Showrooming Markets

Showrooming is a trend more and more retailers recognize. Most online retailers piggyback on consumers trying on merchandise in physical stores, only to search for the best price and then purchase the product online.

Although hard to fight, the trend might be actually beneficial for larger retailers that need to attract customers to their online stores and can afford price matching.

On one hand we have large retailers fighting to keep customers purchasing. Walmart for example, rolled out Savings Catcher in 2014 and now its pushing it across US. The tool allows users to compare prices on Walmart.com to those of its comepetitors. Any difference found is stored as store credit for the customer.

The likes of Amazon are trying to allow showroomers even more space to find the best prices online. Its recently launched Fire Phone has a built in mechanism that allows users to scan products (not just barcodes) and find the best deals online.

Showrooming around the world

Showrooming around the world

In this battle the ones that suffer most are the small retailers or retailers unadapted to omnichannel operations. This companies cannot afford customers trying on merchandise only to buy it some place else, while still keeping the shop open. It’s not just a passing thing either. 33% of customers worldwide report being showroomers, with 21% using their mobile phones to do it ( Source ).

Even more, markets that are earlier adopters of this trend seem to be even more into it. 71% of shoppers in developed Asia, 60% in North America and 54% of European consumers report showrooming practices.

As probably small to medium retailers won’t just roll over and disappear a new type of partner will probably appear in the near future

Showrooming markets as outsourced product display

Traditionally, retailers evolved to outsource everything that didn’t make sense handling within the company. Things as manufacturing or logistics are now commonly outsourced to reliable partners, companies that handle more than one retailers.

It’s not just manufacturing or logistics. If you think about it, most retailers outsource vital areas of their operations. Financial reporting, IT services and sometimes even human resources are outsourced to partners providing reliable service and economies of scale. Globalization has helped push this trend as companies can find cheaper, reliable work offshore.

But so far stores were pretty much left untouched. Retailers still feel the need to control and manage stores as they see fit, even if sometimes it is not the most economically reliable thing to do. As showrooming decreases the need and efficiency for the self-managed store, as online retail becomes increasingly popular and outsourcing gains traction in the future product display in store will also be outsourced.

[Article extracted from "Understanding Omnichannel Retail". Download the report here.]

Millennials as well as older demographics still favor B&M stores. They also like to see and touch the products they are buying. But they don’t always buy from the shop displaying the product. There is a solution that will probably become commonplace in the future, especially for small and medium retailers.

As retailers need to optimize their pricing in order to compete to only pure plays and online retailers need to establish a physical presence, a new type of company will emerge. The showrooming market.

The showrooming market is a place that aims to provide customers with extended information on the product, as well as the full product experience. The concept is already available online, with markets such as Ebay providing product display space for smaller retailers, as well as online pure plays willing to try an additional sales channel.

The primary function for the showrooming market is product display, rather than sale. Its revenue sources would be retailers paying and competing for shelf space, but generally paying less than they would displaying the products  on their on. Retailers, on the other hand, would benefit from an affordable B&M space, as well as a logistic point in product delivery, outsourced to companies that can do it better, due to economies of scale and process optimization.

Omnichannel Payments – Battle Between Giants

What comes to mind when you think digital payments? That would probably be PayPal. We all know Ebay subsidiary PayPal leads the game in digital Payments but now the game is set to change.

Paypal bets big on POS integration

Paypal bets big on POS integration

Although it does have the first mover advantage and has been going strong into omnichannel retail, PayPal is threatened by the largest tech companies in the world:

  1. First of all, company president David Marcus has resigned (or has been fired as rumor has it) to join Facebook. His mission – building a new type of … messaging tool. And by that I mean Facebook Payments.
  2. Google is pushing hard on its Google Wallet, a mobile bridge between online and offline sales. It is a fully NFC compatible payment system, which now accepts all major credit and debit cards, loyalty cards and discount cards. It also allows customers to save offers and buy using touch-to-pay systems.
  3. Everyone raved about the Amazon phone but the actual big news is … Amazon Payments. With over 200 million credit cards stored and the ability to pay with one click (for a very long time Amazon held the patent on that), Amazon is probably the biggest competitor to Ebay’s PayPal.
  4. Apple also has a huge database of credit cards stored on its server. It also has a massive database of customer options, customer history and a fully featured Keychain app built into Safari, ready to help customers do a quick checkout. Its wide device adoption allows it to become one of the most important players in the omnichannel payments area.
  5. Let’s not forget Ali Baba Group, the organization that controls over 84% of the fastest growing and biggest ecommerce market: China. AliPay is the group’s payment system, fully featured with the Yue Bao savings account. And now the company is set to have its IPO in the US.

