E-commerce and its adjunct digital

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1 FOCU S e-commerce and digital marketing E-commerce and its adjunct digital marketing is possibly the biggest thing in business today: a 21st century revolution in the way trade and commerce is transacted. In fact, UK consumers spent 79 billion online in 2012, making the Internet economy bigger than the healthcare, construction and education sectors, and the market is forecast to grow 12% this year, according to IMRG (Interactive Media in Retail Group) and Capgemini, which track online sales through the IMRG Capgemini e-retail Sales Index. Traditional business models have been traumatised by technology as the old ways of doing things are swept aside and the tables have turned in favour of consumers. Indeed, what became clear as we spoke to retailers, developers, businesses, lawyers and academics in the course of putting together this issue of INFO is that it is all about the consumer consumers who have undergone a cultural shift in the way they shop, whose spending is no longer concentrated in high street stores, who are increasingly sophisticated in their use of technology, who are more knowledgeable about the choices they make and consequently more demanding. E-commerce is finding ways of meeting those consumers and their expectations at every point, from offering them what they want or might desire, through the process of purchase to delivery, and beyond through return and follow up. But what has also emerged is that the future is not going to be pure e-commerce. Rather, it will be an increasingly integrated confluence of channels, with the focus on giving the consumer opportunity to shop where they want to, when they want to whether on a home computer, laptop, tablet, smartphone, or even in a store on the high street. The most successful businesses are those which are getting to know their consumers through e- commerce channels, and are managing that knowledge and information in a targeted and efficient way allowing unprecedented personalisation in advertising and offerings. They are finding new profiles of customer, new revenue streams and new ways of selling their products and services, as some of our member companies attest to in the following pages. Too much knowledge is not necessarily a good thing, however. Big Data the masses of electronic information collated by cookies from consumer behaviour and actions is getting more and more unwieldy. There is also the danger that it is the wrong sort and businesses will make assumptions about their consumers that are completely off-target. How you determine that or even manage the morass of information is one of the big questions that e- commerce is having to come to terms with. With data come questions of privacy and ownership, as yet unanswered. The law is having to play catch-up as the rampant pace of technological change and innovation turns some areas of e- commerce into the Wild West apps, for example. In all revolutions, there are victors and victims, and the e-commerce revolution is no exception. Even as high profile casualties continue to pile up on the high street, we are seeing the emergence of leaner, cleverer, more agile and responsive businesses that are in tune with their consumers and creating the business models of the future. FOCUS CONTENTS 38 Is e-commerce the death of the high street and the future of retail? 40 7 insights for an e-commerce strategy 41 The how and why of moving from effectiveness to efficiency 42 Getting to grips with Big Data and how to extract value from it 44 New trends in digital advertising: personalisation, retargeting and real-time bidding 46 Delivering on promises 48 The digital revolution is gathering speed but can the law keep up? 50 Mobile take off 51 The art of selling experiences online 53 Journey of discovery: an SME experience of building an online presence 54 Next generation: putting a traditional family business online 55 Digital vision: a new way of engaging with a new customer 36 - INFO - MARCH / APRIL

2 CCFGB e - Commerce Timeline 1960 Development of the Electronic Data Interchange (EDI), replacing traditional mailing and faxing documents with a digital transfer from one computer to another 1979 Michael Aldrich (English inventor and entrepreneur) connects a television set to a transaction processing computer with a telephone line, thereby creating teleshopping 1981 Thomson Holidays submits the first ever B2B electronic transaction using online technology 1982 France Telecom invents Minitel, the most successful pre-world Wide Web online service 1984 Mrs Snowball makes first online purchase of groceries from Tesco via the Shopping and Information System (SIS) on her television 1990 Tim Berners-Lee creates the first World Wide Web server and browser, using a NeXT computer. He then develops URL, HTML and HTTP 1994 Development of a security protocol the Secure Socket Layers (SSL) - encryption certificate by Netscape provides a safe means to transmit data over the Internet 1995 Amazon is launched as an online bookstore Launch of ebay 1998 PayPal launches pay service for online vendors, auction sites, and other commercial users, allowing customers to send, receive and hold funds in 24 currencies worldwide 2001 Amazon.com launches its first mobile commerce site 2002 PayPal is acquired by ebay 2004 The Payment Card Industry Security Standards Council (PCI) is formed to ensure businesses comply with security requirements. Credit card companies create PCI data security standards 2005 YouTube is created by three former PayPal employees 2007 Apple launches the iphone with full web browsing and downloadable apps 2008 First contactless cards issued by Barclaycard QR-Codes (Quick Response Codes) start to hit the UK 2010 First-generation ipad unveiled - a tablet computer designed and marketed by Apple Inc 2011 Adoption of IBM SmartCloud solutions 2013 Predicted to be the year of the Phablet larger screen smart phones INFO - MARCH / APRIL - 37

3 Is e-commerce the death of the high street and the future of retail? INFO GETS A VERDICT FROM ERIC ABENSUR, GROUP CEO OF VENDA, AN E-COMMERCE PIONEER AND PROVIDER OF END-TO-END MULTI-CHANNEL E-COMMERCE PLATFORMS FOR GLOBAL BRANDS AND RETAILERS SUCH AS TESCO, THE BRITISH MUSEUM, LAURA ASHLEY, WONDERBRA, FAT FACE, JIMMY CHOO AND ORANGE We are experiencing an amazing revolution in the retail industry, and when you go through such extraordinary times, there are consequences. Some don t make it, but e-commerce is not about to become the one channel against all channels. The reality is that people are not spending more, but they are spending in a more fragmented way. Retailers therefore have to be able to reach their customers wherever they are and whenever they are able to buy. The key to survival for bricks and mortar shops is to become part of an integrated experience. This is how such a shopping journey might play out: two girls are chatting on Facebook. One tells her friend about a yellow dress she had worn to a party. The other asks her where she bought it and is told Laura Ashley. The girl then goes onto the Laura Ashley Facebook page and clicks on the website link. She registers with her Facebook login and starts browsing. She decides to buy the yellow dress but in the middle of the check-out process she realises she s late for work and abandons the transaction, switching off her desktop. On the bus she logs in from her mobile phone, and continues the check-out from where she left off. However, she realises she s unsure about her size. She browses to see if there is a Laura Ashley store on her way home, and finds one which has the dress in the two different sizes she wants to try. She forwards the information on Facebook to her friend and asks her to meet her at the store for a second opinion. Her friend, who is a loyal Laura Ashley customer, has the Laura Ashley App, which means as soon as she gets close to the Laura Ashley store, she is recognised and gets a text message/notification offering her and a friend she refers, a 5% discount in store. They meet at the shop and the girl buys the yellow dress with the discount, while her friend buys something for herself because she has a discount too. This touches on all the aspects of the multi-channel future of retail. 1. Social media: Facebook is now only second Eric Abensur to Google as a source of traffic to e-commerce websites. A recent study showed that about 50% of British and French woman look at product reviews on Facebook before buying online. 2. Mobile platforms: smart phones have very high traffic but a low conversion rate as they are primarily used for store location, browsing and price comparison. They should be differentiated from tablets, which have an extremely high conversion rate. People seem to be even more comfortable buying things on their tablets than on desktops. 3. Bricks and mortar stores: still have a role to play, and can leverage off e-commerce platforms too. Even pure players (online only retailers) are recognising the importance of having a physical presence and will start opening experience stores in key, select locations with lots of room for customers to browse, and low levels of stock. 4. Integrated platforms: single e-commerce platforms provide tried-and-tested infrastructure and applications for retail clients, making it cost effective and allowing them to focus on brand, marketing, products, and the delivery of promises INFO - MARCH / APRIL

