Tag Archives: retail

Book Review: Authenticity – What Consumers Really Want by James Gilmore and B. Joseph Pine II

Perhaps Variety would describe Authenticity as "Aficionados of Academic Books will Savor The Approach"
Perhaps Variety would describe Authenticity as “Aficionados of Academic Books will Savor The Approach”

Authenticity by Gilmore and Pine has a rating of 4.5 out of 5 stars on Amazon.com, from 27 reviewers. I found it dull, boring and purely academic.

In 1999 I went to the cinema with my wife to watch the award-winning “The Thin Red Line”. I like war films, especially about the Second Word War. After a while we walked out of the cinema because we were both bored and thought there were better things to do. 15 years later, it now has a rating of 7.8 out of 10 by 121,086 users on IMDb. Perhaps we missed something from the film.

Perhaps Big Data can show a correlation between The Thin Red Line and Authenticity. At least with the film I think we saw about an hour before leaving. With the book, I left it on page 27 (out of 251). And that was on my third attempt – I trudged through a few pages, left it for weeks and tried returning. Continue reading Book Review: Authenticity – What Consumers Really Want by James Gilmore and B. Joseph Pine II

Bitcoin introduction, key facts and opportunities

The number of Bitcoin transactions per day looks like it's waiting for a major retailer to join the party
The number of Bitcoin transactions per day looks like it’s waiting for a major retailer to join the party

Firstly, I want to set some context about Bitcoin and this article. I started this blog when I found myself explaining something to one person, then another, and another, and I thought there had to be a more efficient method of distributing information (together with my opinion!) Three years later, this mantra still holds true. However this article has taken the longest to write because when I have met people to discuss Bitcoin, every conversation seems to approach the subject from a different perspective and I’m asked many great questions, so I’ve delayed this article while I’ve tacked those extra points to this article. At times I felt that I should just write a book, but I never had the guts to ask my wife for the time during our summer holiday!!!

This article is split into five sections mainly to specifically answer some presumptions that people have about Bitcoin:

  1. Introduction, and Bitcoin key facts
  2. Anonymity & Illegality
  3. Opportunities
  4. Conclusion
  5. Further reading

Continue reading Bitcoin introduction, key facts and opportunities

Is Airbnb’s $10bn valuation proof we’re in a second dotcom bubble?

Airbnb’s investors have reportedly pushed the company’s valuation to over $10bn, leading some industry commentators to claim that this type of valuation proves we are in a second dotcom bubble.

Airbnb stats March 2014Remember, the first dotcom bubble had many weak business models where pretty much any company that had a domain name was worth billions.

This time round, there are some sound business models, which are disrupting industries not rebadging it. Airbnb is a disruptor, and needs to be examined before we come back to the question whether we’re in another bubble.

Continue reading Is Airbnb’s $10bn valuation proof we’re in a second dotcom bubble?

The cross selling and upselling business model

This is the ninth part of the series on how companies can make money from high traffic websites. In this post we’ll discuss cross-selling and upselling. As we’ll demonstrate, cross selling doesn’t need high traffic to sell more products.

At Endava we work with companies who are capturing data about their visitors and attempting to personalise the experience, usually with a goal of providing superior service, or selling more goods.

It’s all about the customer (and CRM is key)

At the heart of this solution is a CRM (Customer Relationship Management) system. CRM has become synonymous with large, expensive and difficult IT programmes.

Continue reading The cross selling and upselling business model

Why the UK is still a nation of small shopkeepers, even on the web

The 10 most visited UK shopping sites ending August 24, 2013 according to Retail Week magazine who use Hitwise, is shown below. As the table indicates, the market share is stable.

10 most visited UK shopping sites week ending August 24, 2013
10 most visited UK shopping sites week ending August 24, 2013

This table only shows half a story though, because the top 10 make up just under 40% of the total shopping web sites. The following pie chart shows those top 10 as a pie chart along with the missing 60%.

Pie chart for 10 most visited UK shopping sites week ending August 24, 2013
Pie chart for 10 most visited UK shopping sites week ending August 24, 2013

Even this pie chart doesn’t show the full story though, because Hitwise should really aggregate the sites together – i.e. all the Amazon and eBay sites. Gumtree are owned by eBay so if we aggregate this with eBay, we get the following chart.

