Consolidation seems to be the word of the day.
This week’s news of eBay’s purchase of GSI Commerce was the latest in a steady stream of consolidation and acquisitions in the e-commerce retail industry that I am very excited to see. No doubt, the result of this trend has been a tremendous validation across all sectors of retail and e-commerce technology and a boon to all players in this space.
For example, we are seeing a growth amongst enterprise class retail POS solutions such as those run by Oracle, stemming largely from this summer’s ATG purchase. We are also seeing a growing focus on big-ticket retail workforce-warehouse solutions such as those designed by RedPrairie. Their acquisition by Escalate Retail recently only strengthened this trend. Last year’s IBM/Sterling Commerce buyout was also a pivotal turn for the industry, strengthening Big Blue’s position and helping them close the gap on multi channel SaaS offerings. The effects on other platform players like Blueport Commerce, as well as on tertiary vendors and tech providers (the likes of Akamai Technologies) that serve these companies has also been extremely positive from a growth standpoint.
I think the most important thing to note is that the consumer was not left out of these recent shopping sprees from billion dollar publicly traded companies. In fact, this week’s eBay’s acquisition of GSI Commerce proves even a tried and true marketplace leader does not know all and needs to redefine its strategy to meet changing consumer needs. The result of many of these acquisitions is actually a better offering for clients and a better way for them to manage their business.
The next twelve months in our industry will be interesting to say the least.
Copyright 2010, Official Blog of Blueport Commerce
Why eBay's Acquisition of GSI Commerce Is Good for All of Us
Friday, April 1, 2011 by
Morgan Woodruff
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
Retail E-Commerce Trends to Watch in 2011
Friday, February 4, 2011 by
Morgan Woodruff
In her latest report entitled “Five Retail E-Commerce Trends to Watch in 2011”, Forrester Research analyst Sucharita Mulpuru has outlined several main areas that retailers should focus on when trying to boost their ecommerce store sales this year. Here are a few highlights that I think are particularly of note for retailers in less traditional ecommerce categories:
Retailers must boost their multi channel offerings: Consumer shopping behavior is changing, and in 2011 retailers will need to continue to ensure they are offering a seamless experience, online and in- store. Mulpuru encourages retailers to deploy kiosks inside bricks and mortar stores to help customers do product research in store, as well as offering more buy online, pick up in store options. According to Forrester, only 12% of retailers have kiosks and 10% have in-store pickup.
Tablet commerce: Forrester says retailers must cater to a growing legion of customers shopping via their tablet computer or smartphones. These tools are enabling consumers to shop, whenever and wherever they please, and as such retailers need to ensure their sites are optimized across all these digital channels.
Integrating mobile into the in-store shopping experience: While not every customer is comfortable purchasing products via their mobile phone, Mulpuru encourages retailers to use the mobile channel to provide information to customers on the go that will help draw them in to the store and supplement their shopping experience. For example, providing store locations and hours or using geolocation apps to reward customers for visiting your store.
You can read about the rest of the ecommerce trends outlined by Forrester here.
Copyright 2010, Official Blog of Blueport Commerce
Retailers must boost their multi channel offerings: Consumer shopping behavior is changing, and in 2011 retailers will need to continue to ensure they are offering a seamless experience, online and in- store. Mulpuru encourages retailers to deploy kiosks inside bricks and mortar stores to help customers do product research in store, as well as offering more buy online, pick up in store options. According to Forrester, only 12% of retailers have kiosks and 10% have in-store pickup.
Tablet commerce: Forrester says retailers must cater to a growing legion of customers shopping via their tablet computer or smartphones. These tools are enabling consumers to shop, whenever and wherever they please, and as such retailers need to ensure their sites are optimized across all these digital channels.
Integrating mobile into the in-store shopping experience: While not every customer is comfortable purchasing products via their mobile phone, Mulpuru encourages retailers to use the mobile channel to provide information to customers on the go that will help draw them in to the store and supplement their shopping experience. For example, providing store locations and hours or using geolocation apps to reward customers for visiting your store.
You can read about the rest of the ecommerce trends outlined by Forrester here.