4 5. Technological innovation: the next big thing entering the store of a competitor. is GeoFencing, which triggers an action when a device enters or leaves a specific geographical The high street is not going to die, but it is going to area, targeting a particular person, at a particular change. The way people shop has been revolutionised time and in a particular location. A store app can and fragmented. Physical shops are now just one of the thus notify the user of a sale on their favourite ways people purchase products, and their continued shirts when they are walking past a branch, or survival depends on how well they are integrated into offer them a discount voucher to spend within the multi-channel retail system that is the shopping a time frame. It could even target an individual of the future. Themes in e-commerce A FEW YEARS AGO A WEBSITE S MAIN PURPOSE WAS TO RAISE BRAND AWARENESS RATHER THAN CONTRIBUTE TO SALES. NOW THEY ARE EXPECTED TO OUTPERFORM ALL OFFLINE STORES. TIMES MAY BE TOUGH FOR RETAILERS, BUT CREATIVITY IS THRIVING IN E-COMMERCE. ANTHONY WEBSTER, HEAD OF FUNCTIONAL DEVELOPMENT AT VENDA, OUTLINES SOME KEY THEMES Hire experts? When it comes to setting up or expanding online, how much of it should you do yourself? Many companies are comfortable buying basic services such as . Leveraging Software as a Service for e- commerce is a bigger decision though, so there s even more reason to consider a specialised partner with a good reputation to help you navigate the pitfalls. Going this route offers a number of advantages. Many providers offer cloud infrastructure so capacity scales as needed, and you won t need to maintain excess headroom for sales that only happen twice a year. Pricing is usually on a pay-as-you go basis, meaning it is cheaper upfront, and aspects like security and upgrades are handled for you, freeing you up from maintaining technology to concentrate on what you do best selling. Some online only businesses are understandably nervous about outages, but what s more important than the decision to outsource or not is that you trust your provider, whether they are an in-house team or an external partner. Multi-channel and mobile Many brands are adding sales channels and the lines between these are blurring. Now there are sites that literally respond to the size of the screen to provide a tailored experience for mobiles, tablets and desktops. Some retailers are providing in-store kiosks, often via ipads or touch screens, so that if a product is out of stock in store the sale is not lost. It s not just offline pushing sales to the website though, the reverse is also happening with functionality such as click and collect. For the retailer this not only saves on delivery costs, but also drives store visits providing another opportunity to cross sell. It s no accident that the collection counter is usually located at the back of the store. But doesn t all this cannibalise sales? In fact overall sales increases suggest the opposite - all these channels are complimentary. But even if that wasn t the case, customers expect convenient ways to shop. Growing sales internationally If you run a successful online store you already have some of the knowledge to be able to export your website to Europe or further afield. Assuming your technology handles multiple languages, currencies and processes local payment types, why not investigate this? A common first step is to start fulfilling orders from your home country. Of course, new markets don t have to be international ones. If your products translate to a cut down range that naturally target a niche market you may have a ready-made strategy on your hands launching microsites. INFO - MARCH / APRIL - 39

5 7 insights for an e-commerce strategy DINIS GUARDA IS THE FOUNDER AND CEO OF ZTUDIUM.COM, A DIGITAL SOCIAL MEDIA PUBLISHER AND CONSULTANCY, AS WELL AS FOUNDER OF INTELLIGENTHQ.COM. HAVING WORKED ON DIGITAL STRATEGIES FOR THE UN, GOVERNMENTS, FINANCIAL COMPANIES, REUTERS, MASTERCARD, P&G, PHILIPS, VODAFONE AND NIKE AMONG OTHERS, HE SHARES KEY INSIGHTS FOR FORMULATING A STRONG E-COMMERCE STRATEGY The world of e-commerce and digital marketing is both innovative and disruptive. Innovative because it is fast-moving and ever-changing, disruptive because it keeps on shifting, evolving in different directions, out of the box. E-commerce businesses require an allencompassing digital strategy that finds synergy between different platforms. 1. Define clear objectives, focus and guidelines E-commerce can only succeed as part of an overall marketing, business and communication strategy with a clear role and objectives. Its various components such as landing pages, settings, tracking, social mediaassociated campaigns, SEO and PPC (Pay per Click) need a set of guidelines for different but aligned approaches, resources and efforts. 2. Understand that mobile and social media are critical for a successful e-commerce execution Mobile and social media should be part of a holistic approach that recognises that mobile should work alongside and may surpass the conventional web experience. This requires continuous innovation. It s no longer enough for a website to function properly on mobile devices, or have an app. Increasingly mobile and sophisticated consumers expect optimised and UX platform-specific offerings with a better shopping experience, geo-specific rich media, video content and other elements that enhance the e-commerce life cycle. 3. Create strong synergies between strategies, campaigns and budgets Different e-commerce platforms within a company need to share budgets, data, strategy and objectives, rather than having to compete for budgets and resources. PPC is easy to track and gets results faster so tends to get most of the budget, whereas SEO is less expensive but needs resources, technical development and continuous work. Budget decisions need to be analysed in terms of short, medium and long-term strategies and should include ROI (return on investment) and ROA (return on attention). Synergies and joint efforts should encompass lead generation, referral traffic, branding, PR and social media, especially as Google and Bing now include in their algorithms social media sentiment from Twitter, Google+ and Facebook as critical factors for rankings. 4. It is all about data, big data, but relevant data Make sure you manage the e-commerce data from your various research and analytics sources, draw it together and take action on it based on shared knowledge and common goals. 5. Focus on personalisation and real time The message and the product need to be aligned with the right degree of personalisation and in real time to match customer expectations. Amazon is now focusing on personal history as are ebay and Google. 6.Design campaigns together Work on a holistic e-commerce experience driven by information, data and implementation. Is each landing page structured on the correct data and site architecture? Do the campaigns communicate and are they consistent in look and aim? Do they align with SEO and convey the right message through the URL structure? How will it affect the general PPC quality score? 7. Loyalty will be rewarded if you think customer Loyalty is the ultimate goal of e-commerce. Marketing, media buying and word- of-mouth campaigns need to bear in mind that it is all about creating a bond with the customer. All strategies, innovation and product development should work in unison towards creating trust, loyalty and engagement with the customer INFO - MARCH / APRIL

