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While many of us avid shoppers can attest to the immense benefits of shopping online, it may be a surprise that shopping online for furniture is just climbing the crest of its opportunity for retail e-commerce. According to Google/Compete [note: link loads PDF], for shoppers, the path to purchase is all about the right method, products, price and selection that will influence how they buy furniture online. Here’s how furniture retailers can take advantage of the furniture shopper path to purchase.

Online Is a Tool for the Entire Furniture Shopping Pipeline

While furniture shopping is averaging just an increase of 5% unique visits year-over-year, shoppers are behaving all over the map. Furniture retailers have a huge opportunity to capture shoppers at all stages of conversion online. For example, only one in four furniture buyers purchase online but those that do purchase online tend to spend more than those who purchase offline – the average price paid by furniture purchasers who shopped online was $657 versus $600 for those who didn’t. Two-thirds of these buyers who purchase in-store access the internet for furniture information. That’s 66% of shoppers who are just trying to learn more to help their ultimate purchase, whether online or in a retail store!

Omnichannel Is Right On

Marketing to shoppers through omnichannel efforts is not just to satisfy e-commerce buzzwords – omnichannel is a true tenant of what makes furniture retailers reap the benefits of selling furniture online. In-store buyers rely heavily on retail sites while shopping – 76% of them on furniture store sites. These buyers also cast a wide net while shopping online, with 63% of purchasers visiting multiple furniture brand sites prior to purchase.

In addition, shoppers have specific requirements for furniture that influences purchase, among them style (82%), material (81%), durability (81%), and size (80%). With all of these considerations being made by shoppers both online and off, it’s critically important for furniture retailers to engage shoppers wherever they are in their purchase cycle and through multiple channels.

Mobile Continues to Catch Waves

Mobile and tablets are still increasingly important sources for online furniture shoppers. 13% use a tablet to access furniture information, while 12% use their mobile. While these numbers don’t yet represent the majority of those studied, trends still suggest that mobile and tablets are poised for growth in the coming years for e-commerce. In addition, Blueport’s brick and mortar retailers can count themselves as sites that furniture shoppers visit:

• Furniture-only retail sites (39%)
• Home furnishing sites (40%)
• Online-only retail websites (41%)
• Department store websites (44%)

Furniture retailers that can take full advantage of online commerce, while integrating with their brick and mortar stores and mobile, are poised to seize the billion dollar opportunity ahead of them. And Blueport Commerce is riding the wave right along with them, by helping furniture retailers implement a full-service solution that meets the unique, localized needs of selling furniture online.

Buy something online last year? You weren’t alone. According to The State of Retailing Online 2013: Key Metrics and Initiatives by Sucharita Mulpuru of Forrester Research, overall growth for web retailers from 2011 to 2012 was 28%. We at Blueport Commerce are thrilled about the continuing trend of increasing e-commerce activity. Statistics from this report we found particularly salient include:

The Explosion of Mobile

Currently Forrester’s mobile forecast shows less than 5% of e-commerce sales coming from phones. However, of the retailers surveyed, smartphone year-on-year growth hit 129%, and tablet year-on-year growth hit 178%. And while the actual sales may not be there yet, as many consumers use their mobile devices to browse while in stores, mobile has a net positive impact on retailers’ conversion rates, as 36% reported that mobile sales and traffic aided their company’s overall web conversion rate.

Blueport’s takeaway: Retailers should be prepared to optimize for mobile and tablet traffic in order to improve conversion rates, both on the web and on mobile. 

The Need for Speed: Optimization

Retailers mentioned their top priorities in 2013 are improving their site’s conversion rates and redesigning their site experience, optimizing their site’s performance. The three top investment areas cited by retailers for long-term growth are site optimization (e.g. website redesign), mobile optimization and international growth (27%), with products and fulfillment to international markets, as well as localization and translation. Under the large category of site optimization, checkout and a responsive design framework were two sub-areas cited as needing improvement in 2013.

Blueport’s takeaway: Optimization boils down to a simple concept: what levers you can pull to make it as easy as possible for browsers to pull the trigger to become buyers. The need to reach consumers where they want and how they want is critical, and retailers should focus on ensuring all consumers’ browsing and buying needs are met with optimized site and mobile experiences.

The Exorbitant Cost of Marketing

Forrester previously found that web marketing usually consumes about 10% of a web retailer’s expenses. However, that figure is only increasing due to greater competition as email marketing continues to become harder to differentiate, SEO and SEM costs are skyrocketing, social media sites are now experimenting with paid models and there are additional costs associated with mobile marketing. Investment in the effort of organic SEO optimization is worthwhile given the ROI – it isn’t as exorbitantly expensive as Pay Per Click (PPC), and, done right, it can increase conversions. Additionally, the benefits of organic SEO last longer than PPC, whose impact goes away the second you cut off the funding.  

Retailers surveyed also noted that IT investments were the most critical for continued revenue in 2013. Adding to their IT resources and improving core site performance were listed as top priorities, at the expense of social media, whose monetization effects haven’t yet been proven.

Blueport’s takeaway: Focus on the levers that will truly push your margin. Since SEO can account for up to 40% of traffic, maximizing low-cost alternatives like organic search are high impact/low cost.

Shipping as an Opportunity, Not a Pain Point

Same-day delivery and broad reach of fulfillment like Amazon’s was all the hype of in 2012, but other than the big players, few retailers are focused on their fulfillment or post-transaction experiences. Forrester recommends retailers follow the path of companies who focus on fulfillment as a differentiator: tactics such as shopper loyalty programs, expedited delivery programs, shipping clubs and store fulfillment.  

Blueport’s takeaway: The key here for furniture retailers is not just focusing on the front end but also on the back end operations. In essence, while many retailers are focused on website redesign and optimization, the back end operational part of the site is virtually ignored. Furniture retailers have the opportunity to offer not only varying delivery options, but also the chance to rethink shipping pricing models overall. By implementing a truly localized omnichannel experience, furniture retailers who allow customers to choose between various delivery options are better set for success.

E-commerce sales continue to steadily rise, with year-over-year sales growth for the period from October 29 to December 25, 2012 reaching 15.2% (Retail Info Systems News). If you're a big-ticket brick and mortar retailer looking to pick up on online best practices and integrate them into their physical stores, you should be taking note very closely. With the goal of engaging customers throughout the year, not just seasonally, you can recapture the potential sales lost through showrooming. And not all retailers need to adopt the Target defense of price-matching all sources – sometimes the best defense is a good (marketing) offense!

In an interesting interview from Multichannel Merchant, Randall Stone, senior partner and director of customer experience and retail design at Lippincott, has keyed in on a few retail strategies that are being used to enhance in-store shopping experiences. Here are the ones we at Blueport Commerce, the only e-commerce technology and services company that localizes big-ticket retail online, felt most applicable to big-ticket retailers:

1. Integrate Digital Tools Specific to the Showroom: Add digital kiosks and tablets throughout stores to allow customers to access online product information, reviews, as well as full e-commerce functionality to allow them to purchase online after getting to touch and feel the furniture. Provide customers with technology that allows them to visualize products in their everyday lives (read our coverage of augmented reality tools  here). Design a showcase experience that enables on-floor sales associates with tools (such as tablets) to see inventory levels, and allow consumers to customize any products they're interested in purchasing.
2. Embrace Omnichannel: Retailers have a chance to better engage consumers with a browse anywhere/buy anywhere approach. Retailers should allow customers to shop whenever and wherever they please and then pick-up, or have the goods delivered – site to store, store to home, etc.  Retailers who provide an omnichannel experience will be brand leaders.
3. Mobile Apps: Mobile apps allow consumers to shop in-store, pay painlessly with their smartphone and depart. These apps make shopping experiences quicker and easier. Oftentimes, coupons can be loaded onto the mobile app in order to incentivize shoppers to spend while in-store. In fact, in a recent survey, eMarketer found nearly two-thirds of 18- to 34-year-olds reported using their mobile phone for shopping this past holiday season, and almost half said this made their phone a faster resource for accessing information than asking a store associate.
4. Focus on Your Consumer Year-Round: Shopping holidays are high-volume revenue days for retailers, but they don't always mean repeat business. Customer loyalty is dependent on the consistent experience consumers have in your store and online – retailers need to deliver their brand experience all year long. Retailers who concept clever ways to differentiate themselves, such as express frequent shoppers’ lines or loyalty programs, will find retail success year-round. Some stores are experimenting with pop-up stores, flash sales and/or tailored events to appeal to new prospects. Big-ticket retailers can benefit from in-store promotional events that offer a rich, multimedia and interactive experiential component to drive store traffic. Additionally, for big-ticket retailers, design services and email marketing tactics can play a key role in keeping your customers engaged year round.

