Never knowingly undersold?

John Lewis, love them or hate them, are actually doing something right.

Our biggest challenge as ecommerce evangelists is to ensure that retailers with on and off-line properties are properly integrated and sharing customers. After all, an increase in overall revenue is a good thing, whether it's coming from the spanking new website, or the fantastic in store customer service.

So what's the problem? Well the reality is that revenue targets are still designated at the store level, with the website counting as a store. So you have all these high street bricks and mortar shops encouraging customers to buy, and come back and spend more from their individual store, and on the other hand you've got your virtual eshop that's available to everyone and open all hours. Store managers are therefore always feeling that they're competing with the online store and no one is willing to share the love. Surely the sum of the parts is greater than the individual?

In an ideal world, you'll have a single view of the customer; they can shop online, in store or over the phone from a catalogue. Each touch point is tracked and every product can be delivered to the home, or can be collected at the nearest store. Not happy with your product? Well you can send it back through the post, or you can take it to your nearest store for a refund. How about this scenario: you visit your local fashion joint and you've found the perfect pair of shoes - they just don't have it in your size. Well it's simple. In our new multi-channel ideal world, they'll just order it for you from their website and you'll receive it the next day. Nice.

But this isn't happening. The high street is fighting with the eshop which is fighting with the catalogue for the same sale. Some customers actually use all three channels, but that customer is not regarded as the same by the business - it's three customers with three distinct shopping habits. It's getting better but there are challenges. Many. We are sadly still a very long way off that blissful, integrated multi-channel future that we all deserve.

So what's John Lewis done to deserve a mention? Well they've taken a very simple approach to this issue. The website is regarded as an invisible entity that is shared by all. If a purchase is made through the website, that sale is allocated to the nearest John Lewis store and hits their bottom line. Why is this good? Quite simply, it means that the staff in store are now actively encouraging customers to buy stuff from the website, as opposed to insisting they buy from their store. And if it's not in stock in that store, they're logging in to the website and purchasing the item for them. Fantastic! Short cut to multi-channel nirvana. Get rid of the website's P&L and use the stores to actively push web sales. Love it.

Innovation in ecommerce - where's it all gone?

Whilst preparing for a recent presentation I was giving, I found myself questioning whether innovation in ecommerce had ground to a halt. Now I’m not talking about innovations in technology here, there’s a lot of that going on. I’m talking about retailers embracing these innovations and applying them to commercial ecommerce websites.

I look back at 2007 and think about all the exciting things we were seeing/doing for clients. From the initial appearance of the single page checkout; to ‘shop the catwalk’ pages; look books; video product detail pages, etc. 2008 was all about optimisation and best practise; squeezing every last drop out of a site visitor. All good stuff of course, although it still amazes me to think how some retailers are still not doing these basics right.

But what has 2009 brought us? Outfit builders? Well, yes, but that’s not really caught on yet. Social Commerce? Blogs are great at engaging and drive traffic, but that’s certainly not new to the web (just to some fashion etailers). Luxury brands selling direct? Painfully slow. Twitter Commerce? hmmm.

So you see where I’m coming from. Not quite the heady days of two years ago that’s for sure.

Why has this happened? It’s certainly not because creative agencies have run out of ideas that’s for sure. (I can only speak from our perspective as an independent ecommerce agency trying to earn a buck of course). And there are all sorts of great new opportunities out there on new and exciting platforms like Magento Commerce. What we've found is that firstly, retailers have been extra cautious this year and are opting for the ‘safe’ option. Budgets are going to systems that do the basics really well, but aren’t going to set the world on fire with new functionality that customers are demanding. There’s also a shortage of brands actually looking to change platforms right now. We saw a massive increase in ecommerce platform deployment in 2007 and 2008, but this year it seems to about getting those systems to pay back on the initial investment. No new systems mean little progress in innovation. I’m pretty sure this will be the same story for the rest of the year as Christmas is around the corner and no retailer will dare do anything to their very stable (and very vanilla) ecommerce website.

Fair enough you might say, but at what expense? Well the reality is, to stay competitive in the ecommerce space, you need to stay ahead of what every one else is doing. There are more and more websites out there that are selling the same thing. Why would a customer prefer one over the other?

