PayPal to Process More Offline Payments

Ebay subsidiary PayPal is dead serious about taking on a $10 trillion market: the Multichannel Payments Market. To do so it will have to prove its worthiness against older companies, especially in offline commerce.

Multichannel Payments

A steady increase in Ebay's Revenue. Biggest cash cow - PayPal, 41% of total revenue.

A steady increase in Ebay’s revenue. Biggest cash cow – PayPal, 41% of total revenue.

With more than 140 million registered users already, PayPal has the sweetest spot in the online payments today. Its acquisition of global payments company Braintree secured an additional 35 million registered users. As President David Marcus puts it – this is a part of an effort to redefine money and payments into what he calls “Money 3.0″ – a new way of looking at payments and how customers use them.

PayPal owner-company Ebay is at the front of what some would call a commerce revolution led by technology. Its three main branches (The Marketplaces, Ebay Enterprise and PayPal) all work together in this changing landscape.

The Marketplaces (including Ebay.com, Shopping.com and Rent.com) enable C2C Commerce, while Ebay Enterprise caters end-to-end multichannel commerce technology. Ebay Enterprise is the tech, operational management and marketing vendor for the likes of Toys’R’Us, Radioshack, Sony ant many others.

Between these two, the payment processing subsidiary PayPal leads the way in online payments. The company is Ebay’s most promising subsidiary, growing at 20% in 2013. As of 2011, it decided to go offline, allowing customers to handle their money, cards and PayPal wallets in one place.

POS solutions

paypalofflineTo increase offline usage, PayPal now offers point-of-sale solutions, mostly targeted at the new tablet-based counters. Store owners can easily implement its apps and start charging right away.

In an effort to increase adoption, PayPal started integration with third-party store management solutions such as ShopKeep POS, Booker, or Leapset.

Among its benefits for store-owners, Paypal lists security, quick implementation and an all-in-one approach to accepting payments, scanning barcodes, tracking inventory and sending invoices.

Customers willing to take their PayPal Wallet to an offline store account can pay by swiping their PayPal paycard, using their account or by paying online and picking up in store. Having a larger pool of companies accepting PayPal payments allows the company to securely handle all transactions, allow customers to receive loyalty points and handle all personal information.

Ebay and PayPal will stick together

paypal-growthSince Ebay purchased PayPal, both companies listed a successful increase in revenue. Ebay powered PayPal’s adoption to its marketplace users and in turn PayPal grew up to become one of Ebay’s most profitable subsidiaries, amounting to 41% of total revenue in 2013.

With the help from Ebay, PayPal grew from $600 million in mobile payments to $27 billion in just three years. The figures are posted on the 2014 annual shareholder meeting website, in response to Carl Icahn’s demand to spin PayPal off into a separate company.

Carl Icahn, one of the most notorious corporate raiders in the tech industry, demanded PayPal to be split into a separate company and become listed on its on. The board of directors fought his demands showing that even though the company is open to changes in the future, right now the two are working better together.

Luck would have it that shareholders reached an agreement to keep the companies together and handle the incoming commerce revolution as a whole.

“[...] we have moved aggressively to leverage PayPal’s integration with eBay to expand PayPal’s reach to millions of online retailers and to offline transactions. PayPal remains one of the fastest growing elements of the company – which helps explain why others are targeting the payments business but are far behind PayPal.”

John Donahue, Ebay CEO. Source.

 

4 Easy Ways to Better Understand Your Online Customers

understandingAdvances in technology have been revolutionizing the way businesses are conducted. They are also reshaping the landscape on how companies interact with customers. This is a phenomenon that is clearly observed in e-commerce. E-commerce is not only reducing costs but is also increasing efficiency and expanding possible revenues.

Because the Internet is facilitating interaction, it is now possible to instantly and easily understand online customers. A business need not spend much on doing traditional market research. Here are four easy, fast, and less costly ways to better understand the thoughts, behavior, and attitude of online consumers.

  1. Conduct or check out surveys.

Online surveys or polls are designed to determine thoughts and behaviors of online customers. There are many of such studies that cover your sector or industry. If you prefer results and findings that are more specific to your business, you may commission or conduct the surveys. It can be as simple as asking your customers to fill out simple survey forms online. You may also use the free online survey services that are available across the Internet. Survey results can give you an idea of how your online customers think and feel about your business.

  1. Use Web analytics tools.

To date, there are various Web analytics tools that facilitate better understanding of online consumers. The most common are analytics about specific keywords of key phrases that are most commonly used by consumers when using search engines for finding information or products they need. You can use the information to optimize the content of your own online site so that you can take advantage of opportunities brought about by higher search engine rankings.

  1. Check out customers’ testimonials.

You can find out how consumers think about products and services. Testimonials posted by businesses through their own sites may not be reliable as those could be biased. The best and most credible testimonials come from actual consumers who ventilate and air their rants and raves through online forums, discussion boards, and reviews. Check those out to find consumers’ actual opinions about businesses and products.

  1. Test the market.

This option can be quite risky and costly. It is advisable to check out the first three ways enumerated before finally testing the market. You may launch a small-scale product or service launch to determine if online consumers are really ready and are open to try out innovations and new offerings. Actual sales can be the best indication of what consumers really think. Testing the market can lead to two types of decisions: first to pursue or go on with your business activity and second, to stop what you are doing because the market is not yet receptive.

