Cisco Study Shows Mobile Providers Strong in the 'Must Haves' of E-Commerce, Lag on Innovation in Online Channels
Verizon Wireless and Carphone Warehouse Lead Pack in Providing Strong Online Customer Experiences
May. 14, 2007 12:00 PM
SAN JOSE, CA -- (MARKET WIRE) -- 05/14/07 -- To help mobile service providers transform
business and the online customer experience, Cisco® (NASDAQ: CSCO) today
announced the results of a worldwide mobile e-commerce study. The study,
conducted by Cisco's Internet Business Solutions Group (IBSG), finds that
even though mobile service providers are ranked at the bottom of the
American Customer Satisfaction Index, they are strong in basic e-commerce
execution. However, when it comes to innovation, the mobile service
providers fall far behind, while the major nonmobile retailers lead the
innovation curve. The study's key findings show that improving multichannel
collaboration, incorporating "smart" capabilities, such as guided selling
tools, and increasing interactivity and community dialogue help transform
the customer experience.
Online sales are projected to reach $329 billion in the United States by
2010, with almost half of all U.S. households shopping online, a nearly 40
percent increase since 2005. The study shows that to tap into this
burgeoning channel, executing a superior customer experience through their
online channels is critical for mobile providers. To date, online sales
for mobile providers remain sluggish in the low to mid single digits.
In order to compete, mobile service providers must view their online
channel as an integral part of their customer strategy and company brand.
It is a low-cost channel for acquisition, upselling and service, as well a
crucial part of the customer experience.
"Customers do not differentiate between the online and offline channels of
mobile providers; they see both as one company with the promise of one
brand," says Mohsen Moazami, vice president of Cisco IBSG. "Both the stores
and the e-channels should cross-promote and drive traffic to each other to
maximize the value both to the customer and the mobile provider. Operating
the online channel apart from the store will only be costly in the long
run."
Study Methodology
The IBSG study assessed the online channels of 27 major U.S., European and
Australian companies that sell mobile products and services, including
mobile service providers, pure-play mobile retailers, leading discount
retailers and other major online retailers. IBSG analyzed the entire
online purchasing cycle from a consumer's point of view, measuring the
buyer's experience. The study looked at five distinct categories: ease of
use, personalization, content, transaction reliability, and the level of
interaction between the consumer and the online retailer, and between
online shoppers. Within these categories, the study measured foundational,
"must-have" characteristics and emerging, "sophisticated" attributes that
add even greater value to the customer experience. The aim was to compare
the effectiveness of the front-end and back-end processes of these
businesses.
In tandem with the study, IBSG conducted an e-channel assessment of 27
additional retailers that sell online, but whose core focus is not mobile
products and services, extending the total companies surveyed to 54.
Key Findings
Overall, IBSG found that mobile service providers make up seven out of the
top 10 online retailers of mobile services and offer a stronger experience
through their online channels than more traditional retailers offering
mobile products/services. The top 10 rankings among mobile providers were:
1. Verizon Wireless 5. Cingular
1. Carphone Warehouse 7. Nextel
3. Best Buy 7. Telecom Italia Mobile
3. LetsTalk 7. T-Mobile Germany
5. T-Mobile USA 7. Vodafone Italy
Foundational Capabilities
The leading mobile service providers present a superior e-commerce
experience, getting most of the basics right. These consumer "must haves"
are foundational elements that are nonnegotiable for the customer, and
include:
Ease of Use and Content
The online channel is an important tool to inform and educate customers.
Consumers want portals with search capabilities to help them easily
navigate through the maze of products, service plans and networks. While 80
percent of surveyed mobile providers exhibited appropriate product content,
only 50 percent of sites offered side-by-side feature and price
comparisons, and only 40 percent displayed pictorial representations of the
features. The IBSG study found that mobile providers generally offer a
consistent Web experience across different Web properties and landing
pages. The IBSG study also identified self-help functionality and
information searching, especially regarding new products and promotions, as
weak points for mobile service providers, with only 40 percent offering
these capabilities.
