Is Cash-on-Delivery really eCommerce? if yes, then what is (also) Mobile Commerce?

We've all read about how eCommerce is bigger than it looks. There are needs other than actual purchasing that eCommerce fills. Amazon, it seems, has overtaken Google in the US as the startingpoint of product-search. In order to make a purchasing decision, you need information, and an eCommerce site is (or should be, it is believed), in the business of providing the same. Therefore, what you can also do is also use eCommerce only for the purpose of decision-making, deciding what to buy, maybe even where to buy - but not actually buying. 

A recent BCG report ("From Buzz to Bucks") have called this internet-influenced buying.

What also happens is the reverse - people don't know what an Xperia J looks like, weigh or feel like, so they go to a mall, check it out, come back and purchase online where prices are better for the same standard product. This is split by consultants (naturally) into (guess-what) a 2X2, with segments called Research-Online-Buy-Offline, Research-Offline-Buy-Online, and of-course the other two blocks of people who complete the buying process Online or Offline. The transaction will be called Online or Offline basis where it is *consummated*. So this is the first thought I'd like you to hold on to.

The third thought is a simple question - is Cash-on-Delivery eCommerce? The "transaction" i.e. the exchange of goods for consideration really happens after the goods are delivered to the shipping address, acknowledged, checked and then paid for. The entire decision-making process and the commitment to buy has happened online, but the transaction is really offline.

Now the second thought is just an extension of the same logic to say there are people who extensively use the mobile phone to research, but then open their PCs / laptops next morning to transact - maybe because screens are larger, or keyboards are better, or connectivity is better, or just due to plain habits. The use case for the reverse is thinner but still non-zero. You could have used your laptop to make a decision (where you can actually compare four products'-specs side by side), and then used your mobile to monitor prices and then when you saw the price drop to the level you wanted - maybe you were on your way home then - you just clicked on 'Buy' on the mobile.

Now putting it all together, if you read this at one go, it will appear that Mobile Commerce is bigger than it is. If CoD is eCommerce (and rightfully so) then mobile-initiated transactions are m-commerce. That can help change perspectives of a lot of organizations in countries like India where we keep thinking m-commerce has not happened yet just because there aren't enough transactions culminated on the mobile. 

How different is "my" customer and "yours"?

So many brand discussions start with customer profiling. There are deep dissections on the difference between our customers and those of our competition. Our customer is more open to using her credit card online while the competition's customer favors cash on delivery. Our customer is older but more evolved. Our lapsers are more likely to be staying in big cities. It stops striking some of us after a point that we're using a cognitive shortcut by giving an identity to an aggregate average statistic.

More importantly, we forget that in many if not all cases, all these different identities are just one person. These many customers aren't different people who behave differently. Our customer also shops with the competition. Our customer is the competition's customer.

This is not trivial. We draw up pen-portraits, day-in-life's, mood-boards of preferences and so on and forth for these supposedly different characters. We do qualitative research around customer groups that are 'our customers' and 'our lapsers' or 'competition customers' to understand them better. If we see the same person turning up in two groups, we suspect incorrect recruitment if not foul-play and impersonation. How could the agency mix up our customers with theirs? Or customers with non-customers? Sounds familiar?

If there are more men in the people who end up converting on my platform versus my competitor's, this may show up as 'our customer is 70% male while our competitor's is 80% female'. I think it starts off being a small poetic license (the use of the singular) and ends up sounding inane. There is no one out there who is 70% or 20% male.

Reality check - it gives us great pleasure to prick this balloon with the pin of knowledge you had all along. These different characters with their distinct unique personalities are like the average man. Like the man with exactly the average height, weight, hair and nose-length - who doesn't exist.

These customers - yours and mine, are heuristics, short-cuts, simplifications - and just that.

What we really should be talking about, and thinking about - are different need-states. In one need-state, a customer prefers my shop and in another, my competitor's. That's really what it is.

If my eCommerce platform, for example, is great for technology products and not so great for lifestyle products, the same customer, in the lifestyle need-state is my competitor's customer and when in the technology frame-of-mind, is my customer. A frequent misread of this state is as follows: my customer is a technology buyer and the competitor's is a lifestyle buyer. Familiar?

So what?

A lot of things. Just as a starting example, do you think segmenting users or customers makes more sense now or segmenting need-states, use-cases or states-of-mind? Litmus - think of yourself, are you ever just one brand's customer?

Are you building a Concorde?

