You all have heard the good word – online sales are on the rise and consumer confidence is steadily increasing. But the interesting part about the uptick in online sales is that customers are using their credit cards less to make online purchases.

A recent article on WalletPop.com entitled, “Customers rely less on credit cards when buying online,” highlights a new study from Javelin Strategy & Research which reveals that Americans are using other payment methods such as PayPal and debit cards more frequently.

The research group attributes the decline in credit card activity to the advances in technology to make online shopping more secure, and consumers’ desires to curb their “buy now, pay later” spending and keep their debt under control.

What are your thoughts on this trend? Please share them with us – we’d love to hear what you have to say.

We’re pleased to congratulate a number of our customers who have been nominated for The 2010 Racie Awards, which will be announced during a gala reception at The Retail Innovation & Marketing Conference on March 3.

These honors are broken into several categories of pioneering marketing initiatives from traditional print and online advertising to the creative use of motion design and social commerce. According to the Racie Award site, “this year’s competition was stiff, with a 42 percent increase in entries over last year,” so we’re impressed that six of our customers made the list of nominees.

Customers in the running for these notable awards are: AT&T (with our partner, Sapient, as the agency of note), Best Buy, CVS/pharmacy, JCPenney Company, Inc.,  Tommy Hilfiger and OfficeMax. We’ve often expressed our pride that the brands selecting ATG are among the smartest and most creative when it comes to finding innovative and engaging ways to connect with their customers, so it’s great to see our friends getting some well-deserved kudos for the impactful marketing campaigns they’ve executed in recent months.

In fact, we’re particularly thrilled to be recognized for our work to deliver the Tommy Hilfiger iPhone app, which was nominated under the Racie Awards’ new “Mobile Apps,” category. You can read more about this project in our earlier blog post or by reading the app launch press release.

We wish you all the best of luck and we look forward to seeing you and toasting to your success in the year ahead at the Racie Awards Reception & Dinner Gala!

Apple CEO Steve Jobs displays ATG OnDemand customer National Geographic’s Web site on the new iPad during its launch on Wednesday.

Like most folks, we sat on the edge of our seats on Wednesday afternoon, waiting to see the latest bit of coolness that Apple would unveil next. I was particularly excited to see National Geographic’s site featured with the iPad launch for two reasons: One, because National Geo is an ATG OnDemand customer, and two, because I’m planning a trip overseas and the National Geographic connection made me think about the benefits of having a device like that with me when I go and as I prepare for the trip.

The fluid connection between content and commerce really comes to life here. I could be reading the travel section of the New York Times on my new iPad (can’t wait!), click through to research something on the National Geo site, decide I need to pick up a book, or new pair of binoculars or some maps.  And when I walk into a luggage store and the associate on the floor is able to show me specialty items available only on their site, I may find that she is holding an iPad with that nice big screen.  This device, like the iPhone, helps the merchant and the publisher bring better information to the point of decision, and even extend the experience of value.

For consumers, devices like the iPad make life easier. The problem for online merchants is that it’s really hard to make things that simple. Online vendors are tasked with ensuring that their Web platforms are compatible with — and take advantage of — the myriad of tools and applications on today’s market, and with every new device comes new opportunities and challenges.

Forrester’s Josh Bernoff explains the hurdles that devices like the iPad present for Web-based businesses in his recent blog post, “The Splinternet means the end of the Web’s golden age.” Yesterday, he continued that discussion.

These posts serve as a friendly reminder that great Web sites just aren’t enough anymore. Consumer access to commerce will continue to evolve and online merchants should focus carefully on their cross-channel strategies, while learning to embrace new platforms as they arise.

eMarketer published two articles on Friday that centered around the future of retailers’ e-commerce business initiatives, including some thoughts on the holiday shopping season and eCommerce investment trends as we head into 2010.

In a Q&A session with Scot Wingo, CEO of Channel Advisor, one of our strategic software providers, the message was clear—social and mobile initiatives aren’t on retailers’ menus for this holiday season, but it will be the main dish next year and a key part of their long-term success. Scot said retailers “will start to adopt these tactics en masse” in 2010, but this year we should only expect to see “dabbling.” It’s interesting to hear that characterization, since we’re seeing quite a bit of “dabbling” these days as companies like Tommy Hilfiger launch mobile stores and others like Best Buy, American Eagle Outfitters and Diane Von Furstenberg have introduced cool social shopping features that help their customers connect with each other on their sites, or chat live with customer care agents via Facebook pages.

This year Best Buy introduced the Pitch In Card, a reloadable
card friends and family can donate to.

