Top 8 Online Beauty Shops and the Strategies They Use

The Beauty and Cosmetics category is one of the fastest moving digital commerce areas. It is a highly competitive and innovative market with large brands quickly adopting digital models and challengers innovating their way to the top.

The emergence of the ecommerce sales channel for beauty brands has seen a long wait. The time has come for beauty retailers to align with the customer’s demand and specific requests. For example, a recent AT Kearney study showed 28 percent of online shoppers use the digital media to get informed on products. They carry this information in stores where they are sometimes more knowledgeable than the store assistants, which may pose a real challenge for beauty brands.

The AT Kearney study shows that only 16% of all online shoppers are online enthusiasts. The rest either use the digital media for information or for shopping for products they are already familiar with:

Beauty shoppers split

Online shoppers are more inclined to shop for particular products, such as skin, personal and hair care. Products such as beauty tools and nail care are less likely to be purchased online, unless is a very specific product, one the customer is already familiar with:

In this post we’ll get a glimpse of the eight most important type of beauty brands that engage their users through digital commerce (also). We’ll have a look at a selection of global champions with different backgrounds and different models. From digital pure-plays to established brick and mortar brands, let’s have a look at some of the most interesting approaches to beauty and cosmetics digital retailing:

1. Amazon Beauty

As expected, Amazon leads the way when it comes to online beauty retailing also. Customers are delighted to almost 2 million products, including luxury brands.

Its Beauty category is the go-to place for most of online enthusiastic shoppers, where Amazon is available. And with Amazon’s shipment policies, that’s basically everywhere.

Amazon’s secret weapon lies in its free-shipping policy (for orders above 25$), a great motivator for online shoppers and a better threshold than challengers Sephora and Beauty.com.

Another great asset Amazon will use to gather shoppers around its beauty retailing section is the fact that more customers use Amazon (30%) than Google when doing online product research.

2. Sephora.com

Sephora is generally seen as the actual leader in the digital beauty commerce. Though it lacks Amazon’s ecommerce strength, the company is part of the largest luxury high quality goods (ahem…ahem) group, LVMH, packing a lot of beauty retailing know-how.

The company has developed a great omnichannel model that focuses on mobile as a bridge between online and offline.

One of the best things Sephora.com has implemented in its web store is the content marketing and digital assistance features. I’ve previously covered the subject and praised Sephora’s efforts to offer quality content, as praised are due.

The curated content customers find is a great choice to build loyalty. So is the Community where customers can browse among the knowledge base or post questions and interact with professionals.

As mentioned, one of the greatest assets Sephora has is its focus on digital rich content. Users are treated to:

  1. Sephora TV, the go-to area for video advice, how-to’s and trends
  2. Sephora Glossy – a fashion, beauty and style blog that offers great advice from beauty professionals in a great, visual format.
  3. The Beauty Board – an user generated gallery from customers that upload pictures to showcase how and which products they use.

Some other touches make Sephora a great choice for beauty products customers, not the least of which are the three free samples with each order (a great way to drive future orders) and the mobile apps that make us of barcode scanning to offer price info and customer reviews.

3. Beauty.com

Beauty.com is an online retailer so it has no apparent need or intention to leverage offline or omnichannel sales. It has developed specific filters and features to cater to customers that either know what they want and want the best price or they can quickly decide.

The auto-reorder option seems to be a great first step to a subscription program.

Customers can set an auto-reorder flag for certain products, which can be shipped each 30, 60 or 90 days. Before the order is shipped, customers receive an email notifying them and they can pause, skip or cancel the auto-orders. The customer incentives are savings and free shipping.One of the features that really stands out (they have a pop-up to insure it stands out) is “Auto reorder and save” option. Simply put, the online retailer has noticed the habitual purchase beauty customers take and leveraged it.

Another great feature that lets customers reach the right product is the filtering option which is set not only for product features but also customer concerns and specific needs. In the Make-up section, the eye category, one can find brand and ingredients options, but also filters such as concerns (acne, dryness or oiliness), benefits (curling, hold or smooth) and skin type. Unfortunately, the filters are not usable on the smartphone version of the web store.

Just like its direct online competitor (Sephora.com), Beauty.com offers free samples, free shipping for orders $35 and above, free returns and 5% back through its loyalty program. It also features great content areas, such as its Beauty Blog, with Romy Soleimani, The Latest Trends section reviewing product news and a Beauty Videos section, ranked according to customer reviews. A great no-no on the video section is the fact that videos embedding is restricted to affiliates only, leaving a lot of marketing potential untapped.

Download the rest of the report below:

Omnichannel retail will transform distribution

A very important part of retailing is pricing and the most important part of pricing is the cost. To get a complete view of how much a product would cost, retailers think in terms of net landed cost.

The net landed cost is the sum of costs associated with manufacturing and distribution. When thinking in terms of net landed cost you have a better chance of understanding your total cost.

A common fallacy is thinking of costs just in terms of manufacturing, either from a purchase only point of view (how much you pay your supplier for a given product) or a more inclusive manufacturing point of view. The manufacturing point of view assumes that even if you are not manufacturing the product yourself, you still have the liberty to choose another supplier or change merchandising altogether.

The most important advancements in retail, in terms of supply and cost effectiveness, have focused largely on manufacturing costs in the past decades. This has lead to increasingly efficient production lines, a more competitive manufacturing market, shifting manufacturing overseas and many others.

A key to Walmart’s success is selecting suppliers with an optimum manufacturing cost / quality

This manufacturing improvement trend has had beneficial results on the customers life through more accessible, more diversified merchandise. It also meant companies managed to sell more, to more people. Companies such as Walmart have grown to their existing magnitude thanks to a wide network of suppliers, providing them with products manufactured at the best possible cost.

Distribution lagged behind

As retailers improved on the manufacturing, there was one part that has been left mostly untouched. That was the distribution. Distribution costs have decreased but not dropped.

To get a better view of why, get a glimpse of what are the factors that weigh in the distribution costs basket. Here you have costs associated with getting a product from the manufacturer to the customer. This includes freight, stocking, customs, costs associated with store development and maintenance, marketing costs, customer support and others. This is a very large area and a lot of work to be done.

Distribution is changed by technology, data and omnichannel retailing

Today, distribution is changing, and it’s changing fast. As a result, the associated costs will follow.

At the forefront of this change we have several factors, one of which is omnichannel, another being technology and the third being data. This is how they weigh in and these are the areas that will be soon transformed:

Improved logistics

Logistics have not been fully transformed by technology. For example, freight has been virtually unchanged in the past decades. Think about it this way: cargo ships are still loaded after excel files are checked, faxes are sent and handshakes seal deals. For a large part, the industry is archaic and it’s but a question of time until it will be transformed. There is a lot of room for disruption and companies such as Freightos have challenged the status-quo and promise 10-17x ROI. In weeks.

And it’s not just freight. Fleets of small vans contractors have taken up the Uber model and are now roaming the streets of Hong Kong to deliver goods the likes of DHL and UPS can’t.

