Not right now.

Blueport Commerce to TJX: How to Bring Your Local Stores Online

Friday, March 9, 2012 by

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.

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Copyright 2010, Official Blog of Blueport Commerce

Newspaper Advertising Falls to 1950s Levels, While Online Skyrockets -- How Are You Spending Your Ad Dollars?

Friday, March 2, 2012 by

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.

Print newspaper advertising revenue adjusted for inflation, 1950-2011

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?

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Copyright 2010, Official Blog of Blueport Commerce

Why You Should Get on Board with Pinterest

Friday, February 24, 2012 by

It's hard to ignore the hype around Pinterest, the new social sharing platform, and you're forgiven if you are hesitating to invest hours into yet another new social tool. But if you take a close look at what it does and who is using it, we think you'll find Pinterest is worth spending some time on, especially if you're a home furnishings retailer.

What is Pinterest anyway?

It's a place where people can share things they like - such as products, recipes, or ideas - via a pin on a virtual board. Users can follow each other's boards, and can re-pin what they like. Given its similarity to how interior designers create boards to showcase decorating ideas, it's not surprising that many boards focus on home decor and design.

Who's using Pinterest?

Both the demographics and the usage patterns of a typical member are much of what's driving the hype.

  • The majority of Pinterest users are women between the ages of 25 and 54 (source: KISSMetrics)
  • The site received over 11 million users in January, more than double the number in November, and the average visitor spend 100 minutes on the site ( source: The Wall Street Journal)
  • Pinterest is now in the top 5 of referring social sites (source: Shareaholic)

Where should I start?

The best thing about Pinterest is that it's easy to get started and doesn't require round-the-clock care like Facebook or Twitter. You can easily set up multiple contributors to an account so different people can create and maintain boards for your brand. To keep in the spirit of the community, don't stop at pinning your own products, share design inspirations, tips and how-tos, even pictures of the employees who help create the products. And don't forget to update your web site to allow others to easily pin your products!

Do you have some great tips on using Pinterest as a retailer? Share them here!

 

Copyright 2010, Official Blog of Blueport Commerce

 

When Charging Online Customers for Shipping, Localized E-Commerce Helps Make the Price Right

Friday, February 17, 2012 by

Would you spend $300 on shipping an item you’re buying online for $100? If you’re like many of today’s consumers, you might think that’s just not fair. But that is the type of shipping charge Ikea customers are facing.

According to this Stylelist Home blog post, Ikea has established a flat shipping rate for customers further from their store locations. This likely lowers the cost for customers buying roomfuls of furniture, but the customer who is buying a single item appears to lose out. Statistics show that people who purchase furniture on the web are, in fact, often buying single pieces -- it's the guy who’s jumping online at lunch to snag that $899 leather couch he has in his cart that is now on sale for $629 (you know, the one with the brushed stainless legs).  But what is the abandonment rate when a customer sees the shipping rate is higher than the money he’s saving?  I'll save you the thinking on this one: The abandonment rate is huge, and that's a problem for billion-dollar retailers like Ikea.

Shipping is an expensive part of the retail business, especially for big-ticket retailers. But not getting this part of the pricing right can be detrimental to the bottom line. Implementing a local e-commerce strategy can keep shipping costs down for your customers.

Our e-commerce solution here at Blueport takes the customer’s location into account. We tie into our retail clients’ real-time inventory data and display the merchandise that is available in the physical stores closest to the customer. This allows customers to get the merchandise they want as quickly and inexpensively as possible. After all, happy customers equal happy retailers!

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Copyright 2010, Official Blog of Blueport Commerce

E-Commerce Marketing Departments Must Embrace and Work with IT

Friday, February 10, 2012 by
Looking at last week’s post, it seems marketing and IT have switched personalities for this discussion, as marketing is usually the promoter of the bright and shiny future while IT proceeds with caution seeing dangers around every corner.

After years of working with in-house tools and best-in-class SaaS solutions, Blueport’s marketing department has a few words of caution for our kin who are working to gain control over their own technologies.

