Beyond the Store: Drop-shops and Pop-up Stores

There is ongoing change in the retail landscape. Both offline and online retailers now migrate towards hybrid solutions. Just as brick and mortar retailers have shifted towards online retailing, so did online pure-plays started engaging customers offline.

Retailers now need to combine the in-store pick-up options (which most online pure plays don’t have), an offline presence for information and branding purposes, as well as a way of pushing best-sellers into the market. At the lowest cost possible.

Bellow you’ll find two of the most promising directions, especially for online-first retailers:

The Drop-Shop

Not to be confused with the term “drop shipping”, the drop shop is an offline facility that handles first and foremost package pick-up from customers. Such a need arises when customers do not want to subjected to shipping schedule but rather decide when and where to pick up ordered products. When dealing with such customer requests, offline-first retailers have the upper hand, as the existing store network provides support for customer pick-up options.

Slowly moving into the brick and mortar territory, online retailers discover innovative ways to handle customer offline interaction. One such example is the Amazon Locker. Its function is to allow customers to order  products online and then pick-up the package from a near-by Locker.

Amazon Locker

Amazon Locker

As seen above, most Amazon Lockers are not exactly located in the most glamorous locations (here pictured near the lady’s room) but it does the job.

Customers could select the closest Amazon Locker, had their orders delivered there and then receive an email announcing the order is now available. To pick up orders, clients can either enter the pickup code in the central-unit computer or scan the mailed barcode.

So far Amazon tried its luck with the likes of Staples (second largest online retailer in the US),  Radioshack and 7-Eleven. The promise to these companies was that Amazon has many customers and those that will want to pick up their packages from the Amazon Locker will probably buy something else from the store. The practice was not exactly successful as both Staples and Radioshack eventually dropped the project.

However, Amazon and the likes will probably not stop here, to increase sales they need to provide the customer with an way to experience product, as well as return and buy other products from their B&M operations. So far they didn’t need to, as others catered to the showrooming need. Soon enough, however, retailers able to price match will either become serious competitors and improve their online operations and then online retailers will have to battle on unknown land.

The drop shop will be a type of small to medium shop, probably affiliated with larger retail operations, providing customers for:

  • package pick-up
  • merchandise experience and testing
  • returns and customer service

The pop-up store

The concept behind the pop-up store is a temporary location that exists for a short term, to provide marketing exposure or sell limited inventory items. It is not something that online retailers brought to the market but there are a lot using it right now.

Fleur de Mal online retailer uses Pop-Up Shops to engage customers in real life.

Fleur de Mal online retailer uses Pop-Up Shops to engage customers in real life.

Online stores that don’t operate B&M operations found the pop-up store an useful way to attract attention. It’s also a great way to provide sales outlets to customers during high sales periods, such as the holidays.

New brands, focused on retail online increasingly find that using pop-up stores is a great way to attract new customers. These customer acquisition tactic allows potential buyers to experience the brand, as well as its products.

For online retailer Fleur de Mal, setting up pop-up shops has been a great way to appeal to their fashion savvy target customers. Company representatives use pop-up shops to showcase their organic fiber fashion items to potential consumers throughout the US.

BAUBLEBAR, a fresh and innovative ecommerce startup focused on jewelry has seen brand recognition increase as soon as they started opening pop-up shops. Katherin Hill, director of offline at BAUBLEBAR outlined the main incentive to open a pop-up shop: We see about half of the people who walk in to our pop-up shops have never heard of our brand before” [Source].

There are, however, several obstacles that need to be overcome, such as offline channel connectivity to the central server, as well as store design. The biggest challenge is to find the right spot to place the pop-up shops. As most online pure plays have a hard time navigating and understanding the complex offline retail rent environment, a new startup decided to step in and help small and medium retailers find the right store spot.

Storefront is a company connecting landlords to retailers. It works as a marketplace between the two types of users. As pop-up shop demand has been on the rise, the company launched a Pop-Up Shop blog and an eBook detailing the inner workings of setting up a pop-up shop.

Both the drop shop and the pop-up shop are hybrid solutions that point to the fact that online retailers feel the need to set foot in offline retail. The pressure to reach omnichannel retailing efficiency is, thus, equally felt by offline, as well as online pure plays.

This post is an excerpt from “Understanding Omnichannel Retail – A Detailed Report”.

 

 

 

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.

