Multi-Channel Commerce & Retailing

Enabling customers find the right product for their need (and quickly) is a key factor to increase customer loyalty.  In fact, searching for the item is the most frequent and important first step, get this wrong and you straight away have a lost sale and even risk losing the customer for ever.

I feel that for a long term loyal relationship, the end goals are aligned for both the retailer and the customer, which is to ensure that the product is the right fit and the customer is happy with the purchase.

Many a times customers know exactly what they want, the brand and the exact product in which case the job of the search engine becomes simpler, and it is a simple query. But, in this world of ever increasing choice and decreasing patience, customers need a lot of help in zeroing in to the product which best suits them. Traditionally, this has been done by ecommerce websites providing tools like buying guides which are predominantly static content and have their limitations. For an undecided customer, the search engine has to be equivalent of a customer service assistant on the shop floor helping to choose the right product.

For search to be effective and relevant, having a good understanding and analysis of how your customers search for products on your site is critical. It will of course vary depending on the characteristics of the business and the merchandise mix, it will also need to be ascertained by monitoring customer behaviour and usability inputs amongst other things.
It is very important to display the right products based on what the customer intends to buy. The intelligence in the search engine should be aimed to align the ‘intent’ to the displayed ‘content’. To elaborate this further, accommodating spelling errors, allowing synonyms (using a thesaurus), having searchable product descriptions is key to comprehend this 'intent' and then show matching 'content'.

Providing the search engine with all of the product’s attributes is the first step for it to be able to return the desired results. Ranking by contextual relevance for getting greater precision through natural language search is also key to doing this. The use of "faceted search" can then help customers narrow down on options and find the product they're searching more quickly and will have a big influence to getting quicker conversion and will influence the overall conversion rates as well. In the current online savvy world, the ability to filter out unwanted results is fast becoming an expectation and can directly affect overall customer satisfaction with a site.

We all understand the importance of personalisation and so taking it to the next level by applying it to the vital area of search can lead to increased customer loyalty and satisfaction. Displaying and prioritising results based on the segmentation data or additional information available with the retailer about the customer will lead to quicker conversion and increased customer satisfaction.
Having a smarter Search will ensure that the customers get to the final few products which match their criteria, and intent, however, ‘the final choice’ can be helped by providing the customer additional confidence that the product has been useful for others by providing them access to the reviews and ratings data.
Helping them understand what others are saying about it, going further even helping them in their analysis by having review comments and ratings data structured based on segments like age group, gender etc. and providing analytical tools to understand fitment to their situation will make a big difference in my opinion.

Many websites have incorporated reviews and ratings features however, the results do not mean much if the number and quality of reviews is not adequate. Encouraging good quality feedback from customers is important for the usefulness of this feature. Potentially, the effectiveness can be increased by linking the providing of this feedback to some benefits (even low value) like loyalty points, coupons etc.
So to conclude, in my opinion, a powerful, intelligent and personalised search, coupled with good quality reviews and feedback from customers enable quicker conversion and increases loyalty. Having said that, the main customer offer (competitive pricing, customer service etc.) is still of utmost importance.  If this is not the case then the retailer risks having their site used more as a research website and once zeroing on the product, customers can jump to competitors sites for the final buy.

Posted by Sudhir Joshi at 03:00 PM | Permalink | Comments (1) | TrackBacks (0)

Over the last few years, this subject has preoccupied the management at the all Retailers world over. There are significant benefits & drawbacks in each of the options which I cover in the following sections. Initial thoughts during the early days of online commerce has been around how retailers can control their destiny by creating a site that they could manage & control. Alternate options were considered surrounding how this could be outsourced to a MSP (Managed Services Providers) who could start with the construction of the web site and manage the entire commerce lifecycle from site to Order capture to Fulfillment within a short turnaround cycle. The recent trends have been to move towards a packaged implementation where there has been a significant progress made by a few leading vendors.

 

Some analysis that I have attempted to capture classified as positives and drawbacks based on three options - Custom build, Managed Services, Package implementation.