Copyright 2010, Official Blog of Blueport Commerce
RedPrairie Acquires Escalate Retail
Wednesday, February 2, 2011 by
Morgan Woodruff
We have seen a wave of retail and ecommerce acquisitions lately, and the latest comes from cross channel vendor Escalate Retail. The company announced today that it has been acquired by Red Prairie, a vendor providing workforce, warehouse and transportation management software solutions. The acquisition is touted by both companies as a move to provide retailers with collective functionality that enhances multi-channel retailing with order capture, POS, store kiosk, call center operations, and more. In essence, it will give Red Prairie the opportunity to extend their supply chain capabilities into the retail space. Read more about the deal here.
Copyright 2010, Official Blog of Blueport Commerce
Copyright 2010, Official Blog of Blueport Commerce
Engaging Customers at Every Purchase Touchpoint
Thursday, January 13, 2011 by
Betsy Miller
A newly released report from eMarketer highlights the seismic shift that is occurring in how consumers shop, and consequently, how multi channel retailers need to market to them.
Digital media, technology and content have dramatically altered the multichannel retail shopping experience. eMarketer outlines how retailers can use technologies to target consumers during their three shopping phases: pre-shop, in-store and post-shop.
Pre-shop: Make the shopping experience as easy and convenient as possible for consumers, by equipping them with a variety of digital shopping tools to help them save money, grant them access to deals or provide the product information they are looking for quickly. At the heart of this is your ecommerce store, which should give customers everything they need at their fingertips and a foundation for their purchase path.
In-store: eMarketer highlights several technologies that retailers can incorporate into their stores, such as self-checkouts or kiosks, but they emphasize the most notable of these is mobile. In addition to store staff, location-based check-ins and in-store mobile tools and apps such as price comparisons will offer retailers an additional opportunity to engage and interact with their customers in the final moments before they make their purchase decision.
Post-shop: Once a customer has made their purchase, retailers should look for creative ways to encourage customers to share their stories via social media or other online communities.
As eMarketer notes, more touchpoints for consumers along their purchase path mean more opportunities for retailers to get creative in how they engage with them. Start by thinking holistically about the customer purchase path and how your various retail marketing initiatives impact their decision process every step of the way.
Copyright 2010, Official Blog of Blueport Commerce
Digital media, technology and content have dramatically altered the multichannel retail shopping experience. eMarketer outlines how retailers can use technologies to target consumers during their three shopping phases: pre-shop, in-store and post-shop.
Pre-shop: Make the shopping experience as easy and convenient as possible for consumers, by equipping them with a variety of digital shopping tools to help them save money, grant them access to deals or provide the product information they are looking for quickly. At the heart of this is your ecommerce store, which should give customers everything they need at their fingertips and a foundation for their purchase path.
In-store: eMarketer highlights several technologies that retailers can incorporate into their stores, such as self-checkouts or kiosks, but they emphasize the most notable of these is mobile. In addition to store staff, location-based check-ins and in-store mobile tools and apps such as price comparisons will offer retailers an additional opportunity to engage and interact with their customers in the final moments before they make their purchase decision.
Post-shop: Once a customer has made their purchase, retailers should look for creative ways to encourage customers to share their stories via social media or other online communities.
As eMarketer notes, more touchpoints for consumers along their purchase path mean more opportunities for retailers to get creative in how they engage with them. Start by thinking holistically about the customer purchase path and how your various retail marketing initiatives impact their decision process every step of the way.
Copyright 2010, Official Blog of Blueport Commerce
Talk to the phone: Shoppers prefer interacting with their smartphones than with store staff
Tuesday, December 7, 2010 by
Betsy Miller
A new Accenture study provides further evidence of how mobile is changing the way consumers shop bricks and mortar stores and interact with retailers. According to Accenture, 73% of shoppers with smartphones favor using their smartphone to handle simple tasks in stores compared with 15% who favor interaction with an employee. Similarly, 71% favor using their smartphone to identify a store with a desired item in stock, while 17% would prefer to get that information by speaking to an employee.
These figures reinforce the rise of “the omnipresent consumer”, one that wants a seamless shopping experience whenever and wherever it suits them, be it in the store, online or through their mobile phones. How retailers rise to this multi-channel challenge will no doubt be one of the big trends to watch in 2011.
Copyright 2010, Official Blog of Blueport Commerce
These figures reinforce the rise of “the omnipresent consumer”, one that wants a seamless shopping experience whenever and wherever it suits them, be it in the store, online or through their mobile phones. How retailers rise to this multi-channel challenge will no doubt be one of the big trends to watch in 2011.
