An Irish government report was issued today that made for pretty depressing reading when it comes to progress in broadband rollout in Ireland. Why is this important to us here? Increasingly, all of our businesses are depending on having access to low-cost high-speed internet access and more importantly that our customers have this access. When people have access to decent broadband they do more online and stay online longer.
Internet speeds in Ireland, while they have increased slightly, are still “substantially below the fasts speeds available to customers in other OECD countries” according to the report. Furthermore, “businesses in many other countries can also procure significantly faster services for the prices charged in Ireland”.
The fastest home broadband in the country of just 20 mb/s will only become available to 35% this year with the rollout of UPC cable services. However the cost of this service is the same as the average cost of a 50 mb/s service across the OECD countries.
We are “3-5 years behind our competitor countries” in terms of the rollout of infrastructure that is capable of supporting our needs into the futures.
The criticism is very clear. We have a poor service at rip-off prices.
So what’s to be done?
The report suggests that regulation governing Eircom should be relaxed to incentivise them to invest further in infrastructure. Currently they are limited to earning a mere 10% return on investment. Would it not be reasonable to increase this to 12-13% on the basis of a more extensive rollout of a high bandwidth network?
The report also recommends that regulation which limits co-investment by a number of operators in infrastructure be “lightened or removed”. So currently, if BT and Vodafone seek to come together to jointly build a single infrastructure which both can use in the future, the regulation currently in place is not conducive. There are obvious economies of scale in allowing competitors work together to invest in better service.
Since more and more broadband is being accessed via mobile and wireless spectrum there is a clear call that with the switch-off on analogue TV planned for 2012, that the released spectrum be made available to broadband services as a priority. Worryingly, there is a clear indication in the report that the government doesn’t actually believe the 2012 deadline will be met.
A final recommendation made in the report is that the State should take an even greater role in infrastructure development. It cites the success of the rollout of MAN’s in certain regional towns where the speed of access provided by the new competitors exceeds that of Eircom. Ironically the government which sold its broadband infrastructure with Eircom six years ago is now seeking to build a brand new infrastructure based on other State assets such as the electricity network.
Perhaps it is time for the government to step in and relieve the ineffective incumbent of their responsibilities and take back control of such a critical national asset.
David Putnam, former film producer, turned politician and now chairman of FutureLab was in Dublin today talking about Ireland’s education needs to succeed in the Digital Age. His entire speech is available on the IIEA website, but the following is worthwhile reproducing in print (highlights are mine):
As I’ve already said more than once, we in the developed world find ourselves in an environment literally saturated with moving and interactive images.
They’re the dominant means by which we increasingly learn about, understand, and hopefully begin to make sense of the world.
In this new learning environment, mass participation in creating, sharing and reusing images has taken hold on a quite extraordinary scale.
Our task is surely to harness these opportunities in addressing the many longer-term challenges we as a global and Digital Society now face.
And with these ‘long-term’ objectives in mind, allow me finish with a bit of ‘tough love’, by re-stating what I see as the crucial the lessons we, living here in Ireland, ought to have absorbed during these past thirty years in considering what makes for a successful society, in an ever-more difficult world.
Firstly, like it or not, getting education right is the whole ball of wax.
Secondly, and at risk of repeating myself, no education system can be better than the teachers it employs, and the standards it demands of them.
Thirdly, teacher training in a digital age has to be viewed as an entirely non-negotiable and continuing process.
The commitment of Governments and individual head teachers to the best possible quality of teacher training, along with regular, preferably annual, time out for professional development, must be absolute.
Fourthly, there needs to be an undisputed global acceptance of the importance of the education of women.
Educated women are the fulcrum around which can be built educated and healthy families – and those families will invariably be smaller, and better cared for.
There is no magic in any of this.
Fifth: this country enjoyed an early and inspired start due to the courage and foresight of Donogh O’Malley who, in the mid-sixties, when it was thoroughly unfashionable, laid the foundations for a strong public focus on education.
His tragic early death was another in Ireland’s history of all too often losing the best of its leaders before they’re able to complete the goals they’ve set themselves.
But it was largely thanks to his imagination that this country was able to take an early lead in encouraging its young people to embrace what was at the time not just new, but largely untried technology.
The gamble paid off, and a well educated returning diaspora had a lot to do with promoting twenty years of unparalleled growth.