The observations on the Custom Build options are:

Positives:

1. One can build the site according to one's own needs. No waiting for the business for any new initiatives introduction into the market.
2. This would mostly be managed by internal IT team of the organization & hence have a better understanding of the business needs.
3. Not bound by any package or technology restrictions, hence no boundaries in terms of technology.
4. Not a significant licensing fee cost provided the technology & tools used to develop the applications are relatively commonly accepted frameworks / tools.
5. Internal teams working to build the technology for the commerce site, hence the ability to request for a quicker turnaround.

Drawbacks:

1. Time consuming and takes too long to build a good & stable online commerce platform.
2. Internal IT teams expectations or goals not in alignment of the business needs as IT team may fall under organization IT department & may not have a dedicated online commerce team.
3. The internal IT teams land up using a plethora of technology tools where beyond a point, things become unmanageable.
4. IT team may take too much time to make minor changes, hence losing out on potential business. Business team is challenged to respond to the competition & may not have the IT team support its initiative time to respond to the competition.

Observations on Managed Services Providers:

Positives:

1. The Retailers concentrate on what they do best - provide the best products & Services. Focus on its customers and trust the Managed Service Provider to provide end-to-end solution.
2. Quick enablement of the web site & business is pleased on quick turnaround timeframes.
3. Transactions oriented pricing / license structure. Not heavy on IT budget.
4. Best returns of Investment (ROI) in terms of enabling the Retailers go live in the shortest possible.

Drawbacks:

1. New features or additions will be delayed as this has to undergo an internal analysis by the vendor & evaluate if the request adds value to their platform.
2. Outsourced SLAs have to be met, outsourced risk as the retailer has to trust the vendor to deliver to set expectations.
3. No control over the website layout & day to day events except having the ability to control the content displayed.

Observations on Packaged vendors:

Positives:

1. Out of the box features available for basic retailing with limited complex feature support.
2. Some package maturity is fairly advanced & can support seamless integration into different sub-systems (Order Management, Content Management, Web Analytics etc)
3. Business user friendly on top of being IT friendliness.
4. Robust & high performance ability from some of these packages

Drawbacks:

1. Packages on Commerce have been of relatively newer developments and the level of maturity is gaining over the last 2 - 3 years. Not all have achieved the same level of maturity.
2. Complex requirements land up being heavy customizations & some have the ability to break the core of the product, hence rendering the package upgrades untenable.
3. Most packages claim to meet basic retailing as out of the box but in reality some amount of customization is essential (not 100% plug & play).
4. Expensive annual license fee & yearly maintenance fee structure not suited for medium to small businesses. Package / product support is expensive as well.

In conclusion, retailers have to evaluate the options based on - investment capability, internal capabilities & technology challenges, ability to take risks & so on..

Posted by Madhusudan Murthy at 01:03 AM | Permalink | Comments (0) | TrackBacks (0)

By now, you’ve probably heard about the incident where two Dominos employees decided to enhance food intended for customers with their own special recipe of additives.  If not, you can read about it here:

http://www.nytimes.com/2009/04/16/business/media/16dominos.html?_r=2&ref=business

The internet is dense with examples of how web 2.0 communications, e.g. blogs, gripe sites, social networks have created havoc and damage to corporate brands and images.  There is no question that these new media will persist and likely proliferate.  Just pick a company name and insert it into the URLs www.IHATE(companyname).com or www.(companyname)SUCKS.com.  There’s a good chance the site already exists.  The internet is a double edged sword that can buy you desired awareness and public praise or place a giant e-spotlight on your least proud moments faster than child actor gossip travels to TMZ.  Some of the most compelling sources of information are employees, current or past, publicly praising or covertly condemning.

So from a governance and management perspective, how do you wield this potentially awesome yet dangerous tool to your advantage?  How do you exert control over the effect of your employees on your image and brand while still respecting them and respecting their rights?

• Is it ethical, moral, and/or legal to disparage your employer online?  Does it matter whether you do it during work hours versus during time off?
• How do you differentiate between an employee stating an opinion versus disparaging their employer and possibly sharing sensitive information?
• What are the implications of posting trade secrets?  How do you define a trade secret?
• What policies should be instituted to protect against these damaging information?  What policies and enforcements can be instituted?
• Are there consequences for posting false information?

