  Jeremy Gray – The Geriatric Entrepreneur IBGR. Network. The World of Business at Your Fingertips Is retirement not for you? Me neither! I have always known that retirement did not hold any attraction for me. Those financial product advertisement promising early retirement never resonated. As Elizabeth Queen of England, who is still active at the age of 95, says “If I stop, I will drop.” In season 9 I will share with you my experiences running a consulting business that delivers the much targeted six figure income. I also invite you to join me, as I build my business plan to escape the tyranny of the clock which limits my earnings to the hours I work. Over the next five years I plan to build an income portfolio that will support my family into the future. Please join me as I plan that journey.  Episode 25. Why online retailers have need for speed. A common choice for an entrepreneur looking to launch a second career is online retailing. It sounds so appealing, find a product on an Asian based website, such as Alibaba, buy it a low price and resell it in the American market at a huge profit. The business can be run from your home office and does not require any sophisticated equipment. At least that is what many folks who offer training courses on how to achieve would have you believe. But if standing out from the crowd as a consultant or coach is hard, doing so as an online retailer is even harder. It’s a challenge to find solid numbers, but Digitalintheround.com claims there were between 12 to 24 million online retailers in 2021 with 2.1 million in the US alone. Other websites offer up similar numbers so, suffice to say, there are a lot of online retailers. If you are going to achieve success you need every advantage you can gain. This week I am going to share with you some of the latest thinking on the topic from experts from McKinsey & Co, a leading consultancy company and Wharton the famous business school based in Philadelphia USA among others. The first article which comes from Wharton is titled “Why online retailers have a need for speed” by Santiago Galliano a Wharton professor of operations, information, and decisions. I am sure many of you have experience frustration with online retail. You want to checkout, but the page does not load or there is too much third-party content slowing it down. And this can happen to the most professional of websites. This week it took me three attempts to buy tickets online from Singapore Airlines for a flight from Saigon to Singapore. As only Singapore Airlines has Singapore Airlines Business Class I had no alternative to keep trying. But if I had been in my more usual cost avoidance mode I might have switched to another airline. What Professor Galliano found is that slow website could be costing you serious cash. It is well known that if you make it hard for your customers to buy from you, they will buy less or even walk away, on the case of online retailing abandon the purchase. Professor Galliano’s research was aimed at finding how big an impact a slow website would have on buying decisions. Today most websites are pretty fast, so can small fractions of a second impact the conversion and sales? The answer is yes, it can. A 10% decrease in a websites speed can reduce sales by 4.2% and conversion rates by 2%. If you consider all the effort you have put into getting a potential onto your website from the millions of alternatives available to them, and then they get frustrated and abandon the purchase, well you are just throwing money away. And we are talking about fractions of a second here. The research showed that the average time to load a page was 3 seconds. A 10% decrease in speed in 0.3 seconds. That is hardly discernible, but it will impact your sales. Your first reaction is there is not much I can do about the speed of my website. I cannot control the overall traffic on the internet, I have no control over the server hosting my website. But the more you look the more you can control. Take customer tracking software as an example. Its common to say we are on the internet we can track everything about a customer. That is true but it will also slow down the performance of your site. You need to consider the trade off of speed versus information. Keep in mind that we are talking about fractions of a second. Another thing you can do is when designing your online store is to consider both mobile and desktop users. Desktop users tend to have faster and more stable connections. They are often at home and in that context have more patience. The mobile user maybe commuting to work, the performance is different but so is the users attitude to a website. This context is one of urgency, I have only limited time to make my purchase. When setting up your online store consider those two aspects. What is the level for third party content I want to include, and are customers going to be landing on a mobile or desktop application? For older entrepreneurs it is important to remember the use of mobile phones for internet shopping is the default mode from many these days. I tend to use a desktop when making a purchase online, I may sometimes use my iPad. I would never use my phone. My wife, who is a lot younger than me, and my step daughter almost exclusively use their phones. According to Outerboxdesign.com in the US 50% of internet purchases were made from mobile devices. Checkout.com reports 88% of Indonesians make online purchases via an App on their phone. Some parts of your website are more important than others when optimizing for speed. The check process is where you really need to mindful of speed compared to the landing