Now this is the real Game of Thrones in the omnichannel world. Five tech monarchies are reaching for our wallets.

 

 

Amazon vs Walmart Comparison in one Essential Chart

Two companies have redefined retail in the past 50 years. One is a company founded by Sam Walton in 1962. Mr. Walton opened the first Walmart in Rogers, Arkansas. The other is an Internet company, founded by Jeff Bezos in his small garage in Bellevue, Washington. This second company is Amazon, the largest Internet Retailer.

Both companies went on to be huge successes but in terms of revenue, Walmart has the upper hand. With $469 billion in 2013 revenue and 10700 stores opened worldwide, Walmart beats by far Amazon’s $74 billion 2013 revenue. If you look at the raw data Amazon is no match for Walmart. But pull back just a bit and the picture is changes. By comparing the track records for the two companies an interesting insight becomes clear:

Amazon vs Walmart - 17 years revenue comparison

Amazon vs Walmart – 17 years revenue comparison

The chart above is a comparison in terms of historic revenue. On one hand you have Walmart – the biggest and most successful retailer in recorded history. Employer of 2.2 million people, crusher of markets and destroyer of mom and pop shops. On the other hand you have Amazon, the brave new world of online retail. Both redefined their markets and both are leaders in their respective fields.

But one is unlike the other. See – I couldn’t even put together figures from the first years in Walmart’s history. Walmart’s revenues starts 6 years after the first Walmart opened, in 1968. That’s when the company reached a figure ($12.6 million) comparable to Amazon’s first year with recorded revenue (1996 – $15.7 million). 17 year after the company launch, Amazon registered $74.4 billion in revenue, while Walmart registered “just” $6.4 billion.

Both the trend and evolution show one thing - Amazon is on its way to become the biggest retailer in the world, a type of retailer the world has never seen. This might probably be a good time to reconsider your stock choices.

There’s no Place Like 127.0.0.1

When it comes to computers, 127.0.0.1 is the “localhost”. In computer networking the local host is “this computer”. Or home. We have a changing landscape in computer usage (shift to mobile) and we notice the same trend in human behavior. People change places more than before. Decreased cost in transportation and relocation means we can move from one place to another without much hassle.

Our home when we're away

Our home when we’re away

But there is no place like home, right? Well – what is home? Apparently our digital hubs have become our homes when we are on the move. Social networks are now our go-to place when we want to connect with our friends, even when we are away. Photo sharing apps like Instagram or Flickr store our memories and we can access them on the fly whenever we are away.

Even our local shop gets replaced by the increasingly present favorite online shop brand. There is a pattern that shows mobile buyers (those that change residential areas) are more prone to purchasing online and staying loyal to their favorite online store brand:

“For example, customers at Diapers.com who change locations become more or less likely to shop online, depending on the increase or decrease in their offline shopping costs in their new neighborhoods. Specifically, shoppers who have some experience shopping online and then move to a new location with homes with more storage capacity and relatively few stores will increase their online shopping activity.” Source: MIT Sloan Review

We, human beings, do not enjoy change all that much. In a fast moving world – we need stability. We need a fixed point. And after all it is all relative. If we’re constantly on the move – the only fixed point is that which moves with us or is everywhere around. Brick and mortar stores are fixed and therefore always moving for the traveler. Our fixed point is in the cloud. Our fixed point is the mobile.

Top Three Most Influential Persons in Online Retail

Online retail is a fast moving sector and there are lots of outstanding business leaders out there. Among the best of the best, some really stand out. The way they’ve founded their companies and directed their investments have placed them in the higher echelon of influence in online retail.

Let’s have a look at them and their stories:

No.3 Jack Ma

Net Worth: $9.6 billion
Company: AliBaba Group

Jack Ma - founder of Alibaba.com

Jack Ma – founder of Alibaba.com

Jack Ma, a former English teacher in China, got his first taste of internet entrepreneurship in 1995, when he founded China Pages, a directory of Chinese businesses. He previously worked as a lecturer in English and International trade in the Hangzhou Dianzi University.

