Thursday, September 29, 2011

Mobile Commerce Struggling: Tablet Sales Outcasts Smartphones'

Mobile commerce is a hype issue. A lot of people foresee in the incredible growth of smartphone users the next  trend in E-commerce. And they must be right: People now are able to buy any kind of goods in any situation. This is all the purpose of ubiquity: People can access information wherever and whenever they want, so why would they have to wait to be home or in front of a computer to buy what they want?

martphones may be good for mobile shopping, but tablets are where buying gets done. That's the implication of new research from e-commerce software firm Ability Commerce, which shows the iPad has driven more revenues for retail clients than smartphones, even though handsets account for the bulk of their mobile traffic.
Data provided for the three m-commerce clients indicates that the majority of their traffic from mobile platforms comes from smartphones, and typically from the iPhone and Android devices. For each retailer, those two platforms accounted for between 69%, 71%, and 43% of their visits, respectively, over the last year.

The iPad typically had a smaller share of mobile traffic, reflecting the lower penetration of tablets compared to smartphones generally. About 5% of U.S. consumers surveyed by Nielsen in the first quarter had tablets, versus 36% that had smartphones.

The Apple tablet made up 17%, 15% and 49% of traffic for the three retail clients studied by Ability Commerce, respectively. In the last instance, the retailer had an iPad-specific app that helped boost its share of traffic.

When it came to generating revenue, however, the iPad accounted for a disproportionate amount of m-commerce activity. The retailer, with 17% traffic from the iPad, got 35% of its sales across mobile platforms from the Apple tablet. The one with 15% iPad traffic got 51.5% of revenues from that device, and the retailer with an iPad app got 91.5% of sales from the tablet.

"The trend we are seeing is that while there is a significant increase in Web site traffic due to mobile phones, there is still a much higher percentage of conversion rates on tablets," said Jennifer Tonisson, marketing manager at Ability Commerce.

Research has shown that people tend to use tablets more at home than when they are out. A first-quarter Nielsen survey found about 70% of tablet owners use the devices while watching TV. People used tablets least while shopping or running errands (21%), or commuting (20%). About the same proportion (68%) of smartphone owners use their handsets while watching TV. But 59% use their phones while shopping or running errands.

Taken together with the Ability Commerce data, that suggests people may browse or research retail purchases using their ubiquitous smartphones, but wait to make purchases at home using the iPad or another tablet model. The larger tablet screen naturally makes it easier to complete a transaction than on a smartphone.
"Shopping on a tablet isn't that much different from shopping on a laptop or a home computer," said Tonisson. "You see the same amount of information and product detail. Shopping on a mobile phone is different. Graphics are downsized, descriptions are shorter."
New research from Forrester indicates that among online shoppers who have tablets, most prefer tablets to smartphones when buying online. Most find their tablet as easy to use as their computer when doing so. Specifically, 72% of Gen Xers, 67% of boomers, and 65% of Gen Yers say they use their tablet more than their smartphone to shop online.

This article shows three main things:

1 - Tablets Are Well Designed For E commerce
Tablets, thanks to its tactile interface, allows the customer to easilly interact with the products they want to buy. This is good news for retailers, but that also means that to get the full potential of tablets, they will have to design specific interface and boutique for this new channel.

2 Mobile Commerce On Smartphone Requires Adaptation
I believe that this study shows out that buying on smartphones is something which still needs to be unfold. Some goods may be easy to be bought on smartphones, especially goods linked to smartphones (ringtones, music, videos, apps...), but maybe others are more difficult. Therefore, retailers need to innovate, and to find new ways to make the buying experience better on smartphones. I am sure there is a sky of opportunities for smartphone commerce, but yet, I haven't seen anything convincing so far. 

3 We Should Not Mix Tablet Commerce and Mobile Commerce
As shown in the article, tablets are most of the time used at home. So should we consider tablet commerce as mobile? I don't think so. The use of tablets in a mobile condition will for sure grow, but yet, the two devices are very different, in terms of use and size. A retail strategy on tablets should for sure be different than on a smartphone. Also, I believe that the type of products shopped on both devices must be very different, which explains why we have so much difference in data analysis.