With big-ticket retail, the focus is going to be inherently local, as consumers often want to touch and feel the big-ticket items they are going to purchase. By focusing on creating a cohesive brand experience from site to store, enhancing convenience and providing a superior customer experience, big-ticket retailers can turn showrooming prospects into satisfied, loyal customers.

What do you think? Join the discussion on our Facebook page.

Blueport Commerce’s Bob Howland shares his retail e-commerce experience and why he thinks big-ticket retail is the next big thing.

What sparked your interest in e-commerce?

I think e-commerce is all about being customer-centric. In many ways, I felt pre-wired to e-commerce even before I was specifically engaged in e-commerce roles. All of my experiences in the past – whether driving customer segmentation at AMEX, competitive differentiation at GE, or brand management at J&J – were about engaging customers how they want, where they want, and when they want. The focus on end-to-end customer experience was the same across these roles and translated well to e-commerce. 

What led you to GSI?

At Vanguard in the late ‘90s, I led a charge to move the mutual fund giant from being an inbound call center to embracing the internet as a way to educate and engage retail investors. Vanguard became one of the first investment firms to enable transactions online, which was transformational for the business and the industry.  

I was enamored by how the internet transformed customer-centricity, as well as the huge branding implications for businesses. I wanted to find a company that was completely focused on the digital space with a branding and commerce focus. GSI Commerce was a natural fit as a high growth company that served as an end-to-end e-commerce provider for leading retailers. 

How did you help GSI grow to a $1B+ company? 

My expertise is centered on optimizing businesses and the customer experience. At GSI, I saw a significant opportunity to grow our current clients’ businesses as well as expand our offerings to become a more valuable partner to our clients. 

The initial successes were two-fold: 

1. First, we developed our digital marketing services capabilities. Our retail partners were already strong in offline marketing, such as weekly flyers to drive in-store traffic. So, GSI focused on the areas they needed help – online marketing – to drive dramatic increases in site traffic and overall sales.
    
2. Second, we focused on the omnichannel experience. A company’s website is often the hub for their brand. It’s always accessible and available whenever the consumer wants to touch the brand, and gets far more visibility than any other marketing vehicle (often more than ALL other marketing vehicles combined). Helping retailers fully maximize the web, not simply as their online store, but more broadly as an omnichannel tool brought huge dividends to our clients. 

Ultimately, companies such as GSI and Blueport live and breathe e-commerce every day, just as retailers do with their core store businesses. The value that we provide to our clients is the ability to bring the omnichannel opportunity to life and develop a roadmap for maximizing the opportunity. I’ve seen this approach succeed time and time again whether it is apparel, home décor, electronics, or food. Big-ticket retail has a huge opportunity to replicate this success.

Why Blueport and big-ticket?

I was looking for the right opportunity to engage with an organization, but had specific criteria for the business model fit and long-term vision. Furniture is the last $1B+ e-commerce opportunity left. And, for good reason. It’s hard to sell furniture online and drive the type of customer experience that has become standard to online retail shopping. Why? The biggest difference is the end-to-end experience and the many challenges around delivery of big-ticket items, such as sofas into homes. I think Blueport has the will, experience, and technology platform to work with our clients to create a positive and remarkable end-to-end customer experience for furniture, as Zappos did for shoes. This is the vision that Blueport and its client base share, and why I ultimately came on board.

What is it going to take for big-ticket to achieve success in e-commerce?

Consumer demand and technology proliferation leave no choice but for furniture retailers to adopt an omnichannel presence. But, that’s not all – we need to understand the need to provide an exceptional end-to-end customer experience. At Blueport, our mission is to help big-ticket retailers drive exceptional omnichannel experiences in order to optimize both online and offline sales. We want retail partners who believe in delivering these “wow” experiences and the incredible untapped growth opportunity embedded within them. 

Last week, we examined the record-breaking success of e-commerce over US Thanksgiving and Black Friday 2012, and their worldwide impact. This week we examine the numbers and impact of Cyber Monday 2012. As the only e-commerce platform, technology, and services company that localizes big-ticket retail online, Blueport Commerce breaks down the Cyber Monday 2012 holiday numbers to uncover trends and insights relevant to big-ticket retailers.

Numbers are courtesy of MultiChannel Merchant/IBM's Cyber Monday Report; ITProPortal’s Black Friday 2012 Results: $1bn Milestone Hit as Online Spending Soars, But Cyber Monday Nets Even More; Internet Retailer’s A Robust Weekend for E-Retail; The Retail Email Blog’s Alert: Record-Setting Cyber Monday Propels 5-Day Weekend Email Volume to All-Time High and MarketWatch’s Bari Furniture Reports 62% Increase for Black Friday/Cyber Monday.

 

Cyber Monday

Sure, the term "Cyber Monday" may feel antiquated, but the concept is current enough to be embraced by the millions of people who didn't feel like hitting the local malls or stores to wait in line for hours. Let's face it: shopping from the comfort of your desk, whether at work or at home in your pajamas, is a lot less stressful than braving the crowds and hitting local stores. And online shoppers in the United States agreed, to the tune of $1.465 billion spent on Cyber Monday, making the day the most lucrative ever for e-retailers per comScore Inc. (Internet Retailer). Some more intriguing overall statistics include:

Cyber Monday 2012 Vs. Cyber Monday 2011

• Shopping Peaks at 11:25 am EST: Consumers flocked online, with shopping momentum hitting its highest peak at 11:25 am EST (IBM).
• Mobile Shopping and Mobile Traffic Increase: On Cyber Monday more than 18 percent of consumers used a mobile device to visit a retailer's site, an increase of more than 70 percent over 2011. Mobile sales reached close to 13 percent, an increase of more than 96 percent over 2011 (IBM).
• The iPad Factor: The iPad continued to generate more traffic than any other tablet or smartphone, driving more than 7 percent of online shopping. The iPad also continued to dominate tablet traffic reaching a holiday high of 90.5 percent (IBM).
• Multiscreen Shopping: Consumers shopped in store, online and on mobile devices simultaneously to get the best bargains. Overall 58.1 percent of consumers who were in a store used smartphones compared to 41.9 percent who used tablets to surf for bargains on Cyber Monday (IBM).
• Social Sales: Shoppers referred from Social Networks such as Facebook, Twitter, LinkedIn and YouTube generated 0.41 percent of all online sales on Cyber Monday, a decrease of more than 26 percent from 2011 (IBM).

Blueport Cyber Monday tip: Save the best for last. Black Friday traffic was high for all websites across the world, with traffic from people scoping out deals. However, a big-ticket retailer’s best deals should be saved for Cyber Monday, which had the highest conversions, with people buying online at more than double the rate of Black Friday.

“Despite some news reports suggesting that Cyber Monday might be declining in importance, the day has once again set an online spending record at nearly $1.5 billion,” says comScore chairman Gian Fulgoni. “However, it is also clear that the holiday promotional period has begun even earlier this year, with strong online sales occurring on Thanksgiving Day and Black Friday. Now, we shall see the extent to which continuing and attractive retailer promotions are able to boost sales for the remainder of the week.”