After founding and running China pages he briefly worked for the Chinese Ministry of Foreign Trade and Economic Cooperation, between 1998 and 1999. In 1999 he founded Alibaba, a B2B marketplace connecting Chinese manufacturers to the world.

Alibaba’s spectacular growth pushed Ma and his associates to add new companies to the group. AliBaba Group now owns Alibaba.com, Taobao Marketplace, Tmall, eTao, Alibaba Cloud Computing, Juhuasuan, 1688.com, AliExpress.com and Alipay.

The company is now only outmatched by Walmart in terms of revenue. Recent developments and an increase in online retail spending have made the Chinese market the largest online retail market in the world. The big winner: Alibaba Group. Through its subsidiaries, the AliBaba Group now handles $248 billion in transactions, 84% of the total online retail market in China.

But Jack Ma is not to be stopped. He is preparing one of the largest IPO’s in American history, after failing to reach an agreement with the Hong Kong exchange. His ambition is fueled by a sense of mission to run his company as an army conquering the world:

“I had always wished that I was born in a period of war. I could have been a general, I thought about what I could have achieved in war.” – Jack Ma, AliBaba Group

All signs point to Jack Ma building the hyper company he dreamed of. He is an effective leader, running the monopoly on online retail, in the world’s future largest economy.

No.2 Larry Ellison

Net Worth: $51.7 billion
Company: Oracle, NetSuite, Salesforce, etc.

Larry Ellison

Larry Ellison

You wouldn’t think of the fifth wealthiest man in the world as one of the most influential persons in online retail. But he is. Through it’s flagship company and different personal investments, he is in control when it comes to online retail infrastructure and software.

For once, Larry Ellison is Oracle and Oracle means, first and foremost, databases. Ellison started his career working for the Ampex Corporation in 1970, on a relational database for the CIA. His designs were based on a paper written by Edgar F. Codd, called “A Relational Model of Data for Large Shared Data Banks”. The same design was implemented by IBM, but the company didn’t have time to solidify its dominance on the market. Challengers soon began to emerge.

Database deployement - Oracle leads the pack

Database deployment – Oracle leads the pack

One of those challengers was Larry Ellison’s Software Development Laboratories (SDL), founded with two partners and later renamed Oracle, based on the database Ellison developed when he was working for the CIA database.

After a long struggle against the largest competitor, IBM (which would push its DB2 and SQL/DS products) and other challengers (Informix, Sybase, Microsoft) – Oracle eventually took lead in the database war. In 2010 the European Union approved Oracle’s acquisition of Sun Microsystems. One of the most important assets Oracle got was the wide-spread, popular MySQL database.

So for one - Oracle now dominates the database market, the underlying infrastructure of connected systems and retailers worldwide.

And that’s just the begging – Oracle is currently on a purchase streak, aiming to build a strong multichannel retail presence. It is second only to Adobe Systems, with its customers registering over $200 billion in revenue in 2013.

It’s presence is split between Social marketing, ecommerce platform software, site search, customer service, personalized content and transportation management.

To give you a glimpse on how serious Oracle is about its investments in multichannel retail – they paid $1.5 billion in 2011 for Right Now Technologies, a company providing customer service software and services to the likes of Overstock.com.

Larry Ellison is also one of the major shareholders in Netsuite and Salesforce, two companies shaping the global B2B and B2C commerce future.

1. Jeff Bezos

Net Worth: $30.1 billion
Company: Amazon

Jeff Bezos

Jeff Bezos

Jeff Bezos is the one man we all picture when we think about ecommerce. He is a Princeton graduate with a degree in Computer Science. After graduating from college he pursued a career in investment banking in Wall Street, which he left to found Amazon, after noticing the fast growth in Internet usage.

He set up his company in the proverbial garage with few employees and in 1995 launched the beta version for 300 friends. Days after the launch the book selling eshop managed to ship books across US and 45 foreign countries. Yearly sales in the first year reached $510 000, much more than Bezos envisioned. The company grew and grew, survived the dot com and went on to register $74.5 billion in 2013 revenue.

By expanding the initial book selling operations into CD’s, videos and later clothing, toys, electronics, home & garden, jewelry and even art, Amazon essentially became the “everything store”. Amazon is now the biggest online retailer and a disrupting force in retail.

