Infographic: M-commerce and mobile shopping in Australia

by Marketing ON 17 May 2013

Online shopping still accounts for only a fraction of the $256 billion total retail market in Australia, and shopping done through mobile devices like smartphones and tablets is just a slice of that, but at $5.6 billion it’s a considerable slice.

In this, another original infographic developed by Marketing, we draw on sources from Nielsen, TNS, PayPal, Quantium, NAB and the ABS to paint a picture of which categories are most popular via mobile, which retailers get the most hits online, and who uses which devices to scratch their ecommerce itch.

Click the image for full-size version

Omnichannel blueprint: sales events like Click Frenzy ignore retail brand fundamentals

by Simon van Wyk ON 7 May 2013

This time around, from an infrastructure capacity perspective at least, Grant Arnott and the people behind Click Frenzy got it right. While the promotion for the Mother’s Day event was muted compared to the crescendo of excitement bubbling around the inaugural sale, four hours into the event, Click Frenzy reported that it had registered just under a million clicks to participating retailers and approximately 3.5 million pageviews.

Yet consumers were hardly effusive. One tweet posted on BRW.com.au nicely sums up consumer response this time aroun: “Click frenzy wasn’t that bad… Spent $50 on loads of mossimo underwear that would usually cost over $130.”

Offers and discounts fail to excite

So while the latest instalment of this cyber sales push has been mercifully free of the problems that plagued and embarrassed the eretailing event last November, the level of enthusiasm from shoppers seems to have been lukewarm at best. While they still signed up in droves, the quality of the offers and deals that were promoted by the participating retailers seems to have left consumers more than a little unimpressed.

Yet I think this is part of the problem that is hardcoded into an event like Click Frenzy. The whole premise is discounting and deals. For retailers that have been discounting more or less round the clock – do they really need an online event that provides more of the same? Smart retailers are forging fully integrated customer experiences across the physical and online environments.

After all, buying stuff online is a daily activity for many millions of Australians. According to eMarketer, around the world, B2C spending on ecommerce surpassed US$1 trillion last year. Over here, in excess of 10 million Australians, or almost half of the country’s population, shopped online in 2012, and spent a sizable US$36.2 billion collectively.

This outlay amounts to an average spend of US$3547 per person, which eMarketer predicts will grow by a further 7.2% this year to more than US$3800 per person.

High level of per capita spending

Indeed, this level of per person spending rates second only to the UK, where average B2C ecommerce sales tallied $3585 per person for 2012. Australians are eager online shoppers where price, availability of brands, quality and convenience are all key factors driving the move online.

While events such as Click Frenzy make the headlines in Australia, over in the UK, the ongoing success of department store John Lewis continues to set new records. Online sales at the much celebrated store have now surpassed the £1 billion mark – more than a year ahead of earlier expectations.

John Lewis sets records

Quoted in the UK’s Telegraph, Mark Lewis, online director of the omnichannel retailer says, “Customers don’t view us as a store or a website, they view us as John Lewis. If you think about the world we are in now, it is more about customers choosing how they want to shop than retailers telling customers where their stores are. It is a different dynamic, it is being led by the customer. Our job is to follow that and stay ahead of it.”

He adds, “Omnichannel means we are there for the customers for how they want to shop, when they want to shop, in a way that suits them. That goes across the whole shopping experience, whether they are researching items, buying items, getting items delivered or collecting them.”

As all channels come together seamlessly for John Lewis, the company stands to benefit immensely from satisfying customer expectations.

The website is not a stand-alone thing

“Now we are at the stage where the website is not a stand-alone thing with a different set of customers,” explains Lewis. “Actually, it is part of the integrated business and we as a business want to fully integrate that and present a very seamless, single presentation to the customer.”

Indeed, looking at the success of John Lewis, Australian retailers now have an omnichannel blueprint and every opportunity to build a successful eCommerce business that’s wholly integrated with into current and future business plans.

Mobile analytics to refine multichannel retail marketing: a case study

by Joe Barber ON 15 April 2013

Website analytics provide a wealth of information, and even the free Google Analytics is well supported by myriad graphs and charts dissecting website traffic in just about every way imaginable. Leveraging this data to improve electronic direct marketing (eDM) efforts and refining site structure, however, seems to be a challenge and an ignored discipline.

There are aspects of mobile website usage that, when combined with good analytics, can provide a very valuable insight into the behaviour of your customers and should be used to refine a range of customer engagement strategies. Many of these insights can be derived only from mobile usage.

