ecommerce » Dave Jenkins

Ecommerce in Asia

Oct 072010

I’ve relocated to Tokyo with my wife for a four month assignment (possibly longer) in order to work with my company’s retail and wholesale partners in Japan, Korea, China, and perhaps The Philippines. I hope to understand the nuances of Ecommerce much more closely as I settle in over here. Here’s what I can tell from the first week:

Japanese retailers are behind the US retailers in terms of integrating social media. This is likely due to Facebook’s (relatively) recent arrival. Twitter seems to have good penetration, but not so much integrating into the catalog sites yet (no one is screaming ‘tweet this product!’ at me like every site in the US)
Design aesthetics are– well– a bit on the noisy and crowded side. This is probably just as much due to the print legacy of crowded leaflets as well as to an under-representation in the drive for UX and its effect on conversion.
Rakuten. They still call the shots.

I’ll be meeting with as many marketing software and ecommerce vendors as I can while I am here. If you know of anyone I should meet in Japan, Korea, or China, please let me know.

.mobi Domains Are a Dead End

ecommerce, mobile 1 Response »

Sep 202010

Alas, not available on the Kindle yet.

Not too many months ago, I advised my friend to buy up the .mobi equivalent of all the domains he owned. We were questioning the value of a mobile-version website, and what content to put there. I still stand by my recommendations for what thrives on a mobile-version website, but the idea of a separate domain name is completely moribund now.

Here are three reasons why: Multichannel, convenience, and branding.

Multichannel – Your customers will want a consistent experience across channels. My interactions with The Economist or Toyota Motor Corporation should be pretty similar whether I am coming in through a desktop browser, my iphone, the printed paper, or the showroom (yes– I mixed channels there, that was on purpose). This point doesn’t have anything to do with the .mobi domain specifically, until you see the next point…

Convenience – Iam lazy. All customers are. Personally, I blame a service-oriented economy and our advanced democracy: if I can pay a little money and avoid headaches, I’ll pay just about every time. Companies know this, and are constantly adjusting those services for which they charge money (because the convenience is valuable but not necessary), and those services which simply make money on their own, because the convenience greases the skids on separating me from my cash. Mobile websites are definitely in the latter category. Customers can be anywhere and now simply tap into the endless market with a few keystrokes or voice commands. This is the crunch point: every additional finger tap required costs people to give up. Each diad of information imposed upon the customer to remember costs lost sales. There’s no way I am typing in ‘foo.mobi’ instead of just ‘foo’. You’re lucky I type anything at all– I want to get to the point where I simply speak ‘foo’ into my phone, or just wave ‘foo’ in front of the camera.

Branding – A domain broker has been calling me every week asking if we are interested in buying a common-word domain related to our industry. They’re asking a huge amount of money. Every week, the answer is the same: nope. Not that I don’t think the domain could get some decent traffic (it could, and I actually calculated out a value). The problem is that the word is not part of our branding. It’s not consistent. The same thing goes for the .mobi domains: unless you’re an emo musician from New York, the domain has nothing to do with your brand– the ‘.com’ is the runaway default.

So, get that mobile website up and running. Make sure it’s convenient, but don’t bother with the .mobi domain, just make sure your IT geeks are smart enough to have an automatic redirect that senses the customer’s device and directs them to the native version.

Comign up next: why you don’t need or want a mobile app.

Selling out the guest list

ecommerce No Responses »

Jul 252010

I’ve often described social media as a cocktail party– there are various types and levels of interaction, and there are some basic rules of etiquette. As host of the party, facebook has a tough balancing act: give out all that functionality for free while keeping the lights on. Well, it looks like they just sold the guest list.

We’ll see what effect this has, but I think it will be marked as an error after a while. I’ll have to think on this one some more: it’s a step toward a more connected intarwebs, but it also exposes the relationship between company and person. It all comes down to your personal delusion of privacy.

Thanks Harry for the link.

Online Community = Pub Topics

ecommerce, Social Media 4 Responses »

Jul 222010

Cocktail party by Mike Jones

When you’re at the pub, what do you talk about? Your car? Your weekend? Your golf game? Your new tasty favorite indie band? FSM help you if you talk about work– boring. When you’re online, what do you chat/write/blog/tweet about? Sure, we geeks talk about the biz and tools and sites and Steve Jobs gossip– but that’s part of our job. If it really were free time, what would you really write about? And where would you write it?

