A new e-commerce 2.0 buying model

A just released survey of the top 40 e-commerce sites asked users to rate their satisfaction with the buying experience. Of these top 40 sites, only 2 exceeded 80% satisfaction and most are at 70% or less.

E-commerce 2.0 requires taking existing best practices to a higher level. Technical and social changes of the last 8 years have to be accounted for.

  1. Prevalence of web 2.0 attitudes I wrote about earlier
  2. Influence and communication circles are expanding. Like in the classic AIDS commercial, every customer you touch, you have the potential to touch their friends and their friends’ friends. Now at internet speed.
  3. Social Web. Using the internet is not a solitary experience anymore. People surf together, buy together, twitter all day and share everything.
  4. Web applications are expected to be faster, sleeker and with a rich user interface
  5. Available anywhere. With improved browsers in phones, the phone with its small and limited browser is fast becoming a popular and growing way to surf the web.
  6. Data, data everywhere. The proliferation of interaction channels is making it harder than ever to collect and analyze it.
  7. Service orientation: whether you call it web as a platform, software as a service, service oriented architecture or just web services, web applications are expected to be social too.

Has the cognitive buying experience changed? How should all these changes affect the forward thinking enterprise?

The classic AIUAPR model (Awareness, Interest, Understanding, Attitudes, Purchase, Repeat purchase) can be expanded upon to include the web 2.0 concepts and create a solid backbone for the e-business 2.0 infrastructure. David Mercer in his book Marketing has laid a great foundation adding a few very relevant steps into this process

 simple-process

Susceptibility addresses the set of activities that promote a brand and makes the consumer susceptible to the advertising that brings specific brand and product awareness.

Understanding is added to the Interest as research and comparison are becoming an essential step in the purchasing decision

Legitimacy is ever more important as identities of sellers have to be credible enough to result in a transaction. A strong off-line brand name, heavy advertising or good seller feedback on eBay will make it easier for customers to trust the seller.

The Repeat purchase step was divided into the components that determine if the customer will come back

Experience encompasses the shopping experience, satisfaction / experience with the product or service and even the experience with customer service. As more sites and tools allow customers to share their experiences, the impact of positive or negative experiences is magnified beyond the immediate circles and is kept for posterity.

Loyalty is the culmination of all brand efforts to make you a frequent customer who is loyal to the brand and is a brand ambassador to others.

David Mercer also suggests adding Peers and Vendor activities in parallel to the customer process and examines how they influence the decision making process

 

Peers Customer Vendor

process-10

 

 

While this model greatly expands the basic AIUAPR model it addresses the reality e-commerce 1.0

In e-commerce 2.0, a few things change:

  1. Communications are not one sided. Every communication is interactive where data and opinions get exchanged.
  2. The Peer group definition had expanded to include everyone accessible through the internet that has an experience or an attitude/opinion towards the brand, product or service.
  3. As such, it is not enough for the Vendor to try and manage customer experience as they become peers, you need to manage and have specific information and communication plans for the peers as defined at every stage.

The new model will look something like this:

It includes on top the customer, peer, and vendor relationships

anewecommer3

On the other it looks at the customer lifecycle from e-awareness to e-commerce and e-service. Each one of these buckets includes the actions and interactions in the phase.

On the bottom it has the funnel that collects all possible data from all these interactions and processes it as analytics, to be fed into the systems and decision processes that will improve the next iterations.

E-commerce 2.0 high level map

ebusinessdiagram

 

What I think differentiates this model from traditional e-commerce models:

  1. Peers. The influence of peers as part of a social network or even opinions of strangers expressed in blogs and communities or review sites had increased tenfold and has to be acknowledged and managed.
  2. E-marketing is evolving into e-awareness as marketing and PR work together to create awareness to brand and products.
  3. Analytics need to be collected at many different levels. Customer actions and interactions not just on our site but through the awareness and service channels. The interactions with the brand can provide great data as to cause and effect and ROI

Top 5 Web Technology Trends for 2009

cball

The Holidays are here and with them all the yearly summaries and forecasts. It may be a good idea to go back a year and check how many oracles have seen this slowdown coming..