Copyright 2010, Official Blog of Blueport Commerce
Leon's Furniture Earnings Jump 41.7% in Q2
Wednesday, August 25, 2010 by
Morgan Woodruff
Congratulations to Blueport Commerce client Leon's Furniture on a highly successful second quarter.
A Canadian multi-channel retailer, Leon's Furniture recently reported a 41.7% earnings jump in Q2. Leon's cited the increase was mainly the result of higher sales, an improvement in margins as well as the retailer's continued commitment to improving productivity and expansion.
Check out their Blueport-powered ecommerce site for more information about the company: www.leons.ca.
Copyright 2010, Official Blog of Blueport Commerce
A Canadian multi-channel retailer, Leon's Furniture recently reported a 41.7% earnings jump in Q2. Leon's cited the increase was mainly the result of higher sales, an improvement in margins as well as the retailer's continued commitment to improving productivity and expansion.
Check out their Blueport-powered ecommerce site for more information about the company: www.leons.ca.
Copyright 2010, Official Blog of Blueport Commerce
Arhaus Furniture's Custom iPad App Aims to Drive Cross Channel Sales
Thursday, August 19, 2010 by
Morgan Woodruff
Arhaus Furniture, a high-end furniture multi channel retailer with stores in 13 states in addition to a print catalog and an e-commerce site at Arhaus.com, will soon arm their entire delivery team with an iPad application aimed at not only enhancing the product delivery experience, but also driving repeat and incremental purchases from their customer base.
The application is designed primarily for customer use: customers will be handed the iPad at the start of the delivery, which will include a welcome and thank you message from the retailer, will be able to look at different furniture setup options and even browse the entire Arhaus ecommerce catalog. Customers will also sign off on deliveries using their fingers on the touch screen and will also be able to fill out a post delivery survey on site.
While the iPad application will certainly result in efficiencies in the retailer’s fulfillment and delivery systems, what is interesting here is how the company is adding another level to their customer service experience through a true cross channel retail strategy. For example, while a customer is having a sofa delivered that they purchased at their local store, they will be able to browse the Arhaus.com ecommerce catalog through the iPad app for the matching chair they recall seeing during their shopping trip.
No doubt that we will continue to see more and more retailers integrate these type of mobile and tablet products into their multi channel strategy to enhance their customers' retail shopping experience, be it in-store or on the go. And as retail channels become increasingly blurred and intertwined, the importance of having consistent content and product information for your customer no matter where they are shopping will be imperative and essential to driving sales.
How are your stores or franchises integrating technologies such as the iPad into their sales or customer service process?
Copyright 2010, Official Blog of Blueport Commerce
The application is designed primarily for customer use: customers will be handed the iPad at the start of the delivery, which will include a welcome and thank you message from the retailer, will be able to look at different furniture setup options and even browse the entire Arhaus ecommerce catalog. Customers will also sign off on deliveries using their fingers on the touch screen and will also be able to fill out a post delivery survey on site.
While the iPad application will certainly result in efficiencies in the retailer’s fulfillment and delivery systems, what is interesting here is how the company is adding another level to their customer service experience through a true cross channel retail strategy. For example, while a customer is having a sofa delivered that they purchased at their local store, they will be able to browse the Arhaus.com ecommerce catalog through the iPad app for the matching chair they recall seeing during their shopping trip.
No doubt that we will continue to see more and more retailers integrate these type of mobile and tablet products into their multi channel strategy to enhance their customers' retail shopping experience, be it in-store or on the go. And as retail channels become increasingly blurred and intertwined, the importance of having consistent content and product information for your customer no matter where they are shopping will be imperative and essential to driving sales.
How are your stores or franchises integrating technologies such as the iPad into their sales or customer service process?
Copyright 2010, Official Blog of Blueport Commerce
Local E-Commerce:
The GSI Commerce Perspective
Friday, August 6, 2010 by
Morgan Woodruff
Forrester’s e-commerce analyst Brian Walker recently featured a great interview with GSI Commerce founder and CEO Michael Rubin on his blog. Rubin discussed how GSI is evolving and what some of the main areas of focus will be for the company in the near future.
One of the most interesting things that stood out for me from their conversation was Rubin’s identification of localization as one of the next key e-commerce trends to watch in the near future. Consumers are increasingly demanding more personal, relevant and local products and services from their online shopping experience. Consequently, retailers will need to invest in technologies that cater to these local preferences to capitalize on the consumer need.