But I’d argue that those early successes were insufficiently built upon; to the point at which public expenditure on education, as a percentage of GDP – was allowed to drift downwards – at the very moment it should have been going up – exponentially!
A minimum of seven percent of total GDP is the figure the Government should set and hold to – all other areas of Public Expenditure, including health, must be allocated by the Cabinet in such a way as to make that figure as quickly achievable as possible.
A world class education system will, over time, deliver a world class health service – the reverse can never be possible.
Sixth, and last – although I could go on – young people learn and teachers teach best in environments that they respect, and which accord with what they see and admire in the best of what they see around them.
The physical infrastructure of many of the primary and secondary schools in Ireland should be a cause for national shame.
And when I speak of infrastructure I most specifically include every aspect of connectivity, and its complementary hardware and software.
Choices were made to spend billions of euros on buildings in the private and public sector that now lie either empty, under used or simply not needed.
It’s my personal view that had some fraction of that sum been committed to refurbishing the quality of the schools and classrooms in this country the nation would be far better placed to dig itself out of the hole that all that accumulated debt and waste has helped create.
The good news is that there are really excellent people in this country who understand that education at every level is both the cause and the consequence of any possibility of national renewal.
For too long Ireland relied on the good offices of the Church and the largesse of Europe to address and solve many of these problems.
I came here this morning to argue that, for good or ill, those days are over, and it’s now down to a simple test of national will to invest in the future; to rediscover those things for which this country has rightly been celebrated.
Learning, Culture, and a unique sense of community and place that the world has in the past, and please God will once again, come to admire – and possibly even envy.
So who are the Irish brands that have transferred their business processes to the web and been successful at it? Those of us who work in traditional organisations will be interested in this and in how others have achieved that success.
I’ve undertaken some analysis of Irish websites here before and this time, based on feedback, I have combined insights from both Google AdPlanner and Alexa. Neither in my mind are completely accurate, so take the following as trends or indications of relative position rather than absolute numbers.
Here are the Irish brands that have a traditional bricks and mortar business and have developed a significant online presence. They are ranked according to worldwide unique visitors in December based on data available from Google AdPlanner.
Ryanair.com, love it or loathe it, is by far the largest website in this analysis with nearly six times more traffic than the nearest rival RTE.ie.
There are some clear trends here as some sectors have very much embraced the web and been embraced by online customers. Travel is the clear winner of course thanks to Ryanair and to a lesser extent AerLingus.com. Media comes in next with RTE.ie, IrishTimes.com and Independent.ie completing the top five. The other sectors of note are the banking sectors, primarily as a result of their self-service offerings, and the mobile sectors, thanks to Ireland’s fascination with mobile devices.
Of particular interest to me at the moment are those bricks and mortar consumer retail organisations that have developed successful e-commerce strategies. Most Irish consumer retail brands have an online presence, but which of these are the leaders online. Which bricks and mortar brands have made significant inroads in the e-commerce arena. This is a list of those brands, again ordered primarily based on data from Google:
Leaving aside the travel and mobile sectors there are some other interesting findings here.
I was actually a little surprised to see PaddyPower.com and BoyleSports.com rank so highly. By going international and shifting beyond the world of gambling to “entertainment”, Paddy Power have carved out a really successful online business – two-thirds of Paddy Power group profits in the first half of 2009 came from their online activities.
AAIreland.ie, an online insurance broker, punches above its market share thanks to their very useful RoadWatch and RoutePlanner services, and shows how content strategies online can still deliver. That being said, the online insurance sector is dominant with three insurance agencies making it to the top 20.
Buy4Now.ie, while not in itself a bricks and mortar business, is the platform for a dozen or so Irish business to compete online. These include Arnotts, Elverys, DID Electric and Superquinn. Many of these don’t have their own domain, so it is hard to tell what the size of their individual successes might be.
There is some seasonality showing in the results, given that they relate to last December. Toys.ie, the website of Smyths Toys, probably only features in the top 10 once per year. However by combining a “check store availability, reserve and collect” service with their online store they have succeeded where their competitors have not.
Overall however the e-commerce sector to me seems quite underdeveloped. The travel sector represents a notable success and mobile is also strong. After that the numbers start to get small rather quickly. For me, not competing in international markets is probably the dominant weakness of the sector. Given the ease of access to new markets that the Internet makes possible, is it vision we are lacking in our established brands that prevents more for stretching beyond our own shores?
