Running Online StoreBlueport.com

Blueport Commerce would like to offer a hearty congratulations to Demandware, which priced 5.5 million IPO shares at $16. They closed at $23.59 making the company’s value $530 million. Demandware joins the likes of other cloud computing-based software companies, including Brightcove and Bazaarvoice, that have joined the IPO wave since December.

There are a number of reasons why we here at Blueport are happy for Demandware’s success. Above all, it shows how more and more retailers are looking to the cloud for e-commerce solutions, rather than trying to build and run their own e-commerce software.

Retailers who use Software as a Service (or SaaS) e-commerce solutions like Blueport or Demandware leverage the cloud, cutting-edge technology and the expertise of companies that live and breathe e-commerce to bring their brands online efficiently and effectively.

This IPO is also a good reminder of how far e-commerce has come. Demandware’s e-commerce solution focuses on apparel. There was a time when no one believed anyone would buy clothes or shoes online. Now, buying clothing online is as commonplace as buying as anything else.

Just as Demandware has done for its apparel clients, Blueport takes the hard work out of e-commerce for challenging categories like furniture, flooring and appliances. We provide a robust SaaS e-commerce platform that solves the unique, local challenges our customers face, so they can focus on their businesses, rather than attempting to reinvent e-commerce technology.

We’ve seen our customers have great success selling big-ticket items online. Demandware’s IPO reminds us this is only the beginning.

Related posts:

• E-Commerce 2.0: The Next Wave
• Blueport Commerce to TJX: How to Bring Your Local Stores Online
• Retail CIOs Should Champion Collaboration Across Departments
• Keep Your E-Commerce Site on Target and Avoid Outages

Copyright 2010, Official Blog of Blueport Commerce

We’ve already written about today’s smarter consumers, but a new study from PowerReviews, a Blueport Commerce partner, and the e-tailing group takes a closer look at how today’s sophisticated online shoppers use a variety of tools to research items before buying.

Of the 1,000 consumers surveyed, 70% research their purchases for at least a day before taking action. A ZippyCart piece also covering this survey offers this insight: “one reason for this longer-term research…could be the fact that most online purchases are for bigger-ticket items (TVs, other consumer electronics, etc.).”

Unsurprisingly, most of those surveyed said they begin their online shopping either at a search engine or a major retailer’s website. And 90% said product reviews had the biggest impact on their decision to buy.

At this point, only a third of respondents use social media sites, like Facebook, for researching products and instead look to them to find deals. But consumers are using their mobile phones to search for product ratings and reviews from within physical stores.

How Does This Change Your E-Commerce Business?

While these insights may not change how you run your e-commerce store, it does give you a few things to continue to focus on or try out. Including:

• Retargeting advertising: If consumers are spending more time online researching, retargeting allows you to keep your brand in front of them during their time online.
• Search engine optimization: SEO comes down to content creation. Be sure you have unique, helpful content on your product pages and consider branching out and creating content to help users buy your products. These tactics will aid consumers in their research and you in your search engine rankings.
• Product ratings and reviews: This is just another form of content, which will help with SEO and informing your customers. And even better, since ratings and reviews come from their peers, consumers trust them.

Related posts:

• Retailers, Meet the XTreme Shopper
• 3 Reasons Why Quality Content Could Be Your Key to E-Commerce Success
• Retail E-Commerce Trends to Watch in 2011
• Facebook's Role in Social Shopping

Last week we posted about Forrester’s report on Facebook as an ecommerce driver. And while we agree that Facebook will likely not become a major ecommerce platform any time soon, we do see the social network’s value for marketing your ecommerce brand.

There’s more to marketing on Facebook than adding a Like button to your web pages. You need to become a content publisher with a marketing slant. You need to provide value in the form of resources, product information and special deals. The frequency and scope depends on your audience, and cultivating that audience is the number-one step for successful marketing on Facebook.

Building a Facebook Audience for Your Ecommerce Website

We recently worked with one of our clients to run a Facebook fan promotion. The more likes the store’s Facebook page received within a specific time period, the larger the discount all of the Facebook fans would get.

We promoted this “The More You Like, the More You Save” campaign on Facebook, the store’s website and through email marketing. The nature of the campaign was for fans to spread the word -- if their friends liked the page too, everyone would save more. In two weeks, we nearly doubled the store’s Facebook fans, but it didn’t end there. Once we posted the special coupon code on Facebook, we promoted the discount to the site’s audience, encouraging an additional 1,300 of the store’s customers to go onto Facebook and like the page to get access to the code.

We’ve been able to attribute tens of thousands of online sales to this promotion, not to mention additional in-store traffic and sales. And we can continue to use the store’s Facebook page to market to these customers.