6 The how and why of moving from effectiveness to efficiency IN AN INCREASINGLY COMPETITIVE E-COMMERCE WORLD, CUSTOMER KNOWLEDGE IS POWER, BUT IT MUST BE THE RIGHT SORT, WRITES JEAN-PIERRE LE BORGNE, ASSOCIATE DIRECTOR OF DIGITAL USER SPECIALIST YUSEO For companies today the question is not about going digital, it s more about How..? : How far do I adapt my organisation to be digitally orientated? How do I measure the contribution and return on my digital investments? Until recently, digital achievement was measured by effectiveness: SEO or SEA (to increase traffic and maximise visibility), technical platform (server response time, page download), conversion rate or customer satisfaction. Such metrics, used at every level of an organisation up to the board, did the job pretty well. Digital business expansion was heavily driven by a natural growth of web users and the novelty phenomenon. Now with tougher, broader competition, and the arrival of new, game-changing players, many business models are under pressure to reach and/or preserve margins. How many e-tailers from the early stages have actually reached profitability on their core operation without any additional side revenues (advertising mostly)? Even Amazon gets the most significant chunk of its profits from its Cloud Services operations. Everyone agrees that digital has brought a new breed of customers with a completely new way of buying. The digital age customer is more aware, more demanding, but also more frivolous, partly as a consequence of this new empowerment that allows her/him to freely choose, get information, complain or praise. No website can afford to leave a customer on the roadside. Even if a customer completes a purchase, a poor online experience may damage loyalty. Clearly the digital customer experience has to be as intuitive and satisfying as possible. This is where efficiency matters: of course, the customer must find the product/information in store (effectiveness) but she/ he will not spend more time and effort than necessary to achieve this goal when there are a growing number of alternatives. Efficiency often equates to simplicity, although for any digital project manager, under the pressure of daily routine as well as technical constraints, reaching this goal is far from easy. Where customer experience matters Every company knows that each touch-point with its customer is an opportunity to convert or miss. Therefore, every detail matters to optimise these contact opportunities whatever the context. With the digitalisation of the customer relationship, every organisation faces the challenge of Big Data and has to address it accordingly. The answer is not in collecting additional data there is already more than enough to deal with. Customer experience and knowledge is the new holy grail for any marketer to optimise their strategy and customise their offer. Fotolia but customer data qualification even more so In the past, marketing surveys made an impact on traditional media thanks to their ability to deliver relevant meaningful customer data. In the digital age, analysis needs to take into account the specifics of the media in order to understand how customers behave. Piling up data that has no relation to the customer s goal is almost pointless because it does not answer the question Why?. Most existing data is a direct consequence of usage but does not help to build up genuine knowledge to understand the leverage for a good customer experience. So-called behavioural marketing solutions often rely on usage instead of anticipation and understanding. Data relevancy and qualification is key to gathering actionable insight that will not only have a short term impact but also help understand what really matters from a customer perspective in the long run. Digital behavioural analysis (and measurement of customer experience) contributes to this equation, introducing new reliable metrics and helping to find the needle in the Big Data haystack. INFO - MARCH / APRIL - 41

7 Getting to grips with Big Data and how to extract value from it THE BEHEMOTH OF BIG DATA PRESENTS CONSIDERABLE CHALLENGES TO BUSINESSES, BUT UNLEASHING ITS POWER IS CRITICAL AND CAN BE ACCOMPLISHED WITH THE RIGHT ORGANISATIONAL FOCUS AS PROFESSOR MARIE TAILLARD, ACADEMIC DIRECTOR, MSC IN MARKETING AND CREATIVITY AND DIRECTOR, CREATIVITY MARKETING CENTRE AT ESCP EUROPE BUSINESS SCHOOL, EXPLAINS In the morning-after analyses following the 2012 US Presidential elections, most pundits agreed on one particular point that had gone very right for the Obama campaign and terribly wrong for the Romney campaign: their respective ability to gain real competitive advantage from the masses of voter data available to them. Both of the campaigns had bet heavily on being able to extract value from the thousands of available databases containing voters leanings on political and social issues, previous endorsements and donations, from sources ranging from social media to registration records to door-todoor canvassing reports. For the Democrats as well as the Republicans, data management was a key strategic focus, albeit a daunting one, as the potential of socalled Big Data as a game changer in gaining valuable insights into voter intentions and behaviour was well known to both candidates. IT professionals and analysts on both sides had been working for more than 18 months on ramping up their projects, which ironically shared one feature: they both bore the names of large cetaceans, Obama s Narwhal and Romney s Orca (the orca is the only predator Big Data has, in many ways, become so big as to test the limits of human intelligence that goes after narwhals). While interviews with Obama campaign staff and volunteers suggest how much they benefited from the Narwhal data in the months leading to the elections, the Orca team had to admit defeat early on election day when the system went bust and failed to deliver. The rest is... history. The scope and scale of Big Data This example illustrates the power of Big Data and how critical it can be to an organisation s performance. A study of the compound annual growth rates of companies that employ Big Data for fine-grained insights into their customers behaviour suggests that they are growing anywhere between twice to 50 times faster than their competitors that don t follow this practice. What makes Big Data so different and so powerful? First, its scale: not only is the sheer number of clicks, transactions, comments, mobile connections and other data points unprecedented, but the ability to store them is a new development. Timeliness of the data is also key large e-commerce sites such as Amazon and Expedia are collecting and acting upon real time data around the clock to forecast, update, test, optimise and, in general, extract greater relevance and value every step of the way. Beyond the scale of the data, the diversity of its sources and the ability to mash it up is also new social media is crossed with geo-location, search and other data to produce clearer, richer insights. Thanks to cloud solutions, Big Data is also now easily distributed and shared with partners around the world, again in real time. Finally, beyond the storage capacities, analytical capacities have also grown exponentially, and make it possible to crunch more and more data, faster and faster. Therein, however, lies one of the main issues. Big Data has, in many ways, become so big as to test 42 - INFO - MARCH / APRIL