Know What the SaaS Will Really Offer Your E-Commerce Website

There is an ever-increasing number of technologies being pitched to marketing as being the key to higher conversions, with easy-to-use interfaces and “little IT involvement” required. But beware of false promises and flashy demos. For every app that really makes your life better (like social media posting apps), there are apps that will only add to your workflow, not your bottom line. Many seemingly promising apps turn out to be so limited and inflexible that in a month your ideas will have exceeded their capabilities.  Even worse are the apps that make website pages grind to a halt as they call numerous third parties to display data in a fancy new interface.

Technical Resources Required

One of the benefits of your internal development team is their ability to help identify your needs and find a real solution. While the solution may be found outside your company, marketing will still need business analysts and vendor managers to help evaluate and maintain these new services. These professionals, which typically sit in the IT part of the organization, will have insights and questions that are not evident to all in the organization. These same talents are needed to ensure these services are implemented correctly and doing what you expect them to do on the client side – many of these SaaS provides offer little handholding around the backend of things. I would caution marketing to be too willing to take over their own IT projects without first having these resources in place.

Tracking All Your Systems

Lastly, be aware that tying these systems together with other marketing efforts and internal systems to gain a complete view of your customer becomes more and more difficult with each new service. Each service will come with its own usage data, which may or may not conflict with other information you have. Make sure this new information really adds value, and not just inactionable data.

When IT and Marketing Collaborate, There’s Some Letting Go

For e-commerce companies and the like to truly advance and be competitive in a world where the latest technology consumers want to experience may come from anywhere, marketing and development leaders should sit down and set some ground rules as to who makes the calls – with input from the other – on what functionality. In other words, they should draw the lines between core (IT’s domain) and subject area (marketing) expertise. On an e-commerce site, the key shopping cart workflow would be ultimately owned by development but product reviews would be marketing’s domain. While it is necessary for each side to provide input and support on changes and technology, clear owners will help keep projects and advancements moving along.

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Copyright 2010, Official Blog of Blueport Commerce

Retail CIOs Should Champion Collaboration Across Departments

Friday, February 3, 2012 by
Here at Blueport, we’ve been passing around last week’s StorefrontBackTalk blog post “Should CIOs Now Surrender to Marketing?,” and it has sparked some discourse between our own marketing and technology functions. As Director of Integration, do I think CIOs should surrender to marketing? They already have!

Some don’t know it yet and some have walled themselves up in time capsules, and for both those groups, the battle has passed them by. Those CIOs who don’t know it yet lead organizations that just can’t seem to make up lost ground chasing the most profitable new technologies. Those who have walled themselves off behind pretexts of the need for conformity and centralized control have done nothing but stifle and stratify the process of business evolution critical to ongoing competitiveness. IT organizations that encourage and support peer business unit management of specialized, cost effective, outsourced applications have won the day.

When CIOs Let Go, Bigger Opportunities Result

By foregoing complete control of all that has become the technology function, the CIO also realizes benefits and reveals opportunities. No IT organization has excess resources to spend making specialized applications that compete with today’s best-in-class cloud and SaaS solutions. Spinning off responsibility for tools that cater to subject area expertise allows CIOs to focus resources against core projects where their resources thrive as opposed to working a potentially complicated solution in an unfamiliar discipline.

A Real-Life E-Commerce Example

The real opportunities result when, through a collaborative approach to enabling specialized applications, a vision develops of the next generation corporate infrastructure, an infrastructure that enables and supports snap-in specialized solutions and opens the door to the same type of quick, cost-effective solutions for all business units. Collaboration between the company’s business functions leading to a common enabling infrastructure gives the CIO the benefit of steering decisions on critical issues central to modern IT, such as compliance and security. Finally, the specialized applications researched and implemented by business units act like a research and development IT skunk works, exposing the organization to the newest technologies and solution patterns.