Now what about furniture? In a trend that foreshadows the ROI potential of taking your big-ticket retail items online with e-commerce, home goods continued to grow, reporting a 26.8 percent increase in sales from Cyber Monday 2011 (IBM). Additionally, Bari Furniture, an online and brick and mortar retailer specializing in Leather Furniture, said that Black Friday and Cyber Monday produced record sales, with Black Friday sales up 59% over 2011 and Cyber Monday sales hitting an all-time record with a 64% increase (MarketWatch).

"As our selection broadens, reviews from our customers tell us that year over year growth will continue to expand for niche sites like ours that focus so closely on service, selection and value," President Tom Tilaro said.

Blueport experienced this phenomenon firsthand. One of our clients, TheRoomPlace, had their best-ever online sales day on Cyber Monday, lifting their revenue 14% from 2011. Another one of Blueport's clients, Leon's Furniture of Canada, experienced a 380% increase in revenue on Cyber Monday compared to their daily average sales. The best part of this? Leon's is actually a long-time Canadian retailer, where Thanksgiving is celebrated the month prior, meaning that Cyber Monday is truly becoming a worldwide phenomenon.

Between the success of big-ticket retail's predecessor of home goods and furniture over the holiday weekend, as well as the increased overall spending by consumers via e-commerce, Blueport Commerce remains committed to furniture as the next big category to go online.

As the 2012 Thanksgiving-Black Friday-Cyber Monday e-tailing season is behind us and we look to the December holiday season, big-ticket e-commerce retailers who sent early emails (early in both time of day sent and in advance of the Thanksgiving holiday) reaped the best rewards. Knowing that December is often the splashiest and most profitable holiday season, it’s a best practice to promote sales early and often to your loyal email subscribers and social media followers, as well as offer pre-holiday deals to your VIP customers.

Miss our Thanksgiving Day and Black Friday 2012 breakdown? Check it out here.

It is inevitable that any retailer in the e-commerce space will aspire to be the success story that is Amazon, no matter how unrealistic that dream may be. As an e-commerce site that was born in 1994 as a seller of used books, Amazon has morphed into a Goliath in the industry, becoming the dominant retailing marketplace for products ranging from books to electronics to food. With its low prices, rapid delivery and huge inventory, Amazon poses a threat to retailers in all industries.

“It is coming down to convenience, assortment and price,” said the operator of a Los Angeles area consumer electronics retailer to HFN. “And Amazon is beating us on all three fronts.”

However, there are steps furniture retailers can take to counteract Amazon.com before they find themselves floundering like former retail giant Best Buy. We at Blueport Commerce, the only e-commerce technology and services company that localizes furniture online, have our retailers place an emphasis on service, product knowledge and convenience to ensure customer loyalty and retention.

1. Service

While Amazon is known for their accommodating customer service, our clients can actually benefit from showrooming, which extends a personalized touch that Amazon itself can't offer. Shoppers in a brick-and-mortar store may be tempted to see, touch and feel a piece of furniture they like, and then immediately try to find it for less online on their mobile device. With the help of experienced, knowledgeable salespeople in the brick-and-mortar store, as well as an e-commerce website optimized for mobile, plus a mobile app, furniture retailers can turn showrooming from a lost opportunity into a closed sale by keeping the buyer on their brand's site. Additionally, offering iPad and touch tablets loaded with inventory information as well as allowing store consumers to experience online checkout while in their store, can reach more connected consumers. 

Kathee Tesija, Target’s executive vice president of merchandising and supply chain, said it best when she said, “Do we love being a showroom? Yes, when we can book the sale.”

And we at Blueport Commerce are confident that in this case, our clients can book the sale.

2. Product Knowledge

Currently, Bed, Bath & Beyond is one retailer most at risk of losing out to Amazon. “Our work suggests there is 89 percent direct product overlap with Amazon in kitchen electrics, 83 percent in cookware and 83 percent in cutlery, all key traffic-driving categories,” said Matt Nemer, retail analyst with Wells Fargo.

Bed, Bath & Beyond is responding by changing its merchandise mix toward more exclusive products, mirroring that of Williams-Sonoma, Crate & Barrel and Pier 1 Imports, who are less vulnerable to Amazon due to name cachet and exclusive products. Bed, Bath & Beyond now has its own specialty food, as well as home textiles. In a similar vein, by offering a strong range of one-of-a-kind, name-brand products, as well as having a plethora of information about each product available both online and in-store, furniture retailers can benefit from consumers who aren't just price shopping, but are looking for durable and stylish furniture and appliances that last. 

3. Convenience

Bed, Bath & Beyond, which currently receives only 3 percent of their total sales from e-commerce, has invested heavily in improving their website and opening an 800,000-square-foot e-commerce fulfillment center in Georgia. Convenience-based improvements they are exploring include in-store pickups and returns on e-commerce purchases, identical pricing on merchandise between stores and online, more exclusives and increased private label. Like Bed, Bath & Beyond, furniture retailers who can most successfully merge the in-store and online e-commerce experiences to result in the most seamless, customer-centric experience possible will succeed. 

“Having a unique product mix, backed by a strong knowledge of the products and consumer needs, will definitely help smaller brick and mortar retailers hold off Amazon,” said Alan Mendelson, a business reporter based in Los Angeles.

Our retailers who offer quality service, a deep product knowledge and convenient ways for customers to shift between digital and physical channels are the stores who will survive as Amazon continues its rapid growth. 

Growing your e-commerce and digital presence is as essential for the holiday season as Rudolph's glowing nose is to Santa Claus on a cloudy December 24th eve. If executed correctly, your web presence can be a beacon to consumers, guiding them to checkout online and in store, depositing gifts to your bottom line.

Retailers know that November and December can make or break their annual sales. This year, a projected $54.5 billion in online holiday sales for November and December could account for 24.3% of the total $224.2 expected e-commerce sales, according to eMarketer – nearly 25% of an online retailer's sales could be closed in the last two months of the calendar year.

Retailers should already be preparing for the onslaught. Being prepared entails increasing inventory levels, adding warehousing resources and adjusting your product catalog.

In October, you'll want to start building holiday content into your e-commerce store. By November, you'll want to launch overall holiday marketing. For December, you'll need to focus on delivering a superior customer experience. The “Cyber 5,” the Thursday-through-Monday window that includes Thanksgiving, Black Friday and Cyber Monday, is a key stretch for businesses whose strategy includes hefty discounting and significant sales. From 2010 to 2011, online Black Friday sales leapt 24.3% from 2010, while Cyber Monday sales were up 33%, according to Forrester Research.

With all this in mind, we at Blueport Commerce, the only e-commerce technology and services company that localizes big-ticket retail online, have several tips to get big-ticket retailers locked and loaded for a joyous 2012 holiday season. This is an essential time to make sure you’re doing everything right, beginning with the basics.

1. Review Your Transactional and Triggered Email Messages

Ensure all text, such as contact information and return policies, is up to date. Make sure the sending information, such as from name and from address, match your non-triggered messages. Send tests to be sure the message renders properly and all links are functional. Bronto Software recommends a general rule that 80% of the message must relate to the transaction and 20% can be used for marketing purposes. Per Forrester Research, marketing effectiveness in driving site visits is on the upswing. The percentage of site traffic driven by overall marketing—including email, paid search and display ads—reached a new high of 32% during the November/December 2011 holiday period, up from 29% about a year earlier. So get your holiday marketing set before Black Friday and Cyber Monday to ensure increased site traffic for the holidays.

