Today’s E-Commerce Content

Friday, October 21, 2011 by Betsy Miller
Content is king. Sure, this phrase is overused, but that’s because there’s a lot of truth behind it. While much has changed since Bill Gates first said those words in the early days of the Internet, people still want to consume information, and today’s shoppers want to be able to access it quickly and in a number of ways.

For e-commerce sites, content is about creating an engaging brand for consumers. The more you talk to your customers, the more they will interact with your brand and convert.

E-Commerce Content Trends

Here are just a few of the driving content trends for e-commerce today:

  • Over the past year, many e-commerce companies have hired editorial directors from the publishing world. They are being tasked with pulling all of the content together to create that single voice you might expect from a magazine. And in such cases, “voice” extends to visual aspects of the sites as well.
  • Thanks to Google Panda and e-commerce websites’ needs to distinguish themselves, it’s no longer enough to post manufacturers’ product descriptions and images.  By bringing unique information, engaging storytelling, informed search engine optimization and visual panache, one website can beat out another when it comes to closing the sale.
  • User-generated content and community continues to flourish both on e-commerce websites and their social media pages. From online reviews to contests where users post content, e-commerce sites are allowing consumers to help create website content and build the brand. Some e-commerce websites even allow customers to customize their products or choose what goes on sale. Content allows e-commerce shopping to become a participatory and social experience.
E-commerce websites are becoming destinations beyond a place to shop. Those websites that are able to use content to transform their websites into destinations for customers to browse and spend time will continue to thrive. Selling online is not just a numbers game. It’s about offering a service customers want, and content should be at the forefront of that strategy.

Related posts:Copyright 2010, Official Blog of Blueport Commerce
0 Comments »

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:
  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.

Copyright 2010, Official Blog of Blueport Commerce
0 Comments »

Canadian Consumers are Waiting for You Online

Friday, March 18, 2011 by Betsy Miller
Analytics firm comScore recently released their 2010 Canada Digital Year in Review report.  Consumers north of the border continue to be a growing market for multichannel retailers here in the U.S. and many Blueport Commerce clients, particularly as ecommerce retail gains in popularity in Canada. comScore’s report looks at digital trends among video, search and mobile users, and reveals what opportunities are available for marketers and retailers targeting Canadian consumers online.

Here are some of the highlights:

-    Canadians are a captive online audience: In 2010, Canada maintained its position as the most engaged online audience, ranking highest among the top markets in average hours and visits per visitor in Q4 2010.
-    Blogging and social networking is on the rise among Canadians, especially older consumers: According to comScore, Canadians spent 58% more time on blogs and social networks in Q4 2010 compared to that of Q4 2009. As this category continues to grow, older age segments are increasingly more engaged with social networking sites.
-    Video rules: Just like their U.S. counterparts, Canadians love video, especially those that are over the age of 35, who accounted for more than half of all viewers in Q4 2010.
-    Mobile is growing in Canada: Canadian consumers are updating their devices more frequently and will be able to access more and more online content in 2011. comScore believes mobile is the next marketing frontier in Canada.

The big ticket retail take away? Canadian consumers are a powerful, often untapped market for online retailers.  The ecommerce principles remain the same when targeting these digitally savvy shoppers.  Incorporating video, social media and mobile elements into an online retail strategy will be essential to engaging Canadians with your brand.



Copyright 2010, Official Blog of Blueport Commerce

0 Comments »

Cross Channel Commerce:
How The Home Depot 'Gets It'

Friday, February 18, 2011 by Morgan Woodruff
Providing a seamless cross channel experience, with physical stores and ecommerce retail sites working towards a coordinated selling effort, has always been at the heart of our strategy at Blueport Commerce.  We get the importance of this approach in driving sales for big ticket items in particular, and so do our multichannel retail clients. 

The Home Depot is another retailer that ‘gets it’.

Hal Lawton, president of Home Depot Online, recently gave a presentation at the  Internet Retailer Web Design & Usability Conference 2011, focusing on The Home Depot’s successful integration of online and offline stores. At the heart of this is the understanding that Home Depot customers want to shop, browse or do research through their channel of choice – and they want that experience to be consistent, whether it is online or in-store.

Since 45% of Home Depot customers visit the retailer’s site first, providing a localized e-commerce experience is essential to making sure customers get the most accurate pricing and inventory information for their area.  So the price and product selection customers see online is what they will see in store. This is a fundamental approach to the sites we build for clients like Carpet One and RoomStore.

One of the most interesting points of Home Depot’s cross-channel strategy is the fact that associates are responsible for sales in both channels.  For example, a store manager’s compensation is based partly on in-store sales and also on online deliveries to the local area. This represents a seismic shift in the siloed approach we still see many retailers take towards their e-commerce site and store network, but it’s a powerful motivator in making sure all your teams are truly working together towards an end goal: the sale.

