Ecommerce Consulting.com | Experts in Online Retail

Time to Drop the “E” in E-commerce? A Practical (and possibly selfish) Perspective

At a conference I attended a long time ago (probably at least a decade ago) I remember an industry analyst (don't remember who) saying something along the lines of "we'll know that e-commerce has arrived when we no longer have to put the "e" in front of it."

Well, maybe we've arrived. Over the last month there have been some declarations and murmurings that it's time to drop the "e". Forrester's Brian Walker suggested it at the Internet Retailer Conference, and a few blogs have since echoed the same.

E-commerce is undeniably a part of everyday consumer life. Much as we predicted years ago, consumers have woven the web into a shopping process that now spans channels, devices and touch points. The internet influences nearly half of all retail sales. Regardless of where the transaction occurs, the web is a vital part of the discovery, research, consideration and decision process. That's of course the argument for dropping the "e". Customers don't think of e-commerce sites as a "channel" anymore than they think of their phones or retails stores that way. So why should we?

The answer to that question (and ultimately the answer to whether or not it is indeed time to go "e"-less) lies within the perspectives and practices of the retailers and the companies that support them.

For enterprise/advanced online retailers and suppliers, dropping the "e" not only makes sense, it symbolically removes obstacles and enables bigger thinking. An enterprise level platform provider today may provide e-commerce infrastructure, but must also provide mobile, multi-channel and social commerce services in order to meet the needs of its retail customers. The entire retail commerce ecosystem is involved. Advanced retailers planning the present and future needs of their business must look at online selling in relation to all other touch points and channels. For these companies the "e" can represent a restrictive silo, limiting strategic progress.

But, what about those retailers and service partners that are successful, but not yet quite so advanced? Here's my take.

Over the last 15 years, e-commerce has become a specialized discipline, or rather, a set of specialized disciplines. While customers, thankfully, shop our websites like it was second nature, it takes channel knowledgeable people on the back side to do it well.

Think about the disciplines necessary to do e-commerce well: e-commerce merchandising, e-commerce interaction and visual design, site analytics and optimization, online marketing. If someone is a great search engine marketer, do we say they are a great marketer? Sure, we could, but calling them a great search engine marketer helps us to define their specialty.

For many companies who are either in the early stages of online selling or who to whom digital DNA is not a given, the "e" is necessary, as it provides a foundational symbol for a specialized core competency.

Just in the last month of my work I have encountered the following situations that illustrate this point:

• A mature multi-channel retailer with heavy catalog DNA and without seasoned online leadership finds that they need to build e-commerce expertise in order to fully realize the online and multi-channel potential.
• A regional brick and mortar retailer taking their business online for the first time must create new positions and processes to accommodate e-commerce
• A brand manufacturer in the midst of an extensive re-design of the e-commerce site, previously 100% outsourced, is now taking steps to own and manage their online presence internally

These guys shouldn't drop the "e". In fact, I could argue that they need to get some "e" in a big way. In a few years, as their "e" competencies mature and develop, they will likely see the benefits to dropping the "e", at least in some aspects of their business and infrastructure. But for now, the "e" serves a valuable purpose. It delineates commitment to learning and growing the channel.

Are you ready to go "e" free? Take an honest assessment of where you are in your online competency:

• Do you have knowledgeable online specialists who are experts in their disciplines?
• Is the online channel at the table for all company strategic discussions and is it a part of all/most major company initiatives?
• Are the other channels at the table for strategic discussions about the online channel? Is there a cross/multi-channel component to all /most web initiatives?
• Do your operations and IT teams support and build solutions that encompass multiple channels and touch points as a matter of course?
• Is being digitally savvy a characteristic of most employees in your company, regardless of what department they work in?

If you've answered "yes" to all or most of these questions, you've already dropped the "e", at least figuratively.

If you answered "no", the e-commerce team is likely the digital center of gravity in your organization, or it might be just getting up and running. You probably need that "e", at least for a while.

So, is it time to drop the "e"? Maybe yes. Strategically. Where it makes sense. 

For some, holding on for a while is a smart move. 

Then there's the selfish side of me. As someone who uses ecommerceconsulting.com as her blog, I'm a bit attached to the "e", at least for the time being.

 

 

Want your E-commerce Project to Move Faster? Try Slowing Down: New Data Supports the Tortoise and Hare.

 

 By most people's definition, I'm a fast mover.  I learn fast. I speak fast.  I walk fast (I'm only about 5'2 so I have to in order to keep up with everyone else), and I get things done fast.  One of the reasons I've stayed in the digital world and embraced e-commerce as a career is that it's an industry that likes to move as fast as I do. 

