Tags Posts tagged with "Ecommerce"

Ecommerce

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The military has used drones for years, for a variety of missions. Now ecommerce retailers are evaluating their use.

Consumer research firm eDigitalResearch conducted a survey that found that 33 percent of online shoppers are open to using drones to speed up the delivery of their orders. Another study conducted by Walker Sands Communications reported that 66 percent of the surveyed American consumers think that online merchants will use drones for delivery within the next five years.

Consumers are apparently keen to utilize this technology, in other words. Amazon’s announcement in 2014 of a potential drone-based delivery service called Amazon Prime Air has led other retailers to consider drones.

AmazonPrimeAir

While the U.S. Federal Aviation Administration is evaluating the use of drones and the regulations related to them, there are challenges retailers need to overcome before drone-based order delivery becomes a reality.

In this article, I’ll list eight of them.

8 Obstacles to Drone Delivery

1. Order staging. Before orders are shipped, they are typically assembled in a staging or docking area in a warehouse to be loaded into trucks. With drones, this docking process will need to be redesigned and may require changes to how products are picked for an order. This is not a small change, as existing processes will have to be redesigned for supporting drones and employees will need to be trained on these new processes to make drone delivery successful.

2. Weight limit. Since drones can presumably only support orders below a certain weight, the retailer may have to split the order into multiple shipments. This will increase the delivery costs and will need to be somehow offset or passed down to the consumer.

3. Drop ship vendors. Many retailers use drop ship vendors. These vendors will have to invest in drones to support faster delivery, to remain competitive, or retailers will have to look for other options.

4. Distance limit. Drones can travel only a certain distance. This may require retailers to load the drones, along with the ordered products, in delivery trucks and use drones for delivery only when they are within a defined radius for customer deliveries.

5. Requires investment. Introducing drones as part of the delivery process requires investment. But this investment will be a bigger strain on smaller retailers — or use third party services that utilize drones.

6. Shipping big-ticket items. Drones fly a few hundred feet from the ground and could become targets of thieves who want to steal merchandise. Retailers will have to consider this before using drones to ship big-ticket items. Retailer shrinkage could increase significantly after introducing drones.

7. Weather restrictions. A customer who signs up for faster delivery using drones will need his orders to be delivered regardless of the weather. Drones are not ideal for inclement weather, such as snow, hail, rain, and high winds, which could delay delivery to the customer.

8. Uninterrupted service. Drones are machinery that can fail. When that occurs, retailers will presumably have to send another drone to deliver an order. They will also have to determine how to collect the broken drone or write it off as loss.

In short, drone technology sounds exciting. But the reality of putting it into use is not straightforward. While the F.A.A. considers regulations on the use of drones, retailers can ponder and plan their strategy.

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Many small business owners have told me they understand how Facebook is a good fit for business, but have difficulty drawing a similar conclusion when it comes to Twitter.

According to a report from GlobalWebIndex, an analysis firm, Twitter increased its user base by more than 288 million people in 2012, making it the fastest growing social network, exceeding Facebook, Pinterest, and Google+. Of that number, Twitter became most popular among older users. The over 55 age group grew 115 percent, while those in the 45 to 54 age range grew 81 percent.

If for no other reason than its brisk adoption rate, businesses need to make effective use of Twitter, not just have a presence there.

This article addresses Twitter’s value and describes six effective practices for using it.

Ways to Use Twitter

I often refer to Twitter as a “social media Swiss Army knife” in that it is a simple tool that has many uses, as follows.

  • Community building. Create a strong community of followers who will help raise awareness, visibility, and affinity for your business.
  • Media relations. Share updates, events, ideas, and relevant stories in which the media may find interest.
  • Customer relations. Use Twitter to engage with customers who may have questions or issues;
  • Event promotion. Drive attendance to events you sponsor or in which you take part.
  • Special alerts. Alert customers to new products, special sales and exclusive offers.
  • Branding and awareness. Use Twitter to increase awareness about your business and its products.
  • Influence building. Share information that your followers value and they will look to you as an essential resource.
6 Effective Twitter Practices for Ecommerce Merchants

1. Tie to specific marketing goals. Like any other social network, Twitter should serve specific marketing goals. For example, if increasing sales is the goal, launch a Twitter campaign using unique URLs, along with calls-to-action focused on driving sales.

If the goal is to improve customer service, set up a dedicated Twitter account for customers to ask questions, similar to what Comcast (@comcastcares), Zappos (@zappos_service) and Ford (@FordCustService) have done.

2. Use hashtags to find conversations. Use hashtags — #keyword — with events, topics, brands, products, special campaigns, and sales promotions (or just about anything you choose) to find and track conversations in Twitter.

Here are some helpful tips for using hashtags:

  • Determine a specific reason for using a hashtag;
  • Don’t overuse hashtags — 1 or 2 per tweet is best;
  • Keep hashtags concise to use fewer characters;
  • Promote the hashtag both online and offline;
  • Integrate hashtags into sentences rather than just appending them to tweets.