Everything from the ecommerce revolution to online payments, shipping and marketing has been heavily influenced by Amazon and guided by Jeff Bezos, both a star-gazing visionary and a focused micromanager.

kindle dx

The Kindle DX

In 2007 Amazon launched the Kindle which soon became a revolutionary device that changed the way we think of books and digital content. In 2013 the company hinted at the idea of using aerial drones to enable faster shipping and in 2014 it announced that it’s now testing its 7 and 8 generation aerial vehicles.

But beyond his influence in online retail and retail at large, Bezos is a special human being. A libertarian, he invested in projects most of us would consider unreal and unattainable. He was one of the first investors in Google, financed a clock that would run 10 000 years and a company that’s working on lowering space flight costs, to allow humanity to explore the great unknown.

This short list, headed by Jeff Bezos, is prone to change. The world around can change as well, partly due to these people’s and efforts. To get a deeper glimpse on how they did it and what motivates them, have a look at Jeff Bezos’ Princeton graduation address, “What matters more than your talents”:

Tweet to Buy From Amazon. #AmazonCart – a Partnership Between Amazon and Twitter.

amazon-twitter-cartTwitter keeps getting closer to social commerce. The social network just announced a partnership with Amazon where users can add products to their Amazon cart with a tweet.

The process is fairly simple. Amazon customers who are also Twitter users can add products by following three simple steps:

  1. Connect their Amazon and Twitter account
  2. Watch for tweets containing an Amazon link
  3. Reply to above mentioned tweets and adding “#AmazonCart”

After users follow through these steps products are automatically added to their Amazon Cart and they can buy later. If Twitter users didn’t connect the accounts or the service is not yet available in their area, they get an automated message from @MyAmazon guiding them to a specific Amazon web page describing the service:

amazon-twitter-cart-not-working

Most avid users – the Amazon affiliates

tweets-amazoncartAfter quickly connecting my accounts I was expecting to see a public stream of Amazon shoppers announcing their purchases.

Not even close. Right now most of those tweeting the hashtag are Amazon Affiliates asking their followers to reply to tweets containing  their affiliate links.

Apparently this is somewhat of a feature, as Julie Law, Amazon spokeswoman states: We have a significant number of customers who use Twitter, and a significant number of affiliates who use Twitter, too.

Twitter is serious about eCommerce

The #AmazonCart partnership is probably just a first step for the two companies. Amazon is interested in social commerce and as Facebook is probably harder to steer, Twitter seems the right choice.

Twitter on the other hand, showed interest in developing ecommerce abilities by hiring ex Ticketmaster CEO Nathan Hubbard. Moreover, this year information was leaked about a potential partnership with Fancy.com and mobile payments company Stripe, involving a three way solution allowing Twitter to leverage potential customers.

Target CEO Resigns Over Security Breach. Gets Paid Millions to Leave.

Last year american retailer Target was the victim of a security breach. The hack compromised personal data for over 110 million customers. What is now known to be one of the biggest security breach in corporate history has not left the company unscathed.

The Backstory

target-storesOn December 13th, 2013, Target executives meet with the US Justice Department. The reason: discussing a hack that exposed credit and debit card data for over 40 million customers. On December 18th security analyst  Brian Krebs breaks the news. The Secret Service is involved and Target gets investigated.

On Dec. 27, 2013 word’s out that PIN numbers for the stolen cards were accessed. Target acknowledges PIN’s were accessed but says they were not decrypted. Meanwhile Russian forums get flooded with millions of credit cards.

And then it gets worse: Target declares an additional 70 million customers were affected by the security breach. The company reveals poor Holiday sales. Lays off 475 employees and reports costs associated with the data loss topping $200 million.

Fortunately, employees get to wear jeans and polo shirts.

The breach left Target in a disastrous situation as profits dropped 46% in the last quarter (-$440 million), compared to the year before.

First the CIO, now the CEO

After the blast, some heads were sure to fall. First was CIO Beth Jacob, the obvious … target. To show it means business, the company brought Bob DeRodes on board, as new CIO and executive VP. DeRodes, 63, started on May 5th and now oversees the adoption of secure technology, with the help of $100 million worth of tech investments.

