April 25th, 2016 by Oren Smilansky
The digital commerce market is expected to soar, growing from a recorded $4.9 trillion in 2015 to more than $8 trillion by 2020, according to new data from Juniper Research. To put this in perspective, the firm points out that Japan’s gross domestic product (GDP) was approximately $4.6 trillion in 2014, and that country has the third largest economy in the world in terms of nominal GDP.
According to the report, titled “Digital Commerce: Key Trends, Sectors & Forecasts 2016-2020,” contributing to the growth are transactions from three major commerce sectors. These are: digital banking, remote digital goods, and remote physical goods.
According to Lauren Foye, author of the report, the digital market is seeing an ongoing movement towards an “omni-channel approach.” “This extends to eCommerce where the mobile and tablet platform is seeing increased use towards the purchasing of physical goods, either for delivery or collection,” Foye said in a statement. She added that “global online banking users as a proportion of banked individuals are forecast to cross the 50% mark in 2016.”
Dedicated online retail events such as “Cyber Monday“ are largely responsible for the boost. Last year, on China’s “Singles’ Day” (the nation’s equivalent to Black Friday), the e-commerce platform Alibaba processed $14.3 billion in goods. Another factor in the growth of digital transaction volumes, the firm finds, is the ongoing popularity of streamed subscription services.
The firm also finds that by 2020, near field communication (NFC) mobile payments at the point of sale (POS) will increase by 400%. Additionally, by the end of the year, total volume of mobile and online money transfers is expected to surpass the amount tallied from the remote purchase of physical goods.
April 15th, 2016 by Leonard Klie
It’s long been said that it costs a lot more to get new customers than it does to keep existing ones, and the topic has been debated back and forth for years. Through it all, I’ve yet to see an actual dollar amount to support this (no one, to my knowledge, has said exactly what each one costs). If such numbers do exist, I’d love to see them.
A related topic, and one that is also hotly debated, is what’s the right balance of new vs. existing customers.
Marketing software provider Optimove recently published interesting data that answers that very question.
Optimove looked at data from millions of online customers and more than 180 brands to help companies understand if their ratio of new-to-existing customers indicates a state of growth, stagnation, or decline.
Some of its findings include the following:
- Online retailers with a ratio of 90:10 new-to-existing are unhealthy, with a five-year CAGR lower than 2 percent and customer churn rates 100 percent higher than average;
- Online retailers with a new-to-existing customer ratio between 70:30 and 40:60 are typically early-stage companies (less than seven years old) and are growing very fast, with a five-year CAGR of more than 100 percent and churn rates 50 percent lower than the average;
- Businesses with new-to-existing ratios between 40:60 and 20:80 can be considered “healthy grown-ups,” as they’re typically more than seven years old and have a five-year CAGR between 20 percent and 60 percent, with the lowest churn rates of any companies in the study; and
- Businesses with ratios of 10:90 or worse are practically dying, showing declining revenues over the last three to five years.
So there you have it. That should lay the topic to rest. I hope, instead, that it just starts the debate. Feel free to chime in with your own stats.
April 14th, 2016 by Sam Del Rowe
The Internet of Things market will be worth $661.74 billion by 2021, according to a new report by market research firm MarketsandMarkets. The report estimates the current value of the IoT market at $157.05 billion, and assumes a 33.3% compound annual growth rate.
According to the report, the development of cheaper and smarter sensors, the evolution of high speed networking technologies, and the rising adoption of cloud platforms are all major forces in the IoT market. The report also notes that predictive maintenance, security, and analytics are increasing in usage for connected devices—a trend that the report expects to continue.
The report expects software solutions to play a significant role in the IoT market. In particular, data management solutions will be essential to manage the massive amounts of data generated by IoT devices. Security solutions are also expected to see high growth rates, due to the challenge of keeping the various elements of the IoT secure.
From a geographic perspective, the report says that North America will hold the largest share of the IoT market in 2016. However, the IoT market in the Asia-Pacific (APAC) region is expected to grow at the highest compound annual growth rate between 2016 and 2021—a process driven by increasing technological adoption in India, China, and Japan.