8 fotolia the limits of human intelligence. How to get our heads around the magnitude, the richness, the potential, the structure, the implications of Big Data has become the billion dollar question, one that requires creativity and sure-footed leadership to answer. Initiatives to tackle Big Data Some call it analysis paralysis, this caught in the headlights reaction to too much input the main hurdle in unleashing the power of Big Data in an organisation is a very human one that revolves around a dislike and distrust of numbers, fear of what is new and unknown, and a certain tendency by data geeks to keep things opaque. Getting around this requires several key initiatives: 1. Transforming the organisation to adopt a data-ready culture 2. Integrating data into the decision-making process 3. Making the data itself usable and approachable. The first step is one of cultural transformation and requires both education so as to understand the nature and value of the data, and a real shift in mindset to accept its impact on the organisation. The second step is about integrating data analysts into functions such as marketing, sales and customer service in order to create an effective interface between the data itself and the valuable insights it reveals. Step three transforms data into human facts, stories and pictures that can speak to people. Starting with a highly visible, but easily controlled project may help to create proof of concept and generate interest and buy-in once clear results have been shown. We ve seen such easy wins in sales organisations where Big Data allowed insights into micro-markets that were just waiting to be serviced. Once the numbers were in, internal resistance broke down very quickly. Privacy, ownership and transparency Questions around privacy and ownership and the ethical uses of data must be addressed both internally and with key stakeholders. As usual, transparency must be the name of the game. As a matter of fact, transparency will itself become a competitive advantage as pressure increases on organisations to share data with consumers so they too can use it to their own advantage. Mobile operators, for instance, can compete on allowing customers to better customise their calling plans and control their usage. Supermarkets can offer financial and nutritional data and analyses. As firms embrace the full potential of Big Data, we may well do away with some of the vestiges of information asymmetry which consumers have endured for years. INFO - MARCH / APRIL - 43

9 New trends in digital advertising: personalisation, retargeting and real-time bidding CHIEF OPERATING OFFICER THIBAUT MUNIER AND VICE-PRESIDENT MARKETING UK FRANCOIS-XAVIER WATINE FROM PIONEERING INTERACTIVE MARKETING COMPANY 1000MERCIS REVEAL WHAT S NEW IN THE DIGITAL MARKETING UNIVERSE In an era of advertising overload, website visitors are bombarded by all kinds of messages, but consumers time and attention spans are limited and they have started to filter things out. This, in turn, reduces the impact of mass marketing messages. Therefore, sending fewer yet more personalised messages is an absolute priority for advertisers. This means adopting a conversion-driven approach, where relevant messages help optimise marketing budgets. Personalisation Advertisers need to differentiate themselves through highly targeted and personalised campaigns. They must strive for relevance and avoid advertising saturation. In order to attain an efficient click-through rate, they need to pay extreme attention to what is sent, to whom and when. Thus, delivering the right message, to the right person, at the right moment and through the right channel is now key more than ever. Each message needs to bring relevant information and value. This can only be attained by knowing the customer you re talking to. The good news for advertisers is that technology and the massive amount of data discharged every second by each Internet user allows them to do this. For customers, the experience could be compared to what they might have in a local shop, where the salesman knows their children s favourite colour and asks about their last holiday in Spain. There are many possible applications of this customer knowledge, but two of the most popular trends in online marketing are retargeting and real time bidding. Retargeting Retargeting is a subset of behavioral targeting, which consists of addressing individual consumers with relevant advertising, based on their previous online behaviour. Retargeting by relies on a three step process: (1) tagging websites and loyalty s; (2) matching browsing behaviour with individuals; and (3) sending personalised s to those individuals. It can be used either as a retention tool or as an acquisition tool. It is possible to target visitors who are already part of the advertiser s database, usually subscribers to a newsletter or existing customers. If tracked, stored and used properly, individual browsing behaviour can be considered a proxy for purchase intentions. The results are improved customer conversion rates thanks to more focused campaigns. When visitors are not opt-ins to an advertiser s brand, they might be to someone else s. To take advantage of it, third party opt-in databases, help target How retargeting by works 44 - INFO - MARCH / APRIL

10 these potential customers. Using calls to an advertiser s website, such programs can match visitors with their own opt-in database thanks to cookies. Matches can then be contacted by the third party database on the advertiser s behalf, with the specific offer of the product they saw but didn t buy yet. Real-time bidding Real-time bidding (RTB) allows you to implement the same kind of strategies, and much more, with display advertising. RTB is a method of buying online display advertising by auctioning at the best price and in real time on a large and growing network, as on a stock-exchange market. It optimises media buying. Any impression of a banner with RTB is based on criteria associated with a cookie. While traditional media buys impressions en-masse on a website-by-website basis, RTB automatically buys impressions based on the profile of the user visiting a website, thanks to the user s cookie. In other words, you are not targeting the audience on a specific website anymore, but you are targeting a specific individual, thanks to a cookie, on any website in the RTB network. Thus, data and cookies become a crucial element for the advertiser. When they can link this cookie to their CRM database, it s not only a powerful tool to acquire new targeted customers, but also a new relationship channel Real-time bidding Real-time bidding allows you to implement the same kind of strategies as retargeting with display advertising for advertisers that want to display a personalised message to their customers, anywhere on the web as RTB already represents more than 50 billion impressions per month in the UK. Let s take an example: a user arrives on a publisher s website, creating an opportunity to display a banner ad to this user, the cookies tell us that he s a 35-yearold man, surfing regularly from London on travel websites. At the same time, the publisher tells thousands of advertisers via an ad exchange that this banner impression is on sale for this user. One advertiser recognises through cookie matching that this user is his customer, Mr Smith, who bought a flight yesterday to Berlin. He makes the highest bid to win the auction for that banner and he displays it to Mr Smith, offering him a nice hotel in Berlin. Of course, one critical point beyond the huge possibilities offered by the technology and the amount of data available is the need for advertisers to learn how to make the best use out of it, and to adapt the message and their own limits to the sensitivity of each customer on the use of their personal data. flickr/ Victor1558 INFO - MARCH / APRIL - 45