Why then, do I become so frustrated when I hear clients say "we've got to move fast on this; I expect to get a new site up in XX days", or when the first question they ask is "so, how fast will this get done?" I like to work quickly.  I respect speed, as a general rule.  But, I detest poor execution.  My frustration typically surfaces when the client is moving too quickly to execute well.  In other words, they are jumping recklessly into execution before they have given the necessary strategic issues the time, thought and discussion that they deserve. 

Having spent plenty of time in the "real world" running e-commerce businesses, I have seen my fair share of short deadlines and jammed project queues.  I've also seen plenty of big hairy complex projects breeze through execution on time, on budget and error free, despite tight deadlines. I can cite example after example where taking time to define strategy or delaying production to deal with an unexpected strategic issue has sped projects along, and probably even saved them from total failure. 

At last, I now have some data to back up my experience and beliefs. 

A recent article in the Harvard Business Review, "Need Speed? Slow Down", got me so excited that I actually left my tea water boiling on the stove and almost ignited my home (seriously).  In a study of 343 businesses (conducted with the Economist Intelligence Unit), here's what they found: 

• Companies with the "go go go" approach had lower sales and lower profits than those that paused at key moments to be sure they were on track. 
• Firms that took the slower approach improved their top and bottom lines, averaging 40% higher sales and 25% higher operating profits over a 3 year period. 

Not convinced? Here's what I consider to be the true enlightenment of the article: not all speed is the same.   HBR explains that there are two types of speed, and companies often confuse or intermingle the two.

First, there is operational speed, which is increasing the pace of production.  Then, there is strategic speed, which is reducing the time it takes to deliver value.  The key here is that strategically fast companies, as odd as it may sound, take their time.  They take the time up front to be sure they have alignment, definition and commitment to success.  They take the time to review how the work is going along the way, and they take the time to capture and communicate lessons learned. 

My personal take, based on experience, is that operational speed without strategic speed is a no-win proposition, or a least a short lived one.  You can pile on more resources, remove production bottlenecks and horsewhip everyone to go faster faster faster.  But, if the strategic alignment, reflection on progress and post-game recapping isn't taking place, the operational gears will grind to a halt.  Decisions won't get made at critical times.  Team members will become demoralized and confused. Quality will suffer. Customers will leave (or never show up). 

If you are lusting after speed, ask yourself which kind of speed and why. To deliver value? To reduce operational time/cost? Or to quiet down an impatient CEO or board member?  First step: be honest about what's driving the need for speed.  Second step: if strategic speed is what you want (and it probably is), slow down.  Put some time in getting aligned and reviewing progress. You'll probably deliver a lot faster and make your customers (and that impatient CEO or board member) a lot happier.   

See you at the finish line.  I'll be the one in the hard green shell. 

A Lesson from Dad: Why Your E-commerce Platform Search Isn't Just About Software

When I was a kid, I used to love to listen to my father talk about politics. He was opinionated and unfalteringly convinced that his point of view was not only right, but shared by "all" Americans (at least the smart ones).  Today, I don't always agree with my dad's political views (and I'm pretty smart), but there's something I remember him saying during an election that I very much agree with, and have found to apply in many areas of my life, especially e-commerce:  "Issues change."

During the heat of an election long before I was old enough to vote, my father was frustrated by the fact that a single issue was swaying the voters to choose one candidate over another.  "Hell," he said, slapping his newspaper down like a flyswatter, "this guy is going to be in office for at least four years, maybe eight, and we're acting like there's only one problem that matters.  This issue will hardly be on the radar 6 months from now and we'll wake up and realize we've got the wrong guy!"  

The bigger point, of course is that that hot issues come and go.  When you make an important decision about someone, you need to take the long view and ask "is this the kind of person who I feel confident about, who has the kind of character, experience and perspective necessary to do a good job beyond the immediate issues at hand?"  The issues are a factor of course, but voting on those alone is short sighted. 

So, what does this have to do with e-commerce? Plenty, especially if you're thinking about a platform search.  Recently, in the middle of a very complex e-commerce solution search, a client and I were evaluating the options.  I asked the team for feedback on what they'd seen so far.  One team member immediately said, "I am not sure about company ABC.  I liked them, but the platform didn't offer a couple of features out of the box like company XYZ's did."  So I asked: 

Which company had done the most research on your business?  Answer: company ABC

Which company asked you the most questions during the call? Answer: company ABC

Which of the two companies would you prefer to do business with if the features were the same? Answer: company ABC

Which company would you choose? Certainly there are so many other things to consider. Track record, price, speed to market, installed client base, the list goes on.  But, at the end of the day, it can be easy to get side tracked by a slick e-commerce feature, just like it can be easy to let the issue of the moment be the focus of your political decisions. 

