Ged Carroll

Month: February 2009

  • Ian Jindal on retailing

    Ian Jindal was on top form at the Sense Loft where he presented some interesting ideas about the future of retail. I know Ian from my work with Econsultancy. Ian Jindal is also the editor of Internet Retailing and consults for the great and the good of the retail sector. Some of the observations about technology made by Ian Jindal are of particular interest. I made some notes on the presentation in real time on my mobile phone and will try to elaborate around them in italics:

    The UK

    Ian Jindal addressed the overall health of retail and e-tail in the UK.

    • UK most onlne country outside Korea – we may not have 100MB/second fibre into the home broadband connections, but the way in which UK people engage with the web and engage with e-commerce in terms of the amount they spend and the frequency that they shop online means that they are more online than most other countries outside Korea. Hong Kong has a strong broadband infrastructure but e-commerce is superflous in such a compact space. Japan has become almost post-consumer in the way that they no longer splash out on fast cars and Louis Vuitton accessories. One of the things that makes the UK online is the ubiquitous nature of credit cards – still the most effective payment system infrastructure that has seen off a host of rivals
    • UK is the most sophisticated market – consumers have better knowledge in the UK, they know how to play the system. They understand where voucher programmes are and how to best game them to get benefits. UK consumers haven’t stopped spending but are very value driven. They know retailers weak spots and exploit them to get the best deal for themselves

    2008/2009 sales

    Ian Jindal commented on a retail sector struggling with the fallout of the 2008 financial crisis

    • November big growth due to fire sales – retailers dropping prices enticed consumers online: its a value crunch as much as anything else
    • Volume big but not making money – consumers are buying goods at lower prices and for a given amount of revenue far more is having to be spent on logistics
    • Winners include John Lewis because of gift voucher sales, PCWorld due to the reduced costs of modern big plasma and LCD screens, New Look – why?
    • Successful businesses need to deliver on product, price and promise (and make a profit)
    • Logistics companies screwing the small businesses to service big players like Amazon – in the run up to Christmas 89 per cent  of consumers received their purchases on time, with Amazon it was 97 per cent. Small upstarts will get screwed over on performance as delivery companies prioritise their largest accounts
    • Customers a lot cannier play voucher schemes – they abandoned the voucher sites as soon as the sales kicked in and play the system to maximise value
    • 2009 its about cash, ROI, business focus, focus on SEO and conversion – In the credit crunch the first priority is cash flow, a focus on business efficiency and effectiveness. It moves emphasis from getting traffic to getting conversion as business. Pay-per-click (PPC) buys traffic, but does not guarantee a sale. The high price of PPC means that extreme SEO (search engine optimisation) including hand-building the top 100 search pages
    • Ruthless chopping product lines – To reduce the amount of cash invested in stock and focus product lines on those that sell. A focus on the ‘head’ of the long tail

    Future

    Ian Jindal on the future focused on the problem of getting to close a sale online and the role of data to signal user intent which is still a major problem.