Author: Richard Fisher

About the author:

Richard has been involved in the online marketing industry for several years. After spending time working on user experience optimisation, Richard is now a strategist at Infinity Technologies, one of Australia’s leading ecommerce digital agency.

Tracking customers in-store. Where is the Privacy?

Did you know that stores use smartphone WiFi and Bluetooth connections to track your movement? Turns out that’s kind of a growing trend right now. Showrooming is ever on the rise so traditional retailers need to act on understanding customers better. Tracking phones is one way to do it.

privacy

There are some companies out there (their number increasing) that provide tracking technologies. One of them is Shopper Trak and I had the pleasure of meeting one of their representatives this week. The company uses a combination of WiFi and Bluetooth signal detection to count, profile and report on customer behavior. How do they that? By registering the smartphone’s MAC address.

What are MAC addresses? Good thing you asked. These are unique identifiers for your smartphone. Kinda like your IP, except they don’t change. That’s one great feature if you’re going to track returning customers. Of course – all of these informations are anonymized and encrypted, as Bill McCarthy of Shopper Trak convincingly told me a couple when I had the pleasure of chatting with him.

Working in tech for some time now – i’m not really so sure about anonymous data but the technology is pretty interesting and its applications can work wonders for multichannel retailers.

Being a online-first type of guy, I was surprised to see the kind of tracking you get with Google Analytics in brick and mortar stores. The first question that popped into my mind was – “Can you compare store tracking data with online analytics data?”. Apparently most of the companies that provide such a service do provide a form of data export that can be used to understand online-offline behavior.

WiFi / Bluetooth tracking is not that popular, due to privacy concerns.

The second question was “Isn’t this thing a little intrusive?”. Probably.

Comments on Nordstrom's decision to track shoppers behavior.

Comments on Nordstrom’s decision to track shoppers behavior.

Last year Nordstrom decided to find out more about its brick-and-mortar store shoppers. They thought they can get valuable intel by tracking who comes in the shop, which products customers buy more, what’s the return rate and others. You know – the kind of stuff all online shops track so they can improve customer experience and increase sales. Except they did this by tracking customer’s smartphones.

But Nordstrom did something that online stores don’t usually do – they posted a sign announcing shoppers they were being tracked. And the shoppers were not happy at all. You can see in the image on the right the kind of feedback they received.

Fearing increasing frustration with their tactics, Nordstrom discontinued the program.

Tracking in-store traffic with video cameras

Some of Brickstream's graphics are definitely not intended to address privacy concerns

Some of Brickstream’s graphics are definitely not intended to address privacy concerns

Atlanta based Brickstream uses a 2d /3d type of cameras to track shoppers inside stores, reporting on queue length and customers behavior.

Brickstream uses path tracking to understand and report customer routes. It also uses height splitting in order to differentiate between different demographics (male, female, child) and 3D technologies to “see behind obstacles”.

Their video intel is, of course, pretty efficient. Used together with mobile tracking- even more so. It is also a little scary for customers inclined to privacy concerns.

Are you are one of those customers? Than you may want to scan through info on the 8 major players in this growing market, Brickstream being one of them:

Companies providing in-store customer tracking technologies

In-store traffic traffic tracking is an industry lead by these 8 companies, with other minor companies quickly growing. The list is provided by “Future of Privacy”, a think tank based in Washington DC, focused on “advancing responsible data practices”.

Nomi tracks customers online and offline

Nomi tracks customers online and offline

One of the younger companies providing in-store analytics, Nomi, which recently received a $10 million funding, mentions the length they go to in order to insure customer privacy. The privacy principles they list on their website are:

  1. Collect, use, and share anonymous information only.
  2. Allow you to opt out of Nomi’s services.
  3. Use industry standard security practices to protect the data we collect.

So everything is cool right? Well…

Good thing you can turn of your Bluetooth and WiFi, if you’re concerned about privacy. Oh, wait…

So far there have certainly been some concerns regarding privacy. Retailers usually addressed them as quick as possible. And when that was not the case – customers could just turn off their WiFi and Bluetooth connection so they won’t be tracked.

As mentioned earlier the technology only works when there is some type of WiFi or Btooth connection that beacons can track. Without it – smartphones are basically invisible. But than Apple thought – hey, let’s change that.

One of the often left out features when it comes to Apple’s new iOS 7 is the iBeacon. The iBeacon is Apple’s response to NFC (near field communication). When an iOS 7 device comes within range with an iBeacon it emits a BLE (Bluetooth Low Energy) response. It becomes trackable even when the above mentioned connections are turned off.

And Apple is really committed to using it:

Apple will track iOS users with iBeacons

The Apple Store Visits you

The Apple Store Visits you

The technology laid dormant during the past months since it was announced. Now Apple will instal iBeacon transmitters in its stores. When walking past such a device, iOS users will be notified of additional information they can read and save on their mobile devices.

The technology will offer in-store analytics to Apple, push ads and info to customers, assist in queue lines at the genius bar and of course help with purchases and payments.

Numerous other possible uses come to mind, mostly location based enhancements… Things like door opening for the blind, customized ads, personalized offers and many others will act as an usher in a new age of technology.

This new age, however, does not leave place for privacy.

