• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
MANG6228 Session 2, 5/11/2009

MANG6228 Session 2, 5/11/2009



Slides for Digital Marketing Communications MSc module at University of Southampton, 5th November

Slides for Digital Marketing Communications MSc module at University of Southampton, 5th November



Total Views
Views on SlideShare
Embed Views



2 Embeds 48

http://www.lisaharrismarketing.com 47
http://www.linkedin.com 1


Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
Post Comment
Edit your comment
  • Google has changed purchase behaviour in the UK in the last ten years. Interestingly Google has the highest awareness of any brand in the world (Nielsen 2009). Yet Google has never advertised, neither has Amazon.
  • The sameness of High Street where ever you travel. Customers get more choice online and that choice is increasing. Amazon understood this several years ago when it opened up Amazon Sellers. These sellers were given equal priority in Amazon search results with Amazon’s own goods. At the time most other online retailers thought that this wasn’t a good idea. The concept of promoting sellers where the margin for Amazon would be smaller than if Amazon sold the goods directly didn’t seem obvious. Of course, the result was that consumer choice increased and Amazon became a destination website that dominates online retailing. Choice is a key online retail driver and anything that increases the lines available for purchase will keep visitors returning. These examples are from a clothes retailer.
  • (click) Free delivery has always increased online retail sales and John Lewis understands this and they make it the primary message in their search result. (click) Delivery and Collection is also featured very strongly on the John Lewis homepage. (click) But when it comes to Returns the John Lewis offer - like a lot of other online retailers falls down on customer appeal. (click) One of the very best performing online retailers in the US is Zappos. By contrast they major on shipping BOTH ways. (click) And on their homepage they strongly feature the free shipping for Returns and the duration of the period allowed. That’s a tremendous offer for online shoppers that considerably increases the propensity to buy from Zappos because of the reduced perception of the risk in making the transaction. For customers it is also incredibly convenient… convenience has always been a key driver to online retail sales and this leads me into the next trend…
  • Banks are discredited...the UK Government is discredited...MP’s are discredited... The most trusted brands in Britain are the supermarkets. Talking with consumers I’ve found that Tesco could sell virtually any product.... They could form the next government if they wanted... (click) So it’s not surprising that Tesco is launching a Bank. How long before Tesco follow what Lidl have done in Germany. On 12 th March 2009 Lidl started to sell cars at a 25% discount from its German website. Just two models an Opel Corsa or VW Polo...but at a 25% discount. Retailers are expanding their product set because of Internet technology.
  • Coupons and voucher use in the UK has never matched that in the US. But the credit crunch is starting to change that behaviour . (click) …this is the volume of people who are using generic search terms for vouchers. This gives a good idea consumer intent and the rising trend because over 85% of search is navigational. You can see as the credit crunch hit people are taking the time to look for vouchers. The peaks match the vital Xmas retail shopping period but notice how the volume has increased throughout the year. (click) This is the UK traffic to myvouchercodes.co.uk – around 1.5 million visitors a month. (click) Obviously you have to cater for multi-channel voucher purchases – consumers may not use just a single channel. This Cotton Traders print ad is a good example of how to do this. Make it obvious that you can still get the discount if you buy online. Multi-channel shopping is now the norm.
  • The outside moves inside. (click) The Internet is moving into the offline store presence. This is the New format HMV store in Dudley in the UK. (click) and this is the new Borders concept store in Michigan in the US. This is a retail trend that affects everybody. This is a response to the shopper behaviour of checking out the goods in a shop then going online and seeing if you can buy it cheaper elsewhere. Keep the shopper in the store to do the checking and you are more likely to make the sale. Customer Internet terminals are even going into car showrooms. The mobile Internet will mean that for higher priced goods Internet comparison shopping at the point of purchase will become the norm.
  • The Internet is becoming more real-time… In 2008 O2 sold over 1 million iPhones in the UK. Expect that number to more than double in 2009. This is Amazon’s iPhone App. iPhone owners use the mobile Internet considerably more than other types of mobile phone owners primarily because of the larger screen and “all you can eat” tariffs. There is also a considerable number of SmartPhones with iPhone size screens. Customers can be in your store and checking Internet prices. Amazon even has a iPhone App where you use the in-built camera in the phone to take the picture of any product and their Mechanical Turk locates the product on Amazon and sends you back the appropriate Amazon web page. The networks themselves are forecasting that Internet enabled large screen mobile phones will be owned by half of mobile subscribers in the next four years. All other types of phone sales are down – Internet enabled phones are significantly increasing. (click) This is how Kraft in the US is distributing recipes that use their products. How are your distributing your new product news. (click) and don’t forget the Twitter feed…technology is opening up new buying behaviours…retailers are having to accommodate the real-time Internet already.
  • Shopping has always involved to a greater or lesser extent a social element…it depends on the context. This is Buzzilions – an affiliate website taking advantage of how poor the customer experience is at most electronic retail websites. Two things to note – firstly the total absence of “tech speak” but the Pros and Cons are explained in consumer friendly terms like “Easy to use” and “Great Picture.” The second thing to note is that the attributes are all consumer review based. You can click a tab for the conventional specifications if you want but the primary focus is the consumer reviews….and the reviews aren’t static you can post your own comments to any review. This is true wisdom of the crowds stuff…find out how many other people have got on with the product. This is reality…how to sell in an Internet connected social networked world…no sales speak. Nothing is perfect – shoppers can easily decide the best product to suit their needs based on the global experience of the community. This is an excellent example of digital marketing. “People” and “Pull” marketing that creates the right environment for a “Personal” buying decision in an Internet enabled world.