What do you think about it?

Tuesday, September 27, 2011

Discount/Low Cost And Customer Relationship Management: Ikea's Case Study

Customer relationship management and low cost business seems to be unlikely to coexist. Nevertheless, I wanted to share with you a thought I had once I went to an Ikea store.

Indeed, Ikea sets its success on its low cost strategy. They have been able for years now to gain market shares by proposing furnitures at the lowest price. Most of the time people make fun of those furnitures which you have to assemble. But when Ikea has been funded, it invented this way to retail furnitures, and now, it became almost like the standard of the business.

How to approach customer relationship management in a low cost business is an uneasy task. Low cost implies you to look after any kind of unnecessary expenses, and by doing so, you are not supposed to have any kind of mergins which would allow one company to proposes vouchers. Therefore, the traditionnal approach of CRM which is to give discounts to loyal customers as a reward is not possible.

Rather than on focusing on giving rewards out, which is not really what assure customers' loyalty, low cost firms need to set up a partnership with its customers. This is what Ikea did, by explaining the whole philosophy behind its model

The company agrees to keep its prices low by cutting all kinds of non necessary costs, and the customer remain loyal because it finds what it is looking for: affordable products.

Also, on the other hand, the customer agrees to have a limited service, to assemble by himself its furniture, and so on.

Most of the time companies in need of securing market shares are luring on customer relationship management strategies, and are looking for reward based strategies, which may not always be the best way, as it can become very expensive. Ikea focused on its philosophy, delivering what the customer is expecting them to deliver, and then secures customer loyalty.

Monday, September 26, 2011

Fermeture de Zlio: Mon opinion

J'ai appris à la fin de cet été que le site de création d'e-boutique Zlio allait fermer ses portes. J'ai utilisé le service Zlio depuis pas mal de temps sur mon site Internet. Je trouvais le concept très intéressant: pouvoir ouvrir une boutique, très simplement, sans à avoir à gérer la partie technique (logistique - programmation - hébergement), demandant beaucoup de temps et de travail. Je n'ai pour être tout à fait honnête jamais considéré Zlio comme une réelle source de revenue, mais plutôt un moyen de partager avec les personnes faisant partie de ma communauté, et plus particulièrement les lecteurs de ce blog, mes lectures, mes sources d'inspiration, en leur proposant un moyen simple de pouvoir acquérir tout ces produits.

Déjà à l'époque Loic Lemeur avait émis quelques doutes sur le succès du site.

Sur le blog de zlio, la société estime que c'est sa baisse du classement dans Google qui a engendré la perte du système. Il est bien entendu très important pour Zlio de proposer un moyen efficace d'être vu sur les moteurs de recherche. Car avec le nombre exponentiel de boutiques existant sur le web, il est très difficile de survivre si on n'a pas un bon classement. Mais j'ai aussi l'impression qu'ils n'ont pas réussis à intéressé les e-marchants, qui ont décidé pour la plupart d'arrêter leur collaboration avec Zlio...

Je trouve cela bien dommage, et j'espère que les différents salariés et créateurs de Zlio réussiront à relever la tête et trouver de nouveaux challenges intéressants.

Sunday, September 25, 2011

Has Groupon A Future ?

Groupon has been the last couple of months the hypest story in the Internet business. Groupon has emerged as a new business model emerged from the web, and has experienced a great growth at a high pace.

In 2010, Groupon has generated $644 million, and the number of users has skyrocketed. What I have always been impressed by with Groupon, was there ability at a very early stage to generate revenues, whereas most of the Web 2.0 actors are focusing on growing their audience than finding an actual business model.

As an evidence of its success, Groupon has seen a lot of copycats blossoming in the different countries where it settled.

Groupon ambitions to go on the stock exchange market soon, but bad news came up, as its audience seems to be decreasing since June.