Selling Office Supplies Online – 2013 Ecommerce Market Report

The second biggest online retailer in the world, Staples.com, made $24.4 billion last year. Apparently the office supplies online market is growing steadily and attracting unwanted attention from Amazon, while its brick-and-mortar counterpart is struggling with recession. Below we’ll have a look at the market overview, main sales drivers, top retailers and marketing.

staples-img

Let’s start with:

Office supplies online – market overview

Staple logo

The US market, as well as the global market for office supplies is heading to a small rebound, mostly due to a small decrease in demand and a  larger decrease in physical store space.

For example, leader Staples.com, is planning on closing 40 underperforming stores this year (out of a total of 1886 stores in the US and Canada), 10 more than previously announced. Challengers Office Max and Office Depot,  some of those late at the ecommerce party, have been blown even harder by reduced sales, as well as online retailers increased competition. The two companies are planning on closing 175 and 150 stores, respectively.

Multichannel experience through interactive kiosks at  Staples.

Multichannel experience through interactive kiosks at Staples.

On the other hand online and multichannel stores are doing great and Staples announced a new type of smaller stores that engage visitors with interactive kiosks and staff aimed at driving more sales to staples.com.

[Read more how retailers connect channels with Omnichannel Retail]

Staples.com is embracing showrooming and engaging customers offline to drive them to buy online. This means that the company is expecting a decrease in offline buying interest. It also means that the age of the behemoth stores is over and now customers will be expecting offline experience that leads them to buy online.

Office Depot also shifted focus towards a multichannel approach. Monica Luechtefeld, who’s been with Office Depot for the past 17 years restructured marketing teams into a single department, to offer a 360 degrees approach, focused on the customer.

 “Instead of looking at you as an online shopper, it’s an attempt to think of you as the customer of Office Depot. The more we look at you horizontally and look at the multiple ways you engage us and the multiple tools that you use to buy − one day a store, one day online, one day a call center − the better we’ll be able to serve you.” said Luechtefeld.

In order to counterbalance Staples’ and Amazon’s competition, Office Depot is also moving into a merger with Office Max, as WSJ reports. The two companies worth $1.3 billion (Office Depot) and $933 million (Office Max) will probably be trading stocks. With almost 60 000 employees and $17.5 billion in combined sales, the two companies will decrease costs and increase market share, if the deal pulls through. Office Depot also tried a merger with Staples in 1997, but the deal was shut down by the U.S. Federal Trade Commission.

Until the merger goes through the US market is shared by Staples (39% market share, also the largest office supplies company in the world), Office Depot (22%), Office Max (13.5%). These companies control 74.5% of the market so they are really setting the trends, and the trends are:

  1. decreasing brick-and-mortar store space
  2. transforming stores into offline experiences aimed at converting customers to online buyers
  3. increase profitability by increasing online sales
  4. focus on customer centric, multichannel marketing

Product segmentation and best sellers in office supplies

Office supplies are some of the most sought products online, up there with computer hardware and consumer electronics. The online market for office supplies totals $22.8 in US alone but not all office supplies are created equal. When purchasing online customers spend their money on:

  1. Office and school supplies – largest portion of total office supplies category – 45% of total sales. Among these office supplies account for 80%.
  2. Office equipment (fax machines, photocopiers, computers, recorders) amount to 24% of total sales
  3. Last but not least – stationary and computer paper account for 23% of total revenue, as stated by IBIS World.

Among the office supplies the ones that stand out are the ink and toner cartridge supplies. For office supplies retailers the fact that these product sales decreased in the past year meant a hard blow to the market cap.

Ink and toner Cartridge online market – opportunities and threats

ink-marketCartridge supplies make up for a large part of office supplies retailers’ margin. In 2011 the ink market alone was worth $14 billion globally so it’s safe to say that the market is here to stay, although growth has suffered due to global recession. New developments in ink manufacturing, online retailing and customer acquisition have changed the landscape but printer ink is still one of the most needed and expensive products on the planet.

As for the vendors, a recent study by Research and Markets shows top vendors as Brother Industries Ltd., Cannon Inc., Hewlett-Packard Co., and Seiko Epson Corp.

The study also shows that among the key growth drivers there is an increase in demand for cheap, high-speed continuous-feed inkjet printers. Recent changes in technology are making possible for buyers to expect reasonably priced color printing.

Increase in demand for ink in labeling and packaging

Increase in demand for ink in labeling and packaging

Although the overall cartridge supplies market is not doing great, thus affecting leaders like Staples, Office Depot and Office Max, a few trends have really picked up:

  1. Labels and Packaging have increased demands for ink: part due to companies expanding into emerging markets but most important due to a ecommerce growth labels and packaging show increase needs for ink and will probably continue to do so for the foreseeable future. A slower growth can be seen in commercial printing.
  2. There is a growing demand for cartridge refills: the global recession helped increase demand for cartridge refills. Information regarding inflated ink cost and news of printers wasting ink all helped pushing the consumer into finding new ways to decrease print costs.
  3. Companies are helping consumers recycle used cartridges in a move that helps companies retain clients, fight the cartridge refill trend and position themselves as “green”. Staples announced it has recycled over 350 million cartridges through its ink and toner cartridge recycling program. Through this program customers receive $2 back in Staples Rewards points and can be used either online and offline.