2. Merchandise Your Products for the Holidays

Think about what big-ticket retail items become more in-demand according to the season. For example, dining tables become more popular around the late October and early November with the onset of Thanksgiving, followed by Hanukkah and Christmas in the US. The highly anticipated holiday season could bring sales and promotions on dining rooms and dinettes. Big-screen TVs remain popular gifts in November and December, so inventory and merchandising around these items should reflect this, as well as marketing and discounting. You may even want to pair a popular December item, such as a big-screen TV, with a year-round purchase such as a sofa, and offer a package deal in order to move more inventory.

3. Lure Customers Back with Holiday Marketing

Target your existing customers first. Per Amazon, existing customers can be up to 80% more likely to purchase from your business than new customers. A nicely targeted email campaign can make sure your most loyal fans are shopping with you again. Social networks, like Facebook, Twitter and Pinterest, are good places to reach them with holiday messaging, too. For big-ticket retailers, social media can be a great way to drive in-store traffic with holiday-themed events that allow followers to come into your brick-and-mortar store to touch and feel the furniture.

Remember to add a little joy into your brand image. Absorb this upbeat vibe in your e-commerce store's copy and promotional materials to enliven your brand and get site visitors in the mood to make holiday purchases. Additionally, make the shipping policy and details clear and prominent on your e-commerce site. How long will shipping take, and how much does it cost? And most critical to the holiday season: when is the last day a consumer can submit an order, and still be guaranteed to get their item by the holiday?

4. Narrow Your Marketing

Avoid broad messaging and targeting. The narrower you can focus on your target market, the better. For example, instead of creating a guide of the “best holiday dining room tables,” consider something as focused as the “best dining room tables for Thanksgiving.” The search volume for such niche-specific terms will be lower, but you can concentrate on driving better qualified (aka higher converting) traffic instead. Use this as a seasonal opportunity to target only your most ready-to-purchase leads for the holidays. Also tie this in with your historically best-selling products for each month.

5. Staff Up to Be Helpful

If you post a phone number or email address for customer questions, ensure you have the resources dedicated to it during the holiday season. Customers will require speedy answers to their questions, and it’s in your best business interest to answer them before they shop with your competitors.

Don't forget that January 2013 can yield valuable data and insights when retailers take stock of what worked best in the 2012 holiday season! This allows big-ticket retailers to spend the first half of the year putting together strategies for the 2013 holiday season.

Here at Blueport Commerce, we feel holiday retailing can never be done early enough. As our big-ticket retailers traditionally look to gain a significant boost in revenue from November and December, it is our goal to help our clients with their marketing efforts every step of the way to ensure they seize this opportunity for sales growth. By improving an online retailers' holiday marketing, staffing and merchandising for e-commerce, big-ticket retailers will drive qualified traffic to both the e-commerce site and in-store, thereby fueling growth.

Related posts:

• E-Commerce Lengthens the Path to Purchase
• Omni-Channel Retailing 2012: Marrying the Best of the Digital and Physical Channels
• E-Commerce Leads to Smarter Brick and Mortar Retail
• Thanksgiving, Black Friday, Cyber Monday -- How Did E-Commerce Do?

These days, companies that want to get noticed online can no longer pay for the attention – they actually need to be contributing to the online discussion. While display advertising is an opportunity big-ticket retailers cannot afford to miss, there is a lot to be gained in the value search engine optimization, social and content marketing offer both to their customers and brand.

According to a recent eMarketer article reporting on data from SEOmoz, more and more marketers are focusing on these three types of inbound marketing. And of these three, marketers spend the majority of their time on SEO (23.9% spent more than half their time on this), followed by social media marketing (7.8%) and then content marketing (6.3%).

What’s particularly interesting about this is that the three tactics can be set up to really feed each other. Content creation can boost SEO rankings as can links from social media sites, and the content can also feed your social media posts. The result? E-commerce growth like never before.

Content Creation and Inbound Marketing Are Evolving

Over two-thirds of online marketers globally are already creating short-form content, like blogs, social media posts, articles and guides. And now only a small percentage focus on the longer forms, like white papers and surveys, they used to depend on.

Why? The shorter, more social content is quicker to create and you can expect it will get in front of your intended audience on your website, on your Facebook and other social media pages, and in search.

For Content Marketing, Pictures Can Be Worth a Thousand Words

And this content can also be visual. Product photos and videos are an important part of any retailer’s content marketing efforts.

And we at Blueport Commerce find the marriage of rich images with detailed text to be essential to selling and marketing big-ticket items like furniture in the digital space for our clients. This is an important component of every product page, as we have to help consumers experience the items as they would in a store.

We also work the visual and text combination into our furniture buying guides, blog posts and social media updates. And each time we bring these types of content together, we find a profoundly larger response. Employing this multichannel strategy can pay off quickly as your audience does your marketing for you.

What’s Next for Content Marketing for Big-Ticket Retailers?

We believe the next step will involve further engaging customers in the content creation. With e-commerce website data and social media, retailers are in closer contact than ever before with what their consumers are thinking. And the next step is to harness what customers are saying, build the relationships and engage them in being your brand ambassadors and content creation. And we at Blueport have never been more excited.

Related posts:

• 3 Ways to Leverage Social Media for In-Store Events
• Old SEO Tricks Won’t Help Your E-Commerce Business, But SEO Basics Will
• Retailers Win Over Consumers with Social Media and Content Cultivation
• Omni-Channel Retailing 2012: Marrying the Best of the Digital and Physical Channels

As exciting a time this is for e-commerce, this is also an extraordinary time for the business of paying for goods. From Square, which converts smartphones into credit card-processors, to mobile payment regulations, there’s a lot going on in payments.

When it comes to mobile payments, do you have a pulse on customers’ needs, retailers’ goals and the big technology players? We’ve gathered a roundup of some of the hottest headlines to help you keep up with this fast-moving field:

NFCNews – Survey Shows 66% of Retailers Want Mobile POS

A new survey from Motorola Solutions shows there is increasing interest from retail, hospitality and field service industries for mobile Point of Sale (mPOS) solutions, such as NFC payments and mobile loyalty programs, as a core strategy for improving customer service. According to the survey, which was comprised of 541 retail, hospitality and field service employees from North America, UK, France and Germany, 66% of respondents are interested in mPOS, while 42% of respondents are currently piloting or starting trials within the next 36 months.

U.S. News & World Report – How Safe Are Mobile Payments?

For some consumers, paying at the checkout line becomes a lot simpler when they can forgo the plastic card and pay with their phone. Mobile payment applications like the Isis Mobile Wallet, Google Wallet, Square, and LevelUp turn your cell phone into a payment source: Just store your debit card or credit card information on the phone and scan the device at checkout. "Consumers like the convenience factor," says Sarah Jane Hughes, a commercial law professor at Indiana University. But is this new form of payment safe?

Mobile Payments Today – PayNearMe Gives Unbanked a New Mobile Payment Option

One of the problems for "cash-preferred" consumers is that some transactions, for instance, airline tickets or online purchases, require an electronic payment method. Now U.S. consumers who choose to use cash have another mobile option to make electronic payments. PayNearMe, a cash transaction network that markets to the under- and unbanked, announced its new mobile cash payment system, a product that lets those without credit or debit cards use their cash to make loan payments, pay bills or buy tickets.

Seeking Alpha – Apple: Sleeping Giant Within the Mobile Payment Industry

The mobile payment industry is still in its infancy. I believe the mobile payment industry is a multi-billion dollar, multi-year secular growth market which will have a huge impact to the bottom line of key mobile payment players. Aite Group states the volume of mobile payments will grow to over $200 billion by 2015. In 2010 mobile payment revenue was approximately $16 billion. That is an over 12-fold increase in just five years. Apple is a dominant leader in the smart phone market with over 35 million in smartphone sales last quarter alone. They have not entered the mobile payment market yet, but I expect them to arrive on the scene very soon and disrupt the current mobile payment landscape.

