Developing Scottish eCommerce

I recently answered a few questions for a press article about eCommerce, following my presentation at a the 'Pixels & Pies 2' event in Edinburgh.

One of these was printed yesterday in The Times Business Insight supplement:

http://www.times-scotland.co.uk/

The latter part of what I wrote was quoted:

The Question?

What themes/issues were most able to help attendees get to grips with in the tourism industry briefing?

The Complete Answer.

My presentation covered the opportunity that eCommerce presents for all industries and in particular the tourism and food & drink ones. I gave several examples of new businesses that are using eCommerce in

different ways and across the international stage. The UK is actually one of the most mature markets for the adoption of eCommerce, both from a supplier/retailer perspective and a buyer/consumer one too. 

We therefore have the opportunity to learn from the fantastic success stories that are out there already, build

or evolve current off-line processes, products & services to suit a growing online population and contribute to the growth of the Scottish economy.

eCommerce in Scotland

As friends and readers of this blog will know, I've now relocated my business and family to Scotland. I've therefore taken an obvious interest in the online retail scene north of the border.

The UK is now a world leader in the field of eCommerce and over the last few years has seen double-digit growth (despite the worst recession in living memory). Furthermore recent figures from the Boston Consulting Group have predicted that the UK’s Internet economy will continue to expand at around 11% per year for the next four year. This means it should reach £221bn by 2016, or a whopping 12.4% of the UK's GDP!

However it is clear that (except for a few notable exceptions) that Scotland does not have an eCommerce economy to fully match that of other parts of the UK. In fact, in a recent report by Scottish Enterprise it said that Scotland had the lowest proportion of any nation or region in terms of advertised IT jobs mentioning eCommerce..... just 2% compared to 11% in London and 10% in the East Midlands.

But ecommerce is a huge part of business today and is a growing industry within the Scottish economy in 2012.  It also contributes an estimated 200,000 jobs, worth £31 billion in sales (of which about £8 billion was actual sales using websites, compared to other online transactions such as direct B2B connections).

Clearly there is a lot of ground to make up. Or put another way, there's a huge eCommerce opportunity in Scotland for those companies who want to move into this market.

The 5 steps to creating a successful Digital Strategy

Here’s my 5 steps to creating a successful Digital Strategy

1. Understand …

…. not only the commercial goals, but the stakeholders & team involved. Take time to then walk through the current digital requirements (priorities & dependencies) and all the relevant internal processes that you have to work within  (there will be some, even on a ‘green field’ project – or as I recently said to one senior marketer, who said there were no restrictions: “every green field has borders eventually”. 

2. Review …..

all existing projects, including any project interdependencies with the work done by other departments (e.g. IT),  current suppliers of online services (e.g. Digital Agencies) and make sure you know what KPI's (Key Performance Indicators) are reported against across the business. 

Note: You should also take the time to identify the immediate wins (e.g. is there something so obvious and easy that is can be done now?)

3. Document…

Key Deliverables. This means writing up what has to be done and when it is expected. Focus both on commercial optimisation (operational efficiency) and innovation to gain competitive advantage. Consider all digital touch-points, where possible adopting a user-centred approach and cover all lines of business, such as: B2C, B2B, Back office (e.g. purchasing).

4. Plan….

for success by creating a rolling 30 day plan that keeps delivering wins and fixes over the short and medium term. From this build up a longer-term roadmap that integrates functionality with marketing activity (content, campaigns, etc.). Where necessary develop robust justifications (business cases) for large pieces of work.

5. Future-proofing…

means considering all changes likely to occur over the roadmap timescales. I use the “STEP” acronym as a handy way to classify the different innovation drivers:

a.       Social (what will individuals and groups do differently?)

b.      Technological (what new software or devices are expected?)

c.       Economic (how will and increase/decrease in household income affect you plans?)

d.      Political (why legislation is due that could cause an impact to the organisation?)