So there you have it. Four more months of struggling to get out of bed and living in hope of that brave client that wants to take the next step in ecommerce. One that understands the endless possibilities that something like open source can bring. One that allows it’s agency to really pull out the stops, using budget to do something creative, exciting and innovative in our wonderful world of ecommerce.

Shopping cart abandonment emails

According to a study by my favourite research hub Marketing Sherpa, shopping carts abandonment rates are at around 59% (at the time of the study). This doesn't come as a surprise to us in the business of Ecommerce but it is staggering how high the numbers are. Even a small decrease in this number could mean a huge increase in revenues.

Further studies have identified that the number 1 reason for people abandoning baskets is delivery charges. I'll write a separate post on this soon.

One way of reducing the abandonment figure is by auto sending emails to customers who've abandoned their basket with a handy link they can use to continue where they left off. Results for the success rates of this tactic vary from 5% going up to 35% of people clicking through and completing the sale. Those etailers that incentivise the return visit tend to achieve the higher numbers.

What's interesting however is that such a minority of etailers actually implement this on their sites. A US survey by Listrak indicated that out of the fortune 500 retailers they were able to conduct the test on, only 10.55% used this on their sites. The report doesn't detail the reasons why etailers had not implemented this type of solution, but implies that they considered the cost of the set-up and infrastructure limitations as the primary barriers.

It only takes a very simple equation for ecommerce managers to decide if this is worth it for them. Take 5% of your abandoned baskets over a 12 month period, apply your AOV to it and see how quickly you'll be making your money back.

I think this low-hanging fruit is a must have for any ecommerce operation. Low risk with a potential for very high rewards.

So why aren't more of you doing it?

Are you PCI compliant?

Ok, so it's a bit of a dull subject, so i'll keep it brief, but it's a very serious one for anyone that's transacting online:

For those not aware, PCI DSS stands for the 'Payment Card Industry Security Standard'. It was set up by Visa and Mastercard and compliance ensures the security and protection of sensitive customer information (like credit cards).

The issue is not about having a secure website with an SSL certificate (you need one of those too), it's the availability of sensitive information that could be used for fraudulent activity. This includes anyone who has access to the data; from the web agency that maintains the website (that can access the database) to the customer service rep that's taken a telephone order! An example we sometimes cite is when ordering over the telephone, and the conversation is recorded 'for training purposes'. That tape contains your confidential information and can be accessed by your data can be used by an unauthorised person.

As you can imagine, when looked at in granular detail, it's a minefield. The key points of the PCI DSS require merchants and service providers to:

- build and maintain a secure network

- protect card holder data

- maintain a vulnerability management programme

- implement access control measures

- maintain an information security policy

The deadline has come and gone and merchants who are not compliant face hefty fines , but will also not be able to accept Visa or Mastercard (the two organisations behind this standard).

So if you run an ecommerce website (or indeed any retail operation), get yourself audited (http://pci.evolve-online.com) and make sure that your agency/ecommerce provider is also PCI compliant.

Outfit builders prt 2 - the outfit builder strikes back!

Following on from my previous, less than enthusiastic post about outfit builders and their viability in online ecommerce, I came across this video which really got me excited:

Yes it's clunky, and the production quality is poor, but if the guys behind this have managed to get a prototype working, others will surely not be far behind. This is the kind of exciting development that would be a game changer in fashion ecommerce.

Do outfit builders increase conversions?

There's recently been a flurry of activity at Pod1 h.q. meeting with various developers of online outfit builders. The principle behind all of these is pretty straightforward: allowing customers to virtually try something on and mix and match with other items is that one step closer to the real experience and will therefore lead to an increase in conversions...that's the theory anyway.

