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Afraid of Customer Reviews? A Word of Advice. February 22, 2010

Posted by Michael Carney in : ecommerce , add a comment

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Are you hesitant about implementing ratings and reviews on your website because you’re concerned about negative comments?

It’s a common complaint. The US National Retail Federation’s Ellen Davis spoke about the issue to Brett Hurt, CEO of BazaarVoice, a social commerce technology company that powers ratings and reviews for 50 of the top 100 US retailers. Here’s what he had to say:

“Every day people are coming to your store and having experiences – positive and negative. You’re kidding yourself if you think all customers have great experiences, and the truth is that most unhappy customers won’t ever take the time to write a letter or complain to a manager. So, what happens? You see the negative effects in one way or another – defection to your competitors, high return rates, and decreasing sales. Why guess at what is happening when you can make it easy for consumers to communicate with you, and each other, so you can solve these problems and uncover new opportunities?

“You should also note that our research over the past four years has shown that over 80 percent of all reviews are positive – worldwide. There’s simply no reason to hide from reviews. They are proven to increase sales, decrease returns, lift customer loyalty, and transform the practices of your marketers and merchandisers. To think you can hide from the effects of word of mouth are misguided, and there is no debate about the positive, highly quantifiable effects of embracing it.”

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Is Customer Loyalty Even Possible Online? February 22, 2010

Posted by Michael Carney in : ecommerce , add a comment
How does a brand create loyalty when shoppers can easily switch to other brands they see on the Internet? David Selinger, CEO of Rich Relevance, a San Francisco company that makes personalization and product recommendation tools for eCommerce sites, such as Sears, WestLaw and Patagonia, shared his insights in a recent Forbes article.
Creating and maintaining loyalty as consumers move across channels is the biggest obstacle for all marketers today. Shoppers are constantly searching for items online, comparing prices at different sites, coming back to a retailer’s site (or not) after searching on Google ( GOOG – news – people ) or Amazon for the same product. Or they might go into a store intending to buy a certain product, but then use their mobile to look up prices at competitors’ Web sites. (According to Motorola ( MOT – news – people ), 51% of shoppers overall and 64% from the 18-to-34 age group used their mobile phones for in-store shopping-related activities during the 2009 holiday season. This included comparing prices, finding user reviews and making a purchase via mobile.)
Overall, 43% of consumers switch channels during the shopping process, according to a June 2007 Forrester study entitled “The Web’s Impact On In-Store Sales: U.S. Cross-Channel Sales Forecast, 2006 To 2012.” The problem is, as people move between channels–online, offline, and mobile–they have a 45-50% chance of changing the retailer they will end up purchasing from. People want the best deal today; they are not loyal to brands or certain retailers.
The loss of loyalty isn’t simply a problem, it’s got massive opportunity cost as the multi-channel shopper should be considered our most valuable asset. Whatever the channel a customer uses to interact with a retailer, those interactions should be problem-free, but they should also be full of value-added, personal, engaging offers. And these interactions should be seamless–one customer, one experience. When a customer frequents a retailer’s site online and then goes into the physical store, the sales associates should be able to access that person’s past sales history to recommend items they’d be interested at the price points they are willing to pay–and vice versa.
One way to build loyalty is to converge on one concept of engagement across channels. Most retailers do this independently in the offline and in the online channels; but few focus on creating a consistent user experience across channels, which may explain why retailers are losing 45-50% of shoppers as they switch channels. Instead, retailers need to give consumers a reason to continue shopping at the same retailer–regardless of channel by providing a personalized experience in every channel–enticing people not only with recommendations for specific products and services that meet their needs, but with recommendations for products at price points that match their past purchase behavior. After each purchase marketers should utilize every channel to present consumers with relevant, personalized offers over time–by e-mail, Twitter, iPhone app, personalized recommendations on their site, etc. That way shoppers don’t need to switch to another retailer to get the products they want at the price they want to pay; they trust their preferred retailer to present them with the most relevant products and the best deals, so they don’t need to comparison shop.
It ain’t much, but it’s a start.

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Coupons and/or Promotional Codes: Now is the Hour February 11, 2010

Posted by Michael Carney in : ecommerce , add a comment

There’s never been a better time to offer coupons and/or promotional codes than right now, in the current economic conditions.

Consumers have started to rediscover ‘The Joy of Coupons’, with US coupon usage rising in 2009 for the first time since 1992. That’s according to Inmar, a leading promotion transaction settlement provider.

