Tuesday, July 31, 2012

McKinsey Report “The Social Economy” – Unlocking $1.3 Trillion

Great report just out from consultants McKinsey – “The social economy: Unlocking value and productivity through social technologies“. (download)
It’s 170 pages long, a free download, and based on in-depth analysis of usage in four sectors (consumer packaged goods, consumer financial services, professional services, and advanced manufacturing) that represent almost 20 percent of global industry sales.
But here’s what you need to know…
First, McKinsey provide a useful, succinct, and plain English definition of social commerce;
Social Commerce: Purchasing in groups, on social platforms, and sharing opinions (McKinsey more broadly define social technologies as “products and services that enable social interactions in the digital realm, and thus allow people to connect and interact virtually “
Overall, $940bn of consumer spending (one-third) could be influenced by “social” interactions, which could mean that $940 billion of annual consumption in some US and European categories could be influenced by social input.
But social commerce is only one of ten ways social technologies can add business value
  1. Co-creating products
  2. Forecasting and monitoring
  3. Distributing business processes
  4. Deriving customer insights
  5. Marketing communication
  6. Generating leads
  7. Social commerce
  8. Providing customer care/service
  9. Improving intra/inter-organisation collaboration/communication
  10. Matching talent to tasks
In terms of value potential yet to be unlocked by social technologies, McKinsey estimate that at $900bn-$1.3 trillion
  • $345 billion of this value potential would be available from product development and operations;
  • $500 billion from marketing, sales and after-sales support activities;
  • $230 billion from improvements in business support activities
Overall, two-thirds of the value creation opportunity afforded by social technologies lies in improving communications and collaboration within and across enterprisesIn other words, much of the value potential of social technologies lies in collaboration, not commerce; particularly, professional collaboration between colleagues and businesses.
And for stat-afficiniados…
  • By adopting social technologies internally, companies could raise the productivity of knowledge workers by 20 to 25 percent.
  • In the CPG (FMCG) sector, the value of social technologies lies primarily in consumer research and market intelligence – for new product development; social technologies can deliver value equivalent to 15-30% of consumer research/MI spend
  • $900 billion– 1.3 trillion Annual value that could be unlocked by social technologies in four sectors (consumer packaged goods, consumer financial services, professional services, and advanced manufacturing)
  • 2x Potential value from better enterprise communication and collaboration compared with other social technology benefits
  • 3% Share of companies that derive substantial benefit from social technologies across all stakeholders: customers, employees, and business partners
  • 20–25% Potential improvement possible in knowledge worker productivity
  • >1.5 billion Number of social networking users globally
  • 80% Proportion of total online users who interact with social networks regularly
  • 70% Proportion of companies using social technologies
  • 31% Proportion of American SMEs used social media in 2011
  • 90% Proportion of companies using social technologies that report some business benefit from them
  • 28 hours Time each week spent by knowledge workers writing e-mails, searching for information, and collaborating internally
  • 5% Percentage of all communications and content use in the United States takes place on social networks.
  • In May 2012, Facebook logged its 900 millionth user. It is estimated that 80 percent of the world’s online population use social networks on a regular basis
  • In the United States, the share of total online time spent on social networking platforms more than doubled from January 2008 to January 2011, from 7 percent to 15 percent
  • Social technology has almost primal appeal. It is fundamental human behavior to seek identity and “connectedness” through affiliations with other individuals and groups that share their characteristics, interests, or beliefs. Social technologies have given these basic behaviors the speed and scale of the Internet at virtually zero marginal cost
  • For electronics, 16 percent of shoppers rely on social input for purchasing decisions; in home goods, the figure is currently just 2 percent
  • “Social” is a feature, not a product. Social features can be applied to almost any technology that could involve interactions among people (e.g., the Internet, telephone, or television)
  • Social technologies enable social behaviors to take place online, endowing these interactions with the scale, speed, and disruptive economics of the Internet
  • Social technologies enable unique insights, by allowing marketers and product developers to engage directly with thousands of consumers and to monitor unprompted and unfiltered conversations


The additive effect of tablet usage.

In little more than two years, the tablet has gone from an early adopter’s “must-have” to an increasingly common device for consumers, even for those who consider themselves less tech-savvy. 

Think about it: it was only in 2010 that Apple launched the first iPad, essentially marking the birth of the tablet for the mainstream consumer. 

There are now variants from dozens of manufacturers available in the global marketplace, and the number of devices continues to grow as products evolve. According to recent Nielsen surveys, a significant percentage of Americans and Europeans now own tablets.

Mobile checkout headed to a store near you.

Nordstrom is quickly replacing cash registers with mobile checkout, joining J.C. Penney, Apple and what's expected to be a rush of other retailers to embrace technology to eliminate lines.

More than 6,000 Nordstrom salespeople are already using mobile devices to check people out, just like at Apple stores. By the end of this year, Nordstrom salespeople will be able to do everything on their handheld devices that they can at a register, says Jamie Nordstrom, president of the company's online division.

"I believe the future of our point-of-sale systems is completely mobile," he says. "It's hard to know whether it's in one year or five years because the technology is evolving so rapidly."

Several grocery stores — Costco and Sam's Club are two — already use employees armed with mobile devices for "line busting," retail consultant Kevin Sterneckert says. The workers scan products for customers standing in lines and print a bar code that they can take to cashiers to pay.

How to Compete with the Big Chains? Think Locally.