GoGoVan is a Smart Logistics company, connecting individual contractors to larger companies in need of their services

Omnichannel retail decreases distribution costs

Omnichannel makes possible and desirable a few things the previous retail models couldn’t. First of all it allows for a better inventory transparency and improved shipping effectiveness.

Customers that would otherwise expect orders placed online to be shipped at home with the respective costs and operational challenges, can now just pick up orders in store. Or better yet, they can have the closest store ship these items at home, instead of mixing the order in a large, central warehouse.

Omnichannel also makes possible having just a limited number of products in store and keep the most either in the warehouse to be shipped when convenient or with a supplier. By reducing store footprint companies can reduce fixed costs associated with marketing and distribution of products, thus decreasing costs.

And it’s not just these, the many aspects of omnichannel retail all converge to a decrease in distribution costs and more efficient ways to handle product demand.

Macy’s growth versus JC Penney and Sears.

Improving marketing and advertising with data

John Wanamaker was a retail innovator. He is credited with the fixed price and money back guarantee marketing concepts. Wanamaker was one of the pioneers of the department store and loved advertising. He is also credited with the famous saying :

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

Good thing that was more than a century ago.

“Show me your budget.”

Marketing is now changing rapidly and unfortunately for some advertising agencies, long gone are the days when the Mad Men of advertising charged millions for concepts that could or could not work.

With the rise of digital commerce and omnichannel retail and the smartphone to bridge the gaps, data is all around. Marketing is now data driven and the half of budget Wanamaker complained about can now be easily tracked. Companies such as Macy’s are investing heavily in omnichannel policies and marketing. The results are clear. While their competition is diving, Macy’s business is on the rise.

Advertising is data driven and marketing costs are constantly improving.

By improving distribution and decreasing distribution costs we have two very important things happening. The first is that companies engaged in improving this area will be more profitable and more inclined to continue on this path.

The second thing is that lower distribution costs mean better prices for the consumers, therefore an improved appetite for consumption. Improved profitability and decreased prices – these are two very strong forces that will shape tomorrow’s retail. And it’s happening today.

L’Oréal plans Digital Transformation through Omnichannel Marketing, Ecommerce

With the launch of its first digital edition of the annual report, L’Oreal steps into a new era.

The report is an impressive tool on its own, aimed at investors, shareholders and journalists. But the real change comes with the overall shift to digital as a tool to engage consumers.

For example, the “Digital” section of the annual report states just how important naming the first Chief Digital Officer actually is. This move shows L’Oreal as an up and coming major digital player. The company will probably focus on ecommerce, data technologies as well as engaging consumers both online and offline.

An example in the digital report shows just how promising ecommerce is, especially in China:

“In China – the world’s number one online-purchasing market(1) – e-commerce already accounts for 10% of L’Oréal sales, and more than 15% for brands like VICHY, LA ROCHE-POSAY and MAGIC(2). These promising results are underpinned by partnerships with online distributors like Alibaba and Tmall. On Singles’ Day, a very important day of special offers, L’Oréal’s brands performed well, particularly MAYBELLINE NEW YORK – the number 1 make-up brand in the country(3) – and MAGIC, which sold over 11 million face masks in 24 hours” 

The shift towards omnichannel marketing AND ecommerce is spectacular. L’Oreal has traditionally relied on third parties to distribute products to consumers through retail shops. Could this shift be a change in strategy with a direct-to-consumer approach or will it be an improvement in dealing with online and omnichannel retailers? Nevertheless, the move will probably ripple trough and be adopted by others.

It may be a tectonic shift in manufacturers switching from traditional models to new digital models, engaging their customers, as well as providing them with the opportunity to purchase. How will this affect traditional partners remains to be seen.

Functional Online Marketplaces

The marketplace has been a very influential social and economic construct for a very, very long time.

It has been a central concept to commerce all over the world since the dawn of man kind. In time, the marketplace has been refined and evolved to include ever more complex structures. During the past century it morphed from temporarily trade gatherings to large permanent structures such as shopping malls and eventually it evolved into what we now know as the online marketplace.

Ebay, Alibaba, Etsy, Amazon and others have one thing in common – they get sellers and buyers in one place. These online marketplaces are fueled by a business model that has seen a steep increase and proved excellent in the past years. But now, it’s time for the next step:

Functional Online Marketplaces

I believe the times they are a-changin’, like Dylan would chant. The Online Marketplace is not enough any more. The markets demand something more.

That something is the Functional Online Marketplace, a virtual hub that combines the features of a marketplace (buyers and sellers, reputation management, transaction handling) with functions that improve the lives of either sellers or buyers.

The Functional Online Marketplace goes beyond just letting sellers and buyers trade. It helps the seller run its business better and the buyer benefit more from the product purchased.

And some of the biggest tech companies we know have created this type of Functional Marketplaces. We’ve used them and most customers love them. We just didn’t put a name on it. Have a look at some examples:

The Apple Ecosystem

Steve Jobs envisioned the PC as a digital hub, a central unit that connects the user’s digital activity. From email to web surfing, from music to pictures and more. It than proceeded to create this vision and along the way he built much more.

By launching the iPod and than the iPhone, Apple moved the digital hub inside the consumer’s pocket. With such a valuable real-estate in the reach they’ve had to build a system that shipped music, video and applications from third parties to these devices.

The iTunes Store and the AppStore were born. Apple built the platform to consume apps, the place where customers could download these apps, empowered developers to build these apps but did something else too.

It built Xcode (the development tool for iOS developers), it launched Objective C and than Swift (the programming languages used to build apps) and helped developers create useful apps.

Apple went beyond the marketplace paradigm. Yes, it allowed media and software consumers to meet developers but it also created the platform where they could be consumed and the tools to build them. It built an extraordinarily effective Functional Marketplace.

But Apple is not the only one …

The Uber-marketplace

Uber is an extraordinary successful company that connects freelance drivers to those in need of their services. It connects buyers to sellers. It is technically a digital marketplace. And more.

First of all Uber empowered a set of freelancers that didn’t know they’ve actually had a market. The driver app allows drivers to see potential riders and provides GPS-linked functionality inside a simple mobile device.

The functional side of Uber not only improves the way sellers (drivers) provide their services but actually it makes it possible.

For customers, the app makes hailing a driver an easy task, it allows direct payment on mobile phone and brings the comfort previously unattainable. The functional marketplace at its best.

Google – the biggest functional marketplace

Google is many things. Search giant, mail provider, mobile os developer and robot builder among others. But at its core, the business model is quite simple: Get people to pay for ads. Show ads to customers. Make people click on said ads.

Advertising accounts for 89.5% of Google’s total revenue so it’s safe to say that ads are its bread and butter.

To achieve these levels of revenue Google has to place together “The Sellers” (Advertisers) and “The Buyers” (Customers clicking on ads). Though customers don’t technically buy on Google, those that generate the company’s revenue end up as leads or buyers on advertisers’ websites.