April 11th, 2016 by Oren Smilansky
Organizations are investing heavily in digital sales technologies, but are still not using them to their full potential, according to a new study from Accenture.
For the study—titled “Empowering Your Sales Force: It’s Not Just Automation, It’s Personal”—the research firm surveyed more than 800 sales professionals, and combined its findings with data from CSO Insights. Its goal was to get a better idea of how organizations are using sales tools, as well as an understanding of their attitudes towards them.
Indeed, companies are spending on sales tech. Accenture highlights that Global 2000 companies have spent a whopping $2.4 trillion on digital sales channels and tools. Further, 80% of those companies Accenture surveyed have implemented a CRM system, and most have adopted tools to support their entire sales process. But despite high adoption, sales rep turnover rates have risen to upwards of 22%, and the majority of organizations (60%) aren’t confident that they will hit their targets revenues.
The problem, Accenture holds, originates with the relationship between the sales leaders who develop, design, and decide on the tools, and the reps who are using them to get their jobs done.
For one thing, the two factions have different objectives in mind. While 58% of CSOs state that their top goal is to acquire new accounts, more than a third of reps’ (36%) primary aim is to improve customer satisfaction. And though message being sent to reps is that they should focus on cultivating long term customer relationships, they are often not equipped with the tools that support them.
Perhaps a resulting issue is that salespeople view digital sales tools as being more of a complication than an aid. Only 13% of reps felt that they were making use of the scope of capabilities their technologies have to offer. Close to sixty percent felt they were being asked to use too many applications, and that these were in place to help management to monitor their progress.
Accenture recommends a more personalized, experience-centered model. Unsurprisingly, they believe that the tools that salespeople use should more closely resemble those they’ve come to appreciate in their personal lives.
Rather than starting at top and working downwards, “companies need to take a people-first approach that listens to the sales force and marries their needs with tools that deliver data-driven, flexible and personalized omni-channel experiences that help them sell smarter and drive the bottom line,” said Jose Gonclaves, MD and global sales lead at Accenture Interactive, in a statement.
Those companies who take heed, Accenture holds, are bound to improve sales performances and are more likely to enjoy lifts in revenue.
April 8th, 2016 by Leonard Klie
Data is currency, and Microsoft wants businesses to be able to convert it to intelligence and intelligent insight that can be used to address changing business needs and business models.
At least that is the goal that Satya Nadella, CEO of Microsoft, outlined at this year’s Microsoft Envision conference in New Orleans earlier this week.
During his keynote, Nadella pointed out that businesses are in the midst of a digital transformation where they are building out systems to better engage with customers, empower employees, optimize operations, and transform products.
Nadella further outlined three areas of focus for Microsoft to help companies reach those ideals. They include creating more personal computing with mobility at the center, building intelligent cloud platforms that combine machine learning and artificial intelligence, and reinventing products and business processes.
Technology “is playing an increasing role in everything we do,” and can be used today “to shape and change industries,” he said. “The responsibility that business leaders have to understand and use technology to shape their own businesses is more important the ever.”
In this new business environment, Nadella also noted that “customer engagements have been changed by shifts in the points of engagement and the types of engagement.” These changes, he added, “started with the Web and scaled to many other points,” the latest of which are mobile apps.
These technologies, too, are being transformed with advances in natural language processing, machine learning, and artificial intelligence. Among them, he expects bots to become the new extensions of personal assistants like Microsoft’s own Cortana.
The technology, he said, is still early in the development cycle but will quickly become “much more ubiquitous” he maintained.
Let’s just hope it doesn’t get mired in the kind of controversy that forced Microsoft to pull the plug on its Tay artificial intelligence-powered chat bot. Tay, which was launched with the greatest of intentions, quickly turned into a major corporate embarrassment for Microsoft late last month when Internet trolls hijacked the bot and taught it some very inflammatory and racist language that it adopted as its own in less than 24 hours.
That just proves one thing, and this is something Microsoft and all the other software developers need to think about as they: Artificial intelligence can never really replace human intelligence until it is given the same moral compass that we humans use to let us know that we probably shouldn’t do something. Context is also going to be a key element, or at least it should be.