Part and parcel to a localized e-commerce experience is the expectation of rapid and lower cost delivery and return of products. In order to deliver on this promise, Rubin points out that multichannel retailers will need to leverage their stores and distribution centers to get consumers the products they want as quickly and cheaply as possible. This is an area where GSI is investing a great deal of time to provide innovation.
We have been focusing on e-commerce localization at Blueport Commerce for the last decade. Like GSI, we believe this is at the heart of the next generation of e-commerce, or rather, the next generation of cross-channel retailing. Whether they are shopping for a new piece of clothing or a new piece of furniture for their home, consumers want their retail experience to be local. They want the comfort of knowing they can connect with retailers in their area, who can answer questions about the product, or handle exchanges or returns quickly and easily.
In order to deliver this kind of experience, retailers need to stop thinking of e-commerce as an isolated ‘island’ within their operations and begin to construct a truly coordinated, cross-channel strategy. E-commerce teams need to be aligned with bricks-and-mortar stores as well as fulfillment and warehouse facilities. When all of these components are working as one holistic retailing effort, localization is inherent and e-commerce becomes a driver of multi-channel retail sales.
This approach is at the heart of Blueport’s e-commerce package and I am intrigued to see the innovations from GSI in this area as well.
Copyright 2010, Official Blog of Blueport Commerce
One of the most interesting things that stood out for me from their conversation was Rubin’s identification of localization as one of the next key e-commerce trends to watch in the near future. Consumers are increasingly demanding more personal, relevant and local products and services from their online shopping experience. Consequently, retailers will need to invest in technologies that cater to these local preferences to capitalize on the consumer need.
Part and parcel to a localized e-commerce experience is the expectation of rapid and lower cost delivery and return of products. In order to deliver on this promise, Rubin points out that multichannel retailers will need to leverage their stores and distribution centers to get consumers the products they want as quickly and cheaply as possible. This is an area where GSI is investing a great deal of time to provide innovation.
We have been focusing on e-commerce localization at Blueport Commerce for the last decade. Like GSI, we believe this is at the heart of the next generation of e-commerce, or rather, the next generation of cross-channel retailing. Whether they are shopping for a new piece of clothing or a new piece of furniture for their home, consumers want their retail experience to be local. They want the comfort of knowing they can connect with retailers in their area, who can answer questions about the product, or handle exchanges or returns quickly and easily.
In order to deliver this kind of experience, retailers need to stop thinking of e-commerce as an isolated ‘island’ within their operations and begin to construct a truly coordinated, cross-channel strategy. E-commerce teams need to be aligned with bricks-and-mortar stores as well as fulfillment and warehouse facilities. When all of these components are working as one holistic retailing effort, localization is inherent and e-commerce becomes a driver of multi-channel retail sales.
This approach is at the heart of Blueport’s e-commerce package and I am intrigued to see the innovations from GSI in this area as well.
Copyright 2010, Official Blog of Blueport Commerce
Multichannel retailers have their work cut out for them if they want to succeed online
Thursday, July 8, 2010 by
Morgan Woodruff
That’s the latest from Goldman Sachs ... Goldman estimates that e-commerce will grow at five times the rate of traditional retail, overtaking offline retail by 2020. Not surprisingly, the most successful retailers will be the ones that invest most heavily in technology to keep up with demand.
Goldman notes that while online pure plays already realize the importance of investing in Web technologies, multi-channel retailers will be challenged to keep up with their pace of innovation and e-commerce spending. While pure play e-tailers spent 7% of their revenue on e-commerce technology in 2008, multi-channel retailers only spent 2%.
This is an important consideration for Blueport and our customers, who are predominantly multi-channel or brick and mortar retailers in the early stages of their e-commerce development. While they will certainly not be able to keep up with the e-commerce budgets of mammoths like Amazon, they will be challenged to harness the right e-commerce innovations that bring in the most bang for the buck, generating the most leads and driving cross-channel sales.
Copyright 2010, Official Blog of Blueport Commerce
Goldman notes that while online pure plays already realize the importance of investing in Web technologies, multi-channel retailers will be challenged to keep up with their pace of innovation and e-commerce spending. While pure play e-tailers spent 7% of their revenue on e-commerce technology in 2008, multi-channel retailers only spent 2%.
This is an important consideration for Blueport and our customers, who are predominantly multi-channel or brick and mortar retailers in the early stages of their e-commerce development. While they will certainly not be able to keep up with the e-commerce budgets of mammoths like Amazon, they will be challenged to harness the right e-commerce innovations that bring in the most bang for the buck, generating the most leads and driving cross-channel sales.
