The madness has begun! 

If you spent any amount of time in front of your television this weekend you inevitably saw many an intrepid reporter documenting the crowds at the mall – all while riding an escalator (for those of us in New England, we will soon see these same reporters standing in front of the season’s first mountain of road salt).  This evening’s newscast will likely lead with a story of the US workforce eagerly shopping away on the company’s broadband and taking advantage of the growing number of discounts and free shipping available online.  Black Friday has officially gained a sister in Cyber Monday.  But while Cyber Monday is a great promotional angle, the real story is in the shifting season. 

As many have documented, this holiday season is projected to see lower total retail growth than each of the past 5 years.  The NRF has projected a 4% growth rate overall which has kicked the retail world into the full promotional zone.  However, online sales are projected to see growth rates near or above 20% this season.  Whether gas prices, crowds or convenience are keeping them home, more Americans will shop online and returning Web shoppers will spend more of their budget online this season. 

Early estimates from Black Friday support the projections as stores saw an estimated 8% increase over last year while web sales outpaced last year’s same day by 22%.  And we’re just getting started.  The peak online shopping days likely won’t be seen for another week or two.  Last year’s peak days fell in mid-December and given a higher penetration of broadband to the home and increased consumer confidence in shipping systems, we expect to see that trend continue this season. 

So, enjoy the increased attention from the press on Cyber Monday and use it to drive increased attention from shoppers throughout the season.  Target your promotions to deliver value where warranted while maintaining margins.  Learn from the early shoppers to drive more relevant recommendations and offers for the procrastinators.  Optimize your category and search pages for each shopper so that they can find just the right present for each person on their list.  The satisfaction shoppers will get when their gift is opened and enjoyed will drive them back into your stores post holiday – especially when they receive your personalized, gift card promotion. 

Merry Cyber Season!   

[tags] Cyber Monday, e-commerce, online shopping, e-tail, e-tailers, Web retail, holiday shopping, Black Friday, ATG, holiday promotions [/tags]

While those of us who post regularly to this blog consider ourselves experts in e-Commerce, we know we’re not the only ones. That’s why we’re initiating a series of brief interviews with other internal and external experts to explore more thoughts on all the exciting things going on in the world of e-commerce.

Today’s post summarizes a chat I had recently with ATG’s VP of product strategy, Barry Coleman.

Barry, what’s exciting about the e-commerce industry right now?

Of course, the growth in online retail has been tremendous. And now more than ever, competitive pressures are forcing merchants to take a very smart, proactive approach to the way they sell on the Web. The sites they built years ago just aren’t cutting it anymore, which makes it a really exciting time because merchants now need to get more sophisticated in order to be taken seriously.

In many ways, we can now create better, more relevant experiences online than we give customers in stores, because we can allow companies to target their merchandising efforts down to customer segments that are very particular. But the challenge has not been developing the technology—we know how to do that and we have had most of it around for years. Retailers and other merchants have been slow to adopt these capabilities, though. What I’m seeing is that most of our customers are beginning to take advantage of the kinds of personalization that ATG has been able to offer since the early days of e-commerce.

You mention companies are driven by the need to compete more. What are some of the ways that they’re accomplishing this? 

Personalization makes a huge difference. The retailers who are driving repeat purchases are cross-selling, up-selling, but doing it in a targeted way. They’re targeting content based on customers’ market segments, their transaction history, location, etc. —  not just one or two of these, but ALL of them. So companies are doing more than just helping customers find products faster, they’re helping them find what makes sense to individual shoppers at a particular time, based on the sum total of everything they know about that customer.

We took all these segmentation principles to heart in the recent Affinity Selling features we added to ATG Commerce. Most collaborative filtering or recommendation engines don’t take customer segmentation into account when generating cross-sells for a product. They take the sum total of click and/or purchases and generate the cross-sells from there. Segmentation is now such a fundamental part of our customer’s business that we felt it was important to calculate product affinity scores for each customer segment and show the user the product affinities for their segment.

Another way companies are competing better is by focusing on multi-channel interactions and multi-channel transitions. Online sellers are realizing that true loyalty is earned through the entire customer experience, not just the Web buying part of the relationship. Customer service – before, during and after the transaction – plays a huge part in determining customer loyalty. We’re seeing companies taking a much more proactive approach to customer assistance. Things like click to call and click to chat technology (Editor’s note: read more about this on eStara’s blog) help companies move high-value, at-risk online transactions to live agents, who can answer questions and actually finish an online order that a customer may have started. In fact, the entire Commerce Service Center suite we released this summer helps companies tightly integrate their web sites with their contact center.

What else are merchants interested in? Are they embracing mobile commerce?

Yes and no. In the U.S., mobile hasn’t been a big focus for most large brands because they just aren’t seeing a demand worth investing in yet. The technology is all there from an e-commerce standpoint, and we do have those capabilities within the ATG platform. Merchants don’t want to have to manage mobile sites they’d rather focus their efforts on driving conversions in the primary online channel.

As an industry we have been predicting the rise of mobile commerce for the last 7 or 8 years and it really hasn’t materialized. In my opinion there are two important factors as to why it hasn’t happened. Firstly, the networks are to slow. 3G networks are basically the slowest you can go and have a reasonable experience, and none of the US carriers have a widespread roll-out. Secondly, the devices just weren’t capable. The iPhone is a first step in the right direction for device capability. It has a good high(ish) resolution display, but it’s hampered by a slow network and a closed architecture. It’ll be interesting to see if Google’s Android changes the landscape, making it easier for us to deliver compelling experiences to phones, and whether the device manufacturers will adopt it. All of this combines to point to Asia and Europe as the markets that’ll lead the way in mobile commerce.