A real world example of this is your typical big-ticket retail e-commerce website.  Assuming the CIO chooses to develop the e-commerce solution in house, the company first needs to decide on a technology for catalog, order tunnel, fulfillment, and reporting. Then the CIO must hire a development team or train existing staff. While the staff is either hiring or training, none of them are advancing the IT organization’s other core solutions. And, as the new e-commerce team is building the website against the initial technology chosen, they are already falling behind technically. When the in-house solution finally launches, it is already underwhelming to consumers and, more often than not, the effort needs to be set aside immediately to resume work against the ever-present backlog of requests for changes to core business solutions.

All the while, the CIO could have used one of the SaaS solutions that are evolving quickly and constantly setting new user experience paradigms.

Alternately, if the CIO chooses to embrace an SaaS e-commerce solution advanced by the marketing team, the CIO’s team would have input on integration and security, as well as an easy case with management for building enhancements to core infrastructure and systems. The enhancements to the core infrastructure, quickened and focused by working against the new SaaS e-commerce solution, open the door to additional SaaS or cloud solutions as well as new technology core solutions by the in-house team. And don’t forget the finished product: SaaS solutions evolve very quickly and constantly set new user experience paradigms – customers love the new website. The next SaaS integration is very cost-effective, and the CIO is the hero. Best of all, nothing of true importance was actually surrendered to marketing.  

Next week: Marketing responds!

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Copyright 2010, Official Blog of Blueport Commerce

Are Trigger Emails the Real One-to-One Communication for E-Commerce?

Friday, January 27, 2012 by
For years, the promise of one-to-one communications with customers has made online marketers giddy with the personalized messages they’d be able to deliver and the resounding results they’d get back. Sadly, reality isn’t always the same as what we can dream up.

In the case of one-to-one marketing, the tools technically exist. Companies have rich data on their customers and e-mail systems have the ability to target based on them, but the missing ingredient is the content that has to be generated to create this truly unique messaging. Is the content creation and its associated cost worth the return on investment, or is there a better way?

Here at Blueport, we’ve worked to achieve true one-to-one communication for our clients and have seen few returns. But trigger messages based on the customers’ lifecycle has been a completely different story. We’re able to segment users and send them relevant messages based on actions they’ve taken on the website. If marketers get too specific, the messaging becomes hard to maintain without becoming more useful .

Apparently we're not the only ones to come to this conclusion. According to a recent article on ClickZ, “Triggered communications are being widely adopted. This is messaging that, while not necessarily personalized in content, is triggered in response to specific behaviors or events, giving each recipient the feeling that the message was personal due to contextual relevance. Whether it's time, location, or behaviorally triggered, such messaging can feel extremely personal and engaging even though it may be being sent to thousands of recipients each day.”

This year, I have seen our retailers embrace the trigger/lifecycle message concept as a requirement to how they do business thanks to its positive ROI and high user engagement. It's just one way we're making ourselves relevant to our customers and not just another retailer in the crowd.

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Copyright 2010, Official Blog of Blueport Commerce

Get to Know Tablet Shoppers to Drive Your E-Commerce Business

Friday, January 20, 2012 by
In a previous post, I talked about how tablet commerce will continue to be one of the top growing e-commerce trends this year. And there is good news for e-commerce businesses who want to drive additional business through this medium: You can now get to know tablet users a little better.
 
Internet Retailer recently wrote about the results of a Zmags survey conducted by Equation Research on who the people are who are making purchases via their tablets. Here are some of the results:
 
The Typical Tablet Owner
 
  • Age 40
  • Average annual household income: $63,000
  • 52% are women
  • 81% use Facebook
Tablet Shopping Habits
 
  • 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
Why Tablet Commerce Makes Sense
 
  • 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
This is further evidence that tablet shoppers are poised to browse and shop e-commerce site via their devices. While you don’t want to miss the opportunity to get in front of these shoppers, their influence on social networks is also an alluring reason to capture this audience.

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Copyright 2010, Official Blog of Blueport Commerce

Data Center Issues Are Part of E-Commerce -- But They Can Be Mitigated

Friday, January 13, 2012 by
For e-commerce sites, both on the web and mobile, there’s a lot you can control about your site, for instance, what products are featured, site promotions, the shopping cart and more. But when it comes to site performance, some issues are out of the retailer’s hands.

