As 2011 comes to a close, reporters, bloggers and now we at Blueport Commerce are talking about the hot e-commerce trends and predictions for the new year. After 2011, a year in which e-commerce sales grew year-over-year despite the floundering economy, we’re expecting to see some of the seedlings of trends blossom into their own in a new year where technology and consumers’ adoption of e-commerce will continue to explode.
Trend #1: Online or Offline, Customer Experience Counts
Customers expect to be able to shop wherever and whenever they want. To facilitate this, retailers need to create a seamless experience so that there is no difference for consumers, whether they are shopping online or in-store. IMediaConnection used the term “phygital” to refer to the engagement between brands and their customers and how the relationship needs to be consistent regardless of the medium. The consistency builds the relationships, the relevancy and sales.
In this regard, beyond marketing message, online retailers need to make their products as relevant online as they are in person. Consumers expect to have a rich online experience that will stand in for the offline experience they would otherwise have. Expect to see richer product descriptions and imagery, product videos and even user-generated content that is detailed and visual to give fellow consumers additional product information.
Trend #2 Mobile Commerce and Tablet Commerce Will Continue to Grow
If you didn’t believe it before, certainly the 2011 holiday shopping’s couch commerce tells you that consumers are buying via mobile devices, whether smartphones or tablets. Experts predict that mobile transactions will grow to make up 20 percent or more of all e-commerce transactions. Online retailers need to continue to brush up on their mobile presentation, as well as get ready to leverage the geo-location information provided by such devices to reach consumers when they are nearby and to close the gap on closing sales.
Trend #3: Increased Social Integrations with Increased Options for Customers and E-Retailers
While it is doubtful f-commerce will truly take off any time soon, Facebook and social networks are not going anywhere, and nearly half of consumers who are on e-commerce websites will simultaneously be on a social network. E-retailers will integrate more with Facebook, beyond the “like.” Perhaps following online content sites’ “recently read” features, e-commerce sites will adopt “recently bought” or “recently browsed” to encourage relevant social sharing.
Additionally, brands will further use social networks to develop those ever-important relationships with their consumers. Strong bonds through such networks will help online merchants close the sale and keep the customers coming back.
What do you think of our 2012 trends? Do you agree or have more of your own? Share your thoughts in the comments.
Related posts:
Copyright 2010, Official Blog of Blueport Commerce
3 Key E-Commerce Trends to Watch in 2012
Friday, December 30, 2011 by
Morgan Woodruff
Rethink Shopping Cart Abandonment on Your E-Commerce Site
Friday, December 16, 2011 by
Betsy Miller
Cart abandoners are not the enemies of your online retail business, skewing your site metrics. In fact, they could be your best prospects.
So says research conducted by ClickZ’s Charles Nicholls to be compiled in an e-book this month. His analysis of the behavior of more than 600,000 online users and 250,000 e-commerce transactions show that shopping cart abandonment is now a natural part of the buying process. The key for e-commerce merchants is to recognize cart abandonment as such and then to create marketing programs to capitalize on the different situations in which customers abandon their carts.
Nicholls split customers who abandon their carts into three segments: one-time abandoners, serial abandoners and recent goal abandoners. Serial abandoners appear to be the sweet spot for conversions.
Serial Shopping Cart Abandoners
Serial shopping cart abandoners put items in their carts and then abandon their purchases multiple times within a one-month timeframe. Forty-eight percent of these customers will convert after being remarketed to – that’s more than twice the rate at which one-time abandoners who are remarketed to convert. An average of 18 percent of one-time abandoners will pull the trigger on purchasing after being remarketed to.
Recent goal abandoners are e-commerce customers who have already completed purchases with your website but then come back to your site and abandon their carts. These customers, who have already bought from your e-commerce website, are the most likely to abandon their carts again, but they are also the most likely to make another purchase from you.
How E-Commerce Retailers Can Capitalize on Shopping Cart Abandoners
E-commerce merchants need to recognize shopping cart abandonment as a natural step in the buying process and create plans that offer specific messaging and service to cart abandoners. Here at Blueport, we have helped many of our clients find success by creating marketing programs like these:
Remarketing Emails
Your e-commerce retail business should have an email plan in place to reach out to customers who abandon their shopping carts. The messaging can be fairly specific since you know a lot about these customers, including the specific items and categories they are shopping for.
And don’t forget to reach out to those who have bought from your website. Follow up with additional offers and related products based on their purchases. If you win a customer over with one purchase, you could have a customer for life.
Remarketing Advertising
Similar to an email strategy, you can use display advertising to remarket to your customers once they have left your site. While there is debate about how Big Brother remarketing and retargeting ads can feel to consumers, when implemented correctly, they can lead to increased conversions.
Related Posts:
So says research conducted by ClickZ’s Charles Nicholls to be compiled in an e-book this month. His analysis of the behavior of more than 600,000 online users and 250,000 e-commerce transactions show that shopping cart abandonment is now a natural part of the buying process. The key for e-commerce merchants is to recognize cart abandonment as such and then to create marketing programs to capitalize on the different situations in which customers abandon their carts.
Nicholls split customers who abandon their carts into three segments: one-time abandoners, serial abandoners and recent goal abandoners. Serial abandoners appear to be the sweet spot for conversions.
Serial Shopping Cart Abandoners
Serial shopping cart abandoners put items in their carts and then abandon their purchases multiple times within a one-month timeframe. Forty-eight percent of these customers will convert after being remarketed to – that’s more than twice the rate at which one-time abandoners who are remarketed to convert. An average of 18 percent of one-time abandoners will pull the trigger on purchasing after being remarketed to.
Recent goal abandoners are e-commerce customers who have already completed purchases with your website but then come back to your site and abandon their carts. These customers, who have already bought from your e-commerce website, are the most likely to abandon their carts again, but they are also the most likely to make another purchase from you.