Create Social Noise Around Your Ecommerce Brand

A side effect of this promotion beyond the dollars, is that this store’s customers are talking to each other on Facebook about the store and its products. They’ve discussed the furniture they planned to buy with their discount, great experiences they had and what they like most about the store and brand. By administering this Facebook promotion, we’ve helped our client to create an army of brand ambassadors -- specifically brand ambassadors who like to post to social networking sites.

Engage Your Facebook Fans

Now the big challenge is engaging these fans and keeping them interested in a brand that sells big-ticket items the average consumer does not buy every day. To successfully do this, you need to think community more than transactional. Help your customers keep the conversation going about their purchases. Solicit pictures of what they bought, provide tips for caring for their items, and offer tangential information from other sources that complements your brand. This will help your fans remember you, recommend you and come back to you the next time they’re looking to make a purchase.





Copyright 2010, Official Blog of Blueport Commerce

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We’ve seen it work in three ways:

1. Brand Building: in high engagement categories, brands can interact with their customers on topics they are passionate about.
2. Deals: Facebook can replace email as a way to distribute deals.
3. As a Platform: we look at Facebook as an emerging platform/operating system that can host online stores with built in traffic.

CS:  Blueport appears to be in a sweet-spot helping merchants in challenging product categories figure out their e-commerce strategies.  Can you talk about the multi-channel environment, how the pace of that shift online may be changing?

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

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

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

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

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

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

Sears (SHLD) – is a company taking another innovative approach.  They are reentering the furniture category via a unique cross-channel strategy.  They’re putting small footprint galleries in their stores, that drives traffic to a dedicated furniture website that we run for them, http://sears.furniture.com.  The site taps into local inventory, and Sears customers can get a sofa delivered tomorrow for $79.  Blueport powers the whole thing.

So, we’re seeing massive change in these categories, the evolution of true cross-channel categories, and it has accelerated dramatically in last 18 month. 

CS:  What are the key attributes that a bricks-and-mortar retailer or supplier of goods look for in an e-commerce vendor?

When looking at vendors, look at what experience they have in YOUR vertical.  Are you looking for an e-com 1 solution, or e-com 2?  Do you want a direct ship, separate enterprise, or do you want your local markets involved? 

Make sure the vendor has experience in your markets and your vision of what you want ecommerce to do for your core business. 

You can make some disastrous mistakes trying to sell appliances or furniture like you do shoes & apparel.

CS:  What would it cost a retailer or brand to build and maintain a state of the art e-commerce site from scratch, versus using a service provider such as Blueport?

Here again, it depends on what you’re selling. 

If you’re looking for an e-com 1 solution – you can put up a Yahoo! store up for next to nothing.  My 10 year old has one.

For e-com 2 – it’s more complex, requiring far more integration with your local stores’ existing systems and operations.  There’s no Yahoo! store or ready-made platform for that (but Blueport is close).

If you try to build an e-com 2 solution yourself, you have to look at three costs:  the cost to build it, the cost to run it, and the opportunity cost of screwing it up. 

We have a current client who first tried to build it themselves.  They spent $3M, and it never got off the ground.  It was two years of lost opportunity. 

With Blueport, they pay a monthly platform fee and a revenue share.  We’ve done major redesigns of their sites three times in the last two years, and added countless new features.  And they pay only their share of the overall platform and hosting costs.

We also help run the business for them from a marketing, merchandising and services perspective.  This is paid through the revenue share, so they get a turnkey, expert staff on a pay for performance basis.

This story has repeated itself a number of times – people trying it themselves, then deciding to work with us.  At the other end of our contracts, we’ve never lost a renewal, so people see the value of what we do (and would prefer not to have to do it themselves).

Part of the story is that the categories we’re in are a good fit for outsourcing.  They are challenging, don’t match the internal expertise of the players in them, and ultimately, they’re not like PC’s or software, where online is 45%-65% or more of volume. Stores are still key, so our clients get to focus on that part of their business, while we port and drive that business online.

CS:  Can you talk about the competitive nature of your business, who do you see as the most successful competitors and what are trends in pricing for these e-commerce services?

Sure, we segment the market on two dimensions. 

One dimension is e-com 1 versus e-com 2.  Is the customer in a market that will be a simple drop ship model, or do they need a cross-channel solution involving local stores?

The other dimension is platform versus managed solution.  Does the customer just want a technology solution, or are they looking for a partner to help them manage their online business?

On the e-com 1 side of the market, e-com 1 platforms are increasingly commoditized and under a lot of price pressure.  It’s a pure customer acquisition game.  Yahoo stores again.

For e-com 1 managed solutions, GSI Commerce (GSIC) is dominant with a huge lead in infrastructure and increasingly in services, where they’ve made some great strategic acquisitions.  While Amazon (AMZN) keeps looking at this space, GSI is the clear leader.