MANG6228 Session 2, 5/11/2009 MANG6228 Session 2, 5/11/2009 Presentation Transcript

  • Online Consumer Behaviour and e-Retail MANG6228 5 th November 2009
  • Summary from last week
    • Online marketing appears to be less affected by recession than traditional marketing, and may even benefit from reduced marketing budgets
    • Trend is towards interaction and engagement between business and customers, facilitated by web 2.0 tools
    • This also allows customers to engage with each other
    • Customers now more likely to take recommendations from a stranger than one directly from the supplier
    • Companies can no longer control the content of their message, but can influence the dialogue to some extent
    • Opportunity or threat?
  • Plan
    • Review of summary postings on Ning site
    • Online consumer behaviour
    • Exercise 1
    • E-retail
    • Exercise 2
    • Online Consumer Behaviour
    • Customers are looking for products & services customised to their needs
    • Customers expect to be delighted and will use word-of-mouth to praise products and services
    • Customers are influenced by the global market place
    • Domestic lifestyles have evolved as well as attitudes to work and leisure
    • Customers know how to mobilise their power
    • Organisations concerned with competitive advantage respond pro-actively and imaginatively to customers
    • Even organisations not operating in a competitive environment are now customer-focused
    Some market truths…
  • Characteristics of online consumers
    • The ‘Martini’ effect - rising expectations (24/7)
    • More powerful - switching barriers are low
    • ‘ Information customers’ who are smart, demanding and have little time
    • Less trustworthy and less loyal
    • Expectation of ‘mixed mode buying’
    • More likely to trust a 3 rd party recommendation (known or unknown) than a supplier website
  • Who are tomorrow’s customers?
    • See full article for this week’s reading:
      • The death of the queue
      • Some customers are more equal than others
      • ‘ Mind the gap’ between standard automated services and premium personalised ones
      • ‘ Technology catch up’ as the “digital natives” gain power
      • Customer service is everyone’s job
      • The all seeing, all knowing employee
      • Customer service is the new advertising
  • “ Word of Mouse”
    • People can “spread the word” and share information far more easily via “peer to peer” (P2P) communications
      • Email referrals
      • Online forums
      • Customer reviews encouraged by merchant websites
      • Social networking
    • Challenges the company’s ability to CONTROL promotional strategies – Apple video
  • Shifts in control
    • Previously the marketer could anticipate when a mailing or phone call was effected and could exert some degree of control when a response would be generated.
    • Consumer interaction with suppliers and with each other has reduced this element of control.
    • A marketer can no longer engineer when a contact may wish to encounter his message, proposition or brand, or come across it on the web. 
    • Consumers are more likely to trust a recommendation from another customer than they are to believe the claims of the supplier (Rubicon, 2008)
  • Growing influence of WOM Source: Rubicon Consulting, Sept 2008
  • Getsatisfaction.com
  • www.lovelewisham.org
  • www.colorzip.jp
    • Bar-code based mobile service popular in Japan, Korea and Singapore
    • User simply points mobile phone at a Colorzip logo to download the content
    • Logo may be displayed on websites, clothing, TV, newspaper adverts, billboards…even a cake!
    • Prompts emotional response as these services are exciting to use and provide instant feedback
  • Harnessing the ‘e-fluencials’