There will be another e-commerce feature that you want next month, and several more the year after that. And, not all of them will be necessary or even appropriate for your business.  Unless you have a large and highly competent IT team in house (in which case you probably really do want just e-commerce software), you are choosing an e-commerce solution provider who will be your partner in building a successful business, and the decision will likely be one you live with for many years.  Don't let the feature of the moment become the focus of your decision.  Features change.  Just like issues change.  Thanks, Dad. 

Webinar Replay - More for Manufacturers. What is the Meaning of Your E-commerce Life?

If you missed last week's webinar with Elastic Path, From Manufacturer to Retailer: Expanding Your Brand Through E-commerce, you can view a recording of the webinar here

You can also check out my guest blog post on getelastic.com highlighting a portion of the webinar: Getting Your Product Content Ready for the Consumer

Still hungry?

A critical decision manufacturers face when establishing their e-commerce presence is "What is the meaning of life?", or more practically, "What is our site's role in e-commerce?"  The obvious answers of "we want to sell more product" and "we want to build our brand" immediately surface, but the subtleties of how you choose to do that can be much more interesting and complex.

While manufacturer websites are cited as one of the first places shoppers go to get product information (source: Forrester Research), these sites, while growing, aren't getting a lion's share of the online sales. See the below chart from e-Marketer:

It may be that the commerce capabilities on these sites are limited. It may be that consumers simply want to research on manufacturer sites, then go to the retailer (bricks or online) to buy.

Whatever the case, manufacturers can win by determining where they can add value to the shopping experience and how they can best facilitate the transaction, even if it's on a retail partner's site instead of their own.

Here are a few note able examples from the webinar showing distinct approaches to handling the transaction:

First, online powerhouse Nike.  Great site, well executed shopping process with extensive imagery and product information.  This is all about Nike capturing the transaction and customer relationship themselves, and they do it well. Note that access to retail partners is hardly noticeable at the bottom of the page and the store locator is utilitarian at best, no indication of whether or not those stores even carry the product I'm looking at.

 

Contrast the approach above with Patagonia, who offers a choice of seamless options to purchase, either on their own site, or at a retail partner.  They let me know that the item I'm looking at is available from a variety of partners, and take me right to the appropriate product page, with identical product descriptions to assure me that I am indeed getting the item I want.

Callaway Golf offers a good shopping and transactive experience, but then passes the order to a nearby retail partner for fulfillment  - a nice way of servicing the customer and adding value for retail partners: 

 

Samsung does the ultimate in combining great decision tools for both product selection and retail selection.  The shopping tool helps me choose the dimensions, price and specifications of my TV. Then, I can see what retailers have the item in stock and even do a price comparison.

 

Whether it's one of the above or somewhere in between, the options for taking or transferring the transaction should be  carefully considered, factoring in:

• Your brand's pervasiveness online and offline - how easy is it for customers to buy your product somewhere else?

• The size/scale and capabilities of your retail partners

• Your relationship with your retail partners

• Your own capacity/infrastructure for handling fulfillment, service and direct customer relationships

• Your brand and business objectives: is it about building a direct customer relationship? Or helping your retail partners sell more of your product? Or both?

Above all, think creatively: where can you add unique value in the customers research and purchase process? And, where can you bring value to your retail partners?

10 Reasons Why Some Manufacturers Still Ponder Selling Online

Earlier this month, I read a blog post from E-consultancy titled "Why Not Selling Online Can Damage Your Brand".   The piece covers many of the key reasons why e-commerce has become a must have for brands, and why not selling online can be more than a missed opportunity; it can actually damage the brand. 

As a long time veteran and advocate of e-commerce, I agree with all of the points in the article.  Yet, having worked with some notable manufacturer brands who have yet to take the plunge into online selling, I can offer that for many of these companies, the decision to sell online is not the "no brainer" that it might appear.

Manufacturers who sell online don't just need to become web merchants, they need to become retailers, and that presents some interesting and often sticky strategic issues.