The new CIO is a tech security veteran, his previous endeavors including being a senior IT advisor for some organizations you might have heard of: the US Department of Homeland Security, US Department of Justice and the US Secretary of Defense.

gregg-steinhafel

Gregg Steinhafel

But that was not enough. Chairman, President and CEO Gregg Steinhafel announced his resignation. The breach left both Steinhafel and the company in a vulnerable position. 

The company announced the parts have reached a settlement that will probably allow the ex-CEO to walk out with over $11.7 million salary and incentive pay. Not bad for a CEO leaving a company that lost $941 million in its Canadian 2013 expansion, is under heavy fire from Amazon and Walmart and was just exposed to the biggest card robbery in history.

But than again, the man did work for Target for the past 35 years.

Fastest Growing Online Retailers in the United States – an insight

In 1972 an young man, then 22, would join his father in their family owned small tailor shop. After graduating from Waseda University he tried his hand at selling kitchenware in a Jusco supermarket but that didn’t really worked out. So after one year in the kitchenware sales business he was back to the family shop.

It took him 13 years of hard work and one day, in 1985, he opened the first unisex clothing store in Hiroshima City. The brand our young man built would soon become a global multi-billion company and in 2014 – the fastest growing online retailer in the US.

The brand you will see towering at number one in the fastest growing online retailers in the United States is proof that the Internet is indeed a leveled play field. As many economists, investors and analysts showed – the Internet is clearing the way for a border-less economy.

InternetRetailer’s top retailers list clearly shows the fastest growing retailers are a special breed of companies. From foreign investors to Google, from mom-and-pop stores turned fast growing retailers – these companies show that we’re living extraordinary times for a ever-evolving breed of new retailers. Their growth and many others’ amount to a 16.9% growth in ecommerce sales in the US. That’s one big number but it gets even bigger when you have a look at the growth rate for the five fastest growing online retailers.

 

No.5: Google Play – Growth rate – 162%

Google PlayGoogle’s entertainment ecommerce business has been growing rapidly with the extended adoption of Android based mobile devices. In terms of android app sales is second only to the largest online retailer in the world, Amazon, but it seems the gap is closing fast.

The company is now one of the biggest digital goods retailer online, selling anything from music to movies, apps and games. It is also heavily pushing Android – powered mobile devices such as those manufactured by Samsung or HTC and the much praised Chromebooks.

Google Play closes in on the App Store, according to Distimo

Google Play closes in on the App Store, according to Distimo

Google Play, originally named Android Market, was launched on 22 October 2008, as an Android alternative to Apple’s App Store.

In July 2013 Google Play listed more than 1 million apps available and over 50 billion downloads since launch. The number is growing fast and it has already surpassed the App Store in terms of submitted applications and downloads. With gamers worldwide switching from PC and gaming consoles to hand-held devices, the app sales market becomes more and more attractive, thus the increased growth rate.

Google Play Sales Figures

Here are some key take-away figures to get a glimpse into Google Play’s sales:

  • estimated $1.3 billion in revenue in 2013
  • 75% of all downloaded mobile apps run Android
  • top 200 grossing apps are cashing in on $12 million /day

 

 

No.4: Alex and Ani – Growth rate – 250%

alexandani

Alex and Ani was founded in 2004 by Carmen Rafaelian. The company designs, manufactures and sells its own line of bangles, earrings, necklaces and rings.

A factory originally built by Rafaelian’s father in 1966 was home for the first manufacturing operations. Now Alex and Ani has 40 brick and mortar stores and an online store that reported a 250% increase in YoY sales.

The one thing that sets the company apart from its competition is its focus on a virtuous company ethos. Alex and Ani, originally named after its founder’s two daughters, takes pride in designing and manufacturing long-lasting, beautifully designed, hand-made jewelry. The products are somehow filled with positive energy, using carefully designed symbols thatcarry their own energy and are accompanied by thoughtfully crafted and meticulously researched meaning. Buyers are of course empowered by the jewels, which “reflect the unique qualities of the individual“. All materials and manufacturing is “Made in America With Love”. And positive energy.

I don’t know about the esoteric power of its products but the company is definately ahead of its game when it comes to customer experience. Besides adopting a multichannel approach to product sales, Alex and Ani adopted a mobile checkout process in store. The company partnered with Mobiquity to create a mPOS (mobile Point of Sale) solution that lets store associates handle payments and answer customer questions independent of fixed POS. The hardware solution is part iPod and part mobile payments processor. Each Alex and Ani store now comes equipped with up to 25 such devices. As a result store associates (or Bangles Bartenders) can bond with customers and quickly answer their needs.