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.

 

Is Mass Customization the Future of Ecommerce?

Henry Ford said “People can have the Model T in any color – as long as it’s black”, in the early 20th century. That’s when Ford’s innovation, the assembly line, vastly improved productivity thus reducing production costs. Lower costs meant companies could manufacture cheaper products and still be profitable.

The assembly line made possible the mass production of goods. Things that were previously custom-made and unique soon became available to the now emerging middle class. Clothing, food, even cars and houses became accessible to the mass market.

More than 100 years after Ford launched the "one color" Model T, Ford buyers can customize their cars online

More than 100 years after Ford launched the “one color” Model T, Ford buyers can customize their cars online

Industries were built around product manufacturing. The customer was no longer the center of the universe. Companies focused on the product. Products were manufactured in large quantities, distributed and sold, with a lot of help from advertising companies. Even though advertising was around, it wasn’t the type of organized industry we now know until the television set became a part of consumers’ daily lives. By borrowing some concepts used in WWII propaganda, experimenting a lot and innovating, advertising quickly evolved in a mature tool to push mass – manufactured products to the market, globally.

Mass manufacturing becomes the standard

After 1970 two trends started to emerge. First one – the mass-manufactured product becomes the norm. Faster assembly lines, improved productivity with better management and companies going global – it all lead to bigger manufacturing facilities and more money poured into advertising. In the western world people were spending earned and borrowed money faster than ever before to buy mass-market products.

The second trend was improving production with help from computers and networks. It all started small and kept growing. Innovation in the IT industry allowed companies to improve manufacturing productivity further. Soon cars stopped being built by people and robots took over. They were faster, better, less prone to error and cheaper in the long run. They also learned new things a lot better. With automated assembly lines, the mass produced goods could be reprogrammed to build new products fast.

The product development cycle was shortened. The fact that now BMW or Mercedes are able to launch a new model every month is possible because of advancements in management and IT. These companies can now target customer groups. Ford’s Model T was a “One Size Fits All” product but now everything’s changed. The auto companies can split their customers and they can build products for increasingly smaller niches.

Mass customization becomes a reality

The internet changed everything. When Michael Dell decided he would create a special PC for anyone willing to pay for it, he probably had no idea what his actions meant. Now Dell is a global company and one of the largest online retailers. When the company decided it was going to offer mass market customization features, it seemed like a really risky move. At that time, computer manufacturers were already engaged in a price war to market accessible computers.  It didn’t seem like a good idea to turn a mass produced, mass marketed product in a customizable one.

Dell offered their customers what they wanted: the ability to choose between different options in terms of design, software and hardware. The order, assembly and shipment processes were streamlined using software designed to minimize human input and error. Today’s devices (be it desktop computers, laptops, tablets or smartphones) are available in many formats. Most of them are a hybrid between mass produced and customized products.

The future of mass customization is already here and the company that helped most with making it a reality is the largest online retailer in the world: Amazon.

Amazon lead the way in mass customization with Print-On-Demand

amazon logoFirst off, Amazon made possible a type of personalized experience for customers by providing personal recommendations and notifications based on purchase history. Its second biggest innovation was print on demand. With Amazon, books were no longer published en-masse for long-tail items. Rather, for a small amount of extra cost, they were made available as items printed on demand.

This innovation spawned a new breed of self-published authors, leveling the field for publishing. In turn, readers were now able to read books otherwise unavailable and writers could skip pitching to publishing houses. The effect was so dramatic that some large book retailers had to close their brick and mortar stores.

Top ecommerce companies selling mass customized merchandise

From shoes to t-shirts to art-prints it seems like anything is game when it comes to online-powered mass-customization. Many companies jumped the customization wagon, but few stand out. Have a look below at these companies:

zazzle

 

Zazzle.com

One of the most popular platforms in the world for Built-To-Order, customized products is Zazzle. Its mission: “To Enable Every Custom, On-Demand Product in the World On Our Platform.” It is a mix between self-curated product designs that can be customized by customers, and a wide variety of products submitted by designers and entrepreneurs in the marketplace.

The company partnered with large brands to provide customizable products for companies such as Disney, Hallmark, DC Comics or even Google. It is growing fast, outpacing its competitors and bringing mass customization for the wide market.

