inst2001-06-UCL Digital Consumer Course eDR 22 Feb 2010.ppt

INST2001 Feb/March 2010The Digital ConsumerPrivate & Confidential© eDigitalResearch 2010

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For informed direction

Reporting PresentationsBlue Compass

Private & Confidential© eDigitalResearch 2008Private & Confidential

© eDigitalResearch 2008


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bbc.co.uk Pulse Presentation14th April 2008






INST2001The Digital ConsumereDigitalResearch


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Digital Consumers eCommerce and the Digital Consumer

Overview22 FebruarySession 1 Online Shoppers

Background and History

Session 2 Researching the online consumer

Session 3 Fieldwork briefingIntroduction to the research techniques you will be

using

1 MarchSession 1 Online shopping – site functionality and what is happening

now?

Session 2 Fieldwork review

8 March Fieldwork tutorials

22 March Student Presentations


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eDigitalResearch – Who are we and what do we do


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eDigitalResearch – loyal client base


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• ‘Closed group’ research

• Usability & ‘end to end’ experience

• Focus groups

eMysteryShopper

Product Overview

• ‘Open’ user research• Visitor/user opinion

• Key performance indicators

• Brand advocacy

• Omnibus research • Client panel management

• Media panels

• Web 2.0• 3 way dialogue from

profiled users• Product ratings

• Net chats

Private & Confidential© eDigitalResearch 2009

• Automated qual-to-quant text analysis

•Full reporting of verbatim comments

across any digital medium


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Some Observations

Jeff Bezos founded amazon.com in 1995 An Internet ‘year’ lasts 7 weeks

– By 2007 eBay operated in 37 markets and had 233million global users – iTunes launched April 2003 – by Feb 2006 they had sold 1billion tracks

• by Oct 2008 they were 85% of digital tunes market and sold 2.4billion songs

• 2009 itunes accounted for 24% of all music sales in USA

– Tesco • 2000 = £125m online sales with 250,000 regular users

• By 2007 = £1.226billion online sales 850,000 regular users – 250,000 orders per week

• 12 month sales to Feb 2009 - £1.9billion and profits of £109m

– Facebook founded 2004 – by Sept 2006 was 126th most visited UK site – by 2007 it was 5th most visited – 2009 now 2nd most visited (after Google) and has 350m members (Jan 2010)

– Twitter – usage grew 1600% in 2009 – now 27th most visited UK site – ahead of BBC

2009 - UK online sales estimated £49.8billion (IMRG)


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Principles of Disintermediation

• eCommerce protagonists used the Internet to set out to change business principles

‘Disintermediation’

Definition‘Removing the middleman. Internet based businesses that use the Web to sell products directly to customers rather than going through traditional retail channels. By eliminating the middlemen, can sell their products cheaper and faster. This will revolutionise the way products are bought and sold, and disintermediation is the driving force behind this revolution’


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The ‘History’ of the digital consumer

• The eRetail Timeline1990 Tim Berners-Lee invents “hyperlinked” documents residing on networked computers

(the basis of today’ WWW)1994 Marc Andreessen develops ‘click and point’ browser developed – becomes Netscape

Browser – using expanded DARPA network, hypertext and TCP/IP protocols. This provides the e-commerce environment and sets ‘free’ software precedent

1995 Amazon opens in Jeff Bezo’s spare room. eBay conducts it’s first auction1996 Microsoft launches ‘Merchant Server’ combines shopping cart, product database and

secure back end payment modules. The eRetail infrastructure is in place1996/7 ‘Dot Com’ boom starts as companies and investors recognise that a public web

presence was no longer optional.‘Growth over profits’ model becomes commonplace

1998 ‘Always on’ internet arrives when SBC Communications launches DSL – within 12 months 60,000 DSL subscribers and 500,000 using broadband cable

1999 Amazon and AOL companies both report $billion sales. Napster report users of its music swap site rose 5 fold in one week

