Chris Fletcher

A member of the Gartner Blog Network

Chris Fletcher
Research Director
4 years at Gartner
30+ years IT industry

Chris Fletcher brings more than 30 years of industry experience to his role as research director at Gartner. He has worked in both the analyst and vendor sides of the IT industry in CRM, e-commerce and enterprise applications. He is part of Gartner's CRM and E-Commerce research team and publishes research on CRM and e-commerce segments, including lead management, B2B and B2B2C e-commerce ...Read Full Bio

Fickle Friends and Short Memories: Oh, the Tech World

by Chris Fletcher  |  April 10, 2012  |  Comments Off

The buzz this week is Instagram’s $1 Billion valuation by Facebook, which is of course valued in the … well, uber-billions, I guess. And all on the fairly simple premise that people are using these services, and will continue to use them, which then provides a basis for advertising, which then provides the revenue, which then supports the valuation.

Now, call me crazy, or cynical or even septuagenarian …but does anyone remember Kozmo.com? Webvan.com? Pets.com and the sock puppets? Valuations not in the billions, but solidly in the hundreds of millions. All of which fell to earth like Icarus.  Because nobody used them.

Now fast forward from 1999 to today, maybe even this week: if enough users decide that Instagram is no longer cool, maybe just because Facebook acquired them and hopes to make them yet another way to suck up your personal data, what happens to Instagram’s valuation? Does anyone really think that Facebook is immune to becoming, well, not the place to go anymore?  Remember MySpace, which stopped being the social place to go, for no other reason than that nobody went there anymore? 

The technology world is nothing but fickle and fast, and memories are almost always short.

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A Tale of Two (E-Commerce) Retailers

by Chris Fletcher  |  February 4, 2012  |  Comments Off

Last week I attended the Massachusetts Internet & Technology Exchange (www.mitx.org) conference on E-Commerce, held at Microsoft’s R&D Center in Cambridge MA and on the other side of the Charles River from Gartner’s Boston offices. MITX is a non-profit trade association for digital marketing and the Internet business industry, with a membership of technology vendors, user organizations, students, developers, consultants, and the occasional tech industry analyst makes it a unique place to get a fresh perspective on things related to the web .

The two best presentations of the day came from retailers at opposite ends of the e-tailing spectrum. At one end, Staples, the #2 internet retail according to the Internet Retailer 500 (http://www.internetretailer.com/top500/list) and seller of all things office supply (and, soon of SMB services – see below). At the other end, Newbury Comics, a Boston – based purveyor of music, comic books, and apparel, and for more than two decades one of the things that makes Boston a great town to live in.

Staples: According to Brian Tilzer, VP of E-Commerce at Staples, 40% of Staples’ sales touch their web or e-commerce sites. To keep pace with their projected growth Staples is looking to expand its web and e-commerce team from around 700 associates today, by 3X, or about 2,100 professionals total. To support this growth in personnel, and to attract the right kind of talent, Staples also announced plans to open a Cambridge research center and innovation hub. (Note to real estate professionals and headhunters: Not so confidential rumors have it that Amazon is looking to open a Cambridge-based R&D center early in 2012 to fuel – guess – digital research and development. With Microsoft’s R&D Center already established in Cambridge there is a real-time land and talent rush going on in Cambridge, which is an interesting, if somewhat sad, counterpoint to some of the job and real estate trends in other parts of the country).
Staples also plans to spur substantial revenue growth by providing office solutions and services (think: payroll services, web and hosting services, payment services, and related Cloud-based applications for SMBs) through its web properties to fuel future growth and augment their staple (sorry) business in office supplies.
Core Takeaway: Think Digital commerce.