Some of the better ones I came across were:

Schway
A simple mannequin experience that can be quickly and easily dressed. Nice layering functionality means you can see how items look when worn over each other - something not all systems I tested could do.

http://schway.net/

Boden USA
I really like this. Works straight off the listings page with a real model. Limited stock of course but certainly has the impact.

http://bodenusa.mixmatchme.com/MME/bodenusa/home.aspx

Republic, using Polyvore
This was more of a scrap book then an outfit builder but accomplished the task i.e. to mix and match items and see if they work together. Additional functionality to resize items was pretty good.

http://www.republic.co.uk/page/outfitbuilderwomens

No Need 4 Mirrors
A system utilised by Oasis, Karen Millen, Coast and Lipsy amongst others.

http://www.nn4m.co.uk

They all have their pros and cons but I'm actually yet to be convinced. Lack of product range, unrealistic visualisation of the body/face, inability to change skin tone, body shape and most importantly the arguably clunky technology (it's flash but it's not exactly a seamless experience).

It's early days so would be great to hear if they are working for brands to deliver incremental revenue. I do think for systems like this to really work however, there needs to be some sort of standardisation of how these mannequins/avatars pull in data so retailers can integrate image dimensions into the standard photography schedule.

So calling all developers and innovators: create a common micro-format for this technology so that these outfit builders become truly useful and actually add value to the online shopping experience. One day this will be cracked, and hats off to those who've already attempted a system, but i think we're still in Outfit-Builder 0.5 with 1.0 coming our way towards the end of the year.

It's incredibly frustrating..

..to see how etailers are still ignoring the lowest hanging fruit that could generate them the most revenue: their beloved existing customers.

It's madness. These guys have purchased from you before. They love your brand. They recommend it to friends and even buy their Christmas gifts from you. They cost you a third of the amount to market to and they typically spend at least 30% more with you. So why oh why do you still treat them like everyone else?

Experian recently carried out some research into online retailing called 'Engaging Online with the Empowered Customer'. It revealed this piece of information: 70% of revenues were generated by just 30% of customers.

The smart marketers will read this and agree. Please just  do the sums and you'll see that it's so very very clear. In fact, I'll do the sums for you just to prove my point:

Right, say your £100,000 of revenue comes from 1000 customers. If the above stat holds true, then 300 of them contributed £70,000 to the revenue (£233 per head), and the remaining 700 contributed £30,000 (£42 per head). Simples. So if you want to make another £10,000, what's going to be easier? Getting your loyal 300 customers to spend an extra £33 with you, or reaching out to 700 new customers to spend £14 each?

So spend more time and effort on your loyal customers. Give them something special for their next purchase. Surprise them and give them an automatic discount when they are next purchasing. It's like showing up tonight with a bunch of flowers (or organic chocs) for your beloved. Unplanned, but very very welcome earning you much needed brownie points.

Hey, what about asking them to recommend a friend or two? Don't be shy. These guys love you. They're just delighted that you've recognised them as 'special' and would do almost anything for you.

So please do something with these brand fans. Extract the information from your database and plan an 8 week campaign where you court them and make them feel loved. A little investment now will yield massive rewards and incredibly loyal lifetime customers.

E-commerce plus

There’s a new digital model emerging in New York and I think it’s something we could learn from here in the UK. Our NY office recently designed and built a website for luxury fashion designer Catherine Malandrino. Nothing unusual about that I hear you say, but more than that, we’re taking hold of the stock, storing it, dispatching it directly to the consumer and answering customer service queries. We’re effectively running an online shop on behalf of the designer.

Now why would a designer hand over the reigns to a digital agency in this way? Well there’s a number of reasons, firstly, a lot of them don’t ‘get’ digital, secondly they don’t have the resources or the manpower, and thirdly, they don’t have the budget. Yes we know that they are ‘luxury’ brands, but unless it’s Louis Vuitton or Gucci these designers, of which there are many, haven’t got millions of pounds in their remit to do online stuff. This sort of solution is perfect for them, because it allows them to sell online, not worry about it, make the money, and someone is looking after it all for them. 

At the moment it seems to work in New York as opposed to the US generally because of its size and the amount of designers that are based there, but I think this is going to get bigger and bigger and could work well in London. There is no cash anywhere at the moment and certainly with these kinds of brands this route makes perfect sense. The future? I think so.

The future of shopping online?

I’ve been wanting to write something about ‘Social Shopping’ for a while but never had any specific examples I could share with you until now.

Firstly, what do I mean when I say ‘Social Shopping’.

This is in fact a term used for many things; the power of crowds to rate and review as in Crowdstorm; the ability to add items from any website to a centralised wish list as in List Ideas and Kaboodle; and now we’ll add into the mix: the ability to quite literally shop with a friend on line!