2000 March 10 – the Dot Com bubble burst amongst bad press many high profile failures ensue – Boo.com, Pets.com,. lastminute.com are the last of the .coms to successfully float in UKThe ‘old economy’ competitors with respected high street brand names pick up the pieces e.g. Argos buy Jungle, Woolworths buy streetsonline

2001 Billions are written off stock market values – ………………………………………...but in the background online sales continue to

grow


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The dot com bubble burst NASDAQ index

• The basis of the boom was ‘land grab’ based on poor business principles but (only) some (very few) made it successfully– Amazon.com eBay – Google – MSN – PayPal (now a subsidiary of eBay) – Priceline.com – Yahoo! – Netflix


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The dot com bubble burst ‘Boo’ case study

• Sports and High fashion e-tailer founded by two Swedes, Ernst Malmsten and Kajsa Leander. Backed by Bernard Arnault, the chairman of luxury group LVMH, investment bank JP Morgan and enthusiastic Middle Eastern investors

• Boo.com eventually burned through $160 million before liquidation in May 2000

• Arguably the largest UK dot.com failure. Why?– Overly complicated Web site– Relied heavily on JavaScript and Flash (when difficult to use)– Very slow to load at a time when dial-up Internet usage was

the norm– Poor management and management controls

• Boo spent cash to market itself as a global company but then had to deal with different languages, pricing, and tax structures in all the countries it served

– Poor marketing strategic decisions• Sales never reached expectations (mainly because the site failed

to work)

For an interesting list of top 10 ‘flops’ go to MSN techs and gadgets reference: http://msn-cnet.com.com/4520-11136_1-6278387-1.html?part=msn-cnet&subj=re_po10


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• The eRetail Timeline continued……2001 Organisations who see the paradigm shift of consumer habits continue to develop their

online offer in key market sectors– Grocery– Travel (particularly low cost airlines)– Electronics– Books and media

2002 UK retail sales online reach 4% of total retail sales. £1billion is spent online in one month (Nov 2002) for the first time in the UK

2003 Apple iTunes launches, following rights deals with all major record companies, racks up 70m sales in 12 months and effectively fatally wounds the traditional music distribution channelUK consumers spend £1.34billion in December alone

2004 Global online ecommerce revenues reach $150billion. 1billion users worldwide Half the UK population shops onlineeBay contributes biggest demographic change to UK Internet usersUK consumers spend £1.6billion in December aloneOnline shopping represents 6.8% of all UK retail sales in 2004

2005 Users are online for longer than watch TV eBay represents 24% of all UK site visitsUK consumers spend £2.3billion online in December - whilst high street sales were flatOnline shopping represents 8.8% of all UK retail sales in 2005



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The eRetail Timeline continued……2006 10% of retail purchases in UK being made online - £30bn

More strong growth, driven by consumers embracing a broadband lifestyle and retailers investing in better web services the internet beginning to precipitate structural shifts in consumerism.Social networking websites, in particular MySpace and Bebo, are not only capturing an ever-increasing share of UK internet visits but are also accounting for a larger share of upstream visits to retail websites

2007 £40 BN spent online in 2007 (up 33%) on 2006 : Christmas - £15.2 BN spent online in Q4 2007 with December sales 49.5% higher than year before – compared to High Street sales only +2.5%. But Rate of growth slows as economic downturn starts. Christmas Day becomes a shopping day

2008 £45 BN spent online. Twitter emerges as a social network phenomenon. Even in recession online sales continue to increase. iPhone and smart phones (devices) start to give consumers successful alternative mobile internet access



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• Number of UK internet users 2008 40,362,842

• Number of UK online shoppers 2008 26,598,000

• UK internet penetration 2008(number of homes online) 66.5% • Number of UK homes online 2008 16.5m • Average online spend in UK 2008 £1,502 • UK homes with broadband 2008 58% • Number of UK online banking users 2007 721m • UK homes with digital TV 2008 87%

The ‘History’ of the digital consumer – 2008 – UK statistics


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Latest News – January 2010 – growth but slowing

• Online retail sales increase in 2009/10 by 14% v 2008 • Online search for ‘discount’ doubles• Increased basket size but decreased conversion (from 6.2% to 5%)

suggesting more carful purchase patterns


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Latest News – January 2010 – growth but slowing – but not slowing as fast as retail High Street!