Watching the online online communities mature, I’ve noticed that people progress along a path:

First, they blabber anything just for the sake of blabbering. This is really just experimenting with the toolset for most.
Second, they share everything they see and read and link, until they realize that everyone else is linking/sharing the exact same stuff.
Third, people settle into their “thing”: constant updates of their children, their home business, political rants, mindless blogospam. Here’s where people’s idiosyncrasies start to show up. To quote John Worfin, “Character is what you are in the dark.”
Eventually, people resort to the same topics they like in the pub: politics, their children’s sports, luxury vacations, and making up historical facts.

That covers Facebook and twitter for most people (twitter is more gossip-y, but whatever). But what about an online community based on a catalog ecommerce site, or a specifically-themed site? The one thing all the visitors to that site is the stuff that’s for sale, so this becomes the dominant topic for the online community. At some sites, this works, other sites bomb miserably. Why? What is the difference? Where is that line?

Likely:

Woot.com – wins because all visitors are bargain hunters, and are happy to share juicy details on the deals. We see this in real life where people brag about the coupons they clipped or the steals they got at Try-n-Save.
SteapandCheap.com – wins because of the same reasons that woot.com wins, but even better because these people all share a leisure activity: they ski (or snowboard or hike… er… they go outdoors)
Any catalog that is basically a technical sale: consumer electronics, exercise equipment, software, new cars, gardening tools. If you think you’re the neighborhood expert, congratulations on becoming the new King of the Online Community. Online dashboards are great for this.
Politico.com – wins because all those ranters who alienated their friends on facebook with their hatred of Presi-senato-gressman Blankenstien now have a home where they can win Free Internets with the other crazies (just like the bars in Dupont Circle) Online dashboards are also great for this, but only to show who is the biggest d-bag.

Not Likely:

VictoriasSecret.com – Who wants to brag about their lingerie? TMI. Questions & Answers generally wouldn’t work for personal apparel. The most obvious question “will this fit me?” has the most obvious answer: “I have no idea who you are, so how the hell would I know?”
Vehix.com – mostly used cars, which means that deals are not repeatable– it does no use bragging about your good deal, no one cares. The same goes for any one-off item.
fandango.com – tickets to movies (which people _do_ discuss at length in pubs), but Fandango is a ticket site– nobody has seen these movies yet, and they certainly don’t want to hear the ending. BTW, Inception is all inside Leo DeCaprio’s head because he’s insane!!

So, will your website be able to build a community successfully? Will you really be able to plug it back in to increased user-generated content about your products? I would suggest that the ‘tell’ is rather simple: would people talk about your goods in a pub? Would they mention your stuff at a cocktail party?

Everyone’s an expert (part 1)

ecommerce, Network, United States, wiki 2 Responses »

Jun 172010

Times was, I used to be able to spout off any random factiod I thought I knew, and the Internet took it as read truth. The Wikipedia used to be great for this. Now, my rants are pretty much limited to the blarg you’re reading right now– we’re probably all better off for it. Most university professors scowl very deeply if a student references the Wikipedia in a footnote, which is fair, but not for the reasons most people think: Wikipedia is a bad reference source because it’s a derivative work, not because it may be inaccurate: The student should be citing the original work, not someone’s summarized boilerplate. Wikipedia has largely squashed the ‘inaccurate’ label through a zealous use and requirement of all statements must have footnotes.

But that raises a conundrum for many of us: where is truth? Where is the expert? Is the expert the one with the most experience? Is the expert the one with the most money? The most devotees? Is truth simply the mob’s consensus? Graduate school told me that truth is the logical sum of a tested thesis. I spent 15 years being smug that I knew what that meant, only now to really see that when the Internet gave everyone a soapbox from which to preach, now social networks are giving everyone a Hyde’s Park corner complete with audiences. Companies like bazaarvoice and pluck are setting up these cacophonies wherever possible (good for them). These systems invariably include meta-rating systems to rate the reviews and the reviewers, in the hopes of crowdsourcing the good information from the bad. In general, it usually works. It is still, however, all based on a Kuhn-model of mob truth.

The NYT recently published an article on a new computer named “Watson” designed by IBM to play Jeopardy. Another possible use they summized might be to find counter-factual statements to anyone’s gtiven declaration on the Internet. In short: a bullshit detector. I can imagine they will be able to monetize this thing into millions of dollars: every social network and review thread can now come with a robot that can read plain speech, offer immediate counter-responses to erroneous information, and perhaps even show us a numerical score for ‘trustability’ or ‘truthiness‘ (all the footnotes in that link– irony!). The downside here, of course, is that most reviews for most products will be reduced to little more than the barren subjectivism of American Bandstand: “It’s got a good beat, I can dance to it.”