To do this, Google built its ad market on top of its primarily function: Search. Users searching for information of interest are effectively buyers in the Google functional marketplace.

The marketplace, therefore provides functional support to buyers. The search, Gmail, Android – are all basically functions that lock in the ad-clicker and in turn generate revenue through these types of transactions.

These are just three functional marketplaces examples but they illustrate the concept. To be successful, a newly established marketplace has to provide more than just a connection between buyers and sellers. It needs to provide function beyond the commercial. By improving the lives of buyers and sellers beyond the commercial, Functional Marketplaces provide the type of lock-in and effectiveness previous models don’t.

How to Start an Online Store: Part 5 – Ecommerce Marketing, Sales Channels and Testing

Here we are. The fifth and final part of the guide to starting your online store. It’s  been a fun ride for me and I hope it hase been fun and informative for you. Before we dive right in, let’s take a moment and go through a quick recap of the steps we’ve covered so far.

As you remember, Part 1 covered planning and finding the right business model. Part 2 was focused on registering your business, finding and negotiating with suppliersFulfillment operations and making your back office work were the main subject of our third part and last week we’ve covered branding, ecommerce software and content in part 4.

Now … it’s marketing and sales time!

During this section of the guide you’ll discover how to expand your reach through additional sales channels, market your brand and products and finally – how to test the main areas in your online store.

So let’s go ahead and have a look at…

Adding Sales Channels to your Online Store

First of all – what is a sales channel? The answer is quite simple: any method of getting products to the market so customers can purchase them. For example, your online store (the actual web store) is a sales channel. It showcases products, it tells their price and allows customers to purchase these products.

Let’s assume that by now you have already started your online shop. The web store is up and running and customers start showing up. But the web store should not be your only sales channel. Your customers are complex and their habits diverse. One day they’re browsing your store, the next they’re hanging out on Facebook and meanwhile they search product info on their mobile phone. You should be there also.

You could have your products lined up in a Facebook store. You could build a mobile app that engages customers outside your store and collects orders.

It’s not just online, either. Offline engagement shouldn’t be a taboo either. Maybe a brick and mortar showroom for your main products is not cost – effective. But you could set up a pop-up shop occasionally.

There are numerous ways you can add sales channels to increase your market reach and some are really easy to set up. Others are a bit more complicated but in the end it’s mostly about your product, your brand and of course your budget. Let’s see which are the most popular sales channels and how you could benefit from them.

Call center

Out of all the sales channels you may choose, one really complements the online store. The call center can be a simple line you for customers to demand information on products.

(Zappos’ call center is legendary and effective. It’s both a sales and suppor channel.)

 

It can just as well be a full fledged call center with operators answering calls and helping customer choose the right product, handling orders and managing complaints. It can also mean people calling prospects or indecisive potential customers or just plain cold calling sales leads. No matter the choices you will be making, the phone is a great connection to the customer and you should build a smooth phone support operation.

 

Social media

You could ask – isn’t social media more about marketing and communication, connecting and understanding your customer? Yes it is but it can work just as great as a sales channel.

For example – Twitter is testing purchase options (right now with just a few high profile retailers such as Amazon) and ways to drive targeted traffic to stores through offers. Pinterest is also testing options to drive targeted customers to your online store and they do that through their ads. That is great news as Pinterest is more efficient into turning views to sales than any other social network. It works awesome for industries such as travel, home-deco and fashion.

And let’s not forget Facebook. Being the largest social network in the world it is a place you should be digging into. For a while, the network was so popular with retailers that a term was coined to split Facebook commerce from everything else: f-commerce. Recently, the company lead by Mark Zuckerberg has focused more on advertising revenues than helping retailers get close to their customers but it is a great channel to study, nevertheless.

There are some companies that will make selling on Facebook as easy as it gets. And if a Facebook store may look like a great option for your store, this involves apps connecting your store to Facebook.

(Shopify, among others, built options for users to connect their stores to their fan pages and sell directly on Facebook.)

On the previous chapter we’ve discussed the most popular ecommerce software choices. Turns out most of them get some sort of support for a Facebook store by third party apps. Here are some of them:

  1. Shopify for Facebook: Shopify provides useful tools for store owners that want their Facebook fans to browse products and place orders directly on Facebook. These add-ons work as extensions for online stores that retailers can set up easily.
  2. StoreYa is a simple solution for owners of stores running on the usual ecommerce platforms. The company supports Shopify, Magento, Prestashop, WordPress and even marketplaces such as Ebay or Etsy. Although the Facebook Shop is their main product, they also offer other effective marketing apps for store owners.
  3. StorefrontSocial works with new and existing retailers to connect them to Facebook fans and allow for an easy store set-up. Unlike previous options, StorefrontSocial works as a standalone platform where you can either set up a new store or import existing products. It doesn’t allow for an existing platform connection.
  4. Beetailer is yet another option extending your existing store to work on Facebook. It integrates great with platforms such as Magento, Shopify, Prestashop or even Amazon Store. Plus – if you have less then 30 products, you get a free account so you can test and see how it all works.

There you have it – these applications are easy to set up and you can start selling directly on Facebook thus adding a new sales channel. And once you start adding sales channels, you now you have to look into …

 

Mobile Apps

What is the device you think customers use the most throughout the day? It’s the smartphone. Mobile usage has gone through the roof lately and its bound to continue.

(Number of smartphone users in the US (millions). Source)

So you want to be close to your customers. Mobile apps provide a special sales channel, one that’s personal and it makes impulse buying all the more attractive.

How do you add a mobile sales channel?

There’s an app for that. Actually more:

  1. Shopgate makes it possible to turn your store into an app. It connects with Magento, Shopify, Prestashop and other ecommerce platforms to enable store owners to build mobile apps. It works on both iOS and Android operating systems and provides support for both smartphones and tablets.
  2. Shoutem is not built specifically for eCommerce but among others it supports building mobile apps for your Shopify store. The interface is quite simple and doesn’t offer many options but it gets the job done if you happen to be a Shopify user.
  3. MobiCart works with established ecommerce platforms and can help you build your mobile app. They integrate with Prestashop, Magento and others.

Give mobile apps for your store a try. The more smartphones become a part of our daily lives, the more we will use them. Your store can benefit from users that are not strapped to their desktop or notebook. And speaking of that, a great way to interact with customers are the …

 

Pop-up Shops

Pop up shops are temporarily stores, in the real world, where online store owners can showcase their products and interact with their customers. The pop-up shop sales channel has really taken off recently and store owners have started adopting this online-offline connection.

(Adidas pop-up shop. Not exactly low-budget but hey – one can dream, right?)

Setting up a pop-up shop is a personal choice but works great if it’s posted either in a high-traffic area (such as a popular shopping center) or at an industry event. For example you could set up a pop-up shop at a home-deco event if you are a store selling home decorations. It is a great way to interact with customers and get feedback on your merchandise.