page. When on the landing page your potential customer is an exploration phase, trying to learn more about the product and whether they are willing to engage with your company. At this stage they have a different level of patience than when they are in action mindset, which where they are during the checkout process. Bricks and mortar retailers have studied this for many years in the physical world. You know the scenario; you have gone into a supermarket to pick up a few needed but not immediately essential items. You put the items into your basket only to find there is a long line at the checkout. You may be tempted to abandon the purchase, leave your basket of items for the shop staff to put back on the shelves. There is a parallel in the online world. Of course, there will be times when your site slows down during peak shopping times Black Friday or Cyber Monday in the US, Singles Day here in Asia. Professor Galliano’s research shows that consumers may be more willing to wait on those days. The point of his study was not to optimize for those types of disruptions but to focus on the everyday operation of your website. The lessons from this research are particularly relevant for the small business. Maybe you make products that you only sell online. Keep in mind the psychology of the buyer. When they are learning about you and your products would be the optimum time to capture some third party data, such as where they are in the world, how are they accessing your website. As you lead them to the checkout optimize for speed. To summarize, think about the connection between a physical shopping trip and an online shopping experience. When you physically go to a store you take into account the time it will take you to complete your trip. How long will it take you to travel to the store? How convenient is the available parking? Does the store have peak periods which you may want to avoid? The same is true of the digital world, how easy is it for your customers to find your site? Can they quickly access the items they want to purchase? How easy is it for them to check out? To read the full article or listen Wharton’s podcast Ctrl+Click here Tags: Online retailing Roadmap to success, The successful entrepreneur, business common mistakes small business start-up; Jeremy Gray, Geriatric Entrepreneur  Episode 26 It’s show time, how live commerce is transforming the shopping experience. Based on a McKinsey & Co article of the same name published in July 2021. Blending entertainment with instant purchasing, live commerce offers retailers, brands, and digital platforms a new channel with enormous scope for creating value. Live commerce arrived in May 2016 with Alibaba’s Taobao Live. This was a new approach combining online livestream broadcast with an e-commerce store that allowed viewers to watch and shop at the same time. This has approach has established itself as a fixture of Singles Day, 11 November which is a major shopping event in China. And the results are staggering, last year 2020, sales in the first thirty minutes of the presale campaign totaled $7.5 billion in revenue. Some of the advantages of live commerce include: Faster conversion – a well presented live stream holds viewers intention longer, it shortens the buying journey from awareness to purchase. Some companies report conversion rates as high as 30%. 10X the typical e-commerce rate. Improving your brand appeal and differentiation. It can help you strengthen your position with existing customers and possibly more importantly attract new customer to your website. Younger views are especially keen on new shopping formats and experiences. What type of products are most suitable for live commerce? Based on McKinsey’s analysis apparel and fashion are the most often show cased items, followed by beauty products and food. Consumer electronics and home decor are also popular products for live commerce. As you might expect Generation Z and Millennials dominate the audience but middle aged and senior consumers are increasingly part of the audience. Knowing your audience and where they turn to for information is important. There is a lot more information in the article, links are in the show notes, but Gen Z is heavily influenced by non traditional media. 75% of Gen Z say they turn to social media, online reviews and websites and experts, celebrities or influencers when researching a product or brand. I found it interesting that they looked to family or friends only 15% of the time. Outside of China live commerce is still relatively limited so there is still time for you to be a leader in this field. Can you do this as a solo entrepreneur? The answer is yes. To cover I will move away from the McKinsey article now which is focused on larger businesses, to advice for smaller companies I have found while researching this show. Much of what follows comes from an article from OCBC, for those of you outside of Singapore OCBC or Oversea China Banking Corporation to give it its full name is one of Singapore’s major banks. A link to the article is in the show notes. The article focuses on Singaporean SME businesses and cites some interesting success stories but the lessons and advice are relevant wherever you are in the world. Getting started in this regard may be easier than you think as SME owners and staff can leverage social media platforms that they are already familiar with such as Facebook and Instagram. These businesses can leverage the Facebook Live or Instagram Live features within these apps to carry out their live streams and by considering the following basic guidelines they will be able to get started.