 

Your hardest working employee

We're living in a time of austerity. An age where boom and subsequent bust have now been replaced by stagnancy and misplaced optimism about the economy.

Companies of all sized are, quite rightly, looking to get more for the same (or less): car fleets are stretched another year before replacement, machinery is worked through the night to optimise its use and staff are 'requested' to work additional hours to save on salary costs (when in reality, we all know the inference is that unless staff actually work harder and put those extra hours in, they could be added to the list of potential redundancy candidates)

But what about your company website? How hard is it actually working for your business?
It's sat there day and night, designed & built with the aim of getting you more customers or keeping the existing ones serviced and engaged. But is it doing all it could?

Surely your website should be your hardest working employee?

If its not, then talk to your digital agency straight away and see what they suggest....

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Conversation economics

What's the value of a conversation?

Or to put it another way, what's the opportunity cost of not having a conversation with your customers? (And by a conversation... I actually mean a continuous dialogue not a one-way monologue that pushes information at them).

We're now living in a world of Attention Economics, where the attention of a customer is easily lost and so very hard to regain (especially if your business is commoditised). So basically a lost conversation is a lost customer, and with the cost of customer retention usually far cheaper than new customer acquisition... even the financial benefits are obvious.

The divison of creativity

The divison of labour was cited by Adam Smith as an essential factor in the growth of prosperity (A.K.A. The Wealth of Nations). The idea was that as you sub-divide production into smaller tasks, you create specialisation in activity & process and therefore efficiency in production. Factories were created that allowed this specialism in production and resulted in increases in product and quality. Note: My school economics teacher would be proud of me

However as we reach a new economic time where:

1. Media business models are failing (e.g. newspapers/printing presses)
2. Distribution is free and the incremental cost of digital production is almost nothing
3. Consumers needs are fragmented (and continuing to do-so)
4. People are forming online groups that more-closely resemble social structures
5. Creativity and innovation are recognised and encouraged more & more

Are we now suffering from a mainstream factory mentality that is counter-productive to understanding and embracing the new economy?

Note:
Tom Fishburne puts this nicely in his 'Idea Factory' Brand Camp cartoon:

http://www.tomfishburne.com/.a/6a00e008c451518834010536eb8d52970b-450wi

Online UK adverising set to grow despite economy woes

I've previously covered the expectation of an forthoming UK recession (or a "contraction in the economy" if you're a politician) and now its looks like its actually here.

I don't think there's any doubt that the overall ad market will be affected by the financial crisis. Indeed Guy Phillipson, CEO of the U.K. division of the Internet Adverting Bureau has said:

"Online is not immune from the economic downturn, but while other sectors see
falls in expenditure the Internet is still experiencing an incredible increase
and is propping up the entire advertising market."

But indicators are that online advertising spending should continue to rise. Indeed some organisations (e.g. eMarketer) are even predicting its double-digit growth through to 2010.

More doom & gloom?

Here in the UK, we're hearing daily news reports of a forthcoming recession. For the second year running the summer was a wet wash-out and even winning lots of medals at the Olympics in China didn't raise spirits back home for long. So, what's in store for online?

Well, suprisingly its not all bad news, as UK ecommerce is still bucking the downward trend.

According to eMarketer's latest report 'UK B2C E-Commerce:Continued Growth in Tricky Times' 2008 will see an increase of over 28% on 2007 for online sales.





This figure, including online ticketing and digital downloads, is an amazing feat considering the decline in fortunes of High Street stores right now, for example:

• Woolworths £20m loss this year, potentially seeing the beginning of the end for this 99 year old
• Next's Spring/Summer sale volume being 20% down on 2007
• John Lewis, Argos & Homebase are all feeling the pinch

And what's more, predictions are that eCommerce will continue to have significant growth, with the same eMarketer report stating:

online sales will hit £94.2 billion ($169.6 billion) by 2012, although the
annual growth rate will drop below 10%

One thing's for sure... this isn't the online marketplace's recession right now!