Intrigued? I was when I first heard what Vans were doing. So the site works like any other hyper flash ecommerce store for a funky shoe brand but this has a small difference.  If you select the custom show option, you’re taken to a microsite, which asks you to select the base shoe etc. Once you get the customisation part, you’re invited to ‘Chat with Your Friends’. This takes the form of a pop-up box where you select if you want to email them a link or chat via AIM.

Once you actually manage to do this, you’ll both basically be seeing the same screen at the same time so in theory, when I pick fandango pink as the base colour, my very good friend who can see my every move would stop me and say perhaps I should select something slightly more manly, like the ‘swirly hearts’ pattern…well, that’s what friends are for.

The truth is, I really love the concept and I’ve been wanting to implement something like this for a while, but budget and tech had never allowed for the opportunity. In reality, I only managed to get the Vans site to work for me just the once. Perhaps it was because I was on a Mac, or all the friends I attempted this with were luddites, but I’m sure that for the target audience, this would be just one of a multiple of chat interfaces that they would be operating at any one time whilst finishing that GCSE project and nailing the last level on Grad Theft Auto 12.

It doesn’t stop there. A couple of weeks back, Coast (high street occasional wear for women) re-launched their newly designed website with a new feature within the Fitting Room section called ‘Group Shop’.

This has similar functionality to the Vans site however it requires more planning as you have to invite friends to a pre-agreed time slot whereupon everyone clicks on their click and hey, you have Sex in the City right there on your laptop!

So there you have it. Social Shopping is finally here - ish. I’m not entirely sold on either website’s social shopping functionality or their reliability, but hats off to them for giving it a go. Will it have mass appear? We’ll have to wait and see.

Let me know if you’ve come across anything similar during your web travels.

Is digital in the USA more advanced than the UK?

Just back from a trip stateside (bimonthly visit to our New York office) and while crunched up in my economy seat I began to ponder over the transfer of skills between the US and UK, which has always been a hot topic for me. While reflecting on the debate about whether the two markets were ready to benefit from each other’s styles, particularly within e-commerce I concluded that the big difference is that Americans generally think differently and expect a different type of advertising and marketing to Europeans and this is apparent in their respective approaches to digital. The most obvious driver for this is the sheer size and disparate nature of America, which goes some way to explaining the brash nature – at least by European standards – of their marketing style.

This difference in styles - the real difference in terms of skills, is that the US suffers from a shortage of what I believe is good creative talent whereas the UK has fewer outstanding digital strategists, marketers, optimisers, researchers or analysts. It is common knowledge that the US is at least a year or so ahead in these areas and much more advanced in techniques such as multi-variant testing, data analytics, information mining and ECRM – all things your average ecommerce marketing director barely implements in the UK.

On top of this, Americans in general have a much more “online” mentality, they are far more plugged in to technology and proud of it, and this tends to be reflected in the fact that their technical development skill sets are much more advanced than ours. Many of the cutting-edge concepts like Web 2.0 and Web 3.0 were born in the US. Indeed the current thought is that the future of the web will be about apps living online, and the US is way ahead in this area. Their skills base (in terms of creating user interfaces that cross from desktop to online and working in environments such as Adobe Air & Flex) are beyond anything we are producing in Europe.

I think it’s time to admit that we can learn a lot from our cousins Stateside (and vice versa), specifically within the ecommerce arena, and start pooling our resources. Now’s not the time for being coy.

5 standout features of theOutnet.com

So Net-a-Porter's discount brand, TheOutnet, launched last week and of course I was all over it. My agency has been involved in the launch activity but this e-commerce site is the work of their in-house team.

TheOutnet.com is essentially a designer clearance site that's aiming for those aspirational shoppers who want designer brands but not pay the full price. I think it's an interesting concept and it's definately right for these difficult times, but when all's said and done, how well does the site function?

Overall, I liked it. I thought the functionality is pretty similar to it's big sister site (net-a-porter.com) with strong branding site-wide. I've always thought that the net-a-porter site is amongst the best for fashion eCommerce so I'm glad they've followed on with a similarly well thought out website.