11 Delivering on promises HOW DOES AN ONLINE RETAILER ENSURE IT STANDS OUT FROM ITS COMPETITION? ELLIOTT MALLOWS, MARKETING DIRECTOR OF ASENDIA UK, PUTS IT DOWN TO BEING ABLE TO DELIVER ON YOUR PROMISES TO CUSTOMERS Research indicates that a large proportion of the complaints made by e-commerce customers relate to fulfilment and delivery issues. So companies that offer the best customer experience from point-of-sale to delivery are often those that will maintain customer loyalty. We provide response handling, fulfilment and distribution for many online businesses, says Rebecca Owen, Value Added Services Director at Asendia UK, And it still surprises me how often people leave this area as a final thought as they get excited by perhaps the more glamorous areas like website development and marketing, but all research shows that a poor fulfilment experience can cause significant damage to a company s reputation. Research by IMRG (Interactive Media in Retail Group) shows that more than 12% of deliveries do not arrive in accordance with shoppers expectations, and this does not include orders that are not dispatched on time and in full. Furthermore, 22% of orders were returned by UK consumers in 2011, so the importance of reverse logistics cannot be overlooked either. So what advice does Rebecca give? Think about your fulfilment and delivery strategy Late and incorrect delivery of products is a frequently cited complaint, so e-commerce providers must be realistic about the delivery promises they make to customers, especially when demand is high. There are pros and cons to handling fulfilment in-house or outsourcing it. It really depends on the size, scalability, and flexibility of the business, but it s a decision that requires a lot of thought. The importance attached to on-time delivery by customers means that you must select your distribution partner service very carefully. Research shows that customers want their retailers to fulfil their promises rather than necessarily be the cheapest. Depending upon the nature of the product you are supplying, you also need to think carefully about packaging to ensure it is robust enough to ensure safe delivery. Keep the customer updated Customers are entitled to written confirmation of their order under the Distance Selling Regulations, but customers demand much more than just what they are entitled to. Successful e-commerce sites make a point of confirming orders immediately by and provide the customer with a way to track down the progress and availability of their order. Many carriers now use and SMS messages to notify a customer that an order has been dispatched, and an online tracking system that allows the customer to log on to their website in order to check on progress. These are now a must-have rather than an added extra. Have an acceptable returns policy With almost a quarter of orders being returned, online retailers must put in place an acceptable means of handling customer returns and ensuring that any customer dissatisfaction is professionally resolved. In fact customers will often identify a returns policy as a key reason for placing an order with a particular retailer. International orders Expanding your market across borders can provide significant opportunities for sales growth, and with the power of Google it is often not that difficult. The barriers that retailers often face are related to delivery and returns. It is easy to pay a lot of money for international delivery if you are not careful and this can make you uncompetitive, and if you don t have a robust returns policy what happens to those 20% of people that struggle to get their money back? Will they buy again, or will they post about their negative experience on social media sites? Many national postal operators like Royal Mail, La Poste and Swiss Post (Asendia is a joint venture between La Poste and Swiss Post) provide a growing number of international mail distribution services specifically aimed at the e-commerce market as well as advice on international cross border trade. Rebecca Owen concludes: At Asendia we ve worked with big brands like Boden, Paul s Boutique, and Tesco, as well as mediumsized businesses and start-ups. No matter the size of the business they all have to consider these issues as a priority INFO - MARCH / APRIL

12 Logistics case study: Little Fashion Gallery Little Fashion Gallery is an international online children s fashion boutique that retails over 200 brands of clothing, accessories and even furniture. Although it is a French company, and 40% of its business is in France, the company sells its products internationally in 100 countries through its French and UK websites, and it is due to launch a US website soon, offering duty free shopping and the ability to pay in dollars. While the UK is Little Fashion Gallery s second biggest market, its US customers tend to have high value shopping baskets and order volumes on a par with those from Spain. Pricing is adjusted to the local market, in line with competitors. Initially the company managed its logistics inhouse under the umbrella of the head office with CEO Marie Soudré-Richard directly managing the pickers and packers. However, three years ago the decision was taken to contract out this side of the business to a logistics company based near Paris and now all the products are warehoused and shipped from there, with the exception of some large items of furniture that are shipped directly from the manufacturer. We have no interest in having different platforms in different countries because this is where you multiply all the problems, comments Marie. For a start you would need much more stock. For a small business like us, having a centralised stock makes sense and it is very important for our business to have control of this. Even Net-a-Porter which turns over hundreds of millions of pounds has centralised stock in the UK and the US. Little Fashion Gallery still keeps close tabs on the logistics operations, nevertheless, as Marie explains: We have a managing director in charge of the logistics and supply team. They go to the warehouse at least once a week to make sure the stock has been received, sorted and warehoused. This is especially important in the transition period between the end of the sale and the start of the new season when we have a large volume of products going out at the same time as receiving all the new collections. We need to make sure everything is sorted as soon as possible because it is really crucial for the business to minimise the lead time between the moment the products arrive in the warehouse and when they are actually put online. This is something we are really working Bespoke packaging on because it affects margins. Although some e- commerce companies put products online and pre-sell them before they get the merchandise, Little Fashion Gallery avoids this practice because of the potential problems it may cause. There are always discrepancies between your order and what you actually receive, says Marie. If you sell before you have the guarantee that you have the stock, you will have huge issues with customer service and at the end of the day it will cost you more money because you will have to deal with partial orders, issues with clients and loss of reputation if you cannot deliver. International shipments are dispatched with UPS, and postage costs are additional. However, the company offers free delivery for orders over 150 for UK and European customers. Returns are free: We have always done that because it is very important for the customer experience, and customer service is a priority us, says Marie. We ve always positioned ourselves as quite high end in terms of the quality of our service. We ve always had lovely packaging, the facility of being able to return your products very easily, and a person who speaks your own language when you pick up the phone. For a small company like us, it has been quite difficult to build all this into the structure, but it is integral to our brand and reputation. KF INFO - MARCH / APRIL - 47