1. Lack of in-house retail or e-commerce talent.  This means that manufacturers may not know what questions to ask or understand the complexity of what they are getting into.  It also means that there may not be a logical choice for a leader of the strategy, planning and execution of an e-commerce initiative.
2. Concern about disruption to retail relationships.  This typically tops the list of issues, as manufacturers attempt to walk the delicate line between building their brand through direct to consumer sales and cannibalizing their retail partners.  Every manufacturer selling online has faced it, and there are many flavors of potential answers to striking the balance.
3. Product offering and pricing decisions can be mired with complexity.  Manufacturers' product lines many not be "retail ready", meaning they have been assorted for the retail buyer, not the consumer.  Thus, there are key decisions to be made around the online offer. The whole assortment? An edited version? Exclusive products? Clearance items? New test products?   And then there's pricing.  There's a need to offer the consumer a competitive value,  yet the need to be sensitive to retail partner margins and not undercut.
4. Product information and assets are not e-commerce ready. Manufacturers have a unique opportunity to showcase their products online, and consumers will likely have an expectation that the best and most extensive product information will come from the manufacturer's website.  Yet, many manufacturers find that their product images and copy are geared towards product spec manuals for retail buyers vs. online shoppers.  Re-purposing and enhancing product assets for the web can be a significant undertaking.
5. Fulfillment is not set up for single piece consumer orders.  Separate processes and systems may need to be set up to effectively manage consumer shipments and returns. Ditto for new packaging. Outsourcing many need to be investigated and considered.  Similarly, managing inventory for e-commerce can be complex if the manufacturer's systems are not set up to buy and reserve inventory for the online store, or allow for easy access to overstocks.
6. Customer service takes on a whole new role.  As with fulfillment, discreet processes, systems and people will be needed for e-commerce. Whether or not to turn service over to an outsource partner can be a critical strategic decision.  Build the team and infrastructure and reap the benefits of direct communication with your customers? Or hire experts with the people and systems in place to get you up and running quickly?
7. Marketing activities have been focused on B2B relationships and broad consumer branding.  Digital direct response marketing may not be part of the company's DNA, so understanding search marketing, email, affiliate relationships, retail promotions, social media and the whole balance between traffic and conversion becomes a new skill set need.
8. E-commerce ecosystem components need attention.  While the search for an e-commerce platform will likely be part of the manufacturer's path to online selling, equally important is the suite of supporting systems (many of them possibly in "legacy" condition) that will need upgrading or readying for integration. Order management, CRM, warehouse systems, the list goes on.
9. Resources, Resources, Resources (People, Money, Time).  All of the above is a lot of work, and everyone has day jobs.  Not to mention, this sounds like it could be a significant investment.  Maybe we're just too slammed to deal with this now?
10. Lack of a deliberate process to work through #s 1-9.   It's easy to get confused and overwhelmed by the decisions and intimidated by the potential costs, especially when you're busy running your core business.   A host of manufacturers have made the transition to direct online selling successfully and profitably.  If you have not yet taken the plunge, it's probably high time that you start the investigation process to wrestle these issues to the ground.  None of them are insurmountable, but they do require some disciplined thought and decision making.  Get some help from a knowledgeable, experienced expert to help you identify the issues and opportunties, and engage in a process to work through the answers.  Your brand deserves it, and your prospective consumer customers are asking for it.

If We're so Smart About Multi-Channel Retail, Why Are Some Store Locators so Dumb?

Getting multi-channel retailing done well is not easy.  Good news for shoppers and retailers, a lot of companies are getting very good at it.   Buy online, pick up at the store.  Buy online, return to the store.  Order from the web kiosk in the store.  Check store inventory online.   Read web customer reviews in the store on your mobile phone.   There's no limit to the way customers use channels and devices to save time and get the information they need, and they are hopping across channels and devices like never before.  A couple of quick stats, in case you need convincing:

• 69% of shoppers research products online before going to a store (Source: Business Week survey 2008)
• With the economic downturn, 53% of shoppers say they use the internet more frequently to research products and prices (Source: NCR survey of U.S. consumers)

There's one multi-channel essential that's not that hard to execute, but can easily be ignored by e-commerce teams: the store locator.  Done well, a store locator can be a great resource to help a shopper  before she heads out to buy...it  might even get her excited about the shopping trip.

Here's a quick glance at the store locators of a few well known multi-channel brands, showing the best, and unfortunately the boring worst of what store locators can be.  

REI: They've been a leader in multi-channel execution since the early days of e-commerce, and their approach comes through loud and clear with their online store locator.  Shown below, I can get all kinds of information about upcoming events, the product categories carried in the store,  and I can even set an appointment to get personalized shopping help.  Love the GPS coordinates in addition to the directions, too.  

  

Nike:  While Nike's e-commerce site is frequently cited at the top of critics' lists as the pinnacle of balancing brand, engagement and utility, their store locator appears to be a long forgotten element.  After a forced zip code entry, you get in return little more than a weak Yellow Pages listing.  With an e-commerce site that's so vibrant and exciting, this makes me want to skip the store.  Surely that's not the intent.

 

Apple: It's a bit of an effort to find the store locator on Apple's site (deep in the footer), but as you might expect, the info and experience deliver above and beyond once you get there.   At the Apple locator, I can register for classes, schedule an appointment with a Genius, reserve a new item before it arrives in the store, even watch videos of past store events. I can sign up for email from my store to keep updated on upcoming events too.

