Multichannel RetailingBlueport.com

You likely heard the news this week that Facebook is acquiring Instagram, a mobile photo-sharing app, for $1 billion.
 
According to DailyDealMedia, with Facebook’s IPO a month away, some were expecting the company to announce major news related to e-commerce capabilities on the social network. While an F-commerce announcement is still rumored to surface between now and the public offering, there’s much that might come out of the Instagram acquisition that could make Facebook a more robust platform for e-commerce marketing and potentially monetization. Take a look at what Instagram is bringing to the social network table:

Instagram’s Audience

The Instagram app is on 30 million iDevices. When it was recently made available for Android, 1 million people signed on within 12 hours. And when users share photos through Instagram, they use the filters and the app’s rich tagging system to share with family and friends. Which brings us to…

Data, Data and More Data

Embedded in these photos is a lot of information. Photographs put the consumer in a specific location at a specific time. Your images show your real interests and whether or not you have children or pets. They weave a richer story, and show the people you actually spend time with (as compared to your Facebook friends). These images and the data that comes with them can be a marketer’s dream. Marketing could be targeted to the content of your photographs.

Brand Engagement

Facebook’s current photo album functionality could be greatly improved by Instagram’s filtering and tagging abilities. If Instagram’s features are integrated into Facebook’s photos, then companies will be able to create a much more engaging visual presence for their brands.

Mobile Capabilities

To date, Facebook has been lacking in the mobile department – Instagram is all about mobile. It’s easier and quicker to share an image than a status post from a phone. With Instagram, that photo will be more compelling. And, Instagram’s 30 million+ users are already engaged in the mobile platform.

Social Commerce

So does Facebook’s acquisition of Instagram have a direct e-commerce of F-commerce play? I would venture, it sure does! So far, the one social networking platform to be the quickest to monetize its clicks? Pinterest, of course.

According to this blog post on VentureBeat, Pinterest has grown from driving 1.2% of social media revenue for  e-commerce websites in Q2 2011 to now being responsible for 17.4%. They’re projecting “Pinterest will be responsible for 40% of social media e-commerce transactions by end of Q2 2012, reducing Facebook’s share to slightly under 60% from 86% a year ago.” What’s even more interesting is that consumers are discovering new retail brands via Pinterest, in contrast to consumers following brands they already know on Facebook.

While we can’t be certain how Facebook will integrate with Facebook, we are definitely excited to see how it will all play out and the effects it will have on e-commerce, social commerce and multichannel retailing.

Related posts:

• Why You Should Get on Board with Pinterest
• 3 Key E-Commerce Trends to Watch in 2012
• There's a Lot to Like About Facebook and E-Commerce Marketing
• Facebook's Role in Social Shopping

The answer to that question depends on what you’re selling. For instance, if you sell electronics and video games or other commodities, like Best Buy does, then you need 50 less physical stores than you currently have.

Last week, a day after Best Buy’s e-commerce site was down for 17 hours’ worth of upgrades, the company announced it would close 50 big-box stores as a cost-reducing measure.  Similarly, big-box commodity seller Wal-Mart is losing ground to Amazon and is working to beef up its own e-commerce offering.

We’re seeing this trend, because commodities can be easily searched online and via mobile devices, and consumers can easily shop the lowest bidder. After all, a Canon Powershot is a Canon Powershot and has the same features and feel no matter where or how it is purchased. E-commerce operations with lower overhead can underprice physical stores and win the business away from them.

However, if you’re a retailer selling big-ticket or other non-commoditized items, your e-commerce presence can be a vital customer touch point that drives the overall business. When executed correctly, the e-commerce site becomes a full brand extension that drives in-store traffic and vice versa. This is what Blueport Commerce helps its clients do.

For the merchandise our clients sell, like furniture and flooring, the store behind the products matter.
Consumers often begin their searches online, researching selections and offers from various retailers, but for some, they will need to move on to the store to make their final decision. As a retailer, you want to give customers the choice so they can buy in the way that best suits their needs. Even if sofas from two different retailers look the same, they likely come from different manufacturers and may be constructed differently. Given that this is a larger, more expensive purchase, consumers are also looking for trusted retailers that can provide quick, inexpensive delivery, as well as service, if ever required.

Our clients are fortunate -- they can truly harness the power of multichannel retailing, because all channels play important roles in the buying cycle. And consumers win as well, because they’ll still have a place to go test drive a sofa.