I was invited recently to join a US-based team that was given the task of analysing their site statistics and using this data to refine many aspects of their marketing tactics encompassing email, SMS, letterbox catalogues, in-store promotions and even site design adjustments. In the past, the primary use of analytics was to see how ‘hits’ or sessions were increasing and when to look at conversion rates to sales (the site was an online store generating around 2.1 times its largest physical store in a network of 780 stores).

The approach to reviewing the site traffic was simplistic and focused on conversion rates and the raw dollars being generated. Very little was done to link back eDM executions and their content to the impact on sales versus traffic.

If a particular promotion generated a 20% traffic spike, everyone got excited. But nothing was being done to see if ‘normal’ conversion rates increased or decreased and how deep visitation went into the site. No effort was being applied to refining the site structure to adjust the journey for a consumer, nor was there any effort to discriminate between mobile and desktop.

Some very interesting insights emerged from the team analysing six months of data, which was provided along with a detailed schedule of all eDMs, product specials, above the line activities and so on. The following paragraphs are some of the more intriguing facets of that analysis work.

With mobile, there is the ability to collect and log location-based data. This will prompt the user for permission to ‘locate’ their device. Interestingly, over a six-month period consumers agreeing to be located went from 32% up to 67%. There are so many applications on mobiles that request this data that consumers are becoming less fearful of accepting.

This location-based data, especially if logged with every progressive page transition, provides some very valuable data when combined with things like search terms used on the site.

Analysing the search data delivered some fascinating information. The search terms were simplistically broken up into three categories: category type words like ‘jeans’ or ‘televisions’, model-specific phrases like ‘Belkin N600’ and then the rest. On the desktop site, model-specific phrases were less than 17% of all searches performed, but on mobile they accounted for a staggering 67% of the phrases.

We then looked at the locationbased data and started mapping where consumers were using specific make/model search terms. I am sure there could have been an easier way, but for us this was a very arduous task! Due to the manual nature of what we were doing, we only had a small sample space, but we found that in nearly 90% of cases when a model-specific search phrase was used the consumer was close to or inside a competitor’s premises. The consumer was price checking!

It’s important to appreciate the number of sessions analysed was relatively small compared to overall traffic. But on mobile, where the consumer was clearly in a residential or office area, the behaviour was more aligned with desktop, and search terms became more generic and less targeted.

Think about what you present to a consumer searching your site for a specific make or model of product, on a mobile you are able to locate. It’s a consumer that knows what they want and are simply after the best buy, or are comparing models and makes for prices. Regardless, they are more than just a ‘site visitor’ browsing through your offering.

Imagine if at this stage in the site design you implemented some ‘close’ sale strategies. You could de-clutter web pages to focus on their requirements. With your top three or four competitors’ locations loaded into the back-end systems, you would immediately be able to discern if someone on your site is inside a competitor’s store and then tailor the search result to close the sale. Or, if they’re located near your own retail outlet, you could drive them into your store.

If there is good competitive understanding on prices, then ensure whatever price you deliver is the ‘best’ price and make it a time-limited offer if less than usual; for example: ‘Our regular price is $X, but for the next 30 minutes you can have it for $Y’.

Drive the customer into your store with special bundles that make the price check more complicated, but your offering more attractive, such as: ‘If you come into our store just three minutes away from where you are we can offer the TV with gold-level HDMI cable, personal video recorder and free delivery for just $X’.

The interception of search terms with location-based data delivers a new level of insight about the digital consumer. It gives you back the ability to use sales strategies to close a deal that can be customised by behaviour almost in the same way as in-store staff would approach a consumer. Remove the generic one-size-fits-all approach to their online experience.

A similar strategy was implemented for click-through off eDM pieces where location-based data was known. The consumer location was analysed to discern the type of page and content being presented and was customised based on proximity to a physical store, time of day, whether they were in transit or a fixed position and the type of promotion being delivered.

Time of day was very important and saw some big variations in search terms, navigation behaviour, page views and transaction rates on mobile. Multi-product purchases on mobile, for example, were significantly higher after hours than during normal shopping hours.

The next interesting discovery was when we started looking at basket composition by desktop and mobile, along with conversion rates and shopping cart abandonment. Per transaction, average session page views were almost 50% of that for desktop. In other words, on mobile, consumers browsed far less before concluding a purchase. So, on mobile we turned off banner adverts and simplified navigation and saw a 1.1% increase in conversion. Unfortunately, I haven’t seen the data over a long period, so I am unsure if this is a related spike or not. But hopefully what this example is doing is getting you thinking about how to take the volumes of data and actually use it to refine and improve sales.