Newbury Comics: The best part of the day for me was, by far, the fireside chat with Mike Dreese, CEO and founder of Newbury Comics(http://www.newburycomics.com) , and Scott Dirsner of the Boston Globe. First, if you don’t know anything about Newbury Comics, it used to be the place to go for records you couldn’t find anywhere else: Think – Punk, Ska, Thrash Metal, and Imports (Full disclosure: I am one of the few people around that still buys CDs. At a store. Almost always Newbury. I rip my own MP3s. Go figure). Today they sell alternative lifestyle stuff, which roughly translates to “We sell fun stuff to people that like music and comic books, and are likely to like other fun stuff.”
Newbury is a privately held company and as such has the luxury of being candid and honest about what’s going on behind the covers. Plus, it is pretty hard to imagine Mike as being anything less than candid about what he thinks. Really refreshing, especially when it runs across the grain of most conventional e-commerce thinking. Revenue: About $75 Million last year, with about 1/3 of that online. Comments from Mike:
When he first started selling records and comic books “…scarcity was our friend” because they sold things you couldn’t find anywhere else. Punk LPs imported from England. Japanese comic books. They charged a premium for this. Still do.
They do a lot of e-commerce selling, not only through their own site, but through Amazon and eBay. How do they maintain their margins? Scarcity – selling product you can’t find easily anywhere else. This is sometimes risky: sometimes edgy products fail and you end up eating the inventory. A few pay off.
“I don’t really care about mobile commerce.” He does, of course, he just doesn’t have to support mobile devices on his own web site. Most of Newbury Comics’ mobile presence is provided for them through their 40,000 Facebook followers, 320k social media contacts, and through affiliate sales on Amazon and eBay. Which, of course, all support mobile. Why invest money in building mobile when someone else he can sell through has already done it?
He expects the majority of their brick and mortar stores will go away, and a majority of the business will go to the web and e-commerce.  Why do you still see so many Newbury Comics stores in strip malls around the Boston area? Because there is lots of mall space available, partly due to the recession, partly due to other competitors moving their business to the web. Of course.
Core Takeaway: Question conventional wisdom.

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Managing E-Commerce through Mergers & Acquisitions

by Chris Fletcher  |  December 20, 2011  |  Comments Off

An October research note titled “M&A Activity Poses Risks and Benefits to Ecommerce  Plans”  gave clients a short list of mergers and acquisitions in the e-commerce sector over the prior 18 months.  The note also gave clients a set of tactical guidelines to follow as they managed through vendor transitions that might have an impact on their organization’s e-commerce critical technology path. 

2 months later, we can add a few more M&A transactions to the list:

  • IBM: Announces plans to acquire Emptoris, a provider of supply and contract management solutions.
  • IBM: Also announces plans to acquire DemandTec, a provider of  price optimization and merchandising for retail.
  • Microsoft: Announces it is handing off future development, marketing and support of the Microsoft Commerce Server product and technology (post Commerce Server 2009 R2) to Acentium.

Moving forward into 2012, e-Commerce executives need to anticipate ongoing market disruption as merger and acquisition (M&A) activity continues between vendors and in adjacent technologies.  Map vendors and technologies that are part of the critical path of your company’s e-commerce objectives, and identify contingency plans for vendors that may be impacted.  Integrate e-commerce interactions with customer points of contact in the contact center, retail partners, channel partners, and direct sales. Plan for rapid adoption of mobile, tablet, and social technologies into your e-commerce platforms using short-term solutions, at the same time as you evaluate longer-term architectural tools and platforms as they become available.

Here is a summary of our recommendations if you are on the receiving end of M&A  activity with your organization’s e-commerce vendors.  For more details, including a 12-month set of tactical guidelines, click here: <http://www.gartner.com/resId=1830919 >

Recommendations

  • Evaluate your vendor’s vision and strategic plans critically, and from the perspective of short term challenges to the business. Realize that the biggest impact to your organization, and the greatest level of uncertainty in the vendor’s organization, is likely to be felt in the short term of six to 18 months after an acquisition.
  • Identify your business requirements for the next 18 months, and map dependencies and integration points with back-end ERP, CRM, supply chain management (SCM) and payment/subscription applications against your vendor’s technology road map.
  • Develop contingency plans in the event that short-term commitments from your vendor are not met. Identify internal and external “reserve” resources that can be brought to bear for custom development if needed.
  • Quantify the impact to your e-commerce operations, your customers and your organization if you decide to transition away from your incumbent e-commerce provider. M&A activity can be an effective catalyst to force a re-evaluation of current e-commerce implementations.

What has been the impact of M&A activity on your organization’s e-commerce and CRM plans?  Are these changes a net + or a net – for your company?