Copyright 2010, Official Blog of Blueport Commerce
Live from IRCE: Drop the ‘e’ in ‘e-commerce’
Friday, June 11, 2010 by
Morgan Woodruff
This week while attending the Internet Retailer Conference & Expo in Chicago, I sat in on a session called “What top execs need to know about the future of e-commerce platforms,” which was presented by Forrester’s Brian Walker. In this session, Walker brought something up that we have been debating internally at Blueport Commerce for a while – whether we still need the ‘e’ in ‘e-commerce.’
Because we specialize in “big-ticket” retail, a lot of the companies we work with use their e-commerce sites not only to sell direct to consumers, but also to educate shoppers who will ultimately make their purchase in a local store. So we tend to think of our platform as cross-channel and not solely ‘e-commerce’.
Walker went on to say that Forrester (which typically has conservative estimates compared to other analysts firms) believes 51% of all retail sales will be made or researched online by 2013. He also pointed out that e-commerce sites will not be driving all those sales. With the emergence of new devices like the iPad, consumers will be shopping from nearly everywhere – TRUE multi-channel shopping. And if that’s the case, the term ‘e-commerce’ will address only a piece of the entire commerce pie.
What do you think? Is it about time we drop the ‘e’ in ‘e-commerce’?
Copyright 2010, Official Blog of Blueport Commerce
Because we specialize in “big-ticket” retail, a lot of the companies we work with use their e-commerce sites not only to sell direct to consumers, but also to educate shoppers who will ultimately make their purchase in a local store. So we tend to think of our platform as cross-channel and not solely ‘e-commerce’.
Walker went on to say that Forrester (which typically has conservative estimates compared to other analysts firms) believes 51% of all retail sales will be made or researched online by 2013. He also pointed out that e-commerce sites will not be driving all those sales. With the emergence of new devices like the iPad, consumers will be shopping from nearly everywhere – TRUE multi-channel shopping. And if that’s the case, the term ‘e-commerce’ will address only a piece of the entire commerce pie.
What do you think? Is it about time we drop the ‘e’ in ‘e-commerce’?
Copyright 2010, Official Blog of Blueport Commerce
e-Dialog Acquires MBS and M3 – Gains Targeting Insight Across Channels
Wednesday, May 12, 2010 by
Betsy Miller
Last week e-Dialog, a division of GSI Commerce and a Blueport partner, announced the acquisition of database marketing firm MBS for approximately $22.5 million cash. This announcement follows closely on the heels of last month’s acquisition of mobile services company M3.
What does this mean for e-Dialog?
These acquisitions are all about the data. e-Dialog not only gains a wealth of data acquisition and integration technology, it also leverages interesting consumer behavioral insights and patterns. This technology will help the company to better collect, analyze and act on customer data across channels. We believe this will only strengthen e-Dialog’s already great targetingimpressive data segmentation capabilities.
What does this mean for the industry?
John Rizzi, CEO of e-Dialog noted that the average multichannel retailer does about 7% of revenue online and 93% in stores – yet most retailers do not tie those customer activities together or create strategies that are truly cross-channel. The missed opportunities resulting from this lack of integration are glaring.
As consumers’ shopping behavior (be it for mass products or high-ticket items) becomes increasingly cross-channel, retailers must be ready to meet them where they shop – be it in the store, online or through mobile – or risk losing the sale. That means that it’s increasingly essential for companies to be able to integrate their databases across channels to create a ‘single view’ of each customer.
e-Dialog’s ability to integrate email, point of sale, mobile, social media and online databases will prove to be a competitive differentiator which will push others in the industry to further innovate to keep up.
We look forward to continuing working with e-Dialog to provide our clients with the very best in multi channel marketing services.
Copyright 2010, Official Blog of Blueport Commerce
What does this mean for e-Dialog?
These acquisitions are all about the data. e-Dialog not only gains a wealth of data acquisition and integration technology, it also leverages interesting consumer behavioral insights and patterns. This technology will help the company to better collect, analyze and act on customer data across channels. We believe this will only strengthen e-Dialog’s already great targetingimpressive data segmentation capabilities.
What does this mean for the industry?