What do you do as a small, independent retailer when a major food chain, big-box store or national franchise becomes a direct competitor? All along you've been specializing in items that aren't in the mainstream but sell well, and then some big outfit like Sears or Walmart decides they're going to horn in on your action.

A perfect example is Kroger, the Ohio-based supermarket chain that recently began offering natural foods inside half of its 2,500 stores, setting aside aisles now designated as Nature's Markets. When this happens, what can you as a specialty retailer do to remain in business and retain your dominance in any niche market?

Your first reaction might be to lower prices in order to compete with the big stores. But that's like bringing a knife to a gunfight. There's no way you'll ever compete on price. Yet there are steps that specialty merchants can take in order to maintain position. 

Big Box Stores Slim Down for Online Survival.

How retailers can use QR codes to prevent showrooming.

Half of all people who buy products online first go to a bricks-and-mortar store to do their research, according to a recent ClickIQ survey of 900 shoppers. Known as “showrooming,” this habit is taking an increasingly large bite out of retailers’ bottom lines.

That is because in many cases, consumers buy the product for less from an online-only retailer such as Amazon rather than from the actual store or the Web site of the merchant where they just shopped. This trend makes it more critical than ever for retailers to provide an integrated shopping experience across multiple touch points through the path to purchase.

But savvy retailers are already turning showrooming from a problem into an opportunity by using the mobile medium to engage shoppers, educating them about their products, and delivering relevant deals available only in the store.

Increasingly their strategies center around QR codes as an easy way to bring shoppers to a controlled and extremely targeted experience.

Amazon Says It Can’t Scale Same-Day Delivery Economically.

Amazon downplayed the idea of same-day shipping on its earnings call today, saying it had not found a way to do it on a broad scale economically.

Several reports have suggested recently that Amazon’s strategy is to move its distribution centers into urban centers, so that it can deliver products to consumers within a few hours after they hit the buy button.

But Amazon’s CFO Tom Szkutak said not to get your hopes up.

“On the topic of delivery speed to customers, we are trying to get closer to customers, but in terms of same-day delivery, we don’t see a way to do same-day on a broad scale at the moment. But we are always trying to figure out a way to serve them [our customers] better,” he said. “We don’t see a way to do that on a broad scale economically.”

While that still leaves the door open a crack, it appears from the company’s second-quarter call that while faster delivery may not make a lot of sense right now, the economics of building more warehouses in more central locations does.

85% of AaramShop deliveries across India (28 cities) are same day deliveries. It is able to do this largely on account of its hybrid retailing format.

Will m-commerce overtake other payment options?

Around the globe, our retail spending habits are transforming and mobile is a big part of that.
$1 out of every $10 is spent online and nearly half of Americans are interested in paying with a mobile wallet. In the US, 42% of all mobile subscribers have smartphones and 3.6% of online payments are currently made via them.
According to research behind the new infographic on mcommerce from Big Commerce, nearly half of retailers have optimized their site for mobile devices but less than a third of retailers have optimized their sites specifically for tablets.
As m-commerce is set to hit $119 billion by 2015, it looks like a lot of companies need to invest in mobile, and fast.
Check out the Info Graphic Here

Monday, July 30, 2012

ComScore: Google+ Worldwide Traffic Up 66 Percent Since November

Traffic to Google+ has grown by 66 percent worldwide since November, and is up 82 percent in the US in the same time period.
ComScore confirmed the numbers with us this afternoon, and shared the following charts showing US and worldwide traffic to Google+ since the company began tracking Google+ last November. The figures are desktop traffic only; no mobile/tablet visitors are included.
These are positive signs for Google, but the numbers reflect traffic, not specific usage of the service. Google itself has been hesitant (an understatement on my part) to discuss true usage numbers for Google+, instead focusing on counting how many people have “upgraded” to Google+ accounts and discussing how many of these account holders use all of Google’s services.
Still, Google did announce a month ago that active users are spending 12 minutes per day in their Google+ stream — up from nine minutes per day only three months earlier.

23% of UK smartphone owners access retail sites on their device

The number of m-commerce shoppers nearly doubled in five of Europe’s biggest markets in the past 12 months, according to new stats from comScore.
One in six smartphone users in the EU5 (France, Germany, Italy, Spain and the UK) now accesses online retail stores and apps on their device, while one in eight users has completed a transaction on their phone.
Typically smartphones shoppers convert at a much lower rate than tablet or desktop users, but the comScore study shows that the market is still growing.
In May this year 16.6% of EU5 smartphone owners accessed retail sites or apps, a 4.6% increase year-on-year.
The UK was the largest market by absolute numbers with 6.5m smartphone retail users, but also had the least rapid growth rate at 74%.
The report, which uses data from comScore MobiLens, found that 12.4% of smartphone owners made a transaction on their device in May.
Clothing and accessories was the most popular retail category followed by books and consumers electronics.
ComScore’s European product manager Hesham Al-Jehani points out that given Europeans’ existing predilection for buying clothes online it’s not surprising to see this category rank as the most popular for purchase via mobile devices. 
But it’s also possible the category’s popularity corresponds with the heavy use of email marketing, with consumers more likely to see and respond to offers on their phones when they check their email.
A separate study by Knotice found that around 27% of emails are now opened on mobile devices.
As part of the report comScore also published its mobile benchmark data, including a review of mobile consumption behaviour and device penetration for the EU5.
It shows that while the UK is second to Spain for the overall penetration of mobile users, proportionally the UK’s mobile population is the most active in every category except listening to music.