13 The digital revolution is gathering speed but can the law keep up? LAWS DRAFTED LONG BEFORE THE INTERNET AGE CANNOT HOPE TO KEEP PACE WITH FAST-CHANGING TECHNOLOGY AND APPLICATIONS, SO IS IT TIME FOR A RADICAL RETHINK ASKS OLIVER BRAY, COMMERCIAL/ IP TECH PARTNER AT RPC Blogging, streaming, surfing, posting, pinning, poking it seems that the online world is spinning faster than ever before, and increasingly from devices held in the palm of a hand. This all drives the development of streamlined technology, which can be accessed by as few touches of a button as possible. Nowhere is this more prevalent than the app market, which aims to provide us with instant gratification for our social, entertainment or organisational needs with a simple tap of the install now button. Inevitably, this new technology is creating tensions with the law, in particular with legislation drafted years ago (some of it even before the Internet came into existence). And while lawyers have become accustomed to the static world of the website (where there is ample room for lengthy terms and conditions, privacy policies, cookie pop-ups and the like), one only has to scratch the surface of the new online, and increasingly mobile, world to see just how far the law is falling behind. Consider, for example, the concept of permissionbased controls (as favoured by the law) compared with the reality of app-land where everyone wants free and instant content and where personal data is often offered up without a real understanding of where it will end up. Law & Tech...one only has to scratch the surface of the new online, and increasingly mobile, world to see just how far the law is falling behind How else to explain the global phenomenon that is Pinterest, which has now attracted 17 million users at almost twice the pace of Facebook (Comscore data, as reported in Fortune Magazine/CNN Money)? The appeal of Pinterest (in its own words) is that it lets you organise and share all the beautiful things you find on the web, by letting you add them to your pinboard. Allegations of copyright infringement have inevitably circled around Pinterest since its launch in March 2010, and while Pinterest has been looking at its service to try and reduce the risk (for example by incorporating new tools to report abuse), one suspects that the average user is happily pinning away without really giving a thought to the legal implications. Data protection is another area where the reality of consumer interaction conflicts with the aims of data protection regulation, which in large part is designed to give people control over how and where their data is used. Tablets and mobiles are far more personal devices than PCs, and yet we happily let them collect vast amounts of private information about us, including the ability to let them track our every move through geo-functionality. The recent scrutiny of the WhatsApp messaging service (which accessed users address books and then retained that data from even those who had 48 - INFO - MARCH / APRIL

14 not signed up to the service) has only added to the growing concerns over just how effectively the law is being used to protect our private information. But perhaps the biggest elephant in the room is the fact that hardly anyone reads terms and conditions anymore, especially when they are downloading, say, an app on a mobile. In large part, this is because terms and conditions vary so wildly in terms of style and format that it is simply too arduous and timeconsuming a task for anyone to take on, especially when in purchase or consumer mode. A recent survey by Which? Magazine picked up on this when it worked out that PayPal has a total of 36,725 words for its terms and conditions, which is longer than Shakespeare s Hamlet! This all begs the question, is it not time for business and lawyers alike to drop lengthy terms and conditions and move to a much more fluid, and effective, way of engaging with users? In other words, by consigning over-complicated terms and conditions to the bin and adopting a wholly fresh approach? There are many ways this could be done be it through just in time information (i.e. presenting terms to consumers only at the time it s actually needed) or by breaking sets of PayPal has a total of 36,725 words for its terms and conditions, which is longer than Shakespeare s Hamlet! terms and conditions into properly digestible bitesize chunks (whether through simple layering or onetouch click boxes). But of all the steps we can take, it s arguably in the field of collaboration (between the business, developers, and the lawyers) where the real solution lies. In this way, online platforms could ensure that at each stage of the development process the risks (both legal and commercial) are addressed, so that there is nothing left to surprise or disappoint the person who really counts, namely the much-valued consumer. If this means we end up losing 36,000- word terms and conditions, or that there s simply more transparency over what it means to engage with an online platform, then the world will surely be a better (and safer) place. Top tips for avoiding legal landmines online Beware of infringing someone else s intellectual property (IP) in images, photos, trade marks, etc. Remember the online market is a global market check you have the rights to operate in foreign jurisdictions, and that you re complying with local consumer laws Think about how you present your user licence terms consider tailoring them to highlight the key terms that users really need to know about Make sure that you own the relevant IP in your website/app i.e. ensure the IP is properly assigned to you, or that you re fully licensed to use any third party rights Be careful when collecting personal data, and make sure you obtain appropriate consents Work alongside the website/app developers from the start of the project ensure your IT team fully understands the functionality being included Negotiate the development agreement before work begins, and use this to record the specification/ service (in particular any data/geo-location functions, use of open source, on-going support obligations, etc.) Consider your liability for user-generated content if necessary, include easy-to-use take down policies If you re building an app, be familiar with the rules of the online platform (ios, Android, Blackberry, etc.) Above all, be consumer friendly (both in language and presentation) so that your users know what they re signing up to INFO - MARCH / APRIL - 49

15 Mobile take off JAMES MILLETT, EASYJET HEAD OF DIGITAL, SHARES HOW THE AIRLINE HAS INCORPORATED MOBILE TECHNOLOGY INTO ITS OVERALL STRATEGY OF MAKING TRAVEL EASY AND DEVELOPED IT INTO A COMPLEMENTARY CHANNEL FOR A SEAMLESS CUSTOMER EXPERIENCE EasyJet was at the forefront of the Internet travel revolution after launching online booking in Just eight years later it became the first major low-cost airline to offer Internet check-in for its UK passengers both great examples of innovation and a culture of thinking differently that have changed the face of travel. Fourteen years on, the face of the Internet has also changed. It wasn t long ago that Internet cafés were commonplace and households had one desktop PC on a dial-up connection... remember that sound! In 2013, society boasts about superfast broadband, 4G, Wi-Fi boosters and an always on Internet culture. Smartphone and tablet penetration has exploded, and you can even connect your light bulbs and fridges to the Internet if you so wish! Brands have had to adapt their activity and behaviour quickly to reflect how customers want to interact with them. In 2011 easyjet introduced iphone and Android applications, shortly followed by a mobile website, and has since seen usage and adoption explode. With over 4.2 million app downloads and 60 million in revenue across Europe, this isn t just a gizmo with a short shelf life but a customer tool to be taken seriously. Customer behaviour itself has fundamentally changed as a result. easyjet had a record mobile day when our summer routes went on sale, as customers reached for their smartphones to secure the best prices, and earlier this month we saw 850,000 updates to our new app with allocated seating in the first 12 hours. At easyjet we are focused on introducing developments that drive incremental revenue and take cost out of our operation, in line with our commercial priorities. In addition, we see mobile playing a pivotal role in supporting our making travel easy cause, particularly at airports. Flying over 600 routes and 1,300 flights a day to more than 130 European business and leisure destinations, things don t quite always go according to plan. Our new mobile flight tracker gives up-to-the-minute information and we re currently working on improvements including giving reasons for a delay and even live progress updates direct from our Operation Control Centre. It s important that mobile is seen by customers as a complementary, not separate channel. Bookings made on easyjet.com can immediately be viewed on the app with a countdown to departure. And it doesn t stop there. From the booking, in one click, the most popular hotels in the specific destination can be viewed, flight details can be shared or products easily added - for example, bags the night before travel for those last-minute packing emergencies! Looking ahead, mobile penetration will continue to increase and as technology moves forward customers will understandably be more demanding in their expectations of brands. At easyjet, we have a small yet passionate team always challenging itself and ready to exploit new opportunities across all digital channels, in order to help drive our cause of making travel easy and affordable for all INFO - MARCH / APRIL