As I look ahead to 2009, I see a few clear trends for web technology areas that are providing value in these rough economic times and are maturing to the point that companies cannot ignore anymore.

Gartner published their list of strategic technology trends for 2009 a few weeks back. They highlight Cloud Computing, Web Oriented Architecture, Enterprise Mashups and Social Software and Social Networking.

Here are 5 additional web technology trends that will be important in 2009, in no particular order:

  1. Actionable Web Analytics as part of Enterprise BI and Dashboards.
    Web Analytics in many organizations is still an orphan with no real parents. Every department looks at its data but rarely does it get a strategic priority as an indicator of business trends and business intelligence asset. Investment in web analytics allows for customer insights, marketing spend ROI, conversion optimization and can impact the bottom line. As companies invest in sophisticated BI and analytical dashboards, web based data that is not transactional is usually not there. Integrating web traffic and user interest data into these systems can result in new insights and better actionable data.
  2. Phone Browser Compatibility
    Mobile computing is booming. About 13M iPhones were sold so far, and the support for location and browser that both the Android, Blackberry and all Microsoft based smartphones are offering, the percentage of traffic to web sites coming from phones is already in the 3%-10% range and will only increase. These are not the early 00′s WAP/WML jokes but full HTML browsers. Still, these special browsers are very different from the full version used on PC’s and Laptops. Bandwidth is still a challenge and their support for Rich Applications such as Flash and Silverlight is lacking. If you have a fancy Flash based site, your users will most likely not see a thing. Companies that have ignored it so far will have to adjust their sites or redirect mobile traffic to a mirror mobile optimized site.
  3. Location based services
    Continuing from the previous point, these mobile devices have GPS included and location based applications can drastically impact the user experience. Either as an iPhone/Android application or websites, the ability to share location information and get back location specific data about local services, other people, events, sales or anything else adds a new dimension to mobile applications.
  4. Increased reliance on open source infrastructure products and technologies
    Free is always a powerful word. Strong and reliable open source environments allow companies to create a robust e-commerce infrastructure with little or no proprietary platforms. The excellent Apache OFBiz for example, provides strong open source modules for e-commerce, ERP, CRM and many others. Alfresco offers a great content management solution and multiple open source development environments are available. The case for Enterprise Open Source web environment is getting stronger every day.
  5. Approaching Social Networking and Collaboration in a Strategic way
    Everyone now realizes the power of social networks and is rushing to get in, establish a FaceBook page, a Twitter account and get’s their PR to sprawl the web to “engage” people. Internally, companies are haphazardly trying various collaboration methods. We see a maturity process happening through 2009 that will force companies to look at all their collaboration points in a strategic way and tie them to business goals and processes. This new approach will transform them from toys to tools and will establish their place and value in the new order.

A revised approach to web strategy: reaching out, not luring in

We have recently completed several web strategy engagements and have noticed how much the focus has changed in the last few years.

I remember doing a web strategy engagement for a major publisher, where the focus was making the site sticky, relevant and where the success metrics were visits to the site, length of stay and frequency of visits. The marketing team focused its budgets and efforts on generating traffic and shoring up the features, tools and information provided.

The challenge with this strategy is that introducing a new and valuable destination for users in the current saturated and fragmented web market is extremely expensive and hard to sustain beyond the initial marketing campaigns.

With consumers (and business users) spending more and more of their time in specific sites, social networks and through mobile devices, businesses are following suite and coming to the mountain.

A recent statement from one of our clients summarizes the change nicely - “We need to be where our audience lives, not focus on getting them to us.” An updated strategy would try to make content and services available where people already spend time. In addition to the central site, companies are finding ways to leverage their content and services throughout the web.

It is much harder than building a great website and doing expensive SEO/SEM. Not that these can go by the wayside, they are still very important but additionally the following must be considered:

  • Who are your different audiences? What are their online habits and communication preferences? Should you revise segmentation models from site activity focus to external behavior and web usage patterns?
  • What information and services will make sense to expose? In what format? Is it sufficient to provide text based RSS, audio podcasts, Video Webcasts?
  • What can be packaged in widgets, plugins and applications?
  • Do you have location specific services and applications that will help users with mobile devices?