There is still salvation for quality content in quality reviews: hard numerical data, solid logic, and qualitative feature polarization. I’ll explain myself on those in some upcoming posts.

The case for free wifi in retail stores

ecommerce, Network 2 Responses »

Nov 262009

I really don’t like shopping. It used to bring out my inner Marxist, but now it just incurs a low-level buzz in my head. I’ve found I can keep it under control if I satiate my internet addiction every 10 minutes or so. Many stores, however, are large window-less Faraday cages, which kills the 3G signal on my phone. There’s wifi, but it’s not free (it’s usually the corporate offices of the store, and the days of poor security with open enterprise networks are over). Free wifi in a retail environment is still a rare treat. Some stores get it, but the vast majority do not.

So, here’s my case for offering free wifi in a retail environment:

The percentage of customers with smart phones will only get bigger. The share of people who will want to check prices, ask-a-friend, or otherwise tweet about their shopping choices will only get bigger. Do you want to welcome those people, or frustrate them?
The potential for data mining about what customers are doing on their smart phones is a huge opportunity.
Cost is pretty minimal. One wifi antenna should do for most stores; Macy’s might need one on each floor.

Risks are fairly minimal, and can be contained with some common sense policies:

Put a standard anti-porn filter to mitigate the legal liability of perverts in the store.
It’s doubtful someone would go down to the mall to download mp3s– the bandwidth is relatively poor compared to the land-line available at the public library (not that I condone that kind of behaviour).
Someone may try to hack into NORAD from the store wifi, but again– internet cafes are better for that because they offer coffee and a table for all your blue-tooth voice encryption equipment (again– I’m not suggesting anything). Barnes & Noble isn’t a hip enough place to hang out for that long anyway.

So, where’s the upside? Where’s the money? It’s in that second point in the first group: the data mining. There are several forms of valuable bits of data flying around that the store would be well to catch:

Competitor Recon: if Barnes & Noble could know exactly which books people are looking up on Amazon, they could match it against their own conversion rates on those same books. They would know where they’re losing the sale. They would also know which books people are viewing on Amazon that B&N doesn’t stock. This is great informaiton for gauging demand.
Brand Awareness: how often are REI customers going to REI.com whilst inside the store? Are they trying to get details on products that the floor peeps aren’t explaining well enough? Should the floor manager and corporation welcome this kind of look-up? [yes]
Social network awareness: how often do customers ping Facebook that they’re about to buy / just bought a 60″ LCD or a $600 pair of boots? How often are they tweeting?
Instant couponing: most free wifis have a ‘Conditions of Use’ short login page. This doesn’t need to have a username and password, just a paragraph that tells the customer we are tracking web traffic anonymously (for all these rich data mining opportunities). it’s a great opportunity to offer someone some up-sell and cross-sell offers, and maybe an instant coupon with a barcode for 10% they can take up to the register.
These same advantages apply for airports: people love to surf– a gold mine of surfing behaviour lying unexploited because some airport middle manager thinks there’s more money in trying to charge $9.99 for the 2% of people on expense accounts that will fork over that money. [stupid]

Some stores will understand this sooner than others, but in a pretty short window (the next 18-24 months), we should have pretty ubiquitous wifi signals in any urban or suburban environment. The benefits for free and onmipresent wifi are legion. The most apparent opportunity is the VoIP, and the chance to show some advertisements.

Google gets this second point clearly– they’ve chosen a target-rich environment (airports), and are handing out free wifi just to get people to surf, and maybe use Google, and maybe click-thru on some AdWords. In this sense, they’re competing with the idiot box CNN. If it pays off, I wouldn’t be surprised to see Google putting in free wifi anywhere there are more than p number of people waiting for an average of t amount of time. The equation would look something like:

Demand (D) = p * t * p(sp)

Opportunity (O) = D * p(G) – wificost

where

p = number of people in a given location

t = average time of wait or lounging around that location

p(sp) = percentage of people with smart phones

p(G) = percentage of people who will go to Google and click on an AdWords

wificost = cost of installing and running wifi base station

In the market, I would not go long on telco stocks, unless they’re leading the pack on opened smart phones. I would go long on Skype and Cisco, and business intelligence providers, and of course, Google.