How to get started: Testing the waters
• Rely on the technology of one social-media channel (such as TikTok, Instagram, or Facebook) or marketplace (such as Amazon Live, Taobao, or Tmall)
Do not expect instant success, do not get disheartened if initial audiences are small. Take the long view and give yourself credit for doing something different from most online retailers. This is high level advice and much more how to information is available to you with a few hours of research. Amazon Live Streaming is well worth looking at, we cannot ignore one of the largest global online shopping platforms. My take away from this topic is that Live Commerce will give you an opportunity to stand out from the crowd, you can experiment without investing a lot. And it has the potential to scale. If you feel uncomfortable in front of the camera, it almost every town or city there are struggling actors and actresses who can be hired at reasonable rates. If I were into e-commerce I would certainly give this a try. And those of you who may have seen my promo videos on Linked In will know I am not the most professional of presenters. To read the McKinsey article Ctrl&Click here To access the OCBC article Ctrl&Click here Tags: Online retailing Roadmap to success, The successful entrepreneur, business common mistakes small business start-up; Jeremy Gray, Geriatric Entrepreneur  Episode 27 How Tech will revolutionize retail.
Mr. Straw recounts a story when he was talking with a Silicon Valley investor who said “You know what I’d really like from one of my startups? I’d like a dollar in revenue with a hundred users engaging a thousand times a day with a product, rather than a thousand dollars in revenue with a few hundred users engaging once, because that is where I am going to place my bets – that level of engagement. The point this investor was making is that a high level of engagement shows you have got the product right. Where people come only once it is the marketing you have got right. And marketing does not scale but products can. Continuing with the theme of getting the product right Mr. Straw mentions the value of prototyping. In this case this does not mean a prototype that does not see the light of day beyond a design studio. These are prototypes that you get into the hands of consumers early in the development stage and judge the level of the consumers engagement. Use feedback to improve the product. Producing some prototypes need not be prohibitively expensive there are many design and build companies that can help. Do not try to get the prototype perfect, get a functioning version and get it into consumer’s hands. You may want to consider setting a self-imposed deadline for the launch date. There is nothing like a deadline for focusing the mind. Backward planning will help in this regard. I talked about backward planning in Show 4 Season 4 as part of the series on strategic planning. In summary you identify when you want to launch your prototype and all that needs to be done to get there. You then work backwards to today and build what is effectively your to do list with milestones. If you are disciplined this will keep you on track and enable you to celebrate as milestones are reached. Based on his experience John Straw says the first lesson he would draw is to be sure that in the early days you have something tangible to show. Show and tell is very important if you want to gain financial traction. Show, tell, engage. Augmented Reality AR and Extended Reality XR are creating opportunities for retailers. John Straw recounts how IKEA quickly took advantage of the AR feature on iPhones to create an App that enabled customers to see how a piece of furniture would look in their own rooms. IKEA went further by finding company whose technology could measure a room and allow the consumer to see how a complete range of furniture would look. The big news is that Apple is rumored to going to launch a range of XR glasses. Based on Apple’s track record these glasses will be a significant advance on anything that has gone before. If you sell high priced items it is time to start thinking of what AR/XR can do for you. You can be sure there are developers working on Apps for Apple products already. If you could work alongside a developer as a beta test site, you could be the coolest retailer in your town. The progress in virtual assistants and chatbots will provide opportunities for retailers to allow customers to interact with virtual assistants with no limits on their knowledge and experience. Chatbot technology is not where it needs to be today. I am sure you have had frustrating conversations with chatbots. Where you ask a question, get an unsatisfactory answer, so you try to ask the question another way, only to get the same unsatisfactory answer. I know there are challenges. I once listened to a developer of Chatbot technology for IRAS, the Singapore Inland Revenue service and he talked about the difficulties on handling local dialects. However we can expect virtual assistant and chatbot technology to improve. A retailer or anyone who hopes to implement such systems needs to be thinking about how to capture the knowledge and experience of their employees. Especially those employees nearing retirement. And not just what works