The benefits can be substantial, expanding reach at a fraction of the cost needed to get people to the company’s site, and are much more sustainable over a period of time.

In addition to its impact on marketing, the new outreach strategy has a large impact on the technology. Bringing renewed value to service oriented architecture and modular design, the ability to segment and deliver slivers of content and functionality to remote users can only be achieved if the applications are built using open standards and accessible through web API’s.

Chrome: Apple Looks Better All The Time

I should be biting my tongue, but the pain exploding in my brain by thinking this prevents me from doing anything further to my anatomy.  As one who escaped IBM’s totalitarian regime of the 1980′s (run Apple 1984 Super Bowl commercial), I can not believe I want to return, even if Steve Jobs is cool and IBM was not.  Chrome is what is sending me there.

Does anybody think of the poor slobs shoveling coal in the bowels of IT support when they think up a new browser or (shudder!) yet another toolbar.  These unsung heroes are just turning the corner on the Safari onslaught — every user with an iPod (99.999998% approx.) had this disease ridden Typhoid Mary installed on their PC auto-magically (thank you for the opt out Apple, not).  At least Chrome is “voluntary” at this point, requiring a mouse click for download, but given Google’s track record with their Toolbar, it is sure to be foisted on every unsuspecting PC in short order.  I can’t wait.

The best part about all of these revolutionary browsers is playing malware shell games with their developers: “We fixed some bugs, but we are not going to tell you which ones (Ha Ha Ha).”  Nothing personal, but what happened to “Do No Evil”?  It is an oxymoron, name one marketing/advertising entity with morals (it started with Josef Goebbels and has been downhill ever since).

This weeks Economist has a much more interesting insight in its technology section. The bulk of the world will be accessing the Internet through their cell phones based on cost, penetration, and true ubiquity.  This is the platform of the future and the one most in need of innovation and development (the greatest good for the greatest number I always say).  Putting all of the resources of the Internet in the hands of the poor and repressed and truly flattening the world as put forward by Friedman seems so right, squabbling over the desktops of the rich developed world seems so Evil (well trivial and venal in any case).

I am not a Luddite (argh! I am having an existential moment), Chrome does have value beyond firing up the trade press and blog traffic (oops, did I say Chrome in my blog too?).  It legitimately tries to move the user experience up a level in terms of trying to derive an informational level of interface instead of gratuitous data groveling at a list level.  More research needs to move in this direction as the data volumes increase to the absurd.  One question we discussed: Would cartoon character representation assist C-level executives understanding?  The answer is of course, Yes! Only The Family Guy could illuminate those fixtures.

Chrome – a quick first look and review

Yesterday I got all excited about the Chrome release. It is available now for download at http://www.google.com/chrome

After playing around with the new Google Chrome Browser for the last hour, here are some initial thoughts:

  1. It’s very light weight. It installs in seconds and takes little system resources to run. It is also light on features. More on that later.
  2. It’s FAST and renders almost every page I’ve tried perfectly. 
  3. I like the new interface which is nice and clean, the tabs on top etc.
  4. The tools for developers are cool with the task manager providing great system details and even the view source supports code color coding. 
  5. The first page is fine but I find it somewhat annoying that you can not edit the content of the 9 default boxes. Automation is a fine concept but you are not always alone. If I happened to go and check on a gossip site during the day, do I want everyone present in the next meeting when I fire up my browser to know that? some editing functions will be useful.
  6. It is a beta release granted but even for a beta it is missing some browser staples that have been part of any browser for a long time. Accessibility, content ratings, parental controls, Zoom, Fontsize change all gone.
  7. Bookmark management is extremely basic
  8. Passwords. I could not believe but here it was in plain text. If you answer positively for storing you password, Chrome will allow you and anyone else that happens to be sitting at your desk not just to access sites but to view the plain text version of passwords to saved sites. This is bad.
  9. Surprisingly, no support exists for the Goolge Toolbar but I’m sure that will be remedied soon.
  10. Lack of support for plugins.