Wall Street Daily – Google Could “Wrapp” Up the Mobile Wallet Race for Good

Wall Street Daily readers know that point-of-sale Near-Field Communication (NFC) technology is one of my top trends to watch this year. And although a recent study by Pew Research found that the technology likely won’t be a dominant form of payment until at least 2020, that’s not stopping players from jockeying for position now. After all, whoever lays claim to the biggest share of the NFC market should have an easier go of dominating the industry as the technology gains popularity down the road.

Related posts:

• Square Register Lets Retailers Play with the iPad, Too
• Offering Your Customers Multiple E-Commerce Payment Solutions
• 3 Key E-Commerce Trends to Watch in 2012
• Talk to the Phone: Shoppers Prefer Interacting with Their Smartphones Than with Store Staff

In February, when TJX announced its plan to nearly double its annual sales, we here at Blueport took notice, especially since e-commerce is a crucial part of the plan to get there.

For the fiscal year ending January 28, 2012, TJX, parent company of T.J. Maxx, Marshalls and HomeGoods in the US, had $23.3 billion in net sales. The goal is to reach $40 billion by investing in technology and e-commerce. While the company has a web presence with a combined 4 million visitors per month for all of its properties, they do not sell merchandise online in the US and have not since their last attempt at e-commerce in 2006.

“E-commerce is clearly in our future,” said TJX CEO Carol Meyrowitz in a recent conference call as reported by RIS News, Internet Retailer and others. “We believe e-commerce will open up a greater landscape for categories. Just think about the potential for us to carry categories online that we wouldn’t carry in our stores.”

At this point, TJX is building a team of e-commerce experts with a focus on developing the new initiative.
 
My Advice for TJX

Working at a company with more than 10 years of e-commerce experience, I have some thoughts on the possible tact TJX could take in growing its online retail business.

As I understand the retailer’s overall business, much of the merchandise it sells comes from opportunistic buys, like when a distributor liquidates 900 name-brand sweaters or 500 sofas in a discontinued upholstery pattern, or from program buys, when items are manufactured specifically to be sold by discount chains. Most, shall we say, Maxxinistas, go to the stores to land the opportunistic merchandise, which is harder to find because of the limited supply. So not every store carries the same merchandise, and much of the more sought-after stock moves very quickly. How does this translate to an online retail business?

Option 1: The Gilt Model

TJX and all of its properties could follow in the paths of Gilt Groupe, Fab.com and the like, selling the best stuff online, perhaps even following the invite-only model. Then, items could be shipped from a central location, which tends to work best for smaller items that can be packed in a Fed Ex box.

The challenge here is that their retail websites would directly compete with their stores rather than creating a beneficial and seamless multichannel retail experience for consumers. (Hint: Don’t do this.)

Option 2: Localized Cross-Channel Commerce

TJX could go for a truly localized e-commerce solution that ties into real-time inventory data would provide the best results for their overall bottom line. Customers would be able to get their purchases inexpensively and quickly or even see items in a nearby store. The web presence would continue to improve the overall bottom line without jeopardizing any individual location’s own fiscal health. (Hint: Do this!)

Based on the e-commerce solution we’ve created for our own clients, we think the second option and offering customers a localized cross-channel e-commerce experience would be the best for any retailers’ long-term growth. After all, we’ve already proven this model in the home furnishing industry for stores just like HomeGoods.

Related posts:

• When Charging Online Customers for Shipping, Localized E-Commerce Helps Make the Price Right  
• Hyperlocal Beyond Marketing -- Think Localized E-Commerce
• Online Advertising: Now Delivering Local Shoppers -- Is Your Website Ready for Them?
• Consistency Is Key in This Multichannel Retail World

Copyright 2010, Official Blog of Blueport Commerce

We’ve said it before, and we’ll say it again: Retailers must advertise online to compete in today’s market. We’ve showed you that customers are online, and we’ve shared data that proves the direct correlation between online advertising and increased in-store sales.

We continually talk to our clients and other big-ticket retailers about the merits of advertising online vs. sticking with what some still call a “tried-and-true” newspaper advertising strategy.

The times, they are a changing. This week, a little graphic has been making its way around the Web, showing the decline in print newspaper advertising revenue, adjusted for inflation.

The image was created by Dr. Mark J. Perry, a professor of economics and finance at the University of Michigan in Flint. One of his more striking observations? “It took 50 years to go from about $20 billion in annual newspaper ad revenue in 1950 (adjusted for inflation) to $63.5 billion in 2000, and then only 11 years to go from $63.5 billion back to about $20 billion in 2011.” Said another way, in the last decade, newspaper advertising has fallen back to 1950s levels.

As an article from The Atlantic explains, newspapers have been losing advertising revenue to websites, because the softer sections of the newspapers that actually sell the ads, like “the car section, the style section, the travel section and the classified” all have online counterparts. “Ad dollars started flowing to websites that gave people their car, style, travel, or classifieds directly. So did the readers. And down went print.”

What is it about print advertising that still has some retailers hooked? Print ads are expensive, can’t be personalized and the ROI is often hard to track. Meanwhile, online advertising has numerous capabilities for localization, personalized targeting and tracking. They reach shoppers not when they are reading a news article, but when they’re searching online for the goods that you can sell them.

As the print advertising industry has been collapsing, the folks at the Interactive Advertising Bureau have been tracking online advertising growth, and have a very different story to tell.

In the third quarter of last year, US online advertising revenue hit nearly $8 billion, reaching double digit increases despite the lagging economy. “The ongoing increases in internet advertising revenues points to a new paradigm within the advertising world -- one in which digital is taking a bigger seat at the table,” said David Silverman, a partner at PricewaterhouseCoopers LLP, in the IAB press release. “Moreover, even with a softened economy, digital advertising is making tremendous gains.”

Overlay these two trends since 2000, and the message becomes even clearer: Advertisers are fleeing newspaper advertising for the improved ROI of online.

Compare how you spend your advertising dollars to this trend. Are you spending like it’s 2012, 2000 or 1950?

Related posts:

• Online Advertising: Now Delivering Local shoppers -- Is Your Website Ready?
• Will You Make Back Your Online Advertising Spend in Store Sales? Yes!
• Multichannel Communication: A Marketer's Dream or Nightmare?
• E-Commerce Marketing: Multichannel Analysis Is a Must!

Copyright 2010, Official Blog of Blueport Commerce

In a previous post, I talked about how tablet commerce will continue to be one of the top growing e-commerce trends this year. And there is good news for e-commerce businesses who want to drive additional business through this medium: You can now get to know tablet users a little better.
 
Internet Retailer recently wrote about the results of a Zmags survey conducted by Equation Research on who the people are who are making purchases via their tablets. Here are some of the results:
 
The Typical Tablet Owner
 

• Age 40
• Average annual household income: $63,000
• 52% are women
• 81% use Facebook

Tablet Shopping Habits
 

• 14% of consumers who own tablets consider themselves to be spontaneous shoppers
• 9% classify themselves as  “addicted to shopping”
• 24% window-shop on their devices
• 13% go shopping with a specific product in mind
• 11% are moved to action based on advertisements
• During the survey, on average spent $325 on their tablets

Why Tablet Commerce Makes Sense
 

• 29% of tablet shoppers say it’s convenient since they are on the device so much
• 14% like the ease of making a purchase on their tablets
• 9% enjoy the simplicity of being able to share shopping-related information on their social networks

This is further evidence that tablet shoppers are poised to browse and shop e-commerce site via their devices. While you don’t want to miss the opportunity to get in front of these shoppers, their influence on social networks is also an alluring reason to capture this audience.

Related posts:

• 3 Key E-Commerce Trends to Watch in 2012
• Why E-Commerce Should Be Fired Uo About Kindle Fire
• 'T-Commerce' Reinvented as iPads Shape Multichannel Retail
• Arhaus Furniture's Custom iPad App Aims to Drive Cross-Channel Sales

Copyright 2010, Official Blog of Blueport Commerce

The immense e-commerce success of the holiday shopping season is so last year. Now online merchants need to navigate January’s retail hangover.

