what does web2.0 mean to retailers?

What does Web 2.0 mean to retailers?

Chris Hoskin

Chief Marketing Officer

Salmon

Prepared January 2009


The term ‘Web 2.0’ means very little. But

what Web 2.0 enables will have significant

bearing on retail in 2009 and beyond.

Inventory management, store systems, Inventory management, store systems,

logistics, and CRM will all be affected in one

way or another.


The term ‘Web 2.0’ means very little. But

what Web 2.0 enables will have significant

bearing on retail in 2009 and beyond.

Inventory management, store systems, Inventory management, store systems,

logistics and CRM will all be affected in one

way or another. And in eCommerce, it already

is having an impact.

Who are Salmon?

Diverse interests and practice areasInterests in retail, finance, insurance and utilities

Focus on enterprise architecture , IT / Business Change

Focus on Business impact

Application management and support - 25% of the business

Established, global systems integratorGlobal SI, Operations in London, New York, Beijing, Sydney

Successful track record over 19 years

c. 170 staff, c 100 in eCommerce team

£16.8M turnover

Privately owned, Financially sound

Open, honest and responsive approach

Innovative risk reward modelsFixed price

Managed Risk

Shared Reward

Open, honest and responsive approach

Strong delivery-focused culture and Focus

Mission critical systemsBroad and deep expertise in web based applications and technologies

Specialist skills in highly transactional systems and solutions e.g. B2B and B2C eCommerce, multi-channel integration, insurance underwriting

Customer experience / design

SalmonDelivering solutions for market leading & challenger retail brands

AgendaWhat does Web 2.0 mean to retailers?

> What is Web 2.0?

> Related technologies / vendors / products

> Trends & themes

> Implications for retail

> Real examples

> Web 2.0 in retail demo (eCommerce)

> Q&A

Quick Video

What is Web 2.0?

Clearly 1.0 to 2.0

StaticCentral publication controlSingle site contentSlow bandwidthPage refresh

“web as a platform”“users add value”(Tim O’Reilly)

Tools+Technologies+Business Strategies+Cultural and Social trends


> What is Web 2.0?

> Trends & themes



> Real examples


> Q&A

Trends & ThemesSurvivors of 2001 bubble burst had similarities

MashupsWikisBlogsRIAsPodcastsRSSTaggingCloud Computing

Attitude, not technologyThe long tailData is the “intel inside”HackabilityPerpetual BetaRight to remix (some rights reserved)Software that gets better the more

people use it Cloud ComputingSocial NetworkingCloud ComputingArchitecture of ParticipationStandardsDecentralisationOpen to > devicesModularityIdentity‘Services’ not ‘Software’

people use itGranular addressability of contentRich user experienceSmall pieces loosely joinedTrust your usersReputationCreation v ConsumptionWeb as componentsEmergent: User behaviour not

determined

Source: http://www.oreillynet.com, Web 2.0 Meme Map

Trends & ThemesPersonified

2005Has a good specked PC in the spare room

Uses email

Uses Next.co.uk and Argos.co.uk in combination with a catalogue

Researches a bit, mainly for holidays

Starts to send and receive some pictures

Watches TV

Uses her mobile to arrange meetings

2008Has a very high specification laptop, with speakers

Uses it all round her flat via wireless broadband

Still uses email but also instant messaging with a webcam

Does virtually all her research online

Buys far more on impulse e.g Nike+

All her music is online

Banks on-line

She posts her photos to her family on-line

She watches BBC iPlayer on-line, and has a favorite youtube channel

Has started a blog on her trek round Europe

Subscribes to several on-line fashion magazines

Has a Facebook and My Space account. Is trialing Twitter

Regrets a very dodgy video appearing on YouTube from a girls night out

And she still goes out to shop and talk to people despite meeting a man

online!!!!!


> What is Web 2.0?