The second article puts the spotlight on e-commerce technologies like live help services and personalization capabilities, pointing out that retailers are investing in upgrading their e-commerce sites now to prepare for the future spike in consumer confidence. The article highlights a survey conducted by Internet Retailer and Vovici Corp., which found that more than seven in 10 online retailers plan to invest in more sophisticated and advanced e-commerce applications and services this year, noting their existing software can’t compete with online consumers’ demand for a top-notch shopping experience. While e-commerce applications such as content management and customer reviews topped the chart of desired site add-ons or replacements, live help was right behind with 34 percent of all respondents indicating a plan to add or replace live chat / click to call in the next year. The survey also revealed that 37 percent of respondents plan to add or replace personalization, indicating a continued emphasis on this for 2010.

From surveys to advice from thought-leading CEOs, it is clear that retailers are putting their ducks in a row for 2010 and expecting a resurgence in online consumer activity in the coming months. Both articles are good reads – take a look and feel free to weigh in with your thoughts below.

In September, I attended Shop.org’s Annual Summit, where I moderated a roundtable discussion and attended many industry analyst presentations. One session that has stayed with me ever since is the keynote address from Forrester’s Sucharita Mulpuru. Her address, “The State of Retailing Online,” outlined what online retailers are doing well in the current economy and why e-commerce continues to be a bright spot for the retail industry.

Why am I still thinking about her talk? I was really taken by her emphasis on the importance of live help strategies, and her declaration that live chat is “underutilized.” Sucharita inferred that although few retailers are actually using this live help solution, a majority of e-merchants do seem to understand its value because, according to Forrester’s State of Retailing Online 2009 report, 80 percent of retailers surveyed are planning to focus on live chat this year. But why are relatively few retailers actually using this live help solution?

Perhaps retailers understand the value on one level, but still don’t feel the urgency of adopting it themselves. Yet, at ATG, we consistently see the results of implementing a solution that gives online shoppers the instant ability to have their questions answered or get more information before making an online purchase. A live help study we recently conducted at ATG showed that 52 percent of consumers said live chat would be “very/extremely useful when making an online purchase.” This ability to connect easily and directly with a store associate can spell the difference between an abandoned transaction and a completed purchase.

In these times when retailers are trying to pull out all the stops to maximize revenue this holiday season, we see that live chat can decrease Web site abandonment rates, provide consistent and optimal customer service and, perhaps most importantly, increase conversion rates.

If you are among the 80 percent of retailers who had planned to focus on live help this year, but haven’t done so yet, what’s stopping you? What do you plan to do to drive sales this holiday season? Are click to call or click to chat part of your Web strategy for the upcoming season? I’d love to hear your perspectives on this topic.

In my last blog post, I discussed how the e-commerce platform is emerging as the software foundation for all commerce apps, supporting all channels – and is thus becoming more of a “commerce platform” (without the “e”). In other words, the information and services needed by most selling applications (web storefront, kiosks, call centers, mobile) can be elegantly delivered via an e-commerce platform. Another approach that some are taking is to use an ERP system as their commerce foundation and extend it. This is a very different and in most cases the wrong approach. Here are some of the major differences and reasons why an ERP system is not the right foundation for customer facing commerce applications:

• ERP systems are built upon one large monolithic data repository and one set of core application services that access that repository. Commerce applications are built upon many data sources that can reside both within internal legacy systems and external outsourced systems. Commerce applications leverage both internal (behind-the-firewall) services and external web services often delivered by 3rd party SaaS vendors. Applications like SAP are not designed to be a hub for other systems as required by a commerce application environment.

• The management of commerce applications is also very different from managing supply chain & ERP applications. Supply-chain/ERP vendors offer configuration solutions built upon a single data repository. Streamlining is key, but so is adaptability and responsiveness, which have not been recognized as strengths of traditional ERP systems. In this cross-channel world, executives need to manage their entire business spectrum as a single identity. They need a unified configuration and management tool that can deal with the distributed nature of data and services. Tools provided by ERP vendors focus on managing data that is local to the ERP system. They are not set up to manage data from external sources. They do not provide the merchandising and marketing tools needed to implement a unified cross-channel, multi-touch-point selling solution that is centrally managed by both IT and business users.

• The end-user interface and usability requirements are very different in commerce applications than ERP. ERP applications are used by trained business professionals who are forced to use the tools that are given to them to do their jobs. Commerce applications serve customers, often consumers, who have no training and who may abandon the application if needs are not met, since they have many other options for where they can shop and buy. These customer interfaces/devices aren’t under a company’s control. Unlike suppliers, customers are unpredictable and demanding – affected by the rapidly changing marketplace. You can’t negotiate an interface. You need to meet their needs and if you don’t, they’ll go elsewhere. That means providing cutting-edge rich media applications that are very interactive and easy to use, which is not a strength attributed to ERP platforms.

