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.

 

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.

Shopify Raises $100 million. Targets online and offline shopping.

shopify-ceo

Shopify, the company that now powers over 80 000 online shops, with almost $1.5 billion in sales generated on it platform, announced it has raised $100 million. Existing investors, as well as new ones, such as OMERS Ventures and Insight Venture Partners, chose to extend the initial $22 million investment.

Target: Clicks as well as Bricks.

Shopify is, as CEO Tobias Lutke mentions in its most recent blog post, the “fastest growing ecommerce platform in the world” but it seems this is not enough. The company plans to bridge the gap existing in small to mid companies’ approach to multichannel shopping.

shopify-posThe future, it seems, lies not only online or in an online vs offline struggle but rather in a 360% approach to customer care and sales.

Earlier this year Shopify announced Shopify POS, a point-of-sale solution designed for stores already running on Shopify’s platform. These stores can now easily use the software and hardware provided by the company to ensure a better care for their customers, independent of channel.

Rags to riches

The company was founded in 2004, when CEO Tobias Lutke and co-founders were trying to find a way to sell snowboards online, legend has it. Because they were not able to find an affordable application to help them do that, they built it themselves. Later on they thought it would be better to rent the software as a SaaS solution rather than try and sell snowboards. “That was the best decision of my life” says Lutke.

It took the company 6 years of bootstrapping until they finally got their big brake. Th first investment came in 2010 ($7million) and than 2011 ($15 million).

Now they sit on $122 million in investments and the company is probably the most interesting Canadian tech company of the moment. As the market’s demand for affordable, flexible solutions to multichannel retailing increases, so will Shopify’s market value.

Tracking customers in-store. Where is the Privacy?

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

privacy

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

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

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

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

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

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

Comments on Nordstrom's decision to track shoppers behavior.
Comments on Nordstrom’s decision to track shoppers behavior.

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

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

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

Tracking in-store traffic with video cameras

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

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

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

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

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

Companies providing in-store customer tracking technologies

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

Nomi tracks customers online and offline
Nomi tracks customers online and offline

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

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

So everything is cool right? Well…

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

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

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

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

And Apple is really committed to using it:

Apple will track iOS users with iBeacons

The Apple Store Visits you
The Apple Store Visits you

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

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

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

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

Flipboard Becomes an Ecommerce Gateway with its New Catalogue Feature

flipboard

 

Flipboard, famous for making it easy to read webclips and magazines on mobile devices, flips over to ecommerce. In a recent blog post the team announced it will allow brands and users to create virtual product catalogues.

For starters the company allows users to flip through curated content with v-magazines such as “Modern Man,” “Beauty Bar,” “Home Sweet Home,” “The Pantry” and “The Active-ist”.

Several brands have also taken up the opportunity and have launched brand magazines. The thing is – these magazines allow users to browse through holidays offers and than shop. It’s safe to assume that Flipboard aims at something more than just content browsing.

Right now the company has enlisted Banana Republic, Birchbox, eBay, Etsy, Fab and Levi’s. Soon others will  join given the fact that Flipboard has more than 85 million users (a rather interesting market), with 1 million of them actively creating and curating magazines.

Flipboard closing into Pinterest

Remember when we talked about how Pinterest is killing it in terms of ecommerce referral traffic? It seems that Flipboard has also taken up the model and lets users collect products using this handy-dandy little bookmarklet that allows users to collect and share their favorite products.

A mobile commerce gateway to lovable goods

Flipboard is one of the most popular mobile apps around  and not just in terms of number of users. Its 1 million personalized magazines has led to change in user behavior. Almost 50% of all users now read personalized magazines created by less than 1%. The time stamps are interesting also: most reading is done in the morning (9 AM – kinda like a morning newspaper), magazine updating is done in the afternoon and most sharing is done in the evening.

So far their unpaid editors were not able to make an actual living curating the magazines but who knows – The new commercial magazines might change the way we look at Flipboard.