Some ideas about developing your corporate position on participating in web 2.0 communications related to the company:

• Do you have goals/ guidelines for what you want to accomplish using social media (e.g. raise awareness and visibility, supplement the traditional channels of communication like help lines)?
• Do you have relevant guidelines for this area for proper business conduct?
• Are employees explicitly informed as to whether they are allowed to participate in social media during company time?
• Do you have/ want/ need an oversight or review function?
• Do you have explicit guidelines on what can be posted on internal social media platforms?
• Are employees allowed to identify their company affiliations on their public messages and postings?
• Do you have guidelines for how your employees discuss the competition?

Some thoughts for employees thinking about sharing their thoughts indiscreetly:

• Are you really anonymous on the web?
• Can the company find you?
• Can the company monitor your web activity?
• If the company does find you, can it fire you?

Yes, plenty of questions and not many answers at this stage of the game.  What I can tell you in this space is this: Enterprises should manage social network dangers with sensible policies leveraging a combination of proper training and use of technology.  Do not do this reactively to a recent fire that was created, but go through the necessary thought process (like the questions above) and develop a position on what you want to accomplish.  Then your policy can be developed to support these goals.

Your next challenge will then be getting your employees to follow the policies, but that’s a topic for another time.

Have you successfully implemented social media guidelines that reduce risk to your brand, yet provide your employees freedom (and hopefully leave their Constitutional rights intact)?  How do you measure success in this area?

Posted by Lester Lam at 04:34 PM | Permalink | Comments (0) | TrackBacks (0)

Creating the correct management roles in an eCommerce project is a critical step when embarking on a new site ( or a replacement for an existing site).  If you consider that a typical retail site will contain 50,000 item numbers(skus), take 10,000 orders per day and interact with 75-100 external touch points to legacy and third-party systems, you will see how complex the project can get.  The management of this complexity is a challenge, especially if no one on your team has been through this before (and only a few people have).

In the old world, when systems were simpler, a manager and a team of technical people created software.  In the new world, where we now find ourselves, software is created by vendors and purchased by clients.  Of course, all of this software must be gathered into a solution stack and each piece must be customized to meet the functional requirements.  To achieve this, each packaged software product must be interfaced with at least one other product in the stack, and a few of them will be interfaced with 20 or more other products.

Because of this, a different set of roles must be planned and budgeted for if you want to launch this site in a reasonable amount of time (normally about 1-1.5 years):

Program Manager – Communicates with the business.  Don’t underestimate the amount of time this will take.  Whenever a business commits millions of dollars/Euros to a project of any size, careers are on the line.   When careers are on the line, business managers want proof that they are not on a fool’s errand.  This proof, in the form of project plans, status reports, prototypes, demos, etc., takes time to create and communicate.  Normally, this person is also responsible for the allocation of people to teams.  Beyond that, there may not be time for them to do much.

Program Architect – Draws the “big picture” of what connects with what, and how. Products stacks have a certain number of design decisions built into them.  In spite of that, there will hundreds of technical decisions to be made before the stack is ready to go live.  He communicates primarily with technical people, but he must be able to speak to the business and reassure them that he knows what he is doing.  This person must be someone who can get a diverse group of technical people to agree on things and stay in agreement throughout the project.    This person will take the bottom line responsibility for the performance of the system once it goes live.

Deployment manager – Manages the process of taking the site from “done” to “live”.  A site is live when it is selling products and taking payments.  Managing this process means making sure that every other group has done its part, with no gaps.  It means hardware, operating systems, databases, and software products are installed.  It means that load balancers are installed, backup servers are ready, network connectivity is done and firewalls are installed and configured.  It also means that the correctness of the system is verified and the performance of it is validated.  It also means that security certificates are procured and deployed.  Finally, it means that everything must be choreographed carefully.  Assign someone really good to this.

Hardware Architect – Specifies the size and number of servers, the amount of disk space, the size of the network connection, the number of load balancers, the type the disaster recovery, type of content delivery network, etc.  He also creates the IP addresses and opens the firewall ports.  This job is complicated by the fact that eCommerce deployments have more types of servers and communication devices than other types of systems.

