Actionable Marketing Advice

The digital revolution has only just begun – the huge potential of the Internet for digital marketing and sales

New Boston Consulting Group report on the Economic impact of Internet on retail

Value/Importance: ★★★★★

Recommended link: BCG Perspectives March 19th article

A new report on consumer and business use of the Internet in the G-20 countries

If you’ve been working in online marketing or Ecommerce for a while, it’s easy to lose sight of how new digital platforms are, and the opportunity they will still bring in the future.

A major new research report by the BCG Group reminds us of the future potential by its review of the size of the opportunity – $4.2 trillion by 2016 they estimate. To put it into a more meaningful perspective, if it were a national economy, the Internet economy would already rank in the world’s top five, behind only the U.S., China, Japan, and India, and ahead of Germany.

You can read the full report summary above, here is what stood out for me:

1. UK leads the way in contribution of Internet to Economy

This has been touted in the UK media today as a feel-good story, but cynics will say it reflects the lack of investment in manufacturing of physical goods. Overall, the report does suggest the innovation in digital technology in the UK is positive.

2. UK also predicted to lead in online retail

This prediction for 2016, again shows the UK with a commanding lead, suggesting many of the G-20 will look to UK retailers and their marketing-tech vendors as good practice to grow their E-commerce.

3. Understand the contribution of ROPO to make the most of Ecommerce

We’ve talked about the vale of ROPO analysis previously since many will browse then buy offline. The importance of this phenomenon is clearly indicated in the BCG analysis.

 4. E-intensity analysis shows a wide variation between countries

In my books I’ve used the EIU E-readinness index for many years to show variation in investment in digital platforms between countries. This is a nice summary of the latest state of play:

5. SMEs: early adopters benefit

My final selection shows that those who deploy the new technologies tend to benefit most. I’m not sure whether this is within sector; you would expect certain sectors to be favoured.

All in all, this was a “feel good” report for me too since it really shows the future potential for anyone making a career in digital marketing. From a business point-of-view it also shows that in many markets, there is an even bigger opportunity, particularly through social media marketing.

 

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  • http://twitter.com/G30Powell Gareth Powell

    Great article Dave, very motivating and inspiring.

    And just what the economy needs – growth!

    Gareth

  • http://twitter.com/DavidValhalla David Hall

    Great the way you have pulled together several strands of information and themes. To digest we almost needs a pestel analysis. UK plc to sustain its economy going forward needs to look closely at its physical goods production: some element of “Made in Britain” must be maintained. However more important is that we must stop ceding control of companies away. How will we build a Nike and an Apple if we keep selling the IP and the company? Cadburys and Autonomy were world class businesses and will both be looked at in the future – when all but a token presence of both remains – as another part of Britains unique experiment in “Cash-in-Capitalism”, which by encouraging “divest and devoid” has brought Britain to its current predicament. How can UK generate growth and employment for a wide variety of people?

    This conundrum and the one thing I want to tease from this array of figures is education. Theoretically and practically inspired it will drive and inform the digital future. Not just the coders and developers and technicians but the people able to think and apply the social media “fascinators” (part of the BV branding model) within production, npd and marketing to add value. A wide variety of different skill sets but all requiring education. We need a root and branch review of schooling and the qualifications system and an immigration points system like Australia’s deployed immediately. Beyond that as Dave says we need a full understanding of the impact of digital and the opportunities it offers at all levels.

    The one thing that stands out from Dave’s excellent piece and the data is the confirmation that the world of the G20 now rewards knowledge and the “knowledge savvy” (those people who can apply the knowledge at a practical gain and will use groupon till like a black star it implodes or causes a significant number of the businesses it works with too) and the UK must act to harness both these megatrends and exploit them. It also means we have to talk in terms of two dynamics not one. Knowledge economy and knowledge savvy economy (with due respect I say Deborah Meadon – recent The Bottom Line “Capitalism” R4 potcast with Evan David and DM is essential listening).

    I personally believe ROPO (research online purchase off) is so significant in some categories (e.g. white goods) that it has changed them forever. A research project completed now I believe would show for some the behaviourto be “second nature” and part of a new generations unthinking behaviour – lets get this done as it will change thinking. Already the knowledge savvy are approaching Groupons clients directly to chase down a margin for both. One thing that doesn’t change is human nature (ventromedial prefrontal cortex rules!) and we all know “split the difference” is a compelling behaviourial economic argument (and win,win if you remember to pull down the range before you start – watch and bbc antiques programme!).

    And then is ROPO at the point purchase….. mobile moves on….

    • http://www.smartinsights.com/ Dave Chaffey

      Thanks for extending my comments David – interesting you pick up on the education angle. With the speed that the technology changes, it’s not so much education on the specific techniques (although we can help there), but rather a willingness for companies to invest in testing and optimisation. I don’t think it’s in the mindset of many senior managers.

      You can see the problem in that for many companies the web is one of the key lead-gen/sales channels, yet the website functionality is only occasionally updated and many still don’t sufficiently invest in content.

      Yep, ROPO is an interesting cultural challenge too, since the web team are often tasked on online leads and sales, so they won’t support the mixed-channel journeys so well.

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