Overall, it is a good little browser that mostly good for casual reading and using the Google tools. It is not ready for the workplace nor can it be a single or even the primary browser for any power user.

It is an impressive first foray into the arena and I hope they beef it up for the actual release if it’s to be a contender

Chrome: a new browser from Google. Or a new Web OS?

I’m very excited about the news breaking out today of Chrome: the new browser from Google. It will launch tomorrow and you can read all about it on Google’s blog and see their tech friendly comic book(that is brilliant by itself).

I have to admit that both the last release from Firefoxand especially the half baked lackluster IE8 beta from Microsoft were disappointing. While providing relatively minor improvements to most users, they failed to address the biggest challenge confronting the continuing growth of the web: inherent support for rich applications. All we want is to use our email, IM, Search and Facebook without it crashing every few hours taking all windows and tabs with it.

The browser had become the master application where most of our work and play on the computer is done these days. As Google had nicely put it in their blog post “All of us at Google spend much of our time working inside a browser. We search, chat, email and collaborate in a browser. And in our spare time, we shop, bank, read news and keep in touch with friends — all using a browser.” … “What we really needed was not just a browser, but also a modern platform for web pages and applications, and that’s what we set out to build”

So it seems that the smart guys at Google finally understood that if they base their entire business on ads presented while web browsing, they better make sure that browsing experience is fast, secure and continues to flourish. Counting on Microsoft to do that for you is not a smart business strategy.

The new Chrome browser was built from scratch not as a browser but as a platform. Most of the features and improvements are taken form the OS playbook for stability and security: process containment, sand boxing, efficient garbage collection, tight security model.

Here is a short list of some of the innovation the Chrome is introducing:

  • Process isolation for tabs and plugins within tabs. Awesome. No more will a single window force me to kill the browser with all 30 tabs I have open gone with the wind.
  • New Javascript virtual machine that will product compiled machine code. If Java script is to be the future of rich web interfaces (as opposed to the proprietary Flash or Silverlight) it needs to run fast and be more robust and that’s exactly what the new virtual machine is providing.
  • Gears Integration: with Gears support for persistency and OS level access, developers can build client level applications for the web with reasonable portability
  • Security: the new security model offers a strong foundation for ongoing security schema that can be used by application coders and plugin providers.

Google will also make the whole thing open source, allow plugins and invites everyone to add and extend.

That’s the kind of innovation we need in order to keep the web growing and becoming the robust platform for work and play.

I can’t wait to give it a full try tomorrow.

Web 2.0: Like Prego Spaghetti Sauce “It’s In There!”

It's in there!

It's in there!

Web 2.0 is giving me flashbacks to an old TV commercial for Prego spaghetti sauce; “Tomatoes, in there! Garlic, in there! Carrots, in there! Half of Italy, in there!…”  It seemed no matter what you asked for it was in that bottle of sauce.  Being a sauce, how could you really tell what was in there, or if it was really needed?  Plus, the tomatoes colored everything red so who knows?  Now we have another bottle of technical sauce here called Web 2.0; it’s in there!  It’s colored all Internet so how can you tell what is really in there, or if it is really needed?

Good question, seems like every vendor says they’re on the bottle of ingredients, in fact the most important one.  It would be funny if it was not so pathetic.  Unfortunately, the smell here is not a nice bubbling spaghetti sauce, closer to a warm crock of….., you get the concept.  Every vendor out there seems to believe companies will blindly buy anything labeled Web 2.0. Rather, the CIO’s are more apt to remember the Internet bubble and where that approach got them the last time.

What is required is more definition of what Web 2.0 is, and why we in IT need to move in that direction.  To get that basic understanding, we need to breakout that old spaghetti sauce pan again to boil out all the fancy analysis and obsequious technology.  Lo and behold! What remains is a simple concept: the inmates are now in control of the asylum.  Users of the Internet have turned the tables on the big players in the space, they are no longer happy being spoon fed from a portal. The denizens want to hunt it on their own terms, see it their own way, save it and dispose of it as they please.  If you stand in their way, this mob of Internet hunter-gatherers will crush you with the loss of their eyeballs (poor Yahoo, poor EBay, happy Facebook, happy iPhone).