Much of the growth of electronic commerce has been rooted in convenience – the Internet has made it easier to complete a wide range of tasks without leaving their desks. As our media consumption and shopping behaviours become more sophisticated, success will increasingly rely on the efficiency of online transaction processes.
In the early years of Internet shopping, retailers could rely on the fact that customers were increasingly time-pressed to drive them to their websites. While many consumers turned to the web in the belief that the prices would be lower, there were many others for whom it is just an easier way to get things done.
Having worked for brands with national distributions I was always struck by the higher than average proportions of consumers from commuter belts around large cities. It became clear that the web worked most for those with least time on their hands. People who spend 2-3 hours per day commuting have very little time in their lives for the ordinary things like buying that new fridge freezer, sorting out insurance or paying their motor tax.
Now that nearly every self-respecting retailer is online and has an online order process, the goal posts have shifted – if anything they have moved further down the park and gotten smaller. For evermore time-pressed consumers retailers must also now meet their need to get the task completed in the shortest time with the least effort.
Being efficient means “performing or functioning in the best possible manner with the least waste of time and effort” [ref]. For online customers this means getting the best possible result – the right product for me at the right price – with the smallest amount of effort.
To see what this might mean in real terms let’s have a look at the world’s largest and best known online retailer, Amazon. Even though they don’t use the term efficiency, many of Amazon’s strategies have been absolutely focused on delivering efficiencies for their customers.
Efficiency Imperative #1: Make it fast
Speed matters. Research studies from many large websites indicate that tenths of seconds in the download times of retail websites has an impact on customers’ likelihood to continue. As far back as 2007, Amazon discovered that with every 100 milliseconds increase in the load time of pages on their site sales decreased by 1%. A golden “one second rule” was introduced as a result with the imperative that no webpage should take longer than one second to download [ref].
We need to consider speed not as a technical problem but a business imperative. Technical factors such as server capacity and the complexity of the code will impact on the speed with which a webpage will render in a person’s browser. Google, for example, learned that by cutting its home page size from 100KB to 70-80KB, thereby decreasing upload time, Google Maps’ traffic went up 10% in the first week, and an additional 25% in the following three weeks. As business owners and managers these factors should be understood in order to ensure that download times are reduced to the point of insignificance.
Today, the home page of Amazon.com does indeed load for me in less than 1 second. However the home page of one of Ireland’s largest online retailers took at least five times longer to render. Is that 40% of their customers lost already?
Efficiency Imperative #2: Give me all I need in once place
Many factors go into any purchase decision; the product specifications, the price, how it compares to other similar products, what others say about it. Wouldn’t it be great if you could get everything you need to make your purchase decision in one place. Through the many e-commerce innovations that Amazon have introduced they have done just that, thus reducing the effort that their customers need to make to complete their task and building up incredible customer loyalty as a result.
Customers want to find out about the product. Amazon do that of course on a product page by providing imagery, detailed product descriptions, excerpts and previews from inside of books they stock.
Customers want to ensure that they are getting good value. Amazon do that by highlighting the RRP and showing their retail price together with the value of any discount. Amazon typically also highlights their free delivery option which is a significant decision-maker for online purchases.
Perhaps the most compelling innovation in bringing value to customers is the Amazon Marketplace; where customers are presented with the same product available from others sellers through the Amazon site. Customers can choose both new and used alternatives, all at different prices. Amazon benefits by taking a share of the revenue, but their customers really benefit by being presented with the choice of a wide range of options in one place thus eliminating the need to cross-check with offerings on other websites.
Increasingly, customers trust the views of others “just like me” more than what advertisers or product creators might say. Amazon have long offered other customers’ reviews and ratings and cleverly rank the reviews based on how helpful others find them. Amazon also highlight what other customers do on their website after viewing a particular product and what other similar products they buy – all helping to inform and support customers’ purchase decisions.
There is very little that Amazon don’t do to help you make your decision, and they do all of this on just one webpage – now that’s incredibly efficient.
Efficiency Imperative #3: Make the Checkout Really Quick
Online retailers always bemoan the high level of exits on their checkout page. Customers make all the effort required to decide to purchase and then just before they commit their payment details they disappear in their droves. Now while customers often click through to the checkout just to verify the final final price, for many the process is just too unwieldy to bother. The final critical piece of efficiency is securing payment and delivery/billing details, and once again Amazon excels at this.