• Convenience of ecommerce giving way to consumer need for research and keen pricing prior to purchase


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The Future – UK

Government stated aims –

All UK households to be connected with 2mps broadband by 2012

Ofcom given go ahead for roll out of 100mps broadband with aim of reaching 40% of UK households by 2012

Cohesive plan for digital government and broadcasting


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Summary

• The dotcom boom/bust cycle did not halt the paradigm shift in consumer behaviour and this is now growing in pace for e-retailers

• Disintermediation is now becoming a reality for a number of organisations and may require fundemental shifts in organisational structure and behaviours in the future

• New brand names and organisations can establish themselves quickly and challenge traditional business structures and methods of product distribution .e.g. eBay, amazon, google

• Increasing ‘globalisation’ of product distribution causes pressure on traditional geographical price differentials

• Financial turmoil highlighting consumer need for research and keen pricing offerred by online shopping


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Researching the online consumer


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Market Research – Market Size

Market Research Industry worldwide• In 2007 the total market for market research world-wide was US$ 27bn• The EU and USA each accounted for 79 per cent of the total world

market. • The largest market for market research world-wide is the USA, followed

by the UK and Germany• Growing fastest in Brazil, China, India and Russia – all recording double

digit growth (Europe +2.8%) UK Market Research Industry• Estimated size of the UK Market Research Industry in 2007 was £2.37

billion. • During 2007, the UK market grew by 2 per cent on the previous year

Online Research• Worldwide = US$4.1billion in 2007 – an increase of 14% on year before• In UK online research accounted for 18% of total spend - +5% on 2007

Source: ESOMAR and Market Research Society


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Why Research Online?

• Provides site teams with key communication links with their visitors and users

• Reduces costs• Increases speed of fieldwork – faster

information allows better decisions• Improves accuracy through larger sampling

sizes • Cost effective market research that allows

MORE to be done• Allow easier cross boundary research (global

– World Wide!)


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Elements of Digital Consumer Research

• Web analytics and log files• Online user surveys and feedback• Research panels• Usability – the site experience• eMysteryShopper


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Web analytics and log files

• Web analytics is the measurement, collection, analysis and reporting of internet data for purposes of understanding and optimizing web site usage– Log file analysis– Page tagging

• On-site web analytics measure a visitor's journey once on a website

• This includes its drivers and conversions; for example, which landing pages encourage people to make a purchase

• On-site web analytics measures the performance of a website in a commercial context. This data is typically compared for performance and provides key performance indicators, and is used to improve a web site or marketing campaign's audience response

• Historically, web analytics has referred to on-site visitor measurement


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Web Analytics – Some definitions

Most Common Measures• Hit - A request for a file from the web server. The number of hits received by a website is frequently cited to assert its

popularity, but this number is extremely misleading and dramatically over-estimates popularity. The total number of visitors or page views provides a more realistic and accurate assessment of popularity

• Visitor / Unique Visitor / Unique User - The uniquely identified client generating requests on the web server (log analysis) or viewing pages (page tagging) within a defined time period (i.e. day, week or month)

• Impressions - An impression is each time an advertisement loads on a user's screen. Anytime you see a banner, that is an impression

Other Measures• Page view - A request for a file whose type is defined as a page in log analysis • Visit / Session - A series of requests from the same uniquely identified client with a set timeout, often 30 minutes. A

visit is expected to contain multiple page views• First Visit / First Session - A visit from a visitor who has not made any previous visits• Repeat Visitor - A visitor that has made at least one previous visit• Stickiness – or Duration - Average amount of time that visitors spend on the site each time they visit. This metric

can be complicated by the fact that analytics programs can not measure the length of the final page view.• Page View Duration / Time on Page - Average amount of time that visitors spend on each page of the site. As with

