Thursday 5 April 2012

Internet Market Research: P&G

Procter and Gamble (P&G) and Colgate-Palmolive have been competitors for decades. Before it used to take 5 years to launch a product after the concept was developed. Companies used to send out product photos and descriptions to potential consumers to ask them their opinions about the product and whether they would buy it or not. If the comments were negative, the products would be ameliorated and the previous process would be conducted again. Once consumers found the products satisfactory, they would be given some samples to try out with some questionnaires to fill out. When the customers' feedback was positive enough, the the company would start conducting mass advertisement on T.V.


However, when P&G started using the Internet to do its market research, its research time was reduced to 3 years and a half. This was the case for the Whitestrips, the teeth whitening product. It was very fast for P&G to get the sales of the Whitestrips to reach $200 million a year. This happened a lot faster than for other products.


P&G achieved this because in September 2000, thew out the old marketing research method and decided to launch the Whitestrips on the Internet on its P&G website. The company spent a few months analyzing the website's traffic and looking at the responses collected from questionnaires.This was a lot faster than the old mail-out method. The data collected from the Internet, revealed that teenage girls, brides-to-be, and young Hispanic Americans were vey interested in the Whitestrips. Consequently, the company decided to target these segments. The Internet created a brand awareness of 35% even before the product was available in stores. The buzz online created a large demand before the product hit shelves. The Internet changed the way that market research and market segmentation is done.
Turban, Efraim, and David King.Introduction to e-commerce. Upper Saddle River, N.J.: Prentice Hall, 2003. Print.

Friday 30 March 2012

Google’s Smart Phone Glasses


According to the New York Times, Google will launch its digital glasses by the end of this year. The glasses will be like a smartphone and the technology will be based on the technology of the Android phones but will have augmented reality features. For example, it can tell you how far you are from an object or remind you who the person is and where you know that person from.

The price range for the Google glasses will be between $250 and $600, which is in the price range of actual smart phones. The glasses will be licensed to other mobile phone companies like every other cell phone in the market to be able to have access to 3G and 4G networks.

Reports about this new technology say that the Google glasses are not meant to be everyday gadgets. Some critics claim that the glasses will change the way we use smartphones but others say that this technology will be very strange and dangerous. For example, Google will be able to know everything you do at all times. It will know your location, your most common interactions, your closest friends through its facial recognition technology and your daily habits such as your eating and shopping habits. 

The Google glasses could be a new opportunity for marketers to get consumers attention at all times. For example, every time you walk close to a McDonald’s, the Google coupons application could pop an image of a coupon on the glasses.  This would help marketers understand consumers’ daily habits almost instantly because Google would be following consumers through out their typical day. However, for consumers this is bad news and would generate privacy issues.

Google’s glasses seem to be a great technological advance, however it seems that many consumers would not be willing to adopt this technology so quickly due to privacy issues. 


http://www.pcworld.com/article/250507/google_glasses_are_a_prescription_for_disaster.html

Thursday 22 March 2012

Godiva.com: Selling Chocolate Online

Godiva chocolatier is a well-known international company based in New York. The company had been looking for ways to increase its sales and after rejecting a CD-ROM catalog in the 90s, it took the courage to try online sales in 1994. Godiva was a pioneering click-and-mortar e-business that took the opportunity of online sales before its competitors.

Godiva chocolatier teamed up with Fry multimedia to create the division of Godiva. The objective of the new division was to sell to both consumers and other businesses. Godiva.com encountered many problems when it was first launched when it tested many technologies, but it maintained its commitment to its online division and Godiva.com became the most successful division of Godiva. Just like other e-business pioneers, Godiva had to build its website from scratch without any EC-building tools. Godiva tried to use games and puzzles to attract consumers but this strategy failed because consumers were coming to godiva.com to learn about chocolate not to play games. Godiva also tried to make its website look like one of its retail stores. However, Godiva realized that different channels should have different looks.

Godiva.com sells both to consumers and businesses. For corporations, incentive programs are set in place. This includes a list of the employees or customers to whom the chocolate is to be delivered. This is an example of their B2B2C EC model.

Godiva.com is a good example that shows how a traditional brick-and-mortar can turn into a click-and mortar to grow its customer base and obtain a competitive advantage while a new technology is non imitable. 