All of us know about the concorde - sorry, let me correct myself - about Concorde, right? You have to get it right, so I hear.

So here's what happened, broadly.

An Anglo-French JV (Aérospatiale and the British Aircraft Corporation) built Concorde, a supersonic passenger plane (out of two ever built) that halved transatlantic flight-times, a proposition that'll still sell if you were to poll potential passengers today. It flew for 27 years but only 20 aircrafts were built. While there are multiple theories on its efficacy, it is known as a supreme technological feat. It is also known that it never made money. Finally after the one accident it had, and in face of mounting losses, the program was shut in 2003. This was despite Government subsidies and sponsorship, despite the muscle of Aérospatiale and BAC, but importantly, despite a very strong consumer proposition – halving transatlantic time, the hype value of flying cutting-edge etc.

Or was it? Was it really a strong value proposition? I'm not an expert there, I've not seen the value-prop, but I assume that while it was undeniably good for the customers to half their flying time, maybe it wasn't important enough to pay the ticket price premium. Why I say this because had it not been the case, I assume other supersonic passenger jets would have been built.

What is known is that costs spiraled to 6 times the initial estimate. For perspective it was $ 23mn. Note, in 1977 dollars. Post retirement, Branson offered to buy British Airways’ Concorde planes, first offering their nominal original price of £1 each, then increasing the offer to £1 million each. Note, this is in 2003 pounds.

Also quoted is the fact that the big reason behind Concorde's grounding, apart from the cited reasons of the 4590 crash, fuel cost etc, was that it was more profitable to carry passengers at subsonic speeds.

The existence of technology, and a thumbs-up from potential customers sometimes blinds us into confusing these things as a 'buy-in'. Today, a faster website, faster delivery, better packing, better consumer service will all be things that a customer wants. Without a sensitivity curve along all the value-prop axes, however, these are all directional and that's all. What we should be researching is how many customers will pay what it takes to get these desirables on the table. What we should also do is check if there's a margin buffer between original price and a post-spiral price for long development projects.


I'm never against cool technologies. I love them. I'm genuinely sad to see Pandora, Wikipedia and WorldSpace bleed. Maybe not wiki - they made a choice not to make ad-money, but WorldSpace was in it to make money. Customers loved it. Just not enough customers maybe, not enough love perhaps, not enough love to pay. This is an important litmus for those of us in the In Tech industries especially, it is common to see over-spec-ed products. It's an engineer's / designer's self-actualization, but let’s remember all that is useless if there aren't enough people who pay for those specs.

What do you think?

Social Recommendations, Discover-ability of the Truly New, and the Aha!

I'm sure you see a lot of "people who bought this also bought this" or "people who read..." or "friends who listened..." or "friends who watched...." nowadays on sites. That is social recommendation for a lot of businesses. The assumptions are clear. We are sheep. No, that sounds bad, but we're some similar creatures.

I kind-of agree. Most of us are not early adopters, and we seek sanction in the actions of other people. Why should we try untested waters unless we know people who jump in them come out alive, or better, enjoy it? The friends part makes even more logical sense. If we're sheep, we follow sheep and now flies. We make friends based on some commonality, and if my friends like something, maybe I like it too. Better chance than trying out a product none of my friends like. Right?

Yes, except that most of us are also unique. Sometimes, actually most of the times, we are sheep. But some times we are deliberately not. We don't want to wear the same shirt as everyone else. We also try to be different. We want to seek our own New. We want the thrill of being the first to discover something cool which then, other people also like. Some times we want to hold on to what we discover and don't want others to know about the small cozy cafe we discovered because once they do, it'll stay neither small nor cozy. Also if you think about it from the other perspective, that of someone / something wanting to be discovered, you have a terrible cold-start chicken-egg problem.

No one knows you, no one likes you, so no one follows any one to your door. Seems like a dead-end.

Not on the Music Genome Project, not on Pandora.

Anyone who's used Pandora is a fan, or I haven't had the fortune to come across any other type. Pandora is a radio-station for those who still don't know, that will ask you for a couple of songs you like and then will go on to predict, based on what you like and what you skip, to progressively suggest songs that you love, but have never heard of. Pandora doesn't do the 'like' business. The Music Genome Project, in the background, describes each new song, through an algorithm on about 400 attributes (genes), and each new song is rated by a musician on those attributes again, and that is what it uses matches to match your taste. This means that if Pandora has figured out what kind of music you like, and there's someone who's written a song like that, you discover it, hear it, love it - without ever needing to hear about the band, or the genre, or the country or century it was written in - and without any of your friends having heard of it. For those who can (it's legally available only in US / AU / NZ I think), you must try it for genuine aha moments.