Session Duration, this metric is complicated by the fact that analytics programs can not measure the length of the final page view

• Page Depth / Page Views per Session - Page Depth is the average number of page views a visitor consumes before ending their session. It is calculated by dividing total number of page views by total number of sessions and is also called Page Views per Session or PV/Session

• Frequency / Session per Unique - Frequency measures how often visitors come to a website. It is calculated by dividing the total number of sessions (or visits) by the total number of unique visitors. Sometimes it is used to measure the loyalty of your audience

• Customer journey – or Click path - the sequence of hyperlinks one or more website visitors follows on a given site


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Logfile Analysis

Web server logfile analysis• Web servers record some of their transactions in a logfile. It was soon realised that these logfiles could

be read by a program to provide data on the popularity of the website. Thus arose web log analysis software.

• In the early 1990s, web site statistics consisted primarily of counting the number of client requests (or hits) made to the web server

• This was a reasonable method initially, since each web site often consisted of a single HTML file. However, with the introduction of images in HTML, and web sites that spanned multiple HTML files, this count became less useful. The first true commercial Log Analyzer was released by IPRO in 1994

• Two units of measure were introduced in the mid 1990s to gauge more accurately the amount of human activity on web servers. These were page views and visits (or sessions).

– A page view was defined as a request made to the web server for a page, as opposed to a graphic– Visit was defined as a sequence of requests from a uniquely identified client that expired after a certain amount of

inactivity, usually 30 minutes

These are now considered rather unsophisticated measurements• The emergence of search engine spiders and robots in the late 1990s, along with web proxies and

dynamically assigned IP addresses for large companies and ISPs, made it more difficult to identify unique human visitors to a website. Log analyzers responded by tracking visits by cookies, and by ignoring requests from known spiders.

• The extensive use of web caches also presented a problem for logfile analysis. If a person revisits a page, the second request will often be retrieved from the browser's cache, and so no request will be received by the web server. This means that the person's path through the site is lost.

• Caching can be defeated by configuring the web server, but this can result in degraded performance for the visitor to the website.


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Web Analytics – Page Tagging

Page tagging• Concerns about the accuracy of logfile analysis in the presence of caching, and the

desire to be able to perform web analytics as an outsourced service, led to the second data collection method, page tagging or 'Web bugs'

• In the mid 1990s, Web counters were commonly seen — these were images included in a web page that showed the number of times the image had been requested, which was an estimate of the number of visits to that page

• By late 1990s this concept evolved to include a small invisible image instead of a visible one, and, by using JavaScript, to pass along with the image request certain information about the page and the visitor. This information can then be processed remotely by a web analytics company, and extensive statistics generated

• The web analytics service also manages the process of assigning a cookie to the user, which can uniquely identify them during their visit and in subsequent visits

• Examples of use: Allows metrics such as ‘lifetime’ value of a customer to be calculated, plus affiliate links success – but should be treated with suspicion

• Ongoing EU debate and directive – cookie setting


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Evaluating an Online Site

Home PageSearch / Browse

Departments

Find product

Info?

Shopping Basket Checkout

Delivery and after

sales

Customer Service

End to end experience of site and back end processes. Qual and Quant data. Benchmark best practice. Internet and Sector

VisitorsVisitors WhoWhy

What are they looking for?

Likes /dislikesBrand Advocacy

WhoWhy



Checkout Overall site experience

Brand Advocacy


Brand Advocacy

Post purchaseDelivery

Cust ServiceBrand

Advocacy


Cust ServiceBrand

Advocacy

Mystery Shopping

Online SurveysOnline Surveys UsersUsers

CustomersCustomers

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OverviewAn online survey research system providing immediate

reporting and feedback from visitors/consumers• eCustomerOpinions (eCos) Delivers fast and inexpensive

real time research direct from cross channel users utilising our proprietary Web based survey provider tool

– No licence fee – Unlimited survey responses

• eCos provides immediate unmoderated ‘Quant’ and ‘Qual’ data

• eCos provides immediate online reporting and analytic tools

eDigitalSurveys

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Layered ‘permission window’ Survey delivered at the end of the visit

• A ‘permission window’ is an invitation to participate in a survey

• Delivery frequency is controlled by cookies

• Unlike a ‘pop-up' a ‘layer’ (or ‘floater’) can be selectively positioned within the site

• ‘layers’ are not blocked by pop up blockers

• When the user acceptsthe invitation the survey can either appear immediately or sit behind the site until the end of the visit.