With over 1 million editors, 85 million users and a lot of nice products out there Flipboard can maybe become the mobile Pinterest. There is a need for socially curated ecommerce stores, Pinterest is a success so far in terms of ecommerce interest and mobile is on the rise. Say hello to the new Ecommerce Gateway.

Google Checkout Checks Out – the Service to “Sunset” on November the 20th, 2013

Google checkout is soon to be dead. Recent changes to Google’s strategy made the product obsolete. The change will affect mostly physical goods merchants as Google offers options for digital goods and app sellers.

While PayPal can surely be happy about it, customers will not be. However, the company has partnered with companies providing payment processing options (Braintree), online store solutions (Shopify) and online invoicing (FreshBooks).

If anything – Google is moving even deeper into ecommerce services

Google Shopping Express
Google Shopping Express

The recent changes and Google Checkout’s “Sunset” (definitely a great spin) will not change the interest Google has for ecommerce services. The company is looking for places it can grab a larger market share, places with a faster growth rate. Here are some:

  1. Shopping Express – Same day delivery service for companies such as Staples (second largest online retailer), Office Depot, Toys’R’Us. Launched in march 2013, it expanded september 2013 to include the area between San Francisco and San Jose. It currently offers 6 months free trial to customers signing up until Dec. 31st
  2. Google Wallet Instant Buy – a service that provides a multichannel solution to payments, allowing customers to pay on mobile, on the desktop and in app.

Google is still interested in ecommerce. It just figured out Google Checkout was not going to happen.

So – if you are a Google Checkout customer – remember, remember, the 20th of November.

Selling Office Supplies Online – 2013 Ecommerce Market Report

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

staples-img

Let’s start with:

Office supplies online – market overview

Staple logo

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

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

Multichannel experience through interactive kiosks at  Staples.
Multichannel experience through interactive kiosks at Staples.

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

[Read more how retailers connect channels with Omnichannel Retail]

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

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

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

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

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

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

Product segmentation and best sellers in office supplies

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

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

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

Ink and toner Cartridge online market – opportunities and threats

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

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

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

Increase in demand for ink in labeling and packaging
Increase in demand for ink in labeling and packaging

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

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

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

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

Markets and marketing for office supplies online

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

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

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

Customer care and retention – loyalty programs

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

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

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

Using mobile to connect multichannel customers

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

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

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

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

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

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

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

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

 

Social media

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

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

Direct marketing / customer targeting

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

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

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

Key take aways:

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

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

 

 

 

Selling and Marketing Cars Online – 5 Most Important Trends

People may not be (yet) buying new cars online but they sure spend a lot of time and energy researching their future purchases online. Remember the old cars salesman stereotype? Forget it. The new cars salesmen is the guy with the most positive online reviews, a stellar social media presence, hired by the friendliest dealership in town and quick to respond to his customers’ questions.

new-cars-online-stats1. Car buyers are in the market for 5.3 months. Mostly researching online.

Speaking of customers – those looking into buying a new car are in the market for roughly 5.3 months, as shown in this Cars.com research. During these months they check out:

  • information regarding manufacturers
  • information on car models
  • dealership information

Now when it comes to dealerships – you can be sure that by the time a customer sets foot in one he has probably read everything available online on:

  • company website
  • social media profiles
  • online reviews

Sometimes potential customers don’t even bother visiting their local dealerships if online reviews are not good enough. A curated online presence can do miracles for dealers as long as their service matches their marketing. Good service and reliability are still the most important factors when deciding what and where to buy. Recent online developments just make it easy for customers to find out the good and the bad about dealers and cars.

2. Photos sell cars. Reliable cars.

decision-to-buy-carWe all know how important photos are when buying cars. 63% of potential car buyers make their first steps towards a purchasing decision based on photos and other media. However, no dealer is going to make them pay unless esthetics are backed up by great reviews on reliability (52% new car buyers showed interest), features/colors (51%) and safety information (49%).