What I find even more amazing is that this stuff is possible in as complex a realm as music. What I find amusing, however, it how much simpler it might be for, say, books - and you don't see this happening. T-Shirt fans could be following the herd in styles and trying to stand out a bit in terms of the slogan, but book fans really look for that unheard of book that gives them the aha.

Recap, recommendations work. Social also works. Attribute-based cataloging also works. There are categories (like the undiscovered), and occasions (imagine gifting someone what everyone else is gifting), and people (the cult of the non-conformists) for whom a Pandora of things is a crying need.

It is more difficult to build this out, but this could be well worth its while. I'm sure, at least hoping, that there is stuff being built as we speak.

The Mobile Conundrum - Part 2 of 2

Continued from The Mobile Conundrum - Part 1 of 2...

Let me throw in the last bit of complexity to this one. Is it really bad if we can’t solve the entire problem today? There are people, we know, who research online (“this one has cool reviews”) and buy offline (“I know the guy”). There are others who research offline (“I like the feel of the phone”) and buy online (“better price online”). And of-course there are people who do both online, or both offline. Think for a moment about a similar framework around mobile. There would be people who research on the mobile (e.g. quick-price-check) and buy on the PC. Why not build out something for them? There’s more to this.

Lots of us were brought up on plain-jane information-only websites - text and a few images. Now the mobile adds multiple dimensions to this.

a) Now almost all mobiles have GPS. Users will share geographic information when there’s a proposition (e.g. the now much touted local-deals thing). Does our website leverage this information? Have we thought about propositions here?
b) Now many phones have inputs like the accelerometer. Have we thought about how we could leverage that? If I could shake my phone to navigate, it could be cool. It could even be, like the Wii, ground-breaking.
c) We all know the app real-estate is limited, we still expect the consumer to install one app per retailer. Maybe we can start thinking about platform plays, where the front-end is built by whoever knows the user-segment best.
d) It could be time to move on from what my facebook friends like to what my phone contacts like - most of us have our closer people there, and at least some junk contacts on facebook.

Are we thinking hard on this? Or we’re opening up the field for a new breed of mobile-first operators to walk in and cash in? We should start thinking about pure-engagement providers on the mobile who may move into eCommerce and for all we know, provide a better experience than us eCommerce guys.

The Mobile Conundrum - Part 1 of 2

What, really, is your mobile strategy?

What does mobile mean to your business? I believe the answer is unsurprising in most cases. It’s like an answer to the World Peace question. It’s great, it’s awesome, it’s the future. Women, children, youth, engagement, 3G, 4G, tablets, blah and more blah.

So, what really is your mobile strategy?

I think most businesses are in denial. I believe one could get interesting results by hooking CEOs to polygraphs and asking them questions like, “is mobile happening?”, “has it already happened?”, “will it happen?”, “will it not happen”, “what is mobile?” etc, one might get interesting results, if there are any responses at all.

We guys believe in mobile and World Peace. We believe the world will be 5 or 7 inches across (sorry, did I miss out on 11”?). We believe there will be tons of mobile-first consumers. We still ask users to register. We ask them to block a userid, then we ask for an email id. Our registration page is 20 fields long. We forget all these screen-holders have a Facebook id (well, almost all, unless someone’s really trying to make a statement), all the android guys at least, if not all, have a gmail id. We forget that it is really easy for a person to have 500 email ids, but difficult (/ expensive) to have more than 3 mobile numbers. All the junk we have in our user-bases, all the waste of coupons can become so much lesser if we start using the mobile number as our identifier.

We forget the 7 inches when we give him 247,000 results for his query, images unoptimised for the mobile screen, one-time-password-flows for checkout (i.e. the user exits the app / browser, goes to SMSes, picks up / memorises / copies the OTP, exits SMS, re-opens the browser / app and feeds in the password) and so on forth. What, really is our mobile strategy? We want the user to use drop-downs, buttons close-together, images in PC-screen resolution, and browse through our jungle of tiny text and million pages with tiny arrows to click, and still feel like paying at the end? And if he does, go through the payment flow described above?

Hmm... tough one, this one, anyone?

...to be continued

The Dangers of Extrapolating Early Adoption

From Everett M. Rogers' Diffusion of Innovations (1962) we got this terminology around Early Adopters, and then for some reason it got even more popular than the term Innovators. Here's the classic adoption curve we all would have seen.