Migration Manager – Coordinates the migration of data from the old systems to the new ones.  This data is composed of user credentials, order history and product catalogs.  Each of these sets of data is potentially quite large and often dirty.  It is not uncommon to migrate 6-10 million orders in batch jobs that run for days, if not weeks.  The data is rarely in the format that it needs to be in, and thus must be transformed before storing in the new system.

Development Team Leads – Coordinates the build/customization of the component software components.  Each team needs to have its own leadership who understand the products being used and the business domain that it pertains to.  They will direct the creation of the detailed design documents and manage the programming resources.

QA Manager – Responsible for the correctness of the system.  Coordinates the creation and execution of test scripts.  He validates the functionality, scalability, and performance of the finished product.  He also acquires the tools and resources needed to accomplish the testing.

Integration Manager – Coordinates the creation of all of the interfaces between the products in the stack and between these products and the legacy systems.  This will be a difficult job because of the variety of technologies that must be mastered to make this work. 

Business Readiness Manager – Coordinates the activities that the business must complete prior to going live.  Product data preparation, tax code decisions, training plans, supplier communications, support plans, etc. are the responsibility of this person.  Change management is also required if the new site changes the processes significantly.

In a large site, each of these roles may have a whole staff of people to assist them.  In smaller sites, these roles may each be a single individual.  There is always a temptation to combine roles to reduce the headcount.  Sometimes this is wise but it often indicates that the complexity of each of these tasks is not fully appreciated by senior management.

Posted by Stephen Alan Potts at 08:05 PM | Permalink | Comments (1) | TrackBacks (0)