 

Best Buy: This retailer has set many examples of the importance of involving store team members in just about everything.  The Best Buy store locator shows promise but could be so much more.  I love the personal note from the store manager and the ask for customer feedback, but the events area is blank (of course it should be coded so that the events header does not appear if there's nothing there) and I don't get the sense that there's much going on here.

 

Whole Foods:  Ok, so this site does not qualify as an e-commerce site, but it's a great example of what a store locator can be when you let the employees take ownership.  Note the store calendar, ability to download a PDF of the store's specials, get an RSS feed of events,  and the Twitter feed of the store manager's Tweets!

 

Let's face it.  I've lived in Seattle for 25 years and I already know where all of the stores near me are located.   But there's something cool going on in just about all of these stores every week that I usually don't know about. 

If you're not convinced that making your store locator worth visiting is worth the time, here are a few more stats you might want to consider:

46% of shoppers say that they want to receive product information, coupons, promotions and store sales information online. (Source: NCR survey of U.S. consumers)

26% of shoppers say the weak economy is causing them to make more frequent shopping trips to take advantage of sales and promotions (Source: NCR survey of U.S. consumers)

Keeping up with Your Customers: 5 Fundamentals for Tackling the Multi-Channel Monster

This morning, two very good articles about multi-channel retailing popped up from Twitterers that I follow.  With way too much to read already, I hesitated to click but I am glad that I did.  This is a topic I have long been passionate about; and with the changing dynamics of customer behavior in a recession and mobile moving like a high speed train, more and more retailers are becoming equally passionate about aligning channels and devices to capture demand.  First, a bit about the two articles and then my take.

Both articles are well worth reading.

The first, in How to Fit Into Your Customers' Multi-Channel Lives, Peter Merholz of HBR does a great job of setting the historical stage for multi-channel services.  Long before e-commerce or the Internet, Kodak helped customers and built loyal relationships by breaking up the process of taking pictures an developing film, letting each step be managed by the people and places best suited to the task.  Apple followed suit with the iPod decades later by separating the music purchase and management from listening.  Good multi-channel food for thought for any  retailer or service provider.

The second, a new blog post at X-Channel Retail provides a good overview of recent multi-channel studies from Aberdeen and Retail Systems Research.  You'll find plenty of stats indicating that multi-channel initiatives are alive and well in most top-tier retail organizations, with improved visibility to inventory across channels and coordinated marketing efforts high on the priority list.

It's hard to argue that investing and executing well on a multi-channel strategy is a smart thing to do.  But achieving the elusive "seamless experience" is easier said than done.  With mobile adoption on a fast and furious pace, the need for retailers to orchestrate the research, shopping and buying experience not only across channels but devices (and devices within channels) means that execution will be more complex than ever.  While many retailers are doing it well, many are simply not prepared for the cultural, technical or organizational challenges that come with tackling the multi-channel monster.  Having spent a good portion of my career and consulting life in the multi-channel world, here are my top 5 fundamentals for taming the beast:

1.  Focus on the unique strengths and uses of each channel and device.  Multi-channel is about more than having the website available in your store or on a mobile phone.  It's about each channel bringing unique value to the customers' shopping and buying experience along the way. Think about the Sears curbside pickup program; customers receive a text message when their online purchase is ready for pickup at the store curb.  The cell phone didn't process the transaction, but made it a more convenient experience.

2. The decision to integrate across channels and devices must be deliberate.  Most retailers today are multi-channel in at least some sense.  Most have some level of channel synergy, but often that synergy has happened organically or accidentally.  Despite the clear customer demand for multi-channel convenience, many retailers organize and incent team members to behave like silo channel operators.  According to the Shop.org 2008 SORO Report, 85% of multi-channel retailers say that their website's highest priority is to drive online sales and profit.  If that's the case, multi-channel initiatives are unlikely to be at the top of the priority list, with online conversion drivers taking precedent.  If the decision is to integrate (and it should be), giving it the appropriate priority and resources will leapfrog internal silos and organizational boundaries.

3.  The technology essentials must be defined and planned.  Those in the know on multi-channel will tell you that transparency to inventory and pricing across channels, centralization of customer data and flexible access to product content are key. None of these are small things, so a clear road map will need to be created based on priorities and anticipated ROI.

4.  Multi-channel integration requires clear ownership and teamwork.  An executive mandate to integrate is critical, but so is "on the ground"  leadership.  Often, multi-channel initiatives lack a clear owner or a dedicated cross-functional team to focus on execution.  According to the SORO study, only 37% of companies surveyed reported having a cross-functional team to design and roll out cross-channel features.  Consistent accountability for multi-channel programs vs. treating them as "side projects" outside of normal business will go a long way.  You'll need a great knowledge source from each channel, someone from customer care, someone from IT and likely others, depending on the initiative.