3. Mobile is used before, while and after purchasing a car

As mobile is quickly revolutionizing every aspect of our lives we were bound to use them on the spot, in dealerships, when making our final decisions. If you’ve used your smartphone in the dealership you can rest assured you are not alone – 43% of customers visiting dealers use their mobile device. Most frequent uses during dealership visits are targeted at:

  • pricing information (57%)
  • general information (22%)
  • vehicle information (14%)

So price checking really matters when visiting the dealer. It’s not a secret that any dealership will try to maximize its margin but that seems to be harder and harder with everconnected consumers.

Much more than this – customers will also check for user generated content on the spot. 79% of new car buyers value user generated reviews , as this CapGemini report shows.

The same report outlines some of the media channels buyers will scan to form an opinion. The big take away from the info below is that social media outlets (for both manufacturers and dealers) really matter when forming an opinion. Make sure that they are well set up and properly maintained.

infomation-checking

4. Customers connect to connected cars

options-connected-cars
Connected users need connected cars

There is a growing need for connected cars. I wrote about it a couple of months ago and now, with the new iOS 7 and recent developments in smartphone manufacturing customers seem to be getting what they want, when it comes to in-car smartphone support:

  • driving support
  • care information
  • remote support
  • communication
  • vehicle information

5. Women feel empowered when it comes to buying cars online

A big shift in car buying, especially when it comes to online-related purchases is the fact that women seem to be more and more engaged.

What has been looked at as a traditionally male influenced industry is shifting by the day and internet plays a large part in this shift. Women are big spenders when it comes to auto: they spend more than $200 billion yearly on new cars and car – care. They also influence over 80% of all new car purchases and account for almost 65% of all car service work done on dealerships.

These are some really, really big numbers and they just keep on increasing as women feel empowered to negotiate their prices behind a computer screen. Once a somewhat biased industry, the auto dealerships are leveled fields for both men and women and purchasing can now be fun and engaging for women. Feel like reading a little more about it? Check out Libby Copeland’s experience with buying a car online here.

In the end remember that:

  1. customers will research online their car options long before visiting a car dealership
  2. dealerships are (still) the ones to finalize the car sale
  3. unreliable car salesmen will soon be a thing of the past
  4. mobile is changing the way we buy cars
  5. women are quickly becoming the most important segment in car sales

 

 

Apple CEO Tim Cook: “The App Store is the Biggest Online Store that We Know Of” – WWDC 2013

Tim Cook at WWDC 2013
Tim Cook at WWDC 2013

Apple has just released its new iPhone 5S at the WWDC 2013. That’s the biggest news in tech right now. Now for something more online retail related news – Apple’s CEO declared App Store to be the biggest online store that they know of, and he sure has some figures to back that up:

  1. Apple sold over 50 billion apps in the App Store
  2. There are 900 000 applications online, 93% of which have been downloaded in the previous month
  3. There are more than 375 000 iPad apps, more than any other tablet
  4. Most important – there are 575 million registered users, most of which have registered with their credit card and are ready to pay with one click

Yup, the App Store has 575 million registered users.

appstore

So – we have one of the largest companies in the world, with one of the biggest online retail operations that just mentioned that it has almost 600 million users ready to buy whatever they’re sold with the click of a button. They sold 50 billion apps. They have roughly 500 million iOS devices out there on the market. Let’s just think for a moment of what would happen if Apple decided to seriously go into … I don’t know … books?

Beat that, Amazon.

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

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

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

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

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

Mobile sales
Mobile sales

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

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

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

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

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

1. Make it useful

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

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

uber

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

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

Amazon Barcode Scanning app
Amazon Barcode Scanning app

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

2. Make it fun

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

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

Talk about fun…

3. Make it local

Shop Nearby, by The Find
Shop Nearby, by The Find

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

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

4. Make it Personal

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

Gilt understood this when they launched …

Gilt personalized shopping

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

Personalized sales
Personalized sales

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

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

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

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