    • PPC is outmoded as a marketing communications vehicle as attention is the goal: PPC gets traffic to the site but is no guarantee of ‘stickiness’ or completion of a sale
    • One-page department store – This was a concept that Ian mentioned. There is no point having consumers trawl through a site the only page that matters is the page that they buy from. This page needs special attention. 
    • Context vended pages based on user intent – The example Ian gave was two consumers using Google: one looks for Levi’s 501 36 inch waist cheap. Price is obviously important so you don’t display a lot of options and put the price front and centre on the page. The second searches for smart jeans dark blue, you provide them instead with a series of large images that they can click on to buy since they don’t know what they want and reduce the emphasis of pricing information on the page
    • Google as department store of the world. Google,  niche players and brands are what will drive online shopping. Affiliates will not exist in present from in two years time. Affiliate marketing falls down for many of the same reasons as PPC, Google is the department store of the world because of the pre-eminent position of search as the front door to the web. Niche players will do well as they can meet consumers need and won’t be under so much price competition pressure
    • CPA (cost-per-acquisition) is symptomatic of an overly simplistic world that doesn’t understand a complex decision making process – Consumers may go to multiple online and offline brand touch points in order to make a purchase. Who is responsible, how do you measure assists and infer linkages?
    • Social bored him shitless, reviews not believable, people moving beyond reviews as inspiration stories – As Ian so eloquently put it social bored him shitless, it achieves very little for a lot of effort on behalf of the retailer. Current review offerings don’t provide a lot of utility to customers who often don’t trust them, whether it is an act of ‘sock puppetry’ or consumers with a very different viewpoint to our own. Reviews are also based on a viewpoint that is needs focused rather than desire focused. We live in a consumer society where most people’s needs are already met, much of current consumption is about desire and aspiration. Consequently, empowering consumers to tell their own aspirational stories is much more powerful – a kind of crowd-sourced version of the old TV ads from the 1980s
    • Co-shoppers as retailers – Ian highlighted a new US site called ThisNext, which uses individuals as retail curators. As their authority increases and consumers click through on their recommendations they get rewarded with ‘maven points’. This is a mix of the best attributes in social and affiliate marketing – tapping into consumer aspirations and their trust of people like them
    • nikeID vender management, intelligence gathering on trends and colors – Rather than nikeID being about mass-customisation and prosumption Ian thought that it was about getting information on trends, what colour ways should Nike be making products in. What combinations never sell. It is more scientific than coolhunters tracking down kids in urban setting of New York or Tokyo and helps support buying decisions. It is all about trying to understand the head of the long tail
    • Cross channelists – retail businesses who can deliver experiences through different channels are more likely to be part of consumers complex purchase decisions

    Evolution of data

    • Data – screw this and you build it on sand – the right data and the right architecture to structure the data is the lifeblood of any retail business. If you get this wrong your decison making process and business is at risk
    • Data is facts – facts works as a good definition of data
    • Meta data – data about data that the data would not know itself
    • The way we use data has changed as the number of nodes that process it change, moving from business analysis to data as a service and mash-ups – Google services and APIs are supported by thousands of servers in a given data centre
    • Social web – evolving to responsive and self configuring services – context, location all start to become important – flickr uses camera details from metadata to provide shopping recommendations
    • APML and microformats – APML is a proxy for intent and understanding the consumer. It shows where they put their time. Microformats allow for data to have more utility than plain HTML data – addresses can be readily imported into address books a la Google Maps using the hcard format
    • Rescue Time time management software allows consumers to make use of their own APML data
    • APML-powered commerce: engagd, phorm, google checkout
    • Entering network age with services such as pique and bazaarvoice  – where predictive services offered based on APML and population monitoring to spot patterns of consumer behaviour
    • location: omnifocus brightkite – includes where 2.0 techniques. From a consumer point-of-view this means a move towards apparent ESP by services as they have an emergent intelligence

    You can find Ian’s slides for this event here.

  • The Writing On The Wall China And The West In The 21st Century by Will Hutton

    Before we get into The Writing On The Wall I thought it would be best to talk about how I got into reading books like this. I didn’t start reading economics for fun until I read Will Hutton’s The State We’re In when I was in college. I was interested to find out what Hutton thought about China and the west in his new book The Writing On The Wall. China has a history of technological and legal progression going back three millenia and made an unprecedented move back to the forefront of the global economy.

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    The Writing On The Wall China And The West In The 21st Century by Will Hutton writes in a narrative style that would be familar to readers of The State We’re In. Hutton covers how the teachings of Confucius led to a ‘modern society’ in China when my ancestors were building Brú na Bóinne.

    How the western colonial powers (notably the UK, France, Germany and the US) managed to embarrass and humble the celestial kingdom? The hard choices which the communist party had to make and the hard road that the country has walked to gain its present status and the challenges that the party faces in maintaining an even keel.

    Whilst Hutton is critical of some Chinese measures, he points out were the west has made similar mistakes and the lessons learned from them. Some readers may feel mis-sold as Hutton discusses the global politics of energy and protectionism by the US. However the world is connected and I feel his discussion of the intertwined fates of the US and China is a valid one. More on China here.

