Not right now.

Hyperlocal Beyond Marketing -- Think Localized E-Commerce!

Friday, November 11, 2011 by
Earlier this week, ran a guest post titled "The Benefits of Geolocation Marketing." It discusses how online marketing needs to be hyperlocal to appeal to an audience that prefers to make purchases close to home.

It’s a good read that makes some good points – particularly that 80% of consumers’ disposable income is spent on businesses within 10 miles of where they live, and that marketing needs to be location based to effectively influence this spending.

What struck me, however, was the opening sentence of the article. “The seeming ubiquity of e-commerce…masks a very contrarian reality,” the authors warn, “Most shopping is still local.” What a late-nineties view of e-commerce! People either buy via e-commerce or locally? These two ways to buy aren’t contrary in the least.

At Blueport, we’ve been hyperlocalizing e-commerce since the early 2000’s. In today’s world, both your online marketing and your e-commerce experience should be hyperlocal to best meet your shoppers’ – and your business’ – needs.

Localized E-Commerce

Consumers want to shop locally because they want trusted service from brands they know. They want to be able to talk to people, experience the merchandise, get local deals and have the instant gratification of having merchandise in their homes as soon as possible, delivered by someone who can provide service after the sale if needed. And with the right technology, even a large retailer can combine these powerful benefits of its local stores with the convenience of e-commerce.

We work with our retailers to help them sell big-ticket items on the Web. All of our sites reflect local markets – from hyperlocal selection, deals, delivery and service. It’s everything consumers like about local stores, effectively ported online so that consumers can conveniently research and buy our clients’ merchandise, knowing they’ll get the same local store experience they love – especially for big ticket purchases.

So yes, hyperlocal marketing is important. But viewing it only as a way to drive people into stores misses a huge opportunity. Hyperlocalizing both your online marketing and your e-commerce presence ensures the best of what your stores have to offer is leveraged where today’s consumer can be found – online.

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Copyright 2010, Official Blog of Blueport Commerce

Luxury Websites: If You Don’t Have E-Commerce, Why Not?

Friday, October 28, 2011 by
Many luxury brands have been slow to cultivate their online presence, and even slower to integrate e-commerce capabilities. They seemed to think that the mass appeal and convenience of online shopping would dilute the value and prestige of their brands or that consumers would not be willing to pay big-ticket prices via the Web. This has been proven wrong, as research shows that wealthy people shop online more frequently and spend more per transaction. As of late, many luxury retailers have come around to see the value of the Internet for driving sales, and, even more, the value in allowing customers to transact on an e-commerce site.

According to a recent study by PM Digital, 81% of the luxury websites surveyed now have e-commerce, and the sites with e-commerce get 98% of the traffic that goes to these luxury sites. About a third of this traffic comes from search engines, and there is very little cross traffic, since luxury shoppers are very loyal to their brands. Surprisingly, only a very small amount of luxury brands’ traffic (0.29%) comes from luxury daily deals sites, like Gilt Groupe, ideeli and RueLaLa.

What Makes Luxury E-Commerce Successful?

When selling big-ticket luxury items online, however, it’s not as simple as using a plug-and-play e-commerce solution. Luxury brand customers expect a high-end boutique experience whether in-person or online. Here are some aspects to consider when selling luxury via e-commerce:

  • 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.
Related posts: Copyright 2010, Official Blog of Blueport Commerce

Big-Ticket E-Commerce Should Be Ready for the Holidays

Friday, October 14, 2011 by
There was a time when some big-ticket retailers didn’t think they could cash in on the holiday shopping season, let alone such e-commerce-fueled events as Cyber Monday. But then again, there was also a time when no one expected anyone to buy anything online and computers filled entire rooms.

Whether it’s a push from e-commerce or the trend that holiday shopping starts earlier and earlier, we’ve found that big-ticket merchants, like furniture stores, which had traditionally been slow over the holidays, have been able to share in some of the Black Friday and Cyber Monday cheer.

At first, we would ask our clients what their plans were for these major dates on retail calendars, and they would often tell us they had nothing special planned. But slowly, we helped them to turn these potentially down days into big sellers with special events. For example, one of our clients began with a special Thanksgiving Day offer. It wouldn’t compete with stores, so what would be the worst that could happen? And it worked!

From exclusive email offers to Black Friday doorbusters and Christmas Day specials, our retail clients have been able to boost their fourth quarter sales. One client now mirrors the types of deals you see in retailers across the country with 12 days of deals leading up to Christmas; the big difference is our retailer is selling bigger ticket items like furniture and appliances as well as some electronics – and all three categories perform well.