5.  Objectives and incentives must be aligned around customer scenario success.  Teams tasked with multi-channel issues need to map the "end to end" customer experience, carefully planning how each channel or device will help the customer achieve their goals.  If performance metrics are focused on customer success, the right decisions will follow.  Chances are someone on your e-commerce team is skilled in scenario design: tap into them for multi-channel experience design.

Finally, pace yourself and don't expect overnight success.  Most multi-channel initiatives by their nature are hard to do well.  Be sure roll outs are carefully planned and tested before wide release, and have mechanisms in place to gather customer and employee feedback early.  You're going to have a long relationship with the multi-channel monster.

E-commerce Help Wanted: Retailers Need Not Apply?

Today is Darwin's 200th birthday, so what better time to reflect on the evolution of e-commerce leadership.  

A recent article about e-commerce executive recruiting  in Times Online reveals that retail experience is among the least important attributes that retailers now seek when hiring someone to lead their online effort.   While at first I was surprised, some quick memory checking made me realize how much the e-commerce leader's role has changed in the last decade, and how very different the skill set requirements have become.  Still, when I thought about the important perspective that a seasoned retailer brings to the online channel, I'm nI decided I wasn't necessarily willing to push retail experience to the bottom of the pile.  Here's why:

In the years following my graduation from college, I spent a lot of time on the selling floor of retail stores.  It was the early 80's; there was a recession going on (sound familiar?) and jobs were scarce.  It wasn't glamorous. My feet hurt,  it didn't pay well, and the customers were demanding.  I was glad to leave.  But, 15 years later, as a pioneer in the early days of e-commerce, I drew from that selling floor experience in a big way.  When I had to think through how to present a product online, what information a customer would need to make a decision, how to communicate helpful service information without a human, I thought back to those days when I had to look the customer in the eye (not in the email address) and tell them that the item they wanted was out of stock or that the sale didn't start till tomorrow and I couldn't honor the price today. I remembered that sick feeling in the pit of my stomach when I had to walk a customer because I didn't have what they wanted.  To this day, when I am getting a website ready to launch, I think about how I had to be sure that the selling floor was "ready for showtime" every morning, with the best selling products front and center, the right signs on the fixtures and my brain up to speed with what specials were running and what new items had just come in.  Today, as an e-commerce consultant, I can always tell when the client I'm working with came from the retail ranks.  They are typically the ones with an intuitive sensitivity to the customer experience and a maniacal sense of urgency about every customer facing detail.  I never ask, but I suspect they have that same sick feeling in the pit of their stomach when the customer isn't happy.

Of course, e-commerce has grown up, and with it, the expectations of the e-commerce leader. In the beginning, retailers had no choice other than to choose a passionate person from the inside.  After all, when an industry is only a few years old, there are no seasoned veterans to choose from.  Early stage e-commerce leaders relied heavily on their offline institutional knowledge  and internal company relationships to get things done.  They found insight and validation from their peers at other companies through Shop.org and regional/local networking groups springing up to share information.  They became evangelists in their organizations, and were often the catalyst for channel coordination and integration; and who better to do this, they were the ones who had a view of what the future retail experience was going to be.

As the online business matured, these e-commerce leaders became a very special breed: seasoned execs who not only had an extensive background in traditional retail or catalog operations, but who now offered a bonus layer of expertise in how to get it done online.

But, sometimes evolution happens very quickly, as it has in e-commerce. The demand for seasoned e-commerce leaders has outpaced the supply.  E-commerce businesses and technologies have become more sophisticated and complex.  E-commerce now represents a substantial portion of many retailers' sales and profits.  For most retailers, e-commerce represents one of the few bright spots of growth and innovation. 

Retailers eager to make the most of the online channel may no longer have the luxury of putting a good store/catalog person in charge of e-commerce and letting them "figure it out".  The learning curve has gotten steep and the e-commerce leadership job now comes with c-level expectations and demands.   When seeking an online leader, the Times Online article points out, retailers may cast a wider net for talent.  That net may include top tier talent with little or no experience in retail.

In the wide net, you may find someone with the right leadership and vision to drive e-commerce, but before you leap to hire someone without retail chops, think about these questions:

• Who else on the e-commerce team can be the retail voice? Is their voice loud enough and respected enough to be heard?
• Is the boss of this potential new leader someone with a strong retail mindset and can they provide mentorship in this area?
• How critical are cross-channel and multi-channel initiatives in your organization? Will this potential new leader understand the complexities and cultural challenges in executing these initiatives without hands-on retail experience?