As such – companies looking into expanding ink and toner sales need to seriously look into:

  1. cartridge buy back and recycling
  2. refill options for customers
  3. loyalty programs that offer incentives such as buyback points or discounts

Markets and marketing for office supplies online

When it comes to customers, the main targets a office supply retailer has are, according to IBIS World:

  • Households make up the largest share of all sales, with 50% of total revenue
  • Businesses amount to 45% of total revenue
  • Government is just a small part of office supplies sales (5%)

When it comes to marketing and customer care, it seems that most office supplies retailers are moving towards a multichannel approach as to leverage the existing stores and maximize profit. Customer care and retention, location based marketing, mobile marketing, direct marketing and social media also seem to be playing a big role when it comes to customer acquisition and retention.

Customer care and retention – loyalty programs

teacher-programA very important part in Staples.com customer care is their Staples Rewards program. Every purchase offers customers 5% back in online/offline purchases as well as free shipping. Customers can redeem rewards when buying from a physical store, online or on their mobile device, thus ensuring a multichannel experience.

As a very large chunk of the market are households, usually families with one or more children, Staples.com now offers a program targeted at parents and teachers. Parents can offer a teacher of their choice a chance to earn as much as $2000 a year, in reward points.

Office Max also offers a loyalty program – MaxPerks – that allows customers to receive 5% off every purchase in rewards,  rewards on cartridge recycling, and other bonus rewards.

Using mobile to connect multichannel customers

staplesmobileOffice supplies retailers use mobile to leverage increased mobile commerce traffic, drive foot traffic in store, helping customers find product information and help them check rewards quickly.

When it comes to mobile the largest player on the market, Staples.com is using both a scaled-down mobile version of the site, as well as native apps on iOS and Android.

The mobile experience is extremely easy to use and focuses on:

  1. hot deals
  2. store locators
  3. reward points
Office Depot Mobile

Office Depot Mobile

Office Depot also offers a mobile version, as well as iOS / Android native app but it features more information regarding products and a clearly visible “ink finder” section.

It is clear that both companies are really working on providing their customers with a great mobile experience and help them find the best deals and the right products quickly.

Staples.com has really set a target at providing the best mobile approach it can and Brian Tilzer, VP of Global Ecommerce declared:

“More and more shoppers are turning to their mobile devices as a way to research and shop whenever and wherever they want.  Staples is thinking ahead and anticipating customers’ needs, providing an offering that not only serves as an m-commerce tool but listens to, and solves, customers’ pain points.”

 

Social media

When it comes to social media there is no really big winner and tactics and strategies are really similar. Some overall trends seem to be more prevalent though:

  • social media engagement – companies such as Staples, Office Depot and Office Max are all channeling their efforts to discussing new products and  deals, occasionally engaging in social responsibility programs such as Office Depot’s “Stop Bullying”
  • deals apps – wether it’s Staples’ “Weekly Ad” or Office Depot’s “Weekly Deals”, the companies are showcasing their best offers wherever they can. That includes Social Media.
  • companies have a cross-channel social media approach, as seen here.

Direct marketing / customer targeting

Traditionally direct marketing has been one of the best marketing and sales channels before ecommerce started getting traction. Now companies need to face a world where the customer expects real-time, personalized offers.

Amazon is closing in with its beta Amazon Supply, an online store targeting office and home supplies. As such, Staples needed to find a way to fight fire with fire and acquired Runa, a California-based software company that specializes in personalized shopping. The company analyzes browsing history, previous purchases to create a virtual profile for the customer and predict what products would he be interested in.

Profiling is clearly the key to direct marketing as customers are looking into personalized offers and expect companies to provide them with it.

Key take aways:

If you’ve read so far, let’s just assume you’ve probably missed a couple of ideas along the way so let’s just wrap this report with the most important take aways:

  1. office supplies brick-and-mortar stores are struggling and will soon be gone
  2. they will be replaced by multichannel retailers that use physical stores to showcase merchandise and sell online
  3. there are three big players in the office supply market in the US: Staples, Office Depot, Office Max. They make up 74.5% of the market
  4. the office supply market has slightly decreased. So did the ink market.
  5. new trends in the ink market: increased consumption in packaging and labeling, cartridge refills are up, companies need to provide recycling options to customers
  6. mobile is a very important factor in office supplies online retail as it bridges the gap in multichannel shopping
  7. Amazon is moving into office supplies

 

 

 

An Ecommerce Guide to Improve Holiday Sales

santa-claus

The holidays are coming and for most online retailers ’tis the season to be jolly. With shoppers starting their Christmas purchases as early as september, the holidays season starts earlier for those that really want to take advantage of this opportunity.

When to expect sales? Source: ICSC Spending Survey

When to expect sales? Source: ICSC Spending Survey

Most retailers expect 20-40% of their yearly sales to happen during holidays. Here are some things you should keep in check to insure optimum online store performance and increased sales:

1. Check your suppliers and stocks

It would be quite unfortunate if your sales would increase tenfold and yet you could not ship in time for everyone to get their presents. Say Little Timmy was due to receive a brand new toy but you can only deliver on the 27th of December. Too late.

Even worse – say you have one bestseller your pushing out there on the market and demand is so big that you’re left with no stocks after Black Friday?

These things and many others can happen and can leave a big impression on your sales, profits and customer retention so make sure you check your supply chain for any problems. Here is a brief list you should have in mind when preparing for the holidays:

Check your stocks inventory and your main suppliers

Have a look at last year’s analytics and see what products were most likely to convert users into buyers. Round up the total sales per product and increase that figure so you make sure you’ll be ready to supply the demand.

After you’ve optimized your inventory – make sure the supplier won’t bail out on you if you’ll still run out of stock. You never know when you’ll get your big hit.