Thursday 15 March 2012

Nike’s Supply Chain: Failure and Eventual Success

During the 1970’s retailers would make their orders with Nike 9 months in advance before their delivery date. The orders were then sent to Nike’s manufacturers all over the world. At the beginning this process worked well and allowed Nike to deliver its orders on time. However, during the 1980s and 1990s Nike’s business grew dramatically and customers became more demanding about style, comfort and variety leading Nike’s forecasting, manufacturing and distribution to become very complex.

In 1999, profits dropped by 50 percent due to supply chain factors. The situation led to the adoption of Nike’s supply chain project called NSC. The project attempted to improve the failing forecasting and order activities in Nike. However this didn’t work well for Nike, so it acquired and implemented i2 technologies’ demand forecasting system at a cost of $40 million. The objectives of this project were to forecast over 1 million stock keeping units (SKUs). Algorithms were used to generate Nike’s forecasts for manufacturing. However, later in 2000, the forecasts were found to be faulty, causing Nike to over manufacture some products while struggling to meet the demand for other products. It took Nike between 6 and 9 months to overcome its manufacturing problems and more than 2 years to makeup for its financial loss.

After analyzing its i2Technologies, Nike learned that it needed a more adequate training of users, more comprehensive testing for the application and a more careful integration of the application with other information systems. The review of the project found that there was too much reliance on forecasts generated by algorithms without using any judgment to evaluate the forecasts.
By 2004, Nike had an integrated and efficient supply chain with 12 technologies’ forecasting system, SAP’s ERP system, and Siebel’s CRM systems. Nike spent 6 years and $800 million on the project.

Turban, Efraim, and David King.Introduction to e-commerce. Upper Saddle River, N.J.: Prentice Hall, 2003. Print.



Friday 9 March 2012

Styku: 3D Virtual Fitting Room

Styku is an online fitting room for apparel sold through eCommerce vendors. The 3-D technology allows consumers to vitually try on the clothing they want to buy on a website by creating their own avatar. They can virtually try on clothes from home or from their mobile devices. This application has the potential to dramatically increase sales, reduce returns and provide confidence for consumers that are hesitant about purchasing their clothes online.
Offline apparel sales decreased considerably due to the recession but online retail sales continued to grow by 8% annually. Only 9% of clothing sales in the United States are made online and this is because consumers are skeptical about the clothes not fitting properly and the costs of having to return an item that does not fit. Online consumers return around 30% of the clothes that they buy online and this causes large losses for the online retailers because the items become obsolete. Online retailers have been looking for ways to strengthen the online shopping experience by investing in e-commerce technology. But the main problem stopping online sales from growing is the lack of an online fitting room or a technology that will reassure consumers about their purchases online.  There are new technologies that claim to be virtual fitting rooms however they don’t fulfill the main purpose of a fitting room, which is to make sure that a piece of clothing fits properly on your body. There are technologies where the consumer uses a webcam with their computer and then the flat images of the clothing are placed on top of the image of the consumer. This is similar to looking in the mirror and placing the clothing on top of your body. This allows you to see how the clothing matches your hair and your skin tone but it does not show you how the clothing will look on you when you put it on.  I previously mentioned an example of this called UPCload.  I also mentioned meemee.com which the virtual models start to become 3D but are not fully 3D like an avatar. It also does not take into consideration all the measurement of your body to create the virtual model.
The Styku virtual fitting room application asks you for all of your measurements except height. Online retailers can offer the application on their website. The video below shows how the process works.

http://events.nrf.com/summit11/public/Booth.aspx?IndexInList=&Upgrade=&FromPage=&BoothID=122518&Task=PressReleaseDetails&PRID=887
styku.com

Friday 2 March 2012

Example of a Virtual Fitting Room: meemee.me

meemee.me is a an online retailer that is changing the way we shop for clothes online. Usually when we purchase clothes on a website, we do not know how they will fit us until we try them on and usually that involves sending the items back to the company, and exchanging them for a different size like I mentioned previously in my other posts. This involves a lot of effort and it certainly discourages many customers to buy online.

The online retail market could grow at a faster rate if this was not an issue. Meemee.me is a website that has recently launched its virtual room where customers can enter their hip, waist and shoulder measurements to create an avatar and be able to try on clothes. This also allows customers to mix and match different items and put an outfit together. This is difficult to do with conventional e-retailers that do not offer virtual fitting rooms. This also time consuming and exhausting in a brick-and-mortar retailer. It is difficult to find the items customers are looking for because they have to physically walk around the store to find the items.