If this basic principle is followed like a lode stone, much that is occurring in the Internet space is much more illuminating and the proper path forward (with supporting technology) is a great deal clearer to discern.  For example, the winning companies embrace openness and external developers.  There is no way their internal staff can create and the site push enough content and functionality to stay on top.  The Tao of a top site is to be one with the masses, following and attempting to push is uncool.  Allowing users to mash-up specialty widgets into cool personal discoveries is winning, monetization will ultimately follow.

By this point, you are thinking — how is all this ethereal philosophic spew helping me?  I need to get something together that can be called Web 2.0 or my IT existence is at risk!  Do not worry Grasshopper (I’m showing my ’70s again, rats!) I’ll put forward a corporate-friendly straw man.  If SharePoint is used to enable a project, process, or department; it is so Web 1.0 (boring!).  If we put the entire corporation up on SharePoint, acting like a corporate Facebook, we are getting there.  If we template it such that we now have ubiquitous collaboration; optimizing and moving our corporate intellectual property (IP) at light speed much nicer.  But for ultimate coolness, we need to commit heresy and wire a Google search appliance in, after adding all of our corporate content to the pile: documents, presentations, everything.  Then the cherry on top, flatten key data bases to HTML and toss them in.  Now, with proper organizational change management (Yes Billy! You can run with scissors, points down please), employees can use all of the power contained in Web 2.0 to maximize unstructured corporate data for speed and profit.  Mangiare! Mangiare!

Leveraging Enterprise Web 2.0 for competitive advantage

What is Enterprise Web 2.0?

For the last 3 years, web 2.0 and social networking have been all the rage in the Internet community. This is where the VC money is going, the media attention is focused and users are spending much of their time. Businesses are still trying to figure out what does it mean for them. Applying web 2.0 principals and attitudes to business and the enterprsie can be called enterprise web 2.0

Many tend to think that becoming a 2.0 organization as the use of flashy interfaces, communities, blogs, wikis and user generated content and tried to jump on the bandwagon by adding these to their sites without comprehending the deeper and more fundamental cultural changes that make these tools effective, and have seen little gain.

Web 2.0 is about attitudes and a new way of interaction with all constituents, customers, employees, and partners.

 

With all its hype, cool startups and sexy conferences, web 2.0 still baffles many business people who see it as a playground for kids (MySpace, Facebook, YouTube) or a get-rich scam for young entrepreneurs and VC’s. Many who have been through Bubble 1.0 would rather wait until the web 2.0 fad disappears to see what is left standing. Tim O’reilly has provided what many see as the most comprehensive definition of web 2.0. And while his explanation is very thorough, it is also technical in nature.

 

My favorite definition comes from Ian Davis who wrote:

Web 2.0 is an attitude, not a technology. It’s about enabling and encouraging participation through open applications and services. By open I mean technically open with appropriate APIs but also, more importantly, socially open, with rights granted to use the content in new and exciting contexts.”

In my opinion, web 2.0 is indeed defined as an attitude that can be personal or organizational. A web 2.0 organization adds specific terms and values to its code of conduct and sets priorities and incentives to promote them.

We see web 2.0 attitudes, or what I like to call the web 2.0 spirit, as made of the following attitudes:

  • Open: you don’t have to share your source code to be open but from the application to the users, the approach is open. Easy to integrate with, easy to add to. Built on Sharing. Open to new ideas, Flexible, Agile, Simple, and Diverse.
  • Interactive: the interaction among users and active participation is a core element of Web 2.0. The ability of customer and partners to respond and engage in discussions, post reviews, comments, thoughts and ideas. Agree and disagree. Provide a different point of view. Support and promote.
  • Transparent: Do not hide, lie, spin, manipulate, threat, or intimidate. The Internet walls are nonexistent and everything you say or do, internally or externally will be exposed. Therefore: Share as much information as possible, acknowledge mistakes, and explain decisions.
  • Collaborative: Listen, encourage opinions and group decisions. True collaboration is a tremendous thing producing a result much greater than the sum of the parts. It can only flourish in a nurturing environment.
  • Social: Web 2.0 is about building relationships, trust, playing well with others, give and take, respect of each player and of the social order that is in place. Social corporate responsibility, caring about the environment and about the local community are very important as well.