3. Establish a Twitter schedule. Use a social media management application likeHootSuite or Buffer to create a series of tweets and schedule them for posting a various times throughout the week. This helps keep Twitter messages on target and your account active.

Such tweets can include helpful tips, observations about your industry, product recommendations, inspirational quotes, and links to relevant resources. The key is that they add value to your followers. Scheduled tweets can be interspersed among real-time tweets.

It’s important to establish a pattern of consistency with your tweeting strategy and scheduled tweets help ensure that you do.

4. Monitor relevant keywords. One of the best ways to use Twitter is to monitor conversations about your brand, products, industry, and competition, as follows.

  • Define a set of keywords. Search for your business name, Twitter handle, product names, industry terms, and competitors’ brand names, Twitter handles, and products.
  • Make a schedule. Monitoring Twitter works best when you set a schedule. Spend a few minutes — daily or weekly — searching for your keywords to see what people are talking about.

If you share links on Twitter and use the URL shortener bit.ly, you can copy the link into your browser and add a “+” at the end to see how many people clicked on it and the types of conversations it generated.

5. Grow your following. Make it a practice to consistently grow a community of relevant followers. This can include current and prospective customers, vendors and product suppliers, employees, or anyone who has expressed interest in what you sell.

One of the best ways to get followers is to follow others first. Mention them in “shout outs” and retweet their content to gain their attention. Also, follow and proactively engage when they mention or retweet you.

6. Use the right tools. You can use Twitter directly, without third-party tools. However, it’s much better to use more robust management tools such as HootSuite, TweetDeck, or SproutSocial.

Not only do these tools allow you to engage via Twitter, they enable you to add other social network accounts, as well. Some provide detailed analytics on your social media engagement activities.

Wrapping Up

The best way to understand Twitter is by using it. Whether you choose to leverage Twitter for sales promotions, media or customer relations, branding, or influence building, these six effective practices should help you get started.

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When showrooming became popular a few years ago, brick-and-mortar retailers realized they needed to change, to compete with lower-priced online stores. Amazon became the target of many brick-and-mortar companies. But the reality is that ecommerce merchants of all sizes benefited from consumers who researched in a physical store, and then made a purchase online because it was cheaper or more convenient.

Today, global retailers are sleeping giants who have awoken and are aggressively pursuing innovative strategies to recapture lost market share and grow their customer base.

The buzzword for 2013 is “omnichannel” and the global retailers are all buzzing about it. They are trying to ensure that the customer experience is consistent at all potential touch points during a buying cycle.

Global retailers leading the charge include Macy’s, Target, Lowe’s, Home Depot, and Nordstrom. Their actions are being copied by other brick-and-mortar retailers.

They are capitalizing on the increased use of smartphones by developing apps that pull people back into their stores. They realize that smartphones are used more often for product research than actual purchases. They are using that to their advantage.

They have also greatly improved their own online stores. Rather than being second-class citizens in the customer experience department, they are now setting the bar higher than many online retailers.

In this article, I’ll review some of the basic things that Lowe’s is doing to compete with Home Depot, and with pure-play online retailers like Amazon.

Lowe’s

I picked Lowe’s because its ecommerce business is growing rapidly. At the same time, it is deploying smartphone apps to drive traffic to physical stores. Lowe’s is the ranked 47 out of the top 500 online retailers, according to Internet Retailer, with 2012 online sales estimated at 1.5 percent — approximately $757 million — of overall revenue. That was a 51 percent increase over the previous year. Lowe’s accomplished that by increasing its conversion rate and roughly doubling online SKUs to more than 600,000.

I like the customer experience in the Lowe’s online store. Here are a few examples.

  • Clean interface. The user interface is clean. The branding is simple, but functional. The main navigation uses rich pull-downs with traditional categories as well as images that guide shoppers to featured product categories. Notice the focus on having an account and associating with a local store. This is the main focus of the top header.

Main navigational pull-down includes images and featured categories.

  • Prominent search. Lowe’s search is both powerful and fast with both type-ahead suggestions and actual product suggestions that pop up. Faceted navigation allows a high level of refinement on the results and sorting order.
  • Product detail pages are content rich. Once again, notice the focus on in-store availability along with free delivery and shipping options. Product reviews include a nice feature that categorically summarizes pros and cons so that you do not need to read every review to understand that important feedback.

Product Detail Pages

Expanding beyond the basic site features, Lowe’s has invested in a loyalty program called My Lowe’s that includes promotional offers, a process for expedited returns, tracking purchases, a reminder program, online inventory of home items, and multiple shopping lists with easy mobile access.

It also offers a mobile app that improves the shopping experience. In addition to being able to shop online and pick up in the store, you can also make sure items are in stock or use the locator to find a store that has an item in stock. The app includes a local store map that will guide you to items in your cart.