So what does that mean for our business? It means that the innovators and the early adopters really bring in the early majority, the bulk of our business. They give us signs on what's our likely scale, what we should get right, what we should do less of, and so on. They've taken the leap of faith with our products, so we also love them more, and rightfully so.

Everett M. Rogers' Diffusion of Innovations 1962

There are two dangers of this focus on early adoption that were called out in this article I came across recently by a gentleman called Peter de Jager, namely:

a) People do not fall into one Change Adoption Category; they drift from category to category depending on the specific change/innovation. There are no people who are always early adopters in every category, and

b) The statement "13.5% of the general population are Early Adopters" makes two related and dangerous assumptions.
        a.     complete Adoption Curve will exist for any change..
        b. It assumes 13.5% of us will embrace any change,

Evidence of the incorrectness of this statement is found in two casual observations, he says;
      a) At the height of the Hula Hoop craze, not everyone was hula-hooping
      b) Not even 2.5% of the population have bought a Segway

The adoption terms are accurate only in hindsight; they tell you nothing about how a population might respond to a change/innovation.

I found it very insightful and enlightening. In addition, I wanted to highlight something I've been trying to convince various companies on for a while. It may not be just useless to listen too literally to your early adopters, it could also be dangerous. It's like entering the weld-shop without the safety goggles and here's why.

The early adopters are called out as a separate segment in all these studies because they are different. How different? Sufficiently different to be called out separately from the majority. They think and act differently and look for different things in products or services. What may be really cool and worth paying for, for this community, may still be cool, but not worth paying for by the early majority. Concorde stands out as an example, but that probably deserves a separate dedicated post.

Peter's examples on the Hula Hoop and Segway are appropriate to think about here. One of our current struggles in eCommerce now is the same. Less than 1% of the opportunity has happened in India, there is temptation but not logic to extrapolate our learning to the entire potential community. It could be okay to do in Durables or Telecom where more than half the potential population has been onboarded. But in nascent industries, there is really no reason to believe that the other 99% will behave like this 1%.

Innovation and Attrition

They say men are known by the company they keep. I believe a company is also known by the men it keeps.

Who invented the iPhone? Most people might just say Apple, while we understand it must have been someone within Apple. A company is a set of people. Most of the intellectual property owned by a company comes from its people. This bit is clear.

If the link of innovation to attrition is unclear, let's just first establish IP = people, and then the link of people to attrition. For all companies in the world, attrition is a reality of varying proportions. Again for all companies, innovation and creation of intellectual capital is a clear part of purpose, and a strong lever of competitive advantage and sustainability. This IP, despite all the talk of DR/BCP, effectively resides in the minds of a company's employees, we know that. When we lose people, we lose IP.

I daresay it is impossible for a company to have a innovation strategy without having a strategy to retain key people responsible for innovation and other guardians of such IP. We all understand it is not very difficult to replicate innovations people see in one company in the next company they join. It is in more cases than some, easy to tweak designs to escape patent litigation. A lot of IP, especially around business innovation, as against technology, is implicit and never patented. A lot of other IP is not patented since patenting is a time-consuming process and requires you to declare and define the innovation, which is seen as making it easier for competition to access, copy and tweak the same.

Next level - it may not be real attrition, but maybe even pre-attrition loss of engagement that might prevent people from opening up their ideas for the good of the organization (or, let’s say, to further their own growth in the organization for the more self-centered ones) instead of saving up their ideas for the day they either start something on their own, or another environment that makes them feel it’s for the longer term there. Or simply provides for more respect for their ideas.

We hire people who bring knowledge with them. We value employees for their prior experience at respected organizations. We expect them to deliver results leveraging their knowledge and experience. The competition expects exactly this from our employees.

It’s high time we take a hard cross-functional look - are we really investing on ideas for our own company’s future or are we in danger of becoming a breeding ground for talent and ideas for our competition to benefit from?

Who's your Competition?

I'm sure all of us strategy guys get this all the time. How do we get competitor information? How do we confirm it? How do we spell-out risks and mitigation plans? How do we make plans around their weak points? What's our competitive strategy? How have we reverse engineered competition's strategy? Then the usual stuff around deep dives, war-game simulations, scenario planning and so on. I often feel another question should come first.

Who's our competition?