16 The art of selling experiences online SELLING LUXURY HOLIDAYS ONLINE IS A VERY DIFFERENT PROPOSITION TO SELLING PRODUCTS, BUT THE AGE-OLD PRINCIPLES OF QUALITY, CUSTOMER SERVICE AND PRODUCT DIFFERENTIATION STILL APPLY SAYS MATT CHEEVERS, UK MANAGING DIRECTOR OF VOYAGE PRIVÉ, AN ONLINE MEMBERS-ONLY TRAVEL CLUB Our members come to us to book an experience not just a holiday. It is our job to inspire them and gently convince them that our experience is the right one for them. The convincing is the tricky part given the amount of choice afforded to consumers in this Internet driven world! For the majority of the last decade the big changes to the UK travel industry have been focused on technology developments that allow the customer to choose holiday combinations that they require from millions of options. Unfortunately this has in many cases commoditised travel products and destroyed much of the innovation that once existed in our industry. The good news is that companies like Voyage Privé are driving a change in the way UK consumers choose and buy their holidays. Our principles are built on inspiring our members with our luxury products and we focus all of our efforts on creating a handful of carefully selected deals that we believe our members will want to engage with. So in reality we are guessing what they want based on their past behaviour, trends in the marketplace and the good old-fashioned principles of a wow deal. Then we are faced with the difficult bit, how do we get them to book online when the whole Internet is based on choice, speed and consumer promiscuity? We have a choice to make, in terms of our online offering, and it s a complex one. Do we set out to kidnap the customer by trying to give them everything they need in one website? Or do we accept that they will visit other websites to research and compare the products we offer? Simple and inspirational products littered with added value are always the answer. In short, make it impossible for them to compare your product with others even though you know they will try! Let them go onto your competitors websites, let them visit review sites and let them make up their own minds if your deal is good enough. Couple this with a very simple booking experience, inspirational content and strong communication and they will come back. You have to have confidence in your brand, product and people that they are delivering value to customers. Get this right and everything else becomes a lot simpler. We shouldn t get hung up on selling online or offline, the principles are the same and as they have always been. If you have a special product that nobody else has then you will be successful! Booking a holiday is an amazingly complex act at times. There are so many factors to consider and you rarely find two customers who have the same overall requirements. Compare buying a holiday to say buying a CD or a pair of shoes online, it s a completely different challenge. I have read much research during the decade I have spent in the online world but I am always left with more questions than answers. When I read that the average customer visits 23 different websites before they decide which holiday to book I wanted to cry! When I read that consumers spend eight times longer choosing a holiday than they do their mortgage I did cry! For now I will focus on finding amazing and inspirational deals and trust in product differentiation. INFO - MARCH / APRIL - 51

17 FOCUS TFOEJB n :PVS HMPCBM QBSUOFS GPS IJHI RVBMJUZ QSJOUJOH GVMl MNFOU BOE QPTUBM TPMVUJPOT SÈEÈSJD FUUPO IJFG YFDVUJWF Ť DFS TFOEJB JT B QBSUOFSTIJQ CFUXFFO B PTUF BOE 4XJTT PTU UIBU CSJOHT UPHFUIFS UIF FYQFSUJTF BOE HMPCBM OFUXPSLT PG UXP MFBEJOH NBJM TFSWJDF QSPWJEFST MPZE 8FCCFS BSLFUJOH BOE 4BMFT JSFDUPS TFOEJB JT ZPVS GVMM TFSWJDF QSPWJEFS, GSPN NBSLFU FOUSZ QSJOUJOH GVMl MNFOU UP EPNFTUJD BOE XPSMEXJEF EJTUSJCVUJPO TL GPS NPSF JOGPSNBUJPO BCPVU PVS TFSWJDFT BVM 5BZMPS IJFG JOBODJBM Ť DFS 5 SFBUJOH TZOFSHZ BOE JOOPWBUJPO TFOEJB CSJOHT DPTU FŤ DJFODZ UP ZPV UIF DVTUPNFS POUBDU VT UP NBLF TBWJOHT BMPOH ZPVS DPNQBOZ T XIPMF WBMVF DIBJO PO BMM VT( ")" &* "#)'% BJM PS FN EJB DPN 2BTFO JOGP VL 5IF XPSME JT ZPVS BEESFTT / TFOEJB JT BO JOUFSOBUJPOBM QBSUOFSTIJQ CFUXFFO UXP MFBEJOH QPTUBM PQFSBUPST B PTUF BOE 4XJTT PTU 8F Pţ FS JOOPWBUJWF TPMVUJPOT BMPOH UIF WBMVF DIBJO GSPN EBUB BOE QSJOUJOH TFSWJDFT UP GVMl MNFOU BOE QPTUBM TPMVUJPOT 8IFUIFS ZPV OFFE UP TFOE EJSFDU NBJM NBHB[JOFT QBSDFMT PS CVTJOFTT QPTU XF DBO IFMQ ZPV 7JTJU XXX BTFOEJB DPN GPS NPSF JOGPSNBUJPO

18 FOCUS Journey of discovery: an SME experience of building an online presence C J H,, S B W e launched Josephine Home bespoke service initially, and built up our brand for a few years before launching the website. We wanted to ensure that the design of the website reflected the positioning and personality of the business to avoid brand confusion and reinforce brand loyalty. For the build of the site, however, we aspired to Amazon as the ultimate easy model and tried to get as close as possible to the magical 3-clicks-to-buy. From the beginning, we viewed josephinehome.co.uk as a standalone store in itself and put together a plan to invest in online marketing. There is no point having an ecommerce site hidden on the worldwide web that nobody knows about or is ever going to find. As an SME you are expected to have a fully functional e-commerce site (it has replaced business cards in a way). You are judged on its looks and functionality, as well as the after-sales service. Providing great service was a key driver we thought of our website as a friendly and knowledgeable sales assistant efficient, not too pushy, yet business minded: all the features had to create that experience for the user. Resources are usually tight for SMEs so finding the right online marketing agency is key. Many will not even consider working with a small budget, but there are some who do work with SMEs in particular it s in their interest to help you grow. For us, it has been better to outsource this rather than trying to do it all in-house where staff cross over a number of different roles and don t have the time to dedicate to the task. Having a good relationship with your agency also means that they will pass on ideas for new strategy as well as general advice. However we have learnt through the process of launching our website that no one knows your products and your customers the way you do, so you (as manager, founder, creative director, etc.) have to drive the development of the outer aspect whilst leaving the technicalities to the web designers. The dialogue (often fraught!) between the web agency and the business team is crucial. Although the web business model seems simple enough, it takes time to find out what works online for your brand, how your brand will come across online and how people will want to shop your products. It has taken us more than a few iterations and you have to be prepared to embark on a journey of discovery. Some businesses (like Cath Kidston) have discovered unexpected opportunities in Japan for instance, thanks to their web presence. The strength of people s connection to your brand will take you by surprise on occasion, in unexpected regions, or for unexpected products! There is a black box element that you have to be aware of: it is hard to understand why some products clients love in store do not raise interest online and vice versa. Building a presence online does not happen overnight and you won t see a return immediately. Most online marketing strategies need to be implemented for at least a year before you see them having an effect. We have also learnt that your online customer will not necessarily have the same profile as your bricks and mortar customer so it is very important to have the correct tracking in place to analyse where they ve come from, how they use the site, what they buy and how much they spend. From there you can adjust your strategy to make sure you are always targeting the people who are most likely to buy from you. Today s customers expect to be able to engage with brands across all channels web, mobile, social media so you have to have a constant presence overall and when customers connect with you, respond as soon as possible. Online customers are increasingly savvy and demand a constantly changing and fresh range of products, competitive prices, good quality products, easy website browsing and a streamlined delivery and returns process. For a business like ours, it is an on-going learning process and certainly feels like an adventure, every day. X - / - 53