On the social media front, Lowe’s is invested heavily in Twitter, Facebook, Pinterest, YouTube, Instagram, and Google+. It recently ran a Pinterest promotional board where it teased consumers with Black Friday deals by showing product silhouette images that were revealed on November 4. Lowe’s engages consumers about what those might be on all their social outlets. As a result, this integrated campaign likely has consumers thinking about Lowe’s for gift purchases. Notice products that are not solely focused on home improvement, including things like furniture, mixers, and wine coolers. Lowe’s accumulated more than 90,000 followers on this board.

Black Friday Deal Reveal Pinterest Board

Lowe’s Facebook page has more than 2.6 million Likes and 30,000 people talking about it.

On Twitter, there are not as many visible conversations as I expected. Lowe’s uses Twitter primarily to broadcast deals and post products for promotion. It uses the image capabilities on Twitter effectively to show products and other fun graphics and images.

Why Does This Matter?

For many consumers, Lowe’s is part of a buying cycle for home improvement products. If you compete with Lowe’s on price or availability, it will tougher to beat. If Lowe’s adds price matching — like Best Buy — and if Lowe’s has an item in stock in a physical store when a buyer is shopping, you may lose sales that you won in the past.

Because it is more convenient now to shop in Lowe’s physical stores with in-store maps and GPS guidance, more shoppers may choose to research in physical stores rather than online. Since Lowe’s also has solid mobile apps and web presence, smaller competitors will likely need a robust and well-designed ecommerce site, in addition to their physical locations.

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Global payment firm MasterCard announced that its customers will receive free, two-day shipping from five of the Internet’s leading retailers. MasterCard also offered a premium service that extends the free, two-day shipping offer to other online merchants.

MasterCard joins American Express and PayPal in offering customers free, two-day shipping options at select online retailers. Earlier this year, American Express offered its cardholders free permanent membership in ShopRunner, a service that gives its members free, two-day shipping at several retail sites. Similarly, PayPal recently tested two-day free shipping offers with a few retailers, whereby shoppers could get free, two-day shipping without an annual fee if they simply checked out using PayPal. The offer had no minimum purchase requirement.

MasterCard has a new site in support of its free shipping offer.

Collectively ShopRunner, PayPal’s offer, and MasterCard’s recent move may be part of what some in the retail industry are calling the Amazon Prime effect, which is a trend to faster, free shipping services driven in part by Amazon’s Prime service. These offers arechanging customer expectations, so that merchants, regardless of size, may need to change free shipping offers to reflect the two-day service available from Amazon Prime, ShopRunner, and now MasterCard.

MasterCard Offer Aims at Large Retailers

The “Free Shipping by MasterCard” offer features five of the retail industry’s best known merchants: Best Buy, QVC, Macy’s, Kohl’s, and Walmart. Online purchases made from these sellers can earn free shipping up to $20 per purchase and $500 maximum over a six-month period.

To take advantage of the MasterCard offer, shoppers must register at a special MasterCard site, sign in and shop from the site, select two-day shipping at checkout, and, of course, pay with a MasterCard. Customers will have to pay for the two-day shipping upfront and email the order confirmation to MasterCard to be reimbursed.

Customers must take several steps to use the MasterCard free shipping offer.

Regular online shoppers may purchase an annual subscription for $69.99, extending the free, two-day shipping to about 30 larger retailers, including Nordstrom, J. C. Penney, Home Depot, and GameStop. The premium annual subscription also raises the maximum limit from $500 for six months to $1,500 per year.

Implications for Small, Mid-sized Ecommerce Merchants

Free shipping is now — or, at least is becoming — a key to online ecommerce success. As an example, Forrester Research’s U.S. Online Holiday Retail Forecast 2013, which was released on November 25, found that many online shoppers will leave a site and not buy anything if there is not a free shipping offer available.

Customers may look at shipping as an extra cost or even a waste of money, which is different from how they calculate the gas and inconvenience of going to a store or mall. Even offering free shipping with a minimum purchase can make customers feel better about the checkout process.

Where MasterCard’s offer is different is that it is increasing the expectation around how long a package should take to arrive, and, perhaps, changing how sellers need to think about free shipping.

Consider the model at ShopRunner, which for many reasons, may be the most potent Amazon Prime competitor at the moment. ShopRunner is a marketing tool for merchants wherein the cost of two-day shipping and the 3-to-5 percent commission that ShopRunner takes on each sale is the cost of acquiring the customer.

When an ecommerce retailer purchases pay-per-click advertising, invests in email marketing, buys banner ads, or even prints a brochure or catalog to include in the shipping box, that retailer is investing to acquire or keep customers.

When it comes to accounting for these marketing investments, pay-per-click advertising, as an example, is often taken as part of marketing expenses generally and not attributed directly to a single transaction. For this reason, it is possible that merchants are losing money on some particular orders because of the advertising and promotional expenses associated with those particular orders, but making a profit overall thanks to spreading out marketing costs over all orders and generally increasing the total number of orders and reorders.

Ecommerce businesses may need to start thinking about shipping costs, even two-day shipping costs, in a similar way, not necessarily associating these costs with individual orders, but looking at the business as a whole to see if the free shipping offers are increasing profitability or market share company wide.