Times are hard - for Consumers AND retailers. So what methods can retailers use to ensure they capture the most likely $ or £ to be spent? The current climate has led to a break up in established shopping habits. As shoppers face a decline in real income, and increasing uncertainty in home and work life, a creeping cautiousness has entered the profile of many more established shoppers. A recent survey suggested this may hit some of the previously more attractive segments retailers have come to rely upon.
The 2009 Consumer Shopping Intentions Study suggested over two-thirds (69%) of US adults plan to spend less at retailers in 2009 than they did in 2008. In contrast to the younger age group, nearly 80% of consumers age 35-54 plan to spend less. However, the survey reveals a twist which might offer some hope within this gloomy forecast. It suggests 58% of those ages 18-24 plan to spend the same or more, especially at mass merchants, according to results from the study by research agency, Cavallino. Fuller results can be gleaned from their website (below).
http://www.cavallinollc.com/files/2009%20CSIS%20Press%20release.pdf
With this shift a re-calibration of marketing initiatives may be required to establish the loyalty indicators of previously relied upon customers, and potentially to target this new group more aggressively. This bears out some of the predictions which were already present in the The National Retail Federation’s (NRF) who compiled a list of how shopping will change in their report, “The State of Retailing Online 2008:Marketing Report”
www.shop.org
This compiled a fascinating store of statistics of how shopping online will change this year as social marketing was predicted to increase, repeat customers will be searching for improved shipping deals and e-store discounts
As blogger, Jennifer Litwin (The Shop Cop blog, http://www.jenniferlitwin.com/) reported, shoppers will be learning a new set of facts about how marketing is conducted, proof that the harder times are creating more savvy users. She describes the trends consumers will be watching out for, as follows:
1.        Paid search and email marketing becoming the most popular marketing avenues for online retailers
a.      5% of online sales revenue was spent on Web marketing initiatives whereas 92% of all online stores paid for email marketing and paid search
b.      Shoppers will receive, on average, 77 emails a year from sites visited/purchased
c.       Email lists are kept current by 72% of all online stores; shipping deals will be for loyal customers this year, and not new shoppers
d.      E-stores pay $.50 for each customer to record email data
e.      90% of emails sent from online stores go through and are not considered spam
f.        Only 22% of consumers open these emails!
g.      Most emails relate to recent shipments and are most likely to be opened
2.        Companies are dipping their toes in the waters of social marketing
a.      Only 1% of all sales come from social networking sites!
b.      Virtually no sales come from mobile devices
3.        Catalogues becoming the biggest expenditures after email lists
a.      E-stores are bumping up catalogues to their core customer base
b.      Expect a 46% increase in catalogues this year.
4.        Computer related purchases to continue as the fastest growing sector of online sales
5.        Home furnishings sales will likely double in the next 5 years as house sales decline and people look to improve their current location
6.        35% of all online sales come from search engine marketing/referrals from other sites
So is this really a ‘brave new world’ or merely a case of ‘back to the future’? An old Top 10 list of ways to guarantee online success (from 2006) proves that some things “just don’t get old!”
So check out these time worn ‘homilies’ and just kep in mind if – honestly – you can still claim to be staying ‘true’ to the message they contain:
1.      Focus on Win-Win Situations
The Web has shown that working alone is the fastest way to fall on your face. Search engines reward sites that are linked and recommended by quality sites. Successful online businesses enlist the help of other websites to promote their products through affiliate programs.
2.      Give Value to Customers
Despite the Web being the "new economy," the old fashion business rule still applies: the most successful businesses are those able to create value for their customers. The website exists first and foremost to fill customers’ needs whether for information, a product or a service. You will only succeed if you give customers something that they want
3.      Focus on the Customer
The challenge facing every small business owner on the 'Net is how to keep customer service alive and well in a medium where personal interaction is inherently limited. One way would be to keep your web site functional and personal.
4.      Under-promise, Over-deliver
Customers love it when you deliver way more than their expectations.
5.      Tighten the Belt, but not the Service
Contrary to the dot-com s excessive and free-wheeling spending, you can run an Internet business on a tight ship.
6.      Design the Web Site for Your Customers
Although a well-written, well-designed Web site with great content can make a positive impression on your prospects, the design should focus around getting the visitor to take the action you want.
7.      Team Up with the Right Partners
Partnering with the right groups or individuals can help increase the exposure of your website, build its reputation in your industry, and move on to become the industry authority
8.      Focus on Creating a Brand
On the Web, Google, eBay and Amazon also have built strong businesses based in part on great branding. These big businesses understand that an integral part of success is building strong brands. Effective online branding does not require big budgets, just an understanding of what brand attributes you are trying to build. By making every Web transaction brand-relevant and providing your customers with brand-based value, you will increase the depth and stickiness of your customer relationships.
9.      Put on a Face!
Automation is the name of the game on the Web, but it does not mean that personal touches that will assure your customers that they are dealing with humans have gone out of style. In fact, customers are more likely to trust, use and patronize a Web site repeatedly if they know that they can communicate with a person easily. They want assurance that their orders will come through, their complaints will be addressed and their feedback will be heard. Many successful e-tailers are generating sales through click-and-buy (e-commerce) but a hefty percentage also comes from telephone calls after customers found the number on the websites. If your sales are done without the assistance of a live person, send out personal "thank you" emails, including a real name and phone number of their personal customer service representative so if there are any questions, they can call or email a real person!
10. Don't Predict the Future
One important lesson of the Web is that you cannot predict the future. What is hot today may be gone tomorrow. The key is to be vigilant and flexible in the creation of your site and products. Take the long view of your business. Observe carefully if new uses of your products emerge. Get customer feedback on your site and monitor what the competition is doing. Forums and chatrooms are some of the easiest ways to check out what is happening on your industry and on the Web in general.

 

http://forums.teneric.co.uk/finance-forum/10-ways-guarantee-your-online-success-5679.html

 

Here’s hoping you scored a ‘Perfect 10’ but if not, remember what Meg Ryan was advised when Tom Hanks started to up the competition in “You’ve got mail”
“Go to the mattresses!”

 

Posted by Billy Byatt at 07:48 AM | Permalink | Comments (0) | TrackBacks (0)

My fellow blogger Rockey has recognized the arrival of Mobile-apps and the increasing retail presence in the space[i]. I want to further expand on this topic by recognizing some important trends – predicted boom in smartphone usage and increasing demographic variety of users. Both of these suggest customization as a way of creating value of the consumer interaction in this space.

