether or not these elements will cause the performance problems, and if so, how much.  The business can then make the tradeoffs between features and performance.

Posted by Stephen Alan Potts at 5:45 PM | Permalink | Comments (5) | TrackBacks (0)

I am sure that most of you would have a large number of online user ids and passwords – each uniquely identifying you, as a user. While some of those identities have just your name and an email address associated with it (for example, a Gmail® or yahoo® id), some others contain large amounts of information (name, date of birth, addresses, payment information, etc) about you contained within them. Examples are your google checkout® account, PayPal® account or an account that you have created with your favorite online merchant. In effect, you are left with a ton of user ids and passwords, each one of them meant to uniquely identify you – the single and unique you. So aren’t we creating too many identities?

 

One obvious problem with having so many identities is that you have to remember their passwords and other credentials (unless you have the habit of using the same user ids and passwords everywhere – which is another problem altogether). The next ‘not so obvious’ problem is that of keeping your information current. When you move, or when you start using a new email address, would you like to log on to each of these accounts and update information? The third aspect is the time that you have to spend to register on every new website with which you have some business to do with – may be to buy something, may be to join on a discussion about a product that you have or may be to network with people. Not sure if you would share the same experience – I have decided not to interact with some sites only because of the pain of creating a new user profile. Having thought about the problems of having so many profiles for a person, I begin to wonder – doesn’t this problem exist in the real, physical world? Certainly it does. You fill out a different form to join each of the loyalty programs, to open each bank account and so on. But then everything online should be slightly better (at least) than the physical world –that is what I believe in. From the way things are evolving, looks like we are getting better at this.

 

Today, there exists a movement called openID (http://www.openid.net) which aims to clean up online identity management. Before explaining the concept, let me tell you who all has signed up. Google®, Yahoo!®, Facebook®, AOL®, Microsoft®, Verisign® and Sun® are some of the prominent members –this list should tell you a bit about the acceptability of this idea. This movement started as early as 2005, but it is only now that the big players are taking notice. Let me explain the idea - openID is an online identity which will have an associated password. There will be a set of websites called as openID providers who will be issuing these identities. Google® and Yahoo® are good examples. There will be a set of websites which allows users to use their existing openIDs without having to register and create profiles separately. Such websites are known as openID accepting sites. An important aspect is that the accepting websites never get to see the openID credentials that are used. They would want to know the user id (so that they can use the same to identify the customer in the future as well). They can also request for other information – like name, address, etc to be shared by the openID provider. There is no standard set of information (yet) that you can expect from an open id provider that is still evolving. For example, Google would only share name and email while AOL shares date of birth in addition. So the single openID ends up being your unique online identifier.

Want to see this working? That is easy to do. I will show what happens when an openID holder (most of you would be one) visits an openID accepting website. I will be using my Gmail id as the openID and the accepting site is the MySears community website. I start by visiting the login page - https://www.mysears.com/login

 

In the login page, you have the usual login form. In addition you can see some options on the right side. Shown there are some of the most popular id providers. If you have a user id at any of these sites, you do not have to register! You can just click on any of them. In our example, I choose to click on the Google® icon.

I am taken to the Google website and the familiar Google login form is displayed. However, there is a message on the page which tells that MySears is asking to share some information. Since I did this on purpose, I provide gmail credentials. Please note that MySears does not get to see my password.

Once I sign in, Google tells me that MySears is asking for my email and Name. I chose to allow and also checks the ‘remember this approval’ box (so that I do not have to approve the next time). Once I do that, I am transferred back to the MySears website and I am logged in! Please note that during the first time that you use an openID to sign in, MySears asks for some additional information like zip code (which is specific to MySears since that site requires some additional information to work than what Google has).

This was a very trivial and simple example and the only attribute shared is my email. Still I would never have to remember a user id and password for this site. Isn’t that a good starting point? I am excited to say that we already have created working openID integrations with some of the leading ecommerce products. This would mean that an online business which is using one of these products will be able to become an openID accepting site. Other than solving some of the problems described earlier, there is much more to gain for an online business which can act as an openID acceptor. Let us discuss that a later point in time or maybe you can start listing the obvious ones by commenting…

 

 

 

Posted by Mohan Kumar Krishnan at 6:36 AM | Permalink | Comments (0) | TrackBacks (0)

Over the past few months I’ve had many clients outside of retail (banks, airlines, and manufacturers) approach us about learning how to merchandise and target online.

It seems that having your burger “my way” has permeated to all types of goods and services. Companies selling services online are beginning to deconstruct their services into products. Something as simple as an airline ticket is now broken down into a boarding pass, an upgrade, a bag of peanuts, and rumor has it Ryanair has even considered selling access to the restroom.
As a result, the online shopping experience starts with a base purchase, such as an airline ticket. Through to checkout is a challenge to see how much merchandise or service can be tacked on to that base purchase without losing the customer. So how do I maximize the size of what is now my shopping basket?

The answer is to target effectively. Everyone knows that targeted mail is more effective than spam or junk mail. Online presents a unique challenge. There are at least 3 types of data that can drive the offer:
1)      Segmentation – the tradition method for marketing, coming from loyalty programs or straight transaction history
2)      Browse History – customers browse activity in a particular session tracked via Web Analytics
3)      Product Relationships – products related by being similar, complimentary, mandatory, or premium  

So how do we use it?

First and foremost, use all of it. Use it wisely though. Segmentation is the traditional method. Be careful how you use it. Segmentation data coming from data warehouses is by nature relatively old. It has been updated via several data sources, most likely via batch updates. It is good for banner ad space and other lifestyle offers. It is not always great to integrate into the shopping process.

Recent is relevant. Browsing and search history is as recent as it gets. Even using other shoppers history is still used, the old Amazon phrase “people who purchased X also purchased Y.” Real estate on the right side of the web page typically holds browsing related offers. These can be truly effective if your recommendation engine is smart enough to detect a pattern in the browsing. This can be extremely affective for a bank. As users research funds or loans, a bank can offer the hottest product related to the category the user was browsing. If this is tied to the customer segment as a secondary filter, this is like the nirvana of offers.

The foundation for these offers is the product data. It’s hard for non-retail or consumer goods companies envisage their services and products in a catalog. Retailers deal with tens of thousands of products and variants and they get it done. Spend the time with your data to set up the product relationships needed to effectively merchandise. Don’t be restricted by how you have sold in the past. These relationships are important, as are their integration to browsing patterns or segmentation data.

So what offers do you click on? How often do you buy complimentary or upgraded products? How often do you click on an offer because it fits your lifestyle? I’d love to hear your opinion.

Posted by Seth Lively at 11:47 PM | Permalink | Comments (1) | TrackBacks (0)