Adobe + Omniture. Allurent, you’re next

ecommerce 2 Responses »

Sep 162009

I read last night that I’ll be recouping some of my losses after betting on Omniture a couple of years ago, with the pending buyout by Adobe. The early take on this is that Adobe needs to pick up some ongoing subscription revenue, I am assuming because they simply cannot keep raising the price on the 167 legitimate licenses for Photoshop which are sold to designers in New York that everyone else copies over to Pirate Bay.

So, the revenue part I get. But where’s the Bonus Fat?

Up until now, Adobe provides a suite of tools that creates and converts various bits of digital eye candy for presentation on the web, but has precious little to do with the operations part of actual presentation layer. Adobe has become the de facto ‘solid document’ format with .pdf, but there’s no real money there. They also offer the Scene7 technology, which can convert a multipage .pdf or other print document into a “browsable” online catalog (which is insane to me, but that’s how some people like to shop, I guess). Flash is becoming more prominent but it’s never been able to get passed the debate of ‘needless cartoons’ vs. ‘functional website navigation’.

Omniture is all about the data. Their strategy so far has been to build up all the back-end marketing tools needed to run a dotcom: page and traffic analytics, A/B comparison, keyword tracking, affiliate relationship management, some crude BI. They are in the driver’s seat on a lot of this– despite the disappointment that a lot of these platform tools came in through acquisitions, and didn’t necessarily play nice with each other.

So, what to make of this acquisition? We have someone who has some juice in the front-end presentation layer, who now will have a hand in the back-end data that should be driving that presentation layer. One thing is for sure: every marketing service in the dotcom space has one thing in common– somewhere in the sales pitch you’ll hear the salesman say “we simply take your traffic data from Omniture and…”

Ah. There it is: product personalization, merchandising, traffic shaping, and all that crap getting shoved through the presentation layer touches Omniture-derived data at some point or another. If Adobe can make the merchandising and happy bouncing balls that appear on the website become that more integrated and real-time personalized with the Omniture data, then they have something.

But wait– someone’s doing exactly that– they’re taking Omniture traffic data and showing personalized merchandising via Adobe Flash out to the Consumer. They’re name is Allurent, and I bet they’re next.

Amazon is the new EDI

ecommerce, Network 4 Responses »

Aug 152009

I watched Amazon’s acquisition of Zappos with some interest last week. I am certainly not the first one to blog about this, and I am no doubt one of thousands of armchair pedants on the subject, but here’s my take: Amazon is becoming the new EDI for online retail, and will continue to acquire front-end retailers– the real money is on the back-end (the real money is always on the back-end, it seems). Amazon is becoming the new EDI.

For those of you who may not be familiar with EDI, it’s a system for all those coal-burning AS-400 mainframes and other legacy computers to share data with each other in a standard format. Through a series of arcanely formatted pre-set protocols, computers send invoices, inventory levels, sales requests to each other, and then send back all the acknowledgement messages. It’s efficient, but klunky. I would bet that Amazon sees this klunkiness, and thinks it can do better, and make a little bit of cash by providing a better service.

Retailers will come and go, but they’ll always need to do a few things: store their data securely, talk to vendors, track customers, and sell stuff. Look at Amazon’s trajectory: they offer all of these things either freely, or for a small percentage-type handling fee. They have the A9 search/merchandising platform, a cloud computing offering, most of their sales comes in from vendors, they have millions and millions of customers tracked in real-time, and they offer a method for small vendors to sell goods fairly easily. Prediction: Amazon.com will continue to be a front-end website, but more and more, we’ll see Amazon showing up as the “retail platform” for other branded websites (like Zappos.com).

The ice is getting thinner for conglomerated pure-play online retailers. If they don’t offer something uniquely value-add, customers will simply go directly to the brand’s own website to buy their stuff. Where would you buy your Adidas? Zappos.com, Shoes.com, or Adidas.com? It depends on what you need and what each one offers, right? The end product is the exact same, so it comes down to the free shipping, the search engine, and the eye-candy on the website. Amazon was never that glamorous a website to start with– a very utilitarian look and feel (but very information-rich) experience overall. We all know that Amazon does usability research, so all that data must be worth something, right?

Zappos has built a great base of user loyalty through its mix of customer-centric activities and transparency. Their back-end has always been first-rate, but also probably very expensive (call centers are pricey). If all that IT development and warehouse operations can be folded into the larger Amazonian Empire, then Zappos can concentrate on giving away free pizzas to the customers, or tweeting about Tony’s sushi dinner, or whatever.