1.       Mobile-apps are booming

There over 30,000 apps on the Apple appstore and they are growing by the day. The rest of the major players – Microsoft, Palm, RIM and Google either already have or are planning to open an appstore of their own. The number of smartphone users capable to access those apps is expected to quadruple in 2013 growing to 100MM[ii] . The large variety of apps paired with the ever improving technical specs of the phones are truly driving the convergence into a single device for work and play – work an Excel sheet, level a bookcase, find a favorite song or your parked car and play an office prank with the iFart app.

2.       User profile is changing

At first, smartphones were only used by the high income early-adopter user type. However, this trend is quickly changing with prices becoming more affordable and users willing to spend more for a multi-functional device. The growth rates in iPhone adoption are three times higher in incomes $25K - $50K as compared to over $100K[iii]. This trend will most likely continue into the future and smartphones will penetrate even further into a variety of demographic segments where users will have starkly different interests and needs. Combined with the plethora of information, available apps and the small screen size for access, customization will become of high priority.

Both of these trends imply that if a retailer does not yet have a viable presence in mobile-apps they need to start working on it. But even more importantly, the retailer needs to be thinking of ways to provide a customized experience that will be essential in user satisfaction and creating value in this space.

Retailers can start by customizing the landing page based on the user profile when their domain is accessed by a smartphone.  To solve this they can marry their current segmentation approach and identify the top 3 product groups and activities that those segments perform on their web page or store. Then, they can classify the phone user (getting the data from the mobile carrier) based on the segmentation and offer them the tailored landing page. If the user is classified to be part of the “Retired Consumer” segment, then they could be shown quick links to books, prescriptions and online photo. For the “Teen” segment the user can see music, fashion and school supplies.  This can be further tailored by the specific user behavior and preferences exhibited over time.

Additionally, retailers can improve the in-store experience by converting the smartphone into a functional shopping assistant. Large retailers can provide annotated store maps and pair them with the built-in phone GPS to assist in getting to the right places based on the user shopping list. While browsing the store the user can take a picture of an item bar code with their phone camera and use an app to match it against the product database to see e detailed list of features and reviews. Users can get tailored promotions on their phone as they are shopping and redeem right off their phone at the register. Market basket analysis performed on the specific user segment can be used to suggest relevant complements to the shopping lists created by the user.  Users could also be allowed to create “profiles” of their own, like Health Conscious , Environmentally Friendly or Price Focused and establish goals associated with that – concentrate on low-fat foods, save an additional $100 a month, lower carbon footprint etc. A mobile-app can be provided by the retailer to track the products purchased and match against the established goals, along with suggesting relevant products and additional activities that meet those goals.

Posted by Nikolay Trandev at 10:52 PM | Permalink | Comments (0) | TrackBacks (0)

I was talking to a colleague of mine who stressed on Consumers being digitally savvy for mobile marketing the other day and it made me think really hard on whether the consumer needs to be digitally savvy at all? I still remember about this aunt of mine who thought that cell phone is way too complicated to dial and handle 4 years back, but now she is actively using one and happily clicking photos of friends and family  and sharing them without booting up a desktop computer.

On the other hand, while we all, world over, are heaving and waiting for the economy to show something positive so that we can shop happily, I see no news of things getting better; and this often makes me wonder - what would a retailer do to attract more shoppers? And how would a brand, in such a downturn, influence a value conscious shopper? A swanky marketing advertisement from a brand promoting their products may not draw Gina’s attention as much; but she may have all the ears for Jane’s tip on that product.

And I thought...If I want to market a product, the best way to do so is to become a part of the shopper conversation, and her cell phone comes handy for this. Fortunately, the era of mobility has turned out as an opportunity for brands to create awareness without spending a lot of time and energy on letting the consumer know what to buy; the conversations taking place in the socially connected world represent a profound opportunity to create awareness of a magnitude that never existed before.

So, how do we become a part of those conversations, provide her more value &  influence her decisions? Can we also try & make her influence decisions of her friends in buying a product? Can social networking become pervasive and viable, turning this economic calamity into a 'never like before' opportunity?

 

Posted by Sapan Shah at 01:38 PM | Permalink | Comments (0) | TrackBacks (0)