Consolidated 10 most visited UK shopping sites week ending August 24, 2013
Consolidated 10 most visited UK shopping sites week ending August 24, 2013

More than a third of shopping web site traffic in the UK goes to these two US companies, and are then followed by Argos who have less than 2% of traffic. Perhaps this goes to show the UK is still a nation of small shopkeepers.

The value of Amazon’s cloud for consumers

Madonna MusicThis morning I received an email from Amazon to say “Albums you have previously purchased on CD from Amazon are now available in Cloud Player for FREE”.

It’s always a nice surprise to receive something for free, and when I logged on to the Amazon Cloud Player, yes indeed the CDs I’d bought from Amazon in the last few years were all on there.

Half of all the CDs I’d bought from Amazon were gifts for other people. This reminded me of the nightmare I’ve had in the past with registering my children’s iPod Touch devices, and setting up iTunes for them. Or our ‘family’ Spotify account. Or just buying MP3s for my kids.

All of these purchases for other people are against the terms and conditions of use. I haven’t found a legitimate method of buying music for my kids like the old physical CD method. Perversely it’s easier to download music from BitTorrent for other people than legitimate methods. However, I’m completely against music piracy and feel that it’s morally correct to buy MP3s from iTunes, Spotify or Amazon and then give access to my kids.

Amazon has just brought this debate back to life where all the CD gifts for others I’ve bought in the past are now available for me to listen to via MP3s.

The next step will be for Amazon to offer the same service for videos and DVDs. If you bought a DVD film a while ago, you should be able to watch it over the Internet.

There are systems in place such as Ultraviolet which enable users to watch a film irrespective of the original purchase media. So if you bought a DVD or Blu-ray or Internet file for a specific film, you can watch it on the other media for no additional charge.

This is exactly the type of advantages that consumers want to see from cloud services. In fact, consumers don’t want to know about cloud any more than RAID storage, they just want life made easier, and with additional value thrown in as part of the package.

Buying a car in the disruptive digital world

At work at the moment we have a number of clients for whom digital is presenting some turbulent, disruptive challenges. Many of these clients are forced to face the challenges head on. One industry which has faced digital disruption head on is the retail car industry.

A couple of weeks ago, we needed to replace Mrs H’s car. Our Hyundai Trajet has been the family car for eight years, and with four young kids, there aren’t many durable alternatives open to us.

Like most people we went to AutoTrader and looked for options. AutoTrader is the leader in the car industry (more on that later); it’s easy to use and enables users to filter exactly what’s needed. For us it’s at least 6 seats, automatic (Mrs H’s requirement) and we only wanted to see results within 20 miles of where we live because we’d be schlepping the kids around with us to look for cars.

Some of the results were from Car Giant – which is advertised as a car supermarket with over 1,500 cars available for viewing (apparently there’s another 3,500 ‘in the back’). It’s reasonably close to our house so we went for a visit.

I’ll skip the details of the visit, other than to say that the entire experience is ruthlessly efficient, for both customers and Car Giant. Within 2 hours of opening on the Sunday they’d already sold 200 cars. You need to be efficient to cope with that much stock and customers.

Back to the digital elements… After we’d taken a car for a test drive we thought about speaking to them about financial options. They gave us the headlines and some time to think about it. So I got out my phone and within a few minutes I’d arranged an improved offer with my bank using their standard banking app. And despite being a Sunday, the money was in my account immediately (can someone remind me why cheques take time to clear…?).

When we ordered the car, they asked the standard questions like “Where did you hear about Car Giant?”. I answered AutoTrader and the sales guy said that virtually everyone answers the same. AutoTrader is the ubiquitous car search engine. He asked what car magazines we’d used for research and I answered that we hadn’t read any magazines, just online websites and he said that he hadn’t had a single customer in the last month that had answered with a magazine title.

Clearly people buy car magazines such as Top Gear and the top selling Auto Express but I suspect their readers either buy brand new cars (which Car Giant doesn’t sell) or want to hear news and stories about cars rather than buying advice.