How E-Commerce Retailers Can Capitalize on Shopping Cart Abandoners
E-commerce merchants need to recognize shopping cart abandonment as a natural step in the buying process and create plans that offer specific messaging and service to cart abandoners. Here at Blueport, we have helped many of our clients find success by creating marketing programs like these:
Remarketing Emails
Your e-commerce retail business should have an email plan in place to reach out to customers who abandon their shopping carts. The messaging can be fairly specific since you know a lot about these customers, including the specific items and categories they are shopping for.
And don’t forget to reach out to those who have bought from your website. Follow up with additional offers and related products based on their purchases. If you win a customer over with one purchase, you could have a customer for life.
Remarketing Advertising
Similar to an email strategy, you can use display advertising to remarket to your customers once they have left your site. While there is debate about how Big Brother remarketing and retargeting ads can feel to consumers, when implemented correctly, they can lead to increased conversions.
Related Posts:
- New Insights on How Consumers Research Products and Shop Online
- Engaging Site Visitors Through Email
- Online Research Is Critical for Big-Ticket Purchases
- Will You Make Back Your Online Advertising Spend in Store Sales? Yes!
Luxury Websites: If You Don’t Have E-Commerce, Why Not?
Friday, October 28, 2011 by
Morgan Woodruff
Many luxury brands have been slow to cultivate their online presence, and even slower to integrate e-commerce capabilities. They seemed to think that the mass appeal and convenience of online shopping would dilute the value and prestige of their brands or that consumers would not be willing to pay big-ticket prices via the Web. This has been proven wrong, as research shows that wealthy people shop online more frequently and spend more per transaction. As of late, many luxury retailers have come around to see the value of the Internet for driving sales, and, even more, the value in allowing customers to transact on an e-commerce site.
According to a recent study by PM Digital, 81% of the luxury websites surveyed now have e-commerce, and the sites with e-commerce get 98% of the traffic that goes to these luxury sites. About a third of this traffic comes from search engines, and there is very little cross traffic, since luxury shoppers are very loyal to their brands. Surprisingly, only a very small amount of luxury brands’ traffic (0.29%) comes from luxury daily deals sites, like Gilt Groupe, ideeli and RueLaLa.
What Makes Luxury E-Commerce Successful?
When selling big-ticket luxury items online, however, it’s not as simple as using a plug-and-play e-commerce solution. Luxury brand customers expect a high-end boutique experience whether in-person or online. Here are some aspects to consider when selling luxury via e-commerce:
According to a recent study by PM Digital, 81% of the luxury websites surveyed now have e-commerce, and the sites with e-commerce get 98% of the traffic that goes to these luxury sites. About a third of this traffic comes from search engines, and there is very little cross traffic, since luxury shoppers are very loyal to their brands. Surprisingly, only a very small amount of luxury brands’ traffic (0.29%) comes from luxury daily deals sites, like Gilt Groupe, ideeli and RueLaLa.
What Makes Luxury E-Commerce Successful?
When selling big-ticket luxury items online, however, it’s not as simple as using a plug-and-play e-commerce solution. Luxury brand customers expect a high-end boutique experience whether in-person or online. Here are some aspects to consider when selling luxury via e-commerce:
- You need to provide rich product descriptions. The more expensive an item is, the more information the consumer will want you to provide.
- Offer exceptional customer service, getting as close to what you offer in-store with a personal shopper. On the Web, that translates to online chat.
- The entire online shopping experience should be like going into one of your boutiques. Craft a strong welcome message on your home page. And then as customers drill down into products, allow them to zoom in on the images or even watch product videos – the goal is for them to handle the product, virtually.
There’s a Lot to Like About Facebook and Ecommerce Marketing
Friday, April 22, 2011 by
Betsy Miller
Last week we posted about Forrester’s report on Facebook as an ecommerce driver. And while we agree that Facebook will likely not become a major ecommerce platform any time soon, we do see the social network’s value for marketing your ecommerce brand.
There’s more to marketing on Facebook than adding a Like button to your web pages. You need to become a content publisher with a marketing slant. You need to provide value in the form of resources, product information and special deals. The frequency and scope depends on your audience, and cultivating that audience is the number-one step for successful marketing on Facebook.
Building a Facebook Audience for Your Ecommerce Website
We recently worked with one of our clients to run a Facebook fan promotion. The more likes the store’s Facebook page received within a specific time period, the larger the discount all of the Facebook fans would get.
We promoted this “The More You Like, the More You Save” campaign on Facebook, the store’s website and through email marketing. The nature of the campaign was for fans to spread the word -- if their friends liked the page too, everyone would save more. In two weeks, we nearly doubled the store’s Facebook fans, but it didn’t end there. Once we posted the special coupon code on Facebook, we promoted the discount to the site’s audience, encouraging an additional 1,300 of the store’s customers to go onto Facebook and like the page to get access to the code.
We’ve been able to attribute tens of thousands of online sales to this promotion, not to mention additional in-store traffic and sales. And we can continue to use the store’s Facebook page to market to these customers.
Create Social Noise Around Your Ecommerce Brand
A side effect of this promotion beyond the dollars, is that this store’s customers are talking to each other on Facebook about the store and its products. They’ve discussed the furniture they planned to buy with their discount, great experiences they had and what they like most about the store and brand. By administering this Facebook promotion, we’ve helped our client to create an army of brand ambassadors -- specifically brand ambassadors who like to post to social networking sites.
Engage Your Facebook Fans
Now the big challenge is engaging these fans and keeping them interested in a brand that sells big-ticket items the average consumer does not buy every day. To successfully do this, you need to think community more than transactional. Help your customers keep the conversation going about their purchases. Solicit pictures of what they bought, provide tips for caring for their items, and offer tangential information from other sources that complements your brand. This will help your fans remember you, recommend you and come back to you the next time they’re looking to make a purchase.