In a website like meemee.me customers can find clothing depending on the size and color they are looking for under a smaller period of time. Suggestions of items are also made depending on the customers’ body shape. Another advantage of virtual rooms is that customers save time when trying on the clothes on the avatar. At the physical store, customers usually have to wait in long lines before trying the clothes on.

One of the main disadvantages of the fitting room at meemee.me is that the software does not ask customers for their height. Also the avatar only comes in one shape. This is large limitation because customers cannot see how the clothes look on their specific body shape. In my opinion, the virtual fitting room is only useful to get an idea of how the clothes will look on you and also the main advantage is that you have the opportunity to create an entire outfit with the clothing offered in the website. This is something that can be difficult to achieve in a regular website.

Friday 17 February 2012

Information Assurance

Information assurance (IA) is the protection of information systems against unauthorized access to or modification of information that is stored, processed, or being sent over a network.  For e-commerce to be secure, the information assurance should ensure the confidentiality, integrity and availability of information. Confidentiality means that private information should be encrypted so that the person who it is intended for can only read it. Integrity means that the information should be kept accurate without being altered. Lastly, availability means that the data, website of other EC information should be timely, reliable and restricted to authorized users.

For the EC data to b able to have confidentiality, integrity and be available, the data should also depend on authentication. Which is the process of verifying the real identity of an entity like a person, computer or website. Authentication verifies that the entity is who it claims to be. After the entity is authenticated, the entity also needs to be authorized. The process of authorization is the process in which it is determined what the authenticated entity is allowed to access and what operations he is allowed to perform. There is also nonrepudiation, which is the process that assures that online customers or teading partners cannot falsely deny their purchase or transaction.

Authentication and nonrepudiation are defenses against phishing and identity theft. To ensure trust in EC transactions, digital signatures or digital certificates are used to validate the sender and time stamp of the transaction so that later it cannot be claimed that the transaction was unauthorized or invalid. 

Thursday 9 February 2012

Virtual Fitting Room

Online retail sales only account for 8% of total retail sales. This is due in part because customers are skeptical that if they can't try the clothes on before buying them, the clothes may not fit them properly. Customers don't want to go through the long process of having to return their clothes and exchanging it for a different size that once again may or may not fit. This is also very inconvenient for retailers because they have large amounts a returns which increases their costs. Previously I talked about UpCload, a size profiling technology that tells you whether a specific clothing item will fit according to your body measures taken through a webcam. However that technology does not let you see how a clothing item will look on you before you buy it. "Fits.me" is an Estonian startup offering a solution to this problem using a robotic mannequin that can mimic your body shape so you can see exactly how a clothing item would look on you online before purchasing it. The robot is capable of replicating 2000 body shapes. 

Retailers that sign up with Fits.me, send their clothes to Fits.me so that the robot can cycle all the body shapes it knows with the clothes on. At the same time a camera is taking shots and storing them in an online database. When a customer goes online and they enter their body shapes, the software calls up the picture of the mannequin that corresponds to that body shape. This way you can see exactly how a clothing item fits on you online. The robot can show you how a medium looks on you versus a large. Fits.me has increased sales of some online retailers by 300% and reduced returns by 28 %. This new technology is certainly very useful in my opinion for customers and retailers, but I am sure that the robot will not be able to mimic exactly how a clothing item looks on every body type. Each individual has a different and unique shape. Also another reason why customers don't like to buy online as much and prefer buying clothes offline is because they like to feel the fabric of the clothing before buying it. Fits.me will definitely solve some of the problems involving returns an low purchasing rates but it won't solve the problem entirely. Here is a video showing how the robot takes different body shapes.


Friday 3 February 2012

Blue Nile Inc.

Blue Nile Inc. (bluenile.com) is a pure-play online e-tailer that sells diamonds and Jewelry since 1999.  Blue Nile's success is due partly to its B2C EC model that allows it to cut down prices by 35% and to get rid of intermediaries. This has allowed Blue Nile to capture a large market share in a short period of time.

It is hard to believe that an online diamond business would be successful, but Blue Nile has defied this conventional wisdom by providing more information about diamonds that any jewelry expert could offer at any other physical store. The vast selection of diamonds and the availability of information have attracted many customers who are not willing to pay the high prices at Tiffany & Co. 