Have clear commitments from your shipping supplier

Everyone will expect their purchases  delivered by the 25th of December. If you can’t fulfill that – you’re likely to lose a lot of customers. As such – make sure your shipping supplier is ready to deliver on time. Push for shorter delivery terms. After you’re done with that you should also…

Be ready for a lot more pick and packing

Remember – the objective is fast delivery. The fact that the shipping supplier delivers the next day may be useless if it takes you 5 days to pick (or order) and pack an order.

The Holidays will likely increase activity in the warehouse so make sure your fulfillment team is ready to handle a lot more work than it’s used to. If not, scale up temporarily. Can’t scale up? You can outsource your fulfillment operations to a third party logistics (TPL) supplier such as Fulfillment by Amazon.

2. Holiday marketing starts in september

Of course – that doesn’t mean you have to post Santa Claus pictures, snowflakes and Christmas Carols on your Facebook page but being prepared long before your competition can work out miracles. Here are some things you should get ready for, things that usually take quite a lot of time to prepare:

Sell Christmas Bundles  to insure up-sell

Great products need less marketing and bundles are great ways to insure your customer feels he’s getting more for the buck. Your best-selling products are usually bought with other smaller accessories. You can find out which are these by having a look at last year’s purchases and analytics.

Have a look at what people bought and how they bought it. Try to look for patterns in these purchases but don’t stop there. If you see that customers bought an Xbox, two extra controllers (one to play with and one to replace the one they’ve previously smashed against the wall) and the latest GTA – make it a bundle. Go beyond that and bundle up for a Playstation gift.

It’s hard to pick presents. Make sure you offer Gift Cards

Remember that ” ’tis the season to be happy ” part at the beginning? Well – turns out that’s kind of a lie. People feel depressed and anxious during holidays. Among the reasons – media overload, crowded places and a pressure to find appropriate gifts for those they hold dear.

Of course you can’t shut down the media overload but an online store is a great place to avoid the crowd and a gift card can be the perfect gift for anyone. Have a look at what customers are preparing to buy as Christmas gifts:

• Gift Cards: 59%
• Electronics (ex: TV, Computer, iPad/Apple products): 38%
• Apparel: 35%

Gift cards are not a maybe – they’re a must.

Improve your search ratings and email database BEFORE Holidays

How will you get customers to your site? Of course – they are buying, but are they buying from YOU? If you’ve planned to increase your sales during the Holidays you can be sure you’re not the only one. However – you can improve your results by:

  1. Improve your listings in search results: there aren’t many things you can “quickly do” (heard this like a bazzzilion times) but there are some, as long as you have a fairly decent search engine positioning:
    1. Check for lack of content – some of your products may not have an appropriate description or may not have a description at all, the title may be missing or misleading. If you’re new to this, a great place to start is Moz’s Begginer’s Guide to SEO.
    2. Structured data goes a long way when you go head to head against your competitors. Showing data regarding product prices, ratings etc. directly in search results can be the difference between a sale and an user that doesn’t bother to click on your link. Better have a developer include Schema.org structured data but if you’re curious to what this means – check out the “getting started” area on Schema.org.
  2. Increase your email subscribers database: Offer discount, vouchers, products – anything really but get those people to signup to your newsletter, before the holidays. When it comes to sales during holidays, a fairly targeted, permission based newsletter can do a lot more in terms of sales than your usual display or facebook ad.
  3. pinterest-drives-ecommerceImprove your Pinterest page – people on Pinterest like to buy stuff. That’s why they browse. Here are a couple of stats (you can read more about it here) that will make you WANT to improve your Pinterest presence:
    1. Pinterest drives 41% of ecommerce traffic, 4% more than Facebook
    2. Pinterest users are big spenders – at $80.54 average value per referred customer, Pinterest is doing better than Facebook ($71.26) and Twitter ($70.17)

Make sure your Store stays open through the traffic flood

Your Black Friday program will likely increase traffic by more than 800% . Most online retailers have an larger increase and the trend just gets better by the year. That means that in order to have your store open during the surge in traffic you should:

  • move your store into the cloud so you can easily upgrade used resources when needed. Don’t know what “cloud infrastructure” means? You should definitely catch up with IT reading because these things are not IT – only territory, anymore.
  • increase call center operators if you have a support line (hint: you should have one)
  • focus mostly on client service and less on marketing when the holidays are actually there. Client service sells, marketing just drives people in the store.

This short guide covers some of the most important basics. If these areas are fully covered – you should do fine during the holidays but make sure you come back to Netonomy.NET for more information.

Pinterest Ads: Who Needs Them Most?

Pinterest has been growing steadily for the past year and some think of it as a possible competitor to Facebook’s social media turf. That means they do very well in the growth department.

Pinteresting Ads - source: Pinterest Blog

Pinteresting Ads – source: Pinterest Blog

Money isn’t a problem either (at least not for now), as Pinterest is slowly digging through $200 million in funding, but it still has to come up with a monetizing plan.

Pinterest growth rate decreasing in the US, increasing worldwide.

Pinterest growth rate decreasing in the US, increasing worldwide.

Last year’s try with Skimlinks probably looked great in a board meeting pitch but it caused quite a stir when word got out that Pinterest was changing it’s users’ links into Skimlinks affiliate leads. The company was accused of making money of its user generated content (which everyone understood, as … you know … servers cost money), without their consent or an explicit disclosure (which seemed to be not so easy to understand).