What are your thoughts on Home Depot’s strategy?




Copyright 2010, Official Blog of Blueport Commerce

0 Comments »

Will Consumers Purchase Eyeglasses Online?

Wednesday, January 19, 2011 by Betsy Miller
The New York Times’ Claire Cain Miller just wrote a great profile of Warby Parker, a New York startup that is seeing success by building an ecommerce market for prescription eyeglasses. This is the latest example of how traditional notions of what consumers will or will not buy online no longer apply.

Ecommerce Has Evolved

Up until recently most skeptics considered certain items off-limits in the ecommerce retail world -- items like furniture, fine jewelry, cars and appliances. All of these products were considered too complex, and as such, most retailers felt consumers would need to see them in person before committing to a purchase. 

At the heart of Warby Parker’s strategy is a focus on offering customers convenience and superb customer service to make them feel comfortable with purchasing online.  For example, the site allows shoppers to upload photos of themselves and virtually try on glasses.  All eyeglasses are completely returnable, but the company will also mail customers five loaner frames to try on at home, or they can even be directed to several of Warby Parker’s physical locations across the country. 

Ecommerce Works for Big-Ticket Retail

Here at Blueport Commerce, we recognized the ecommerce market for these big-ticket purchases over a decade ago and have been at the forefront of developing online retail strategies for retailers in these categories ever since. Warby Parker is another example of the immense opportunity online for businesses in all categories, and we are excited to see more companies take cues from these successes and make their foray online.



Copyright 2010, Official Blog of Blueport Commerce

0 Comments »

The Power of Online Product Videos

Friday, November 5, 2010 by Betsy Miller
The November issue of Internet Retailer has a terrific article about the benefits of online video at not only telling a better story about your products, but boosting conversion rates and natural search engine results as well. There is no doubt online video is booming. According to the piece, people watch 2 billion videos each day on YouTube, and 35% of the e-retailers in the Internet Retailer Top 500 Guide include online video in their e-commerce stores. 

What's the Key to an Effective Online Video Strategy?

Unsurprisingly, an effective online video strategy starts with creating compelling content that your customers actually want to watch, and continue watching. This could be anything from behind-the-scenes footage of product development, a visual explanation of your product or even interviews with product designers or staff.

Understanding the technology required to deploy and maintain video is the next step. Quick and seamless streaming of video is essential. Slow loading videos quickly lose their appeal and lead to frustrated and dissatisfied customers.

Finally, by refining video content, retailers can quickly boost natural search engine results. Internet Retailer notes that search engines give more weight to pages with video, because they see video as an indicator of website quality. Forrester Research estimates a company is 50 times more likely to show up on the first page of search engine results if a page has video that is embedded in a search engine-friendly way.

I think online videos can prove to be an especially powerful force in the big-ticket category, where the product decision process is longer and more in-depth. When merchandising these products in your ecommerce catalogs, being able to offer your customer as much information as possible to help them feel comfortable with their purchase is essential.  For example, a quick product video (similar to the ones you may see when purchasing a pair of shoes on Zappos.com) can very quickly achieve a level of comfort for the customer that no amount of written product descriptions or images could to help drive a sale. Conversely, a behind-the-scenes look at how a sofa was made can help to create a deeper relationship with that customer, promoting brand loyalty.

I’m curious to hear what role online videos are or will be playing in your Internet retail strategy?

Copyright 2010, Official Blog of Blueport Commerce
0 Comments »

Bringing Your Retail Strategy Online

Tuesday, October 12, 2010 by Morgan Woodruff

Back around 2001, it was common for retailers with brick-and-mortar stores to bring their retail model online. The point was to have the website work just like the store. The whole endeavor was based on bringing in a new revenue stream for the retailer with little actual thought given to the medium and how consumers’ expectations and needs might be different. Very few thought about an online retail strategy.

Defining Your Retail Strategy Today

Now that it’s 2010, we can look back at those sites that have done ecommerce right (Amazon.com, of course) and remember those sites that did it wrong (may they rest in peace). But even with this knowledge, you still see new ecommerce sites popping up with little regard to ecommerce’s nuances and unique demands.

There is hope for companies that are interested in adding an online dimension to their businesses but do not have the ecommerce expertise in-house. Just take a look at Blueport Commerce’s solutions. We can help you with every facet of your retail strategy -- from online merchandising to email marketing and security considerations -- especially if you are working with the additional challenges of big-ticket, considered purchases.

Learn more about the advantages of partnering with Blueport Commerce to address your retail strategy needs today.

