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eCommerce: The Crucible of Customer Engagement

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Today at the Direct Marketing Association’s annual conference, DMA2014, the Global Event for Data-Driven Marketers, OgilvyOne Chairman and CEO, Brian Fetherstonhaugh, presented “eCommerce: The Crucible of Customer Engagement.”

Joined by John McDonald, former VP, Marketing, Americas, British Airways and Ryan Craver, SVP, Strategy for Hudson’s Bay Company, Brian explored a more enlightened approach to eCommerce, one that is omnichannel, relationship-focused and experiential.

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eCommerce: The Crucible of Customer Engagement

  1. eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 28 DMA 2014 OCTOBER 28 SAN DIEGO
  2. cru·ci·ble Pot in which substances are heated to a very high temperature or melted Difficult test or challenge Situation that forces people to change or make difficult decisions eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  3. eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  4. DATA eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  5. CREATIVITY eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  6. CUSTOMER ENGAGEMENT eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  7. WHY eCOMMERCE eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  8. eCOMMERCE IS HUGE B2C B2B > 30% Intent to Buy Online $ 1.5 T $0.9 T Airline Tickets Clothing & Shoes Hotels & Tours Event Tickets Books Electronic Equipment Mobile Phones Cosmetics Sporting Goods Computer Hardware eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  9. IT’S GETTING MORE GLOBAL $1.0 B #1 for Browsing 1.2B Per day People eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  10. EVERY MAJOR PLATFORM IS ON BOARD eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  11. MOBILE & MILLENNIALS DRIVE THE FUTURE Mobile commerce Growing 2X faster Millennials +56% more likely to shop online eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  12. THE PROBLEM WITH eCOMMERCE •Silo’d into the IT organization •Focused just on the transaction and only on the PC-web channel •Crashed on Thanksgiving and at Christmas eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  13. THE ENLIGHTENED VIEW: CONTINUOUS COMMERCE 1. OMNICHANNEL PHYSICAL STORE DIGITAL STORE 2. RELATIONSHIP One Transaction Continuous Commerce Lifetime Value 3. EXPERIENCE eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  14. WHAT LEADERS ARE DOING eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  15. FORMER VP, MARKETING, AMERICAS JOHN MCDONALD eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  16. TRAINING TO WORK FOR AN AIRLINE eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  17. THE SELLING CHALLENGE: GROWING BEYOND LONDON eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  18. THE OPPORTUNITY: NORTH AMERICA — INDIA eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  19. PUTTING THE CUSTOMER AT THE HEART OF SELLING eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  20. FROM DATA TO CUSTOMER INSIGHT eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  21. WHO, WHAT, WHERE, WHEN eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  22. eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  23. RESULTS eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  24. 65% £10+ million #01 xoxo 60% completion eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  25. Visit Mum. eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  26. RYAN CRAVER SVP OF CORPORATE STRATEGY HUDSON’S BAY COMPANY @ryanmcraver E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  27. RETAIL FOOT TRAFFIC HAS DECLINED The “death” of retail has been driven by headlines and data showing: Holiday season Brick & Mortar traffic has declined nearly 50% since 2010 Total Retail Foot Traffic November – December1 40 30 20 10 0 Category 1 2010 2011 2012 2013 Billion visits E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  28. Other “EYE SHARE” HAS SHIFTED DRAMATICALLY 41% 30% 15% 8% 7% 37% 47% 11% 4% 2% 2010 2014 E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  29. MCOMMERCE IS DRIVING ECOMMERCE US Retail eCommerce Sales1 $700 $525 Total Sales (billions) $350 $175 $0 2012 2013 2014 2015 2016 2017 2018 mCommerce as % of Retail eCommerce Sales Traditional mCommerce 1 eMarketer, April 2014. Note: Includes products or services ordered using internet via mobile devices, regardless of the method of payment or fulfillment; excludes travel and event tickets; includes sales on tablets. ‣ eCommerce is expected to grow 87% from 2013 to 2018 whilst mCommerce is expected to grow 157% ‣ By 2018, mCommerce will account for 27% of overall US eCommerce Sales E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  30. CONTENT IN THE DIGITAL UNIVERSE IS EXPERIENCING TREMENDOUS GROWTH ‣ Two thirds of total digital universe is consumed and created by consumers via video watching, social media usage, image sharing 13.0 9.8 6.5 3.3 0 Digital Universe Content1 2013 (+50% Y/Y) 2005 2016 1 IDC Digital Universe, data as of 5/14. Reference from @KPCB Internet Trends. Note: 1 petabyte = 1mm gigabytes, 1 zetabyte = 1 mm petabytes. Zetabytes of Data E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  31. 