And finally:

• Has the potential new exec spent any meaningful time dealing directly with customers, and in what capacity?  In other words, have they had to look the customer in they eye (not in the email address)?  And what gives them that sick feeling in the pit of the stomach?

There are consequences to taking retail out of your e-commerce gene pool.  Be sure you're ready for them.

Nudge Your E-commerce Customers and Grab the Low Hanging Fruit

Often, I'm asked by clients or prospective clients to look at their e-commerce websites and identify low hanging fruit.  Usually, that means unearthing opportunities to improve the customer experience, and thus, improve conversion.

Here's one way to grab some low hanging fruit: give your customers a nudge.

In any given e-commerce shopping and buying experience, customers are faced with a large number of choices to make.  I'm not just talking about selecting the product to buy. It's all of the various configurations of choices that come after you've found the item that you want:

• What color and size do I choose?

• What shipping method do I want?

• Do I want to sign up for email, and if so, do I want HTML or text?

• Do I want the item shipped to my billing address or a different one?

• Do I want to save my personal info or create an account for next time?

• What credit card do I want to pay with?

• Do I want to donate extra dollars to a good cause?

The list goes on.  Depending on the nature of the product, there can by a myriad of custom configurations of a product (like the Timberland boot builder) or options for receiving a physical product vs. a digital version (such as an airline ticket or software product).  As many online shoppers have discovered, on some websites, it's all too easy to make the wrong choice.  In fact, some websites make matters worse by having the wrong choice "pre-selected", causing frustration, abandonment, or worse, an erroneous order followed by dissatisfaction and returns.

By dissecting all of the places on your site that your customers need to make choices and gently "nudging" them towards the appropriate choice, you can make your customers happier AND improve your e-commerce business results.  

Fortunately, some great brains at HBR have written an article and created a useful decision tree methodology for those of us who lead e-commerce efforts.  The article, Nudge Your Customers Towards Better Choices is a must-read for any information architect or designer faced with getting customers through the online decision making process, and for e-commerce business leaders wrestling with the pros and cons of making "default" choices for customers, either with the intent of achieving a business results (such as getting more email sign ups) or improving customer satisfaction (such as presenting personalized selections).  Note: you will need to pay for this article on the HBR site, but it's only $6.50 and, in my view, well worth the investment, as you'll probably refer to it again and again and put the decision tree they've created on your bulletin board.

Fundamentally, the HBR authors divide the world into two key types of "default" decisions that can be presented to a customer: a) mass defaults, where a retailer "pre-selects" the option that a majority of users will likely choose and b) personalized defaults, where implicit or explicit information about a customer is used to "pre-select" the best option for them. 

Both of these default types come in a variety of flavors, all of which are described in detail in the article, with examples of appropriate usage based on the business objectives and customer information available.   But, to quickly make they point on how useful nudging can improve the customer experience and business results, here are a few examples of my own: 

First, an easy one.  A typical illustration of an e-commerce  mass default is below.  When it's time for the customer to choose a shipping option, pre-selecting "standard" shipping makes sense.  It's the least expensive option, and if I have special circumstances that cause me to need expedited shipping, I don't expect the retailer to know that.  Of course, if they can highlight messaging about shipping deadlines here around key gift-giving holidays, all the better.

  

In the above example, specific info like the anticipated date of delivery would go a step further to helping the customer make the right choice.

Now, let's look at an example where the wrong mass default is a likely source of frustration.  On the Allen Brothers site, notice that the default quantity choice is set to "0".  Why not set it to "1", since customers ordering will order at least one, and must choose a quantity in order to add to cart?

 
How many customers do you think mistakenly hit "add to cart" without choosing a quantity?

Personalized defaults, when well executed can lead to increased conversion, loyalty and reduced returns.  Consider myShape.com, the women's apparel site that "pre-selects" the right size for the customer based on the extensive body measurement information she provides.  Assuming they have the right data, this saves customers the hassle of determining the right size, and reduces the risk of returns.  This is a form of personalized default HBR calls a "smart default".  I agree, it is smart.

Then, there are those mass defaults that would be so much more effective if they were personalized. I'm a petite.  I've stopped growing (at least vertically), so that's not likely to change. Yet, every time I shop online from my favorite stores, I have to "override" the default "regular" size setting. Sure, most women are "regular", and while most stores probably don't know enough about me to recommend a specific size, they could easily get enough data from me, either in my profile or in my purchase history to pre-select "petite".  Incidentally, when I was rushing through some shopping last holiday, I mistakenly ordered "regular" from two websites (see eddiebauer.com below) and promptly returned them, I was too aggravated to make an exchange.