Copyright 2010, Official Blog of Blueport Commerce
There’s more to marketing on Facebook than adding a Like button to your web pages. You need to become a content publisher with a marketing slant. You need to provide value in the form of resources, product information and special deals. The frequency and scope depends on your audience, and cultivating that audience is the number-one step for successful marketing on Facebook.
Building a Facebook Audience for Your Ecommerce Website
We recently worked with one of our clients to run a Facebook fan promotion. The more likes the store’s Facebook page received within a specific time period, the larger the discount all of the Facebook fans would get.
We promoted this “The More You Like, the More You Save” campaign on Facebook, the store’s website and through email marketing. The nature of the campaign was for fans to spread the word -- if their friends liked the page too, everyone would save more. In two weeks, we nearly doubled the store’s Facebook fans, but it didn’t end there. Once we posted the special coupon code on Facebook, we promoted the discount to the site’s audience, encouraging an additional 1,300 of the store’s customers to go onto Facebook and like the page to get access to the code.
We’ve been able to attribute tens of thousands of online sales to this promotion, not to mention additional in-store traffic and sales. And we can continue to use the store’s Facebook page to market to these customers.
Create Social Noise Around Your Ecommerce Brand
A side effect of this promotion beyond the dollars, is that this store’s customers are talking to each other on Facebook about the store and its products. They’ve discussed the furniture they planned to buy with their discount, great experiences they had and what they like most about the store and brand. By administering this Facebook promotion, we’ve helped our client to create an army of brand ambassadors -- specifically brand ambassadors who like to post to social networking sites.
Engage Your Facebook Fans
Now the big challenge is engaging these fans and keeping them interested in a brand that sells big-ticket items the average consumer does not buy every day. To successfully do this, you need to think community more than transactional. Help your customers keep the conversation going about their purchases. Solicit pictures of what they bought, provide tips for caring for their items, and offer tangential information from other sources that complements your brand. This will help your fans remember you, recommend you and come back to you the next time they’re looking to make a purchase.
Copyright 2010, Official Blog of Blueport Commerce
Facebook's Role in Social Shopping
Thursday, April 14, 2011 by
Betsy Miller
Will Facebook become a major ecommerce player? According to the latest from Forrester Research, probably not.
In her newly released report, “Will Facebook Ever Drive eCommerce?,” Forrester analyst Sucharita Mulpuru claims a social-network presence is less effective at online retail customer acquisition and retention than e-mail and paid search. She notes that Facebook's major challenge is that the majority of the 650 million users visit the social network to socialize, not to shop. While I agree Facebook is not on track to be the next Amazon or eBay, the social networking site does have a part to play in ecommerce.
Facebook and Online Considered Purchases
Facebook will likely never be a destination for major ecommerce transactions, but I do believe consumers will leverage the community's tools for the social aspect of shopping online and in-person. Whether sending a picture from their mobile phone or posting a link from an ecommerce site, Facebook is one of the quickest ways for consumers to ask their friends if they should get the new sofa in brown or gray.
Retailers can also use the Facebook platform to engage with customers and offer special deals and information specifically for their Facebook fans. Consumers want to be a part of the conversation, and Facebook lets you connect in new ways retailers only wished they could before. And a potential audience of 650 million makes Facebook a very difficult website for retailers to ignore.
What benefits you have seen from your retail store’s or brand’s Facebook presence? Has the site played a role in increasing conversions or helping to drive engagement?
Related posts:
Copyright 2010, Official Blog of Blueport Commerce
In her newly released report, “Will Facebook Ever Drive eCommerce?,” Forrester analyst Sucharita Mulpuru claims a social-network presence is less effective at online retail customer acquisition and retention than e-mail and paid search. She notes that Facebook's major challenge is that the majority of the 650 million users visit the social network to socialize, not to shop. While I agree Facebook is not on track to be the next Amazon or eBay, the social networking site does have a part to play in ecommerce.
Facebook and Online Considered Purchases
Facebook will likely never be a destination for major ecommerce transactions, but I do believe consumers will leverage the community's tools for the social aspect of shopping online and in-person. Whether sending a picture from their mobile phone or posting a link from an ecommerce site, Facebook is one of the quickest ways for consumers to ask their friends if they should get the new sofa in brown or gray.
Retailers can also use the Facebook platform to engage with customers and offer special deals and information specifically for their Facebook fans. Consumers want to be a part of the conversation, and Facebook lets you connect in new ways retailers only wished they could before. And a potential audience of 650 million makes Facebook a very difficult website for retailers to ignore.
What benefits you have seen from your retail store’s or brand’s Facebook presence? Has the site played a role in increasing conversions or helping to drive engagement?
Related posts:
- E-commerce 2.0 – The Next Wave
- The Numbers Speak for Themselves
- Online Shopping on Facebook Gains Momentum
- See, Like, Buy – Capitalizing on Group Buying and Facebook This Holiday Season
- Social Media Monitoring: Facebook and Ashley Furniture HomeStore
Copyright 2010, Official Blog of Blueport Commerce
E-commerce 2.0 – The Next Wave
Tuesday, March 22, 2011 by
Morgan Woodruff
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:
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.
Copyright 2010, Official Blog of Blueport Commerce
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:
- Brand Building: in high engagement categories, brands can interact with their customers on topics they are passionate about.
- Deals: Facebook can replace email as a way to distribute deals.
- As a Platform: we look at Facebook as an emerging platform/operating system that can host online stores with built in traffic.
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.
Copyright 2010, Official Blog of Blueport Commerce
Forrester's Online Retail Growth Forecast
Thursday, March 3, 2011 by
Morgan Woodruff
This week, Forrester Research issued its Online Retail Forecast, 2010-2015. The firm expects US ecommerce retail to have an average annual growth rate of 10% from 2010 to 2015, reaching $278.9 billion in 2015.