 

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Multi-Threaded Conferences

by Chris Fletcher  |  December 15, 2011  |  Comments Off

The SAP Influencer Summit was held in Boston this week, and I was in the audience, along with several of my Gartner analyst peers and 150 other technology analysts, journalists, and bloggers. During the summit presentations few eyes were on the speaker or on the slides: everyone, literally everyone, was looking at the screen of their laptop, iPad, or mobile. Twitter, Google, blogs, email, and, occasionally, Microsoft Word, predominated. Tweets flowed steadily throughout the day, providing an interesting back-channel of communication for attendees that wanted to share an idea, question an assertion, or confirm a point they missed.

The fact that attendees are using iPads to access Twitter or Google at a conference is not a major revelation. What is interesting is that we have become so gradually acclimated to mobile devices and Cloud-based social applications that we haven’t noticed what a major change they have made to the way conferences are delivered and consumed.

What used to be a Talking Heads transfer of information has now become a multi-threaded, socially interactive experience in which the speaker no longer provides facts, but instead a theme and a forum for discussion. Attendees have the ability to question, criticize, agree with, or cross-reference the speaker’s message while adding their own contribution via the Twitter stream. Unfortunately, with the possible exception of PR staff, which enjoy the greater visibility that iPads and Twitter streams bring to their conferences, neither the attendees nor the speakers have leveraged the true potential that conferences have today.

Do these points resonate with your own experience, either as an attendee or as a Talking Head?

If you are an attendee:
• Google, Twitter, and email provide a great way to get a continually refreshed back channel of information. Envision the sub-title of a foreign movie, but with translations being made by everyone in the audience. All at the same time. If you are one of the Luddites not yet on Twitter, I recommend signing up in time for your next conference: It brings in a new dimension you will otherwise be missing.
• On the other hand, and especially if you are an inveterate blogger or Tweeter, it is easy to get caught up in the Twitter or blog feeds and lose track of the event and presentation content itself. Don’t let the data feed become the event.
• Use Google to get a 2nd opinion, or to verify assertions presented as facts. You can get a different perspective on the meaning, context, and source of the data.

If you are a speaker:
• Work to dynamically engage the audience with your presentation and with your presence. It is tough to compete with an iPad, especially when you may be speaking in a monotone or using overly complex slides that don’t immediately convey your message.
• Provide factoids frequently. Tweeters and bloggers are always looking for a sound bites worth of data that are interesting, provocative, and unique. Give it to them. About once every 3 slides.
• Leverage social to your own advantage. Include links to your blog or Twitter. Provide url’s in your presentation that direct them back to your web site where they can get details on your topic, product, company, or point of view.
• Most importantly, remember that even in this era of mobile and social, people attend conferences for a reason. To meet with, interact with, and share insight with people.

Totally unabashed, self-serving promotion: Gartner’s annual Customer 360 event will be held on March 14-16 at the Gaylord Resort in Orlando, FL. Several members of Gartner’s research analyst team will be there to interact with you, your Twitter stream, and your socially enabled world at large on CRM, e-commerce, Social CRM, and other timely topics from the world of customer engagement. We hope you are able to join us.

http://www.gartner.com/technology/summits/na/customer-360/

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“Old school” Lead Management

by Chris Fletcher  |  December 13, 2011  |  Comments Off

Senior executives consistently rank customer acquisition and customer retention as their #1 and #2 priorities.  They put constant pressure on the marketing organization to feed the sales engine, and marketing executives scramble to generate leads – qualified selling opportunities – using email campaigns, mobile search, webinars, digital marketing, social networking, and any other digital medium they think may hold promise.  With all the attention – some would argue, hype –  focused on always on,socially enabled, digitally driven and mobile enabled marketing channels, is “old school” lead management dead?  Old school defined as the off-line, face to face, relationship driven school of marketing and selling?  Hardly.

Insurance agents and brokers use face to face seminars to deliver a product message and a personal interaction to a room full of prospects, albeit prospects that were likely brought together by a well targeted web and email campaign.  In an era where content and presentations are delivered over the web, companies in high tech, financial services, and life sciences continue to invest substantial amounts of their budget in trade shows,  physical ones, with booths and demos and tchotchkes, ostensibly to generate leads, but in reality, to build direct, human interactions and contacts.  Companies selling complex manufactured or technology components find that, wonder of wonders, at the right point in the lead management process a telephone call – with permission, and initiated by a knowledgeable (and usually non-commissioned) pre-sales rep — can qualify a timeframe and budget, provide timely product information, and put a human face (well ok, voice) on an otherwise impersonal, formerly digital-only interaction. 