19 Next generation: putting a traditional family business online BRUNO ALLARD, DIRECTOR OF LIGNE ROSET UK, BECAME AN E-COMMERCE PIONEER FOR HIS COMPANY WHEN HE SET UP A UK-ONLY E-STORE. INFO ASKED HIM HOW HE HAD PROVED THIS MODEL COULD WORK FOR A PRODUCT TRADITIONALLY SOLD IN A VERY DIFFERENT WAY Ligne Roset is an independent family company that has quite a conservative mindset when it comes to selling its products. How did you come to set up an online shop for Ligne Roset UK? There were three main objections to setting up an online shop for the brand. First was the conviction that furniture, especially an upmarket brand like Ligne Roset, does not lend itself to being sold online. Customers need to take part in a physical process that cannot be replicated on a computer go to the shop, be served by professionals who can advise them, take their time to try the furniture, touch it, sit on it, feel the fabrics, see the colours and then wait eight weeks for a piece to be made to order. An online shop did not fit into this rationale. Second was the belief that online sales are associated with discounts, and that this would damage the brand and its exclusivity, make it middle market, and work against the strategic marketing as a luxury product. Third, Ligne Roset is a brand that is sold through independent retailers and franchises a network that has been carefully constructed over many years, and an online shop would have been seen as introducing competition from the brand itself. However, the UK is different from other countries in that the brand is more powerful than the retailers. The market was changing very fast and because of the financial crisis independent retailers were collapsing (especially outside London) so I had to find an alternative way to distribute the products. Online specialists had advised me that furniture and luxury were the next big areas of online development. It was an opportunity to test it for the group. A year on from launching your online shop in the UK, what have you discovered? There was no model for me to follow as no other luxury furniture brands were selling online, but I looked at online stores selling a specific product in a specific market. The indications were that an online shop would provide around 10% additional turnover, which would come from new business with customers who had never bought the brand before and this would create a new profile of clientele. After a year, I am convinced of this. Online is not a magical formula to replace distribution; it is a marketing tool in addition to classic distribution. It brings turnover and recognition 54 - INFO - MARCH / APRIL

20 to all the distributors. I have been able to show retailers that it is not a threat to them. In fact, they are getting new clients who have browsed online, asked questions online and yet end up buying in store. So the online store actually brings retailers new business that they would not have reached otherwise. We know from comparing online client data with our customer database that there is no cross over between people who shop online and in store. They are different profiles of customer. For Ligne Roset in the UK, the online shop has accounted for almost 10% of turnover within a year. We expect that to grow but peak at about 15%, like the fashion sector. It has proved to be an alternative way of selling our furniture, brought a new type of customer and provided additional turnover without destabilising the traditional distribution channels. So are online shops going to be rolled out in other Ligne Roset markets? It is not going to happen overnight. The US market is convinced and is working on something, but in European markets like France and Germany there is a sense that it is not the right time to launch a completely new strategy, especially one that is risky for the independent retailers with which the company has worked closely for decades. However, I am launching a Northern Ireland site imminently, and thereafter once I get the green light I want to launch online stores in Scandinavia, Poland, and eventually Benelux, Spain and Portugal where the distribution is weak. Do you have any developments in the pipeline? We are launching a new UK website, which will be much more advanced than the global one, as well as more pleasant to use and informative. It will be optimised for smart phones and ipads although I believe that people prefer to order from their home computers as they need a big screen and time to choose. For a company that previously only made furniture on demand we have also brought about a mini revolution by stocking our bestsellers in each category so that they are available for immediate delivery. We have enabled the impulse buy. Half our online customers buy online as they would in a traditional store, but the other 50% buy online because it s fast and a new way to get a product they can afford. They don t want to choose from 600 combinations, they know the brand s quality, and they want it delivered to their door next week. The US has decided to start stocking their bestsellers too. The group is changing little by little and our online pioneering is helping to change mentalities too. KF Digital vision: a new way of engaging with a new customer IN 2012, GUERLAIN TOOK AN UNCONVENTIONAL MARKETING APPROACH FOR A NEW FRAGRANCE, AS HELEN MCTIFFEN, GUERLAIN S PR MANAGER EXPLAINS Despite having many loyal fans, Guerlain recognised the need to target a wider audience with the aim of recruiting new, younger customers. In recent years, the Internet and rise of social media have led to the development of a consumer that is more aware and more demanding. There was a clear need to build a strong brand identity and engage further with this audience. Guerlain decided on a differentiating and artistic preconception, giving free rein to artists Kuntzel+Deygas to create a character to represent the fragrance La Petite Robe Noire, an illustrated silhouette depicted in a variety of charming scenes and poses. The duo s stylish animations expressed the brand in an amusing, younger manner and Guerlain became the first luxury perfume house to introduce an animated character to front an online advertising campaign, brought to life via Flash imagery. To really make a statement with this bold new campaign, digital advertising was favoured over print. With visibility across You Tube, retailers websites, online magazines and blogs, the campaign video became a viral hit and Guerlain s ambition to increase engagement was achieved. In support of the digital vision, PR activities ities were also focused on building ing strong, ongoing relationships ips with influential bloggers to generate erate reviews and coverage, building desire and creating buzz. In terms of e-crm, the desire was to create long-term loyalty via tools such as a unique in-pack code which allows the customer to log in to an exclusive La Petite Robe Noire universe and be kept up to date with news, events and activities, such as how to achieve their perfect La Petite Robe Noire party look. The beauty of working digitally is that Guerlain can continue to evolve the character and her story. INFO - MARCH / APRIL - 55

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