NB: All eDigitalResearch surveys are fully DDA compliant and carry SSL certificates

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eDigitalSurveys


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Engaging Question Types

‘Drag & drop’

eDigitalSurveys


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BBC World Best Documentary of Year

Viewers select preview and view video link Vote........

Invite supported by TV advertorials and web site

eDigitalSurveys


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BBC Worldwide Channel Reviewer‘The Screening Room’

Viewer can then vote whether BBC should buy the programme/series

….and can comment on their opinion

Viewer selects Full length Programme from list and synopsis

…can view in full screen mode

eDigitalSurveys


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SurveysSurveys PanelsPanels CommunitiesCommunities

Research KnowledgeResearch Knowledge

One way communication

One way communication

Two Way communication

(news, services and product feedback)

Two Way communication

(news, services and product feedback) Panellists Panellists Panellists Panellists

Opt-In and

Profiling

Opt-In and

Profiling

Invited Profiled

Members

Invited Profiled

Members

Three Way communication

Three Way communication

Panels and communities

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Usability

Web site usability - Definition– The ease with which visitors are able to use a Web site.

• Web site usability is not just about making sure everything on the site works, it should measure

– Speed of use (not necessarily speed of page loading)

– Navigation – searching and finding products

– Ease of use - how quickly and easily visitors are able to make use of the site – how quickly can they make a purchase? e.g. amazon one click

• The need for Web site usability is perhaps best expressed by Jakob Nielsen's Law of the Internet User Experience –

– "Users spend most of their time on other sites.“

• Usability is a concern for an ecommerce organisation because of its potential impact, positive or negative on return on investment (ROI)

• Can use ‘fieldwork’ or Laboratory methodologies


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Usability

• ‘Usability’ is fast becoming an accepted element of web site design

• The accepted guru (in the USA) of usability is Jakob Neilson – in 1994 he wrote guideline of usability that included 34 major items

According to him not much has changed….• "Roughly 80% of the things we found 10 years ago are still an issue today,“• "A lot of people thought that design and usability was only a temporary problem

because broadband was taking off - but there are a very small number of cases where usability issues go away because you have broadband."

• Dr Nielsen said the success of sites such as Google, Amazon, eBay and Yahoo showed that close attention to design and user needs was important.

• "Those four sites are extremely profitable and extremely successful," said Dr Nielsen, adding that they have largely defined commercial success on the net.

• "All are based on user empowerment and make it easy for people to do things on the internet,"

• The latest statistics on how many words people use on search engines shows that, on average, they use 2.2 terms. In 1994 only 1.3 words were used

/


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Evaluating an Online Site

Home PageSearch / Browse

Departments

Find product

Info?

Shopping Basket Checkout

Delivery and after

sales

Customer Service

End to end experience of site and back end processes. Qual and Quant data. Benchmark best practice. Internet and Sector

VisitorsVisitors WhoWhy



WhoWhy




Brand Advocacy


Brand Advocacy


Cust ServiceBrand

Advocacy


Cust ServiceBrand

Advocacy

Mystery Shopping

Online SurveysOnline Surveys UsersUsers

CustomersCustomers

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Overview

eMystery Shopper (eMS) delivers an independent and unbiased

review of Website, Call Centre and Catalogue Usability together

with Associated Service Delivery & Support utilising a ‘closed’

panel group of researchers

• eMS provides detailed quantitative benchmarking, trend analysis and

moderated qualitative reporting for:

• Client website(s)

• Competitor website(s)

• Call Centres

• Catalogues

• eMS delivers succinct management reporting with recommendations:

• to improve the overall customer experience

• to increase customer conversion and improve the bottom line

eMysteryShopper


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eMysteryShopper - Surveys are completed online facilitating fast feedback

‘Quant’ data for comparison

‘Qual’ data for opinions

On line help prompts

Immediate ‘error’ alertsScreen page ‘grabs’

Full ‘end to end’ usability review

Ongoing site reviews and ‘issue’ reporting e.g. checkout

Competitor benchmarking


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Overall score: End to end process

eDigitalResearch eRetail Benchmark is used to give UK retailers a league table of consumer scores across the full end to end process

Run quarterly it receives press coverage and over 250 individual downloads


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Assignment


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Assignment

Objective • To undertake a study of the ‘usability’ of UK ecommerce

websites from pre-determined sectors and report observations, findings and recommendations on possible site improvements

Deliverables/Expected outputs• Analyse responses using automated information provided.

Rate and provide league table for each site surveyed using scoring method provided

• Provide an overview executive summary by site/sector of performance utilising both quantitative and qualitative data

• Provide suggested changes and improvements to site content and navigation by survey research heading

• Present findings to student body via MS PowerPoint (automated download of statistical information into PPT and qual comments into MS Word will be provided)


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Methodology

Methodology• We will utilising our ‘eMysteryShopper’ site usability testing system• Students will be placed into working sector • You will be provided with a login and password to the system (via email)• Go to www.emysteryshopper.com and log in using the shopper login• Each will have four surveys to complete – one for each of the sites within

the sector allocated/chosen• Visit the site and complete the survey – marking the site and providing

appropriate ‘qual’ comments (this should take approximately 1 hour per site)

• When completed syndicate heads will request data downloads (Spreadsheet (raw data), PowerPoint (tabulated presentation) and Word (qualitative)

• Students will meet in syndicates and tutorials to complete assignment• Present findings• Dates:

2 March Fieldwork starts8 March Fieldwork tutorials – timing to follow 22 March Student presentations


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‘Norms’ - allowing quantifiable

benchmarking

Excellent Good Satisfactory Poor Very Poor Bench Marking

4 3 2 1 0

Banding Score (Approx.)

81% or more

61% - 80% 41% - 60% 21% - 40% 0% - 20%

Definitions Excellent - Exceeds expectations - at least as good as the best sites - Special features that have surprised and delightedGood - On par with other good internet sites - Elements work well - A pleasant experience Satisfactory - 95% correct and mostly understood. Not quite on par with the best Poor - Not useful and difficult to follow. Difficult to use. Slow and contains mistakesVery Poor - Did not work or has serious errors

Scoring - The percentage score is calculated by taking the score given by surveyors for each question and dividing by the total possible amount for each question.


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Questionnaire

Site Research to include (survey research headings) NB Questionnaire is provided online• Home Page/first impression of site• Search for products and services• Finding products • Range• Shopping basket• Purchase (to credit card page only)• Registration/log in• Customer service – telephone/email• Final assessment


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Sectors/SiteseCommerce Sectors• Grocery• Electricals• General Stores• Fashion• Music and Video• Mobile

List of sites – each student surveys each site• Grocery – Tesco, Sainsbury, Asda, Ocado• Electricals – Comet, PCWorld, dabs.com, Argos, • General Stores –, John Lewis, Marks & Spencer, House of Fraser,

Debenhams• Fashion - Topshop, Next, Boden, ASOS• Music and Video - HMV, amazon, Game, play.com• Mobile - Carphone Warehouse, phones4u, e2save, orange


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Allocations and Questions


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eDigitalResearch.com

eDigitalResearch.com6 Berrywood Business Village Hedge EndHampshire SO30 2UN

Tel: 01489 772920

www.edigitalresearch.com

Key Contacts

Chris Russell [email protected]

Lisa Bonczyk [email protected]

Becky Allen [email protected]

Documents

inst2001-06-UCL Digital Consumer Course eDR 22 Feb 2010.ppt