The other interesting thing was the structure of the shopping carts between devices. Single-product purchases on mobile were seven times higher than on desktop. This is where some statistics can hide the nuggets of valuable information. The early site reports showed ‘average items per transaction’, but we wanted to know how many consumers purchased a single item.

The other piece of data we had was cart abandonment rates, which were noticeably higher on mobile than on desktop. I am sure there are many ways to explain this, given mobile online usage is far more ‘interrupt’ driven than someone sitting at a PC. When your phone rings, you receive a text message or arrive at your destination, then the online session is interrupted.

We implemented two changes on mobile. This is always dangerous, as it can be hard to correlate what impact each change had. First, we changed mobile to be single-click checkout by default. After checkout (we removed the shopping cart), consumers were offered other products to add to the order. This reduced abandonment rates by 9% and had no material impact on multi-product purchases.

The second change was to ask for an email address at the time of displaying any product detail page. This was intended to enable a follow-up email for anyone not concluding a sale or abandoning at checkout. It also provided the ability to link the consumer to previous purchases, gauge their ‘loyalty’ status and engage them more personally.

Originally, we actually asked for email at the start of a session and found less than 3% entered. When prompted at the product-level page, on the basis of ‘we can email you all this product information’, it jumped to a 35% collection rate. Of those emailed with a ‘hot offer’ after abandoning a checkout process, a further 4.3% were driven in-store showing the emailed coupon or went back online to conclude the transaction.

The analysis, recommendations, site changes and rule guidelines extended to a 200-page report and changed entirely the way the in-house team now thinks about analytics and website design. The significant efforts that physical retail invests in store design, merchandise layout, structures, approaches, visuals, consumer flow, register positioning and pricing has traditionally never been so deeply applied to online. But after six months of many changes and a significant ‘rules engine’ implementation, the overall sales volumes and revenues have increased far more than natural growth and have generated a measurable increase of in-store foot traffic.

Use the wealth of data that can be collected and leverage all aspects of the online experience across different devices and times of day to ‘personalise’ every online experience. Leverage location-based data and start to plot access trends by location and device and transaction ‘styles’. Online is not a one-size-fits-all experience. Online websites are being positioned as ‘middle ground’ to try to suit all consumers with a compromise. It doesn’t have to be that way. Marketing to the mobile audience can be very granular and very tailorable with the impact on sales potentially quite significant.

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Australia Post price increase puts online retailers offside

by Marketing ON 10 April 2013

The online shopping boom is being blamed for the price of postage bags going up, with some products set to increase by up to 30%.

Australia Post is pointing towards difficult business conditions and increasing operational costs for the price hike.

The changes have left online retailers concerned for the financial hit their businesses will have to endure due to the rises. An online petition to has been started on change.org, attracting angry online retailers, and has already been signed by almost 2000 people. The petition states:

“In Australia today many thousands of families rely on income produced through small businesses that operate online. It is not a new phenomenon but it is rapidly growing – well it was.”

The pricing changes came into effect this week.

Australia Post now receives more revenue from parcels than letters, with online shopping accounting for 70% of prepaid packages sent in Australia.

The value of the online shopping market has increased by $2 billion dollars over the past year. NAB’s Online Retail Sales Index found Australia’s annual online retail spending hit $13 billion in the year to January 2013.

The cost of a postage stamp will remain 60 cents.

Ecommerce and data: finding the gold in a mountain of dirt

by Marketing ON 4 April 2013

Vice president of ecommerce at omnichannel kitchenware retailer Sur La Table, Kevin Ertell stepped into the role nine months ago, bringing with him decades of experience in ecommerce and marketing for businesses such as Tower Records, Borders and OnlineShoes.com. Sur La Table blends a sophisticated online sales and marketing channel with a bricks-and-mortar presence that began almost three decades ago.

At the Ecommerce Conference and Expo in Melbourne later this month, Ertell will be presenting his views on data in retail in a talk entitled ’11 Ways Humans Kill Good Analysis’. He says that with the ecommerce world drowning in data, everything that can be measured will.

“The mountains of data can be full of gold if we mine them correctly, or they can just be big piles of useless dirt,” Ertell says.