For example, last month Toolfetch.com’s mobile commerce site experienced availability issues. While load time remained a quick 5.30 seconds, the site was unavailable for nearly 10% of customers who tried to load it. The culprit? Service interruption at the data center. 

Toolfetch.com had likely created a multi-homed network connecting their data center to two independent carriers – it’s like running Comcast and RCN for your home Internet connection and using them both at the same time. Many e-commerce sites conduct such practices, and it’s almost required to ensure adequate uptime these days. Running this type of connection adds complexity and multiple additional layers that must be monitored and managed properly. From our perspective here at Blueport, running this multi-homed network alone isn’t enough to guarantee better performance and uptime.

In addition to implementing a multi-homed network with independent carriers, we also use edge caching via Akamai for all of our clients’ e-commerce sites.  Akamai copies our websites and stores the pages across thousands of nodes all over the US and Canada. When a user hits one of our clients’ websites, 85% of the time the data they see is loaded via a node located geographically close to the user’s computer.  If Akamai does not have already have a copy of the page, the service determines the fastest path to loading the page for the user and fetches the information from our data center to display it as quickly as possible.

By taking additional precautions, we are able to further reduce the risk of the unexpected and improve site performance for our clients.

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E-Commerce Holiday Shopping Is So Last Year…How to Sell During January's Retail Hangover

Friday, January 6, 2012 by
The immense e-commerce success of the holiday shopping season is so last year. Now online merchants need to navigate January’s retail hangover.

This year, with holiday spending significantly up from previous years, January and February spending is projected to drop more drastically in contrast. "Now that those credit card bills are hitting mailboxes, shoppers will cut back in a very significant way relative to [the] January and February of the last few years," says a DailyFinance article, quoting Britt Beemer, group chairman of America's Research Group, in a statement.

Add to that the overall state of the economy, regardless of any holiday binging, and consumer spending is expected to be tepid, says a New York Times article. “Consumer spending makes up 70 percent of the economy, so until it ignites, general growth is likely to be sluggish,” it reads.

So what can online retailers do to come out on top during a typically slow time of the year that might be slower than normal? We at Blueport suggest you try one or more of these ideas:

Sell More with Volume Discounts

Steep price cuts can be detrimental to your retail business, especially long-term. Instead, work to increase average sales by offering volume or tiered discounts.

Focus on Customer Service and Value


Don’t allow your e-commerce business, whether big-ticket or not, to become solely commodity-driven. Zappos.com, for example, may not always offer the cheapest price, but the value that comes from the e-retailer’s brand, policies and customer service make it a destination for consumers. What can you do or offer to make your e-commerce website more valuable than your competitors’?

Spend Time on Social Media

Building your social media presence can be time-consuming, but it can also be an invaluable investment. Take the time now to create your social media brand. Try out special offers for your Facebook fans and test new ideas in this realm. See if allowing fans to vote on deals and other social initiatives can incrementally boost sales.

Expand Your Email List


Reaching out to more consumers now will help your e-commerce brand be poised to sell when they are ready to buy. Are you doing everything you can to grow this list of names? Is there an incentive or contest you could offer? Also, consider the types of messaging you might be able to deliver during this shopping downtime. Mix in some informative content that would be worthy of sending to a friend to extend your efforts.

Don’t Forget Your Recent Customers


Reach out to customers who have bought from your e-commerce website to encourage them to write reviews of their purchases. Any incentive you offer will be worth it -- this user-generated content will help create a strong, interactive e-commerce website to convert future customers.

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Copyright 2010, Official Blog of Blueport Commerce

3 Key E-Commerce Trends to Watch in 2012

Friday, December 30, 2011 by
As 2011 comes to a close, reporters, bloggers and now we at Blueport Commerce are talking about the hot e-commerce trends and predictions for the new year. After 2011, a year in which e-commerce sales grew year-over-year despite the floundering economy, we’re expecting to see some of the seedlings of trends blossom into their own in a new year where technology and consumers’ adoption of e-commerce will continue to explode.