Zazzle’s success is based on two main factors. The first is its ability to customize products that are manufactured separately and customized at the end, with input from the end consumer. This allows for a minimum slowdown in manufacturing capabilities.

The second factor helping Zazzle tackle its competitors is a patented color print technology that allows it to manufacture multicolored items, without signifiant increase in costs and manufacturing time.

It does also help that Klein Perkins Caufield & Byers, a well known Silicon Valley VC firm, backed Zazzle with $48 million. The VC’s have also backed up a couple of companies you might have heard of, such as Google, Amazon, AOL or Electronic Arts.

chikoshoes

Chiko Shoes

Ladies – ever felt like you could be the world’s best shoe designer? Felt like you’ve hadn’t had the chance to show what you’ve capable of? It turns out you are not alone. Founders Rumbert Kolkman and Judy Chin believed they could make shoe design a mass-customizable market. In 1999 they’ve built a B2B company that would allow shoe retailers and designers to access a rich supply chain with ease.

In 2013 they’ve opened this option to the public, unleashing the power of mass-customization to end buyers world wide. Prices are ranging from $230 to $1200 and Chiko Shoes allows customers to chose between 1300 material swatches.

The shop goes against luxury heavyweights dealing with customization, such as Louis Vuitton Mon Monogram or Prada’s Lettering Project.

shapeways

Shapeways

We’ve previously listed 3D printing as one of the technologies that are disrupting online retail. Among many other companies providing 3D printing technology, Shapeways stands out as a potential market leader for 3D printed custom items.

The company was founded in 2007 in the Netherlands. It moved to NY, where it received a $5million founding from VC’s including Andressen Horowitz. It now runs a fully operational marketplace where designers can sell their 3D designs and customers can create their own.

As of June 2012 is sold over 1 million user-created objects. Production was provided by its Queens, NY 3D Printing factory that uses  50 industrial printers to manufacture millions of user designed custom projects.

threadless

Threadless

Threadless started as a marketplace for t-shirt designers and quickly evolved into providing other customized merchandise. Users can purchase clothing items (such as t-shirts, hoodies or tank tops), art prints or phone cases.

Although Threadless does not allow mass customization per se it does allow users to submit designs. These designs can be featured and sold to consumers afterwards. What makes Threadless different is the fact that not all designs are accepted and marketed yet those who do are chosen by the community.

ethreads

Ethreads

Ethreads allows customers to create their very own bags, starting with a blank model and adding options using the online design tool. The shop also offers options to see what others have designed and the ability to buy directly on Amazon.

fab.com

Fab.com

Fab started as a flash sales online store. Its approach proved very lucrative for a while. The company decided to take another path by providing customized design options for furniture and home deco buyers. Although the change affected only its european operations, it seems the company is heavily interested in developing its customization options. It completely stopped marketing its products and flash sales options in the EU and is fully engaged in providing customized furniture.

A preview of furniture designed on Fab.com

A preview of furniture designed on Fab.com

The furniture is made-to-measure according to users’ needs. It allows customers to design their own products in 5 main categories: shelving systems, tables, sofas, beds and wall shelves. A complex yet easy to use configuration system allows potential customers-turned-designers to create the perfect match for the home. Inputs allow customization of size, materials, colors, finishing and others. A 3D visualization engine allows customers to view their newly created product before ordering.

This new pivot in the company was made possible after Fab purchased Massivkonzept, a company founders declared was already profitable and growing. It seems Germany is a great place to look for companies focused on customized furniture design. Woonio, a german ecommerce startup, offers customized furniture like tables, beds, lounge stairs.

The future of retail is mass customization

Examples above show any industry can allow mass customization and is prone to change. Individuals need to feel empowered when purchasing and technology has made this possible. Whether is next year or 10 years from now, mass customization will become massively popular.

 

 

The Newspaper eShops – 4 Types of Online Stores for Online Publishers

For a very long time publishers have been struggling to face a new, harsh reality: their business models becoming obsolete. As traditional customers were switching to the internet, publishers found themselves in a very tough spot. Their product, the information – became a commodity. Anyone with an internet connection and a blog became a potential competitor. News and content became freeware. It wasn’t quality content but people were reading it. For free.

Publishers lost ad and subscription revenue

Soon advertising money started to flow another way. More and more ad revenue got directed to internet companies by media buyers and marketing VP’s. Subscriptions kept dropping. People were now subscribing to these new thingies – RSS feeds and email newsletters and a bunch of other stuff. But they were all free.