New Opportunity for Payment Providers

Free, two-day shipping offers also represent an opportunity for payment companies, like MasterCard, since these free shipping offers could give a particular payment service a competitive advantage. After all, most shoppers will choose the payment card or payment option that provides free shipping over other payment choices.

For the most part, PayPal, American Express via ShopRunner, and now MasterCard are focusing on large retailers, but there may be another opportunity with small and mid-sized online merchants.

What if, as an example, PayPal started to offer ecommerce retailers discounted payment processing fees for providing free shipping when the shopper pays with PayPal? In this example, some of the merchant’s free shipping costs are offset by a generally lower fee schedule, thus the merchant will be motivated to promote the PayPal-driven offer. PayPal has little to lose since it is gaining incremental transactions.

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CSS, Flash, jQuery, and an arsenal of other powerful web techniques and technologies have unbound website design, creating the opportunity to develop either exceptional user interfaces or really frustrating ones.

Furthermore, the growth of “cookie-cutter” ecommerce templates (i.e., “insert your logo here”) has quelled site concepts with great potential and made some ecommerce pages as bland and tasteless as a papier-mâché popsicle.

To avoid the pitfalls of a site design that is too confusing, too ugly, or too experimental to be effective, the ecommerce site owner must strike a balance between leading-edge techniques and technologies, effectiveness, and aesthetics. So, in this edition of “Web Design Tips,” I’ll outline the laws for ecommerce site navigation design to help any ecommerce business.

A Video Tour of Site Navigation
Law No. 1: Make Navigation Easy to Understand and Use

Shoppers browsing to an ecommerce store don’t want to be baffled by navigation. As I implied above, there are a lot of amazing things that you can do with site navigation that you shouldn’t.

As a specific example, the agency Publicis & Hal Riney has developed site navigation that responds to gestures captured via web cam. The effect is stunning, and is an excellent way to demonstrate development talent. But as navigation, it is really frustrating. And if an ecommerce site deployed anything like it, I’d bet that they would never make a sale again.

Make your site navigation easy to understand and use. Provide clear labels that explain what a user will find when he or she clicks. If you sell shoes, try labels like “Men’s Shoes” or “Women’s Shoes” or “Nike.” And put navigation in a predictable place, top, left, right, or front and center.

Here are some examples of sites obeying law number 1:

  • Skooba Design features labels like “Laptop Bags” and “Apple 4G iPod Nano Cases”
  • Bonobos, which sells nothing but men’s trousers and shorts, has a homepage with a less than perfect middle navigation, but the sites store obeys this law perfectly
  • Gateway obeys this law with a very nice top navigation that provides images (easy to understand) for many products
  • Dripping in Fat features a front and center navigation that works because of the limited number of products on the site
  • Crucial uses three forms of navigation—each clear—to make it easy for customer to find the computer memory or Flash cards they seek
Law No. 2: Make Navigation Accessible

Making your ecommerce site easy for customers with disabilities is good for business and the right thing to do. Some of your customers are going to have disabilities that require them to surf the web using screen readers, refreshable Braille displays, magnifiers, or other helpful devices. Develop navigation that these devices easily understand. Take a look at the World Wide Web Consortium’s How People with Disabilities Use the Web for an idea of how these customers use websites.

One technique to try is to place text-based navigation and skip links (often hidden from most site visitors via CSS) at the very top of the page.

Here are some examples of sites obeying law number 2:

Law No. 3: Tell Me Where I Am

Before customers can make a good choice about where they want to go on your site, they should know where they are. Because so many online shoppers use search engines to locate online stores, your customers can enter your site just about anywhere. So there is no guarantee that they are starting on the home page.

Use visual and text clues (i.e., breadcrumbs) to show the customer where he or she is on your site.

Here are some examples of sites obeying law number 3:

  • Eagle Coffee Company uses CSS to change the look and feel of the active page in its left navigation and uses a clear breadcrumb to show the user just where she is
  • Tokidoki uses pink font to highlight the current page in the navigation and has a good breadcrumb trail
  • PEZ Factory Store has an easy-to-read orange breadcrumb and puts the current page in all capital letters in the left-hand navigation
  • Cabela’s actually includes the phrase “You are here” in its breadcrumb
  • Newegg changes the background and font color of the current page and includes an accessibility-friendly breadcrumb
Law No. 4: Use Layers and Facets on Big Sites

If your ecommerce site has more than a few product categories, more than a handful of brands, or more than a dozen products, add navigation layers and facets.

As a customer, I want to be able to browse by brand, price, age-appropriateness, color, or just about any other relevant product attribute. Your navigation should let me do that right in place.

Here are some examples of sites obeying law number 4:

  • PetsRight provides understandable layered navigation
  • Ramco Worldwide offers a price facet
    -MiniRepublic lets customers navigate by just about any product attribute
  • Wlanmall includes attributes like frequency, series, and radio frequency connector
Law No. 5: Let There Be Search

Every ecommerce site should allow shoppers to just search for products. Not a lot of explanation needed. Add a search box (yes it is a form of navigation) to every page on your site.