So whether your big-ticket business can benefit from consumers being poised to spend over the holidays or you can take advantage of shoppers looking for great deals and not just gifts, holiday-timed offers can be a gift to your bottom line.

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Copyright 2010, Official Blog of Blueport Commerce

Why E-Commerce Should Be Fired Up About Kindle Fire

Friday, October 7, 2011 by
On the first day of preorders, 95,000 units of the Kindle Fire were sold. With the product’s release set for November 15th, this all equals a lot of people sitting on the couch after a filling turkey dinner, thumbing through apps and browsing the web on their shiny new tablets.

The release of the new Kindle Fire just in time for some of the busiest e-commerce shopping days of the year (Thanksgiving Day, Black Friday and Cyber Monday), could mean some extra business for online retailers.

According to a survey from the Ponemon Institute, 12% of heavy web-using consumers plan to use their tablets for holiday shopping, and a third of them say their e-commerce purchases will exceed their purchases in stores. And retailers also report that purchases from tablets can be as much as 20% larger than average orders from other devices.

Tablets tend to be great for e-commerce for a number of reasons: the screen size, the presentation (much like an old-school catalog) and the portability. With the Kindle Fire comes affordability, relatively speaking, as well.

There are many who think it is the profile of the tablet owner, rather than the tablet itself, that is responsible for more e-commerce conversions. But with the Kindle Fire’s $199 price tag, the demographic of tablet users could shift. Whether their buying habits do remains to be seen.

Related posts:Copyright 2010, Official Blog of Blueport Commerce

Shopper Know-How and the Retail Renaissance

Friday, September 2, 2011 by
Last week, we posted about the retail trend of Online Expectations, Offline Experiences discussed in PSFK’s 2011 Future of Retail report. In this post, we will talk about another major trend they outline in the report: Shopper Know-How.

Shopper Know-How

The retail megatrend of Shopper Know-How stems from the emerging consumer trends related to how people now use mobile technology and social media, as well as how consumers crave/demand relevant location-based information specific to them.

  • 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.
As you can see, technology is fueling a retail renaissance. Here at Blueport, we’re enjoying being a part of it!

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Copyright 2010, Official Blog of Blueport Commerce

Online Expectations, Offline Experience

Friday, August 26, 2011 by
PSFK, the self-proclaimed “go-to resource for new ideas and inspiration for creative professionals,” recently released its 2011 Future of Retail report, which explores the new trends driving the industry. This year, the focus is on the use of technology and how it will revitalize retail stores, both on and offline.

The study outlines three emerging megatrends:
  1. Online Expectations, Offline Experience
  2. Shopper Know-How
  3. Refined Retail Cartography
Let’s take a look at the first one here:

Online Expectations, Offline Experience

For this megatrend, PSFK identified three smaller trends:

  • 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.
We find all of these trends very exciting. We already know that multichannel retailing allows customers to shop when and how they want to. This new melding of technology and retail will help retailers create a tighter branding experience between their bricks-and-mortar stores and their online e-commerce presence. Both online and offline will be able to more easily benefit from each other, and that gives the biggest benefits to the customer.

In a future blog post, we’ll take a closer look at more of the underlying trends from this report.

Related posts:Copyright 2010, Official Blog of Blueport Commerce

What Retailers Can Learn from Netflix’s Big Multichannel Mistake

Friday, July 22, 2011 by
Last week, Netflix announced a change in its subscription plans and their cost structure. The news was met by anger from many of its customers. In an Econsultancy blog post, Patricio Robles summed up the misstep: “At the end of the day, Netflix is making the same mistake many publishers are: It's hoping to charge consumers by the channel. Want to watch movies on DVD? You have to pay for that. Want to stream movies over the Internet? You have to pay for that separately.”

This forces customers to choose between the two methods, which, from the pricing, Netflix proposes are equal. But with the discrepancy in the number of titles available in the DVD library versus the streaming library, consumers disagree and are enraged.

This is another case, where the retailer is seeing the business differently than the consumers who ultimately foot the bill. And in this economy, consumers will not pay for something unless they see the value – no matter how loyal they have been to the company until now.

Your customers expect a consistent experience with your brand, no matter how they are accessing it, whether in person, on your e-commerce site, or even elsewhere on the Web, like your Facebook page or Twitter account. And your customers expect you to be available in these different venues so they can interact with your brand on their own terms. At Blueport, we work with our clients to be sure the messages customers see online are what they would see in-store, from consistent local pricing to real-time availability.