That was definitely a failed attempt at monetizing Pinterest’s growing userbase and they seemed to have learnt a lot from that. In the post announcing the new feature CEO Ben Silbermann promises ads will be:

  • Tasteful. No flashy banners or pop-up ads.
  • Transparent. We’ll always let you know if someone paid for what you see, or where you see it.
  • Relevant. These pins should be about stuff you’re actually interested in, like a delicious recipe, or a jacket that’s your style.
  • Improved based on your feedback. Keep letting us know what you think, and we’ll keep working to make things better.”

Pinterest Ads are great news for Ecommerce

pinterest-drives-ecommercePinterest is first of all popular. Not just in the US. All over the world. Users devote time into building, curating and browsing through handpicked photos of products, dreamy locations, fashion photos and many many others. Most things people collect and see pinned onto their boards do have one thing in common – they can be bought. And boy does it show:

  1. Pinterest drives 41% of ecommerce traffic, 4% more than Facebook
  2. Pinterest users are big spenders – at $80.54 average value per referred customer, Pinterest is doing better than Facebook ($71.26) and Twitter ($70.17)

All in all – Pinterest is the biggest social player when it comes driving relevant (and by that I mean paying) traffic to online stores.Yet not all industries are equal – some will benefit more than others when using Pinterest Ads.

Which are the categories that will benefit most from Pinterest ads, in terms of ecommerce sales?

You are probably guessing the leading industry but first here are the runners-up:

3. Travel

Travel pins account for only 2.5% off all pins but don’t let that small percent fool you. Pins get shared and in an industry where everything is judged by the numbers it helps improving your margin with a little thing called emotion.

Pinterest is great at instilling positive emotions and shifting purchase options towards recommended / shared locations. While it it was hardly worth the trouble to orchestrate a social media campaign that gets some kind of traffic rolling now everything will get easier with sponsored pins.

2. Home deco / home lifestyle

Home is the most popular category on Pinterest, with 17.2% of all pins categorized as home items. Not surprisingly either: 80% of all Pinterest users are women, more inclined to look into home lifestyle items and 50% of them have kids.

With an annual household income of over $100 000 or more for 28.1 % of Pinterest users, you can be sure that this is the place where you can market home related items. Brands such as Crane & Canopy actively engage Pinterest users and draw new products inspiration from the things they see trending on the social network.

1. Fashion

The big winner is of course Fashion, for both men and women. When it comes to style, beauty and clothing, 11.7% of all pins are pinned under Fashion and those pins usually come from popular users, influencers and fashion media outlets and bloggers.

Think the previous numbers are pinteresting? Well get this – Sephora’s Pinterest users spend 15 times more than their Facebook counterparts.

Sephora’s Julie Bernstein is unforgiving when it comes to Pinterest vs Facebook:

“The reality is that when you’re in the Pinterest mindset, you’re actually interested in acquiring items, which is not what people go to Facebook for,” Bornstein said. “Facebook continues to be just a great customer interaction tool that gives us the real-time ability to dialog with our customer; it’s a big customer-service venue for us.”

There’s no denying that Pinterest is here to stay when it comes to online retail. It probably helps to be pinning even if you’re not dealing into Fashion, Home or Travel as pinners are buyers. But if you are selling these products  then Pinterest Ads, a great addition to your Pinterest marketing policy, will probably bring a great deal of new customers to your business.

4 Ways you Can Engage Customers with Mobile … Other than Sales

Unless you’ve been living under a rock for the past 5 years you’ve probably heard about these two buzz-words – “mobile” and “mcommerce” (or mobile commerce). Usually retailers use them together because hey – that’s what retailers do – sell stuff to people. Now that a new channel is here let’s just go ahead and grab it. Well – maybe that’s not the best way to go.

You see – people tend to think of their mobile phone as something quite personal. It’s always there in their hands or pockets, it holds their most private conversations and information, it’s there when they go to sleep, it’s there when they go to bed.

Not many think in the same terms about retailers or shopping. Shopping is less of an addiction (except for those shoes, ladies) and more of a mix between (1) necessity, (2) convenience and (3) marketing induced propensity to buy. Nothing really personal there so don’t expect your customers to download your app, browse the products and buy after. Oh, and mean while, if you do expect that – don’t push notifications unless they actually ask for it.

When building a mobile app – do more than replicate your online store

Mobile sales

Mobile sales

Say you’ve built an online store for your brick-and-mortar operations a couple of years ago. By now you’ve probably seen a healthy increase in sales and you’re quite confident in online retailing overall so you decide to invest in a mobile application to handle mobile users’ needs. You decide that the logical thing to do is build an mobile app to showcase your products and let your users buy from that app.

That’s what usually retailers do but not what users want – remember the personal attachment people have to their phones?

Here’s a couple of things you can do right on your online store to serve mobile shoppers (which, by the way – are on the rise as you can see here):

  • build a responsive design to handle desktop users, mobile users, tablet users
  • adapt that design to fit each type of device
  • make payments as easy as possible and as secure as you can for mobile users

Now that you’ve covered the basics, while not boring or forcing your users to adapt to your store packed a native application, let’s make your mobile experience personal:

1. Make it useful

The smartphone is nothing if not useful. You can use it as a music player, email reader, browser, game console and dozens of other things. Your app should be useful. Here are a couple of examples as how companies made their apps useful to the targeted audience and changed the way customers thought of them:

Uber connects passengers and drivers. Changes the way they connect.

uber

Alright – Uber is not actually a retailer but we need not think in terms of black and white. What Uber handles extremely well is a customer need and delivers to that need as well as it’s expected. Note that its mobile approach is just a means to an end: customer satisfaction.