We used to think that three clicks was an acceptable number for a customer to achieve a task online. Amazon went two better and introduced “one click” buying, eliminating all of the typical barriers to purchase. Customers do need to be logged in to avail of this service of course, but Amazon remembers all your payment and delivery details. Furthermore, all one-click orders placed within a 30 minute period will be grouped together for payment and delivery where possible, thus further increasing the efficiency of the entire process.
Amazon has recently announced a further simplification of the purchase process by providing an alternative to logging in. Clearly users to all websites often forget their passwords and no matter how simple the password retrieval process is, there will be a high exit rate at this point. The introduction of PayPhrase means that customers can now by-pass the sign-in process by using a 4-digit PIN coupled with a phrase of your choosing consisting of more than two words.
Amazon has long been the standard-bearer for online retail. They have continued to respond to shifting customer expectations, in particular the shift from convenience to efficiency as a key success factor. In the middle of a downturn Amazon’s revenues continue to rise and the share price is at an all time high. It seems that it pays to give customers the efficiency that they want.
One of the biggest lessons I have learned when it comes to succeeding online is the need to shift perspective. Many organisations think that by simply taking existing products, services and processes and transferring them to the net, they are doing what they need to do to succeed. This is simply not enough as it doesn’t recognise that customer expectations and behaviours in the online sphere are distinctly different than in other spheres.
Online consumers are empowered, independent, more price conscious, more informed and more critical than consumers in other spheres. Customers who do not have their expectations met in the online world are, according to Tealeaf in the UK, increasingly likely to tell others – 8 out of 10 frustrated online customers will tell others about their bad experience. Furthermore, 7 out of 10 online consumers will seek out and use online reviews to influence their purchase decisions.
The way consumers think and act online is different to how they think and act offline. To succeed online you need to understand how your customers behave when they are online.
I love the metaphor provided by Chris Meyer, writing in Seth Godin’s new book, when explaining how Capitalism will not die, but adapt to the new world. Meyer cites Darwin’s discovery of 13 species of finch on the Galapagos Islands. These finches all evolved from a single species, the Blue-Black Grassquit Finch commonly found along the Pacific Coast of South America. Once in the Galapagos Islands the finches adapted to their habitat – the size and shape of their bills reflect the plants that were available to them on each particular island. These finches survived by adapting to the particular environments they found themselves in.
Businesses that seek to survive or thrive in a networked economy must adapt to this new world they are operating in. In many instances this involves unlearning how to sell and service customers. As Meyer puts it:
You have a lot to unlearn, and no short-term incentive to do it. But better not ignore the competitor with the strange looking beak.
Many of the assumptions you make about how customers purchase can be thrown out the window. What works in the offline world (retail, face-to-face or via telephone) in many instances simply doesn’t work online. You must seek to understand anew and then validate regularly how customers go about researching and purchasing online. Your marketplace offering should be continuously adapted to meet the ever-changing behaviours of customers. The evolution of e-commerce on the web has been extremely rapid, and with it customers’ expectations of online transaction processes.
Where to start?
Talk to your online customers. Understand the steps they go through in informing their purchase decisions and what their expectations are of online transaction processes. Give your customers what they want. For example, if price is the most important thing for them, then make sure that the prices/rates are clearly visible or accesible from your home page. I am constantly amazed by companies that try to bury their prices even though they know that it is the one thing that their customers want. If 99% of your customers abandon your online shopping process before the check-out are you satisfied that you know the reasons?
Check out your competitors’ online activities. We often have a tendency to scoff at the mistakes of our competitors. However sometimes an apparent mistake can be a clear market differentiator (remember those funny looking beaks). It is always worth understanding the rationale behind why your competitor has gone down a particular route. Are they on to something? It took many of the larger airlines a long time to realise that the new low cost online carriers were on to something. By not reacting quickly enough they allowed the online players to steal a march in the marketplace.
Look to the best in other industries. Too often we spend our time watching our competitors or those in our own industry in other markets. Industry practices and models can become ingrained and players miss an opportunity by not looking elsewhere to understand how to improve. In the sector I operate in I quickly realised that the entire industry was behind the curve and it was actually fairly pointless to spend too much time examining what others were doing.
By looking at sectors that are very advanced online – travel, tourism, music and retail – there is a greater opportunity to learn best practice. Companies such as Amazon, Apple, TripAdvisor and eBay between them will spend millions each year on usability and are also shaping customers’ expectations of what good looks like.
