Thursday, October 20, 2011

Dear Chief Executive 

The internet is contributing 7.9% to the UK economy this year, about £11 billion.

This is up 10% since last year. It is bigger as a contributor to GDP than health, construction and transport.

The ONS report 10% of all retail sales are now conducted online. In September this amounted to  £5.5bn.

Most managers recognise the economy is at best, flat-lining and yet last month while retail sales rose, unexpectedly (by 0.6%), it was dwarfed by Online retail sales which were up 15% Year on Year. 

This is not just for the middle market buying the week's groceries. Top of the line retailers are benefiting from the web too and they are not nearly as affected by a sluggish economy.

When excluding online travel sales, e-retail sales growth in September jumped 20%.  We could do with a similar boost.

Not to be too bullish, it is realistic to imagine annual growth online in the retail sector to slow somewhat but good double digit growth will continue.

This suggests there is an opportunity here for us.

The data is clear that traditional selling outlets, that is, non internet retail sales, are in decline and to make up the shortfall online marketing is essential to maintain turnover, and probably margins.

With 35 million people already shopping online, it is not a big stretch of the imagination to believe that online selling in B2C is reflected in B2B data as well.

Organisations like Autorola are projecting sales of 220,000 cars  this year and twice that in five years. Construction Enquirer is an online magazine with a readership that would make the traditional magazines proud and 57% of businesses are reporting increased internet budgets this month.

We know that seven in ten B2B buyers start their purchase process with a query typed into Google or another search engine. Thus, right at the beginning of the purchase cycle, the internet is pivotal. B2B marketers with a social media strategy has now doubled from 32% to 64% in three months.

To get some idea of the capabilities that are part of the digital infrastructure now, the BBC has done amazing things online for the Olympics that we can learn from. But most important is that they have taken as their mantra that they will deliver content on "on whatever piece of glass" they choose". 

The range of platforms is now extensive and PC's are only one platform among many for delivering digital content. 

Mobile is critical and has even domestic implications notable in being able to offer wifi throughout or premises. 

At the same time the internet is expanding to include physical objects fitted with sensors or intelligence.

We need to find systems to manage different platforms and technologies as we increasingly need to accommodate the many different devices chosen by employees and consumers.

On the delivery side, users are adopting a wider range of channels from Facebook to Google+, mobile phone apps to storing everything in the cloud. 

This applies as much to individuals as to organisations. For the most part the adoption of these advanced technologies is hardly noticeable. The technology is so good it is not even noticeable. 

We will have to come to terms with offering digital services internally among employees as well as for an extensive range of external stakeholders.

What these data tell us is that to be competitive more than £1 in £10 has to exclusively flow from online activity. 

Better than 7.9% of turnover has to be directly attributable to the internet.

We need to be able to adopt and enhance activity on many channels with many communications platforms, including social media, throughout the organisation.

Having done that, we will be ordinary and average. To be competitive, we need to do better. The need to understand the internet at the heart of our organisation is now pressing. 

This means that all businesses, and ours in particular, need good quality digital capability too.

We also need to employ and deploy a much greater level of strategic as well as tactical expertise.

Your sincerely,

Your PR manager

Every statement here has excellent provenance

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