  • Cyprus notes

    I spoke earlier this week at an eTourism Forum in Cyprus. It was my first time on the island. It is an interesting mix of contrasts:

    • The main language is Greek, but everyone speaks English
    • Everyone drives on the leftside of the road and the even the road signs look British
    • The island has a series of micro-climates with snow on the mountains when I was there and a pleasant 20 celsius down nearer the sea

    I spoke and participated in panel discussions over two days. You can find my presentation on Online Reputation Management and the Personalised Web. It was good opportunity to catch up with some old friends and make some new ones including: John Horsley founder of the Marzar social network, Gerd Leonhard media futurist, Richard Sedley of cScape, Andrew Gordon,  Theodoris Koumelis of Travel Daily News and Dr. Natasa Christodoulidou of UNLV. The conference was enthusiastically hosted by Petros Mavros of Avantless on behalf of The Cyprus Tourism Organisation.

    The audience were enthusiastic and eager to learn about what online marketing techniques could do for their businesses. It struck me that there was more demand than there was the local web and design talent to address it, though some of the attendees seemed to already have a sophisticated understanding of search marketing techniques.

    What became apparent was the unequal nature of market power. The local businesses needed to reset the balance between themselves and the large tour groups that had traditionally brought travellers to the island.

    Large tour groups immense market power was used to screw these businesses into the ground on price. Cyprus even needs to import its own drinking water, so a downturn in the economy would be disastrous.

    Whilst I had been there on a professional basis, I wouldn’t mind going back during the winter or spring as a tourist to sample some of its more cultural aspects. More related content can be found here.

  • Spook Country by William Gibson

    I read Gibson’s seminal cyberpunk works a decade ago and felt it was time to visit Gibson’s more recent work. I am not reading them in order, just as they come off the shelf. Spook Country is set in a world similar to the one that we know, and closer in time to now, than his sprawl trilogy books.

    Blue Ant

    The story  revolves around branding and features a future-gazing advertising agency called Blue Ant seeking to grasp the future. In it are cutting-edge artists utilising augmented reality and where 2.0 technologies to make ‘locative art’.

    Whilst it is implied in his earlier works globalisation and container shipping also play a major role in this one.

    Web of no web

    Gibson uses the plot of Spook Country to recant the virtual reality dream of the ‘matrix’ that he painted in his earlier books. This vision feels out of place despite inspiring other cyberpunk and science fiction writers from Neal Stephenson to Earnest Cline. Instead Gibson sigues augmented and virtual reality into the more prosaic web that we have today. The augmented reality of the Wii, Sony PlayStation’s eyetoy,  geocaching, Google Maps, QRcodes and iPhone applications like Carling’s virtual pint. This is what I like to call the web of no web because in essence, the world becomes ‘the matrix’.

    Spook Country has the brand awareness that is a signature of Brett Easton Ellis’ work (particularly American Psycho) and the storytelling of John LeCarre. Gibson pulls multiple strands together weaving the story tighter and tighter together as the thriller gains momentum. You can find more book reviews here.

  • Pattern Recognition

    William Gibson’s Pattern Recognition moves his stories from a fantastical future to a world at the bleeding edge of today. A curious advertising company seeks to find out more about a series of video clips that have developed a cult following.

    The story evokes viral marketing similar to the complex story lines of games like Perplex City, The Majestic or online marketing done by industrial music band NIN and Trent Reznor. The resulting buzz in a passionate community is something that marketers aspire to create in product launches. The challenge that Gibson doesn’t fully articulate is identifying the target audience and watching it coalesce. It also reminds me of how conspiracy theories percolate online and seem to break out randomly. The Slender Man phenomenon and the obsession with number stations are classic examples of this process.

    Unlike Spook Country, Gibson only hints at a retreat from his vision of the web as an immersive experience inside virtual reality goggles. Most of the interesting locations and experiences happen in the real-world: central Tokyo, Moscow and London. Gibson’s literary obsession with Japanese culture and cities is part of the connective tissue that connects his early work to Pattern Recognition.

    These world’s are much more colourful than online. The web is now reduced to a silver screen on which the mysterious videos are projected.

    Marketing insight of the advertising agency and government intelligence operatives are seen by Gibson as two sides of the same coin. This makes sense when one thinks about the amount of data that web and mobile technology use now provides. In some respects big technology has gone beyond governments and moving towards the corporations envisaged in Neal Stephenson’s Snow Crash.

    All of this adds to the feeling that Pattern Recognition is a tale of now. More related posts here.