but what has failed in the past. I am not sure I subscribe to the “there is nothing new under the sun concept” but there are very few truly innovative ideas. With my long tenure with the MNC I worked for, I would often be presented with new ideas that we had tried years ago and failed. When I was presented with such ideas I never dismissed them out of hand. I would spend time talking through our past history What we had tried that and why we failed. We failed because of X or Y. If you can develop a way to overcome X or Y then you could have a real success on your hands. It is not too soon for you to start to gather this information and experience. I do not like to think of this as data as that implies a rigid format, think of it as knowledge. The online retailing giant is opening its first cashier-less supermarket, where shoppers can grab milk or eggs and walk out without waiting in line or ever opening their wallets. It’s the latest sign that Amazon is serious about shaking up the $800 billion grocery industry. At the new store, which opened in Amazon’s hometown of Seattle, shoppers scan a smartphone app to enter the store. Cameras and sensors track what’s taken off shelves. Items are charged to an Amazon account after leaving. In respect of retailing in 2030 Mr. Straw has this to say “For retail, the opportunities are immense for showcasing, for XR capability, for digitally enhanced shopping baskets, et cetera. There will be robots in shops. It’s gonna take us quite a bit of time to get used to that particular idea—enhanced “robo serving”—but that’s gonna be with us, and the technology will just get better and better going forward. Holograms will be quite big by 2030. Therefore, your virtual assistants are going to be quite interactive then. I don’t think that they’ll be brilliant by 2030. By 2035, I think they will be quite substantial. You’ll have conversations with virtual assistants who have no limits to their knowledge and experience.” Another topic that Mr. Straw feels strongly is that he would not invest in a company being led by someone under 50. He admits this is an arbitrary number but believes the experience of been there done that is important. Now you can point to many companies founded by 20 somethings that have been successful, but it is likely you will find there is an experienced mentor in the background. As my fiftieth birthday is a dot in the review mirror I, of course, value experience. To read the full article Ctrl&Click here. Tags: Online retailing Roadmap to success, The successful entrepreneur, business common mistakes small business start-up; Jeremy Gray, Geriatric Entrepreneur  Episode 28 Your loyalty program might be losing you money.
From Amazon Prime to Panera Bread’s Unlimited Sip Club, loyalty programs have become commonplace in a wide variety of industries. However, despite their popularity, it’s not always clear whether these programs are actually profitable. The authors analyzed data from 24,000 customers at a large Asian retailer to explore the various factors that can drive a program’s profitability, and identified three takeaways to help managers ensure their subscription programs are a net positive: In February 2020, Panera Bread announced the Unlimited Sip Club and rocked the coffee world. For just $8.99 a month, members could get unlimited refills of their favorite coffee or hot tea at any Panera location. With the average American consumer spending more than $2,000 a year on coffee, this sounded like an incredible deal for coffee drinkers — begging the question, how could Panera possibly justify such generosity? Loyalty programs like this are common in industries as wide-ranging as retail, food and beverages, health and wellness, and more. Proponents argue that increases in sales justify the costs — for example, while Panera may lose money on its drinks, if loyalty members buy a croissant every time they get a coffee, the program could still be quite profitable for the company — but these effects can be hard to quantify. For example, the average Amazon Prime member spends more than twice as much as the average non-member. This may seem to imply that the program is responsible for a substantial increase in revenues, but the difference in spending could also be driven by self-selection (that is, customers who already intend to spend more may be more likely to choose to become members). The costs to the company of providing membership benefits can also be substantial, whether that’s a free cup of coffee, exclusive product offers, free shipping, or other perks. In light of this complexity, how can managers ensure their loyalty programs are truly profitable? To explore this question, they conducted a large-scale study in partnership with a major Asian retailer that was launching a new, paid loyalty program in 2015. We analyzed 15 months of transaction data for more than 24,000 customers, about half of whom had joined the program, and identified three key takeaways for managers: Go beyond averages and analyze trends on an individual level. On average, we found that customers spent more than twice as much per month after subscribing to the retailer’s loyalty program. However, this increase was not evenly spread out across all the members in the sample: Some customers