• Business processes for commerce applications are also of a very different nature than ERP and are becoming more complex as interactions with customers span multiple channels and touch-points. The selling enterprise, e.g. a retailer, needs to optimize the transitions between channels and optimize a customer’s current interaction to reflect valuable information provided in previous interactions. Context of where the customer is in the buying process is key to delivering a compelling and valuable buying experience.  Most ERP applications are not context-aware and are not personalized.  Without personalization, the experience of customers is not relevant. Customers are not treated intelligently based on past interactions with an ERP system.

• Lastly, the new commerce-centric enterprise that commerce applications are built upon has to help merchants expand into new geographies, add brands, deal with social networks and media and support new mobile devices. Today’s home-grown and legacy ERP systems are too complex and arcane and cannot meet typical needs of scalability, speed to market, cost-efficiency and manageability to serve this multi-site commerce environment.

The e-commerce platform and engine makes more sense as the foundation. It can better represent all the commerce-related IT systems, software and frameworks that are required to deliver a unified cross-channel commerce vision. It can transcend enterprise boundaries to integrate the right mix of applications, web services, and/or managed services to deliver the right commerce solutions anywhere, at any time. It makes it easy to integrate new information sources, such as social networking applications or analytics software, as well as access or consolidate information in existing systems. ERP on the other hand is not in the best position to integrate the range of customer-facing, back end and third-party applications, enabling companies to view and manage sales across channels. Most large enterprises will have both an ERP system and an e-commerce platform. Simply extending ERP with the ERP vendor’s e-commerce module will significantly limit what you can do to deliver a unified customer experience.

A trend has emerged…it seems that more and more companies are landing on their e-commerce platform as the engine and software foundation for all their selling/commerce applications. 

Most companies sell products and services through more than one channel… in stores, over the Web, over mobile devices, via a contact center, through resellers and VARs, etc. But managing a unified view of customers, orders and products across channels has been almost impossible to pull off both economically and organizationally. The complexity of back-end systems, cost of integration projects and deeply entrenched silo’ed business processes have made it prohibitive to deliver a truly unified multi-channel experience for customers. In the past, these limitations meant each channel must operate independently, without synergy or, in some cases, coordination.

The Challenge & the Opportunity
Without a doubt, the e-commerce industry is in a major replatforming cycle – many companies are replacing outdated e-commerce systems that were built before the internet bubble.  These e-commerce replatforms are getting CIO’s and architects rethinking how they can maximize the initiative to serve more than just the Web storefront. They are realizing that there is an opportunity to leverage their new platform to provide commerce services to other sites and applications.

In parallel to the drive to improve Web sales, there is also a drive to improve overall sales via a more consistent and effective cross-channel shopping experience.  But capturing information in multiple channels, aggregating it into an actionable view of the customer and painting the full picture of the enterprise operation is a significant undertaking that requires substantial integration of many disparate systems. It also requires flexibility to adapt to varying kinds of information, at different times and that take many separate actions. There is no single system in enterprise data centers today that choreographs all the elements that are needed, and a transformation is required from current architectures to a new approach suitable for delivering commerce services and unified customer, product and order information to all the applications that need them. Here’s where the e-commerce platform emerges and takes on a new role – as the commerce platform.

The Commerce Platform
A well-designed e-commerce system is positioned to provide the base of a true cross-channel commerce solution which delivers a unified view of the customer. This system must already interface with product, inventory, order management, financial information, customer relationship and transactional systems. It typically must adapt to different information availability and rules about what system is authoritative on which data. The site is built to aggregate information in a meaningful way for a high volume of visitor traffic and is capable of personalizing the view as a function of the audience. It is the most compelling place to aggregate customer-facing information.

The bottom line is an e-commerce platform is in the best position to integrate the range of customer-facing, back end and third-party applications, enabling companies to view and manage sales across channels.  e-Commerce is no longer just the solution for the Web channel… it can be the foundation for all customer-facing commerce applications.  Goodbye “e”, hello “commerce platform.”

In my next post, I’ll discuss why an ERP system is NOT the right foundation for a commerce platform.

Recent reports conclude that Craigslist is expected to rake in $100 million in revenue this year. Kudos to CEO Craig Newmark for his innovative thinking and this very commendable 23 percent hike over last year’s estimated revenue.

In contrast, EConsultancy said the Newspaper Association of America is reporting that newspaper ad revenues are down by 29 percent. So what can newspapers and other online media properties, such as local and vertical directories, Internet Yellow Pages and classified sites do to protect their businesses, keep advertisers coming back and compete with the likes of Craigslist?