This year, with holiday spending significantly up from previous years, January and February spending is projected to drop more drastically in contrast. "Now that those credit card bills are hitting mailboxes, shoppers will cut back in a very significant way relative to [the] January and February of the last few years," says a DailyFinance article, quoting Britt Beemer, group chairman of America's Research Group, in a statement.

Add to that the overall state of the economy, regardless of any holiday binging, and consumer spending is expected to be tepid, says a New York Times article. “Consumer spending makes up 70 percent of the economy, so until it ignites, general growth is likely to be sluggish,” it reads.

So what can online retailers do to come out on top during a typically slow time of the year that might be slower than normal? We at Blueport suggest you try one or more of these ideas:

Sell More with Volume Discounts

Steep price cuts can be detrimental to your retail business, especially long-term. Instead, work to increase average sales by offering volume or tiered discounts.

Focus on Customer Service and Value

Don’t allow your e-commerce business, whether big-ticket or not, to become solely commodity-driven. Zappos.com, for example, may not always offer the cheapest price, but the value that comes from the e-retailer’s brand, policies and customer service make it a destination for consumers. What can you do or offer to make your e-commerce website more valuable than your competitors’?

Spend Time on Social Media

Building your social media presence can be time-consuming, but it can also be an invaluable investment. Take the time now to create your social media brand. Try out special offers for your Facebook fans and test new ideas in this realm. See if allowing fans to vote on deals and other social initiatives can incrementally boost sales.

Expand Your Email List

Reaching out to more consumers now will help your e-commerce brand be poised to sell when they are ready to buy. Are you doing everything you can to grow this list of names? Is there an incentive or contest you could offer? Also, consider the types of messaging you might be able to deliver during this shopping downtime. Mix in some informative content that would be worthy of sending to a friend to extend your efforts.

Don’t Forget Your Recent Customers

Reach out to customers who have bought from your e-commerce website to encourage them to write reviews of their purchases. Any incentive you offer will be worth it -- this user-generated content will help create a strong, interactive e-commerce website to convert future customers.

Related posts:

• 3 Key E-Commerce Trends to Watch in 2012
• Thanksgiving, Black Friday, Cyber Monday -- How Did E-Commerce Do?
• The Economy May Be Looking Down, But E-Commerce Sales Keep Looking Up
• Engaging Site Visitors Through Email
• It's Not Always About Price...
  

Copyright 2010, Official Blog of Blueport Commerce

This Saturday, Amazon is running a one-day promotion that gives consumers who use Amazon’s Price Check app while shopping in a store a 5% discount (up to $5) on select items. Consumers can redeem the offer up to three times.

This offer -- luring shoppers from local stores to instead buy online via Amazon’s e-commerce site -- has been met with a bit of consumer backlash. Even so, it feels like a harbinger of a future retail landscape that’s divided in two: retail in categories where stores still matter and retail where they don’t.

Consumer Reaction: ‘Kind of Sleazy’

The Wall Street Journal’s AllThingsD blog was among the first to report on this story, and consumers were quick to react to what they saw as Amazon’s effort to intercept local shopping. Comments on the story included:

• “This seems unethical at best. Amazon is encouraging people to go into a store with no intention to buy, incurring costs for the retailer in staffing and wear and tear on store premises…. Kind of a sleazy move by Amazon.”
• “This is not about comparison shopping per se. Of course, I’m all for getting the best price. What I’m NOT a proponent of is giving my business to any retailer, online or brick-and-mortar, who blatantly scams to have their customers ‘spy’ for them, and try in the grander scheme of things to shut down the very business who contribute to the local economy.”
• “As a supporter of local small businesses, I find this appalling. But, hey, if you want do Amazon’s market research for them for a measly 5 bucks, feel free. Me, I’ll take my 5 bucks and funnel it into MY local economy….”

The Future of Retail: What Do Stores Do?

I completely understand these sentiments, but at the same time, one starts to wonder: For lower ticket, commoditized items, what value does a store really bring to a shopper?

With a maximum value of $5 off, Amazon is clearly targeting items in the under $50 range. And, for price check to work, the items need to be commonly available. For these commodity-type items, does a store add much (other than cost) to your purchase?

There’s a segment of the retail economy we think will ultimately move largely online. In these commoditized categories, stores don’t bring enough to the table to justify the cost they add. Once Amazon can deliver same day, one of the last reasons for running to the store to buy a low cost, common product will be gone.

Honestly, this end of e-commerce isn’t one that excites us much. Like any commodity market, it will be dominated by players with the scale to cut costs and offer the cheapest price. In this regard, Amazon and Wal-Mart aren’t so different.

At Blueport, we think the other end of e-commerce -- using the Internet to engage, rather than replace, local stores -- is a far more interesting space.

In the categories we commerce-enable -- furniture, appliances, flooring -- stores add a tremendous amount to the consumer experience. They offer expertise, a place to “touch and feel,” local delivery and installation, and ongoing service for big-ticket purchases. We use the Internet to drive sales for these local businesses with walk-in traffic, leads, and yes, e-commerce.

It’s an exciting segment to be in right now. Retailers in these categories have been slow to adopt e-commerce, mainly because they couldn’t see how the Amazon model could work for them. Now, big-ticket retailers are jumping into multichannel e-commerce with both feet. And, I suspect, they may be around far longer than some of their more commoditized counterparts.

Related posts:

• E-Commerce 2.0 -- The Next Wave
• Shopper Know-How and the Retail Ranaissance
• Will You Make Back Your Online Advertising Spend in Store Sales? Yes!
• Forrester's Online Retail Growth Forecast

Copyright 2010, Official Blog of Blueport Commerce

It’s moving week at Blueport Commerce! We will be opening for business at our new offices at 580 Harrison Ave. in Boston’s South End on Monday, September 12th. Everyone here is very excited about this next step in our company’s growth.
 
We spent quite some time finding our new space, all told about 16 months. We wanted a mix of everything: a beautiful space where we could continue to grow, a building that could meet our technical needs, amenities for our staff and an exciting place for clients and partners to visit. After much searching, we found the space. We were able to get all we wanted and more. The time is right, and we’re making the move.
 
These types of changes often get you thinking about your past as much as your future. How did we get here?
 
Remember when people were hesitant to buy anything online? That’s when we started selling furniture on the Web as Furniture.com. We have evolved from a Web portal selling furniture to a technology and services provider for big-ticket retailers who want to sell and brand their hard-to-ship items online. We’ve already extended to markets adjacent to the furniture industry, such as appliances, electronics, flooring, carpet and more. We’ve been helping clients navigate their ways through social networks, daily deals and more. As a business, we have evolved, and now it’s time our office space catches up.
 
The future for Blueport Commerce is forecasted to be even brighter. As the market focuses on local e-commerce (something we’ve done for quite some time), we are poised to continue to be a leader. Come visit us, and see for yourself.

Copyright 2010, Official Blog of Blueport Commerce

According to comScore’s State of the US Online Retail Economy in Q2 2011, despite an increased consumer perception that the economy is getting worse, Q2 e-commerce spending was up 14% YOY. Here are some interesting findings from the recent report:

Online Shopping

E-commerce sales growth is growing at double the rate of total retail sales growth, indicating that consumers are shifting from shopping in-store to buying online. The number of online shoppers increased 16% YOY for Q2 – there are now 170 million people shopping online.

Big-ticket items like furniture, appliances and equipment have shown moderate growth of 5% to 9% YOY for Q2.

Cutting Back on Spending

Because of their economic concerns, consumers are looking to save. They are now switching brands, shopping only when items are on sale, looking for deals online and going to different retailers in order to spend less.