Forrester thinks several growth factors are propelling this double-digit growth for the online channel:
Noteworthy for the big-ticket category was Forrester’s observation that while a growing number of Web shoppers are increasing their spend on “traditional” online categories, like books and media products, they are also increasingly purchasing online in new categories that are “high touch, high consideration goods like furniture or home appliances.”
By 2015, Forrester projects 11% of overall sales to be transacted through the Web channel as consumers spend significantly more online in the future. This means retailers in all categories, and particularly big-ticket players, will need to continue to rework and rethink their multichannel retail models, ensuring a cohesive relationship between their online stores and their bricks-and-mortar network.
Copyright 2010, Official Blog of Blueport Commerce
Forrester thinks several growth factors are propelling this double-digit growth for the online channel:
- Universal Web connectivity among consumers.
- Increasing consumer familiarity with and preference for online retail shopping.
- Best-in-class shopping experiences.
- New online shopping models like flash sale sites, which have generated excitement and grown rapidly.
Noteworthy for the big-ticket category was Forrester’s observation that while a growing number of Web shoppers are increasing their spend on “traditional” online categories, like books and media products, they are also increasingly purchasing online in new categories that are “high touch, high consideration goods like furniture or home appliances.”
By 2015, Forrester projects 11% of overall sales to be transacted through the Web channel as consumers spend significantly more online in the future. This means retailers in all categories, and particularly big-ticket players, will need to continue to rework and rethink their multichannel retail models, ensuring a cohesive relationship between their online stores and their bricks-and-mortar network.
Copyright 2010, Official Blog of Blueport Commerce
The Next Frontier for E-Commerce
Friday, October 1, 2010 by
Morgan Woodruff
According to the State of Retailing Online 2010 report from Forrester and Shop.org, the next big frontier for e-commerce lies in international expansion. The annual report was unveiled this year at the 2010 Shop.org Annual Summit in Dallas, Texas, and it provides insight into where B2C e-commerce retailers are in terms of their capability to expand globally.
According to the report, nearly 73% of the 87 online retailers surveyed are already sending merchandise abroad from their home country's distribution center, with an additional 17% having an established foreign warehouse in place. Retailers who ship abroad see about 5% of their revenue generated from foreign orders.
However the big hurdle still remains in establishing and testing e-commerce logistics or e-commerce payment solutions to service these international customers. For example, when it comes to processing international returns, 37% of retailers currently require customers who want to return an item use a returns center in the retailer's country of origin, while 12% have an international returns center located in their own country to handle foreign returns.
Beyond just international e-commerce expansion, the report also offered a picture of some of the gains online retailers are beginning to see resulting from online retail site improvements, especially as the industry gears up for the critical holiday shopping period: 54% of online retailers say they've increased conversion rates over 2009 levels, 27% have seen gains in units per transaction, 47% say the value of average orders has gone up, and 31% say they've seen a decline in shopping cart abandonment rates, a key measure of customer satisfaction.
I’d love to hear whether these gains are in line with what you are seeing across your e-commerce sites?
Copyright 2010, Official Blog of Blueport Commerce
According to the report, nearly 73% of the 87 online retailers surveyed are already sending merchandise abroad from their home country's distribution center, with an additional 17% having an established foreign warehouse in place. Retailers who ship abroad see about 5% of their revenue generated from foreign orders.
However the big hurdle still remains in establishing and testing e-commerce logistics or e-commerce payment solutions to service these international customers. For example, when it comes to processing international returns, 37% of retailers currently require customers who want to return an item use a returns center in the retailer's country of origin, while 12% have an international returns center located in their own country to handle foreign returns.
Beyond just international e-commerce expansion, the report also offered a picture of some of the gains online retailers are beginning to see resulting from online retail site improvements, especially as the industry gears up for the critical holiday shopping period: 54% of online retailers say they've increased conversion rates over 2009 levels, 27% have seen gains in units per transaction, 47% say the value of average orders has gone up, and 31% say they've seen a decline in shopping cart abandonment rates, a key measure of customer satisfaction.
I’d love to hear whether these gains are in line with what you are seeing across your e-commerce sites?
Copyright 2010, Official Blog of Blueport Commerce
Offering Your Customers Multiple Ecommerce Payment Solutions
Wednesday, April 28, 2010 by
Morgan Woodruff
Offering your online customers flexible payment options is a no brainer. This final step in the ecommerce transaction process is critical for the customer who may very quickly abandon their cart if they cannot pay how they want to, or if checkout is not seamless and easy.
Be it credit/debit cards, PayPal, gift cards or loyalty points, providing a multitude of ecommerce payment solutions is the final component of a successful ecommerce shopping experience that drives conversion and minimizes cart abandonment.
But integrating multiple ecommerce payment solutions and checkout options into your site can be a daunting and time consuming task. Finding an ecommerce platform that supports these multiple payment options can be even more difficult.
That's why at Blueport, we make integrating multiple ecommerce payments solutions a one step process for our clients. All of the payment and checkout tools that you need are readily integrated into the Blueport ecommerce platform.
So, when your online store launches, so does a robust and flexible payments and checkout process. It's really that simple.
Be it credit/debit cards, PayPal, gift cards or loyalty points, providing a multitude of ecommerce payment solutions is the final component of a successful ecommerce shopping experience that drives conversion and minimizes cart abandonment.
But integrating multiple ecommerce payment solutions and checkout options into your site can be a daunting and time consuming task. Finding an ecommerce platform that supports these multiple payment options can be even more difficult.
That's why at Blueport, we make integrating multiple ecommerce payments solutions a one step process for our clients. All of the payment and checkout tools that you need are readily integrated into the Blueport ecommerce platform.
So, when your online store launches, so does a robust and flexible payments and checkout process. It's really that simple.
Ecommerce Software Packages: Which one is right for me?