On the e-com 2 side of the market, e-com 2 platforms are mainly custom builds from players like IBM, and ATG (ORCL).  These are big dollar projects with two commas in the total cost, and they leave the customer to manage the solution - there’s no marketing, management, etc. And, they don’t have a ton of experience in these e-com 2 categories.

For e-com 2 managed solutions, where Blueport plays, we’ve yet to run up against a true competitor. 

I guess we really have two competitors: a customer doing nothing, which is less and less of a factor, and a customer trying to do it themselves, which with our case studies, is an easier and easier argument to overcome.  In a lot of cases, people are coming to us now who tried themselves, and now want out.

We expect competition to evolve, but we have a technology platform and service staff with a lot of specific functionality and experience in these markets, which makes it easy to talk to prospective clients, most of whom have been on the sidelines waiting for a provider that understands their business.

CS: That’s time – thanks to everyone for their participation.

Copyright 2010, Official Blog of Blueport Commerce

This week JC Penny launched an e-commerce presence fully integrated with Facebook. The new site allows Facebook users to browse selected inventory and make purchases without ever leaving the Facebook site.  They can also comment on their friends’ purchases and make recommendations. JC Penny follows similar launches from Procter & Gamble, 1-800 Flowers and others.

While a limited number of retailers have launched stand alone Facebook e-commerce stores, many are linking to Facebook from their online catalog, or using the social networking site to build a larger fan base, cultivate customer loyalty and run special promotions. No doubt Facebook will continue to play a larger e-commerce role for retailers, and its potential as a sales driver is an important consideration.



Copyright 2010, Official Blog of Blueport Commerce

This week Google launched several new features to Google Shopping, most notably localized product search – which we first discussed here back in March. 

Google users will now see two new links accompanying product search results, including the location of local retail stores and an indication if a product is in stock, in limited quantities or out of stock in their area.  A click on an individual product will also return a list of nearby stores that carry that product with an embedded Google Map for obtaining directions. 

70 large retailers are on board for the initial launch, including Macy's, Pottery Barn, and Best Buy.  Google has also struck deals with retail industry software giants JDA, Epicor, and Oracle to integrate the Google Shopping upload process into the inventory management systems of those retailers.

Google understands that most consumers (especially those looking to make big ticket purchases that require consideration and research) go online to compare specs, prices and features before heading to their local store for in-person research and to buy.  This local, cross-channel, big ticket experience is, without question, the next wave of online commerce.

But, say you’re a big ticket retailer not named Pottery Barn. 

You probably aren’t running your inventory on Oracle or JDA.  Most likely, you probably haven’t been able to make local inventory information available on your own website, much less Google’s.  So how can you take advantage of this explosive trend?  

This is where we come in.  Blueport has been building localized e-commerce systems for big-ticket retailers for over a decade.  Leveraging our localized platform, your Blueport website perfectly reflects your local store offerings, regardless of what systems you are running in your stores. 

With that infrastructure in place, it’s simple to take advantage of the latest in localized online advertising – like Google’s new local product search.  Better yet, when consumers come to your Blueport site, you’ll have enabled the type of seamless, local, cross-channel shopping experience that makes Google Local a powerful idea.



Copyright 2010, Official Blog of Blueport Commerce

It seems like it's been a while since the words “optimism” and “retail” have been used in the same sentence. That’s why we love Thad Rueter’s Internet Retailer article “A Great Time for Cautious Optimism About Online Retail.”  In his piece, Thad takes a look at some of the recent predictions and expectations for the 2010 holiday season:

• Kantar Retail, a research and consulting firm, estimated that online holiday sales will increase 6% this year
• Bold Software, which sells live chat services, released results of a survey of 171 e-commerce clients that found 65% expect gains in holiday sales, with 33% anticipating the same results as last year
•  Stock analyst Colin Sebastian of Lazard Capital Markets foresees a 10% to 15% jump in e-retail sales this holiday season

Thad sums it up best when he says he’s rooting for Lazard Capital Markets to be right, as a strong holiday season helps everyone, especially those of you running online stores. And we at Blueport Commerce are rooting right along side him.


Copyright 2010, Official Blog of Blueport Commerce

Any retailer setting up an ecommerce store or considering replatforming their current offering, knows the choices in ecommerce shopping software are endless.  The landscape is wide, with numerous vendors offering ecommerce software packages.

The big-ticket retailer often finds their ecommerce shopping software choices to be even more complex.   This is because their needs are inherently different.  They go beyond setting up a basic online shop, to require more sophisticated merchandising capabilities and fulfillment, and an ability to understand their unique business models. Performing an ecommerce software comparison seems an impossible task.