    • Public opinion leaders who ‘punch above their weight’ online by generating ‘buzz’ about brands
    • Also known as ‘connectors’ (Gladwell, 2000) whose value depends on degree of influence , not just ‘early-adoption’
    • One e-fluencial shares an experience with 14 people on average (Kirby and Marston 2006)
    • E-fluencials are dynamic web users who regularly
      • Forward news to others
      • Email companies
      • Post to bulletin boards
      • Write and contribute to blogs
    • Company websites should provide a forum for e-fluencials to ‘spread the word’
  • Exercise 1
    • What types of products/services do you purchase online?
    • What factors make you trust/distrust a site enough to influence whether to purchase?
    • What is the role (if any) of the offline store in your purchase decision?
    • E-retail
  • Amazon lead the way in data management Google ads: Improvements in relevance Amazon.com recommendation engine: Leveraging data Source: Amazon.com, Google What other customers are thinking What other customers are buying What other customers are doing What other customers are saying
  • Multi-channel marketing
    • PC-based Internet
    • Retail stores
    • Telephone call centres (eg customer services, technical support)
    • Mobile internet
    • Interactive TV
    • Social media
    • Virtual worlds
  • E-retail: Christmas 2008
    • Next, which was the most searched for sale online, was forced to install a "virtual queue" for customers because of the unprecedented demand.
    • Boxing Day was the busiest day for online retailers this year, but sales were down 4.0% on last year (Hitwise figures)
    • More high street stores than ever opened on Boxing Day, triggering a 12.5% rise in footfall v last year (Experian figures). John Lewis sales were up 7% on 2007.
    • http://www.netimperative.com/netimperative/news/2009/january/top-10-uk-online-retailers-christmas-2008
  • Hitwise category data
  • Hitwise UK Christmas Retail Review 2008
    • Online sales for Dec 08 increased by 14.2% over Dec 2007
    • Traditional retail brands did particularly well online (John Lewis, Argos, M&S, Next)
    • Fashion was the fastest growing retail sub sector
    • Searches for vouchers more than doubled over 2007
  • The Internet has changed purchase behaviour
    • Google’s UK ad revenue was £1.9 billion in 2008 – ITV’s TV ad revenue was £1.5 billion
    • Google has the highest awareness of any brand in the world (Nielsen 2009) – without any advertising
    • 3.9 billion Internet searches in the UK in a month (ComScore June 2008)
    1999 Google.co.uk 2009 Google.co.uk
  • Online Retail Trend Choice... “ ...the activity and processes for creating, communicating and delivering offerings that have value for customers...” High Street store typically stocks 800 lines Good Online Retailer in 2009 typically stocks 18,000 lines Good Online Retailer in 2010 will stock 30,000 lines
  • Online Retail Trend Returns are a differentiator..
  • Online Retail Trend In the current economic climate supermarkets can sell anything... ...and even cars...
  • Online Retail Trend Increased use of coupons & vouchers... Myvouchercodes.co.uk
  • Online Retail Trend The outside moves inside... Borders New Concept store Michigan US HMV New Format Store Dudley UK
  • Online Retail Trend The Internet is becoming more real-time...
  • Online Retail Trend Internet shopping is becoming more friendly and social... Buzzillions.com customer friendly taxonomy
  • Characteristics of online customers
    • The ‘Martini’ effect - rising expectations (24/7)
    • More powerful - switching barriers are low
    • ‘ Information customers’ who are smart, demanding and have little time
    • Less trustworthy and less loyal
    • Expectation of ‘mixed mode buying’