Amazon will pick up a few more “major” retailers. My short list of predictions includes: NewEgg.com, Overstock.com (hostile takeover likely), Etsy.com, and maybe even Target retail to finally “go cross-channel”. They’ll likely buy out BillMeLater or even Mastercard to get the financial end covered. Afterall, Amazon needs to watch out for Walmart.

.mobi or not .mobi

ecommerce 2 Responses »

Apr 092009

hamlet mobile Okay, that was a pretty lame title, but it’s actually the most clear way to express the question: what criteria or elements need to be in place to justify a mobile version of a website?

I was talking with a friend of mine, who recently got the .mobi version of his company’s domain, but hadn’t done anything with it. He asked for advice, and I offered up the following crude thumbnail that Internet (not web) information can be broken into three main types:

Transactional snippets of information: flight times, restaurant addresses, bank account info, sports scores, short text email, answers to salient questions. Mobile phones do very well at this– iphone or not– just about everyone with a phone participates in this type of internet transaction. If you see it that way, the iphone app store really becomes a collection ot targetted info queries all eye-candied up.
Search-centric information: Any business model that centers around the shear number of stuff for sale/rent/download/sharing is really a search-centric model and not a browsing model. Amazon, zappos, walmart, piratebay, and wikipedia are all search-centric. So is Yelp. Notice how all of these operations are either exploiting a mobile strategy fairly well (half-way), or are likely close to one.
Browsing ecommerce information: anything that is a context-rich window-shopping experience doesn’t do well on a mobile phone. The screen isn’t big enough, and we don’t have the patience to make the Solomon’s decision of either viewing a stripped down version of the site or spend the time endlessly scrolling around to see the website in it’s original layout. Etsy, Borders magic shelf, Dell, or other ecommerce sites that are inherently dependent on the web-surfing serendipity of the site won’t do well on a mobile phone– at least not without some major rethinking on what works and what doesn’t.

My friend is in an information-sharing business. He handles sets up relationships between business partners, and brokers deals where he sees possible matches. His real strength is the depth of information, but he certainly has plenty of small transaction-level updates that would be more valuable if offered in near real-time. My advice to him was to look through all the activities he does, find those that are in the first bucket, and go with the .mobi version.

Shopping by Proxy

ecommerce, United States 1 Response »

Apr 062009

Times are tough. Escapism is rising. As with all depressions, movie attendance is up, Hulu actually has a shot at beating Youtube at its own game, and alcohol sales are up, as are random hook-ups. We can see the trend on TV: two years ago, the prime-time dreck centered around bling and fabulous homes and even more fabulous lives of the fabulous people that live in them. Now, that same focus on the rich is there, but it’s gotten nasty: they’re being shown as the bunch of back-biting vapid rodents that they are. I am not going to expand much on that, because you already know your favorite rodent shows that you watch every week.

Here’s the question: spending is down, and escapism is up– do those two factors translate into higher ‘shopping by proxy’? Do you find yourself spending more time online, “researching” products? Do you use this research time as a methadone substitute to your normal online shopping habit? My thesis was that page views on shopping sites would be higher, as people spend more time browsing around, but not necessarily buying anything. So far, my thesis is half-right:

Discounters like ebay and Walmart are up, as is the unstoppable ruthlessly efficient Amazon (which I hate and admire at the same time, like Ash did in the first Alien):

But overall page views are the same, or slightly down. Page views have steadily declined as site navigation becomes more efficient, and as buyers decrease, less people go through the shopping cart, which also brings down the average– but the point is that people simply aren’t window shopping on the intarwebs like everyone thinks:

Perhaps the time-wasting website traffic is up? Are we filling our time photoshopping domo-kun and pictures of Kim Jong Il? Nope– flat, with the only gain coming from hulu (likely due to their very expensive ad campaign).

So, what is everyone doing all night? I hate to postulate, but in the end, I think TeeVee will win the day. It may come in through our desktops instead of home theatres, but professionally written stories with good-looking people will beat mindless cartoons and witty political banter discussion threads for the vast majority of us.

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Ecommerce in Asia

.mobi Domains Are a Dead End

Selling out the guest list

Everyone’s an expert (part 1)

The case for free wifi in retail stores

Adobe + Omniture. Allurent, you’re next

Amazon is the new EDI

.mobi or not .mobi

Shopping by Proxy

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