Some publishers moved with the trend. Although a little late to the party, they moved online. They’ve opened web outlets and although it was a harsh decision – most had to give away content. They’ve tried to charge readers for reading the content they would otherwise find free. It was a failure.

Then came the freemium model and some had a bit of success with it. These were mostly financial-related publishers that addressed a information-hungry public ready to pay for quality content. The Wall Street Journal, Financial Times, Bloomberg built sustainable not-for-free online business. Others had to find new ways to get paid.

Classifieds and job boards helped online publishers diversify revenue streams

The classified ad model and the job board came first. The solution was right there for anyone willing to see it. The classifieds were a model that worked great online, combining the need for C2C advertising and micro-payments. Jobs – everyone looks for one at some point. So why not charge people to post their openings. And guess who could target those willing to pay for these models. That’s right. The publishers.

Large newspapers and magazines alike were popular. By going online their readership increased. Using classifieds software they used the otherwise unprofitable traffic to increase revenue streams. It worked great. In 2013 UK publishers registered almost 30% increase in revenue with recruitment and classifieds.

A new revenue model for publishers – the online store

But there was still room. The publishing industry noticed that a lot of those ads shown to their readers were ran by online retailers. With online retail you didn’t have to have the whole retail logistics to be able to sell stuff. You needed media and a partner to provide the right services.

As publishers saw their revenue switching hands, they too got ready to switch to new models. Below you’ll find a list of 4 models that now help publishers to sell merchandise to their customers. Some more than others.

1. The brand-endorsed, curated store

atlantic

The Atlantic decided to try selling merchandise online but was unwilling to build a whole logistics chain to handle sales, customer support and fulfillment. They did partner with Zazzle, a platform allowing on demand ecommerce fulfillment. The Atlantic forwards the traffic and endorses the store. Zazzle provides merchandise sourcing and fulfilment.

Among the products available on the store you’ll find clothing items, cards and postage, office products and even electronics.

2. The “Post a Logo on it and Sell it” store

cnn

CNN decided to go “big” with this whole ecommerce thing everyone’s talking about. Although it’s clear they’ve put a lot of effort in manufacturing a lot of stuff with the CNN logo on it – it really doesn’t feel right. Maybe it’s the 90’s web design or the CNN Store 9 to 6 open hours for the *online* store. These things really don’t cut it.

While it might not seem like a lot right now I bet the store was the bomb when people used to access it via dial-up.

new-york-post

While the New York Post seems to try harder than CNN, it’s still not proper. Although I am sure people just love to walk around in a $24 “New York Post” T-shirt , I doubt this is the right formula.

The merchandise listing is targeted at really die-hard fans of the New York Post… which I figure is not much of a market.

3. The Online Store Built for the Audience

cracked

Cracked.com is one of the most popular humor websites in the world and provider of fun to american readers for over 50 years. Their store is built around the audience. It features witty copy t-shirts that appeal to readers.

The store is clearly a very important revenue driver (at least is expected to become) for cracked.com as the publisher promotes it heavily.

newyorker

The New Yorker knows what readers love about it. It is The New Yorker’s style, elegance and wittiness that make it so successful. The store features products that people would love, just like they love the brand: elegant diaries, printed comics, beautiful covers and … well … umbrellas (?!).

vanity

Just like The New Yorker, Vanity Fair is a part of Conde Nast media holding. Its store is packed with beautiful premium photographic prints, illustrations and covers, items fans would love to own.

4. The Multichannel All – Rounder

national

 

The National Geographic is in a league of its own. Not only has the brand built a strong online store but it also features its own collections, it sells merchandise that appeal to children as well as adults. Its gifts are wonderfully presented and really in tune with the brand identity.

Moreover NG  runs a network of retail brick and mortar stores in the UK and US. As a multichannel retailer The National Geographic shows it can build a great retail experience, as well as provide the world with astonishing information on wildlife.

And that’s not all. Customer purchases enable The National Geographic to walk on a noble path. Its mission – to inspire people to care about our planet. It does that by helping cultural preservation, exploration and research and others you can find out about here.

Talk about a great selling proposition – buy stuff and save the planet. The National Geographic shows you can be a great information outlet AND build a great business model. It also shows the online store is a viable option for publishers trying to improve their revenue streams. If they try a little harder.