Companies such as Storefront help shop owners find retail space temporarily by connecting them with retail space owners. To help online stores they’ve put together an ebook that is free for download. I encourage you to have a look at it as it explains the main steps in setting up (pup-up) shop.

 

Online Marketplaces

Last but definitely not least – the marketplaces. Amazon, Ebay, Etsy, Sears, Buy.Com, NewEgg.com and more. You name them. They provide lots of options to lots of users and chances are your next customers are there shopping right now.

( Ebay – the original online marketplace )

The reason marketplaces are the last on potential sales channels is because I want to emphasize just how important they are. Just like the “old” shopping centers, customers go to marketplaces because diversity means options and options mean they can find what they are looking for.

Diversity drives customers. It drives sales. So you want to be there but plan ahead before you dive in.

As an online store start-up you should be looking for as much exposure as you can get but still try to focus on the right marketplace. Amazon and Ebay are the obvious choice but before you join them you have to ask yourself:

  • are these marketplaces right for me? Not all that’s great is great for you. Just because they have traffic, that doesn’t mean you will get traffic and if you do, you don’t know whether that traffic will turn to sales. The most important aspects you should be looking for are exposure and sales.
  • can my product be found? expect to have competition. If you are among the few selling the product AND your product is popular, than the answer is YES, the product will by found by the customer. If your product is also sold by hundreds of other sellers, there are thin chances you will be the one showcasing the product. Try to make your product look special and attractive through copy, media and of course, price.
  • will my product be bought? If you have indeed managed to get customers to have a look at what you are offering, you must also get them to buy. Most important things are the way you showcase the product to create desire (“A beautiful hand-crafted lamp“), urgency (“A beautiful hand-crafted lamp in LIMITED offer”) and affordability (“just $49.50“).
  • do customers trust me? Marketplaces usually have some sort of peer-review mechanism. Customers can review sellers according to their fairness. Your reviews are your digital reputation. Positive reviews mean more sales, negative reviews can mean NO sales. So try to be as fair, effective and open with your customers.

Handling orders from marketplaces.

Listing your products on all marketplaces can seem like the right choice but it’s usually not. Each marketplace is a sales channel itself. You should be sticking to those that work for you and improve your experience there. Until your business is large enough to allow you to handle orders from more marketplaces, focus on fulfilling orders effective and quickly.

Most marketplaces offer some form of integration with your existing store and you should use those. Product information should be going out of your online store and orders should be synced with your order management system. This way, the order management team can have a single point of entry for orders instead of getting lost in a dozen of order management systems scattered throughout the marketplaces you are using.

The big ones will get bigger

Marketplace orders will continue to be a large part of your business. So large that they will, in the future, dwarf those from your online store. The reason is people tend to gather and shop where they will find diverse products and retailers. Just like in the real world. Online is even more so – marketplaces get even more traffic from search engines, have more money to spend on ads and are better at keeping customers returning.

Connecting sales channels

Each sales channel you will be adding will bring you more exposure and more sales if handled correctly. The sales channels I’ve described so far are the most popular ones right now. But they are not the only ones. As technology evolves, so will commerce. New channels will pop-up and some I haven’t mentioned here will probably increase in importance.

Think about the impact Internet of Things will have. Maybe in the future the greatest sales channel for groceries will be smart appliances. Think of a refrigerator than can place orders for customers when it’s depleted. It sure is going to be an interesting challenge to integrate those in a sales channels mix.

( Omnichannel means connecting all sales channels in a way the customer finds natural )

By adding sales channels you wil turn from an online retailer to an multichannel retailer and if all channels work seamless together you will become an omnichannel retailer. If you want to know what that means – have a look at Macy’s omnichannel strategy. And if that is not enough dive into this omnichannel report I’ve wrote to help retailers integrate their sales channels.

Marketing your Online Store

Marketing is one of those concepts that’s so hard to understand and yet so overused. Most of the times its meaning is so cluttered by useless acronyms and buzzwords that people have trouble understanding what it actually is.

I am not saying that marketing is easy. It’s not. Yet is not the Holy Grail of human knowledge either. It’s just communication. Talking, showing, describing products to the people most likely to buy it.

It’s that simple. The basics need to be simple.

If you are going to survive as an online store owner, you need to keep your marketing basics simple. You have a product. Hopefully a great one. There are people who want to buy that product. Most don’t know they want to buy it from you. You need to show them why they should buy the product you’re selling. You need to show them why they should buy it from you. And then, if everything I’ve shown you so far has been decently implemented, just let them buy it.

Everything else is gimmicks. If you’ve got the basics right, everything else will fall into place.

The market

To get people to buy your product, you need to know who these people are, what they want and how they act. Most likely not everybody will want your product. But if you’ve done your planning right, you pretty much have know a lot about your market.

Targeting demographics

Yup, your customers are “the target”. Why is it called that you ask? Well, because your communication targets them. Until the internet became the norm and we’ve started gathering more data than we can handle on customers, we used to define them through demographics. That means basic info on consumers. Age, sex, marital status, location, education … this kind of data.

( Pictured here: advertising in the 60s. Not pictured here: Google algorythms and tabacco advertising ban )

These targeting methods were made popular when mass marketing was just blooming, in the days of TV, print and outdoor ads made by the likes of Mad Men. When you ran your ad in the magazine or on national TV, you needed to know who’s going to use your product, make sure you understand their psychology and shout from the top of your lungs how cool the product is. Once the ad was approved, there was no going back. Advertising agencies would research, create and test the ad before the campaign was launched because there was no way you could change, tweak or even pull back a campaign in real time.

So demographics were the bread and butter when you would push your message to the market. But the Internet changed that into …

Targeting behaviors

Basically, if you were a mid-class urban wife with no college education in the 60’s there were slim chances you would receive ads trying to sell you repair tools for your car. Even if you were actually a mechanic. The same would hold true if you were a man and would be looking for a sewing machine to fulfill your lifelong passion of becoming a fashion designer.

You would have to find those products yourself. We’ve come a long way and thanks God, we now have the freedom to fix our own cars and sew our pants, no matter the gender

That happened when contextual marketing (the ads you might see when searching on Google), interactive marketing (information instantly delivered when interacting with say an website) or behavioral marketing hit the shelves.

The last one, behavioral marketing, is probably the single most important aspect in online retailing. Technology now personalizes marketing and responds to customer behavior.

For example Amazon’s recommended products (“See what others have purchased”) is a form of behavioral marketing that is based on a complex research on previous customers behavior before they purchased something. Simply put, when people would purchase something, their interaction trail (the products they’ve seen so far) becomes an indication that people taking the same or similar steps would most likely purchase similar products.

The ads you see on Google feature a similar concept. They are shown as to answer your needs. Some ads respond better than others at what you are looking for and thus have a better chance of getting clicked. Google trusts this system so much that they invoice advertising on clicks, rather than how many people have viewed the ad.

So basically we went from effectively targeting people to targeting people’s behavior. Still, demographics and customer profiles are very important and a lot of what you will be doing is to try to guess customer responses based on demographics assumptions. Such assumptions might mean you will favor ladies over men if you are selling women’s clothing (doh!) or rather more complex assumptions such as “Men over 32, employed and married are more likely to buy a family car”.