Related posts:

• Amazon's '$5 to Leave the Store' Promotion: Reactions Mixed, But a Sign of Things to Come
• Big Ticket vs. Small Ticket: Why Disaggregating E-Commerce Matters
• New Insights on How Consumers Research Products and Shop Online
• E-Commerce Is About More Than Online Shopping: Think Digital Marketing

Copyright 2010, Official Blog of Blueport Commerce

If you wanted to browse products or make a purchase at Best Buy’s website on Wednesday morning, you were out of luck. BestBuy.com was down, due to a planned outage, from 10 p.m. ET on Tuesday until 3 p.m. ET on Wednesday, for site updates. But the inconveniences transcended the prospective online shopper.

Customers who already made online purchases could not track or receive updates on their orders, and access to the mobile site and in-store kiosks was also cut. In-store, salespeople rely on the website for checking inventory and other product information. So, if you went to a store and wanted to know if an out-of-stock item was available at another location, for example, a salesperson would not have been able to help you during that downtime.

While the full extent of the updates may not be apparent to the average consumer, the disruptions they caused for 17 hours must have been.

Blueport Commerce Minimizes Downtime for Online Retailers

Here at Blueport, we have set up our systems to keep downtime to a minimum during any release – our goal is to never make core functionality unavailable for more than five minutes.

Our global environment is composed of many small environments that all work together. For instance, we split the websites the public sees into two groups, A and B. When we’re doing a site release, we remove the A group from public view and update that group. Then we repeat with group B group. Releasing in this way allows for almost no downtime as one of these groups is always available to customers.

Such a process has allowed us to release significant site and platform redesigns without any adverse effects for our clients and their online retail customers.

Related posts:

• Keep Your E-Commerce Site on Target and Avoid Outages
• Data Center Issues Are Part of E-Commerce -- But They Can Be Mitigated
• Get Your E-Commerce Website Ready for Daily Deals
• Consistency Is Key in This Multichannel Retail World

Copyright 2010, Official Blog of Blueport Commerce

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

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

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

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

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

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

Option 1: The Gilt Model

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

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

Option 2: Localized Cross-Channel Commerce

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

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

Related posts:

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

Copyright 2010, Official Blog of Blueport Commerce

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

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

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

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

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

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

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

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

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

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

Related posts:

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

Copyright 2010, Official Blog of Blueport Commerce

• Rethink Shopping Cart Abandonment on Your E-Commerce Site
• 3 Reasons Why Quality Content Could Be Your Key to E-Commerce Success
• Engaging Site Visitors Through Email
• E-Commerce CRM Becomes More Meaningful in a Multichannel, Social World

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

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

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

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

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

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

Consumer Reaction: ‘Kind of Sleazy’

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

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

The Future of Retail: What Do Stores Do?

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

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

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

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

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

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

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

Related posts:

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

Copyright 2010, Official Blog of Blueport Commerce

• Big-Ticket E-Commerce Should Be Ready for the Holidays
• Holiday Emails Trump Social Media
• The Big Online Opportunity for Big-Ticket Retailers This Holiday Season
• 'Tis the Season for Multichannel Shopping

• Online Advertising: Now Delivering Local Shoppers -- Is Your Website Ready for Them?
• Will You Make Back Your Online Advertising Spend in Store Sales? Yes!
• Consistency Is Key in This Multichannel Retail World
• E-Commerce Logistics and the Element of Localization

• You need to provide rich product descriptions. The more expensive an item is, the more information the consumer will want you to provide.
• Offer exceptional customer service, getting as close to what you offer in-store with a personal shopper. On the Web, that translates to online chat.
• The entire online shopping experience should be like going into one of your boutiques. Craft a strong welcome message on your home page. And then as customers drill down into products, allow them to zoom in on the images or even watch product videos – the goal is for them to handle the product, virtually.

• Big-Ticket E-Commerce Should Be Ready for the Holidays
• The (Unexpected) E-Commerce Advantage
• Consistency Is Key in This Multichannel Retail World
• New Insights on How Consumers Research Products and Shop Online
  

• Holiday Emails Trump Social Media
• The Big Online Opportunity for Big-Ticket Retailers This Holiday Season
  
• 'Tis the Season for Multichannel Shopping
• Keep Your E-Commerce Site on Target and Avoid Outages

• "T-Commerce" Reinvented As iPads Reshape Multichannel Retail
• Retail E-Commerce Trends to Watch in 2011
• A Big Screen for Big-Ticket: In Defense of the iPad
• Square Register Lets Retailers Play with the iPad Too