I picked up on 5 things that I really liked about it:

1. The Mini Shopping Basket

When adding products to your basket, the site keeps a visual representation of your items in plain site. Nice feature when buying multiple products.

2. Low Stock Indicators

I've seen these before, but I think they're executed pretty well here. Nice way of closing the deal and encouraging that purchase decision.

3. Big Savings

If a customer is saving BIG on their purchase, then make a big deal about it. TheOutnet.com does just that. I like.

4. Packaging

The beautiful packaging that a lot of the luxury retailers provide with their products is all part of the brand and the service. I know of people who buy from a particular online store over another purely for the packaging. TheOutnet takes advantage of this and although the bag isn't as glamorous as net-a-porter's, it is re-usable and they're displaying it at the point of purchase.

5. Branding

It's everywhere! Some might say that they're over-using the circles, but in my opinion, I'd rather they were over branding than not branding at all. Perhaps over time they'll drop these or at least dilute their usage, but for now i think it makes an impact and certainly stands out from the crowd.

Be great to hear anyone else's thoughts on this. You know what to do..

See, browse & buy – all in a banner?

Transactional banners are back in the headlines. Adgregate Markets' ShopAds transactional banner ad technology is being made available to customers of Google's DoubleClick division.

The concept of a transactional banner is simple: customers can browse and purchase products directly from a banner on a third party website without ever having to leave the page the banner is on.

When these were first heralded as the future of e-commerce, you can bet that we were all over it. A few years later and there was still no sign of these transformational widgets. Tailgate Technologies were first to market this technology in 2007 but it’s unclear how effective they were at generating sales. I’ve certainly never come across one of these banners – and I’m one of those people who actually like banner ads (I also like tv ads – go figure).


This latest announcement means that customers of DoubleClick will now be able to integrate the ShopAds’ e-commerce functionality into any of its banner ads. According to Adgregate Markets CEO Henry Wong, its own ad network has about 12 million unique visitors monthly with 1 million of these ShopAds embedded across the web.

So will it take off? Will customers feel safe in purchasing from a banner on a potentially unknown third party website?

I’ll stick my neck out and say yes.

Once people get over the tech and possible security issues, I think these banners will become a key revenue stream for the right brands. Initially, this type of transaction would be perfect for the lower value goods – certainly not the high-end luxury sector. Impulse buys, micro-payment items, electronic tickets, downloadable purchases will be first to benefit.

When confidence grows, and the technology advances, who knows what will be possible.

This is precisely why I love the Internet. A constant flow of game changing innovations that turn what we get accustomed to on its head!

I’d love to hear other people’s views on these…so please feel free to comment below.

Online retailers gain further popularity

This week there’s been two pieces of research that have shown that online spending is where ‘it’s at’ - as if you needed convincing.

A league created by analyst TNS Worldpanel revealed that in an annual top 10 list of favourite retailers in the UK, Amazon came 2nd (Tesco was 1st) and eBay came in at number 10 (full report), and research carried out by PwC and WARC shows that 2008 internet advertising expenditure defied the recession by being up by 17%, with the UK now said to be ‘the world’s most advanced market for internet advertising’ (full IAB/PwC report).

I don’t think that this marks the end for bricks and mortar stores or for traditional forms of advertising, but for brands, it’s now more important than ever to ensure their online offering is up to scratch. 9 out of 10 times the first place people go if they are interested in a product is the brand’s website. Apart from ensuring that a positive first impression is made, it’s important that the online design reflects the offline brand. Too often, websites are treated as the poor cousin of the print or TV ad. This is costing brands sales and customers. People online are less forgiving than in the real world. They have many more choices of where to go and within a single click, they’re at a competitor's website.

Having said that, if online is used properly, it can also be responsible for increasing footfall to stores (I'll post a full report on this soon). More and more, customers are going online to check the range of products BEFORE visiting the real world store (which could be a significant journey to some). Why risk a wasted journey? The reality is, etailers are simply not displaying their full wares online - for whatever reason - which is ultimately costing them sales online as well as offline.

