Digital Marketing Report - Comparing and contrasting the NICE value creation drivers of Mr Porter and bet365 PDF

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Assessed report that contributed to a large portion of the final module mark. I graduated with a 1st class degree. Free to pick any two companies....

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Comparing and contrasting the NICE value creation drivers of Mr Porter and bet365. 1.0 Introduction This report aims to compare and contrast the NICE value creation drivers for two well-known websites from different sectors. These factors are Novelty, Lock- In, Complementarities and Efficiency. I will analyse and rank the importance of the Amit and Zott value creation drivers for both websites, then summarise my report. My first chosen website is Mr Porter, a high-end men’s fashion retailer. With fashion being one of my main interests, I have experienced many online retailers. It has always stood out to me as the leading site in terms of customer experience. My analysis of Mr Porter’s value creation drivers in this report will help me understand how and why the site offers such a good buying experience. The second website I have chosen is bet365, one of the world’s biggest online gambling companies. Similarly, I have chosen this website as it is in a sector that interests me and I have user experience. I’m a big sports fan and enjoy occasional betting, therefore have used a multitude of online bookmakers. I always seem to return to bet365 not necessarily due to better odds, but because of the superior user experience. Comparing and contrasting bet365 with Mr Porter will help me discover why both offer a pleasant user experience and will also help me understand which NICE drivers are more and less important in different sectors. 2.0 Analysis 2.1 Novelty Novelty is defined as “the ability to implement new and original ideas into a market, achieved by coming up with new products/services or innovating current processes” (Johansson & Mollstedt, 2006). Mr Porters’ use of editors’ notes (Figure 1) is pioneering in online retail. These notes, available for every item on the site: give a brief history of the brand, recognise celebrity customers, give a detailed product description and suggest other products to pair with the item. Social media integration is at the bottom of the page, enabling customers to share the product. These extras create value for Mr Porter by making a customer’s purchase more immersive and memorable than other sites. The products sold are often expensive, meaning customers want to maximise their buying experience and will be keener to share it. I rank novelty as the most important NICE driver for Mr Porter as these features differentiate it from other fashion retailers.

Figure 1

Comparatively, bet365 are less able to be novel. One novel service offered by bet365 is the ability to stream live content (Figure 2). These live streams are often of niche sporting events, giving customers an incentive to bet on events that they would not have previously. This is because they are able to watch the event live and monitor their bet. However, this feature is not unique to bet365. I have ranked novelty as the 3rd most important NICE driver for bet365, as it operates in a sector where it is difficult to be novel due to the level of competition. Novelty is important by aiding Mr Porter to create a memorable buying experience, but for bet365 the experience is fuelled by different drivers. Figure 2

2.2 Lock-In “Lock-In is the power to keep third parties attracted as business model participants” (Zott and Amit, 2010). For Mr Porter, the only element of lock-In is trust. In the world of high-end fashion, counterfeit goods are a concern. As shown in Figure 3, Mr Porter are an ‘authorised online distributor’ and can guarantee that every item sold is 100% authentic. This will encourage Lock-In as customers know the products are genuine, making them likely to return to the site. Figure 3

Due to the premium price of the products sold, loyalty schemes and many other methods of lock-in would not be practical in terms of cost. As a result, I have ranked lock-in as the 4th most important NICE driver for Mr Porter. Lock-In is much more prominent in bet365, shown by the sign up and loyalty offers. Figure 4 shows how these offers can create lock-in. Figure 4 Sign-up offers

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Loyalty bonuses

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Bet credits for new customers Winnings have to be staked again in order to be withdrawn Prevents users from signing up solely for the bet credits, taking their winnings and then no longer using the site Free bets granted to existing customers Typically, low value Frequency and value of free bets received dependent upon the number of bets a user has placed Users motivated stay with bet365 in order to receive more loyalty bonuses

I have ranked Lock-In as the 2nd most important driver for bet365 as they rely heavily on customer loyalty in order to be successful. Loyalty bonuses are more affordable for bet365 to implement as the free bets are much lower in value than Mr Porter’s products.

2.3 Complementarities “Complementarities are present whenever bundling activities within a system provides more value than running activities separately” (Zott and Amit, 2010). Bundling can be found on Mr Porter in the ‘wear it with’ section. This could lead to a customer impulse buying a whole outfit when they were initially looking for a single item. This is used by numerous online retailers, but is less important to Mr Porter compared to a site like ASOS. This is because (Figure 5) Mr Porter’s items are typically expensive making impulse buying less common. As a result, I have ranked complementarities as the 3rd most important NICE driver for Mr Porter. Figure 5

The only complementarities I have found on bet365 are links with 3rd parties, like PayPal, when depositing and withdrawing funds. I have found no other evidence of complementarities so have ranked them as bet365’s 4th most important NICE driver. Bundling is difficult in the gambling sector as it is a unique service and few other products fit with it. 2.4 Efficiency “Efficiency-centred design refers to how firms use their activity system design to aim at achieving greater efficiency through reducing transaction cost” (Zott and Amit, 2010). Figure 6 shows some of the efficiency features on Mr Porter’s site. These features give customers symmetric information, which is important when purchasing premium price goods. As a result, I have ranked efficiency as the 2nd most important NICE driver for Mr Porter. Figure 6 Detailed product descriptions

Free returns

Clothes are individually measured to provide accurate sizing information Filters & sliders are able to be used to improve search times Detailed product care instructions

Pictures and videos of models wearing the clothes Live online chat with a Mr Porter ‘expert’ Quick and easy check-out

Efficiency is also a key driver for bet365. They have built a very user-friendly interface for betting, achieved by: extremely quick and easy cash deposits/withdrawals, clear in-play and

pre-match sections and making it easy to find events in any chosen sport. Users can also select to have odds displayed in decimal, per their preference. Additionally, bet365 have a mobile app (Figure 7) which makes betting on the go extremely easy. Figure 7

I have ranked efficiency as the number one value creation driver for bet365. Whilst efficiency is important to Mr Porter, it is crucial for bet365. I feel that ease of use is essentially what differentiates bet365 and gives them a competitive edge. 3.0 Summary In conclusion, my report has found that the NICE value creation drivers are of varying levels of importance dependent on the market that the firm operates in. For Mr Porter, novelty was very important but lock-in was less so. The opposite was true for bet365. A common key driver for both sites was efficiency. This is because different drivers, such as novelty or lockin, can be used to gain a competitive advantage in different markets. However, efficiency was crucial for success in both. Bet365 has put huge emphasis on its efficiency and has used this to gain an edge over the competition. My report has helped me understand which drivers are important and how value has been created around said drivers to achieve success. 4.0 References Bet365.com. (2017). bet365 - Sports Betting, Casino, Poker, Games, Vegas, Bingo. [online] Available at: https://www.bet365.com/#/HO/ [Accessed 14 Nov. 2017].

Johansson, N. and Mollstedt, U. (2006). Revisiting Amit and Zott’s model of value creation sources: The SymBelt Customer Center case. Journal of Theoretical and Applied Electronic Commerce Research ISSN 0718–1876 Electronic Version, 1(3). PORTER, M. (2017). MR PORTER | Designer fashion for men. [online] MR PORTER. Available at: https://www.mrporter.com [Accessed 14 Nov. 2017]. Zott, C. and Amit, R. (2010). Business Model Design: An Activity System Perspective. Long Range Planning, 43(2-3), pp.216-226....