Trend #1: Online or Offline, Customer Experience Counts

Customers expect to be able to shop wherever and whenever they want. To facilitate this, retailers need to create a seamless experience so that there is no difference for consumers, whether they are shopping online or in-store. IMediaConnection used the term “phygital” to refer to the engagement between brands and their customers and how the relationship needs to be consistent regardless of the medium. The consistency builds the relationships, the relevancy and sales.

In this regard, beyond marketing message, online retailers need to make their products as relevant online as they are in person. Consumers expect to have a rich online experience that will stand in for the offline experience they would otherwise have. Expect to see richer product descriptions and imagery, product videos and even user-generated content that is detailed and visual to give fellow consumers additional product information.

Trend #2 Mobile Commerce and Tablet Commerce Will Continue to Grow

If you didn’t believe it before, certainly the 2011 holiday shopping’s couch commerce tells you that consumers are buying via mobile devices, whether smartphones or tablets. Experts predict that mobile transactions will grow to make up 20 percent or more of all e-commerce transactions. Online retailers need to continue to brush up on their mobile presentation, as well as get ready to leverage the geo-location information provided by such devices to reach consumers when they are nearby and to close the gap on closing sales.

Trend #3: Increased Social Integrations with Increased Options for Customers and E-Retailers

While it is doubtful f-commerce will truly take off any time soon, Facebook and social networks are not going anywhere, and nearly half of consumers who are on e-commerce websites will simultaneously be on a social network. E-retailers will integrate more with Facebook, beyond the “like.” Perhaps following online content sites’ “recently read” features, e-commerce sites will adopt “recently bought” or “recently browsed” to encourage relevant social sharing.

Additionally, brands will further use social networks to develop those ever-important relationships with their consumers. Strong bonds through such networks will help online merchants close the sale and keep the customers coming back.

What do you think of our 2012 trends? Do you agree or have more of your own? Share your thoughts in the comments.

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Copyright 2010, Official Blog of Blueport Commerce

Rethink Shopping Cart Abandonment on Your E-Commerce Site

Friday, December 16, 2011 by
Cart abandoners are not the enemies of your online retail business, skewing your site metrics. In fact, they could be your best prospects.

So says research conducted by ClickZ’s Charles Nicholls to be compiled in an e-book this month. His analysis of the behavior of more than 600,000 online users and 250,000 e-commerce transactions show that shopping cart abandonment is now a natural part of the buying process. The key for e-commerce merchants is to recognize cart abandonment as such and then to create marketing programs to capitalize on the different situations in which customers abandon their carts.

Nicholls split customers who abandon their carts into three segments: one-time abandoners, serial abandoners and recent goal abandoners. Serial abandoners appear to be the sweet spot for conversions.

Serial Shopping Cart Abandoners

Serial shopping cart abandoners put items in their carts and then abandon their purchases multiple times within a one-month timeframe. Forty-eight percent of these customers will convert after being remarketed to – that’s more than twice the rate at which one-time abandoners who are remarketed to convert. An average of 18 percent of one-time abandoners will pull the trigger on purchasing after being remarketed to.

Recent goal abandoners are e-commerce customers who have already completed purchases with your website but then come back to your site and abandon their carts. These customers, who have already bought from your e-commerce website, are the most likely to abandon their carts again, but they are also the most likely to make another purchase from you.

How E-Commerce Retailers Can Capitalize on Shopping Cart Abandoners

E-commerce merchants need to recognize shopping cart abandonment as a natural step in the buying process and create plans that offer specific messaging and service to cart abandoners. Here at Blueport, we have helped many of our clients find success by creating marketing programs like these:

Remarketing Emails

Your e-commerce retail business should have an email plan in place to reach out to customers who abandon their shopping carts. The messaging can be fairly specific since you know a lot about these customers, including the specific items and categories they are shopping for.

And don’t forget to reach out to those who have bought from your website. Follow up with additional offers and related products based on their purchases. If you win a customer over with one purchase, you could have a customer for life.