So where do you start in your decision making process? Here are two initial points to consider:

1. Start by evaluating your current ecommerce shopping software or the retail systems you use to run your business.  Many big-ticket retailers find their systems are not ecommerce ready, and that they may pose a barrier to going online.  Make sure the ecommerce software packages you are considering are able to seamlessly integrate with your current systems.  At its best, your online ecommerce solution should be able to extract the data found in your current systems, augment for e-commerce, then return completed ecommerce transactions to you that are indistinguishable from orders placed in your stores.

2. Make your ecommerce store an extension of your bricks and mortar store, not an island in itself.  Look for an ecommerce software package that treats your SKUs, prices and your product information exactly like store orders from a fulfillment and service perspective.  This is a fundamental difference between ecommerce shopping software for mass merchants, and that which is geared towards big-ticket retailers.  The result is less work, higher customer satisfaction and a reduced need to develop separate staff or procedures for online sales. E-commerce becomes another store, seamlessly integrated with your strategy, operations and reporting.

Finding an ecommerce service provider that meets these inital criteria is the first step in setting up your ecommerce store and capitalizing on the advantages of e-commerce.

Most retailers looking to make the foray into ecommerce are quickly hit with the high capital investment required for ecommerce hardware, network equipment and hosting.

In addition to price, there are security regulations to consider.  The impact of down time on your website and stores can be disastrous.
The entire process is complex, expensive and challenging to maintain. Its especially daunting to a retailer that is just stepping into the ecommerce arena and is already juggling with a multitude of factors to get their online store up and running.

Its easy to see the benefits of ecommerce outsourcing for ecommerce hardware and hosting.  Not only does outsourcing of ecommerce hardware help drive down the operating costs for the retailer, but the right hosting solution will help ensure minimal down time.

Blueport's ecommerce platform is hosted by us.  We buy everything that is required to keep your store live and make the process as easy for you as possible - the ecommerce hardware, operating systems, network equipment, bandwidth.  Our scale drives down prices while the retailer gets worry-free (and cap-ex free) ecommerce hardware.

In addition, we provide ecommerce hardware maintenance, expansion and upgrades as well as operating system upgrades. We also provide 24x7 support, meaning no late night or weekend headaches for the retailer. Leaving you to focus on running the online store from the business side, not the technical one.

That's just one of the ways Blueport Commerce makes ecommerce easy.

If you're running a B2B ecommerce site, you should think about localizing your content. Why? Because just like consumers shopping for clothing or home goods online, your business customer expects the content and promotions displayed online to be consistent with the brick and mortar store near where they are located.

Running this kind of multi channel business is becoming more and more crucial to ecommerce success. The ability to understand and accommodate the complexities of each business and deliver a localized solution that meets a retailer’s needs is at the core of a successful B2B ecommerce solution.

For B2B ecommerce solution providers, the impact of localization likely means displaying local sales contacts, showing local inventory levels, delivery times, availability and pricing based on the customer's location.

Not just for B2C anymore, localization is an important point for B2B ecommerce that should not be overlooked.

At Blueport Commerce, we are committed to respecting and integrating WITH systems, not in creating a separate e-commerce solution for you to then maintain. We believe that to be effective, e-commerce integration is essential: your e-commerce must work seamlessly with the systems you use to run your current business.

We also understand that your systems are likely not e-commerce ready, and that you may consider them a barrier to going online. This is a challenge we've faced many times before.

Our e-commerce platform is designed to integrate with any system— to extract what data can be found in your systems, augment it for e-commerce, then return completed e-commerce transactions to you that are indistinguishable from orders placed in your stores.

Your SKUs, your prices, your product information, enhanced and then returned as an order in your system that can be treated exactly like store orders from a fulfillment and service perspective. The result is true e-commerce integration: less work, higher customer satisfaction and a reduced need to develop separate staff or procedures for online sales.

E-commerce becomes another store, seamlessly integrated with your strategy, operations and reporting.

When running an ecommerce store for big-ticket products, in addition to localizing your online offering, build consumer confidence by providing the research information they seek.  When merchandising your ecommerce store, err on the side of too much information rather than too little.  Product specs, descriptions, customer reviews and images are all extremely valuable to consumers.  Make your ecommerce store as informative as your best salesperson (and make sure your salespeople would say the same thing in a store that a customer would see online). 

Specific examples to include in your ecommerce store are:

• Products:  Synchronize your ecommerce store products with your store systems daily, updating SKUs, relationships between items and detailed product information. This is particularly vital for the big-ticket category.
• Regional Pricing:  Update pricing daily, including regional sale and regional pricing if applicable to ensure a seamless Web-to-store experience.
• Store Info:  Update locations and contact information regularly.
• Find Stores with an Item:   Allow customers to look up nearby stores that actually display a product based on store inventory levels.
• Reviews:  Allow customers to see consumer reviews of products, and other user-generated content from shoppers in their region.
• Cross-selling and Recommendations:  Provide customers with personalized, localized recommendations for merchandise based on preference data of other customers in their area.