Here are some examples of sites obeying law number 5:

  • Amie Street allows you to find music from any page on the site
  • Knife Center has search right up top
  • Art.com puts search to the left (ahead) of its text navigation

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Growing a successful ecommerce business may depend on earning repeat business from a relatively small number of loyal shoppers, according to a new report.

The top 1 percent of a typical ecommerce retailer’s customers will spend as much as the bottom 50 percent over time, according to the 2014 Ecommerce Benchmark Report from data analysis firm RJMetrics.

Looking beyond just the top 1 percent, an online retailer’s best customers will spend about 30 times as much as an average customer in the long run, implying that marketing strategies, at least for some online retail businesses, should be more concerned with encouraging lasting shopper relationships with high-value customers, rather than trying to attract unknown masses of new shoppers.

Loyal Customers Spend More in Two Ways

As the figures above imply, having a loyal shopper who returns time and time again, creates a much higher value customer over some number of months or years. This improved lifetime customer value is the first of at least two ways that loyal shoppers can be better for an ecommerce business than single-visit shoppers.

The second way that loyal customers can be more valuable is in average order value. Put simply, loyal shoppers don’t just spend more over time, they also spend more each time they shop.

The RJMetrics report estimated that the average order value for the bottom 90 percent of shoppers is around $54. A loyal shopper in the top ten percent of a merchant’s active customers will typically spend $163 per order, according to RJMetrics, or more than three times as much as the average shopper. Finally, a top 1 percent customer will spend about $267 per visit, which is more than five times as much as an average shopper.

This RJMetrics data released this month generally agrees with a similar study that Adobe conducted last year. In its study, The ROI of Marketing to Existing Online Customers, Adobe estimated that a returning shopper who makes a second purchase will spend about three times as much on the second visit as a single-visit shopper. Similarly, what the Adobe study described as “repeat” shoppers, who return three or more times, will generally spend about five times as much per visit as a newly acquired shopper.

Repeat Shoppers Tend to Cost Less to Service

There are also strong indications that loyal, repeat shoppers may cost less to service.

“Repeat revenue is preferable to revenue from new customers, hands down,” the RJMetrics report said. “Existing customers are cheaper to market to and the revenue is more predictable.”

To help make this point consider the relative cost of sending a targeted email to existing shoppers versus funding a pay-per-click campaign or hiring a search-engine-optimization expert. The former may cost pennies, while the latter could cost hundreds or thousands.

Implications for Ecommerce Marketing

The importance of loyal, repeat shoppers has implications for ecommerce marketing.

“Returning and repeat purchasers generate a disproportionately large share of revenue for online retailers,” Adobe said in its study. “Despite this fact, however, the majority of retail digital marketing budgets are spent on media that does not effectively target these more productive customer segments.

“Retailers can achieve tremendous revenue gains by shifting their marketing budgets to better target these customer segments,” Adobe said.

Practically speaking, this may mean that some online retailers will want to spend less on marketing tactics that aim at single-visit shopping behaviors, diverting marketing dollars to tactics capable of creating long term shopping relationships.

Specifically, this may mean investing fewer dollars and cents in SEO, which is otherwise experiencing diminishing returns in the face of rapid search engine algorithm changes and changes in user behavior; PPC; or even banner advertising.

More resources could be devoted to content marketing, growing email or text lists, developing useful mobile applications, incorporating game principles into loyalty programs, encouraging subscription shopping, remarketing, group buying, or providing better customer service, including personalization and product cross and upselling.

The particular context in which a business is operating will affect marketing strategies and tactics even where the notion of targeting long-term customers is concerned. As an example, a new ecommerce business will need to attract customers before it can engage those customers long term. Nonetheless, even a new enterprise will want to have marketing plans in place to retain shoppers from the very beginning, given that doing so may be a strong indicator of success.

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Business-to-business ecommerce describes Internet-enabled transactions between businesses, such as a manufacturer and a wholesaler, a wholesaler and a retailers, or a wholesaler and a business user. The B-to-B ecommerce market was expected to exceed $550 billion in the U.S. last year, offering great opportunities for distributors and manufacturers to streamline sales, boost profits, and engage with new customers.

Since the late 1990s, businesses have been using the Electronic Data Interchange (EDI) system to transfer purchase orders and similar structured information electronically, representing, if you will, a form of B-to-B ecommerce.

Separately, some B-to-B sellers have created websites on which business customers can make purchases as if they were shopping on a business-to-consumer site. Examples of this newer form include Grainger, Vistaprint, Uline, Stickercutting, and Amazon Supply. This category of B-to-B ecommerce may enjoy the most growth and offer the most opportunity.

AmazonSupply.com

There are at least four important points that a business thinking of running a B-to-B ecommerce site will want to consider.

1. Shopping Is Part of Your Customer’s Profession

One of the most significant differences between B-to-B and B-to-C ecommerce is that shopping is part of the B-to-B ecommerce customer’s daytime job.