US coupon distribution in 2009 hit the highest level recorded since Inmar began tracking trends in 1988. For the first time in 17 years, consumers used more coupons than they did the year before, with 3.3 billion consumer packaged goods coupons redeemed, a 27% increase over the 2.6 billion redeemed in 2008.

The rise in coupon use started in October 2008, coinciding with news of the US financial crisis. That has led to five consecutive quarters of double-digit growth (based on percentage change from the same period of the previous year).

The increase in redemption goes hand-in-hand with an increase in distribution. Despite the tight economy, marketers invested heavily in coupons, boosting the number available to the highest level in over 30 years. Brands issued 367 billion coupons, at an average face value of US$1.44, indicating that they were committed to promotions in 2009.

Of particular importance to our constituency:

However, in spite of the meteoric rise in online and digital couponing, the traditional newspaper-distributed couponed inserts still account for 89% of all coupons distributed and over half of the coupons redeemed. American consumers expect to find coupons in their Sunday papers, and they will continue to look there for them.

As coupon numbers across the board rose in 2009, brands were forced to mitigate the cost of increased redemption by maintaining face values and keeping expiration periods in check. In 2009, face values declined by a penny, reversing a multi-year trend of increasing values. Expiration periods were shortened by 10% last year, after years of virtually no change.

So — time to get into couponing and promotional offers (if you hadn’t already). Just one note of caution — be totally transparent about your offers, and avoid falling into the trap that Borders did (which attracted the attention of an unwanted suitor, the Commerce Commission):

In November and December 2009 Borders advertised a promotion with the headline offer “Receive $20 in vouchers for every $75 you spend at Borders until Christmas.” The promotion was widely advertised in-store and online through an e-newsletter and on Borders’ website. However, the small print of the offer specified that customers could only redeem one $10 voucher in January and a second $10 voucher February, which, in the Commission’s view, materially changed the headline offer.

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The State of Online Retailing: US 2009 February 7, 2010

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The average customer service cost per online order for American retailers surveyed in mid-2009 was US$4.30.

That stat comes from Shop.org’s The State of Retailing Online 2009: Merchandising Report, conducted by Forrester Research amongst 119 US retailers.

Based on that research, it seems that optimizing the basics – not just adding “shiny objects” – is where retailers were prudently focusing in 2009 (and are likely to continue to focus in 2010).

Specifically, retailers set the following as priorities for their Web sites:

So, what should the etailing industry expect to see in terms of specifics?

“The State Of Retailing Online 2009: Merchandising Report” can be purchased directly at www.shop.org/soro.

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Where “stylish young Kiwi professionals” shop online February 3, 2010

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Recession? What recession?

Not everyone has bought into the notion of doom and gloom and economic downturn that’s been afflicting the chattering classes around here.

An Experian Hitwise study (the New Zealand Lifestyle Mosaic Report) compiled by Senior Analyst Sandra Hanchard explores the online behaviour of this lucrative segment, which it dubs “Urban Intelligence”:

  • Urban Intelligence consumers are stylish young professionals, aged 25-34 years. They are very ambitious, driven by success and well-educated. Most work in professional and technical occupations where they earn well above average household incomes, of over $56,000 per annum. Cars, clothes and accessories are seen as an extension of themselves. They wear stylish clothing with the right labels to get them noticed, and express themselves through conspicuous purchases.
  • These people are technologically savvy early adopters and are into computers and associated technical gadgets. They are heavy Internet users, using it for music downloads, online shopping and entertainment, and would prefer to do all their banking without having to visit a branch. They consider themselves intellectuals and enjoy cultural pursuits, appreciating art and fine food, but are just as comfortable with takeaways and a movie.
What does Experian Hitwise know about this Urban Intelligence segment (accounting for 4.8% of New Zealand households)?
Quite a bit, much of it detailed in the free report.
What caught our eye in particular?
  • This group includes a higher proportion of those of Asian descent than the population at large, and as a result they can be found participating in disproportionate numbers on Asian language networks, including SkyKiwi (9.54%), 6park.com (10.09%), Yeeyi (10.4%) and Cyworld (11.94%). In comparison, Facebook attracts 7.42% of the Urban Intelligence Group.
  • The Urban Intelligence set are significantly lower users of Trade Me (indexed at 69 versus the general population) — presumably their obsession with brands and with the finer things of life means they’re not afraid to pay retail.
  • Retail verticals that did perform strongly in attracting visits from Urban Intelligence included Apparel and Accessories (indexed at 125), Grocery and Alcohol (125), Department Stores (111), Flowers and Gifts (111), and Health and Beauty (109).
  • Retail verticals under-represented by Urban Intelligence included Toys and Hobbies (69), Sports and Fitness (80), Music – Shopping (89), and House and Garden (92).
  • In that top retail vertical, Apparel and Accessories, T-Shirts were the most popular offering. Designer t-shirt online shop, 1-Daytee was the leading Apparel and Accessories website visited by Urban Intelligence. US t-shirt company, Threadless.com also ranked in the top 10, and attracted a significant percentage of visits from Urban Intelligence (14.36%).
  • There was a mixture of overseas luxury brands (e.g. Net-a-porter.com and Louis Vuitton) and domestic retailers (e.g. Ezibuy, MaxShop.com, Pumpkin Patch New Zealand) visited by Urban Intelligence.
The Top Ten Apparel and Accessories Destinations (ranked by volume of traffic):
1 1-Daytee 5.94%
2 Ezibuy New Zealand 3.52%
3 UDN Shopping 12.44%
4 MaxShop.com 7.97%
5 ASOS 17.38%
6 Louis Vuitton 19.30%
7 Kathmandu New Zealand 5.66%
8 Net-a-porter.com 18.46%
9 Threadless.com 14.36%
10 Pumpkin Patch New Zealand 3.16%
  1. 1-Daytee 5.94% of Urban Intelligence segment
  2. Ezibuy New Zealand 3.52%
  3. UDN Shopping 12.44%
  4. MaxShop.com 7.97%
  5. ASOS 17.38%
  6. Louis Vuitton 19.30%
  7. Kathmandu New Zealand 5.66%
  8. Net-a-porter.com 18.46%
  9. Threadless.com 14.36%
  10. Pumpkin Patch New Zealand 3.16%

The Urban Intelligence segment of the New Zealand Lifestyle Mosaic Report is available free to registered downloaders here.

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Top Ten Tips to stop eCommerce becoming eChaos February 2, 2010

Posted by Michael Carney in : ecommerce , add a comment

The best investment you can make in any eCommerce project, according to UK e-commerce and marketing consultant James Gurd?

Spend the time and money required to scope the project comprehensively BEFORE you invite any organisations to bid on the project.
That may seem obvious, but (as Mr Gurd observes in his article on the Econsultancy digital marketing blog), the devil is in the scoping detail.
Here’s his take on the top ten project elements you should include in your scoping phase before you write an RFP:

Spend the time and money required to scope the project comprehensively BEFORE you invite any organisations to bid on the project.

That may seem obvious, but (as Mr Gurd observes in his article on the Econsultancy digital marketing blog), the devil is in the scoping detail.

Here’s his very helpful take on The Top Ten project elements you should include in your scoping phase before you write an RFP:

  1. What are your project goals?
    Start by defining commercial objectives – it’s essential you know how your e-commerce platform supports the overall business so that you can prioritise project elements and evaluate each solution provider’s ability to deliver core functionality to support targets.

    For example, if a primary goal is to build a solution that can scale to cope with rapid traffic growth and seasonal spikes, you need a partner that offers a robust and scalable hosting solution with excellent technical support.

  2. Who is responsible for what?
    To keep your project on time and to budget, avoid duplication of effort and internal confusion. If you’re in chaos, the project manager at your chosen solution provider will struggle to hit milestones.

    You need a single project sponsor at Board level (too many cooks, broth etc), a project manager who is the go-to person for your solution provider and a project team which supports your PM. It’s essential that for each person involved, their line manager supports their involvement and has allocated resource to this project. It can’t be left as a “when I’ve got time” approach. If you want a successful e-commerce project, take it seriously across the business.

  3. Which stakeholder groups do you need to involve?
    Involving the relevant people upfront has two benefits; you get visibility of the impact the e-commerce channel has on other areas of your business, and you can tackle the politics that can impede project delivery.

    Humans are complex things. By making people feel that they have a stake in the project, you can reduce the internal barriers. Just make sure they don’t try and take over. Personal fiefdoms can be an issue, so protect your project.
  4. Visualise your in-house technology map
    I’ve always found this a great starting point when defining technical requirements. Get your IT team to map out the systems architecture to illustrate inter-dependencies between internal and external systems.

    You need to understand how each element of the e-commerce platform (database, CMS, catalogue manager etc) interacts with other systems and what data exchange formats your business supports.

    Work with your IT team (and external suppliers) to understand any restrictions that must be catered for within the new platform as well as areas for improvement where you would like the solution provider to add value with their expertise.