Old school?  Hardly:  this is new school lead management, baby.  Oh, and the hype you’ve been hearing about leveraging Twitter, LinkedIn, context aware mobile devices, tablets, SEO, web analytics, and dynamic digital content?  It’s mostly valid, and even valuable.  Just don’t get a myopic focus on the new stuff and forget about the old.  After all, sales professionals are still reading Dale Carnegie.

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Hello, World Redux

by Chris Fletcher  |  December 8, 2011  |  Comments Off

Hello, World!

OK, I realize that my first blog didn’t start with the usual ‘Hello, World’ introductions and pleasantries but instead dove into the cold New England waters of e-commerce and lobsters. Let me take a short step back to introduce myself and let you know what you can expect here.

I have:
.Spent 30 years in the technology industry in job roles ranging from industry analyst, to business development, to global product marketing, to sales/marketing/general management.

.Worked for a few very large companies, and for a few very small companies. I can’t really tell you which was better.

.Worked for tech companies that have gone public, and for companies that have gone Chapter 11. I can definitely tell you which was better.

.Been a tech industry analyst for about 10 years, 4 or 5 of which I have spent with Gartner and AMR Research. I can definitely tell you that the industry analyst role is one of the best jobs in the tech industry, if you like to write, genuinely enjoy working with clients, and are not afraid to take a position.

The CRM team at Gartner that I am part of includes about 15 analysts.  I have published research and presented at Gartner and client events on CRM, E-Commerce, Lead Management, digital E-Commerce (digital products, payments, and subscription management), Partner and Channel Management, and Social CRM.  My Twitter feed (@ChrisFletcher) covers a broader range of topics (technology, cycling, Americana music, and skiing).

Your comments, inquiries, and feedback are valued and welcomed.  I can only promise you in return candor, fresh insight, and, sometimes, brevity.

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Build vs Buy in E-Commerce: Is it a lobster trap?

by Chris Fletcher  |  December 6, 2011  |  1 Comment

Here in New England fishermen use lobster traps to catch, no surprise, lobsters. If you’re not from New England, a lobster trap is essentially a box filled with bait (e.g. fish offal) with a one-way net that covers the opening. The lobster goes in to get the bait, but can’t get out again. For companies that have chosen to build their e-commerce platform, rather than license a packaged or SaaS solution, I wonder whether the build route is a sort of lobster trap. Once you are in it you can’t get out again: the financial investment has been made, the site is generating revenue, and the organizational structure needed to maintain it has been created.

Of the 500 largest e-commerce retailers in the industry, about 52% have built their own e-commerce systems. Of more interest, over the past 3-4 years there appears to have been very little migration away from these internally developed e-commerce systems, even given the challenges of keeping these systems current in the face of rapid technology change (Smart phones, tablets, Cloud, and social networking to name a few). Companies we talk to regularly cite the cost, complexity, and organization scale needed to maintain these home-grown systems, but few migrate to licensed or SaaS alternatives even as these packaged e-commerce solutions gain functionality, scale, and partner ecosystems.

Build vs. Buy decisions for e-commerce often focus on technology comparisons, but the issues extend beyond architecture and feature/function.

Buy: Consider buying a licensed or hosted e-commerce solution when your company:

  • Lacks the internal technical and management resources required to build, deploy, and support an e-commerce system;
  • Cannot keep up with the pace of innovation in e-commerce, particularly in areas such as mobile and tablet support, integration with social software, or managing billing and payments processing in-house;
  • Competes in a market that requires rapid response to market changes and has short “time to productivity” requirements that cannot be met with in-house development.

Build: Consider building an e-commerce solution when your company:

  • Has a complex product, a broad and complex distribution chain, or unique market requirements that can be addressed only by with a custom-built application;
  • Believes that its own e-commerce design will provide a unique competitive advantage;
  • Has made a large investment in e-commerce early on, and now finds converting to a licensed or hosted solution too costly or too disruptive to their business;
  • Has depreciated much of its investment in its e-commerce environment, and the incremental investment required for innovation and ongoing support is less costly than starting over with a licensed or SaaS alternative;
  • Has built up a large IT organization and has legal, financial, or organizational limitations on how quickly it can reduce the size of that staff.

Has your company gone Build or Buy? Are you satisfied with the results, and if not, are you able to make a change?

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