Even worst, Forrester forecasts that by 2016 daily deal market will be miscellaneous.

"Standing out above the clutter [will become] harder for marketers as ad exposures grow," Forrester analyst Shar VanBoskirk explained in a report released last week."Consumers will grow so conditioned to micro-impulse offers they'll lose practice at considered decisions ... Facing a cultural descent into maladroit judgment, employers (and spouses) will blacklist impulse deals to keep people intentional," he noted.

Moreover, it seems that its operating costs are growing faster than its sales.

Here are some thoughts I have:
- In July and August, it is normal that the audience decrease as people go on vacations. Nevertheless, Groupon is still a start up, and despite a decrease in the pace, they should still grow.
- Groupon is probably hurt by its problems of executions. Countless of articles have been written because they oversell their deals. If execution is not there, even though the offer is good it can’t work.
- What is funny is that as a matter of fact, Groupon is not so much an innovation. There were already websites with coupons, they just added the possibility to get great coupons by the large number of people going on the website.

Does Groupon really have a future? I think it will, but its future may not be as bright as people expected. I believe they should focus on their operation and execution, in order to reach profitability. The good point about the story is that they are already able to generate comfortable revenues, whereas other websites of the web 2.0 sphere did not.

Tuesday, September 20, 2011

Customer Relationship Management And Serendipity?

Have you ever heard about serendipity? This term has become very popular lately. I am sure that French Internet guru Henri Kaufman would surely agree, as he has recently published a book about serendipity, where he explains the concept, and how to leverage its wonderful potential.

Serendipity , as defined by Wikipedia: is the moment when someone finds something he was not expecting to find. More than that, serendipity implies finding most of the time the best ideas when it is not expected.

Two factors created the basements for serendipity to grow:
- The information age, where we are facing both information overload
- The new media allowing this information to spread fast.

Hence, one of the key challenges for people willing to create value is to help those moments to come, meaning, to be able to create such a momentum, where people, information and things can be brought together, in order to create something unique and valuable.

I read this very interesting article explaining clearly what kind of challenges companies will be facing to keep up with the innovation pace they must to face competition.

Because even though serendipity is by definition unexpected, and therefore can’t be found by a standard process, as you can force the chance so you can create space for it to grow.

What do you think about it?

Monday, September 19, 2011

Albertson Removes Its Self Service Cash desks

Albertson is a large US grocery retailer, located especially in the Southern and Western part of the country. I actually visited quite a while these stores as I used to live nearby one of them when I was living in the US.

Albertson set up some self service checkout lanes in its stores as most of the chains in the US. The goal is simple: one of the largest expenses line of a retailer is its wages, and one of the activity which needs the most of one workforce time is the cash desk one.

Hence a lot of retailers, especially in France where the workforce cost a lot, decided to implement those kind of cashier, where customers deal by themselves with the check out.

Of course, it is difficult to explain the benefit to customers, as there are basically none (except by cutting the expenses, the retailer don’t have to increase its price to keep its profitability fine).

I learnt recently that the company decided to remove those vendors.

Probably Albertson found out that the total cost savings were not as expected + customers were not accepting this system.

It is interesting if we consider the customer relationship management side of it: To customers, the human touch is a key component of their satisfaction.

I also believe that the mistake of Albertson was not to think about customers benefits to use those cashiers:
- Was there a discount to get? (In order to share the cost)
- Was it faster, more convenient, or more fun?
- Was it compensated by something else (better prices, new service, new area in the store thanks to some space saving?)?
What do you think about it?

Sunday, September 18, 2011

Will The Internet Kill Mass Media Marketing?

The communication market is changing fast due to the rise of Internet usage, and more especially the spike of social media usage. For over 30 years, marketing and communication have been strong tools for companies like Mc Donald’s, Coca Cola, or other global companies to gain market shares and become tycoons. The boom of TV and radio equipment allowed those companies to reach a large number of customers nationwide, and to impact sales in a great way (even though it is difficult to measure accurately the link between a TV campaign and sales, every one agrees that TV campaigns have a great impact on sales growth).