In 2007, Blue Nile sales were $319 million and kept growing 24 % annually and became the eighth largest jewelry company in the United States. Most jewelry companies need 300 stores and 2200 employees to be able to sell $319 million every year and Blue Nile is able to achieve this with a 10000-square-foot warehouse and only 115 staffers. Also, in the diamond industry, a diamond goes through five or more middlemen before reaching a retailer. Blue Nile reduces this by dealing with its suppliers directly. What gives a competitive edge to Blue Nile is its 30 day money-back guarantee, because its gives security to its customers who usually have to worry about paying a fee if they want to return a diamond at other retailers.

Friday 27 January 2012

Online Bartering

Bartering is the oldest form of trade. Today it is mainly used by organizations but the main problem is that it is difficult to find trading partners. With the help of the Internet, matches can be done faster today. The kinds of items that are traded include office space, banner ads, storage and idle facilities.

E-bartering is usually done in a bartering exchange where there is an intermediary that makes the transactions possible. Some of the websites where bartering can be done are: barterourservices.com, barterwww.com, and barterdepot.com. The company makes an evaluation of the item that you want to barter and gives you points according to the item’s value that can be used to buy another item.

A famous example of e-bartering is the red paper clip story. Kyle MacDonald told people that he could trade a paper clip for something more valuable but no one believed him. His goal was to accomplish this in one year and he succeeded. Kyle got the idea to this from a childhood game called bigger and better, but he chose to do the trade on the Internet this time. In two days he traded the paper clip on craigslist.com for a fish shaped pen.  He then traded it for a doorknob with a smiley face until he obtained a camping stove. He then created a website called oneredpaperclip.com where he got more offers. He used some advertising until he got a snowmobile.  14 trades later he got a house in Saskatchewan. Today the website is used to advertise swapping.

Friday 20 January 2012

UPcload: Clothing Size Profiling





 UPcload will change the way people buy clothes online with its new body measurement technology. The only thing customers need is a webcam and the UPcload software will give them their exact body dimensions such as arm length and chest circumference. Customers only need to measure themselves with the webcam once and they will obtain a profile that can be used in all the online stores within the UPcload network. After obtaining their UPcload profile they can shop directly at the online stores within the network and the profile will be transferred automatically to the store. This service is free for customers and the shops pay for the usage themselves. UPcload is responsible of matching the body measurements with the clothing sizes taking into consideration the textile material.

UPcload was created in Germany by Asaf Moses and Sebastian Schulze in 2010. They noticed that the online clothing market was booming but there was a major problem that was leaving many customers unsatisfied. They realized that almost every second item purchases were returned to the retailer. Most of the time these returns were due to a sizing problem and customers only realized this once they had tried the clothing at home.


It was challenging to create this software because it is completely new. Upcload has strategic development partnerships with Israeli software developers specialized in object recognition and segmentation. The UPcload network is still in the developing process and the service should be available at more stores during this year. It is currently being tested with The North Face.


Thursday 12 January 2012

Tesco: Subway Virtual Grocery Stores


Tesco is one of the leading international grocery retailers with operations in 14 countries including Europe, Asia and North America. It is Headquartered in the UK and it employs 492, 174 people. 

Tesco wanted to increase its market share and become the number one retailer in the Korean market through its korean retail brand called market plus. Korea is the second hard-working country in the world where people dread to grocery shop. Tesco saw this as an opportunity to completely redesign the grocery shopping experience. Through its Home Plus retail brand, it created a virtual grocery shopping experience in subways and other public places. The walls of subway stations were turned into virtual store displays that looked exactly like a real aisle of a grocery store. The only difference was that people purchased the products through their mobile phones. Each item on the virtual display had a QR code that could be scanned with a smartphone to be purchased and then delivered at the customers' doors few hours later. 

Tesco's innovative idea became very convenient for people who commute very often and do not have time to shop. They can quickly scan the items they need while they wait in the subway station. The new innovation increased sales dramatically by 130 % from November 2010 to January 2011. The new virtual store will not substitute traditional grocery stores, but this is another distribution channel that will help increase sales. It is not clear yet whether this innovation would be as successful in other countries such as the United States. It was mentioned in other blogs that due to the high rates of vandalism in the United States this distribution would not be effective. However, I think that in some cities and maybe in certain metro stations where vandalism rates are lower, Tesco's virtual stores could be a successful distribution channel. 

http://www.sumoheavy.com/category/innovation/
http://www.emarketer.com