Amazon is sure it can outmatch brick and mortar competitors’ price. Launches barcode scanner app to prove it.

Amazon Barcode Scanning app

Amazon Barcode Scanning app

Amazon handles a huge inventory. If there’s any product out there that has a barcode attached to it, chances are you can buy it on Amazon with one click. The company makes that easy with its barcode scanning app – find a product, check the barcode and find it on Amazon. Easy and useful.

2. Make it fun

The Amazon Kindle is a disruptive mobile strategy that changes the way we read (and buy) books.

The Kindle iOS App

The Kindle iOS App

Back to Amazon – ever thought about the Kindle as a store? No? Because it’s one of the best stores out there. You can’t see the cash register but it is there. It is hidden behind that great mobile device / mobile app that allows you to read your favorite books (and purchase more of them), but it is there. It’s so good that it helped Amazon reach a point where, in some markets, it already sells more eBooks than paperback.

Talk about fun…

3. Make it local

Shop Nearby, by The Find

Shop Nearby, by The Find

Let’s just assume that not all shoppers are inclined to buy online or rather more – some of them need to find a product quickly, in their nearby area. The want the product now and are willing to drive to the local store to buy it. Here comes Shop Nearby, by The Find.

The application makes it easy for you to find a certain product in your close area or browse through all shops nearby.

4. Make it Personal

Last but not least. Make it personal. It has to be personal because mobile devices are personal items and apps should be personal also.

Gilt understood this when they launched …

Gilt personalized shopping

“Our goal is to make it even easier for members to discover products they love while they are on the go” said Steve Jacobs, Chief Information Officer at Gilt.com

Personalized sales

Personalized sales

Gilt.com is, as you probably know, one of the largest fashion flash sales retailers online. With a huge database filled with customer information and purchase history they can make their approach to sales chic and personal again.

When Gilt.com was launched it served as a private venue for brands to unload their unsold inventory. It used to be private and quite a little secret for Gilt’s members. Once the store got bigger and bigger they found they were unable to cope with users need for short-stock brand clothing. Even more – they couldn’t handle selling premium brands discreetly, something their suppliers were not really happy with.

Now that the personalized shopping has been launched, users can get special (and by that I do mean special) deals, based on their purchase history.

What’s not to love about a store that handles a one-on-one relationship with millions of customers?

Twitter Starts Developing Commerce Operations. Hires Ticketmaster CEO to Lead Commerce Efforts

Twitter has recently hired Nathan Hubbard, former Ticketmaster president, to lead the charge on its commerce operations. This move is a part of Twitter’s efforts to pass the $1 billion revenue threshold by 2014. With its current revenues coming almost exclusively from advertising, Twitter figured it can unlock its social commerce potential, a market that is still untapped by most social networks.

Twitter's new Head of Commerce - Nathan Hubbard

Twitter’s new Head of Commerce – Nathan Hubbard

While Twitter’s intention is not exactly disruptive or unexpected, it is interesting to have a look at some of the subtle nuances. Hubbard recently declared in an interview that…

“We’re going to go to people who have stuff to sell and help them use Twitter to sell it more effectively. One of the hallmarks of Twitter’s entire approach has been partnering. We’re going to take the same approach with owners of physical and digital goods.

- Nathan Hubbard

Taking into account Hubbard’s words and the recent developments in social media and eCommerce some things are to be expected:

  1. It’s really important to note that Twitter’s efforts seem to be going into C2C territory, as well as the traditional approach into B2C. Twitter’s users may be empowered to exchange and trade stuff on the social network, an activity that is not that uncommon on its main competitor platform, Facebook. That may mean that Twitter’s commerce innovation will be to help transform its social network by adding a C2C commerce layer, not unlike Ebay’s platform. It does have the users, it might just as well let them trade.
  2. There seems to be a great focus on digital goods, as they may work better with the digital market Twitter is building. Some of Facebook’s best commerce results came from digital content, such as apps, especially Mobile App Install Ads. The Install Ads have helped Facebook increase its share of mobile – related revenue to 41% of total. But digital products is a far larger market than apps. It goes beyond to include concert tickets, airline reservations, hotel reservations, digital books and many others.
  3. You might have noticed that Twitter left the “e” out of its “eCommerce” operations as the company has a Commerce target. Both online and offline. A multichannel approach, if you will. As the lines between traditional and online retail have become almost invisible in the past years, Twitter seems to be looking into an integrated commerce approach, tracking and targeting the potential consumer via brick and mortar stores, as well as online. To help deliver metrics on such efforts, the company recently paid $90 million for Bluefin, a social and TV advertising metrics company.

 

There is a high chance that Twitter’s commerce efforts might not be all that spectacular, as even the mighty Facebook seems to be running around in circles when it comes to commerce, but I am personally looking forward to see where their efforts take them.

Bridging the gap in multichannel shopping

Online retail is the wonder kid of retail – it is young, energetic, it is growing fast yet it is still in its infancy. Based on 2010 estimates online retail amounted for no more than 7% of total retail purchases, as seen below.