The message from these reports is clear. It’s all about choice. eCommerce shouldn’t be seen as a threat to traditional retail, but as a key tool in a multi-channel retailing strategy. In a highly competitive market, it's essential that you make your customer king. Allow them to shop and view on and offline. Give them as much insight and information at each touch point. Provide a 360 degree returns option. Everyone needs to up their game in this climate or risk losing customers to their leaner, more innovative competitors. Etailing and traditional retailing must work hand in hand to ensure survival.

Sell more online

Hello world.

In case you hadn’t guessed it from the name, but I’ll be writing about eCommerce and all things associated with it within the hallowed (virtual) walls of this blog. The key theme will always be around ideas to ultimately help you sell more stuff online, to more people, for as little marketing spend as possible! So if that's what you're interested in/dream about/live for - then you're in the right place. Otherwise, go here.

So let me cut to the chase. I want to respond to a question that I’m regularly asked by clients, colleagues, journalists, prospects and peers in one form or another: “How do you ensure continued revenue growth (online) during a downturn.”

I could spend a long time covering everything from customer acquisition to conversion and retention but the reality is, it’s actually the same stuff you should've been doing all along that you need to continue to do. The trouble is, a vast majority of eCommerce owners (let’s call them eTailers) haven’t even been doing the basics right but they’ve still experienced growth over the past few years.

Well ding dong, those days are now over and the current recession is shaking the apple tree: If your eCommerce site is working hard for its money, then you’ll cling on and prosper. If you’re a ‘me too’ that fails to innovate, engage and attract, then your sharper, shrewder competitors will eventually win over your precious customers and you will lose business.

As a starter for ten, here are some basic tips to get you on your way to eCommerce Zen:

(For those more advanced readers, do bare with me while everyone else gets up to speed)

Tip 1: Understand your customer
Your customer is the most important part of your business (it's amazing how often this is forgotten). It's not the CEO and certainly not the design department’s urge to create everything in Flash - it really is the customer.

Bricks and mortar retailers practice this every day but it is strangely absent on most eCommerce websites. People are still being bombarded with irrelevant branding and marketing messages and the Splash page seems to be celebrating an unholy revival.

It’s more important than ever to now really understand your online customer. If you understand them, then you’ll know what they want to get out of your site.  Finding out about your customer is easy; use a quick online customer survey. 4Q, for example, do these for FREE. There is absolutely no excuse why you shouldn't do this. It takes about three minutes to get it done. You’ll be amazed at what your online customer is willing to tell you.


Tip 2: Segment your email database
Segmentation is the first step to pushing relevant content to your customers. Sending product emails aimed at females to men is certainly not doing you any good. If you haven't got a segmented database, then launch an email questionnaire with a few simple questions. Send this to your database and they will do the segmentation for you. This way you can also clean out any cold leads.

Sending targeted emails to a segmented database really will increase your conversions and make you more money - I guarantee it!


Tip 3:  Optimise your landing pages
You can easily extract what your landing pages are, (that includes your homepage), and how they perform using a tool such as Google Analytics. Once you’ve done this, check the pages with a really high bounce rate and related keywords from both natural and PPC and then measure how they perform over time.

Once you have identified the black holes, you need to get your landing pages up to scratch so that they can start delivering results. For example, if a visitor has searched for “child seats" and you get them to a page where they see car stereos... then it's no wonder they leave you instantly. By correlating keywords to landing pages, the changes you'll need to make become obvious.

This is what I call low hanging fruit. By doing a bit of spring-cleaning on your landing pages, you’ll very quickly start seeing some positive results. And yes, you may well need to create many of these pages but it really is worth it in the end.


Tip 4: Test your site
Testing is free! The CEO's (him again) partner’s opinion is just as valid as yours but now you can prove which one is delivering better results using some basic A/B testing. Use Google Website Optimizer (it’s free, it’s good, there are many others out there but this is a good place to start) to setup your A/B or Multi-variant tests and see how the individual variations perform. Continue testing until you’re happy with the results you’re getting.


Tip 5: Act on your findings
Ok so not really a tip but all too often we see clients collecting vast amounts of data but then letting the reports gather dust. From all the above, you have to drive change. That might be tougher than you think. But if you thoroughly execute the recommendations above and then act on the quantitive data at your fingertips, you will reap the rewards and live to fight another day!

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Over and out.