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Copyright 2010, Official Blog of Blueport Commerce

Online Advertising: Now Delivering Local <br>Shoppers -- Is Your Website Ready for Them?

Friday, July 8, 2011 by
According to a recent eMarketer article, 90% of national ad agencies have clients asking for geographically targeted online ad campaigns.  Daily deal sites, like Groupon, and mobile check-in sites, like foursquare, are hot because they can deliver local shoppers.

Seventy-five percent of survey respondents said location was key in helping national brands reach their target audiences, and more than 50% said the ROI on geographically targeted ads is higher.  It makes sense -- if you’re looking to buy a new sofa in Chicago, would you be drawn to an ad about stylish sofas or one about stylish sofas in Chicago? 

Local advertising brings what the consumer is looking for that much closer.  Local means you can see it in a store; maybe get a local deal; and get it quickly and cheaply (and even get service if you have to).

But is your ecommerce platform ready for local shopping?  Very few are.

Local Commerce Makes Good on Local Advertising

Remember the early days of ecommerce, which promised to “Amazon” everything?  Stores were to become obsolete, and as a result, most ecommerce platforms were built as national channels, designed to bypass local stores entirely.

That’s a real problem for most bricks-and-mortar retailers.  The promise of a local ad falls flat when a customer clicks to a homogenized, national website.

To monetize local ads, you need to provide your customers a complete location-based experience that delivers on the ad’s local promise.  A landing page isn’t enough -- you need to deliver local online shopping.

At Blueport Commerce, we enable local online shopping experiences for our clients. Blueport’s clients present localized content to their shoppers based on location, including merchandise trends, selection and availability, in-store inventory and pick up, local pricing and deals, fast, cheap local delivery, and even “About Us” pages, managed by stores, and that can speak to a local store’s place in a community.

It’s seamless cross-channel shopping between online and a local store, and it dramatically improves the already impressive ROI of local online advertising.

Your customers are ready for a complete local commerce experience -- are you?

Related posts:Copyright 2010, Official Blog of Blueport Commerce

Consistency Is Key in This Multichannel Retail World

Friday, July 1, 2011 by
We’ve all read the news – most likely on a tablet or e-reader of choice – that brick-and-mortar bookstores are closing left and right as their electronic counterparts comparably flourish. But recently, I needed a book.

As do many shoppers, I began with online research. I went straight to a major book retailers’ website and located the title. I was disappointed that I could no longer order the book online for in-store pickup or even find out if my local store had the book in stock. But I could locate the closest store, which took some doing in light of the above-mentioned closings.

In-store, the item was priced 30% more than on the retailer’s website. The manager explained it was for the convenience of coming into the store, and no, it’s not confusing, because the company gets the money either way. I left unlikely to buy from the store or the e-commerce site again.

A Seamless Experience Between Online and In-Store

Of all the retail categories to know the right way to sell in a multichannel retail environment, you would expect books to have it mastered. After all, e-commerce began with bookselling.

Seeing where the book retailer got it wrong, while we here at Blueport are able to get it right as we help our retailers sell big-ticket items online, reminded me of just how new e-commerce and getting different retail channels to work together is.

But consumers are ready, and delivering a consistent experience between all of your retail channels is a must, particularly for considered purchases like furniture and appliances. This is why we tie into our retailers’ existing systems to show their customers consistent local pricing, real-time availability and a way to see the items in a store or to order online. We allow our retailers to give their customers control, so they can get the information they need, whenever and however they want it.

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Copyright 2010, Official Blog of Blueport Commerce

Will You Make Back Your Online Advertising Spend in Store Sales? Yes!

Friday, June 3, 2011 by
All retailers want to know that the money they spend online is coming back to them some way, somehow.  It's become a mantra that the majority of consumers who buy in stores research online first, but in truth, it can be hard to follow customers from their keyboards to retailers’ registers.

We at Blueport see the value that local e-commerce and online marketing bring to our brick-and-mortar clients every day.  But, it certainly helps when a company like Google offers Online to Store research that quantifies cross-channel results.

Google set out to prove that online advertising leads to in-store sales.  For one national retailer, testing keyword advertising specific to one product category not only lifted in-store sales for that category by 3.6%, but the online advertising had a halo effect, lifting sales in all other categories by 1%.  And, the bigger the ticket, the better the results were.