But nowadays the communication landscape has evolved, due to the multiplication of communication tools, but also with the rise of Internet. Internet is by definition the opposite of a mass media, which pushes the content to the audience, whereas the audience decide which website they want to visit.

This change is happening right now. We can clearly see that TV audiences are decreasing while Internet usage is booming. Nevertheless, television advertising remains a must for most of those companies, especially when they are leaders or strong challengers of a market.

For decades, some communication gurus have ruled the world of communication, letting us known what to consume, but the new tools they will have to use for the next decade (Facebook, Twitter, Foursquare, blogs…) are not set up to become “mass media” tools. The whole idea is actually to segment the audience, in order to suit better their needs and points of interest.

Some brands have already experienced great successes by using social media for campaigns, but I believe that we are not done yet. And I believe that this decrease of power of mass media will not only change the way commercials will be designed, but also it will change the way companies will think their products, by focusing more on customization, and adaptation to customers’ needs.

What do you think about it?

Saturday, September 17, 2011

Key Factors Of Success To Innovate

Leonardo Da Vinci is probably the most gifted genius of all time. His genius was marked in different fields, from painting, to mechanics, to even entertainment (he was a firework masters). He was so creative that when you read his notepads, you see that from one page to another he could speak about botanics, mechanics or even philosophy.

I was classifying some of the articles I keep on my desk to review for my blogging activities and I found back this very interesting article of French business newspaper “Les Echos”.
It dedicated a special section to innovation.

Indeed, innovation is a common word, which can sound as a cliché, but companies which are really innovating are obviously successful but also a minority.

I wanted to share with you some of the key factors of success discussed in this article:

Information system
Innovating implies different departments and teams to connect together, to find new ideas and improve collaboration.
I watched once a TED video about how genius ideas show up, and how genius get to the point to find those. And the whole idea behind this video was that those ideas were the result of a connection between facts which did not have any link at first sight, but thanks to a specific situation seems to fit perfectly.
This is the same thing inside a company. It is important that people can connect easily together in order to get a project going fast

Human resources/management
It is very important to create connection on an information system point of view, but also people must be able to create and innovate easily. Most of the time large corporation struggle to innovate because of their size and the high level of procedure they have. Therefore it is important to create structures which allows individuals to create freely.

This is somehow the concept of intrapreneurs, which acts like “start ups” inside a company, in order to give the freedom necessary to develop a project fast. The idea is to combine the liberty of creation and innovation to the large capacity a company can offer (in terms of support like accounting or human resources).

Moreover, the innovation process can become a wonderful leverage of motivation for employees: People like to create and innovate and therefore, if you get them into the process, you will in the end create extra motivation.

Think Innovation And Not Growth Of Existing Process
Companies most of the time thinks about how to grow an existing business, by improving it. But once you innovate, you should avoid these thoughts, because your innovation may be totally different from the existing process. Horse trainers have not become car manufacturers, and this is the reason why it is important not to stick to the traditional processes.

Friday, September 16, 2011

Îndia To Rule The Mobile Internet Revolution

India is one of the fastest growing company in the world. As China is doing right now, most of the time it is growing so fast that it skips some of the industrial steps we (North America and European ones) took for 30 years in order to establish our standards. By doing so it creates sometimes some problems, as China is struggling with democracy, but also great opportunities, to lead some of the new emerging markets.

One of the best examples is India and mobile Internet. I have already attended once a conference about mobile marketing held by Forrester France, which was explaining why they believed that mobile Internet will spread fast through India.

I received not so long ago a Newsletter from Mc Kinsey about the same topic.

India, actually don’t have much choice but to excel in mobile Internet. Its large population added to its large country makes it difficult and pricy to create a cable network for Internet.

Therefore, wireless Internet could become the only way to grow the number of Internet users in the country, which is very low (17%).