Alex and Ani Sales Figures

  • Alex and Ani opened their first retail store in 2009. Sales that year were $2.9 million
  • In 2012 sales had reached $79.8 million, showing a staggering 3 years growth of 3569%
  • In 2013 sales reached $230 million

 

 

No.3: NoMoreRack.com – Growth rate – 250%

nomorerack

 

NoMoreRack.com was founded in 2010 by Deepak Agarval, now CEO. The company sells women, men, home, electronics, kids, and lifestyle products, through a combination of daily deals and flash sales.

Although the company has had a successful increase in sales, possibly due to it small pricing and short-term sales policy, the customer service still needs work. The Better Business Bureau lists no less than 2590 closed complaints in the last 3 years, most (1335) in the last 12 months. Customers complained about product and service, as well as delivery issues. The company seems to be improving its customer service and is willing to resolve ongoing complaints.

What might be harder to solve, however, is the fact that both Overstock and Nordstrom, retail heavyweights, are suing Nomorerack for copyright infringement. The former claims Nomorerack is bidding on the “Overstock” keyword on Google Adwords and the later claims NoMoreRack infringes on it “The Rack” store brand name.

Be that as it may, the old saying “sales cure everything” may hold true, as NoMoreRack’s 250% increase in sales shows. But just in case – the company has a pool of cash to help it get through rough times, thanks to series A investment by asian G-Market ($12 million, 2012) and series B investment lead by Oak Investments ($40 million, 2013).

NoMoreRack Sales Figures

  • $325 million in 2013 sales
  • $78 million sold Nov 1, 2013 through Dec 2, 2013 (Cyber monday). Yes, that is one month.

 

 

No. 2: TheRealReal.com – Growth Rate – 297%

therealreal

 

Although it may not be number one on the list, The RealReal is probably the most interesting business model on it. It is a mix between luxury sales, flash sales and consignment sales. The company was founded in 2011 by Julie Wainwright and is now the top online resale outlet for luxury goods. Flash sales cover a wide array of luxury products, ranging from clothing to jewelry to art and beyond.

One of the products you can get on The RealReal

One of the products you can get on The RealReal

Previously to being the founder of The RealReal, Julie Wainwright, 57, served as a CEO to high profile consumer dot com ventures such as Pets.com and Reel.com, as well as a board member for the San Francisco Art Institute, Baker and Taylor and more. She was named among the top 50 Most Influential Business women in the Bay Area.

As impressive as that sounds, it may be possible The RealReal is her greatest achievement yet. Companies such as Reel.com or Pets.com folded at times she held top management positions, most likely due to the dot com crash. She outlined the challenges and mistakes that lead to these failures in her book ReBoot: My Five Life-Changing Mistakes and How I Have Moved On.

The RealReal Business Model

Consignors sell their goods through TheRealReal and get up to 70% the end price. The company curates the product listing and authenticates all products with the help of professional gemologists, art experts, horology consultants and authentication experts.

Because all sales happen during a 72 hrs time-span customers can upgrade to a 24 hrs advance to sales, by purchasing a “First Look” subscription for 5$/month. Right now only 0.6% of all members have upgraded to the First Look subscription, but founder Julie Wainwright is optimistic about the future.

The company considers itself as holding the “top products from Ebay and the bottom of Sotheby’s and Christie’s”. Unlike Ebay, consignors earn 60% of the sale price and can work their way up to 70%, with repeated sales. The RealReal thus built a gamification system that encourages sellers to repeatedly use the platform.

The RealReal Sales and Membership Figures

  • Over 750 000 members
  • Over 1.5 million visits per month
  • 2012 Sales: $15.1 million
  • 2013 YOY growth in sales: 297%

 

 

No. 1: Uniqlo – Growth Rate – 341 %

uniqlo

 

Remember the young man we were talking at the beginning of this post? The one that opened a store in Hiroshima City in 1985 and went on to become the leader of one of the largest retail chains in the world? His name is Tadashi Yanai, the wealthiest man in Japan ($17.6 billion in 2014) and the founder of Uniqlo, now the fastest growing online retailer in the United States.

