Monday, February 25, 2013

Conversion rate: Working on the other 96%

I was listening to the radio this week end when I heard a very interesting interview of a Google France representative. He was discussing the kind of added value Google Analytics products could deliver to one company. 
"A good conversion rate in the web today turns around 2 to 4%, the goal of Google Analytics is to make the best of the other 96%."

Now that e-commerce is a mature market, and e-merchand websites tend to have a large volume of visits every day, it is important to be efficient. For instance, Jean-Emile Rosenblum, CEO of Pixmania France, is shutting down its stores he opened couple of years ago, saying "it costs less money to open stores than to lead a new customer online"!

Indeed, in terms of efficiency, every visits to a website must count. And there are different ways to see how you may create value from a visit which did not lead to a purchase:
  • Some of the value created is by advertisement: You may advertise for some products which will give you some ad money
  • Some of the value is about the data you may collect:  Why didn't the shopper completed its purchase? This analytics is possible thanks to adword.
  • We all know that people don't necessarily buy the first time they visit a website. The ability of the company to send the proper message after this lost visitor leave. Being able to keep a track of when he stopped to trigger a new visit is also something important.

Friday, February 15, 2013

Some Thoughts About Barnes & Nobel Falls

I have always loved Barnes & Nobel store concepts. When I go to the US, I love to go to one of its shops, and to hang around, to see what kind of books I can find interesting. I have never been really a big book reader (even though I recently own a Kindle Fire, which I count on to really boost my reading habits), but there is something about its concept that gives you the will to sit down and read. 

Barnes & Nobel is about customer experience, to provide you a large choice of cultural products and, a top of the line shopping experience. But with the rise of online competition, Barnes & Nobel results have not stopped to fall.

There are several reasons for Barnes &Noblel's problems:
  • Dematerialization: : Cultural goods tends to dematerialize more than other products. Now music can be downloaded, same thing for movies, video games, or even books.
  • Retailing costs are very high compared to E commerce website. Therefore it is almost impossible to be aligned with online competition and keep being profitable.
To me, Barnes & Nobel has always been a great example on how shopping experience and customer relationship could create value for a retailer. But unfortunately, due to the fast changes of the competition landscape, Barnes and Nobel were not able to keep up. 

So what should have they done? Of course, it is easier to say than to do, but there were other strategies to take into consideration:
  • Find new correlated products with high mergins to be able to compensate with the decrease of its traditionnal goods. We can think of electronic goods, even though this market is also tough, or maybe premium grocery products, to match with its positionning.
  • They could have sold some part of its real estate: Not to shut down stores, but to limit the square meters of each stores to lower the cost of production.
  • They probably should have found a way to create added value, in order to set apart from the basic price comparison.
Virgin, a cultural goods retailer in France, is also shutting down its activities. It is sad to see that we are in an era where we never consumed more cultural goods and services, but with a very poor health of the business.

I really hope Barnes & Nobel's will be able to find a solution.

Sunday, February 10, 2013

Lance Armstrong: The Limit Of Storytelling

I wanted to share you some thoughts I have about the big scandal that happened couple of weeks ago. After years of having denied he took performance enhancing drugs, Lance Armstrong was forced to admit publicly his system. Of course, it has been a big scandal.

Lance Armstrong is a controversial character.
  •  On one hand, he has been a great champion, a great professional, who has had a strong will power to win 7 Tour de France in a row. Doped or not, it is still a performance.
  • He has been a role model, for its capacity to overcome his cancer.
  • On the other one, there has always been suspicious about his drug use. Also, as a cyclist, other professionals have always pictured Armstrong as a cocky person, very selfish.
Now, I don't want to take a side. But what is true, is that the whole story around Armstrong may have been too nice. The whole story Armstrong created around his character allowed him to become way bigger than his sports.

Storytelling is a communication technique that has been around for quite a while now. Not a global company, not a political campaign, are built without a story to give meaning to it. The whole concept is to be able to create an authentic story around a concept. But sometimes it has some limits, especially when there is no true story behind, or when the story is twisted.

But the story was too nice: probably too well written. And the problem is now everything falls apart.

My whole point is to say: You should not use storytelling when there is nothing authentic behind. Because when the true story unveils then everything you built breaks down.