    

After reading the HBR article and doing a quick drive by on a few sites, I've concluded that paying close attention to key points of customer choice and applying the right form of defaults is an area of untapped opportunity for many. If you're under pressure to improve your business results through low hanging fruit (and who isn't these days?), try this:

Buy and read the HBR article. Identify all of the decision points on your site where defaults are used or could be used. For each, ask yourself:

• Is this the appropriate form of default?
• Is the appropriate choice pre-selected?
• Are there areas where we're using mass defaults when personalized defaults would be more effective?
• What customer data could we gather or what data do we have that would help us offer a truly helpful personalized default?

Then, set up some A/B tests, and gently "nudge" your customers to the right choice.  Chances are, you'll see that a well placed nudge might just push them over the "buy" threshold, and allow you to pick some low hanging fruit.

 

 

 

 

 

 

 

E-commerce Freshman: Is Your Shopping Cart Before the Horse?

If  launching a new e-commerce site is on your list of New Year's resolutions for '09, here's what you should NOT do first: start hunting for a shopping cart solution.

While most of my clients are established online retailers, recently I have received a number of calls and emails from e-commerce first timers.  The recession has prompted some pure brick and mortar retailers to seek growth in the online world. Or, sole proprietors are starting e-commerce businesses with hopes of  pursuing a dream and ditching the need for a day job.

Inevitably, the conversation starts with the client inquiring about what e-commerce platform or shopping cart software they should use. There are so many out there, it's confusing, etc. 

Well, it IS confusing.  But one of the reasons it's confusing is that you may be putting the shopping cart before the horse. 

If you are looking at e-commerce solutions before planning the kind of business you are going to run and how you are going to run it, odds are that a) your quest for the right software solution will be frustrating and painful and b) you'll probably pick the wrong one.

Here are ten signs that you've put the shopping cart before the horse.  If any or many of these describe you, don't even think about the shopping cart yet.

1.  You haven't decided what you'll be selling in your online store.   The products, how many of them you'll carry, how frequently they'll change, how complex they are to sell, all of that stuff really matters.

2.  If you have decided what to sell,  you haven't looked at how competitors are doing it , or

3.  You aren't absolutely sure as to why someone would buy from you vs. a competitor. Let's face it.  Just about everything is being sold online already.  Chances are a more established player is already a jump or two ahead of you.  What will make your e-commerce site a more attractive option to customers?

4.  Speaking of customers, you don't have a clear picture of your target customer or a  plan and budget for attracting the right visitors to your site.  Don't think that the search engines will just find you.  It takes money and work to get qualified traffic to a website.

5.  You're not sure how you'll get the photos and product descriptions for the products you'll be selling, or who will be doing the ongoing merchandising and updates.  Doing this part well can mean the difference between a professional site and one that looks and reads like an afterthought.  If you're planning on carrying a wide assortment of products, don't underestimate the workload here or the tools you'll need to handle it efficiently.

6.  You don't know how you'll handle customer service inquiries, who will take the calls and answer emails or how you'll keep track of them.  Many early stage e-commerce efforts overlook the need for human contact with web orders.  It happens, so figure out how you will make it easy for customers to contact you and what you will need in terms of resources and infrastructure to deal with it.

7.  You're up in the air about whether you're going to fulfill orders yourself or outsource the function.  If this is you, you may want to skip ahead to point #10 below and let that start your decision making process.  Think about the volume you'll be doing and what you need to be able to manage, process, and fulfill orders, both at the start and as your business grows.

8.  You haven't thought through your polices and cost structure regarding shipping and returns.  This is a highly competitive and rapidly evolving area of e-commerce.  Flat rate shipping, expedited options, pre-paid returns, shipping promotions, the list of options and logistical issues is significant.

9.  You don't know who will be designing or developing your website, and/or you're not certain about all of the content and features your site will need.  While you're at it, think about how frequently you plan to make cosmetic and technical changes to your site and how those will get done.

10.  Saving the most important for last: You don't have a plan for how much business you will do, thus you don't know how much you can afford to spend on your e-commerce site.   The key here is to start with a plan.  Even if the plan is wrong, you'll be better off than if you had no plan at all.  Start with the fundamental metrics: How much traffic will come to your site?  How many of those visitors will place an order? How much money will those visitors spend and how many units will they buy?  This should be the basis for answering many of the questions above (like whether or not it will be feasible to handle fulfillment yourself, or what kind of budget you need to attract the right number of visitors to your site).

You'll probably find that working through these issues will cause your thinking to change regarding what you need in an e-commerce solution and who you need to help you along the way.  Chances are, you'll need more than just a shopping cart behind the horse.