HP Case Study Shows ROI Is Higher with Bigger-Ticket Items

The Google Retail Advertising Blog post about Hewlett-Packard and the study discusses the following findings:

  • 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.
How Can You See Your Own In-Store Return on Your Online Presence?

In an interview, analytics evangelist Avinash Kaushik offers some ideas for getting quantitative information on how your online efforts contribute to in-store sales.

Some ideas you might be able to implement for your retail business:

  • 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.
We're just at the beginning of this trend.  As localized e-commerce gains traction and enables synchronized web to local store marketing, we'll start to see new sectors of retail get even more involved (and see even better results).  In the meantime, even this simple test shows how stores can -- and in today's world, must -- harness the power of online marketing.

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 Copyright 2010, Official Blog of Blueport Commerce

Square Register Lets Retailers Play with the iPad, Too

Tuesday, May 24, 2011 by
Yesterday, TechCrunch reported on the new Square Register, a replacement for cash registers that not only lets retailers accept credit card payments via iPads, but also allows the stores to communicate with customers more efficiently.

After a retailer processes a customer’s payment via Square Register, the retailer can invite the customer to download the Square Card Case, allowing the merchant to engage with customers in entirely new ways. Customers can add your “card” to this virtual wallet and access your location and contact information, their purchase history and receipts, a live menu of your daily offering and customized offers from you. Customers will also be able to use the Square Card Case to make purchases from your store within two physical blocks of the location. The customer can show up at the store, give the name to the cashier and then be charged on the back-end Square Register for the goods. It practically takes the whole payment process out of your relationship with customers.

Is iPad the Perfect Multichannel Retail Tool?

While we will certainly keep an eye on this application and how it works in real retail, we just need to say how amazed we are with the multifaceted iPad as a catalyst for retail both for merchants and consumers. The iPad is not only a tool for customers looking for great images of product and an ability to buy, share information on the fly and get feedback from their friends on all types of purchases from lunch to gadgets to big-ticket items and everything in between. It is also a tool for selling. Retailers can use iPads to show additional retail to customers, as a mobile option for checking retail and now as a replacement for cash registers and POS terminals with extraordinary customer engagement opportunities.

What can’t the iPad do? Or, more importantly, as a retailer, what else would you like the iPad to be able to do for your business?

Related posts: Copyright 2010, Official Blog of Blueport Commerce

E-Commerce Is About More Than Online Shopping: Think Digital Marketing

Tuesday, May 3, 2011 by
This week’s article from Multichannel Merchant “How to Drop the ‘E’ from E-Commerce,” talks about the evolution of folks who are now in charge of retailers’ e-commerce sites and how they likely worked their ways up through the retailers’ IT ranks and are now measured by online sales. But the article points out that e-commerce shouldn’t be about website sales as much as it should be about digital marketing for the entire retail organization.

Your e-commerce website is an influencer and should be designed to be a cross-channel powerhouse that drives sales and interactions with your business. You need to create a retail business that lets the consumer interact with you on the consumer's terms. And with the way people begin shopping using online search, your website could very well be the first touchpoint for new customers.

6 Ways to Turn Your E-Commerce Website into a Retail Digital Marketing Machine
  1. Offer real local inventory information with local pricing -- right down to the store.
  2. Provide a feature-rich store locator, allowing customers to search stores by location, hours and other customer-centric criteria.
  3. Allow customers to buy online and pick up at a store location.
  4. Be sure there is consistency between your e-commerce website and store when it comes to messaging, naming conventions and pricing.
  5. Boost your local store online, using Google Places and the like, and integrate with location-based services like FourSquare.
  6. Allow local stores to customize their information, and include store specific events, contacts and more.
  7. Work with your marketing and merchandising counterparts to ensure a consistent message that works both in-store and online.
Remember: E-commerce is simply an extension of your existing stores. Don’t overlook your website’s full ability to market your products by focusing solely on online sales.

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Copyright 2010, Official Blog of Blueport Commerce

5 Ideas to Help Multichannel Retailers Beat Big Internet Discount Sites

Thursday, April 7, 2011 by
I read an interesting article this week in Floor Covering Weekly: “Tile Industry Battles Internet Pricing.” While the article is specific to the flooring industry, it discusses an issue that big-ticket retailers, like the ones we work with, face. With big-ticket items for the home (i.e. carpet, flooring, furniture, etc.), consumers like to visit the retail location to “touch and feel” the product before they make their purchase. But then, the consumer might go home and search for the item online and ends up buying from the e-commerce site with the lowest price.