> Trends and themes


> Implications for retail & retailers

> Real examples


> Q&A

Related technologies / vendors / products

AJAXRuby on RailsAPIsTools / IDEsXMLWeb ServicesRSSRSSPythonFlash & Flex & Air

AggregationEmbeddingFolksonomyRemixingVirtual ArchitectureWidgets


Digg

37 Signals

ZoHo

Naymz

Technorati

Wordpress

Twitter

Facebook

Second LifeSecond Life

Del.cio.us

flickr


Digg

37 Signals

ZoHo

Naymz

Technorati

Wordpress

Twitter

Facebook

Second LifeSecond Life

Del.cio.us

flickr

Google (Apps, Docs, Knol, youtube)

Yahoo (Flickr, Pipes, Zimbra)

MS (Facebook, Office Live, Live Writer, Popfly, XBOX Live, Surface,

Silverlight, Sharepoint)

IBM (Bluehouse, Support for core technologies)

Apple (iPhone, iTunes, iPod Touch, iWeb)

Cisco (Five Across, Webex, Holographic video conferencing)

Oracle (web 2.0 ready)


Digg

37 Signals

ZoHo

Naymz

Technorati

Wordpress

Boing Boing

TwitterTwitter

Facebook

Second Life

Google (Apps, Docs, Knol, youtube)

Yahoo (Flickr, Pipes, Zimbra)

MS (Facebook, Office Live, Live Writer, Popfly, XBOX

Live, Surface, Silverlight, Sharepoint)

IBM (Bluehouse, Support for core technologies)

Apple (iPhone, iTunes, iPod Touch, iWeb)

Cisco (Five Across, Webex, Holographic video

conferencing)

Oracle (web 2.0 ready)


> What is Web 2.0?

> Trends and Themes



> Real examples


> Q&A

Implications for retailDifferent segments, different adoption

1. Consumer electronics & entertainment

2. Apparel & footwear

3. Specialty

4. Catalogue & mail order

5. Home improvement

6. Department & discount

7. Drug stores, health & beauty

8. Supermarkets & grocery

Implications for retailbut patterns emerging

Web 2.0 features/functionalities adopted most by retailersRIA based user interfaces

Static Mashups

Qualitative as well as quantitative product reviews

Web 2.0 features/functionalities finding limited adoption by retailersBlogs

Discussion Forums

Data Feeds (RSS, Atom etc.)

Live Agent Chat

Dynamic Mashups (live data feeds)

Podcasts

Videocasts

End user product customisations

Product Tagging

Synchronous chat

Web 2.0 features/functionalities adopted least by retailersWikis

Bookmarks sharing

Collaborative product customizations

Comparison shopping across multiple retailers

End user contributed content

VoIP based customer support

Source: Adapted from an Infosys blog post

Implications for retailbut patterns emerging

Web 2.0 features/functionalities adopted most by retailersRIA based user interfaces

Static Mashups

Qualitative as well as quantitative product reviews

Web 2.0 features/functionalities finding limited adoption by retailersBlogs

Discussion Forums

Data Feeds (RSS, Atom etc.)

Live Agent Chat

Dynamic Mashups (live data feeds)

Podcasts

Videocasts

End user product customisations

Product Tagging

Synchronous chat

Web 2.0 features/functionalities adopted least by retailersWikis

Bookmarks sharing

Collaborative product customizations

Comparison shopping across multiple retailers

End user contributed content

VoIP based customer support

Implications for retail

Ajax-ified UIs: indifferent to engaged

Far better customer orientationBetter support for customer goals

o Research

o Search

o Browse

o Navigation

o guided sales

Hyper-personalisationHyper-personalisation

Convergence of ‘brand’ & ‘community’

Web 2.0 will put some Web 1.0 retail companies out of business

Moving beyond eCommerce 2.0 into Retail 2.0 will bring more challenges

Enhanced checkout flow (i.e. embedded AJAX cart, richer controls)

Quick pick modals with inventory integration (i.e. dynamic)

Second generation product reviews (leveraging product reviews as affiliate marketing; adding rich media (audio and video))

Linking social networking with commerce controls (playing off social sites and/or adding social aspects to existing commerce

Implications for retail2009 Projects

social sites and/or adding social aspects to existing commerce sites)

Increasingly-granular personalisation (issues with geog)

More editorial syndication: RSS & XML

CSS + MV Testing: Modals / widgets (x-sell, upsell, reviews etc) to increase AOV

> ASP, SaaS / Multi Tennant > White labelling

Alternative Payment Services – “BillMeLater”, Google, PayPal, and Amazon v bespoke virtual wallets