“All too often, we misuse the valuable data we have and end up flailing away. Many of the reasons we aren’t happy with the results of the analyses come down to fundamental disconnects in human relations between all parties involved. Groups of people with disparate backgrounds, training and experiences gather in a room to ‘review the numbers’. We each bring our own sets of assumptions, biases and expectations, and we generally fail to establish common sets of understanding before digging in.”

Marketing: How does a marketer in an ecommerce business determine what is and isn’t useful data to their organisation – how does one know when they see the ‘gold in the mountain of dirt’?

Kevin Ertell Ertell: It’s tricky, but crucially important, to be able to decipher patterns in the data that drive results versus data points that are interesting but ultimately meaningless.

I think it’s important that marketing executives understand at least the basic concepts of statistics and remember all the nuances of statistics. As time has passed from our initial statistics classes, we tend to forget about properly selected samples, standard deviations and such, and we just remember that you can believe the numbers. But we can’t just believe any old number. All those intricacies matter. Numbers don’t lie, but people lie, misuse and misread numbers on a regular basis. A basic understanding of statistics can not only help mitigate those concerns, but on a more positive note it can also help decision makers and analysts get to the truth more quickly.

Ecommerce experts such as yourself talk a lot about the importance of continually improving the customer experience. Do you think bricks-and-mortar retail marketers can learn something from that?

I think bricks-and-mortar retailers can definitely learn something from the ecommerce approach to customer experience. We’re forced to look at it very closely because we operate self-service operations that must be incredibly easy and intuitive in order to be effective. To some degree, the brick-and-mortar environment has long had a crutch in that good sale associates can overcome bad design, poor signage etc to help get customers to complete the sale. However, it’s very difficult to track those kinds of assist (or lack of assists) from the corporate office on a national or international basis. That’s where a strong reliance on customer experience metrics in bricks-and-mortar environments can really show where problem area are and help point leaders in the right direction.

What other lessons in general do you think ‘traditional’ retailers can take from online retailers?

I think they should also know that their websites are doing a lot more for their businesses than just creating online sales. In addition to online sales drivers, ecommerce sites are great marketing vehicles, merchandising vehicles, customer research tools, and that works both ways, community builders, and in-store sales drivers. If they ask their customers, they’ll find many of them go to the site to research before ultimately buying in their stores. How they treat their sites can ultimately determine the success of those visits.

And vice versa?

Well, traditional retailers certainly know a lot about the business. They’ve been doing it a long time. They’ve spoken to customers face to face and they know what they way and need. I joined Sur La Table only about nine months ago, so I’ve been incredibly reliant on my store operations partners to understand our customers. They know them very well, and they’ve been incredibly helpful in giving me and my team and understanding of how we can create a better experience online for our customers.

What’s the biggest challenge at the moment for ecommerce businesses?

I continue to say it’s customer experience. Most online retailers still have single-digit conversion rates. Those are partly low because, on most sites, only a small percentage of people coming to the site actually have an intention to purchase online. However, the percentage of people who intend to buy still dwarfs the percentage of people who actually buy. There are plenty of reasons people don’t buy – like prices, shipping costs, and inventory availability – however bad customer experience continues to be an overwhelming reason why people ultimately leave sites before completing a purchase. We all need to be relentlessly focused on site usability to fully meet our potential.

This may be more prominent in tech-based companies, but for marketing executives spending more and more on tech (moving towards a point where it’s even more than CIOs) what are your predictions on the CMO-CIO relationship? Does it need improvements?

I think this is true in most industries. The reality is our businesses are highly dependent on technology. If we have ecommerce, then we have a consumer software application. And if we are developing consumer software applications, then we are technology companies. That means all executives should see themselves as technologist and should be pretty familiar with the capabilities of technology. And at the same time, technologists need to see themselves as business people. They are creating software that is driving the company’s business. Therefore, the ‘business’ team is not everyone but IT. It absolutely must include IT.

App-and-mortar economy: Retail apps usage surges 525%

by Marketing ON 14 March 2013

Forget bricks and clicks, as the world becomes more mobile retailers are looking at the reality of an app-and-mortar economy, according to app services firm Flurry.

The US based measurement specialist found time spent in retailer apps grew by 525% during December 2011 and December 2012, in a study of more than 1,800 iOS and Android shopping apps.

Retailer apps indexed well above the general shopping category, which was broken down into five sub-categories: retailer apps, price comparison, purchase assistant, online marketplace and daily deals. Together, these five categories experienced 274% growth throughout the year.