Indifferently of your assumptions, test them and always quantify your results with …

Analytics software

Here you go … numbers. Charts. Estimates. Hope Miss N., your math teacher, was your favorite back in school, because this is going to be damn complex. Nah, just kidding. Most analytics software is pretty much plug and play and the numbers and charts I mentioned are usually generated on the fly and in such a manner you can easily understand.

You can’t have marketing without analytics and research. Fortunately, it is a lot easier now for a small online store than it was 40 years ago for the largest companies in the world. What is not so fortunate is that it’s easier for everybody so you’ll have to dive deep and understand what your analytics are saying. So will the competition.

Once you have installed Google Analytics or one of these other ecommerce analytics software, you will probably dive in and see what your customers are doing. What you will want to look for is patterns that lead to increased sales. Special products, a certain type of copy, products featuring media versus those that don’t have media. Look for what makes your sales increase.

Targeting, knowing, marketing – the most important ecommerce marketing strategies for your online store

So you know the target, you have the analytics figures, now it’s time for the actual marketing. The web is full of resources to fine tune your online marketing understanding. I will show you which are the most effective ways of marketing so you will have a bird’s eye view on what makes an online store sell.

Search Marketing: SEO

As a startup there are really little things you can do better with smaller budgets than writing quality content and optimizing for search engines. SEO (Search Engine Optimization) is a really large concept and many people earn their living through SEO services. You will probably ask a SEO expert to help you find the perfect balance so your store will show up in search engine results. But before you do that, have a look at the basics. These are the things you will need to keep in check so Google will bring the right customers to your store:

  • content: write great and extensive content. For humans. Describe your product like you would want it described for yourself. Don’t do “keyword spamming” which is the result of cramming keywords in your description so more people would find you. It just doesn’t work that way.
  • code: your webstore is visible on customers’ browsers thanks to programming languages that output information in the way we are accustomed to. Search engines index this information and if you are to have your store indexed properly, you need the right code. If you are not technically savvy, better call someone who knows what they are doing. In the previous part there is a section dedicated to finding technical support when integrating your store.
  • links: get other (relevant) websites to post links to your store. Although not so important now as they were in the past, links are necessarily so search engines can find and index your web store’s content.

Email marketing

Ask your customers to leave you their email address so you can update them on news and offers. This is a great way to get people right back on your store.

But don’t annoy them and don’t do spam! Everybody hates unsolicited email. Make sure your customers give you their permission to send them emails. You can use apps such as Mailchimp or CampaignMonitor to save customers’ emails and then send them newsletters.

Social media marketing

Where would you go if you were to market a product? The answer is fairly simple: where people gather and interact. Social media outlets such as Facebook, Twitter or Pinterest are now used by billions of people. That’s where your online store should be.

Just like interacting with friends, some things work better than others. Here are some tips on how to use social media to interact with potential and existing customers:

  1. listen first, talk later: social media is a great place to gather insights on your market, your products and even your brand. Some of those insights may not be friendly but you should pay attention to them nevertheless.
  2. focus on building strong bonds rather than gathering masses: it’s just like with your friends. It doesn’t matter if you have 10 or 10 000 friends. What matters is how strong your connection with said friends are. It’s better to have few, engaged fans rather than many fans that do not relate to your brand or product.
  3. find the influencers: some people wield more influence than others in their social circle. And they somehow do it naturally. You should get close to these people, develop relationships with them, show them your products and share content they might find interesting.
  4. provide value, not sales pitches: yes, your products are great but don’t bore people with constant product sales. Provide content. If you sell hats, show fans their history, tell them about the manufacturing precess, showcase famous hats. Make it interesting and valuable.
  5. be patient and constant: don’t tweet 40 times one day and than stop for a month because no one followed or retweeted you. Social media success takes time, patience and constant effort.

If your social media strategy is not going the way you’d want it to, there are always the ads. Most social networks provide ways for you to get closer to your potential customers, faster. Most people call them ads  . Facebook, Twitter and Pinterest – they all provide advertiser with the possibility of engaging fans through ads.

And speaking of ads, one of the most effective way of advertising your store and products is …

Paid earch

Remember those Google ads I’ve mentioned earlier? That is Google AdWords, a very effective form of advertising that places ads on search results, ads that are directly related to your search.

For example, if you were to search for “cars”, you will be shown the natural search results AND special search ads. These ads are fueled by advertisers that pay each time someone clicks one of their ads.

You can be one of those advertisers. By carefully analyzing traffic and allocating search ad budget, you can determine with high accuracy the number of clicks you need to convert visitors to buyers. Because search ads are contextual, this means you can optimize your ads in such a way that only those interested in purchasing your product might click it.

However, paid search campaigns are usually better managed by professionals. Even though you might spend a little extra for someone to handle your ads, just leave it to the professional.

And one more thing: Google is not the only one providing the option for paid search ads. Bing does it and Amazon does it, so there’s room to play there.

Performance marketing

Performance – well that sounds nice. What is it?

Performance marketing is a broad term that means advertisers pay a fee depending on how well an action is performed. This action can mean showing an ad a certain number of times or making that ad transform into a special action. The standard actions you might want to encourage are:

  • clicking
  • downloading a certain file (say a product catalog )
  • showing interest in a product (the user becomes a lead)
  • buying a product

And because marketing people happen to love acronyms, you might find the info above coded in three-letter words:

  • CPM means Cost Per Mille (that’s Latin for thousand) – one thousands being the standard minimal block of ad views you can purchase to show an ad.
  • CPA means Cost Per Action – the generic code for any action you might define with those selling the ad space. It is used for sales and therefore sometimes referred to as Cost per Acquisition.
  • CPC means Cost Per Click – the cost you will be paying whenever someone clicks on your ads
  • CPL means Cost Per Lead – the cost paid whenever a visitor shows interest in your product

Performance marketing is sometimes used interchangeably with affiliate marketing. That is  more of a misconception, as affiliate marketing, though popular, is a subset of performance marketing. It works as a shared revenue deal, where the retailer shares a portion of the revenue with the publisher (the one displaying the ad), whenever advertising turns into purchases.

Affiliate marketing is ran through affiliate marketing services, that cover three very important aspects: they connect advertisers to publishers, they make sure all sales are registered and attributed to the right publisher and they handle transactions between advertisers and publishers.

If you decide to go along the affiliate marketing path, here are the most important affiliate networks that can help you sell your products:

  1. CJ Affiliate (formerly Conversion Junction) is the global leader in pay for performance programs. It is the home to many publishers that can help you run your ads.
  2. Rakuten Linkshare is the big contender to CJ Affiliate and a fast growing one.
  3. ShareASale is a great affiliate marketing resource for retailers. Slightly smaller as it may be, it is still very effective.
  4. ClickBank works great for entrepreneurs and content creators. It is effective and easy to use.
  5. Avangate is an young yet fast growing performance marketing company that’s focused on software and digital products.