Now, India is for sure an interesting country for Internet companies, as they can find a large customer base to market. But even though it is important to have a large market, it is also important that local companies can benefit from it. And so far, I don’t know if Indian companies exist, and if they have what is needed in order to thrive in India.

The risk is that the market is dominated soon by foreign countries, which will leave few chances for local companies to settle in the market.

For sure, India has a large base of highly skilled engineers but will it be enough? They need founds and most importantly ideas, which will create successful business there, adapting to the local specificities.

What do you think about it?

Monday, September 12, 2011

Trujillo: The Master Of Brand Coaching

Do you know about Bernardo Trujillo? Probably not. Nevertheless, I consider him as probably one of the most important person in the history of economy and business who ever lived.

Bernardo Trujillo was a sales representative of the NCR, a company manufacturing some cash registers back in the 50s. At this time cash registers was a highly technological gear. It was brand new and no one was actually using it.

The company and Trujillo then needed to educate its potential customers, retailers of all kind, to adopt this new tool. And from this simple idea, Bernardo Trujillo developped the whole theory of mass consumption and modern retailing.

It went beyond explaining what kind of costs and time it could save, he thought through the discount business which could emerge thanks to its invention and thanks to the new environment coming up.

He created some seminars which he was giving to explain how to develop a very lucrative business. And all of his teaching has been the based of the retails we know nowadays. Here are some of his most famous quotes:

  • No parking = No business. He was then understanding and explaining that the boom of car ownership will ultimately lead to high revenues if stores would have big enough parkings to welcome customers.

  • Pile products up and sell down: This is a way to explain how important the theatralisation is important in a store.

  • Billboards are the best sellers: you pay them once, and they don't go on vacations: He understood the importance of mass communication and the rising advertizing market ath this time.

And it worked! Most of the founders of retailers like Gérard Mulliez of Auchan, or Halley from Promodes, from all over the world went to these seminars and got the bases of their soon to become successful businesses.

I could talk to you for hours about how genious he was. Unfortunately, not a lot of documentation exists about his work.

But I wanted to talk to you about Trujillo to show you how to aboard the launch of a highly innovative product: you must educate your customers.

There are a lot of products which experienced tremendous success even though customers did not understand them at first:

  • Renault Espace, a large familly van in France, was shown to customer and all the metrics showed it would be a disaster. Nevertheless Renault launched it and it became one of their most profitable product.

  • The Ipad: A lot of people were wondering what was so new and great about it. No other competitors would have invested a dime in such an handheld. But after having seen the demonstrations, then people loved it.

It is very interesting to go beyond what customers first reaction may be. It is important to have a vision on what customers could do about it, and to show him how to use it. But also, it is very important to look at the bigger picture. This is exactly what Bernardo Trujillo did.

When I talk about brand coaching, most of the time, the brand develops some marketing materials which will help the customer to use more effectively its products. But I believe in this specific case, it goes beyond: The brand added value is given out of its core circle of expertise, which is the cash register usage, Bernardo Trujillo was a product by himself.

Saturday, September 10, 2011

The Michelin Guide: The Beginning Of Brand Content

A lot of marketing and communication consultants are luring to develop some brand contents for their client. In the information age which we are living right now, it is hence important for one brand to go beyond its ability to deliver good products or services in order to create a strong positionning strategy.

Indeed, now marketing is not only based on one company/product quality and differences to aquire a position as a leader, now marketing is mainly based on experience. And therefore, the prospective of building strong positionning is also evolving.

Now companies need to create added value for its customer by advising him the best as he can with the use of its products. The brand must be recognized as a reliable source of information, and a leader of thought in a specific field:

  • Nike set up some sport programs, for example by allowing customers to measure their performances and to compare them to others.

  • Special K proposes some materials (CDs mainly) in order to help its customers to lose weight.

  • French retailer Castorama is proposing some tutorials to help people to use its construction materials in order to achieve their projects.