As a multichannel retailer, what can you do to keep the sale rather than lose it to the lowest bidder? Be sure when consumers leave the store, they will get a consistent experience that focuses on their needs.

Here are 5 things you can do online to help keep the sale you start:
  1. Offer free samples that can be ordered online and shipped directly to the shopper’s home.
  2. Offer free in-home measurement.  Bring samples right to the customer’s door and give a free estimate, including installation.
  3. Include coupons on your e-commerce site.  You can test a variety of different offers, including incentives for new customers.
  4. Make guarantees on your installations so new customers feel comfortable doing business with you.
  5. When customers do take action, use trigger/automated emails to bring people back to your site and offer additional purchase incentives.
You can’t stop consumers from looking for the best deal online, nor do you necessarily want to. It is up to you to offer the best complete deal, including superior customer service and other incentives that a large discount e-commerce site may not be equipped to provide. As the article mentions, sites that offer discounted prices strip away much of the added value consumers need when shopping for big ticket retail products - no hassle returns, product education and design assistance are just a few.

What advice would you give retailers for “keeping the sale”?  We’d love to see your comments below.

Copyright 2010, Official Blog of Blueport Commerce

Retailers, Meet the XTreme Shopper

Wednesday, March 23, 2011 by
There have been numerous terms coined over the years to describe different consumer segments: Brand Aspirationals, Power Shoppers, Savvy Spenders -- the list goes on.  Today, we’d like to introduce you to the latest consumer segment: XTreme Shoppers, as coined by GfK Custom Research

Who Are These XTreme Shoppers? 

To start, XTreme Shoppers are motivated, aggressive and passionate. They can be found across all U.S. geographic regions and income levels. They use multiple resources and go to almost any length to seek out the best possible value. They value such factors as enjoyment, usefulness, simplicity and assurance.

What we found most interesting is that GfK’s research shows that XTreme Shoppers derive more emotional satisfaction from shopping online than in-store, indicating that your B2C e-commerce experience should be a priority if these are the consumers you're looking to attract. When comparing the two channels, more respondents considered online to be inviting (81% vs. 71% for in-store), uplifting (84% vs. 71%), customized (73% vs. 51%), energizing (74% vs. 48%) and calming (80% vs. 53%).

These shoppers consider themselves "in control" of retailers. They want you to be as passionate about them as they are about your brand. Or they will shop elsewhere.

Catering to XTreme Shoppers

Some retailers are excelling at addressing the needs of these multichannel, highly motivated consumers. Williams-Sonoma, for example, maintains consistency across all channels and experiences.  Whether attending an in-store cooking demonstration or browsing the retailer's online library of recipes, shoppers feel like they are being treated to something special when they interact with the brand. The same could be said for Apple, which offers consistent and enjoyable experiences both in-store and digitally.

The takeaway: Gone are the days when price, quality and quantity are the only true purchase drivers.  Is your retail brand meeting the XTreme Shopper's needs, or are you struggling with e-commerce barriers that prevent this cross-channel synchronization?  We’d love to hear from you about what you are doing to attract and please these passionate shoppers.

Copyright 2010, Official Blog of Blueport Commerce

E-commerce 2.0 – The Next Wave

Tuesday, March 22, 2011 by
Excerpts from Lazard Capital Markets  Tech and Media Conference
March, 13, 2011; Boston, MA

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We’ve seen it work in three ways:
  1. Brand Building: in high engagement categories, brands can interact with their customers on topics they are passionate about.
  2. Deals: Facebook can replace email as a way to distribute deals.
  3. As a Platform: we look at Facebook as an emerging platform/operating system that can host online stores with built in traffic.
CS:  Blueport appears to be in a sweet-spot helping merchants in challenging product categories figure out their e-commerce strategies.  Can you talk about the multi-channel environment, how the pace of that shift online may be changing?

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

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

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

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

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

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

Sears (SHLD) – is a company taking another innovative approach.  They are reentering the furniture category via a unique cross-channel strategy.  They’re putting small footprint galleries in their stores, that drives traffic to a dedicated furniture website that we run for them,  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

Canadian Consumers are Waiting for You Online

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

Here are some of the highlights:

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

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

Copyright 2010, Official Blog of Blueport Commerce

Marketing to the Smarter Consumer

Friday, March 11, 2011 by
This week I read about an interesting report from IBM, titled “Capitalizing on the Smarter Consumer.”  It contains the results of the company's recent survey of 30,000 consumers about how they shop and why.  This is the latest report to underscore just how much technology is driving e-commerce growth and affecting consumers' shopping habits.  According to IBM, consumers are more comfortable than ever using the Internet, mobile technologies, in-store tools and other innovations to research and buy products.