Comparison Shopping Engines

A great way to get your product out there is place it in comparison shopping engines. These applications gather information from more online stores and show potential customers what is the best way to shop in terms of pricing.

It basically works for those that are price competitive so before you join such a program, make sure your prices are aligned with the market.

(Shopzilla is one of the most popular comparison shopping engines)

Most comparison shopping engines are CPC based and you will pay anytime people click your products, arriving at your web store. The top four most popular are Google ShoppingShopzillaShopping.com and Pricegrabber. Getting listed can draw targeted traffic and can mean a very scalable way of converting traffic to sales.

Other marketing options

So there you have it – these are the most effective ways you can market your new online store. But don’t stop here, don’t settle. Marketing in the digital world is usually a matter of imagination. Be curious and try new things that might be fit for your online store.

For example you can attract relevant bloggers to mention your store and review the products. You can put out press releases and talk to the media. You can  run contests and sweepstakes to increase reach and turn fans into loyal customers. Once you have the basics up and running, you will be ready to add more and more marketing options to your online store.

Testing and optimizing

Remember: your work is never done. If you want to keep your customers happy and sales growing, you need to constantly optimize and tweak your store. To do so you can run tests that determine what works and what does not. When testing you will be looking for either errors, bottlenecks or usability issues. Do so through:

  1. Functional testing: test your store’s functions. The navigation, user account, user login and others. Each needs to be thoroughly tested and improved
  2. Process testing: we are talking business processes here. These are things like managing orders, fulfillment, shipping or warehouse management. If your company process don’t run smooth, customers get their orders delayed, mixed or canceled.
  3. SEO testing: as I’ve mentioned previously, search engines will always be a very important factor in driving traffic to your online store. Check to see how you stand against competitors and against previous positioning.
  4. Mystery shopping: put yourself in the customer’s shoes and see how’s everything going. Place an order and see how operators behave, how long does it take for the order to arrive and more. You might find some interesting things there.
  5. Hot areas testing: some parts of your shop are more important than others. You can improve conversion rate through a careful  inspection and recurrent A/B testing of what you could call “hot areas”:
    • Homepage
    • Product page
    • Checkout cart
    • Payments
    • Forms requiring customer input
    • Mobile interfaces

Customer journey maps

A great way to see how customers interact with your company is drawing customer journey maps. These “maps” show your existing sales channels and how customers interact with them. Customers may find you on social media, browse products on the web store and place orders through the phone. This is a customer journey map.

When these journey maps get too complex you have to constantly test and look for signs of problems of sources of frustrations for your customers. It may be a poorly designed checkout cart or the voice of your phone operators. By understanding your target customers and their journey maps you can have a guide to testing what works and what doesn’t on your store.

( A blank example of potential sales channels. By connecting the channels you can draw journey maps )

Testing means improving and you should strive to make your store better and better. Little improvements and constant focus on making the customer experience better turns your store into a success. So keep testing :).

And that’s it!

We’ve got this far. Wow! Testing is the last section in our guide to starting an online store. It’s been a great ride and I hope these posts will help you build the store of your dreams. If you’ve managed to get this far I believe you are ready to start your own store. Give yourself a pat on the back for having the patience to get through all this data. It’s not easy, I know, but it is a lot easier than just starting a store and then figuring it all out along the way.

I am more than happy if I’ve managed to help you on your path to becoming an ecommerce entrepreneur. If this guide was useful to you, please refer it to someone else who may be in the need for know-how.

You’ve taken a large step ahead to running your own business and online store. You may be anxious and a bit scared but rest assured. So was Jeff Bezos when he started Amazon. Knowledge, hard work, innovation and persistence will get you far. Have a safe trip in reaching out for your dream!

 

3 Content Strategies that Work Great for Ecommerce

You’ve chosen the best products for your customers, you’re spending top dollar for advertising and your customer service works great. Yet something seems to be missing. Your online store does not yet stand out. If so, you may be in need of some content marketing.

Now content – this is a rather big word and it may mean lots of things for lots of people. For me, content is about more than keywords stuffed on product descriptions or carefully changing your product title to match whatever Google is into these days.

It’s about your shop’s personality. It’s about standing out and standing up for something. It’s your story to the world.

So let’s have a look at five ways to build great content for your online store:

1. Tell your story. No one cares “About us”.

What do you do when you meet someone? You try to look as interesting, smart and great looking as possible. You wouldn’t just go ahead and show them your ID card and recite a bunch of boring facts about you.

You tell a story.

Ecommerce sites all have a story. At some point someone thought – hey, I can do better than my competitors. They decided to stand for something. Yet most of the times they miss the opportunity to show this. They get lost in boring and useless “About us” statements that fail to transmit anything else than the fact that someone bothered to fill in some words on that page.

Others, however, they make it personal. They tell everyone what they stand for and why should you choose them. Meet Warby Parker:

Warby Parker's Buy a Pair, Give a Pair program
Warby Parker’s Buy a Pair, Give a Pair program

Warby Parker decided they would have none of that boring “About us” corporate double talk. No sir. They went on and shared everything the company stands for. The history, their social responsibility program, even why they’re named Warby Parker (Turns out they’ve named the company from two characters in a Jack Kerouac book).

The point: tell a story, not just a few facts about the company. After all, your customers are people, not robots.

2. Show them “How To” do it

So you’re selling lots and lots of products. That means you should be some kind of expert on how they could be used. As shocking as you might find this, your customers are probably not.

So tell people how to use your products.

Take Sephora for example: As their online sales grew intensively, they’ve built a special How To’s page. It features videos, inspiration photos and user posted tips on how to best use make up.

Even the products have their own how to’s and user submitted gallery:

How to look good at everything on Sephora. Being a complex product, it gets easier to use with videos and photos.
How to look good at everything on Sephora. Being a complex product, it gets easier to use with videos and photos.

The point: make your customers understand how to use the product. You probably know a bit more about the products than they do.

3. Earn your media. Own your media. Have a voice.

You know who’s the best at saying great things about you? That’s right. You.

Don’t rely on others to say great things about your products. You know they’re great. Otherwise – why would you sell them?

Build a magazine for your niche and stick to it. Explain what your customer should do to look better, feel better, spend better. After all, you have already picked those “whats”. The times where media was owned by large corporations and they alone could make or break your business – those times are gone.

Just go ahead and build a blog and fill it with great advice, just like the good folks at Gilt.com did. The Gilt MANual is a great resource for men interested in fashion. It’s ran by Gilt and very popular.

giltmanual

And Gilt is not the only case where ecommerce sites built their own media outlets. Bonobos publishes great fashion advice on Equateur. Alex and Ani, one of the fastest growing online retailers in the US runs a great blog that showcases events, company news and things customers would take interest in.

The point: start writing and earn media instead of paying for it. It’s a great way to share insights with your customers and build relationships.