Now one approach is to dismiss this questions as too basic (come on, how old are you?). The other common approach is an exercise around competition mapping. The question, however, is different - it's not about listing but defining. Let me try and clarify, but before that, another basic question at this point, who should be defining competition for us? Aren't all of us senior guys smart enough to do this? Well sorry but no.

Our consumer defines who our competition is.

Let me try and peel the onion here. I work for an eCommerce firm. Our consumers aren't people who have a need for eCommerce because no one really dies without eCommerce, we're one of the channel choices (s)he makes. The need is perhaps for a Juicer. Maybe the consumer doesn't even need a Juicer but Juice. Maybe not even Juice but refreshment or health. Now given this hypothetical flow, a competing product is one that gives him / her a competing option, an alternate route to refreshment or health. Here's what - this is illustrative. I'm not claiming to define this for consumers and neither is the peeling of the onion complete. The point, however, is to show how competition is a) defined by the consumer's need-states and b) wider than we think.

I've worked in the Durables and Appliances industry. I know for most of the time, we feel what competes with our juicer is another juicer. We don't think much about any threats that are not appliances while the truth is that if packaged juices get better and cheaper, if someone sets up juice-vending machines all around, no one will buy our juicers. If someone brings dissolve-and-drink juice-pills to the market (I realize it sounds like an ugly idea but who knows, so did rock music to the classical guys), then the juice-story also dies.

What hit pagers was not cheaper, better pagers. Film-photography, personal-computers, walkmans, watches and so many other products were killed because execs were too bothered looking for competition in the room while the consumers simply shifted to a better source to, literally, get their juice. I'm sure you will know many more examples of these occurrences than I can list, where, as someone says in Sharp Teeth by Toby Barlow - "the bullet that hits you is never the one you're running from".

Personalization versus Customization

A lot of things in online retail have changed in the last some years. The biggest is that we have been told that the online buyer now doesn't like take-it-or-leave-it experiences. I'm not sure anyone's tested it out (e.g. do users buy from suboptimal websites if, say, the prices are slightly lower there?), but let's say it makes logical sense. Another equally big thing that has changed is our ability to create multiple experiences on the same website, without which the first insight is useless. The third thing to keep in mind as background is what I may have said before in the Escalator Problem post, most shopping sites are built by techies, not retailers. Techies love complexity. Multiple experiences, multiple skins on the same backbone is exciting and cool for techies.

As a result of all the above and more, the hue and cry for Personalization.

There's one small school for customization and another big school for personalization, to be clearer, and the second school considers vanilla customization-ability uncool. Custom flows are about giving the user a choice of experience that the user explicitly makes (e.g. you want to see more deals? more lifestyle or tech? when you log in?) while Personalized flows second-guess the user (e.g. we know that you have bought / browsed T-shirts, so here's more T-shirts when you log in). It is cooler to not ask the user but surprise him / her with what we know without being told.

I'm not sure what the best approach is. Personalization could be cooler but could just be techie-cool and not user-cool. I believe customization is safer, not sure if that's the best. Here are a few things to remember whenever, if ever, we as businesses make this call.

a) Users may actually like being asked questions when they walk in. Maybe it's a nice thing to ask them if they like seeing deals on furniture better than music instruments.
b) We know some people mind being second-guessed. We all know the Target example, what happens when your analytics team figures out someone's daughter is pregnant without that someone knowing about it.
c) There could be parts of the user's browsing or buying that (s)he doesn't want recorded for a number of reasons you can imagine
d) Preferences change, with time, with occasion and so on. You may know the buyer's history, but that may not be a good predictor of his / her present state of mind. For that matter, even people change over time.
e) There could be things the user is done with. Maybe (s)he's already purchased the dream double-bed from your site or elsewhere, and now your snowing him / her with latest double-beds is not just useless but harmful. The next time the same person will buy a double-bed is either ten years later or never.
f) There is a distinct possibility, and probability of multiple-user-ids e.g. the son using his Dad's id or the wife using her husband's - maybe it is faster than creating a new id or maybe that someone's received a coupon the other person wants to use. In this case you'd be personalizing for an average of the husband and the wife, a person who doesn't exist, and not impressing them both.
g) Personalization needs data (if not Big-Data, the buzzier, fuzzier word) and if a lot of your users are new users without a lot of data history, you'll have a cold start problem. By the time you figure out the person's preferences, you may have already pissed him off with irrelevant suggestions

I'm sure a lot of statisticians and coders are working on these angles as we speak, but we have buyers walking in now. What should we do? Any views?