The opportunity for retailers to extend their relationship with consumers outside the store has never been greater, Simon Khalaf of Flurry writes. “In the new mobile app economy, devices are always with you, always on and always connected… In the new app-and-mortar economy, they serve as virtual, portable show rooms that consumers can use to shop anytime, anywhere.”

This growth in retail apps exceeds overall app growth, which came in at 132% over the course of 2012, showing the uptake of retail outpacing general app growth. Time spent in price comparison and purchase assistant apps has grown significantly, up by 247% and 228% respectively. However online marketplace and daily deals apps did not grow as quickly, with 178% and 126% increases respectively.

Retailers saw the greatest increase in share of time spent, which grew from 15% of time spent by consumers in shopping apps in 2011 to 27% by the end of 2012. The enormous growth in retailer app share has come largely at the expense of daily deals, down in share from 20% to 13%, and online marketplace apps, which contracted from 25% to 20%.

This suggests that retailers are beginning to better respond to the tectonic shift created by the collision of online- meeting offline-shopping through mobile apps, Khalaf says

Retailers need to re-examine the consumer relationship from the ground up and through the lens of mobile-first, Khalaf concludes.

Tablets to reach 70% by 2017, smaller set to dominate

by Marketing ON 13 March 2013

Tablet penetration is forecast to hit 70% by 2017 with smaller models set to dominate, new research from Telsyte shows.

The technology analysts found more than 5 million people in Australia were using tablets by the end of last year, with Apple making up around 70% of the 2.4 million units sold throughout the year.

The arrival of the iPad mini in November 2012 buoyed Apple’s sales, Telsyte says, which were being eroded by the flood of cheaper Android products hitting the market. Samsung claimed 9% of sales across the year, while the next closest competitor, Asus, accounted for 8% of sales.

The smaller form factor appears to be where the future of the market lies, with 7 to 9-inch tablets forecast to exceed sales of 10-inch devices by 2014, and a decline in cellular-enabled units expected as the home emerges as the main location of use.

“Low cost and smaller form factor media tablets, typically without cellular connectivity, are shaping the market,” Telsyte research director, Foad Fadaghi, says.

By 2013 Telsyte forecasts tablet penetration to hit 50% of homes, supporting figures in Nielsen’s ‘Australian Connected Consumers‘ report, and by 2017 prevalence of the device is expected to reach a level comparable to today’s smartphone user base.

Despite a slow start, Windows 8 tablets are expected to steadily grow in popularity, particularly with the business market, younger users and consumers looking to replace aging laptops.

The study also found tablet related ecommerce is booming, with half of all tablet users having purchased a physical product or service via their devices in 2012. Some categories are approaching similar rates of ecommerce uptake as on computers, such as event tickets and travel related purchases. Telsyte expects this trend to continue as more shopping and catalogue applications appear in 2013.

“The explosion in commercial transactions on media tablets highlights the importance of a multi-screen strategy for digital advertisers and retailers,” Fadaghi says.

Telsyte’s ‘Australian Media Tablet Study 2013-17’ surveyed a representative sample of 1000 Australians.

Retailers fight off internationals: local multi-channel spend strengthens

by Marketing ON 7 March 2013

Australian retailers have hit back against large international players, outpacing the growth in online sales shown by overseas giants, recent figures show.

Domestic online retail has shown near record growth in recent months, with sales increasing by 28% year on year in January, compared to 25% year on year for international operators, NAB’s Online Retail Sales Index found.

Domestic retailers accounted for 73% of the $13 billion spent online in the year up to January, with the adoption of multi-channel strategies, live inventory management techniques and enhanced stock turnover credited for their strong performance.

Online retail sales rose to an estimated $13 billion across the year and are now equivalent to 5.8% of traditional bricks-and-mortar sales when food retailing is excluded.

Overall, growth for January was unseasonably strong at 27%. Even though January is typically a weaker month for the online sector, 2013 experienced a strong post-Christmas period, NAB group chief economist Alan Oster says.

“Online remains much stronger than traditional retail, up just 0.4% year on year in December 2012, on a non-seasonally adjusted basis,” Oster points out.

Trends in the individual sub-sectors of online retailing remain divergent, with ‘Household Goods & Electronics’ showing above average growth over the past three months, after a long period of underperformance.

‘Auctions, Departments & Fashion’ remained the largest sector, grossing almost half (48%) of online sales. ‘Recreation, Toys and Games’ accounted for 20% of spend, while ‘Groceries, Liquor & Specialised Food’ claimed 13%.