Media properties need to influence and enhance advertisers’ ability to immediately connect and engage with their browsers. They also need to provide innovative tools to help illustrate how their customers’ ad dollars are generating real leads and sales.

Let’s face it, we live in a “pay for performance” world right now. The days of disposable advertising dollars are long gone and advertisers – whether they are looking to rent a room, sell a house or publicize a job opening – are carefully choosing where to spend their money. However, according to Forrester Research, 76 percent of advertisers still have no way of determining their online advertising campaign ROI, and few are measuring campaigns across channels.

By implementing optimization services such as call tracking, text to speech technology, click to call and call recording, publishers can close the loop for advertisers by converting more leads, guaranteeing that no lead goes unanswered and proving campaign ROI. In fact, the ability to address the ROI factor alone can put a media company steps ahead of the competition.

These services also allow media properties’ advertisers to be immediately connected with potential customers at the point of peak interest and create a personal connection with consumers.

Yes, it’s true that we live in an overly-automated, fast-paced, now-or-never world, but the fact of the matter is that we – as humans – yearn for personal, trust-laden relationships. Without optimization services, media properties’ customers are just another advertiser with another product to sell. Services that help them interact with potential buyers make them stand apart from the crowd and provide proven ROI by converting more browsers to buyers.

Though the government says consumers are reducing their spending, online retailers are reporting a year-over-year growth in sales for the first quarter of 2009. In fact, a majority of online merchants are predicting that the positive momentum will continue throughout the year.

These numbers were reported this week by Internet Retailer, as part of the publication’s new profitability and business development survey of 92 Web-only retailers, chain retailers, catalogers and consumer brand manufacturers.

This is more great news for e-commerce merchants and we’re glad to hear that a majority of online retailers are faring well in these difficult times. We are also encouraged to see that very few retailers are planning cuts to their technology theater of operations. As Gene Alvarez, vice president of e-commerce research at Gartner Inc., says in the Internet Retailer article, companies that continue to invest in their Web sites through tough economic times are best positioned and prepared to capitalize on the economic turnaround when it occurs.

As such, we wanted to provide a couple of tips to help online retailers continue this growth in sales and power through these shifting times. The time to be a little creative and try new tactics is now, so you are well prepared as we head closer toward the holiday season:

• Deploy automated recommendations: Personalized merchandising services help quickly lift revenue by recommending the most relevant products from the catalog to each shopper. If your recommendations engine understands your catalog and gives you the control to balance automation with your merchandising strategies, you can use it to personalize merchandising across the site and across channels. Why not automate and personalize your top-seller pages, a slot on your homepage, or even create new pages such as gift guides or “just for you” sections? Our data shows that customers who extend recommendations across their site and across channels have a much greater revenue impact than those who use them for cross-sells alone.
• Implement live help with click to call and click to chat: These technologies can help quickly and measurably increase conversions, reduce Web site abandonment, increase order values, and improve customer loyalty and contact center efficiency. A recent report from Forrester Research finds that firms that are successful in implementing interactive help features like click to call and click to chat are quick to move shoppers from the Web to the phone. The more you can do to make experiences satisfying and consistent across channels, the more new and repeat customers you will earn.
• Try re-marketing techniques: One of the most recent trends we’ve observed with our customers is the growing use of re-marketing or “winback” features that proactively ask site visitors to provide their e-mail address when their online behavior indicates they may potentially abandon a transaction. You can easily do this with a proactive rules engine that you control, so you can offer this “winback” feature only to select visitors who exhibit common signs of abandonment, such as hovering on a page for too long. You can then re-market to those who opt-in, providing links back to carts and reminders to complete orders.

Some of you may have noticed that Gartner’s analysts have begun posting interesting clips on YouTube recently – this week we found one entry particularly compelling. Gene Alvarez, a VP in the Gartner CRM research organization, is a recognized authority on retail and consumer packaged goods industry applications and practices; he’s also an international expert on e-commerce technologies. Earlier this year he released research on cost-cutting in e-commerce and this week he addressed the topic again, discussing the continued promise of e-commerce in these shifting times.

Here, Gene debunks the argument that e-tailers can cut costs by holding off on buying e-commerce software and services from vendors, instead letting their in-house development team handle building these tools. (This is certainly a topic we have also spoken out on quite a few times…the old “build vs. buy” debate…) He says those that build out e-commerce functionality like automated product recommendations features, click to call buttons, and site personalization capabilities are actually wasting internal resources that could be better spent elsewhere. We couldn’t agree more.

Related post: Would you build an ERP system? ok, well, how about an e-commerce platform?