John Rizzi, CEO of e-Dialog noted that the average multichannel retailer does about 7% of revenue online and 93% in stores – yet most retailers do not tie those customer activities together or create strategies that are truly cross-channel. The missed opportunities resulting from this lack of integration are glaring.
As consumers’ shopping behavior (be it for mass products or high-ticket items) becomes increasingly cross-channel, retailers must be ready to meet them where they shop – be it in the store, online or through mobile – or risk losing the sale. That means that it’s increasingly essential for companies to be able to integrate their databases across channels to create a ‘single view’ of each customer.
e-Dialog’s ability to integrate email, point of sale, mobile, social media and online databases will prove to be a competitive differentiator which will push others in the industry to further innovate to keep up.
We look forward to continuing working with e-Dialog to provide our clients with the very best in multi channel marketing services.
Copyright 2010, Official Blog of Blueport Commerce
Big Ticket E-commerce Playbook, Rule Four: Localize
Monday, April 12, 2010 by
Carl Prindle
E-commerce 1.0 = World Wide Web (only): Typical e-commerce does not accurately reflect how multi-channel chain retailing is done in-store. Just as “all politics is local,” all big ticket chain store retail is local, too. Through local selection, local prices and local promotions, stores battle local competitors for local customers. Most e-commerce solutions aren’t built for localization – one site offers the same thing to every visitor, regardless of where a customer resides. Retailers who adopt this approach for big ticket e-commerce hamper both their online efforts and their stores.
Big Ticket E-commerce = Localize! Remember that e-commerce supports your overall multichannel retail strategy and your websites should be as localized as your stores. Some big ticket retailers have hundreds of localized, micro-branded sites with content that resonates with local consumers. Others use IP mapping to localize prices, offers and product selection, directing customers to local stores with products on display. All have checkout processes that reflect that delivery times may be 48 hours in one area, two weeks in another. Make sure your e-commerce platform embraces the complexity of local e-commerce – when done correctly it’s a powerful sales tool online and in your stores.
Copyright 2010, Official Blog of Blueport Commerce
Big Ticket E-commerce Playbook, Rule Three: Think Multichannel
Thursday, April 8, 2010 by
Carl Prindle
E-commerce 1.0 = E-commerce Rules!: Inhabitants of E-commerce Island often focus solely on one metric - online sales - to the point of becoming competitive with the “rest” of the multichannel retail operation. Internal competition may work for first wave markets where multichannel upside is limited, but this strategy hamstrings big ticket ecommerce efforts.
Big Ticket E-commerce = Multichannel Impact: Take a more holistic view of the potential the e-commerce channel has for your retail chain. Set multichannel key performance indicators (KPIs) and track interactions across every channel. It’s every bit as big a win for your big ticket e-commerce efforts when a customer sees your TV ad, goes to your website and is convinced to buy in your bricks and mortar store as when someone clicks “Place Order” online. It takes additional coordination to drive multi channel results, but in big ticket categories they represent the majority of your upside. Recognize this, and measure and reward a holistic set of metrics.
Logistically speaking, Ecommerce Should Be Integrated
Thursday, March 25, 2010 by
Betsy Miller
Many retailers believe that in order to implement successful online commerce solutions, they need to build them from the ground up, which can be a logistical nightmare. That’s not necessarily the case, as some solutions have the ability to easily integrate into your existing infrastructure, simplifying the entire process.
Blueport Commerce knows big-ticket businesses are, by definition, complex and unique. We strive to match our technology platform and services to your particular business model, rather than trying to fit it into a commodity-focused, inflexible platform that doesn't meet your needs. At Blueport, we aim to simplify ecommerce logistics and integrate your e-commerce with a complete multi-channel strategy.
B2C E-Commerce Development: Why Retailers Should Not Take this On In-House
Friday, March 19, 2010 by
Betsy Miller
Whenever I speak with a big-ticket B2C retailer about expanding their store online, a recurrent question inevitably arises: "Why not handle e-commerce development in-house?"
Many of these retailers have been considering the online marketplace for some time and are wondering how they can participate without overburdening their current staff and technology. Their big-ticket businesses are complex and a standard platform won't accomodate them, and the addition burden of taking on B2C e-commerce development in-house is a daunting and resource-intensive task that many retailers just can't handle. In developing their multi-channel strategy, using a hosted ecommerce software solution starts to look like the best option.
At Blueport Commerce we have one focus — helping customers exactly like these retailers. We focus on what makes their business unique, so they can focus on what matters most — growing their new ecommerce online store.