 

Andrew McAfee at Harvard likes to add the term Emergent, noting that out of many local interactions as web 2.0 facilitates, comes higher level structures. I’ll expand that definition to include emergence of order and structure out of the seemed chaos that is online interaction. It is the transcendence of web 2.0 communities that created Wikipedia.

 

What can be gained?

Enterprise web 2.0 promises substantial incentives for early adopters:

  • Enhanced brand image, exposure and buzz. As influence circles expand, using new methods for communication and data distribution will reach an ever expanding user base.
  • Improved customer relationships and increased loyalty. Customers will appreciate the new approach that respects and listens to them.
  • Faster feedback cycle and agile response to market opportunities. By providing real avenues for customer collaboration and listening to chatter and monitoring usage, companies can create faster release cycles and quicker response methods.
  • Improved utilization of internal creativity and innovation. When employees at all level are engaged is collaboration and discussion, great ideas and solutions can quickly surface, get reviewed and implemented
  • Better lead generation and inbound traffic. Beyond search, activity in the social web can be a great source of traffic and referrals.
  • New business channels. Whether it is finally establishing a DTC channel to leveraging social commerce applications, the new landscape provides new opportunities and new potential partnerships.

Adoption Challenges:

So now, show of hands. Has your organization embraced the web 2.0 spirit? Chances are that unless you are working for a web 2.0 startup, the most you have seen is the introduction of a limited corporate blog or a Wiki’s coming up on your intranet.

Many companies have a deep rooted problem with the web 2.0 spirit. It contradicts some of the fundamental principles of corporate mentality and therefore risky to undertake. In my experience very few companies have truly bought into this attitude and at the most are paying lip service by implementing some basic enterprise 2.0 applications to replace their failed and unused Intranets and KM systems.

Bob Warfield provided a very insightful discussion as to the reasons companies are wary of embracing web 2.0:

The headlong rush the Web brings to expose everything to everyone scares the heck out of most corporate types. Their two biggest requests for Web 2.0 initiatives are Governance and Security, and the reasons for it are exactly what we’ve been discussing. It isn’t just that they have “control issues”. There are sound business reasons why controls have to be in place.

Morale: Do we really want everyone to know how poorly some initiative is going? How will it help to tell those who can’t make a difference and would only be depressed by the knowledge? Is it fair to expose some internal squabble that was mostly sound and fury signifying nothing? Won’t that just unfairly tarnish some otherwise good people’s reputations and make them less effective?

Governance: Is the information legal and appropriate for everyone to know in this age of SOX and Securities Laws?

Competitive Advantage: Do I want to risk giving my competitors access to key information because I’ve distributed it too broadly?

Still, the web 2.0 spirit as reflected in the actions, habits and expectations of users WILL impact the way companies do business. Some of the most important trends include:

  • Loss of control: as mentioned above, companies no longer have absolute control over their brand, products and services and how they are portrayed. From rumor sites to product reviews and fake commercials, people have many more ways to learn about you and form opinions.
  • Opinions matter. 68% of shoppers read products reviews before making a purchase.
  • Wider influence circles. Information (good and bad) can quickly spread through influence and social circles.
  • Transparency is expected and recent cover-up attempts by companies like Merck and Bear Stearns were not tolerated.

Companies will have to adapt because the old practices are getting them in trouble and new opportunities for leadership position are being lost due to lack of clear web 2.0 corporate strategy or what we would call enterprise web 2.0

By embracing the new enterprise web 2.0 paradigm, businesses can create long lasting changes that will truly resonate with audiences beyond the quick fix of adding a marketing blog to the web site and some promotional videos. As these changes take time to implement, early adopters and market leaders can create a significant competitive advantage by differentiating themselves and reaping the benefits.

Let us know what you think