Using the Mobile Revolution for Marketing

We’re reaching that point in the world where technology has evolved to a micro-level. Computers that used to be the size of large walls are now as sleek and light as a stack of papers, and what was once a brick-sized mobile phone has become the size of a small child’s palm. By now, computers are practically mobile phones.

US teens mobile usage. Source: Nielsen
US teens mobile usage. Source: Nielsen

More people in America use and own mobile phones than toothbrushes. Fifty-four percent of these phones are smartphones, and by 2017, there will be over 10 billion mobile devices. As mobile traffic rises, so too does the need for mobile apps. With 90% of Tweets and 40% of Google searches coming from mobile phones, the way to get and spread day is becoming handheld. While two years ago most of this traffic was coming from teens with cell phones (teens increased mobile consumption in 2012 by 256%, with the standard teen sending an average of 3339 texts per month), mobile usage has extended far beyond teens. Most recently, with the continual creation of mobile apps reaching out to various targeted consumers, many companies have begun a new form of marketing for the mobile online shopper.

In fact, four out of five consumers use their smartphones to shop, and the majority claim that shopping from their phones is more enjoyable than shopping in person. No more long lines, parking tickets, unnecessary purchases, or exhausting traffic jams – consumers can buy what they want, when they want, how they want. And it gets shipped straight to their homes. 56% of consumers use their smartphones to search for a store’s location and directions, 51% to look up product information, 59% to do price comparisons on products, 45% to write up product reviews, and 41% to search for coupons. Smartphones make shopping easy and reliable, even more so than shopping in person. With many stores creating apps or green “Buy Now” buttons, shopping no longer requires physical salesmen.

Not only do mobile apps make shopping easy, but it also allows for information about products to be spread more reliably. 78 – 84% of consumers rely on social networks when researching new products. By 2015, it’s predicted that the amount of goods and services consumers purchase through their mobile phones will total roughly $119 billion. Mobile coupon usage is expected to rise to 53.2 million, and retailers say that 67% see a greater value in having their customers use mobile apps to shop rather than shopping in person. Overall, mobile apps bring five times more engagement – both in the product being sold and in the dialogue between targeted consumers.

Ivan Serrano is a web journalist and infographic extraordinaire from Northwest California. He particularly likes to write about the technology world, social media and global business. 

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.

 

Top 5 Ticket Sales and Event Management Companies. Have a look behind the curtains.

top5ticket_thmbLong gone are the days people would wait in line to buy tickets. Conferences, plays, movies, sports events – they all have one thing in common – the business model implies selling tickets and organising the event. With innovative solutions event managers and venue owners can now leverage the power of cloud solutions, CRMs, mobile apps and a bunch of other buzzwords.

In this post you’ll get a look at the champion and the challengers. The market is split between marketplaces (such as StubHub), ticket retailers (some of which are rather large – see Ticketmaster) and solutions providers, such as Xing Events.

SEE ALSO: Ticket Sales Business Models – The Retailer, The Marketplace, The “Enabler” Platform »

Let’s start with number 5 and count down to the king of the hill:

5. Oveit

Oveit is an innovative take on ticket sales and event management. It is feature packed and allows event planners to publish events and sell tickets on their own website.

 

By using an embedded technology, Oveit allows event organizers to work with a fully functional ticketing and event management app in minutes, right on their website. Some of its features are:

  • simple event setup and implementation – copy-paste implementation or click to publish to Facebook
  • direct payments (connecting a PayPal account allows event organizers to receiving payments instantly)
  • free service for free events
  • customized registration forms
  • interactive badge design application
  • seating design 
  • multiple options packed in one ticket (entry, beverages, tshirts – you name it)

 

Tickets are automatically issued on purchase and they are scanned using mobile apps (so no need for costly scanners). One particular piece of technology is what Oveit calls multiple access. It makes it simple to sell multi-day tickets, pack multiple perks and synchronize data between mobile scanning apps.

Oveit key takeaways

  • Oveit allows event planners to install ticket sales on their own websites or Facebook pages by just copy-ing and pasting an embed code
  • Payments flow from attendee to the organizers. No interruption needed, right?
  • It packs all the right tools in one simple to use interface
  • Though still a startup, it is the best choice on this list for mid-sized event organizers. By the way – creating a free account takes around 5 seconds.

4. Xing Events (Former Amiando)

The company formerly known as Amiando was purchased in 2010 by Xing. Later on it was rebranded Xing Events. It’s worth mentioning that it was probably not a great exit for the company. Rumor has it that the €10 million paid for Amiando was not at all satisfying for early investors. Then again the company seems to be doing great in the last three years since the purchase.

Le Web partners with Amiando to manage events / sell tickets
Le Web partners with Amiando to manage events / sell tickets

Xing itself is not an overly popular company. It is a competitor to LinkedIn and that is a tough spot to be in. Being a german company they are doing pretty well in Germany. Zee Germans make up for 76% of Xing’s traffic. 90% of it’s traffic comes from german speaking countries (Germany, Austria and Switzerland).

It seems the joint venture took the best of worlds. In the last three years since the acquisitions, Xing, the social network, has been providing less value to Amiando than Amiando has been providing to Xing. Some fairly popular conferences organize their events and ticket sales using Amiando /Xing Events. One of them is Le Web, probably the most popular tech conference in Europe.

Xing Events’ best features are its integrated ticket sales / mobile app / entry management  solution. It allows its users to create event websites, customized ticket shops and process payments.

The product is now an end-to-end solution for event management and ticket sales and it’s growing fast, allowing Xing to expand its presence outside Europe.

Amiando Key Takeaways

  • Amiando was purchased by Xing in 2010 and has been growing steadily
  • It is now an end-to-end solution for event planning and ticket sales
  • The company acts as a payment processor / collector for ticket sales and charges a standard fee of approximately €1 / visitor + ~6% of ticket cost (registration fee + payment processing fee)

 

SEE ALSO: Ticket Sales Business Models – The Retailer, The Marketplace, The “Enabler” Platform »

3. StubHub

StubHub_logoStubHub, now a subsidiary of Ebay, is the world’s largest marketplace for secondary market tickets. It was founded in 2000 by Eric Baker and Jeff Fluhr, former investment bankers.

From the largest ticket marketplace in the US it quickly grew into world’s largest ticket marketplace, now serving US, UK and Canada. It is now the go to place for anyone looking into selling and buying tickets for sports events , concerts, theater and entertainment events.

After being featured in 2006 in Fortune 500’s fastest growing companies, StubHub was quickly purchased by Ebay for a reported $310 million . The company has now over 1250 employees and it’s expanding its operations quickly to keep up with growth. The mothership, Ebay, is actually forwarding ticket sellers to StubHub, in an effort to consolidate the market.

Interestingly, on of StubHub’s competitor, Viagogo, a company that has so far raised $65 million, was founded in 2005 by Eric Baker. Sounds familiar? It should. He’s one of the two guys that founded StubHub.