Evolution of online rtail share

Evolution of online retail share

The figure may not be exact as it amounts for purchases that happen exclusively online. Users tend to mix retail channels in their quest for a better shopping experience. They might know the brick-and-mortar store brand and order online because it is more convenient. They might also discover the online store, find the product best suited and than “feel” it in the physical store.

Multichannel tracking has not changed that much since the days consumers would receive coupons in magazines and advertisers would track these coupons to get a better view on what’s efficient and what is not in their marketing efforts.

What is Multichannel Shopping?

First and foremost – what is Multichannel Shopping? As you probably have noticed or done so yourself, shoppers tend to use multiple ways of combining online and offline activities. Here are the most important:

  1. Shopping across multiple channels (brick-and-mortar stores, online shops, mobile apps, phone order etc.). Consumers will try to use the best channel available at the time. Say you are a avid online shopper but this evening your brother celebrates his anniversary and you forgot to buy him a present. You will rush over to the closest store and buy something from there, after you have searched for that store and the gift online.
  2. Using more channels to purchase goods from a single retailer. Users that are accustomed to a certain brand will try to buy as often as possible from that particular brand. They will mix offline and online purchases, depending on the specific occasion, while staying loyal that brand.
  3. Using multiple channels to complete a purchase. Users will use multiple channels sometimes, to get the best deal / the easiest way to get the goods. They might browse the online store, order the product on the phone and purchase / pay for it in the brick and mortar store.

How can we track Multichannel Shoppers?

As retailers increasingly look for new ways of tracking consumers and increasing sales they use a combination of old(er) and new(er) strategies, such as:

  1. Multichannel loyalty programs – this programs are usually extended CRM programs, using identifiers such as member cards, phone numbers, unique ID’s or others. Consumers are encouraged through loyalty points incentives to use their ID’s on the different channels
  2. Multichannel consumer life cycle - tracking the consumer through different channels by combining online and offline purchase steps (Ex.:buy online, pay offline, support on the phone)
  3. Track users through wi-fi and mobile use – a rather cutting edge yet extremely promising strategy of trading free on-location internet (everybody wants some), combining it with personal online data (such as Facebook user accounts) and seeking trends in collected data, in order to increase sales and understand the consumer life-cycle better.

What is your take on multichannel shopping?

Predictive Analytics and Why Companies Are Stalking Their Customers

Tomorrow is all about Big Data and how best can you handle it. See, companies don’t need more data. Most medium to large companies either have the data or ways to get it easily available. The problem is – most of them don’t know how to handle it.

Here comes the boom: Predictive Analytics is *the thing* nowadays. Long gone are the days when merely registering data, processing it and acting upon the findings in the next fiscal year was enough. Right now the fastest growing companies register data, analyze it and respond to it in real time.

Predictive analytics and predictive personalization – how do they work?

Hunch Recommendation

Hunch, now part of ebay, offers personalized recommendations based on personal infromation

We all leave trails behind. Our shopping habits, our marital status, our social groups, the shows we watch and gadgets we buy – all these and much more are trails and they are in some database, somewhere. Using this data, or whatever is available at any given moment, predictive analytics software can determine our future actions through two types of programmed responses (it’s a little bit more complicated than that, but you’ll get the picture):

1. Rules Based Personalization – “If this than that”. Basic personalization. Ex.: Customers click on an ad, enter our website and we can determine they are from New York. Let’s show them our stores in New York first. They click on our product catalog, select the high-priced products. Bang! We now know they have a medium to high income. This kind of responsive personalization does not really make use of any kind of predictive analytics. It just reacts to actions. It does not try to predict them. This is a job for…

2. Predictive Personalization – this is something we, humans, can do easily. Machines, not so much. Let’s say our sports store has a sales person with a decent IQ who’s at least a little bit interested in the customers checking out the merchandise. He notices customer X has tried on at least a dozen of sports shoes in the last hour. He walks to the customer and asks him “Hey, can I interest you in this brand new snowmobile? It’s 10% off. Oh, wait that is stupid. That just what old-time ads would do. He would actually ask the customer if he can help him find some shoes that fit and look good. That’s basically what Predictive Personalization is all about: 1. Analyzing the data real time / 2. Using context to pinpoint the best potential recommendation and 3. Personalize the output.

In case you were wondering – yes, there’s a little bit more science to it but the previous example shows what the buzzword stands for. If you are interested in the subject or you’re a future Predictive Analytics Expert you can have a look at “Personalized Recommendation on Dynamic Content Using Predictive Bilinear Models”, on how Wei Chu and Seung-Taek Park of Yahoo Labs used Predictive analytics to recommend better content on Yahoo’s front page.

Why companies use Predictive Analytics to stalk their customers?

You know why Facebook stalking is so easy? Because people want other people to know about their interests. The Millennials, the digital natives, generation Y – they are today’s youth and they are born and living online. They offer their info, they share their interests, they make their photos public. No more mass message. Each and everyone expects to be treated as an individual.

Companies that do not “stalk” their customers are going to be left behind: Amazon is personal, Facebook is personal, Google is personal. Most of the top online retailers are personal and they make customers’ shopping experience unique.

How about offline? Yes, 5 years ago we couldn’t have had any kind of Predictive Analytics or Personalization offline but the iPhone changed that. Now smartphones fill the gap between the data stored online and offline activities. Companies are now tracking consumer behavior through mobile activity and make use of predictive analytics to address individuals needs and wants … well .. individually.

Acting on data is not enough anymore. It’s acting on data NOW that’s important.