Reliable Transactions
The purchase experience was mostly positive; more than 60 percent of the
mobile providers surveyed had Web sites that required just three to five
clicks to complete a purchase transaction. On the returns side however,
only 50 percent of mobile providers offer an acceptable solution, with
common complaints cited such as customer inquiries handled by multiple
contacts and lengthy telephone hold times.
Emerging Capabilities
The more sophisticated aspects of the online channel that take the user to
a new level of experience, both in terms of convenience and in
satisfaction, include enhanced personalization, multichannel collaboration,
advanced content and increased interactivity, and community dialogue. With
most mobile providers lagging in this area, there is much room for
improvement. A case in point is Amazon, the top-category performer, which
scored only 32 percent in its emerging-capability performance. While the
average performance score for all mobile providers surveyed in foundational
elements was 64 percent, the score for emerging capabilities was only 20
percent. Mobile providers can take the lead from the nonmobile retail
leaders whose superior experience is mainly due to advances in the emerging
capabilities. (While the aggregate performance score for nonmobile retailer
leaders is 64 percent, it is 53 percent for the leading mobile providers.)
Clearly, excellence in foundational elements alone is not enough to attract
and retain online shoppers. Major trends in emerging capabilities include:
Multichannel Collaboration
IBSG found that most service providers do not take advantage of their
online presence to increase in-store transactions. For example, while store
locations are prominently displayed on the majority of mobile provider
Websites, only 35 percent showcase services offered at stores. Only one
service provider among 28 companies surveyed offers in-store pick-up of a
postpaid online order. To blur the line between online and in-store
shopping, customers should be able to research and order products and
services online and pick up the orders at the store. This is a model that
has been executed by retailers such as Circuit City and Best Buy, and
mobile customers expect this type of seamless shopping experience as well.
Increased Interactivity and Community Dialogue
The move to Web 2.0 and the popularity of social networking sites has made
interactivity an expectation, especially among younger consumers. Mobile
service providers need to increase their Web portal community development
with the enhancements of message boards, customer reviews and the addition
of e-mail functionality like "shopping with a friend." Mobile service
providers should borrow a page from nonmobile retailers and "lifestyle
brands," such as Cabela's and Scion, who are successfully tapping into the
social networking phenomenon to increase the frequency and level of
interaction with the brand.
The most popular mode of interaction offered by mobile providers is "click
to chat," which enables online shoppers to directly communicate with a
customer service representative at the click of a button, at various points
in the shopping cycle. It is offered by only 30 percent of mobile providers
in the United State and only 10 percent in Europe.
Enhanced Personalization and Smart Tools
Smart tools are applications that guide customers through the shopping
lifecycle, from research to transaction. They are necessary for helping
shoppers purchase increasingly complex products and services online. While
mobile leaders such as Carphone Warehouse offer tools for consumers to
research and make the most appropriate phone or service selection, only 28
percent of mobile providers surveyed offered any smart or intelligent
tools.
About Cisco Systems
Cisco (NASDAQ: CSCO) is the worldwide leader in networking that transforms
how people connect, communicate and collaborate. Information about Cisco
can be found at http://www.cisco.com. For ongoing news, please go to
http://newsroom.cisco.com.
The Internet Business Solutions Group is the global strategic consulting
arm of Cisco, helping Global 500 businesses and public entities improve
customer experience and revenue growth by transforming the way they do
business. This study is available online at
http://newsroom.cisco.com/dlls/2007/eKits/mobile_echannel_article_051407...
Cisco, the Cisco logo and Cisco Systems are registered trademarks or
trademarks of Cisco Systems, Inc. and/or its affiliates in the United
States and certain other countries. All other trademarks mentioned in this
document are the property of their respective owners. The use of the word
partner does not imply a partnership relationship between Cisco and any
other company. This document is Cisco Public Information.
For direct RSS Feeds of all Cisco news, please visit "News@Cisco" at the
following link:
.gif)
