The seismic shift toward Online

Posted on by Billy Tucker

I met with Business Spectator’s Alan Kohler and recorded an interview for Qantas inflight Radio in June. I was flattered to be invited to the show, the interview is now available below.

A link to the file is here.

Alan was particularly interested in a topic I have spoken about on a  number of occasions, the slow but steady adoption of the internet by all but the most tech-resistant and the impact that shift is having on traditional commerce.

Now that over 3/4 of the Australian population have a connection to the web, businesses of all types are finding that their typical customer is spending an increasing amount of time online and can be reached there quite cheaply for Brand building as well as ecommerce.

Two other significant factors beyond the amount of people online are – the nature of connectivity, i.e. fast connection speeds are no longer the preserve of early adopters – and that almost all internet users are willing to shop online, with only 5% of internet users showing concern about online security.

The shift towards fast access speeds has been so rapid that in 5 short years the issue of access for all has all but disappeared. Mobile internet use has also accelerated with many online businesses signalling that 10% or more of page impressions are from mobile devices and mobile transactions are catching up fast.

Where the online activities of the older demographics were once limited to banking and email, this is no longer the case. Over 20% of the discount shopping audience is 60+ suggesting that older folks enjoy the process of shopping online even if they don’t have to.

I think it’s fair to say that not being online in 2012 is akin to not having a mobile phone, at some point it looks a bit weird!

Meanwhile, as the Internet population has swelled to include your parents and most their friends, technology has evolved that enables Advertisers to single out their target customer and provide a customised offer on the fly – further extending the economic advantage of online commerce.

For the first ten years of the web the economic engine that powered its growth was display advertising (And subscription Porn but that’s another post!), publishers funded their growth by making money from page impressions – a refit of the existing TV and Magazine advertising model. In 2000 Google started selling ads in a new way – through search keywords which provided advertisers with a way to talk to customers based on what they were looking for, rather than what they had already found.

Now the model is shifting again, more people and more data means that publishers are now making an increasing portion of revenues from who you are, rather than just your location on the web. publishers can connect advertisers with their target Market with reasonable precision using browser tags. No longer are marketers confused about which half of their dollars are wasted, in the new world of the Internet, they spend half as much and almost none is wasted.

The rapid shift towards a more personal web has occurred in the past couple of years and the pace of change is accelerating. It was only 5 years ago that Facebook emerged as a public service, touching a Billion or so lives since.

The amount of change we see in the next 5 years will be as dramatic as the last 5, with an even greater emphasis on devices, mobility, personalisation and online commerce, bring on 2017!

Study finds Facebook Fan Pages are a poor source of consumer engagement

Posted on by Billy Tucker

The Ehrenberg-Bass Institute for Marketing Science released a study showing the relationship between Facebook fan pages brand engagement – concluding that Brands should lower their expectations of Fan Page performance.

Facebook Fan Pages include Facebook’s own PTAT (People Talking About This) metric, and that metric was the basis for the study. PTAT as stated is somewhat misleading though given the act of Liking a Brand is included in PTAT.

Once the researchers had removed the impact of the initial Like, they found that only 0.5% of Fans actually engaged with the brand via Facebook on a weekly basis*

In isolation, this seems like an extraordinarily low number, and should cause the majority of Brands investing time and money growing their fan base to rethink. In fact, only 10% of the brands sampled reached 1% engagement, and this was consistent across all categories and included a number of “Passion Brands”.

The engagement value of 0.5% weekly engagement should be used as the baseline when evaluating the return of investment in building a Facebook Fan page, chances are the size of a Brand’s Facebook Fan Page does more for the ego of the Brand stewards than it does for the bottom line!

*Data reproduced from Admap with permission.

Australian Retailers are frozen in time, what they need is Online support.

Posted on by Billy Tucker

In a previous post I said that “Pricing alone will never lead to a long term strategic advantage, only service quality and inspiration can” – something similar to a quote today from CEO of Masters, the challenger hardware-retail brand from Woolworths.

Don Stallings commented: “more than half the people shopping for whitegoods at Masters hardware stores use smartphones to check competitors’ prices… to get those sales over the line in a traditional store, customer service and the personal touch had to be of the highest quality. [at] Masters [we have] spent as much on training staff to deliver customer service as on the rest of the business”

Meanwhile, across town at Myer, Bernie Brooks laments that “[the] customers’ propensity to purchase is not improving” so they are “pinning hopes on their midyear stocktake sale”

Sadly, I suspect a slash and burn approach will not be the answer long term, unless Myer fancy jumping onto JC Penny’s EveryDayLowPrices strategy? (The downside of which I blogged about earlier).

Myer + Myer One Loyalty club have the bones of a very defensible Retail strategy when Multichannel is fully embraced; where Lifetime Value, upsell and cross sell are key and are driven by what is already known about each customer segment, customer cohort or even, individual customer. But each retail touchpoint has to be aligned to the vision of “lifetime customer value is king”, something that may be easier to achieve when the business is built from the ground up with no technical or cultural legacy, sadly Mr Brooks doesn’t have that luxury.

“Discount heavily and I will love you right now, inspire me with insights and ideas and great service and I will love you for ever”