But brand content has not borned with the Internet. It has actually been existing for a long time. One of the most remarkable example of brand content is the Michelin Guide. The first Michelin Guide edition has been edited back in 1900.

At first, the Michelin guide was released as a marketing material dedicated to Michelin's customers while buying some tires. The guide encountered a large success as it was giving to the small population of car owners (about 3000 in France at this time) the ability to find precious information about hotels and restaurants.

The guide has experienced such success that in 1920 it stopped to be given for free, but was commercialized to be sold in book stores.

This story shows you how Michelin has been able to create marketing materials which was in phase with its positionning and set it up as an expert of car cruising.

And as a matter of fact, it shows how well it did as this marketing material became actually a great source of revenue thanks to its quality.

Friday, September 09, 2011

The Magic Of Nespresso:Loyalty Does Not Come With Cards

Nespresso is also known as one of the master of customer relationship management. The close attention it paid to customer experience is driving ultimately to customer loyalty.

Of course, some customer relationship management techniques have been used by Nespresso in order to generate customers loyalty:
  • The high exit barriers: Once you bought a Nespresso machine, you can not use any other kind of capsules with it but Nespresso's. If you paid for about 200 € your machine, you may think twice before willing to change your machines. Also, in a traditional household you may have one coffee machine. Once its a Nespresso, it is less likely you will use others.
  • You have a lot of channels to get in contact with the brand: The stores, the phone, the Internet. It creates bonds with customers which can get in contact easilly with Nespresso.
  • Nespresso uses customers metrics in order to create direct marketing campaigns. They also pay a close attention to conversion rate, in order to reach better customers.
But what is very interesting is that they have focused on an emotional kind of loyalty instead of a traditional transaction based one. Most of customer loyalty reward programs are based on a "card", which materializes the relationship between one company and its customers. These cards offer rewards, either discounts, free products, or extra services.

As a luxury brand, Nespresso prohibits himself to give any kind of discounts on its capsules. Therefore, none of the direct marketing campaign edited by Nespresso can rely on an attractive discount in order to generate higher volumes of orders.

Rather than that, the metrics are only used for quality purpose. And guess what, that works!

Tuesday, September 06, 2011

The Magic Of Nespresso: The Duality Between Mass Market Product And Luxury

What is unique also with the case of Nespresso is its ability to turn a mass market product into a luxury one:
  • Coffee is by definition a mass market product, retailed in hypermarkets and supermarkets like Tesco or Walmart for years
  • It has adopted pricing, brand codes and a positioning of luxury brand.
It is fascinating to see how they got to this point:
  • It took a while: Nespresso has been founded in the early 70s, but really started off in 1987. Over the time, it build its luxury brand codes. Indeed, you may launch a brand like Tide, but you create a brand like Vuitton (quote of Kapferer, a French expert in branding). The goal is to create the conditions which will make the customers accept the high prices. And Nespresso managed to do it over the time.
  • Their communication is based on television advertizing, a mass market medium, which allowed to spread to the largest scale the "premium mindset" of the product.
  • Also, the machines are sold in traditional retails, but not the capsules, which once again may attract the mass market customer, but which will ultimately lead him to the luxury world of Nespresso.
This is also this duality between luxury and mass market product which makes it difficult to copy the Nespresso strategy. It has been innovating, but I believe it is hard for other businesses to do the same...

Monday, September 05, 2011

The Magic Of Nespresso: The Customer Experience

Nespresso has created a business model based on customer experience. In order to create something new in the market, it changed the way to perceive the consumption of coffee into a brand new customer experience. Everything in the marketing mix has been reinvented to create something totally different from the existent:
  • The product: Exist filters and the old way of making coffee. Now, you have pre dosed coffee in capsules, which are instantly "brewed" and ready to be drunk. The product is not named out of the region it has been produced, but depending on its taste and strength.
  • The retailing process: You can't access the product in traditionnal hypermarkets or supermarkets. The only way to get it is through a direct marketing channel (Internet, phone, mobile phone) or through its own stores.
By proposing a unique customer experience, Nespresso must take a particular attention to all the different component of it. Every single link composing this experience must bring an added value to the customer.