This means that the stakes can be higher for the B-to-B seller. If the shopper has a good experience, that shopper is likely to return and reorder repeatedly — even suggesting the seller to co-workers or other divisions. But if something goes wrong, particularly something that would cause the shopper to miss deadlines at work or appear in some way to have done a poor job, that shopper will likely blame the B-to-B seller. Depending on the unhappy shopper’s influence, the B-to-B seller might lose the entire account, including many individual buyers or divisions.

This means that order handling and transactional communications must be top notch. Some B-to-B ecommerce sellers will call customers to confirm orders or shipments when the customer has ordered a large quantity, very expensive items, or requested express shipping, since these orders may represent important transactions to the customer.

2. B-to-B Customers Are also B-to-C Customers

B-to-B sites often trail consumer sites in technology, function, capabilities, and design. That is typically just not good enough.

As an example, the U.S. B-to-B site for a major multinational manufacturer, which includes information for dealers in the U.S., can only be viewed on Internet Explorer, and won’t work in any other browser, including Firefox, Chrome, Opera, or Safari. And don’t even think about visiting this site on a mobile device. It just won’t work.

Sample B-to-B site

This is a ridiculous business decision. It forgets a fundamental fact about B-to-B ecommerce customers. They are also B-to-C ecommerce customers.

It is extremely likely that the professional shopper on an ecommerce-enabled B-to-B website has had at least some experience shopping on consumer ecommerce sites, such as Amazon, Black Milk Clothing, or REI, which all have compelling product photography, good navigation, good search capabilities, and good content.

A B-to-B ecommerce site must provide the same visual and functional experience as the best B-to-C ecommerce sites.

3. Personalization Is Vital

B-to-B shoppers may require a greater level of personalization than B-to-C customers, since businesses may have contract prices, special payment terms, or negotiated shipping rates.

Business relationships may be very deep and complicated. It is not unusual for B-to-B ecommerce sites to require registration before showing prices or shipping rates or offering a quote. This login requirement allows the B-to-B ecommerce site to personalize almost every aspect of the transaction.

A good B-to-B ecommerce site may take a little longer to launch since the system for handling relatively complex business relationships can take some time. But once it is in place, this personalization will mean that the relationship could be longer lasting.

4. Salespeople Are the Primary Marketing Vehicle

While it is both possible and likely that B-to-B ecommerce sites will be able to acquire new customers simply by making products easy to order online, salespeople who contact customers are probably the B-to-B ecommerce seller’s primary and best marketing channel.

Salespeople can attract new customers or deepen relationships with existing shoppers. Sometimes, it can be enough to follow up after a B-to-B sale with a call to make certain that the transaction went as expected.

What Ecommerce Can Do for your B-to-B Business

If you sell to other businesses, ecommerce should have three potential benefits for your business.

First, it may help new customers find you. Having an easy-to-find and use ecommerce site means that new customers — customers with a need — will be able to locate your business regardless of geography or prior relationships.

Second, B-to-B ecommerce may streamline sales for existing customers. Some of your current customers will appreciate the ability to order online, 24 hours a day 7 days a week. The process may also be faster than sending emails or, even worse, faxed orders.

Finally, B-to-B ecommerce may improve margins and boost profits. It may be possible to provide customers with a better ordering experience and better customer service using ecommerce while spending less on labor and order processing. Any cost savings that B-to-B ecommerce brings may drop straight to your business’s bottom line.

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Office supply retailer Staples announced March 6 that it would close 225 brick-and-mortar retail stores by 2015, in part, focusing investments and marketing on the online channel. The move may provide examples of why the ecommerce channel is so important to retail and lessons, if you will, for other merchants.

For Staples fiscal fourth quarter, which ended February 1, the company’s total retail sales fell about 10.6 percent to approximately $5.9 billion. The company has faced increases in inventory and problems with retail overcapacity. As a result, Staples missed its sales and profit projections.

To help solve some of these problems, Staples is doing many things, including focusing additional efforts on ecommerce. This invigorated ecommerce effort, may provide a few lessons or considerations for the online retail business and new ecommerce entrepreneurs who could be thinking of opening an online retail store.

To help solve some of these problems, Staples is doing many things, including focusing additional efforts on ecommerce.

While interpreting these lessons from Staples’ action will require some speculation, here are some of the things worth thinking about.

Ecommerce May Cost Less and Be Changeable

Brick-and-mortar retail can have a relatively high cost of entry since merchants need to lease or buy buildings, order fixtures and equipment, hire employees, and outfit the location with inventory.

In good times, these locations are well worth the investment, but they can also become costly when buying habits or conditions change.

In Staples case, the demand for its office supplies and equipment has been waning, but it was compelled to keep open something like 1,800 stores — some profitable and some not — contributing to a office supply  retail oversupply.

Staples physical stores may have also been subject to changing location dynamics. Perhaps, competitors opened new stores near an existing Staples location, or maybe a retail neighbor who had been contributing to shopping center traffic closed or moved elsewhere. Even changes in roads or new home construction can have an impact on retail store locations, which in turn are not easily adapted.