Three days later we came to collect the car. Full credit to whoever designed the internal IT systems at Car Giant because the process was silky smooth and again, ruthlessly efficient. The advisor went through all the steps on the screen with us (checking paperwork and so on), and just like visiting an Apple store, by the time you leave the place, they’d emailed all the necessary paperwork.

Many companies are experiencing more disruption than any previous period. I congratulate Car Giant for embracing the disruption and transforming their business into the efficient operation which attracts customers on AutoTrader, through to the collection process.

I just wonder what the industry will look like in another 8 years’ time.

Five Key Internet Megatrends: 4. Browsers are too basic

Browsers are too basic and need to mimic the 3D world that we live in
Browsers are too basic and need to mimic the 3D world that we live in

Key points:

  • The future of browsing will be a 3D immersive ‘World’ experience
  • It will solve the discovery issues of current ecommerce web sites

If you had ever worked with mainframe technologies, you probably wondered what the fuss was about when the first web browsers were released.

Mainframes work on a transactional basis. Technically, the entire interaction with a mainframe is to ask something (which in the web world is called a Request) and your program receives an answer (in the web world is called a Response).

In between the mainframe and web world, there was ‘thin-client’ architecture which was the same model again.

In between mainframes and this clients were fat clients. Fat clients are programs which can do complex number crunching using data on the computer in front of you. Common examples are Word, Excel, Access, Desktop Publishing Systems, and most computer games.

So in the 1980s and 90s we had these complex local programs, fat clients, and when the Internet came along, we took a big step backwards. We went from good looking interfaces to white pages with lots of Times New Roman text.

Very recently, browsers have taken advantage of more interaction (using technologies such as Ajax and jQuery) without users needing to refresh a page. It wasn’t that long ago that to use a map inside a web browser that users had to click on a link to see further in one direction, took the user to a different web page. Now, we’re able to zoom in and out and drag a map around and effectively stay on one page.

But we’re all human, and the web browser isn’t good enough. We need to see a 3D style environment to visualise the web.

The first attempt at this was Second Life. In fact Second Life was a very good first attempt as far as technologies go, and big players such as IBM spent a lot of money in the first virtual world if its kind.

Retailers opened stored on Second Life because the shopping experience is more natural n a 3D environment that a single product per page.

Unfortunately, Second Life was too far ahead of its time. It was too early in Internet adoption. The Internet wasn’t as ubiquitous as it has become.

At the time of writing, Google’s Chrome browser is on version 26. It’s sad that after 26 versions, it’s still showing you white pages with text on.

Book review (and much more): The Intention Economy by Doc Searls

The Intention EconomyOn 6 October 2009, Endava hosted an event for all the Premier League Football clubs (and a handful of European ones too) called Football Club Website of the Future. It was to mark the end of the transition of the IMG Digital team over to Endava.

We had a number of high profile speakers at the event including some of the Premier League clubs, IMG, Facebook, and Deloitte, who produce the annual Deloitte Football Money League report.

At the event I gave the introduction/ welcome presentation, and discussed two key concepts based on the experience moving from IMG to Endava:

  1. Football clubs have unrivalled levels of loyalty – a fan might change clubs once in their lifetime, compared to moving around financial services companies every few years.
  2. Technology trends in the marketplace.

The technology trends became a regular part of all our future presentations and events. As I look back on the various industry conferences we’ve spoken at or hosted, I can see how they developed from the Football Club Website of the Future event.

The first trends we highlighted included the following:

  1. Content won’t be free for much longer. Content overly relies on the advertising model as a source of funding. In the future, users will pay tiny amounts per page or function (such as a web search on Google, etc.) and there will be a central ‘agency’ for distributing these micropayments back to the content author.
  2. The web needs an SSO (Single Sign On) system to be the single method to log on to all websites with the same username and password (or another form of authentication such as facial recognition or text message). Facebook Connect had been launched for little under a year when we hosted Football Club Website of the Future, and I thought it was a brilliant first attempt at a web-wide sign on system. However, I didn’t (and still don’t) think Facebook is a trusted brand that I would use for everything across the web. I wouldn’t use it for my tax returns, share dealing, pensions, and so on. I would want the SSO system provided by a fully trusted organisation such as Visa, Mastercard or HSBC. It probably wouldn’t be a government or a dotcom company.