Remarketing Advertising

Similar to an email strategy, you can use display advertising to remarket to your customers once they have left your site. While there is debate about how Big Brother remarketing and retargeting ads can feel to consumers, when implemented correctly, they can lead to increased conversions.

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Copyright 2010, Official Blog of Blueport Commerce

Amazon’s ‘$5 to Leave the Store’ Promotion: Reactions Mixed, But a Sign of Things to Come

Friday, December 9, 2011 by

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:

Copyright 2010, Official Blog of Blueport Commerce

Thanksgiving, Black Friday, Cyber Monday -- How Did E-Commerce Do?

Friday, December 2, 2011 by
Combined together, Thanksgiving Day's couch commerce, Black Friday's mobile shopping on the go and Cyber Monday’s work surfing all made the official opening to this year’s holiday shopping season quite the event. Numbers across the board have been record-setting, and both brick-and-mortar and online retailers are excited as this is just the start of the holiday shopping season.

Here’s a roundup of articles and blogs reporting on these successful online shopping days and what might come next:

Thanksgiving & Black Friday

TechCrunch – Thanksgiving Day Online Holiday Sales Up 39%; Mobile Shopping on the Rise: “As we heard a few weeks ago, retailers were expecting Thanksgiving Day to be a major online shopping day as more and more consumers are hitting their laptops, tablets and more to get a head start on sales in between Turkey time. It looks like early results point to the day being a profitable one for retailers. According to IBM’s Coremetrics retail data, online Thanksgiving 2011 sales were up 39 percent over Thanksgiving 2010.”

E-Commerce Times – E-Commerce Rings Up Boffo Black Friday: "Though Black Friday is typically the day shoppers make a beeline for the big box stores and malls, there were plenty of sweet e-commerce deals to be had, and shoppers swarmed online to snap them up. On Black Friday alone, $800 million in online spending occurred."

Business2Community – Black Friday Saw Strong Increases in Online & Mobile Sales: “As many could have predicted, consumers continued to turn to online and mobile to make purchases on Black Friday. And as it turned out, brands with a strong, integrated retail marketing strategy in place took the cake. According to IBM Smarter Commerce CSO, brands [that] came out on top were those [that] ‘delivered a smarter commerce experience with compelling, relevant deals that people could easily access from their channel of choice.’”
 
Cyber Monday


New York Daily News – Cyber Monday Sales Break Records, Soaring 33% As More Shoppers Do Their Holiday Buying on the Go: “Cyber Monday turned out to be a monster hit for retailers. On the heels of a supersized Black Friday, Cyber Monday broke the record for the most e-commerce sales ever, with sales rising a whopping 33%, according to IBM Benchmark.”

Wired – Cyber Monday Pays Off Big Time: “Cyber Monday, until last year the often over-hyped alter-ego of Black Friday, has not only broken over $1 billion for the second year in a row, but has seen last year’s billion and raised some. There was a time when the busiest online shopping day of the year was generally sometime closer to Christmas, when people were getting last-minute gift-shopping done. But now the race is on hours after Thanksgiving, in both the bricks-and-mortar and virtual worlds.”

E-Commerce Times – Cyber Monday Racks Up Impressive Gains: “So far, so good for e-commerce this holiday season. Both Black Friday and Cyber Monday saw robust sales with surprising gains over last year's performance. Whether consumers will continue to spend beyond expectations, however, is questionable.”

Marketing Pilgrim – Cyber Monday Beats Black Friday: "Cyber Monday is over and the results are in. It’s a HIT! According to IBM Benchmark, Cyber Monday sales were up 33% over last year. The average order value also rose from $193.24 to $198.26. Unlike Black Friday, there were two peaks during the day, one at 11:05 PST and again late in the evening…. Except for the early morning hours, Cyber Monday beat the pants off online Black Friday buying to the tune of 29.3%."