Wednesday, April 7, 2010 by
Morgan Woodruff
Any retailer setting up an ecommerce store or considering replatforming their current offering, knows the choices in ecommerce shopping software are endless. The landscape is wide, with numerous vendors offering ecommerce software packages.
The big-ticket retailer often finds their ecommerce shopping software choices to be even more complex. This is because their needs are inherently different. They go beyond setting up a basic online shop, to require more sophisticated merchandising capabilities and fulfillment, and an ability to understand their unique business models. Performing an ecommerce software comparison seems an impossible task.
So where do you start in your decision making process? Here are two initial points to consider:
1. Start by evaluating your current ecommerce shopping software or the retail systems you use to run your business. Many big-ticket retailers find their systems are not ecommerce ready, and that they may pose a barrier to going online. Make sure the ecommerce software packages you are considering are able to seamlessly integrate with your current systems. At its best, your online ecommerce solution should be able to extract the data found in your current systems, augment for e-commerce, then return completed ecommerce transactions to you that are indistinguishable from orders placed in your stores.
2. Make your ecommerce store an extension of your bricks and mortar store, not an island in itself. Look for an ecommerce software package that treats your SKUs, prices and your product information exactly like store orders from a fulfillment and service perspective. This is a fundamental difference between ecommerce shopping software for mass merchants, and that which is geared towards big-ticket retailers. The result is less work, higher customer satisfaction and a reduced need to develop separate staff or procedures for online sales. E-commerce becomes another store, seamlessly integrated with your strategy, operations and reporting.
Finding an ecommerce service provider that meets these inital criteria is the first step in setting up your ecommerce store and capitalizing on the advantages of e-commerce.
The big-ticket retailer often finds their ecommerce shopping software choices to be even more complex. This is because their needs are inherently different. They go beyond setting up a basic online shop, to require more sophisticated merchandising capabilities and fulfillment, and an ability to understand their unique business models. Performing an ecommerce software comparison seems an impossible task.
So where do you start in your decision making process? Here are two initial points to consider:
1. Start by evaluating your current ecommerce shopping software or the retail systems you use to run your business. Many big-ticket retailers find their systems are not ecommerce ready, and that they may pose a barrier to going online. Make sure the ecommerce software packages you are considering are able to seamlessly integrate with your current systems. At its best, your online ecommerce solution should be able to extract the data found in your current systems, augment for e-commerce, then return completed ecommerce transactions to you that are indistinguishable from orders placed in your stores.
2. Make your ecommerce store an extension of your bricks and mortar store, not an island in itself. Look for an ecommerce software package that treats your SKUs, prices and your product information exactly like store orders from a fulfillment and service perspective. This is a fundamental difference between ecommerce shopping software for mass merchants, and that which is geared towards big-ticket retailers. The result is less work, higher customer satisfaction and a reduced need to develop separate staff or procedures for online sales. E-commerce becomes another store, seamlessly integrated with your strategy, operations and reporting.
Finding an ecommerce service provider that meets these inital criteria is the first step in setting up your ecommerce store and capitalizing on the advantages of e-commerce.
Overcoming the Barriers to Big-Ticket Ecommerce
Monday, March 15, 2010 by
Betsy Miller
Big-ticket retailers face a whole different set of ecommerce challenges than do their mass merchant counterparts. That's because big-ticket ecommerce is fundamentally different than traditional ecommerce, long typified by consumers purchasing inexpensive, simple products online and receiving shipment via parcel service.
Big-ticket retail presents unique ecommerce barriers. It involves more expensive, less well-understood products — furniture, appliances, TVs, flooring, construction materials. Prices are higher and consumer confidence is lower. Inventory is bulky, expensive to move around the country and more expensive to return.
Because of this, big-ticket commerce is fundamentally local. Stores play a critical role. Ecommerce becomes a powerful tool to help stores compete in their local markets rather than a national channel that bypasses them. Online efforts serve to drive store traffic, generate leads and consummate online transactions, cost effectively and measurably.
For these reasons and more, big-ticket retailers often find their foray into the ecommerce space a daunting challenge. How do they successfully overcome these ecommerce barriers to manage the numerous components - merchandise, operations, and IT? Often, big-ticket retailers find that standard ecommerce platforms do not offer the tailored solutions that are required to successfully bring their products online.
At Blueport, our technology is specifically designed to help big-ticket retailers overcome these ecommerce barriers and develop success full online storefront that drive their sales.
We match our technology platform and services to address the unique business needs of big-ticket retailers, not squeeze them into a commodity-focused, inflexible platform that doesn't address the intricacies of your business. We focus on what makes these retailers' business unique, so they can focus on what matters most — growing their business online.
Big-ticket retail presents unique ecommerce barriers. It involves more expensive, less well-understood products — furniture, appliances, TVs, flooring, construction materials. Prices are higher and consumer confidence is lower. Inventory is bulky, expensive to move around the country and more expensive to return.
Because of this, big-ticket commerce is fundamentally local. Stores play a critical role. Ecommerce becomes a powerful tool to help stores compete in their local markets rather than a national channel that bypasses them. Online efforts serve to drive store traffic, generate leads and consummate online transactions, cost effectively and measurably.
For these reasons and more, big-ticket retailers often find their foray into the ecommerce space a daunting challenge. How do they successfully overcome these ecommerce barriers to manage the numerous components - merchandise, operations, and IT? Often, big-ticket retailers find that standard ecommerce platforms do not offer the tailored solutions that are required to successfully bring their products online.
At Blueport, our technology is specifically designed to help big-ticket retailers overcome these ecommerce barriers and develop success full online storefront that drive their sales.
We match our technology platform and services to address the unique business needs of big-ticket retailers, not squeeze them into a commodity-focused, inflexible platform that doesn't address the intricacies of your business. We focus on what makes these retailers' business unique, so they can focus on what matters most — growing their business online.