Of course, CRM is a very important factor of success. It is the only coffee company which can interact directly with its end consumer, whereas others must go through a retailer.

This customer experience is underligned by Nespresso's store. They are a tangible way to show out to customers the way of life linked to Nespresso positionning.

The goal of this customer experience is to make the customer believe it is part of something unique, to make him think as he is part of an elite, and in the end to elevate it from the average.

Sunday, September 04, 2011

The Magic Of Nespresso: The Blue Ocean Strategya

What is interesting, is to see how Nespresso has been able to set apart of the existing competition. It entered a mature market, but thanks to a brand new approach, it has been able to create a new product which can't be compared with the competition.

This is the reason why I wanted to link this approach to the famous Blue Ocean strategy. The blue ocean strategy concept is to avoid the "bloody red competition" which is basically to confront your company to a competition which proposes somehow the same kind of product. The idea of blue ocean strategy is to change the landscape and to change the way customers perceive one product, bringing new added value, which will turns it into something without comparability.

This is exactly what Nespresso achieved: we don't talk about consumption but about tasting, not customers but club members, coffee types but grand crus...

The brand has no tried to create a premium product in an existing market, but to create a brand new category based on usage instead of product type.

Nespresso created a new way to consume coffee, at the crossroad of a mass market product (coffee) and a luxury product (about 6 times more expensive than a regular coffee).

Saturday, September 03, 2011

The Magic Of Nespresso: The Business Model

I believe that everything has been told about the phenomenal success of Nespresso. The topic is widely discussed, especially in the marketing world, as it is thanks to marketing that Nespresso has been able to create a more than profitable business model.

Le nouvel économiste, a newspaper I often read and that I must say I love, has dedicated in its issue of July, 7th 2011 a special article about Nespresso, which I would like to share with you, in a series of article.

Nespresso indeed has created 15 years ago a unique business model which has been along the route copied by a lot of competitors, but never really with the same kind of success: The coffee capsule market.

Coffee in capsule is now one of the hypest category in grocery shopping market. It is one of the fastest growing segment in hypermarkets or supermarkets. Even though Nespresso does not sell in those traditional retail channel, I believe it shows well how the competition surfed on the waves created by Nespresso's Ferry...

The goal was to provide to customers the same quality of coffee it could find in traditionnal cafés. But what has been great is that it created around of its basic product, a whole customer experience and a marketing concept which brought added value.

And it was able to do so thanks to its ability to master every component of the business model:
  • The machines by providing appropriate licenses to premium machine manufacturers.
  • Providing premium coffee
  • Mastering the different retail channels: Phone at the beginning, then Internet, and Nespresso stores after a while, there is no way you may access to its product but to buy it to a Nespresso owned channel.

Friday, September 02, 2011

Quelques réactions sur l'application Ipad de la Caisse d'Epargne

J'utilise depuis quelques temps régulièrement l'application pour Ipad de la Caisse d'Epargne. Depuis un an, la Caisse d'Epargne (qui est par ailleurs ma banque de référence) a beaucoup évolué afin de se rapprocher de ses clients:
  • Site mobile pour consulter ses comptes
  • Application Iphone, puis Android
  • Nouvelles campagnes de communication, avec une nouvelle charte, mais aussi l'abandon de la figure populaire de l'écurueil.
  • La possibilité d'avoir un numéro de téléphone non surtaxé pour accéder à son agence (oui cela parait irréel, mais ce n'était pas le cas avant).
Et donc depuis quelques temps une application Ipad. Ce que je trouve super sur cette application, c'est le module gestion de budget. Je suis très friand de ce type d'outil, car, il faut bien l'avouer, j'aime gérer mon budget de manière très précise.