Uniqlo may not have the biggest number of stores but it does a great job with online retail.

Uniqlo may not have the biggest number of stores but it does a great job with online retail.

It stands as a sign of the times that a brand founded in Hiroshima went on to become the leader in a redefining area of retail, in the largest economy in the world, almost 30 years since its birth date.

In may 1985, Unique Clothing Warehouse was opened as a unisex casual wear store in Fukuro Machi, Hiroshima. It later on changed its name to Uniqlo, a contraction of “unique clothing” and became increasingly popular as it opened store after store in an effort to extend its retail reach.

Uniqlo, now a wholly owned subsidiary of Fast Retailing, is a contender to global casual wear behemoths GAP, H&M, Limited Brands (best known for Victoria’s Secret brand) and Zara (a brand owned by the Inditex Group). Its first urban store opened in the fashionable Harajuku district in november 1998. It was quickly followed by approximately 780 stores in Japan and later throughout the world.

The company entered the chinese market in 2002 and the US market in 2005. Since its debut in America, Uniqlo continuously opened stores and plans to open up to 200 locations by 2020, with a sales target of $10 billion. Right now the total store count is 18, way behind its presence in Japan (790 stores) and China (260 stores). Still not bad considering the fact that many american retailers are actually closing stores.

Uniqlo plans to become the biggest company in its market, by growing at a 20% rate until 2020, when it expects to report $61.2 billion in revenue. The company’s track record so far shows that is possible.

Uniqlo US Online Sales Figures

  • YoY increase:341%
  • 2013 sales: $22 million

 

 

Top 7 Live Chat Software Vendors for Ecommerce

While customer support is one of the most important aspects of running your ecommerce business, it is also one of the most expensive and hard to manage.

When you’re talking customer support, you probably picture people with headsets in a huge open space, taking phone calls and answering questions. Maybe you picture something a tad relaxed, somewhere along the lines of a Zappos call center. Either way call center involve human resources, technology to set up, management and others. If you think that gets expensive – you are right. Fortunately, there is a growing alternative to this.

Enter the Live Chat Software.

bold-chatIn a recent study by BoldChat customers worldwide responded to the question “Have You Ever Engaged in a Live Chat?”. Results showed that more than half the respondents did engage in live chat, with more 65% respondents in the US saying yes.

prefered-form-communicationAlthough email is still the leading form of communication throughout the world (see left), live chat is catching up really fast , especially in the United States, Canada and Mexico.

One of the most prominent companies to use live chat is UK based  Virgin  Atlantic Airways Ltd. The company reports a 23% conversion rate for customers using its live chat feature. That is approximately 3.5 times higher than the conversion rate for users not engaging in live chat.

Virgin also reports that live chat also tends to increase average orders value, with customers spending 15% when chatting with an operator. Not only is live chat useful when trying to increase sales but it can also boost productivity, with one live chat operator doing the work of 15 email operators.

Who are the top live chat vendors?

If you’ve ever happened to look for live chat support software, you’ve probably stumbled across dozens to hundreds of different solutions. Some of them free, some open source, some paid. To help you get through the noise, I’ve put together a list of 7 of the most reliable live chat software solutions, from the easiest to implement to full-blown enterprise software suites.

The list is based on the clients size and profile, data regarding cost of implementation and solution reliability. Let’s start with number 7:

7. Zopim

zopim

Zopim is probably the youngest company on this list and a very promising one, for that matter. Its live chat application is easy to setup, light and very customizable. It offers a wide array of options and reporting information and can be used to integrate fully with sales operator teams.

The company, based in Singapore, has recently been acquired by Zendesk, a leading customer service solutions provider.

Features

Among its many features, Zopim lists:

  • Visitor visualization
  • Real time visitor info
  • Email chat transcript
  • Multi-device support
  • Visitor webpath tracking
  • Customizable greetings
  • Developer ready API

Pricing

Pricing ranges from free (demo account, one chat agent only) to $20 / agent (unlimited chats, departments, widget customization etc.)

 

6. Website Alive

website-alive

Website Alive features live chat, mobile chat and click to call solutions to retailers. One additional service that stands out is the “Concierge” service that includes the live chat software but also dedicated operators by Website Alive, for retailers willing to outsource customer care.