Whether they have products that are unbranded, have a higher price point or are highly customizable, Blueport Commerce helps retailers connect with buyers worldwide. Complex delivery requirements a problem? We can help and ensure that a retailer's customers receive the white glove treatment they deserve, and more importantly, expect.
We match e-commerce development and services to address every retailer's unique business needs, not squeeze them into a commodity-focused, inflexible platform that doesn't address the intricacies of their business.
At Blueport Commerce, we're a turnkey solution specialized for big ticket that ensures the transition to e-commerce is easy, worry-free and profitable. By combining the industry's most advanced technology platform for localized, big-ticket retail, dedicated integration services and personalized B2C e-commerece development, Blueport Commerce can port every retailer's unique business to a ready and willing online marketplace
Many of these retailers have been considering the online marketplace for some time and are wondering how they can participate without overburdening their current staff and technology. Their big-ticket businesses are complex and a standard platform won't accomodate them, and the addition burden of taking on B2C e-commerce development in-house is a daunting and resource-intensive task that many retailers just can't handle. In developing their multi-channel strategy, using a hosted ecommerce software solution starts to look like the best option.
At Blueport Commerce we have one focus — helping customers exactly like these retailers. We focus on what makes their business unique, so they can focus on what matters most — growing their new ecommerce online store.
Whether they have products that are unbranded, have a higher price point or are highly customizable, Blueport Commerce helps retailers connect with buyers worldwide. Complex delivery requirements a problem? We can help and ensure that a retailer's customers receive the white glove treatment they deserve, and more importantly, expect.
We match e-commerce development and services to address every retailer's unique business needs, not squeeze them into a commodity-focused, inflexible platform that doesn't address the intricacies of their business.
At Blueport Commerce, we're a turnkey solution specialized for big ticket that ensures the transition to e-commerce is easy, worry-free and profitable. By combining the industry's most advanced technology platform for localized, big-ticket retail, dedicated integration services and personalized B2C e-commerece development, Blueport Commerce can port every retailer's unique business to a ready and willing online marketplace
Blueport Commerce Is a Different Kind of E-commerce Company
Sunday, March 14, 2010 by
Morgan Woodruff
At Blueport, we pride ourselves on being different from other e-commerce companies. We’re more than simply a back-end system that retailers can plug into. We believe that technology and integration only opens your online store. Expertise in managing that store is what drives results.
Blueport's e-commerce services team ensures you get the benefit of our ten years of experience in big-ticket retail when marketing, merchandising and operating your online store. We know the unique aspects of these considered purchases, from imaging to marketing to customer support, and we'll work with you to develop those programs for your e-commerce efforts.
Our mission is to help you capture the e-commerce opportunity as part of an integrated multi-channel strategy. At Blueport Commerce, we're a turnkey solution specialized for big ticket that ensures your transition to e-commerce is easy, worry-free and profitable. By combining the industry's most advanced technology platform for localized, big-ticket retail, dedicated integration services and personalized service packages, Blueport Commerce can port your unique business to a ready and willing online marketplace.
We like to think we’re the complete e-commerce package. Let's talk.
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.
Localization for B2B Ecommerce Solutions
Tuesday, March 9, 2010 by
Betsy Miller
If you're running a B2B ecommerce site, you should think about localizing your content. Why? Because just like consumers shopping for clothing or home goods online, your business customer expects the content and promotions displayed online to be consistent with the brick and mortar store near where they are located.
Running this kind of multi channel business is becoming more and more crucial to ecommerce success. The ability to understand and accommodate the complexities of each business and deliver a localized solution that meets a retailer’s needs is at the core of a successful B2B ecommerce solution.
For B2B ecommerce solution providers, the impact of localization likely means displaying local sales contacts, showing local inventory levels, delivery times, availability and pricing based on the customer's location.
Not just for B2C anymore, localization is an important point for B2B ecommerce that should not be overlooked.
Running this kind of multi channel business is becoming more and more crucial to ecommerce success. The ability to understand and accommodate the complexities of each business and deliver a localized solution that meets a retailer’s needs is at the core of a successful B2B ecommerce solution.
For B2B ecommerce solution providers, the impact of localization likely means displaying local sales contacts, showing local inventory levels, delivery times, availability and pricing based on the customer's location.
Not just for B2C anymore, localization is an important point for B2B ecommerce that should not be overlooked.
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
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