Those aged in their 30s and 40s remain the key demographic for online spending, while Western Australia’s share of spending continues to rise, as the state outpaces the rest of the nation in growth terms.

“It’s clear that our domestic retailers are now fully comprehending the potential of the online retail channel,” the report concludes.

The spectacular fusion of ecommerce and marketing

by Brian Vella ON 4 March 2013

We all know the customer landscape is radically different to what it was five years ago. Compared with a generation ago it’s barely recognisable. Though how much has changed when it comes to the marketing skills acquired and valued?

What we know is that the explosion of social media, data, bandwidth and constantly-emerging internet-connected devices has left many CEOs and CMOs struggling. And in many cases, the agencies providing them advice and services are struggling too.

Another change driver we’ve observed, which is less talked about though increasingly important, is the convergence of sales and marketing. Historically these disciplines were relatively separated. You were either in one or the other. Sometimes they even acted as competitors, with sales blaming marketing and marketing blaming sales for poor performance.

In the digital economy, with the evolution of ecommerce and marketing, the two have spectacularly fused. It’s now not enough to market a product or service and rely on someone else to make the sale. You need to know how to convert at the same time. It’s about the call to action, and the action itself.

The customer journey in the past was much simpler. Agency makes product desirable (or at least visible). Customer goes out of their way to buy in store. Today the line between sales and marketing is completely blurred. What were once two discreet disciplines have changed completely with the pervasive internet. A customer now engages and interacts with the marketing message and the sales channel in the same act.

For example, someone views a product on TV, Facebook or their mobile and within seconds can be searching for more information. The ideal customer journey would be that they’re quickly engaged on a company’s branded site and then adding that product to their virtual cart. (And then sharing and promoting within their social graph).

To sell in the digital economy, marketing has become so much more sophisticated. An online store – whether it’s in customers’ browsers or on their smartphones – is as much a part of the marketing today as any ad that runs on TV. Lee Clow, the acclaimed creative director behind Apple’s most famous TV spots, once said, “I often tell people that the best ad we ever did was the Apple Store.” Now, Apple’s most important stores are online.

So marketers and agencies need to not only know how to build brands, tell stories and create engagement, they need to craft the experience a customer has outside physical stores.

DT Sydney general manager Phil Whitehouse talks about customer experience being the new brand. He writes, “The customer experience across every digital touchpoint – whether owned or earned – should be akin to a good waiter in a top restaurant, or a concierge in a top hotel. The thought given to the customer should be evident by the ease with which they can meet their goals. They should be able to move seamlessly, joyfully through the system.”

The question therefore is how many of us have skills in this expanding space, and can confidently offer value across the entire digital ecosystem.

Practitioners must understand the principles of marketing communication and the rapidly evolving digital ecosystem in which customers and brands coexist It’s our view the solution lies in a diverse group of experts collaborating with a common goal. These might include interface designers and user experience experts, engineers, data analysts, content creators, social media strategists and ecommerce consultants. The concept of planner, art director and copywriter alone now seems so incongruous it’s hard to imagine. The challenge herein is creating a culture that celebrates all of these diverse specialists under the one roof. This is the number one reason why most agencies have failed to evolve fast enough to date.

The business I’m fortunate enough to work in has always championed a collaborative culture of left-brain and right-brain thinkers. More recently, and via an important partnership with Ogilvy, we have learned and augmented the broader principles of marketing communications.

One day we’re talking to Officeworks about their ‘Tax Time’ campaign’s online ‘advertising’, the next we’re talking about their bounce rate and cart optimisation. Our goal is to get as many people to the product as possible, and then move them through to sales conversion. Both are important skills, though what’s most important is having both.

To achieve this in 2012 we created 15 practice areas, in areas as diverse as digital strategy, ecommerce, engineering, mobile, social media, advertising, user experience, data and analytics and infrastructure support. Each practice area is led by an industry leader, and adapts constantly, to offer the integrated expertise most relevant to our clients at any point in time.

In terms of other learnings, we’d also highlight the importance of a progressive attitude. Many agencies have been so focused on ‘pure creativity’ they’ve failed to stretch their culture to make room for technologists. A token creative technologist, or ‘head of innovation’, is simply not enough. Every employee of a modern agency should be a creative technologist of sorts.

2013 provides an opportunity for a renaissance in business and marketing.

