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284 Part 2 Strategy and applications

Digital channels = the web site supported by e-mail and mobile messaging
Find = improvements to site search functionality
Compare and select = using detailed product descriptions, rich media and ratings
Merchandising and improving conversion = through delivery of automated merchandising
facilities to present relevant offers to maximize conversion and average order value.
Additionally, use of structured testing techniques such as AB testing (see Chapter 12) and
multivariate testing will be used
Experience rated as excellent = we will regularly review customer satisfaction and advocacy
against direct competitors and out-of-sector to drive improvements with the web site.
Scenario-based Scenario-based analysis is a useful approach to discussing alternative visions of the future
analysis prior to objective setting. Lynch (2000) explains that scenario-based analysis is concerned
Models of the future
environment are with possible models of the future of an organization’s environment. He says:
developed from different
starting points. The aim is not to predict, but to explore a set of possibilities; scenarios take different situ-
ations with different starting points.
Lynch distinguishes qualitative scenario-based planning from quantitative prediction based
on demand analysis, for example. In an e-business perspective, scenarios that could be
explored include:
1 One player in our industry becomes dominant through use of the Internet.
2 Major customers do not adopt e-commerce due to organizational barriers.
3 Major disintermediation (Chapter 2) occurs in our industry.
4 B2B marketplaces do or do not become dominant in our industry.
5 New entrants or substitute products change our industry.
Through performing this type of analysis, better understanding of the drivers for different views
of the future will result, new strategies can be generated and strategic risks can be assessed. It is
clear that the scenarios above will differ between worst-case and best-case scenarios.
Simons (2000a), in referring to the vision of Barclays Bank, illustrates the change in
thinking required for e-business vision. He reports that to execute the vision of the bank ‘a
high tolerance of uncertainty’ must be introduced. The group CEO of Barclays (Matt Bar-
rett) said:

our objective is to use technology to develop entirely new business models ... while trans-
forming our internal structure to make us more efficient and effective. Any strategy that
does not achieve both is fundamentally flawed.

Speaking at E-metrics 2008, Julian Brewer, Head of Online Sales and Content, Barclays UK
Retail Banking explained how Barclays Bank was using digital technology today to make
their e-commerce more efficient and effective, including:
Using predictive web analytics (see Chapter 12) which connects online data to effective
action by drawing reliable conclusions about current conditions and future events;
Advanced tracking of different online media across customer touchpoints, in particular
paid search such as Google AdWords which accounts for 60% of Barclays spend on digital
media.
Benefits in 2006 were a 5% improvement in paid search costs worth £400k in saved costs
(showing that around £8 million annually were spent on paid search and the importance of
developing a search engine marketing strategy). An additional 6% of site traffic was gener-
ated by applying analytics to improve search practice equating to £1.3 million income
(Brewer, 2008).
From a sell-side e-commerce perspective, a key aspect of vision is how the Internet will
primarily complement the company’s other channels or whether it will replace other chan-
nels. Whether the vision is to complement or replace it is important to communicate this to
staff and other stakeholders such as customers, suppliers and shareholders.