contributed substantially to the increase in revenues, while others did not. This illustrates how a better understanding of whose spending is likely to increase the most after joining a loyalty program can help marketers better target prospects going forward. To do that, managers must go beyond average results to track and analyze changes in purchasing patterns on an individual level. That means setting up data collection and analysis systems, allocating the necessary resources internally, and getting buy-in from the relevant stakeholders. And importantly, this all should happen before a company introduces a new loyalty program, to ensure managers have the benchmark data that will be necessary to measure the program’s impact. Don’t just measure changes in profits — measure what drives those changes. In addition to drilling down into individual-level spending, our research emphasized the importance of developing a nuanced picture of the various changes in consumer behavior that may be driving shifts in overall profits. For example, we found that post-subscription, customers bought a wider variety of products: Approximately 75% of the increase in revenues came from new products that customers had not previously bought, suggesting that one factor contributing to the program’s success was that it encouraged members to start exploring products beyond their typical purchases. Conversely, we also found that while the total number of purchases increased after the introduction of the loyalty program, average basket size decreased. This was likely because membership included free shipping, meaning that customers were no longer incentivized to group purchases together into a single shipment. This change in member behavior could have substantial cost implications for the firm, as shipping costs increase when members spread out their purchases between more shipments — and if members incur greater costs, higher revenues may not translate to higher profits. When evaluating a program’s impact, don’t forget about the costs of serving customers. This last example highlights the importance of paying close attention not only to changes in revenues, but also to the various costs associated with a loyalty program. That means both the cost of the additional goods sold and the costs of any benefits included in the program, such as free shipping or member-exclusive offers. After we factored these costs into our analysis, we found that net profits increased a lot more for some customers than for others after becoming members. Specifically, we found that 14% of the members in our study contributed the highest profits despite incurring high costs for the retailer, 46% generated a sizable increase in profit without as much cost, and the remaining 40% generated minimal profits and incurred substantial costs. Interestingly, the 14% of members who contributed the highest profits after subscribing were not the ones who had purchased the most prior to subscription. Rather, they were customers who had been less active before subscribing, but who had demonstrated interest in exploring new products, made repeated purchases of similar items, and were responsive to promotions. In contrast, the customers who had purchased the most pre-subscription only moderately increased their spending while still enjoying all the benefits of the program, suggesting that the retailer might have been better off if those customers hadn’t joined. This analysis highlights the importance of monitoring changes in both revenues and costs on an individual level. Rather than assuming costs stay constant with respect to the value of goods sold, managers should track how costs change for different customer segments after the program is introduced — and then target loyalty program promotions at the customers who are likely to generate the highest net profits. If implemented well, paid loyalty programs can be highly profitable. Indeed, after launching its popular subscription program, Panera announced that food purchases attached to coffee orders grew by 70%. But to ensure that a loyalty program is actually a net positive for the company, it’s critical to track revenues and costs for different customer segments — as well as the underlying factors that may be driving both — and experiment and adapt accordingly. To read the Wharton version of this article or to listen to their podcast Ctrl&Click here. Tags: Online retailing Roadmap to success, The successful entrepreneur, business common mistakes small business start-up; Jeremy Gray, Geriatric Entrepreneur I am committed to helping entrepreneurs succeed. I can bring the experience of 30+ years of experience at the C-Suite level in an MNC from Europe, North America, and Asia. Combine this with eight years of helping a diverse range of businesses and I can provide you with practical solutions to any difficult problem may be facing. Please do not hesitate to contact me for chat via the following links: mailto:jeremy@business-in-asia.org Or schedule time via Calendly: https://calendly.com/3-continents-consulting My websites include: https://business-in-asia.org/ https://thegeriatricentrepreneur.com/ https://thedentistscfo.com/ My LinkedIn URL https://www.linkedin.com/in/jeremy-gray1
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