Most interesting was IBM’s identification of the “instrumental customer”: a consumer who uses two or more technologies to shop. According to IBM, this constitutes a growing number of shoppers, with 49 percent of survey respondents falling into this category (up 36 percent from last year).

Other findings of note:

  • 75 percent of consumers would shop on a retailer's e-commerce store
  • 39 percent would use in-store kiosks, a 10 percent increase over last year
  • 25 percent want to shop via the mobile channel, up from 13 percent
  • 78 to 84 percent of consumers now rely on their social networks when researching new products
IBM's research is in line with what we see amongst our multichannel retail clients' customers -- the growing number of technologies and tools at their fingertips is helping customers make more informed decisions and is changing how they go about their research and purchasing process. Their path to purchase may no longer be a straightforward visit to the store -- or even a simple visit to a retailer's website! Today's smarter consumers may research and browse across numerous channels before ultimately buying the product.  Rather than see this as a marketing challenge, we work with our clients to identify new opportunities for engaging shoppers through multichannel communication.

Copyright 2010, Official Blog of Blueport Commerce

Forrester's Online Retail Growth Forecast

Thursday, March 3, 2011 by
This week, Forrester Research issued its Online Retail Forecast, 2010-2015. The firm expects US ecommerce retail to have an average annual growth rate of 10% from 2010 to 2015, reaching $278.9 billion in 2015.

Forrester thinks several growth factors are propelling this double-digit growth for the online channel:
  1. Universal Web connectivity among consumers.
  2. Increasing consumer familiarity with and preference for online retail shopping.
  3. Best-in-class shopping experiences.
  4. New online shopping models like flash sale sites, which have generated excitement and grown rapidly.
And What About Big-Ticket Retail Online?

Noteworthy for the big-ticket category was Forrester’s observation that while a growing number of Web shoppers are increasing their spend on “traditional” online categories, like books and media products, they are also increasingly purchasing online in new categories that are “high touch, high consideration goods like furniture or home appliances.”

By 2015, Forrester projects 11% of overall sales to be transacted through the Web channel as consumers spend significantly more online in the future. This means retailers in all categories, and particularly big-ticket players, will need to continue to rework and rethink their multichannel retail models, ensuring a cohesive relationship between their online stores and their bricks-and-mortar network.

Copyright 2010, Official Blog of Blueport Commerce

“T-Commerce” Reinvented as iPads Reshape Multichannel Retail

Friday, February 25, 2011 by
There were several great articles published this week on the impact the iPad will have on retail and, eventually, workplace computing.  One that I particularly enjoyed was focused on the device’s impact on female shopping behavior.  In her AdAge piece titled “How the iPad is Reshaping E-commerce,” Engauge CMO Patti Ziegler draws on her own experience as an iPad-loving mom.  She quickly points the growing cohort of iPad owners – wealthy, tech savvy and increasingly female – a group that is quickly becoming a powerful driver of B2C e-commerce sales.

Ziegler uses the term “t-commerce” which was coined by Forrester in a January 2011 report to describe shopping on a tablet device.  About a decade ago, Forrester coined the term “t-commerce” to mean e-commerce undertaken using digital television. We think tablet commerce will have a much larger impact on retailers.  Here’s why you should be paying attention, and marketing to, this group of women leading the t-commerce charge:

  • Within four months of launch, the female-to-male ratio of iPad users shifted from 1:2 to 2:3
  • iPad owners are typically affluent and more likely to be spending money online
  • Women control between 70-85% of household spending in the US
  • Tablet sales are forecast to nearly quadruple from 2010 to 2015
  • Many retailers report that over 50% of their mobile traffic is already coming from tablet devices

What is your organization doing to rise to this new multichannel challenge?  Are you creating shopper experiences that extend across mobile phones, computers, in-store kiosks and tablets – including the iPad?  We're interested in hearing your big-ticket retail t-commerce plans and success stories.

Additional reading:

Ad Age - How the iPad is Reshaping E-commerce

MarketingVox - Time to Start Prepping for T-Commerce

New York Times - After the iPad's Head Start, Rival Tablets are Poised to Flood Offices

Copyright 2010, Official Blog of Blueport Commerce

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

Friday, February 18, 2011 by

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

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

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

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

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

What are your thoughts on Home Depot’s strategy?

Copyright 2010, Official Blog of Blueport Commerce