100% 75% 50% 25% 0% CUSTOMER PREFERENCE FOR IN-STORE VS. CLICK VARIES BY DEPARTMENT Discovery Trial Purchase Pickup Return Apparel & Accessories Computer & Electronics Health & Beauty & Furniture Furniture Fine Jewelry Computer & Electronics Health & Beauty Furniture Health & Beauty Furniture Highest In-Store Preference Average In-Store Preference Lowest In-Store Preference 1 A.T. Kearney Omnichannel Shopping Preferences Study, July 2014. n=2,504 respondents and r=8,518 journeys E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  32. NO CUSTOMER IS BINARY, 100% BRICK OR TOUCH/CLICK CLICK/TOUCH Leisure Researched Webroomer Showroomer BRICK ‣ Visits mall to shop on weekends or after work, browses in-store ‣ Reviews print media to learn of sales, brands, and collect coupons ‣ Slow transition to digital shopping ‣ Visits mall or specific store to shop, browses online and in-store ‣ Reviews mix of media, subscribes to favorite brands and retailers ‣ Prefers to shop in-store, when shopping online keeps it familiar ‣ Visits store to try-on or see product, browses mostly online ‣ Uses social sites or affiliates to browse and learn of brands/sales ‣ Comfortable to buy online, mobile next ‣ Visits store just to try-on or see product, prefers to shop online ‣ Uses any social site or affiliate to collect offers and try new brands ‣ Seeks best price and free shipping/returns E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  33. EMERGING TRENDS 1 2 Social Media > Social Commerce On-Demand/Instant Gratification Marketplaces 3 Location Marketing E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  34. EMERGING TRENDS 1 2 Social Media > Social Commerce On-Demand/Instant Gratification Marketplaces 3 Location Marketing E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  35. Users SOCIAL PLATFORMS CAN BE GROUPED BY GROWTH RATE Time DECLINE MATURE STEADY ACCELERATED E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  36. SOCIAL PLATFORMS CAN BE GROUPED BY CURRENT USE CASE Customer Service Commerce Personal Sharing News E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  37. EVENTUALLY ALL PLATFORMS WILL MONETIZE THROUGH COMMERCE Customer Service Commerce Personal Sharing News E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  38. EVENTUALLY ALL PLATFORMS WILL MONETIZE THROUGH COMMERCE Customer Service Commerce Personal Sharing News E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  39. EMERGING TRENDS 1 2 Social Media > Social Commerce On-Demand/Instant Gratification Marketplaces 3 Location Marketing E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  40. QUERYING CUSTOMER SERVICE ‣ Contacting Retailer via Phone, Email or In-Store ‣ 24/7/364 Public Posting via Social Media Channel E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  41. PEOPLE MOVING ‣ Hailing a Cab ‣ On Demand Cab or Car (via Uber) E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  42. FINDING A PLACE TO STAY ‣ Direct Hotel Booking via Travel Agent, Phone or Website ‣ Booking Short Term Rentals By Couch, Shared Room or Entire Home (via airBnB) E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  43. EATING DINNER ‣ Wait for Check and Checkout at Mercy of Restaurant and Server ‣ Pay and Split Check Whenever Ready (via Cover & OpenTable) E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  44. REQUESTING DELIVERY ‣ On-Demand Retailer Batch Selection with Pre-Selected Delivery Times ‣ Delivery via Parcel Companies in 1 – 5 Days E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  45. OUTSOURCING CHORES ‣ Packing and Shipping Boxes to Ship ‣ Snap a Photo and Have Courier Pack and Ship (via Shyp) E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  46. PURCHASING LOCAL GOODS ‣ Access to Millions of “Local is Global” Products (via Etsy) ‣ Attending Craft Fairs E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  47. PERSONAL SHOPPING ‣ Pull Based In-Store Personal Shopping ‣ Initial Stylist Visit with Monthly Push Based Subscription of Product (via Trunk Club, Frank & Oak) E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  48. PERSONAL STYLING ‣ In-Store Visit & Makeover ‣ On-Demand Stylist Visit at Location of Choice for Beauty (via Glamsquad) E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  49. MALL BROWSING ‣ Visiting Malls ‣ Hundreds of Brands at Fingertips with One Click Checkout (via Spring) E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  50. ADVERTISING PRODUCT ‣ Smarter, Targeted Advertising using Push Notifications (via Beacons) ‣ “Dumb” Advertising E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  51. EMERGING TRENDS 1 2 Social Media > Social Commerce On-Demand/Instant Gratification Marketplaces 3 Location Marketing E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  52. MOBILE EMPOWERS CUSTOMERS IN-STORE Customers of all ages use smartphone in-store at least sometimes…1 1 Thrive Analytics & Local Search Association, January 2014. N=1,058 97% 91% Gen Y (18-29) Gen X (30-43) 81% 69% Older Boomers & Seniors (54+) Young Boomers (44-53) E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  53. USING MOBILE LOCATION DRIVES MORE PURPOSED FEET Banner Ads Category Search Location Push Conversion rate in low single percentage Conversion rate in mid single percentage Conversion rate in high single/low double percentage E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  54. BEACONS DRIVE 2-3X HIGH ENGAGEMENT ‣Beacon deployment through 5 major apps with very distinct audiences in 10 stores ‣Initial pilot drove 2-3x open and conversion rates of typical banner campaigns ‣Additional beacon use cases (social, checkout, etc.) are continually being evaluated E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  55. THE NEW RETAIL ‣ eCommerce continues to evolve and drive sales comps for most retailers. ‣ Each customer bridges offline and online retail in a different way yet customer service expectations remain incredibly high. ‣ Location based marketing is in the early stages with initial tests providing high engagement rates. E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014
  56. FIVE BIG TAKEAWAYS ON eCOMMERCE 1. It is an unstoppable global force 2. Put it at the center, not on the side 3. Think Continuous Commerce, not just the transaction 4. Mobile shows the way 5. Bet at least one chapter of your career on eCommerce eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

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