In fact, doing what Staples is proposing, intelligently and systematically closing some locations, is probably the best thing that the company can do to respond to the business changes and challenges it faces.

The takeaway here may be that in the current retail environment, ecommerce is less costly and more adaptive than is the brick-and-mortar channel, meaning that ecommerce investments could be less risky in today’s rapidly changing retail environment.

Even retailers committed to having physical stores can use ecommerce to test locations or regions. For example, rather than spending thousand to lease space in a mall for five or ten years, a retailer might test out the location for six months using a kiosk that featured a handful of select items and iPads that show the retailer’s full product catalog. This test kiosk could even offer free overnight shipping for catalog items, and eventually provide insights about mall traffic and customer buying behavior that demographics could not have.

Similarly, retailers could test new product lines online first before investing in square footage. Staples stated that it needs to change or add to its product offerings. Some of these new products will appear in physical stores, but other lines could be tested online first.

If Staples actions are being interpreted properly, the company is saying that ecommerce costs less and is more adaptive than its brick-and-mortar counterpart.

Ecommerce Can Provide Better Customer Satisfaction

Ecommerce may provide better customer service and satisfaction than the brick-and-mortar shopping experience for some product categories.

Staples does not sell sexy products. Pens, paper, printers, and the like are not usually the fodder of emotionally driven consumerism. Folks don’t often enjoy going shopping for office chairs, waste baskets, or even office cleaning essentials, which were recently featured on the Staples home page.

Staples home page

With this in mind, online orders can actually offer a better shopping experience. Shoppers who just need coffee filters for the break room and pens for the accounting department, should find ordering online far more convenient.

Similarly, many office supplies are considered commodities, so that shoppers will want to be able to compare prices online before deciding where to get file folders or document storage boxes. Why, in that context, would someone want to visit a physical store?

Staples, which is also adding to its business-to-business sales force, seems to be indicating that customer service is not confined to physical locations.

Online Price Competition Is Stiff

To revisit the point made about customer comparing prices online that was mentioned in the previous section. Staples actions may also demonstrate that online price competition is very stiff and retailers need to find ways other than just price to differentiate online.

Here is what Staples CEO and Chairman Ron Sargent said in response to an analyst question about pricing.

“It is much more about the value proposition versus strictly the price. We’re going to continue sharpening pricing in a lot of key categories to ensure that we in the reasonable range of online competition. … I don’t think we have to be the lowest price on all items, but there are many other things that are important to customers. Things like free next day delivery with no minimum order size [or] five percent back for Rewards customers,”

Summing Up

Faced with changes in product demand, location dynamics, and customer shopping behavior, Staples announced that it would close about 12 percent of its stores by the end of 2015.

The company may have also reminded retailers that ecommerce, with its promise of low costs, adaptability, and great customer service, is vital for the future of retail and is an opportunity for new entrepreneurs.

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With all the focus on social media, it seems that email marketing is almost an afterthought for many companies. Email may not be trendy, but it’s cheap, easy to measure, and easy to target. It’s a good place to do testing, it keeps your brand visible, and at the end of the day it delivers results.

Why Email Marketing for Ecommerce Merchants?

Here are 13 reasons.

  • Click through rates are still higher than online advertising. That’s 3.1 percent average click through in the U.S., according to a 2012 study by Silverpop, an email service provider. If you build a list of 10,000, then you’ll likely have 1,500 people open your mail and around 300 click to your promotion.
  • Lists are easy to build. For online retailers, it’s easy to grow your email list by promoting it on your website and through your social media channels. Unsubscribe rates are typically low, so your list will almost always grow.
  • You can deliver effective content to your customers. Don’t just send email promotions. Talk about your industry, trends, new products, even what you did on your summer vacation. Use emails as a way to connect more personally with your customers. You have more space than you do on Facebook or Twitter — take advantage of it.
  • Lists are easily segmented for easy targeting. Subscribers can easily choose the lists they want to be on — by frequency, product or interest. Retailers can mine customer order histories to target specific products, with much success.

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Amazon is a pioneer in sophisticated email segmentation. This email contains only items that the recipient purchased or viewed at Amazon.com.

Amazon is a pioneer in sophisticated email segmentation. This email contains only items that the recipient purchased or viewed at Amazon.com.