The wonderful thing about learning to be a finch in the online world is that understanding your marketplace is incredibly easy. All of the information you seek is readily available with just a few mouse clicks. While there is no replacement for getting feedback from your customers – one-to-one, in focus groups or through usability tests; there are many free online survey tools that will help you get the answers to your questions very quickly.
Over the next few weeks we’ll take some time to see what good looks like across a number of different industries. Hopefully we’ll start to uncover some new insights into how to sell more online.
Have you noticed? There’s a quiet revolution taking place that is transforming our world. Now this is not a violent revolution, but even so it will mark a shift in the order of things. We are moving towards a world where BIG will be supplanted by small; where corporations and institutions are being sidelined by self-organising collectives of connected individuals. Small is the Next BIG Thing. For me, 2010 is the year to look see how to succeed in a new smaller world.
There has been a growing mistrust of all that is BIG. Big business. Big government. Big economy. Big media. Big brand. Big church. The past 18 months was particularly torrid for BIG. The corporations and institutions that dominate modern society, for increasing numbers, are no longer seen as the bastions of all that is good. The doubters are no longer just those on the fringes or with leftist leanings. Capitalists, communist and fundamentalist alike are taking a stand.
In many cases we are revolutionaries and not even aware of it. Have you transferred from a monopolistic brand in favour of a new market entrant? Have you read a blog instead of an opinion piece on a broadsheet? Have you purchased online from a foreign retailer rather than head to the local mall? There are many small acts that cumulatively and over time mark a clear shift in intention and action away from BIG organisations.
However BIG is not going away. It has been deeply engrained in our cultures, societies and economies over hundreds of years. All of our structures lean towards BIG. However, not all BIG organisations will survive. The past 18 months has seen its fair share of BIG’s collapse – economies, industries and corporations. Those that do survive will be those that adapt to the new smaller landscape. Those that fail will be those unable or unwilling to play any other game than the one they’ve played thus far.
So what will the small world look like? There will be no big centre for one. Rather, there will be distributed networks of individuals, collectives and smaller organisations. It is a world that is self-organising where people develop relationships that are mutually beneficial with new ways of talking, new ways of working and new ways of having fun.
Small economies – economies that are based on networks – will become dominant and exist alongside larger more traditional geo-specific economies. Connected economies have no borders and so are more difficult to regulate and control, but then we haven’t been that great at regulating traditional economies. These new economies are fluid and in constant flux as they develop out of a need and dissolve once that need is met.
There will be big organisations of course; they are the ones that have learned how to make themselves smaller – more individual, personalised, human. There will be a recognition that power is more distributed. Individuals are now empowered to efficiently congregate with a view to taking a position or acting against any prevailing big trends. Mass market communication will not be as effective as in the past, in fact it may actually stimulate an international counter-movement of empowered and collaborating individuals (trivially, think Rage Against the Machine v X Factor).
Here in Ireland we are well positioned to succeed in this new landscape. Being small and by necessity well-connected internationally we naturally “get” what it means to act small on a global stage. Even our biggest is small, relatively speaking, and thus we have the agility to adapt and innovate quickly. The opportunity is clear for an innovation island such as ours and 2010 is the year to make good on the promises and good intentions expressed in 2009.
The Internet, ironically developed for military purposes, has been the enabler of this small revolution. The heave against BIG was already in motion in the post-War years, but as the new millenium dawns the power of the Internet to connect individuals and smaller organisations became very apparent. Today we are already living in a world that is transformed by the combination of mobile computing and ubiquitous network access.
To survive and thrive we must all learn how to harness the potential that exists in the Internet. We need to get better at using it to achieve our objectives. As one well-known Irish entrepreneur says, we’re all in the business of selling. Whether in charity, research, education, manufacturing, retail or service industries, we are all involved in transactional enterprise. To succeed in the online world we need to get better at selling and processing transactions in this smaller world.
In 2010 I intend to shift the focus of what I write here to identify and share insights and innovations from around the globe on how to sell more online. Whether it’s a shopping cart, subscription process or service application we can all learn from the best of what others do to improve how they bring others through their online transaction processes. If I can manage a post a week on this, then by the end of the year we should have about 50 insights that should help us all get better at what we do here.
The connected planet is a smaller planet and there is much greater opportunity for each individual and small organisation or business to have a greater impact. 2010, for me at least, will be dedicated to seeing how small can make it big. I don’t know where it will end up but I hope you join me on this journey.