Sign on San Diego – New Shopping Pattern Emerged on Cyber Monday: “The biggest surprise this Cyber Monday was that consumers didn't do most of their shopping at work, according to an IBM analysis of online activity. In the past, people would shop online mostly during the work day. But this year, they did a significant amount of shopping before and after normal commuting hours, using everything from PCs to laptops to iPads.”

Cyber Week & Beyond

ZippyCart – Cyber Week Off to a Successful Start: “Holiday shopping season 2011 got off to a great start with retailers reporting record-breaking Black Friday sales in both brick-and-mortar and online storefronts. According to research by comScore…online sales in the US surged on Black Friday and generated an estimated $816 million, up from $648 million last Black Friday…. The report released by comScore showed that ecommerce spending on Black Friday jumped 26% this year, even though researchers thought brick-and-mortar store deals would detract from the amount of consumers opting to shop online.”

Yahoo! Finance – Cyber Monday’s Unintended Consequences & Other Key Themes Emerging in Retail: “With Black Friday and Cyber Monday behind us, it's time to move past the retail euphoria and look ahead to the sustainability of strong retail sales through the key holiday shopping season. The effects of this season's earlier sales onset and increased doorbuster openings is a must-watch situation moving forward, according to Sucharita Mulpuru, e-commerce analyst at Forrester Research…. ‘All of the research that we've seen is that when there is a really, really strong Cyber Monday and free shipping offers, what we see in the days that follow is some softening,’ Mulpuru says.”

UPI.com – Retailers Extend Cyber Monday Throughout Week
: “Some U.S. online retailers extended Cyber Monday sales through the week as shoppers spent a projected $1.2 billion on the year's biggest online shopping day.”

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HTML5 Moves to the Head of the Line for E-Commerce Web Development

Friday, November 18, 2011 by
When developing our clients’ e-commerce websites, we help drive consumers to convert by providing simple interactive widgets that complement the retailers’ catalogs. With guaranteed interoperability across operating systems and browser flavors, Flash has been the platform of choice for these types of quick projects that engage users -- so far.

With Adobe’s decision to cede the mobile widget space to HTML5, it’s time for web developers to put Flash aside as the platform of choice for quick consumer interactivity. You need to be able to deliver a consistent e-commerce site experience to consumers whether they are surfing the web from their PCs, phones or tablets. And without guaranteed Flash support in the growing mobile space, the unit developer environment cost and associated learning curve sinks Flash’s chances for a decent ROI.

HTML5, however, has a core foundation in interoperability, and the encapsulated APIs that support quick consumer widgets already have a multiyear track record. With Microsoft’s IE9 HTML5 implementation entering the field over a year ago and that implementation’s significant cooperation with the other next-gen browsers, there’s no longer an excuse to keep developing indefinitely in Flash. We plan, and advise other e-commerce web developers, to gradually mix in HTML5 projects for quick interactive widgets now, while the Flash platform support is still good.

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Hyperlocal Beyond Marketing -- Think Localized E-Commerce!

Friday, November 11, 2011 by
Earlier this week, Forbes.com 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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E-Commerce Shopping Sites vs. Social Sites

Friday, November 4, 2011 by
Last month, Performics, a global marketing performance company, conducted its Social Shopping Study, which examined how 1,000 people interact with social, shopping and deal websites. The study had some interesting findings:

  • Men are more likely to visit company/brand/product pages on social sites as part of their purchase decision-making process.
  • Women are more likely to interact with a company/brand/product page after purchasing.
  • When examining a range of shopping activities (including finding specials and deals, product reviews, product information, product comparisons), consumers choose e-commerce shopping sites as their go-to destination.
  • Only 46% of those who responded will look to social networking sites while in a store on a website, but 55% will go to a shopping site in that instance.
  • When consumers do consult social networks for advice before making a purchase, 60% wait no more than 10 minutes.
While the study indicates that consumers often opt for e-commerce shopping sites, the importance of social networks as a part of the purchasing process is on the rise. Retailers and brands need to consider their social networking presence and be sure they are cultivating an environment of brand ambassadors who can influence their peers in their decisions.

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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.
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Today’s E-Commerce Content

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

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

E-Commerce Content Trends

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

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

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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