• On my block deals: This capitalizes on the success of Groupon, Living Social, etc. and combines combining deals with geolocation technology (something Groupon has already ventured into with Groupon Now). Consumers enjoy both the novelty of such alerts as well as the practicality of having time, location and need converge.
• Social currency: There is value in consumers’ social influence. Some brands have already seen success by offering deals or special treatments based on social influence. Others have even offered discounts and products for Tweets.  In the social space, retailers will need to look beyond cultivating a stream of people to merely push deals out to and should work on creating a community of brand advocates, whose organic marketing voices are stronger than the retailers’ own. Pay with a Tweet – social media sharing as currency, too.
• What’s in-store: Making real-time local inventory data available to consumers leads to local discovery. Consumers will be able to find the products they want nearby. By putting this information in the consumers hands, you will be able to attract new customers as people will go to new places to get what they want.

• Online Expectations, Offline Experience
• Marketing to the Smarter Consumer 
• New Research on How Consumers Research Products and Shop Online
• Consistency Is Key in This Multichannel Retail World
  

1. Online Expectations, Offline Experience
2. Shopper Know-How
3. Refined Retail Cartography

• Digitally empowered staff: We’ve posted on this blog about the power of the iPad for retail. This trend is all about giving staff access to additional product information and real-time inventory – information we think are important components of an item’s product page on any e-commerce website. Having this information right at salespeople’s fingertips will allow them to spend more time selling and assisting customers by locating or ordering items.
• In-stories: In-stories give customers access to additional product information in an entertaining manner. Including QR codes in your bricks-and-mortar store could allow customers to conduct the additional research on products that you want them to. Why not allow them to access your e-commerce site’s user reviews?
• Scanned shoppers: This trend is all about interactive technology entering the store to help customers make purchasing decisions, such as what they should make for dinner or what size to get a specific shirt in. We’ve seen some of these types of tools exist on stores’ websites. Customers crave this interactivity everywhere.
• Gesture-based browsing: Gesture-based browsing allows customers to interact with a display via non-contact movement (think Kinect). Such displays will pull customers into the store and the shopping experience. In addition to providing an entertaining experience, it also gives the store information on how the consumer navigates through the display and what the consumer ultimately chooses.

• Consistency Is Key in This Multichannel World
  
• E-Commerce Is About More Than Online Shopping: Think Digital Marketing
  
• E-Commerce 2.0 - the Next Wave
• Marketing to the Smarter Consumer

• Consistency Is Key in This Multichannel Retail World
• Marketing to the Smarter Consumer
• Cross Channel Commerce: How The Home Depot 'Gets It'
• 5 Ideas to Help Multichannel Retailers Beat Big Internet Discount Sites
• Online Advertising: Now Delivering Local Shoppers -- Is Your Website Ready for Them?

• Consistency Is Key in This Multichannel Retail World
• Will You Make Back Your Online Advertising Spend in Store Sales? Yes!
• Google Shopping Goes Local
• Ecommerce Logitics and the Element of Localization
• Local Inventory Search

• 5 Ideas to Help Multichannel Retailers Beat Big Internet Discount Sites
• Cross Channel Commerce: How The Home Depot Gets It
• E-Commerce CRM Becomes More Meaningful in a Multichannel, Social World
• Multichannel Communication: A Marketer's Dream or Nightmare?
• E-Commerce Marketing: Multichannel Analysis Is a Must!

• Overall, HP’s online to store campaign had a 530% overall return on ad spend
• The top 25% of markets in the test had a 1,090% return on ad spend
• Higher-end models correlated with a higher increase in store sales.

• Offer an online survey as consumers exit your website, asking where they plan to buy and how likely they are to buy based on the experience they’ve had online.
• In-stores, include a call-to-action to take an online survey for a chance to be entered into a sweepstakes and ask questions about where their interactions with your brand began.
• Use a store card program, where you have a number attached to customers when they interact with and buy from you online and in-store.
• Allow customers to order online and pickup in-store, and then track additional in-store purchases as a result of the pickup.

• Multichannel Communication: A Marketer’s Dream or Nightmare?
• Engaging Customers at Every Purchase Touchpoint
• Cross Channel Commerce: How The Home Depot 'Gets It'
• Ecommerce Marketing: Multichannel Analysis Is a Must!

• "T-Commerce" Reinvented as iPads Reshape Mulitchannel Retail
• Forrester's Brian Walker Outlines the Fundamental Shifts Taking Place in E-Commerce Technology
• Arhaus Furniture's Custom iPad App Aims to Drive Cross Channel Sales
• A Big Screen for Big-Ticket: In Defense of the iPad