The Live Chat app is feature packed and allows integration with the “click-to-call” option, allowing customers to ask for support on the phone. Retailers can customize their widget look and feel, aligning it with the store’s branding.

Features

  • Chat transcripts
  • Visitor tracking
  • Invitation Pop-ups
  • Chat collaboration
  • Communication records
  • Call Routing
  • Multiple chat lines
  • Call transfers

Pricing

Pricing starts with the basic pack of $29.95/month, with 2 operators included, and goes up to $97.95/mo for the full pack.

 

5. BoldChat

bold-chat-img

 

BoldChat, a product of Bold Software, features the usual live chat support systems as well as some other, more advanced tools. Among them - multiple customer support interactions, click-to-call services, co-browsing and SMS communication.

In 2012 the company was acquired by LogMeIn, a company focused on providing online support for computer, smartphone and tablet owners. Price tag: $16.5 million.

BoldChat invests heavily in research, some of its resources being available online. The company is focused on midsize to larger online retailers, making it one of the more reliable tools out there.

Features

Among others, Boldchat lists some features targeted at larger online retailers, such as:

  • Cross-domain implementations
  • Passive browsing sharing
  • SMS, Email and Twitter management
  • iPhone app
  • Mobile-aware windows
  • Post-chat survey
  • Salesforce integration

Pricing

Pricing starts at $599 / year / agent.

 

4. Moxie Software Live Chat

moxie

Moxie Software is a provider of integrated customer support systems. It’s enterprise products are integrated and used by companies such as Dell, 3M, Epson, Crocs and others. Its Live Chat system allows text dialogues, co-browsing, reactive chat and proactive chat.

The company extended its products to handle social media requests, mobile browsing, click to call features and others. One very important aspect of Moxie Software is its Knowledge Base support center and self-service applications.

Integrations

The live chat solution can be integrated with company CRM solutions such as Microsoft Dynamics, Salesforce.com or Nuance.

Pricing

Pricing varies by project

 

3. Right Now Technologies (Oracle RightNow)

oracle-right-nowIn 2011 Oracle acquired Right Now Technologies, for $1.5 Billion. At the time Right Now Technologies was handling over customer relationship management systems, as well as call center software, for over 2000 SMB’s. After being acquired, the company was integrated to Oracle and rebranded as Oracle Rightnow Cloud Service.

The division handles live chat, among others for some well known multichannel and online retailers, such as Overstock.com, BeachBody.com and others.

Features

Oracle Rightnow handles many critical aspects of customer service, among which larger companies can find:

  • Live Chat
  • Web Self Service
  • Mobile Live Chat
  • Email management
  • Contact Center integration and software

Pricing

Varies by project

 

2. LivePerson

livepersonLivePerson is one of the leading companies providing online customer care solutions. Its LiveEngage platform integrates live chat, social media, voice, content applications, mobile customer support, CRM software as well as advertising and marketing.

The company boasts more than 1.8 billion web visits observed each month. To handle this kind of traffic, the company also launched LP Insights, monitoring a complex set of customer analytics, such as behavior, sentiments and buying patterns.

Its live chat interactions allow contextual customization, so visitors can have meaningful interactions with operators.

The company handles communication needs for some of the largest online retailing brands, such as The Home Depot, IBM or Virgin.

Features

  • Conversion improvement
  • Cross-channel communication
  • Personalized experience
  • Agent productivity tracking
  • Automated customer offers

Pricing

Pricing ranges from $500 / mo for small and mid-size companies to $5000 – $15000 / mo for enterprise users.

 

1. Oracle Live Help on Demand

Oracle-logoOracle made heavy investments in the ecommerce area. Before Oracle acquired no. 3 on our list, it had already bought ATG (Art Technology Group) for $1 billion in 2010. Recent moves show Oracle Live Help on Demand moves toward integration with Oracle Rightnow. Until that happens, Oracle’s Live Help technology still powers some really big retail brands such as Costco, The Home Depot and Procter & Gamble.

Oracle Live Help features live chat, voice and email integration, providing tools for multichannel integration.

The Live Help solution tracks customers, analyzing data left behind, thus improving chat support by personalizing the experience.

As you can see, whether it is the Live Help solution or the Rightnow environment, Oracle is leading the way in online retail live chat and customer support systems. The others, however, are moving fast, are flexible and companies such as Liveperson are soon to challenge the big red.

 

 

 

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.