Content Tips for Big-Ticket Email Marketing:
Part 1
Friday, March 12, 2010 by
Betsy Miller
Email marketing can be a big-ticket retailer's best friend. In the first few weeks of the buying cycle, email content that inspires and educates is key. Creating an email marketing sequence that guides a potental customer through the decision-making process, whether they ultimately complete the transaction online or offline, is a valuable ecommerce marketing strategy.
Inspiration: Similar to the way a customer might visit a bricks and mortar store to check out new or seasonal merchandise, use ‘what's new' content in your email marketing to emphasize new products, top sellers or trends that will inspire the customer to make a purchase.
Research: Particularly in the case of ‘big ticket' items, once inspired, customers typically set out to do more research before making the purchase. Use ecommerce email marketing to highlight why your product is better and why the customer should purchase it from you. The email content here should not be saturated with marketing language, but rather be clever, surprising and creative.
Advice: In using email marketing to make the sale, I often see big-ticket retailers forgetting to use this opportunity to educate the customer and establish a deeper relationship. Sending an email offering customers ‘how to' tips might not necessarily translate in to an immediate ecommerce purchase, but it will build a longer term relationship that will no doubt contribute to conversion down the road.
Copyright 2010, Official Blog of Blueport Commerce
Why Localization is Important for Business Ecommerce Solutions
Friday, March 12, 2010 by
Betsy Miller
As ecommerce evolves from a commodity marketplace to one where consumers make considered, "big ticket" retail purchases online, there are unique challenges that must be addressed. Big ticket ecommerce involves more expensive, less well-understood products - furniture, appliances, TVs, flooring, construction materials, etc. Prices are higher and consumer confidence is lower. Inventory is bulky, expensive to move around the country and more expensive to return.
For these reasons, big ticket commerce is fundamentally local. Stores play a critical role. Ecommerce becomes a powerful tool to help stores compete in their local markets rather than a national channel that bypasses them. Online efforts serve to drive store traffic, generate leads and consummate online transactions, cost effectively and measurably.
Blueport Commerce has developed a business ecommerce solution that is architected around this need for multi-channel localization. Its services drive results through a deep understanding of how consumers research and complete big ticket purchases online and in stores.
Approaching E-Commerce Applications With The Wisdom of Maturity
Monday, March 8, 2010 by
Morgan Woodruff
Blueport Commerce approaches technology with the wisdom of maturity. The Blueport technology team has experience in the e-commerce space dating back to the 1990s and has experienced firsthand the full panoply of technology hype from that era and since. With this experience we conservatively maintain loyalty to cost effective e-commerce applications while aggressively adopting proven new technologies.
Our core infrastructure is based on products from Microsoft, Adobe, HP, Cisco, F5, and Akamai. We utilize Microsoft’s .Net software development platform and SQL Server database engine as the foundation for our proprietary e-commerce platform. Visually engaging client side e-commerce applications are built with Adobe Flash. We implement secure connectivity with a range of Cisco IOS products. Our server farms are principally made up of HP servers running Microsoft Windows. We manage demand for our client web portals with F5 load balancers. Akamai provides us with geographic edge caching of content. None of these technology partners were born after Y2K but all are excellent with proven staying power.
Our e-commerce platform, shared by all of our clients, represents 10 years of evolution shaped by the unique requirements of “big ticket” e-commerce - from local branding, regional product availability, regional pricing and sale events, coupons, consumer financing, variable lead times, and the CRM and CMS systems to support them. With this library of processes and functionalities available to us, we can focus on the unique requirements of our clients rather than reinventing these complex processes or trying to repurpose an “off the shelf” e-commerce platform designed for simpler transactions.
Our custom platform can also adapt easily to partner systems. The long service technologies making up our core have naturally evolved integration pathways with most other competitive products. We leverage these to work freely with partner systems rooted in Oracle, IBM, and other, less well known companies.
Big Ticket vs. Small Ticket:
Why disaggregating e-commerce matters.
Friday, March 5, 2010 by
Carl Prindle
There’s no shortage of e-commerce conventional wisdom - sweeping pronouncements that online is growing at a certain rate. That one tactic works, another doesn’t. That a multi-channel strategy is increasingly important.
I love such analysis and opinion – back in the day, as a consultant at McKinsey, I performed and provided my fair share. However, I will point out the need to dig deeper. What is loosely called “e-commerce” is dramatically different in its application depending on what you are selling.
A few things to keep in mind as you digest the latest e-commerce wisdom or evaluate a vendor:
E-commerce expertise correlates with where money has been made to date, not where it will be made.
Well known e-commerce experts, agencies and technology companies become so because they’ve been doing it for a while and have been well paid for their work. As such, their experience tends to be in those categories that went online early and successfully, yielding enthusiastic clients and customers who could pay.
There’s nothing wrong with that, as long as you are also in those categories. If not, think about whether what you are being told makes sense for your business.
One example: It’s been said that 65% of e-commerce keyword searches include a manufacture name and/or model number. Most online agencies build keyword strategies around that fact. And, it works well in those categories that have dominated e-commerce in the past.
But, say you’re a furniture retailer.
Most of your prospective customers have no idea who manufactured the sofa they already own, much less the one they are thinking about buying. Model number? Forget it. Conventional wisdom is out the window - how will your agency react to not being able to rely a favorite approach?
Beware sweeping pronouncements and general statistics. Dig for what’s happening in your market.
I’m an e-com stat addict. There are outstanding analysts out there providing the pulse of e-commerce on a regular and accurate basis. That said, it’s important to pull apart e-commerce statistics and trends to find those that apply to what you do.
Some recent examples:
E-Commerce Growth Statistics
Pundits seem to be in general agreement that in 2009, e-commerce grew or shrank by single digit percentage points. In the face of brick and mortar declines, this is touted as strength – ecommerce holding its own despite significant economic headwinds.