  • Conversion rates are high. Most online retailers find a much higher conversion rate from email promotions than other forms of promotion.
  • A/B testing is easy. Split your list into segments and test different messaging and promotions on a subset. Then, use the one that was most effective for your campaign.
  • It’s inexpensive. Subscription rates on MailChimp, Constant Contact, and other providers are less than $150 per month for 25,000 subscribers or even more.
  • Email adapts well to mobile. People increasingly read email on their mobile devices. Even if you don’t have a mobile site, you can generate a mobile friendly email in many platforms.
  • Builds brand and loyalty. Emails are a good way to build your brand and engender customer loyalty. Offer subscribers a special benefit they won’t get anywhere else. Just keeping your business name in front of your customers periodically will help them remember you when it’s time to buy.
  • Templates are easy to build and customize. Need to feature three products this week instead of your usual five? Most email services offer flexible templates. Use a branded template of your own. You will still be able to change it in an HTML editor. Add seasonal flair by dropping in stock graphics or photos.
  • Emails can be sent easily and quickly. Drop in your messaging, choose your list and sent it out. It will generate traffic to your site. Don’t abuse your permissions, but occasionally an impulse email promotion when things are slow is a good thing. In my previous ecommerce business, we typically experienced order activity within 15 minutes of sending out an email to our customer list.
  • Easy to measure. You’ll see who clicked through, and how many times they visited. You can remarket only to people who opened and clicked. You can build a list of frequent clickers and market more aggressively to them, versus the ones who don’t click as often.
  • No conversation to monitor. If you post a message on Twitter, it’s best to monitor it to see how it’s responded to or retweeted. There no need for that on email — unless recipients email you back — which makes it a low maintenance promotional tool.
Integration With Other Platforms

The best way to use email is to integrate with other tools and platforms. For example, when you send an email, use Facebook and Twitter posts to direct people to a copy of it. Or, use Twitter to solicit email subscribers by offering a benefit to sign up. Because Twitter is a viral platform, the offer to subscribe may reach hundreds of people that haven’t heard of you.

Use Pinterest as a landing page for a newsletter communication. It’s a good place to show off your products and build community. Send your email subscribers there to join the conversation.

Use a Facebook Sweepstakes to collect new email subscribers. I ran a successful Wildfire Sweepstakes on Facebook some time back. In addition to the 3,500 or so new Facebook Likes we received, we netted about 2,500 new email subscribers, for a total of investment of about $700. The subscribers were fully opted in. So that investment more than paid for itself over the ensuing months.

Social media is becoming less trendy, but more engrained in our daily activities and way of doing business. Email has been that way for about 15 years now. Don’t forget about that.

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Running your ecommerce business can be a grind. You need to replenish products, drive more traffic to your store, create new promotions, respond to customers, develop your employees, and so forth.

In “Reviewing Your Ecommerce Business at Year End,” my article from last month, I addressed how owners can objectively evaluate their business’s performance.

For 2013, be sure to prepare a budget and cash flow projection so that you can invest when opportunities arise. Beyond that, in this article, I’ll introduce 13 tips that will help your business stay successful in the coming year.

Reflect on these tips. For most every ecommerce business I encounter, there is room for improvement in these areas. If you execute on these tips, you will deliver an excellent customer experience, run a more efficient business, and ultimately growing your top and bottom lines.

13 Tips for Ecommerce Success

1. Set your vision, goals, and strategy. Know where you are going and how you are going to get there. Invest the time to identify your business goals, strategies, and tactics.

2. Establish a business model. Understand how you are going to make money, how the various parts of your business work together, your resource requirements, and what your risks are. Identify the areas that need more investment.

3. Understand your customer. Know your customers and what your value proposition is. Why do they come to your store and ultimately buy from you and not your competitors? Are they loyal or simply bargain hunting?

4. Sell products consumers want to buy. Once you understand your customers, be sure to sell products that meet their needs. Watch for upcoming trends. But remember that once a product is a best seller, you’ve probably already missed that trend.

5. Buy low, sell high. This old adage is truer than ever for online retailers. Competition is fierce. You have little control over what price the market will bear. But you do have some control over how much you pay for your inventory. Negotiate, find several sources, buy as close to the manufacturer as possible, and consider private-label generic products.

6. Get found. Invest in search engine optimization, advertising, blogging, social media, and other marketing activities to drive qualified traffic to your online store. Never assume you have all the traffic you need. Be sure to diversify your traffic sources as much as possible.

7. Offer a superior customer experience. Ensure that your website, content, merchandising, landing pages, promotions, shopping cart, checkout, and customer service support your sales goals.

8. Personalize your interactions. Try to personalize every customer interaction. This can be as simple as a first name in every email promotion. Strive to deliver a unique shopping experience within the capabilities of your ecommerce platform.

9. Deliver the goods. Ship your products in a timely fashion. Meet the expectations of your customers. Follow-up with confirmations. Ask for feedback. A sure way to lose a customer and get a bad review is to oversell and under deliver.

10. Build relationships and community. Try to convert a one-time buyer into a repeat customer. Encourage community through social media, events, or other online activities. Participate in conversations wherever your target customers are.

11. Stay fresh. Refresh your content, post seasonal messaging and offers, provide timely insights, and provide incentives for return visitors to your stores. Consider seasonal themes around your store to give it a fresh look.

12. Experiment. Always look for ways to improve. Try new initiatives. Don’t be afraid to fail.

13. Think mobile. Mobile websites and apps are where consumers will shop in the future. Go mobile now. Most smartphone owners already use those devices to shop online. That number will only increase.

Conclusion

Revisit these tips throughout the year. Empower key staff members to oversee projects that review performance against specific goals. For every one of those tips, you can set measurable goals and use them to monitor execution and performance. Start with one or two and see how things work out.

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