StubHub Key Takeaways

  • StubHub is the largest ticket marketplace for sports events, theaters, concerts and entertainment events
  • It was founded in 2000 and acquired in 2007 by Ebay for $310 million
  • It’s present in the US, UK and Canada

2. Eventbrite

Eventbrite Founders. Left to right: Julia Hartz, Kevin Hartz, Renaud Visage
Eventbrite Founders. Left to right: Julia Hartz, Kevin Hartz, Renaud Visage

Eventbrite is a self-service platform for managing and marketing events, selling tickets promoting events across social networks. It allows event managers to promote events and attendees to find these events and buy tickets.

The company was founded by Kevin Hartz and Julia Hartz back in 2006. Legend has it that after the two got engaged (notice the “Hartz”?) Julia moved to the Bay Area and helped setup the company . The platform was developed by Renaud Visage, current CTO and third co-founder. At the time the company was just a startup, Renaud was the only developer so for one year he developed, designed and maintained the platform.

Years later Renaud is still the CTO of Eventbrite. He is generous enough to provide those in the lookout for a roadmap to an $1billion company. Technically speaking. Here it is bellow:

[slideshare id=15031913&doc=dublinwebsummitpresentationrenaudvisage-121105083638-phpapp02]

Eventbrite did pretty well in 2013. 25% of its total sales up to date happened in the last 6 months.
Eventbrite did pretty well in 2013. 25% of its total sales up to date happened in the last 6 months.

In 2013 the company reported a total of $2 billion in total ticket sales, with $500 millions in the last 6 months. The company actually sold more in the past 6 months than it did in its first five years.

How did that happen – how could such a growth happen so fast? Two words: global expansion. Eventbrite started in the US but it’s now available in 7 languages and used in 179 countries.

“We… are ready to put even more power into our global presence” said Julia Hartz – Eventbrite President

Eventbrite has also acquired some companies on its way to the big payday (expect something big with this company). Eventioz and London-based Lanyrd were both acquired in 2013, after Eventbrite secured a $60 million investment, led by Tiger Investment Global.  The reason? Same as above – Global Expansion. Both companies listed above are doing great in the global presence department. Eventioz is an event planning and ticket sales leader in South-America. Lanyrd is a great resource for anyone looking into adding small and medium events such as “conferences, workshops, unconferences, evening events with talks, conventions, trade shows and so forth“.

Eventbrite Key Takeaways

  • Eventbrite is now the fastest growing mid-size events management platform
  • Its growth has been vastly accelerated in the past year
  • 25% of its total sales up to date happened in the last 6 months
  • Given the new investment, its fast growth and global expansion – expect something big coming up in 2014-2015. My bets are on an IPO/large acquisition deal. Maybe even trying to take on …

1. The King of the Ticket Hill: Ticketmaster

Ticketmaster is the granddaddy of all ticket sales and event marketing companies. It’s been founded in … get this … 1976. It’s the oldest and biggest company on the list. It has paid $388million for its three latest acquisitions, Front Line Management, SLO Ltd and Ticketsnow . That figure is 2.7 times bigger than Eventbrite’s total funding to date ($140million).

The company is the king of the hill when it comes to ticket sales for concerts. In 2010 it merged with Live Nation to create Live Nation Entertainment. Maybe you haven’t heard about the company but you’ve definitely heard about its operations. Besides its creepy “One nation under music” tagline, the company sports some of the most popular artists in the world.

Ticketmaster is a pretty big part of Live Nation Entertainment.
Ticketmaster is a pretty big part of Live Nation Entertainment.

The company manages artists, merchandise, tours and ticket sales for a bunch of artists you may have heard of: Jay-Z, Madonna, Beatles, U2, Justin Timberlake and more. Among them – this year’s media sensation: Miley Cyrus.

"That's Mr. King of the Hill". There's no picture of Mr. Maffei not smiling but then again I think he's not the guy you want frowning.
“That’s Mr. King of the Hill to you!”.
There’s no picture of Mr. Maffei not smiling but then again I think he’s not the guy you want frowning.

On the company board sits mr. Greg Maffei, a seemingly not very important person, as he seems not worthy enough for his own Wikipedia page. He is, however, worthy of being the chairman of Live Nation Entertainment AND president of Liberty Media. Just as with LNE – you might not be very familiar with the company – but you do know its subsidiaries. Among them: Associated Press, Barnes & Noble, Time Warner, Viacom and others. Mr. Maffei seems to also be a pretty hard working guy: In 2012 he was the 3rd best payed executive in the US Media ($391mill). You may want to have a look at his payment sources (see previous link).

So that’s where Ticketmaster hangs around. With the big guys. It has the backing it needs, it has its ticket sales outlets, it has two fulfilment centers in  Texas and West Virginia. It has it all. So much that in 1995 Perl Jam accused Ticketmaster of excersing a monopoly over ticket distribution and used its market power to gouge consumers with excessive service fees. [see source]. The Justice Department, of course, cracked down on Ticketmaster’s unlawfully practices … oh wait… it didn’t. 

The Justice Department abruptly dropped the investigation without further notice. Of course that was a great decision for Ticketmaster. At the time the JD had its Antitrust resources stretched thin as it was investigating another company – Microsoft. Guess who owned 80% of Ticketmaster at the time? Well if it wasn’t Microsoft co-founder Paul Allen.

Ticketmaster is still the leader after a not so glorious past. Its practices are often frowned upon. Scratch that – Ticketmaster is actually one of the most hated companies in the US, its competitors are catching up and the company hadn’t had a stellar year in 2013. The company is a leader in its field. A hated, feared, sieged leader and it is a matter of time until it loses supremacy.

SEE ALSO: Ticket Sales Business Models – The Retailer, The Marketplace, The “Enabler” Platform »

Ticketmaster Key Takeaways

  • Ticketmaster is the largest company in ticketing and event management
  • It’s part of a very large conglomerate of businesses
  • It has a shady past and a gloomy future
  • Competitors will soon catch up

So these are the top 5 ticket sales and event management companies. There are, of course, others out there but this is a pretty good place to start if you want to get an understanding of ticket sales and event management industry.

There are also worthy mentions, smaller but very interesting companies such as Ticket Tailor, GuestManager and UK based Ticket Script.

SEE ALSO: Ticket Sales Business Models – The Retailer, The Marketplace, The “Enabler” Platform »

If in need for a more graphic overview on this post – click here to have a look at the “Ticket Sales Companies Infographic – Who’s Who”.

ticket-sales-infographic-thumb

The next post will focus on the anatomy of these companies, their business models and trends that will change the way we sell and buy tickets.

Pinterest Ads: Who Needs Them Most?

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

Pinteresting Ads - source: Pinterest Blog
Pinteresting Ads – source: Pinterest Blog

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

Pinterest growth rate decreasing in the US, increasing worldwide.
Pinterest growth rate decreasing in the US, increasing worldwide.

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

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

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

Pinterest Ads are great news for Ecommerce

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

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

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

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

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

3. Travel

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

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

2. Home deco / home lifestyle

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

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

1. Fashion

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

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

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

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

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