All true – but there’s more to the story. Big ticket online took off in 2009.
Big ticket (think things that cost more and can’t ship via UPS…consumer durables like furniture, appliances, flooring) is 45% of the US Retail Economy, $550B in annual retail sales. It’s never done much online – until now.
Consumers are online and big ticket retailers are now meeting them there. Forrester reports customers feeling comfortable buying furniture and appliances online just in the last 18 months. Big ticket players Blueport works with are seeing monstrous comp increases for online sales and even bigger benefits in stores.
If you happen to be in big ticket markets, this is an opportunity you can’t miss…but easily could, if you just look at broader online growth stats.
E-Commerce by Channel Statistics
Similarly, stats show roughly 45% of e-commerce transacted by Web-only players and catalogers (i.e. pure plays), 15% by manufacturers, and 40% by retailers.
Beneath this stat is a dramatic big ticket vs. small ticket schism in who is winning in e-commerce.
For traditional (small ticket) e-commerce, pure plays have tremendous cost advantages. With no store costs, they can price low. Their products are well known, approaching commodity status, and the shipping is fast, cheap and risk free. In categories from books to shoes, pure plays are cleaning up.
Not so in big ticket. Here, consumers know less about the product. They want to touch and feel in a store. They look for trusted brands – not only for the product, but for the retailer who can deliver and service it. And, they are highly focused on delivery times and costs. Here, retail chains, with trusted brands, local stores and fast, cheap local delivery have the upper hand.
Combine these advantages with the growth noted above, and it’s a good time to be going online if you’re a big ticker player. And, if you’re a retailer in these categories, there’s certainly more than 40% of the online marketplace available to you.
The Importance of Cross-Channel Commerce
There’s significant recent buzz about “multi-channel” or “cross-channel” commerce as the next big thing. We couldn’t agree more – with emphasis on the “big”.
For small ticket items, I don’t think cross channel is that important. Anyone think that opening Zappos bricks and mortar stores is on any of the whiteboards at Amazon?
Conversely, in big ticket, cross channel is critical. The key differentiating factors in big ticket online are store based. Big ticket online and offline channels must be synchronized, as consumers move between them constantly.
This is why we’ve architected our platform to be localized. Big ticket commerce comes down to the local relationship between a consumer, a store, and the inventory in her area. If you’re in big ticket and you’re not reflecting this reality online, you’re missing the point.
Balance online conventional wisdom against what you know about your customers.
Ultimately, e-commerce comes down to a combination of persuading and enabling consumers to buy, using the internet.
Here again, how your consumers do this may not be the same as in “traditional” e-commerce categories.
To grossly over simplify traditional e-commerce shopping, it comes down to finding a product and deciding you like it. After that, the assumption is that UPS takes it from there - you will have your product cheaply, quickly, and some nice brown-shirted gentleman will take it back if things go awry.
As such, most e-commerce wisdom is focused on search and merchandising, helping consumers to find and buy (maybe getting a deal).
These areas are critical (and unique) in big ticket as well, but there’s more to the story – specifically, the part of the story that UPS takes care of in traditional, small ticket e-commerce.
With a sofa or a fridge, more goes into the shopping process than features and price. Customers want to touch and feel in a store. They may want to speak to an expert. They want to know how fast they can get something, and that delivery is as cheap as it can be. They may want financing options. They want to be sure the product can be serviced, and that, worst case it can be returned.
If these are questions your consumer is likely to ask, be sure to push beyond UPS-based ecom conventional wisdom. If you’re a retailer, you’ve got some of the best possible answers to these questions – be sure your online presence takes full advantage (see localization above).
* * *
As consumers look to buy more products online, and e-commerce pushes beyond the simple, UPSable products that were the first wave of e-commerce, the importance of disaggregating e-commerce increases. The opportunities online have changed. E-commerce conventional wisdom soon will too.
Copyright 2010, Official Blog of Blueport Commerce
The Next "BIG" Wave of Ecommerce: Big-Ticket Retail
Thursday, March 4, 2010 by
Carl Prindle
The products that fueled first generation e-commerce—books, software and music to name a few—are all simple to understand items that can be easily shipped to consumers. Today, we are at the tipping point of a second wave of online growth, as consumers push beyond these simple transactions to research and purchase more complex products online. This second wave of growth will be driven by big ticket retail, and it represents a seismic opportunity for those big ticket retail chains that are prepared to catch it.
But, profiting from big ticket e-commerce growth presents a new set of challenges for retailers. That these categories are some of the last to move online is not coincidental - big-ticket products like home furnishings and appliances are inherently challenging to sell online and many retailers in these markets have faced barriers to bringing their offerings online in the past.
Consumers must be made comfortable transacting “big-ticket” purchases. Their decision process is much longer. Shoppers may not know brand or model numbers for these items (know the manufacturer brand of the last sofa you bought?), making it imperative that product information presented online be compelling in its own right. Shoppers are likely to want to see products in a store or consult with a sales representative, meaning store, online, phone, chat and email experiences must be seamless. And, if all this is done perfectly and a consumer makes a purchase, these products often have complex shipping and installation requirements that can quickly become a nightmare for any retailer.
Nonetheless, retail chains, with their local presence, trusted brands and quick, inexpensive delivery have significant advantages pursuing this new e-commerce opportunity. While pure-play internet companies will likely continue to dominate small ticket markets online, retail chains can win in big ticket – which represents a whopping 45% of US retail.
Customers are looking for big ticket online – certainly to research products and, increasingly, to buy them. Retailers can profit by meeting them there.
Copyright 2010, Official Blog of Blueport Commerce
But, profiting from big ticket e-commerce growth presents a new set of challenges for retailers. That these categories are some of the last to move online is not coincidental - big-ticket products like home furnishings and appliances are inherently challenging to sell online and many retailers in these markets have faced barriers to bringing their offerings online in the past.