    • More likely to trust a 3 rd party recommendation (known or unknown) than a supplier website
  • The Internet goes mobile…
    • 10 million picture messages are sent every week in the UK (year-on-year growth 30%)
    • 1.5 billion text messages sent every week
    • 16.5 million people in the UK accessed the mobile Internet in May 2008.  (25% growth since May 2006)
    • Growth driven by improved phone functionality, reduced usage costs and the introduction of popular brands such as the Apple Iphone
    • Source: Mobile Data Association (www.text.it)
  • Toshiba phones and barcodes
    • Take photo of a product barcode
    • Phone scans blogs for customer reviews and websites for best price and produces a report
    • Implications:
      • More power to the consumer
      • Vendors need to create product review blog and incentivise key customers to contribute
      • They need to index with search engines
  • Exercise
    • How do you feel about companies contacting you on your mobile phone?
    • Discuss some positive and negative examples from your own experience
    • What makes your examples “good” or “bad”?
  • Our relationship with the mobile phone
    • Can be very personal (private space, not for business to intrude upon)
    • May be ‘always with us’ and ‘always on’ (any time, any place, anywhere…)
    • Many phones now incorporate internet and email access, music, cameras…
    • Our phone numbers are unique to us as individuals
    • Master or servant?
  • Good marketing practice
    • Mobile advertisements should be:
      • Optional (meaning they are actively requested by users on an “opt-in” basis)
      • Personalised (“Hi Susan…”)
      • Moderate in volume
      • Free to receive
      • Easy to ‘unsubscribe’ if you change your mind
  • Examples
    • Text may include a ‘voucher’ (code) for obtaining a purchase discount on an item, for example concert tickets or movies
    • Text can include an embedded phone number to call for more information
    • Picture messages to provide added value (for example insurance claims or house sales)
    • Provide extra service to best customers (for example information about flight delays, remote flight check in)
    • Time-relevant information (for example resort specific ski conditions, football scores, share price changes, bank accounts approaching overdraft)
  • Exercise 2
    • http://www.youtube.com/watch?v=YO53xVAzsoM (Sony)
    • What can we learn from this video about how an established brand can adapt to new forms of marketing?
  • Reading/Watching
    • Who are tomorrow’s customers? (on Blackboard)
    • http://www.socialmediamarketinguk.com/video-shorty-marketing-through-the-decades
    • http://www.blogstorm.co.uk/the-top-10-viral-marketing-campaigns-of-all-time/
    • Hitwise Retail Report 2008 (on Blackboard)
  • Role of Web 2 technologies
    • a ‘net generation’ culture is emerging based on:
      • decentralised authority rather than hierarchy and control
      • online socialising and collaboration
      • user generated and distributed content (expert endorsement, product ratings, spoof videos etc)
      • open conversations, peer-to-peer sharing and global participation in communities and networks
  • Summary
    • There is growing cynicism and resistance to supplier-led brand messages, with the collective knowledge and feedback from social networks having a more important impact on customers’ purchasing decisions
    • Developments in web 2 technologies and environmental concerns are driving significant changes in customer behaviour, which will only increase as Gen Y gains in purchasing power and influence
    • Success in this new environment requires new ‘mindsets’ and innovative new approaches by marketers. We’ve examined a number of good examples of this today.