October 15, 2013, 12:33 PM

Global eCommerce In The Age Of The Customer

Many brands that have invested heavily in e-commerce in core markets aren't doing the same as they move into newer regions, a Forrester analyst says.

Last week, Forrester published an updated version of our report on The Age of the Customer (the author, David Cooperstein, blogs about it here). The report discusses the fact that competitive differentiation has been based upon the power of manufacturing, distribution and subsequently information. We’ve now entered an era in which “the only sustainable competitive advantage is knowledge of and engagement with customers.”

The report gives great examples of brands that have used both digital and traditional channels to become customer obsessed and the benefits they’ve realized as a result. Yet for a large number of brands, the journey is just beginning. This early stage is often reflected in brands’ eCommerce offerings around the globe, many of which still reflect a product-centric rather than a customer-centric approach. Today we find that:

Many customer-obsessed eCommerce brands aren’t equally obsessed in all global markets. Brands’ eCommerce websites around the globe often pale in comparison to their core offerings at home. Some small markets may not merit substantial investment; however, many brands still fail to carry over best practices into markets with enormous opportunity. At our Forrester Summit in Shanghai last spring, we highlighted a number of areas where global eCommerce brands lagged in China in comparison to their local counterparts. For example, many brands that offer an extensive product selection online in the US and Europe – and have mastered areas like product recommendations and user reviews in these markets – have not extended these offerings into China. This approach means global brands’ offerings often fail to stack up against those of local players. Leading Chinese online retailers across different categories, from Dangdang to Jingdong to Yihaodian (now majority owned by Walmart), have all focused on these core site features.

In some markets, only a few eCommerce brands provide online experiences that truly center on the customer. In markets like Brazil, a handful of forward-thinking local eCommerce players such as Netshoes have taken a highly customer-focused approach and offer online experiences that clearly address key customer pain points. By contrast, many players in the market still lack a sufficient customer focus, ignoring key must-have eCommerce features. I’ll be highlighting some of these essential features during a talk in Sao Paulo at the end of the month, identifying where different companies excel and where they fall short. The situation in Brazil is not unlike that in many other markets: Quite recently in Australia, for example, a few small or online-only players such as City Beach and Kogan offered robust online experiences while many large omnichannel retailers lagged behind.

The Age of the Customer is a global phenomenon: Brands that fail to plan with core customer needs in mind will be surpassed by savvier, more nimble companies that prioritize their customers above all else. How are brands in your country or region becoming more customer focused?

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