 

0 Comments »

Forrester's Brian Walker Outlines the Fundamental Shifts Taking Place in E-Commerce Technology

Friday, September 10, 2010 by Morgan Woodruff
Forrester’s Brian Walker recently coined the term Splinternet to describe how consumers are beginning to interact with e-commerce companies in numerous ways, including mobile phones, social networks and in-store displays. This e-commerce transformation naturally requires significant new technology investments and fundamental changes in how retailers approach e-commerce. Internet Retailer covered Walker’s new report, "What every exec needs to know about the future of e-commerce technology," which addresses the shifts taking place in the e-commerce space. 

Some key takeaways from the report:

  • As the influence of the online retail channel on consumers continues to grow, retailers will need to shift spending to this channel -- or risk losing sales.
  • Consumers' interactions with retailers will move beyond just the website to include mobile phones, iPads and other innovations. According to Walker, many of these innovations will be built on proprietary technology requiring that retailers "develop systems that can easily integrate and support these existingm -- and emerging -- customer experiences in order to compete and capitalize on changing customer expectations."
  • Consistency of information, policies and fulfillment across channels will be a must for retailers as they expand their touchpoints with consumers
Walker notes that most retailers today don’t have the systems in place to manage this new kind of multichannel retailing and fulfillment model. Thus, they will require a fundamental shift in how they approach e-commerce within their organizations and focus on investing in flexible e-commerce systems that can meet their cross-channel retail needs.

How is your e-commerce strategy changing in light of this shift?

Copyright 2010, Official Blog of Blueport Commerce
0 Comments »

Social Media Still Needs Local Relevance

Friday, August 13, 2010 by Betsy Miller
A recent DMNews article about the challenges multichannel marketers face in using social media to reach local customers caught my eye.  According to research from Harris Interactive, seventy-two percent of brand managers believe social media can be powerful in connecting with customers globally, but not necessarily at a local level.

Almost half (48%) of the brand managers surveyed by Harris find measuring ROI a challenge to connecting with local retail markets, while 45% cited managing and maintaining information as an obstacle. Additionally, 42% pointed to engaging audiences as a challenge for localized social media marketing.

In short, even across social media networks, your customers are still looking for a local message that is relevant to them.

While national or global campaigns are important for elevating a retailers' image, localized content helps consumers to relate to you and your products.  Localization is at the heart of our approach at Blueport and it drives the ecommerce strategies for all of our multichannel retail clients.

Social media is a natural extension of any multichannel retailer's online strategy and it's a no brainer that this too needs to have a localized flavor.  When used to connect with consumers at a local, regional level, your social media presence will become a true cross-channel sales driver integrated with your overall localized internet retail strategy.


Copyright 2010, Official Blog of Blueport Commerce


0 Comments »

Capturing Consumers On The Go

Wednesday, July 28, 2010 by Carl Prindle
Most of today’s consumers use the Internet to plan the limited time they have for brick and mortar shopping expeditions - browsing from a home (or work) computer to optimize how they will spend the discretionary hour or two they’ve allocated for shopping.
 
To capture this shopper, a compelling “traditional” website is a must - ideally one that is synchronized with what’s happening in local stores.  With a localized website in place, retailers, especially those targeting smartphone-wielding demographics, should take the next step – capturing consumers who have already left the house.

Whether or not you believe that your products will ever sell over a phone, you can take advantage of location-based services and GPS-enabled phones to entice on the go consumers into stores.  Product information, prices and nearby locations to “touch and feel” products can be ‘pulled’ through local searches by consumers.  Coupons and promotions can be ‘pushed’ to a consumer’s phone based on their location.
 
How is your company integrating mobile into your cross-channel strategy?  For more information on how other retailers are successfully using mobile to capture consumers on the go, check out this article: How Mobile Commerce Can Capture In Store Sales.


Copyright 2010, Official Blog of Blueport Commerce


0 Comments »

E-Commerce Website Aquisitions

Friday, June 25, 2010 by Morgan Woodruff
I am intrigued by Alibaba's purchase of Vendio, expanding the Chinese company's SMB B2C internet retail strategy - what a mouthful!
This marks the third time in little more than a month that a company has announced an allocation of $100 million fund to invest in U.S. ecommerce-related businesses. The Vendio investment represents a key market for a Alibaba - Vendio has over 80,000 small buiness users on line with its U.S.-based ecommerce platform.



0 Comments »

The Blueport Commerce Customer Story & Multichannel Retail Software

Thursday, June 3, 2010 by Morgan Woodruff
We were the first Akamai e-commerce client, more than 11 years ago. Our hosted Multichannel E-Commerce platform is more effective with partners like Akamai rounding out our offering.

 

Here is a link to a video (featuring Carl Prindle, President and CEO of Blueport Commerce) that describes well Blueport's E-Commerce applications and specifically how our long time expertise in Internet retail strategies has allowed Blueport to win clients again and again.

Watch the video >>



Copyright 2010, Official Blog of Blueport Commerce


0 Comments »

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


0 Comments »