Consumers must be made comfortable transacting “big-ticket” purchases. Their decision process is much longer. Shoppers may not know brand or model numbers for these items (know the manufacturer brand of the last sofa you bought?), making it imperative that product information presented online be compelling in its own right. Shoppers are likely to want to see products in a store or consult with a sales representative, meaning store, online, phone, chat and email experiences must be seamless. And, if all this is done perfectly and a consumer makes a purchase, these products often have complex shipping and installation requirements that can quickly become a nightmare for any retailer.
Nonetheless, retail chains, with their local presence, trusted brands and quick, inexpensive delivery have significant advantages pursuing this new e-commerce opportunity. While pure-play internet companies will likely continue to dominate small ticket markets online, retail chains can win in big ticket – which represents a whopping 45% of US retail.
Customers are looking for big ticket online – certainly to research products and, increasingly, to buy them. Retailers can profit by meeting them there.
Copyright 2010, Official Blog of Blueport Commerce
What's the Next Big Area of E-commerce Growth?
Thursday, February 25, 2010 by
Carl Prindle
In big-ticket categories like furniture, appliances, flooring, big screen TVs and building supplies, consumers are increasingly researching and purchasing online, having gained confidence in the online channel through years of buying more commoditized items.
In the last two years, big-ticket retailers have mobilized to meet this demand, for the first time effectively offering these goods online through sophisticated multi-channel and e-commerce efforts, embracing the unique requirements of these complex transactions.
This convergence represents a new wave of e-commerce growth: big-ticket items.
Despite the bleak retail outlook, big-ticket e-commerce experienced a robust 52% e-commerce growth in the latter part of 2008. And, it is projected to be the largest, fastest growing segment of e-commerce in the next five years (source: Forrester Research).
The Next Wave of E-Commerce - Big Ticket Retail
Thursday, February 25, 2010 by
Carl Prindle
What’s the next wave of e-commerce? Here’s a hint –it represents the 45% of retail that doesn’t fit in a UPS box. We call it “big ticket retail” and it includes large purchases that often require more consideration than traditional online purchases.
For these reasons and more, big-ticket retail is fundamentally local. Stores play a critical role. E-commerce becomes a powerful tool to help stores compete in their local markets rather than a national channel that bypasses them - essentially making it local e-commerce. Online efforts serve to drive store traffic, generate leads and consummate online transactions, cost effectively and measurably, creating a true multichannel retail supply chain.
Many e-commerce providers shy away from selling these types of items, as big ticket retail presents unique challenges. It involves more expensive, less well-understood products — furniture, appliances, TVs, flooring, construction materials, etc. Prices are higher and consumer confidence is lower. Inventory is bulky, expensive to move around the country and more expensive to return.
If you are a retailer who thinks your business is too complex for e-commerce transactions, there are solutions available to help you reach your big-ticket retail goals. Fundamental to these technologies and the services is the understanding that enabling big-ticket purchases online is different than traditional e-commerce, long typified by consumers purchasing inexpensive, simple products online and receiving shipment via parcel service.
Will a Multi Channel Retail Strategy Hurt In-Store Sales?
Thursday, February 25, 2010 by
Carl Prindle
If you're in charge of store operations, you may not know what to think about ecommerce integration, or how to present it to your commissioned sales team.
You may ask yourself, ‘Won't my sales staff lose customers to the web?’
This is a common concern, and one that sales managers should address with their teams prior to implementing a multi channel e-commerce strategy. The reality is that for many retail categories, especially big-ticket, the greatest benefits of going online happen in stores. This may sound counterintuitive, but because big-ticket retail is fundamentally local and stores play a critical role. E-commerce stores become a powerful tool to help stores compete in their local markets rather than a national channel that bypasses them.
Online efforts serve to drive store traffic, generate leads and consummate online transactions — cost effectively and measurably. Many retailers have found that this to be true. Specifically, for every online order, 5 or 6 directly trackable orders are placed in stores by people who first registered online. And these are only the customers who provided us with their names online — the real impact in your stores will actually be an order of magnitude larger.
With a managed ecommerce solution, your stores gain customers of the best kind — educated consumers who have found exactly what they want online, and simply want to see the item in person in your stores and complete the transaction with a live person.
Intercepting Ecommerce Fraud
Thursday, February 25, 2010 by
Carl Prindle
One of the biggest concerns many retailers face going online is customer theft and fraud through ecommerce transactions. At Blueport, we work with our customers to minimize these concerns through an extensive database and fraud intercept solution for every ecommerce transaction embedded in our ecommerce platform.
Through a combination of proprietary systems and manual intervention, each individual order that comes in through the retailer’s ecommerce site is reviewed for fraud indicators prior to passing the order to their systems. Non-compliant orders are intercepted before ever reaching the retailer, significantly reducing their risk of chargebacks for ecommerce transactions.
Many of Blueport’s clients often find that their fraud rates for ecommerce transactions are lower than in their stores.
Key features include:
Through a combination of proprietary systems and manual intervention, each individual order that comes in through the retailer’s ecommerce site is reviewed for fraud indicators prior to passing the order to their systems. Non-compliant orders are intercepted before ever reaching the retailer, significantly reducing their risk of chargebacks for ecommerce transactions.
Many of Blueport’s clients often find that their fraud rates for ecommerce transactions are lower than in their stores.
Key features include:
- Automated Order Review – We begin by establishing a rule set against which transactions are screened, with passing orders immediately inserted in your systems.
- Manual Intervention - For ecommerce transactions that fail automated review, Blueport Commerce will contact customers and credit card companies to attempt to validate customer payment, inserting only orders that pass this second screening.
- Monitoring - We monitor accept and decline rates for retailers’ credit card and store card transactions.
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