Get Smart About Smartphones

The number of consumers using their smartphones to browse retail content in some form is now at 78 million. 22% of smartphone owners say they have made purchases via their smartphones, 50% have used their phones to find nearby stores and 40% have used their smartphones while in a store. The top reasons for using the smartphone in-store? To compare prices or to compare an item to other items not available in the store. 36% of consumers who abandon in-store purchases after using their smartphones end up buying online instead.

Social Media Matters

Overall, retailers not taking full advantage of the opportunity social media presents. For example, retail ads only make up 15.4% of the display ads on social networking sites.

If you are looking to expand your social media presence, comScore offers insight on Facebook: Once consumers like a page, they are very unlikely to return to that page. Facebook users spend the majority of their time on the newsfeed, so what and how you post will account for much of their interactions with your brand. Fans and their Facebook friends who are exposed to your brand on Facebook via advertising and status posts have a much higher brand engagement, which includes visiting your e-commerce website.

Related posts:

• The Numbers Speak for Themselves
• E-Commerce Continues to Be a Bright Spot in the Retail Industry
• New Insights on How Consumers Research Products and Shop Online
• Talk to the Phone: Shoppers Prefer Interacting with Their Smartphones Than with Store Staff

Copyright 2010, Official Blog of Blueport Commerce

The Pacific Crest Global Technology Leadership Forum for 2011 was again held in glorious Vail, Colorado. Blueport's third year at this event kicked off on Sunday with an investment-banker-driven, 7-mile run from the town (8,150 ft.) up to nearly the summit (11,428 ft.). What were they thinking? This was followed by a cocktail reception that night for the private and public companies attending. At this early stage in the conference, it was impossible to wrap your head around the event yet: It was a Sunday night and you were working with half the oxygen you’re used to. You spoke with tons of contacts, but there was no mention of the technology, localized e-commerce, social and mobile buzzwords that would be unavoidable in the remaining days.

The sun crested over the mountains at 5:29 a.m. and breakfast began at 6. Pacific Cresters fluttered around, effectively lining up 48 hours of ducks. You had to caffeine it up -- you needed it.

The summit had three modules --  two unique. At most tech summits, you end up in a room with Google or Gilt listening to egos roar as Sergey or Susan talk about how killer things are in ecommerce, search, social commerce and more. At Pacific Crest, these more generic types of corporate briefings were done throughout the two days and you slot them in as best you can. But most of the fun comes from the two more unique tracks of this conference: One portion is the roundtable discussions where industry focus meets opinion. Our CEO, Carl sat on the Internet Digital Media panel this year with Don the Tool King and the CEO of Beyond the Rack. The discussion is led by bankers and analysts who cover the e-commerce space. This year, logistics and inventory (Do you job it out? CAPEX it?) was among the hotter topics. Our market validation vis-a-vis panel discussions with these high-caliber attendees is flattering. When someone who runs a $17 billion fund nods in agreement -- well, nothing is quite like it.

This year, I spent most of my time differently than in the past. I focused on briefing investors interested in e-commerce platforms and, hopefully, Blueport.

Meetings were 25 minutes each (with 5 minutes for travel time to the next meeting lovingly factored in -- very 503, you know 917 wouldn't do that). They’re like those goofy Hollywood junket interviews for movie premieres. I did my best to not pull a Christian Bale, while sitting in a hotel room stripped of its beds (because THAT would be awkward), saying roughly the same thing over and over, changing it slightly for the audience and its reactions. They went something like this:

Them: Are you profitable?
Us: What's your average check size?
Them: Year-over-year growth?
Us: What are you looking for in your next portfolio company? 
Them: We typically would invest $25 to $50 million, but we did a round with Facebook at $200.
Us: OK, we want $5. Can we make that work?

Before you can imagine, there's a knock on the door. It's over and on to the next. It's a blast, and it’s exactly what I love about my career; that it's not a job or work per se, but it's fun. I'm insanely lucky. Events like this remind me of that.

Related posts:

• E-Commerce 2.0 -- the Next Wave
• The Next Big Thing in Big-Ticket E-Commerce
• Does Your Business Need a Franchise Commerce Solution for the Web?
• Creating an Immersive Online Shopping Experience

Copyright 2010, Official Blog of Blueport Commerce

Consolidation seems to be the word of the day.

This week’s news of eBay’s purchase of GSI Commerce was the latest in a steady stream of consolidation and acquisitions in the e-commerce retail industry that I am very excited to see.  No doubt, the result of this trend has been a tremendous validation across all sectors of retail and e-commerce technology and a boon to all players in this space.

For example, we are seeing a growth amongst enterprise class retail POS solutions such as those run by Oracle, stemming largely from this summer’s ATG purchase.  We are also seeing a growing focus on big-ticket retail workforce-warehouse solutions such as those designed by RedPrairie.  Their acquisition by Escalate Retail recently only strengthened this trend.  Last year’s IBM/Sterling Commerce buyout was also a pivotal turn for the industry, strengthening Big Blue’s position and helping them close the gap on multi channel SaaS offerings. The effects on other platform players like Blueport Commerce, as well as on tertiary vendors and tech providers (the likes of Akamai Technologies) that serve these companies has also been extremely positive from a growth standpoint.

I think the most important thing to note is that the consumer was not left out of these recent shopping sprees from billion dollar publicly traded companies.  In fact, this week’s eBay’s acquisition of GSI Commerce proves even a tried and true marketplace leader does not know all and needs to redefine its strategy to meet changing consumer needs.  The result of many of these acquisitions is actually a better offering for clients and a better way for them to manage their business.

The next twelve months in our industry will be interesting to say the least.




Copyright 2010, Official Blog of Blueport Commerce

Excerpts from Lazard Capital Markets  Tech and Media Conference
March, 13, 2011; Boston, MA

Blueport Commerce executives recently participated in a panel presentation titled “E-Commerce 2.0: The Next Wave” at Lazard Capital Markets Annual Technology & Media Conference. Held in Boston, on March 14 and 15. This conference brought together industry executives in a fireside chat format, with presentations from more than 50 leading technology, media and Internet companies. 

Drawing on his deep expertise developing online strategies for leading big-ticket retailers, President and Chief Executive Officer Carl Prindle, discussed the next e-commerce frontier and what brands need to do to capitalize on its growth.  Below are some key excerpts from his presentation:

Colin Sebastian – Lazard Capital Markets:  Carl, please take a minute to introduce Blueport.

Blueport is the only managed e-commerce provider focused on localized, big ticket commerce.

Think of us as GSI Commerce (GSIC) for players that need to involve local stores in their online efforts and whose products don’t fit in a UPS box.

Our clients range from a $250M furniture chain in Chicago, a $1B appliance, electronics and furniture superstore chain in Canada, a $4B flooring retailer with 1,100 independent dealers, to Sears (SHLD).

We provide each with a managed e-commerce solution – a localized, cross-channel commerce platform and the managed services to make their unique businesses work online.

CS: The pace of innovation in e-commerce is accelerating.  This is also driving another step forward in the shift of commerce and advertising from offline to online channels.  Given this overall trend, in your own businesses and markets, can you specify what are the 2 or 3 most important drivers of growth today?

Well, this session is definitely aptly named.  We’re at an inflection point – the start of a second wave of e-commerce.

The first wave of ecommerce was characterized by the Amazon model – online shopping for relatively simple, understood products shipped via UPS. 

There’s very little local store involvement in this model.  Customers buy things on their lunch break, and a guy in a brown shirt delivers it. 

A massive eco-system has grown supporting this model in last 15 years – advertising, merchandising, technology and so on. And, it works great – we see 45% penetration in some categories like PCs.

But, the e-com 1.0 model is bounded in a couple of ways.  One boundary is size – this model probably only works for less than half of all retail, less if you include services. 

The other boundary is profitability – e-com 1.0 was first because it’s easier.  Because it’s easy, it’s prone to commoditization, price pressure…it’s an efficient market, with all of the margin pressure that it entails.