The evolution of marketing presents tremendous opportunities for all involved. Embracing the convergence between sales and marketing is one idea. There are many others. A search for ‘agency of the future’ returns 595,000,000 results. There is no shortage of opinions. What we can say is that today we’re working with CMOs, CTOs and the emerging customer experience officer. We’re increasingly playing a role on both sides of the commerce coin.

Most websites are leaking money

by Bri Williams ON 1 March 2013

Most of the websites I visit are leaking money and yours might be one of them. Out of every 100 people who visit an average website, only five are becoming customers*. Worse still, three out of every 10 online shopping carts are being abandoned*. Something is broken, and it’s up to marketers to fix it.

The fundamentals have been screwed up

The task of your website is to get someone to do something. Ultimately it’s about that visitor buying something which means your task as a marketer is to create a process of behavioural change. ‘Process’ is important here because the secret lies in small, behavioural steps rather than expecting your visitor to take giant leaps.

I’ve boiled the secrets of increasing your website sales and sign-ups down to five essentials. Here are the first two. (I’ll cover the rest next time.)

Establishing confidence

When someone lands on your website you have to establish two types of confidence in order for them to proceed: confidence in them that they’ve landed where they intended, and confidence in you that you’re a site that can be trusted.

And the scary news is that you have around seven seconds to do this.

There are three principles of behavioural economics you can leverage here.

Social proof: gaining confidence from the fact that others have done business with you,
loss aversion: overcoming any anxiety through guarantees and credentials, and
fast thinking: designing content that can be processed easily rather than copy-heavy text and confusing images.

To establish the visitor’s self-confidence look at clearly naming your business in the header and matching the language on the site with search terms that they may have used.

To establish confidence in you consider how you display your credentials (years established, industry accreditations) and proof points (guarantees of service and testimonials).

Who’s doing it well? Check out Mailchimp.com, The Book Depository, Anymeeting.com and Birdsnest.com.au to see how they establish confidence.

Communicating value

“Can you solve my problem?”

The question that your visitor has in their mind is pretty obvious, isn’t it? And yet most websites fail to articulate the problem they solve and the value they offer. Instead they bang on about their history and bombard the visitor with product ranges and special offers. It’s simple too much, too soon.

Remember that your website should be like a date not a lecture.

We’ve all had bad dates where the person talked about themselves at length without pausing for breath. What happened? You got bored and left as quickly as possible.

That’s what a lot of websites do – “At XYZ company we…”, “I’m passionate about…”, “Our business prides itself on…” – Who cares! At this point your visitor simply wants to know ‘Can you solve my problem?’

As marketing professionals value propositions are our bread and butter. Look at your website now and check whether your value proposition does the following:

Articulates the problem your visitor has,
explains how you solve this problem,
describes the payoff, and
explains why only you can do this.

If it doesn’t, then you are missing one of the most essential elements of getting your visitors to buy from you.

In addition to answering the four points above, to communicate value there are three principles of behavioural economics you should aim to use in your value proposition:

Loss aversion: We hate to lose more than we love to gain so communicate what the visitor has to lose if they don’t address the problem,
Scarcity: When it’s rare it’s valuable. When Facebook and Pinterest started they used exclusivity to build desire, so what is rare about your solution? What is your key differentiator? and
Social proof: We follow what others have done so use statistics on your customer base and/or testimonials to showcase your value.

Who’s doing it well? It’s tough to find great examples of value propositions – it’s like the forgotten magical ingredient for effective websites. Evernote.com is one of my favourites and you can check out my website briwilliams.com.au to see how I’ve approached it.

The first two essentials for effective websites, establishing confidence and communicating value are make or break. If you have as little as seven seconds to get your visitor to engage, the heavy lifting has to be done above the fold.

In my next post we’ll cover three more essentials: creating a pathway, asking for action and the effort-reward equation, which together will mean your website stops leaking money and you will see your conversions skyrocket. In the meantime I’d love hear your thoughts on who you think is doing it best.

* ‘Online Retailing Australia 2011′ by Forrester Research

Traditional retail on life support, but omnichannel can help breathe new life

by Simon van Wyk ON 20 February 2013

Until the Australian Bureau of Statistics begins publishing monthly online retail sales figures in November this year, understanding the real size and growth trajectory of online retail in this country will continue to be difficult to gauge accurately.

According to PwC and Frost & Sullivan, Australian online shopping expenditure will grow from $16 billion last year to $26.9 billion by 2016.