Maintenant, tout n'est pas parfait avec cette application, mais on est sur la bonne voie. Voici quelques points vraiment intéressant:
  • Il est très facile de mettre des catégories aux différents achats. Par contre, j'ai l'impression que le nombre de catégories est limité, ce qui est dommage: Pourquoi devrait on limiter le nombre de catégories?
  • La partie analyse reste un point faible, mais le graphique sous forme de camembert est plutôt bien fait, et permet une lecture facile des postes de coûts.
  • Il est vrai que le fait que ce soit un écran tactile permet une interaction facile avec l'application.
Maintenant, je souhaitais quand même partager avec vous certains points d'améliorations.
  • Concernant les catégories: Ne pas limiter le nombres de catégories, laisser à l'utilisateur la liberté d'en créer autant qu'il en a besoin. Par ailleurs, il faudrait permettre de créer des familles au dessus des catégories, pour rendre plus facile la partie analyse.
  • Concernant l'analyse:
  • Au lieu de privilégier les graphiques sous formes de camembert, qui permet de voir une situation fixe, il vaut mieux y avoir des graphiques de types "courbes", qui permet d'identifier l'évolution dans le temps.
  • Il faudrait avoir aussi une partie analyse sous tableau, qui permet de voir les évolutions en % et en valeurs. Cela permet de voir si sur le mois on est dans les clous.
Bref, il y a vraiment du bon et un futur sympa pour cette application, mais encore pas mal de travail pour vraiment rendre l'application vraiment utile.

Thursday, September 01, 2011

Groupon's Journey To Reach Profitability

It has been a while I haven't read the great blog of Laurence Faguer, one of the best expert in customer relationship management and retailing I know in France.

Laurence has wrote a very interesting article about Groupon, trying to explain its business model and also the path remaining to become profitable. Groupon is for sure one of the hypest company in the Internet business right now. What I find fascinating about the company has been its ability to generate revenues at a very early stage of its development, on the contrary of companies like Twitter for example. Of course, Twitter and other Facebook are "social network" or web 2.0 companies. The business model is for sure not the same:
  • Social media needs audience (and therefore focus on having the largest number of users as possible) in order to get the interest of announcers and advertizing companies.
  • Groupon is actually a more conservative companies. It sells somehow some advertizing space, but its business modell, to me, is closer to Google.

Laurence in her French article explains some very important metrics :

2010 Annual Revenue = $713,365,000.
2010 Annual Loss = $413,386,000.

2011 Q1 Revenue = $644,728,000.
2011 Q1 Loss = $113,891,000.

83,000,000 members
28,100,000 coupons bought

15,800,000 customers (about 2 coupons/customers bought)

Average revenue/coupon bought: $25
Average revenue/buyer: $ 50.

Marketing investments in 2010 = $241,000,000
Marketing investments in Q1-2011 = $179,000,000

How Groupon Earns Money
Groupon sends about 1 coupon to all its members (65,000,000 members in Q1-2011), for 90 days.

28,094,000 Coupons are sold
Conversion rate = ( 28,094,000) / (65,000,000 * 90) = 0.48%

… 1 out of 208 members bought a coupon

En Q1-2011, Groupon invested $8 in marketing/coupon sold.
Marketing represents 32% of Groupon's investment in Q1-2011.
46% of the revenues comes from the Northern American market.

If the cost to get a customer remains around $6 to $9, to break the even pints Groupon will need to seel one extra coupons/customers.

Laurence's Analysis
The return on investment ratio remains in the average of a traditionnal e-commerce company.

The Pareto law (20/80) is true in that case: 20% of customers and 80 % of non buying members.

Groupon needs traditionnal advertizing media to get awareness and expand its members data base.

Groupon needs to adopt CRM strategies to trigger a second buy/customers in order to reach profitability.

I hope Laurence doesn't really mind I took her post to translate, but I highly value this insight.

My opinion

Groupon remains a very traditionnal company, as its main advertizing media remain emailing.
I totally agree with Laurence, I believe that Groupon needs to work on its customer relationship management strategy to gets loyalty from its members and to make each customers more profitable.