How will ecommerce look in future?
The future is already here – it’s just not evenly distributed” said the visionary writer William Ford Gibson in the Economist in 2003. Recently, however, there have been some interesting mergers and acquisitions which have helped to distribute the future digital landscape more evenly and give us a taste of what that landscape might look like in the future. When businesses invest billions of dollars buying other businesses to enhance their digital offering, it can be quite telling.
IBM acquired SPSS, Cognos, Sterling Commerce, Unica and Coremetrics, complementing its existing WebSphere e-commerce platform, as well as data warehousing specialist Netezza to go head to head with Oracle.
Oracle has fought back, buying ATG, bringing together the leader in CRM database software with the leader in e-commerce software. Commentators are asking if Webtrends is next.
Adobe’s purchase of Omniture combined the leader in digital creative tools with the leader (by revenue) in web analytics. Many bloggers have said the cultural gap between creative and analytics makes this acquisition a stretching integration. Meanwhile Amazon has acquired dozens of online retailers such as Zappos.com and Pets.com, as it pushes its awesome e-commerce engine to other retailers. M&S has been a long time customer.
So what do these deals tell us? Well, first there is clearly a land grab going on with a number of large technology companies vying for position to stake their claim on the future of e-commerce. With 10% (and growing) of retail goods sold online this makes a lot of sense.
Targeting and data-driven decision making are high on companies’ agendas. For example IBM’s current advertising implies that it is really a data mining business. Better targeting will also drive that fine balance between marketers’ need to personalise and consumers’ wish for privacy.
The market always demands cheaper, quicker and better applications. Online social and cookie data requires real-time response and this is driving a lot of technical development. The traditional database update process is challenged with more distributed applications and real-time updating required.
We are witnessing an explosion of data. Moore’s Law states every two years computer processing power doubles. IT costs do not typically come down, so every two years we must be processing twice as much data. This means there is an exponential growth in data of over 30 times every decade. No wonder we now call it “big data”.
Web analytics is moving from reporting to optimisation. Analytics reporting is really a rear view mirror activity, whereas optimisation aims to improve what will happen in the future. Optimisation requires testing and segmentation, so expect to see more granular data and more flexible ways of manipulating it.
E-commerce websites consist of a number of different systems that create the buying experience. On average over eight different systems are involved in delivering an e-commerce transaction. Most businesses want to move to software as a service e-commerce solutions, so this trend will only increase.
Historically online marketers have had to use web analytics, email, CMS and e-commerce platforms which are not joined up. Not surprisingly, research by Tom Davenport found 75% of CIOs wanted to see an end to these data silos. Online we are still some way away from a wholesome single customer view.
Multi-channel marketing further complicates things and is made even more difficult by these data silos. Businesses want to understand customer data across the multiple digital channels that comprise today’s marketing mix. E-commerce solutions are becoming commerce solutions, no longer limited to just online.
John Wanamaker famously said: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” While the general perception is that online marketing is measureable and accountable, in reality digital marketers are in a similar position to where John Wanamaker was 100 years ago. For example, half of online sales typically come direct, with the user entering the URL directly, so you do not know where those sales came from. Worse, if you tally up the media claiming a sale it is normally twice the value of the actual sale. Today’s digital marketer could say “I know where half my sales are coming from, as for the other half...” There are ways around this but they require better data integration and granularity. Hopefully the present consolidation in the digital market will lead to greater accuracy in the future and John Wanamaker’s frustration with marketing measurement can finally be laid to rest.
20 May 2013: In the third of our special series of articles profiling the database marketing industry, we catch up with Hopewiser, Alchemetrics, Callcredit and greenstone data solutions.
22 May 2013: Insurance provider Ageas has appointed Mark Hanson as Marketing Director for its two over 50s insurance brands, RIAS and Castle Cover.
20 May 2013: Comet Global Consulting, the customer interaction expert, has secured an additional two-year deal with Sky, to further develop and support the company’s customer relationship management and customer interaction systems and operations.
21 May 2013: — Experian has launched a new online credit risk and marketing portal putting a wealth of vital business information at the fingertips of UK SMEs.
8 May 2013: Hector Vass, former Systems Architect in the Customer Lifecycle and Optimisation team at the Lloyds Banking Group, has joined marketing analytics agency Metametrics as Chief Technology Officer.
8 May 2013: The Institute of Fundraising’s Special Interest Group for Insight in Fundraising has announced the shortlist of finalists for the Insight in Fundraising Awards 2013.
8 May 2013: ghd, the UK hair-straightening brand, has seen conversion rates soar as a result of improving the shopping experience on mobile devices using data gathered through Celebrus Technologies’ software.
7 May 2030: Maileva, a European leader in hybrid direct-mail solutions, and Selectabase, a supplier of marketing data, have joined forces to offer marketers what they call "a unique, easy-to-use and cost-effective direct-marketing solution".
7 May 2013: Really Simple Systems, one of the world’s largest providers of hosted CRM systems, has announced availability of an interface to Sage One – Sage's online accounting system.
15 Apr 2013: Following the launch of the Smartdepart suppression file last month, data and targeting specialist Wilmington Millennium has now launched Smartlink, a new goneaway database for direct marketers.
15 Apr 2013: Celebrus Technologies has deepened its partnership with Teradata through its new ability to feed individual-level digital channel data directly into Teradata Real-Time Interaction Manager.
15 Apr 2013: Data8, the data enrichment specialist, has added to its suite of real time data validation applications with the introduction of bank account validation.
15 Apr 2013: The consolidated revenue of Weborama, the European leader in the management, distribution and tracking of targeted online advertising, grew by 5% in the first quarter of 2013.
5 Apr 2013: Kwik-Fit Group has appointed customer engagement agency Lateral to handle the automotive company’s customer eCRM programme.
5 Apr 2013: It is predicted that, over the next year, the human race will produce 4 Zetabytes of new data, which represents about 1 quintillion new objects. Are marketers ready for this deluge and is it an opportunity or a threat, asks the IDM?