Offline, what we can see with our own eyes on any high street or shopping mall in the country is that trading for retailers remains tough. Discounting continues to be the only strategy, especially for bricks and mortar retailers that have ignored ecommerce and building an online presence.

The death of traditional retail

If you listen to Marc Andreessen, the creator of Netscape, who is now partner of venture capital company Andreessen Horowitz, and an outspoken purveyor of online wisdom, the death of traditional retail stores is nigh. He believes that ecommerce stores will be the only way we shop in the future.

Of course this sort of thing makes for a great headline but it is something of a considerable over-simplification. There’s no doubt that traditional retail continues to hurt, but the consumer switch to mobile everything has, curiously enough, breathed new life into bricks and mortar businesses.

After all, channels blur when consumers use their smartphones to price-check merchandise when they’re actually in the store. Consumers jump from their smartphones, to tablets, to desktops to the physical store depending on the time of day to satisfy their immediate needs. They want a consistent experience.

Clearly the traditional bricks and mortar retail business model doesn’t add up any more, but for an omni-channel player, the future looks bright. ecommerce today is a very different beast than it was only two or three years ago.

These days it’s about providing a fully-integrated customer experience that works across multiple customer touchpoints. It’s about delivering a connected and consistent retail and brand experience across all the places where the customers are – online as well as the bricks and mortar presence.

Using an omni-channel approach you can track customers across multiple channels, and deliver a 360-degree brand experience, not one that changes with the channel. Adding an option to buy online and pick up at a store strengthens the value of the bricks and mortar presence.

Just look at the humble US pharmacy Walgreens which now appears on a list of the 10 most innovative healthcare companies as a result of their ecommerce, mobile, online and in-store prescription experience.

10% of its business in online sales

After dragging its heels on ecommerce for something like a decade, David Jones is racing to bring its grand plans to fruition. The goal is to deliver about 10% of its business from online sales, up from less than 1% today.

To mirror the stellar performances of overseas retailers such as Nordstrom or John Lewis, David Jones has been fervently upgrading its online presence for both desktop and mobile users. The retailer has doubled the number of its online customers and has tripled its online sales.

David Robinson, head of omni-channel strategy for David Jones told the Australian Financial Review in November last year that the group has completed “six years’ worth of work in six months” on its ecommerce system. My own experience at Christmas suggests it was unfortunately the six years work just prior to getting the system working.

But that’s another story.

Omni-channel strategy

As further signs of the company’s shift into the omni-channel space, earlier this month David Jones launched its first retail iPad app, and to build engagement and interest in its Autumn/Winter collection used online tools and technologies to stream its new season designer showcase to its biggest fans.

Live footage of the Sydney catwalk show featuring Miranda Kerr, was streamed to selected card holders at special events at the retailer’s Melbourne, Perth, Brisbane and Adelaide stores.

Other customers could log on to the David Jones’ website from their computers, tablets and smartphones to enjoy an online front-row-seat experience and backstage pass. You could tweet your questions on fashion to host Jason Dundas, download music from the show and vote for your favourite designs.

In addition you could capture and share images through social networking sites and add the garment of your desire to your shopping wishlist, check the price and see when it would be available in stores. Alas the technology was not ready for you to actually buy it directly online through David Jones’ online store. There’s obviously much work to be done.

Returning to Marc Andreessen’s assertion that traditional retail is dead, I would proffer a different point of view. While I agree that the traditional retail model is unsupportable, I am a big supporter of the omni-channel approach where the bricks and mortar stores plays an important part as one of the many connection points between the retailer and the customer.

BlueArc Group launches new full-service digital agency, ArdentDigital

by Marketing ON 18 February 2013

BluArc Group has launched new full-service digital agency, ArdentDigital, as a spin-off to existing agency BluArc, with the new agency taking some of the largest clients. It is believed ArdentDigital will focus on this higher end of the market while BluArc will continue to service the mid-market.

On the decision to create the spin-off, ArdentDigital’s commercial director Ben Eames told Marketing in a statement: “ArdentDigital was created in response to feedback from our national and international clients as well as market demands. ArdentDigital will leverage its depth and experience in complex web development with stronger creative and UX services.”

With offices in Sydney, Melbourne and Shanghai, ArdentDigital opens its doors with a client portfolio including Virgin Mobile Australia, Westpac, Colliers International and Freedom Furniture.

Meanwhile, the Group’s other agency, BlueArc, will continue to offer its broad range of digital technology services with a focus on web content management, ecommerce and mobile solutions to the Australian market.