>> 2009 + Web 2.0 outside eCommerceMagic Mirror, 2D Bar Codes, GPS, Live Agent

increase sales

higher average order value & units per transaction

increase conversion

foster loyalty and increase lifetime value

Implications for retailBottom up ROI led to negative press

foster loyalty and increase lifetime value

better merchandising

deliver better customer experience

drive more traffic and unique and new visitors

Reviews drive 23% higher revenues per session, 28% more items per order: QVC-UK

Shoppers who "read all reviews" converted much higher, and had a 67% higher average order value: Boden

20% increase in conversions with just dynamic zoom: Bealls Department Stores

Increased sales by 300%, reduced image production time and costs by over 60%: Macy’s

“We believe co-browsing provides the ‘missing link’ and is a very effective solution to

Implications for retailbut ‘evidence’ mounting, broadly positive, some still too loosely coupled with CX

“We believe co-browsing provides the ‘missing link’ and is a very effective solution to not only ‘delight’ consumers but can help us further boost conversion. People who view our video convert at around 30% higher then the site average: Thomas Cook

Although it is category dependant, you can expect anywhere in the region from a 20% to 70% increase in conversion rates (ajax): econsultancy.com

The number of subscribers using mobile Internet services will rise from 577 million currently, to top 1.7bn by 2013, spurred by demand for collaborative applications known collectively as ‘web 2.0’, and greater 2.5/3G penetration: Juniper Research

Polyvore has 4,553 monthly active users on Facebook


> What is Web 2.0?

> Trends & Themes



> Real examples> Real examples


> Q&A

Real ExamplesTiny url, Live IM, Video testimonials, blog platform, twitter channel

In 8 years $1B 2008 revenue (2005: $370M 2006: $597M: 2007: $850M)

Stocks 1100 brands, 3m pairs of shoes

Orientation to customer service: “A service company that sells ‘x’”

e.g. Free shipping both ways, 365 day returne.g. Free shipping both ways, 365 day return

Diversification into handbags, clothing, eyewear, watches, accessories + anything else

When recently asked about future?Facebook application

Twitter

YouTube

Lifestyle sites e.g. running.zappos.com

Real ExamplesRich Interfaces

Timberland

Threadless


Nike

Ralph Lauren RugbyHalfords


Borders


AmazonWindowShop

Real ExamplesMash Ups

oSkope

Real ExamplesMash Ups, RSS, Social Bookmarking, Social Networking, AJAX

Polyvore

Real ExamplesMash Ups, RSS, Social Bookmarking, Social Networking, AJAX

Real ExamplesCustomer Reviews, Q&A, Dynamic Imaging,

Halfords


> What is Web 2.0?

> Trends & Themes



> Real examples


> Q&A

A day in the life of AmyRetail & Web 2.0


> What is Web 2.0?

> Trends & Themes



> Real examples


> Q&A

Unique Approach • Unique Solutions

Chris HoskinChief Marketing Officer

Salmon 64 Clarendon Road

Watford Hertfordshire WD17 1DA

tel: +44 (0) 1923 320 000 mob: +44 (0) 7903 804 554 email: [email protected]

Unique Approach • Unique Solutions

Salmon LLC220 Old Country Road

Mineola NY 11501-4271

United States of America

Tel: 001 516 742 7888 Fax: 001 516 742 9169

Salmon Asia Pacific (Pty Limited)

Level 1, 299 Elizabeth StreetSydney NSW

Australia 2000

Tel: +61 (0)2 8251 0044 Fax: +61 (0)2 8251 0097

Salmon China Limited 605 Zhongchen Building

Lize Zhongerlu #1Wangjing Science & Technology Park

Chaoyang DistrictBeijing 100102

China

Tel: +86 (0) 10 6439 8779Fax: +86 (0) 10 6439 8665

3.0 (Tim Berners Lee)

Semantic web

“I have a dream for the Web [in which computers] become capable of analyzing all the data on the Web – the content, links, and transactions between people and computers. A ‘Semantic Web’, which should make this possible, has yet to emerge, but when it does, the day-to-day mechanisms of trade, bureaucracy when it does, the day-to-day mechanisms of trade, bureaucracy and our daily lives will be handled by machines talking to machines. The ‘intelligent agents’ people have touted for ages will finally materialize.”