What we’re seeing now is a second wave that pushes past these boundaries, engages the rest of the retail economy, and can be more profitable.

What’s driving it? Consumers looking to apply the habits learned via the Amazon model to new areas.  Companies that that have for a long time been on the sidelines because they DIDN’T fit that model – are now heading to the internet to meet them. 

The energy, the growth, is in the technology connecting the two – whether it is mobile, social, coupon sites, etc. – new technologies are giving new players access to new customers.

And Blueport is providing the multi-channel solutions for these new players to do something meaningful with that traffic.

CS:  You mention mobile. How big a factor is mobile becoming, for example as a percentage of your own transactions or volume, or as a lead generation tool?

Mobile is a huge factor, but different depending on whether you are an e-com 1 or e-com 2 player.

For e-com 1 players, mobile’s increased convenience is arguably driving new volume.  It’s also increasing price transparency, which accelerates the commoditization of some of these categories.

For an e-com 2 player, it’s a huge factor in a different way:  local.  Where e-com 1 was national, e-com 2 is local – local businesses, local services, huge retail chains were their offering is fundamentally local.

Take appliances as an example – I don’t think we’ll see refrigerators transacted via phone any time soon, but mobile can drive customers to local stores, critical for retailers trying to gain a slice of precious weekend “in-store” shopping minutes.

The game changer that starts to blend the two is the tablet…increased use of big screen browsing plus local is intriguing.

CS: There is a fairly rapid increase in merchant and enterprise use of Facebook, not only as a tool to reach out and communicate with consumers, but also to drive transactions.  Similar to the mobile question, how quickly is social becoming a meaningful part of real lead generation and driving online sales?

Well, Facebook, at its most powerful, is a personal network of friends.  A company interrupting that conversation can be pretty cringe worthy.  A company trying to be your friend doesn’t really work.

At the same time, along with apps, Facebook has become the “other” Internet, and retailers have to be there. 

We’ve seen it work in three ways:

1. Brand Building: in high engagement categories, brands can interact with their customers on topics they are passionate about.
2. Deals: Facebook can replace email as a way to distribute deals.
3. As a Platform: we look at Facebook as an emerging platform/operating system that can host online stores with built in traffic.

CS:  Blueport appears to be in a sweet-spot helping merchants in challenging product categories figure out their e-commerce strategies.  Can you talk about the multi-channel environment, how the pace of that shift online may be changing?

It’s a phenomenal time to be where we are.  As we’ve talked about, there’s a seismic change from e-com 1 to e-com 2, and we’re in the middle of it.

You asked about the multi-channel environment.  The term multi-channel has been around a while, but its meaning is changing. 

In e-com 1, multichannel meant exactly/only that – more than one channel.  Retailers in categories that work well via direct ship built drop ship e-com systems, often entirely separate from their store business.

In e-com 2 today, we see true multi-channel, or cross-channel commerce (or just “commerce”).  Retailers are using the internet to drive their core business, not build a separate one.

Companies that were on the sidelines are now investing in solutions that reflect their businesses.  They look to online to drive customers to local stores, sell their local inventory and services, reflect their local pricing and local deals – to drive their core business.

A client, CarpetOne, is one of my favorite examples of this.  They are a $4B flooring retailer in 1,100 local markets.  They didn’t want to be Lumber Liquidators and drop-ship cheap boxes of hardwood.  They wanted to drive their core business – local installation of quality flooring. We enable that – their site reflects each market’s local product, pricing – pictures of owner’s dog, whatever makes that local market work.  It’s a seamless online experience that connects online to local store.

Sears (SHLD) – is a company taking another innovative approach.  They are reentering the furniture category via a unique cross-channel strategy.  They’re putting small footprint galleries in their stores, that drives traffic to a dedicated furniture website that we run for them, http://sears.furniture.com.  The site taps into local inventory, and Sears customers can get a sofa delivered tomorrow for $79.  Blueport powers the whole thing.

So, we’re seeing massive change in these categories, the evolution of true cross-channel categories, and it has accelerated dramatically in last 18 month. 

CS:  What are the key attributes that a bricks-and-mortar retailer or supplier of goods look for in an e-commerce vendor?

When looking at vendors, look at what experience they have in YOUR vertical.  Are you looking for an e-com 1 solution, or e-com 2?  Do you want a direct ship, separate enterprise, or do you want your local markets involved? 

Make sure the vendor has experience in your markets and your vision of what you want ecommerce to do for your core business. 

You can make some disastrous mistakes trying to sell appliances or furniture like you do shoes & apparel.

CS:  What would it cost a retailer or brand to build and maintain a state of the art e-commerce site from scratch, versus using a service provider such as Blueport?

Here again, it depends on what you’re selling. 

If you’re looking for an e-com 1 solution – you can put up a Yahoo! store up for next to nothing.  My 10 year old has one.

For e-com 2 – it’s more complex, requiring far more integration with your local stores’ existing systems and operations.  There’s no Yahoo! store or ready-made platform for that (but Blueport is close).

If you try to build an e-com 2 solution yourself, you have to look at three costs:  the cost to build it, the cost to run it, and the opportunity cost of screwing it up. 

We have a current client who first tried to build it themselves.  They spent $3M, and it never got off the ground.  It was two years of lost opportunity. 

With Blueport, they pay a monthly platform fee and a revenue share.  We’ve done major redesigns of their sites three times in the last two years, and added countless new features.  And they pay only their share of the overall platform and hosting costs.

We also help run the business for them from a marketing, merchandising and services perspective.  This is paid through the revenue share, so they get a turnkey, expert staff on a pay for performance basis.

This story has repeated itself a number of times – people trying it themselves, then deciding to work with us.  At the other end of our contracts, we’ve never lost a renewal, so people see the value of what we do (and would prefer not to have to do it themselves).

Part of the story is that the categories we’re in are a good fit for outsourcing.  They are challenging, don’t match the internal expertise of the players in them, and ultimately, they’re not like PC’s or software, where online is 45%-65% or more of volume. Stores are still key, so our clients get to focus on that part of their business, while we port and drive that business online.

CS:  Can you talk about the competitive nature of your business, who do you see as the most successful competitors and what are trends in pricing for these e-commerce services?

Sure, we segment the market on two dimensions. 

One dimension is e-com 1 versus e-com 2.  Is the customer in a market that will be a simple drop ship model, or do they need a cross-channel solution involving local stores?

The other dimension is platform versus managed solution.  Does the customer just want a technology solution, or are they looking for a partner to help them manage their online business?

On the e-com 1 side of the market, e-com 1 platforms are increasingly commoditized and under a lot of price pressure.  It’s a pure customer acquisition game.  Yahoo stores again.

For e-com 1 managed solutions, GSI Commerce (GSIC) is dominant with a huge lead in infrastructure and increasingly in services, where they’ve made some great strategic acquisitions.  While Amazon (AMZN) keeps looking at this space, GSI is the clear leader.

On the e-com 2 side of the market, e-com 2 platforms are mainly custom builds from players like IBM, and ATG (ORCL).  These are big dollar projects with two commas in the total cost, and they leave the customer to manage the solution - there’s no marketing, management, etc. And, they don’t have a ton of experience in these e-com 2 categories.

For e-com 2 managed solutions, where Blueport plays, we’ve yet to run up against a true competitor. 

I guess we really have two competitors: a customer doing nothing, which is less and less of a factor, and a customer trying to do it themselves, which with our case studies, is an easier and easier argument to overcome.  In a lot of cases, people are coming to us now who tried themselves, and now want out.

We expect competition to evolve, but we have a technology platform and service staff with a lot of specific functionality and experience in these markets, which makes it easy to talk to prospective clients, most of whom have been on the sidelines waiting for a provider that understands their business.

CS: That’s time – thanks to everyone for their participation.

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