These trends have evolved, and I’ve started documenting them in much more detail since reading The Intention Economy by Doc Searls.

I was recommended to read The Intention Economy by a client when we travelled to Romania to show them one of Endava’s delivery centres (where the project management, development and testing is executed). At dinner one night I went through some of the trends, and the client asked whether I’d read The Intention Economy. I hadn’t even heard of the book at the time. The client said that many of the trends ran parallel to Doc Searls’ thoughts.

When I returned to the UK I bought the book within an hour of landing.

When I started reading the book, it was a strange feeling. It was like someone reading back to me some of the presentations I’ve been giving for the last four years (only he is infinitely more articulate and structured!)

The book covers a dozen or so different topics for the future under the banner as a customer-centric economy. These include the Single Sign On concept above, the unsustainable advertising bubble, cookie tracking, modern legal contracts, so-called loyalty schemes, big data, ownership, and the core of the new economy: VRM.

I first reported about a VRM tool (it was a mobile app) that I’d seen on holiday in Israel last summer. I called it a personal CRM tool at the time, which Doc Searls calls VRM, for Vendor Relationship Management.

The concept of VRM or The Intention Economy is simple – we are constantly being pitched stuff all the time – buy this, buy that, this is why you need this or that. However technology should enable us to say “I want this thing, who wants to match the price I’m willing to pay?”

The example in the book is landing at an airport and entering into your VRM system “I want to hire a car, with 5 seats, and can hold 3 large suitcases, and I want to pay $x for 6 days”. Searls calls these ‘personal RFPs’ (Request For Proposals). After submitting this request, the hire companies will return a result with offers.

I don’t agree with everything in Doc Searls’ ecosystem.

He highlights the overuse of cookies, i.e. tracking technology. Although the use of cookies has become too much – his example is the top fifty childrens’ websites installed a total of 4,123 cookies seems extreme. These cookies are then used on other websites to make the advertising more relevant. However cookies are mainly used to track behaviours, not individuals.

The chapter on online loyalty is over simplified for the real world. I often give an analogy that website personalisation [via the use of cookies] is the online equivalent to an old fashioned shopkeeper who recognises customers when they walk into their shop. This is a good thing – I like how Amazon knows about me and recommends relevant products.

Whilst I completely agree with Searls’ key point that the advertising industry has become a huge bubble that now sustains such a large industry, it is necessary. If there was no advertising, customers simply wouldn’t know about new products or services. There needs to be a balance. In June last year I posted an article about Tencent in China, who have revenues of $1.5bn per quarter – not from advertising:

I find it fascinating that whilst most US/ UK B2C digital offerings are focussed on advertising models, especially Facebook and Google, Tencent are earning money from subscription models and e-commerce.

Why isn't The Intention Economy owned by Creative Commons?
Why isn’t The Intention Economy owned by Creative Commons?

Doc Searls is the editor of Linux Journal, so he is a strong advocate of open source. He puts his case for open source in the book, however it’s unbalanced and I see the software industry from the opposite side of the fence, where vendors do want to earn profit from selling software. He then moves on to discuss why Creative Commons (essentially open source Intellectual Property). At the end of that chapter I agreed with his thoughts on this, and decided so change some of the content strategy on this blog – make it more open and not hold back on personal thoughts. However, The Intention Economy book is copyright!

It’s a shame that Searls doesn’t have any retail experience. Although he cites a number of conversations with CEOs of huge retailers, they are completely biased towards their own model (e.g. of not having loyalty schemes) rather than providing a balanced argument.

The Intention Economy is the best business/ technology book I’ve read for a long time. I thoroughly recommend you read it. The style of the writing with lots of short chapters, and an opening argument and closing ‘so, then’ closing argument makes it easy reading.

Most importantly though, Doc Searls gets across how companies need to get back to customer centric organisations. The current organisational trend is that branding and marketing and advertising and other departments within an organisation are becoming more distant from paying customers, even during the recession.

We need to reverse the trend and put the customer first. This can be accomplished through changing corporate culture (making senior managers physically meet customers in their own environment) and systems such as VRM.

I’m delighted to see large organisations begin to do this. At the Visa conference last week, before I’d finished reading The Intention Economy, I could see how the CEO and CTO were discussing key concepts from the book – putting customers first.