In the future we are going to see more companies take advantage of mobile marketing and proximity alerts that rely on GPS technology and Wi-Fi access to grab the attention of young shoppers who are used to living their lives on cell phones. There’s a long way to go before those of us outside that demographic will embrace mobile shopping and especially before the carriers put the appropriate infrastructures in place to make it happen. We see phones and mobile devices playing a larger role in commerce, sure, but right now you can’t expect that massive amounts of people are going to load their credit card data onto their PDA and shop with it as though it’s both a PC and an electronic wallet. It’s too easy to lose and consumers aren’t that confident in the security of it all. Maybe if there was a way that you could remotely wipe your phone clean so that if you lost it, there’s no danger that someone else will go shopping with it. But honestly, I don’t see the wireless carriers wanting to take on an added liability like that. Mobile commerce isn’t taking over right away, but it is coming.

So, we hear a lot about Web 2.0. How can merchants embrace it?

Web 2.0 encompasses a lot of facets. To some it is about using Ajax and Flex to create richer experiences. This is a really good thing. Excellent site experiences are a differentiator. These technologies allow the web sites to appear more like desktop applications, you lose the long blank page while the site refreshes. We’ve been using Ajax in our management and agent tools for several years now and we are adding widgets to the consumer facing pieces too. To me though, Web 2.0 is so much more than flashy web sites. It’s about building community and fostering contribution. There are many millions of blogs, discussions boards, MySpace pages and the like. Many of them are dedicated to the discussion of products that merchants are selling, but to which many merchants are oblivious or they at least have no reasonable way to capture the richness of the information they contain. Building community by allowing people to share opinions and ideas right at home on the merchant’s site allows the merchant to see the discussions (both the good and the bad), to identify the community thought leaders, to participate and to ultimately build or sell better products based on the discussion. Product reviews is a small first step down that road but there’s much that can be done. That’s an area we’re thinking about pretty hard. I fundamentally believe that you need to let the customers in on the merchandising process, they are the merchant’s most valuable asset.

Anything else you want to add?

Hopefully I won’t get slammed for giving a quick plug to the business plan competition ATG announced recently, but I’m very interested to see what comes out of it. As someone who’s worked very closely on both the technology and the business sides of an e-commerce company, I’m curious to see what kinds of plans are submitted, so I hope grad students, startups and developers will take a chance and submit.

[tags] e-commerce, personalization, mobile commerce, Web 2.0, business plan competition [/tags]

Personalization is hot again. 

Just when some believed the term “personalization” was in danger of becoming outdated, there seems to be a revived interest in it. The term is still misunderstood and for that reason is often not used.  New terms like behavioral targeting, precision marketing, and micro segmentation now come up in common marketing conversations, and often replace the more general notion of personalization. But the concepts are still the same and the value is even greater. Content targeting, collaborative filtering, one-to-one marketing, guided navigation… these are all personalization concepts that have been around since the 90’s. But it seems eTailers have finally moved beyond the early hype cycle and have found practical ways to implement and manage dynamic sites that “personalize” the experience, segment their sites and improve the quality of their recommendations.

By most people’s definition, personalization is about delivering “the right content to the right person at the right time through the right channel”.   What is the right content?  The simple answer… the content that converts the looker to a buyer or the one-time buyer to a loyal customer. 

At the heart of managing personalization is the ability to dynamically modify or configure the content of a web site based on who the user is, what the user is doing, or what the user saw, bought or saved.   Why is this easier today?   The difference today is in the easy-to-use business tools that give marketing managers and merchandisers the ability to easily define online segments, tag content (products, reviews, articles, etc.) and create rules to fully-automate real-time intelligent targeting.  Implementing personalization no longer requires Java PHDs and savvy Java scripting that is hard to maintain.

Why is personalization more effective today?  One theory I have… sites are taking a more basic approach.   Rather than implementing rocket science technology to “guess” at customers’ intents and preferences, eTailers are simply asking web site visitors a few key questions like brand preference, price range, product attributes, lifestyle questions, etc.  This information enables very accurate recommendations. The key: consumers, especially the younger generation, are more willing to share information online in return for this “value”. A recent article in eMarketer.com discusses how consumers generally like personalized offers, at least on e-commerce Web sites.  And although one-third of respondents to an Avenue A | Razorfish study were concerned about the privacy implications of personalized recommendations, more than seven in 10 said they found them helpful.

My caution to eTailers: Some of you are abusing this power and using consumer provided information to spam them.  This abuse of consumer information will create distrust with your brand and distrust with the general online shopping ecosystem.  Consumers are willing to partake in an online dialogue with online sellers.  If you focus on returning immediate “value” in return for sharing information, consumers will share.  They want you to help them find the right product or the good deal or the interesting accessory.  But if you begin to intrude upon their lives and take up their scarce time reading junk, they will begin to balk at this sharing.

[tags] personalization, behavioral targeting, precision targeting, micro segmentation, do not track, e-commerce, online shopping, Web advertising, Web marketing [/tags]