  5. What are the individual requirements of each business unit?
    Having got people excited, it’s now time to find out what they want. Set up meetings with key people and drill down into how they interact with the e-commerce platform, what they like/dislike and how they think it could support them more effectively. Getting these requirements accurately defined helps you prioritise project elements and cuts time/cost further down the line.

    Don’t fly blind. Produce a clear agenda for each meeting and circulate in advance clarifying how you would like them to prepare. Start each meeting with a clear summary of objectives and try to make them feel that this is a positive experience, not a grilling interview.

  6. What are the strengths and weaknesses of the current platform?
    You don’t want to reinvent the wheel. If something works well (back this up with your analytics and voice-of-customer data…if you have it) make sure it is documented. Keeping what’s good is as important as addressing what’s not and will help manage the project scope/cost.

    I worked with a client who wanted to change the entire checkout process, thinking it was confusing. Looking at the Google Analytics stats, the last two stages of the checkout had excellent conversion. We revised the requirement to include provision for testing of checkout pages to optimise basket-to-order conversion.

  7. What are your success criteria?
    Define your top level critical success factors, both financial and non-financial. This helps sharpen the mind to focus on scoping requirements that add value and aren’t just “nice to have” and is really important when evaluating potential solution providers.

    For example, a success factor could be reducing the time it takes to load new products to the web catalogue and increasing the automatic categorisation and population of data fields. Having this clearly defined helps you evaluate the user interface at demo time.

  8. What do you expect from a strategic partner?
    In my opinion, 80% of e-commerce platform requirements are hygiene factors. The solution should have advanced search capabilities, support multiple templates, enable dynamic merchandising etc.

    What sets people apart is the soft skills that they bring to the partnership and their ability to work with you to evolve your online presence. Define what’s important to you in a strategic partner and explain what evidence you would like to see.

    For example, in a recent RFP I outlined the need for industry presence and contribution to thought leadership as two key qualities for the successful partner. We wanted to see how active people were in exchanging views and offering advice proactively.

  9. What is your e-commerce roadmap?
    Rome wasn’t built in a day and it’s likely that you can’t deliver all your platform needs with the budget you’ve had signed off. Project phasing is important, so you need to outline your roadmap to chart what functionality and capabilities you want to have and by when. This helps solution providers phase the development approach to manage budget and keep the scope realistic to meet project milestones.

  10. How are you going to evaluate solution providers?
    I’ve sat in meetings where people have been unable to decide who offers the best fit solution because they’re not sure what they’re comparing.

    Before you go to market, create a scoring matrix. This maps each element of the RFP into a spreadsheet with a maximum score. The maximum score for each element is weighted depending on priority level.

    Compare apples with apples. By using a uniform scoring matrix, you can evaluate individual project elements as well as overall suitability. Believe me it really does make decision making a lot quicker.

Excellent advice from a seasoned eCommerce practitioner.

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Australian “Catch of the Day” site launches in NZ February 1, 2010

Posted by Michael Carney in : ecommerce , add a comment

The Catch of the Day online shopping operator has been operating in Australia for more than three years, offering “one deal a day, every day”.

Today it arrived in New Zealand. From midday, the CatchOfTheDayNZ site has gone live.

The first deal on offer:

Of course, we already had a few daily deal sites of our own (tip of the hat to Sheldon Nesdale of Marketing First blog for doing the heavy lifting):

And, of course, the recently launched Yahoo!Xtra shopping site (with its own daily deal listings, powered by Hubsta):

And then there’s the NZ Herald shopping section, also powered by Hubsta:

In other words, the Australians are entering a pool that’s already substantially over-fished (if you’ll pardon the seriously strained metaphor).

Some background on the Australian operation:
The company sells everything from laptops (2000 Asus netbooks sold in one hour), cosmetics, toys or even tomato planters (20,000 sold last spring).
They operate from Melbourne, with a team of 35.
On average the Australian site sells one item every 18 seconds, 24 hours a day, 7 days a week.

Some background on the Australian Catch Of The Day operation:

Here’s an Australian newsclip to add further perspective.

YouTube Preview Image

So how well can the newcomer expect to do?

The new site has been pre-promoted with a reasonable amount of publicity and online advertising, which should serve to lure a few curious eyes — but the critical issue is of course the daily deal.  Consumers will only put in the effort required to keep in touch with what’s happening on Catch of the Day if the products are on offer are sufficiently appealing and at a suitable price point.

The first day’s deal delivered, but that’s only to be expected. It’s what happens in a few weeks and months that will determine the long-term viability of Catch of the Day.

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