Shop.org Blog

I just uploaded Morgan Stanley’s Technology Trends report by Mary Meeker to Bazaarblog along with my commentary.  In my opinion, this should be required annual reading in our industry.

Enjoy, and I’m looking forward to seeing everyone in Huntington Beach at the Merchandising Workshop!

Fundamental elements of the customer-marketer relationship are changing faster than retailers can adapt. In fact, they’ve already changed! While it seems obvious most of us are only beginning to appreciate something important: How customers interact via the Web with a brand is an experience.

Ok… seems obvious but let’s frame it in a new light that may strike you as a little odd:

At a very high (basic?) level Web retail is not about clicks, conversions, optimization… it’s not about the numbers or the metrics. It’s about your ability to create hunger, desire or capitalize on a human being’s latent intent. It’s about stimulating, comforting, rescuing and helping (etc.).

The Web is inherently interactive and increasingly social. This sounds trite and simple but it cannot be under-stated.

Recently, I suggested that authentic digital experiences must be the future of online customer acquisition and challenged the affiliate and search marketing industries to step up to the plate. This week I’m qualifying the opportunity a bit more since some are a bit skeptical. I’m also explaining why it’s urgent to start making change.

Retailers are continually hearing the mantra: “Participate and have a conversation with customers.” Why? It’s because of this newly realized element of interactivity among Web users. The power of this element is breathtaking when one considers its raw EXPERIENTIAL power… the Web’s ability to make humans feel a certain way.

According to Keller Fay Group (2008), Americans have 3.5 billion brand-related conversations per day. With a population of 300 million, that means the average American engages in over 10 such conversations per day.

We know that 8 out of these 10 is likely more influential than any advertisement or paid sponsorship. Why? Because nearly 80% of consumers trust recommendations from friends, family, and trusted sources over any form of advertising.

What are you doing to foster such conversations under your umbrella?

Perhaps you don’t see the opportunity clear enough. You may ask, “why should I bother to foster conversations?”

Here’s why: By providing customers and/or prospects with access to trusted recommendations (and other forms of authentic, relevant, engaging content) marketers stand a better chance of winning their business.

Customers are finding new ways to participate in various online activities. Sure they still love search, but they’re rapidly finding more social and participatory elements such as product reviews, product design suggestions and a new thing called “crowdsourcing” (more on that in weeks ahead) to be helpful and even fun. Remember fun? It’s powerful stuff!

The world belongs to companies that can…

1. Identify the right micro-verticals where consumers engage deeply
2. Activate new or existing consumer communities that welcome their participation
3. Make the ‘network effect’ work for them through syndication & aggregation
4. Think the way industrial designers think about ergonomics – in our case it’s form factors of media consumption

So says Jeffrey Rayport, founder of Marketspace LLC.

So how can one become one of these companies?

As new customer behavior patterns emerge new marketing practices are needed to capitalize on them. We need to create them. Customer acquisition and retention cannot survive on traditional strategies like affiliate and search marketing alone. Intercepting customers during buying processes is no longer enough.

What are these new strategies? Some call it “conversational” marketing. Whatever name you give it, this emerging practice area is all about joining in with customers – listening to them and interacting on a more intimate level.

Quite literally this translates into socializing with customers and prospects – a skill set that is a bit foreign to most marketing departments (beyond traditional market research). After all, we’re not formally trained in good listening skills or prone to making altruistic gestures. Rather, marketers expect measurable return on investment (ROI).

Some retailers will be satisfied with following the crowd, others blaze trails. This begs the question: Can you afford to wait to implement pioneering and innovative digital marketing strategies, or will you help lead the charge?

The best way to answer this question is to make sense of and prioritize these emerging, digital acquisition and retention strategies. Your decision should ultimately be based on your market’s active use of digital technologies. If a social, experiential marketing approach is right for you, begin testing now. Eventually you can vet strategies to decide which are worth continued investment.

Before all else, the key to success in today’s digital, multi-channel shopping world is a bold, new mindset. This way of thinking is what feeds new decision-making and creative strategy development processes. I admit… I’m making it sound pretty easy so we’ll get into the details on HOW to do actually dip toes in the water (safely) and experiment with social marketing in weeks ahead.

Rich Internet Application (RIA) capabilities, such as whiz-bang Flash and AJAX capabilities, do look cool. But do they attract return on investment for ecommerce? Do they drive up conversion, average order size or deter abandonment? There does not seem to be definitive A/B testing consensus to prove it, but some RIA capabilities do seem to make a positive impact while many seem to have dubious returns. If your ecommerce site is meant to show a progressive brand, and driving ROI is secondary, than ROI is not the measurement to use to evaluate RIA success. For most ecommerce sites however, ROI is the primary yardstick. Some RIA elements may even be detrimental to ROI, if they are distracting or confusing for the customer. Ecommerce sites do not want to alienate their existing customers with a new or non-standard interface. Because of this some retailers are treating RIA with some trepidation, or at least caution. Some retailers on the other hand are not taking a conservative approach at all, and there are emerging examples of full RIA sites such as beta.bordersstores.com, nike.com, style.ralphlauren.com, memorabilia.hardrock.com, thenorthface.com and jcrew.com. These are mostly Flash-based sites that are progressive in how they approach interaction design. There is some risk in the approach as they are introducing somewhat new navigation schemes. An RIA strategy does not have to be this ambitious however, as a few specific RIA capabilities are leading the pack of adoption, and they seem to have good circumstantial evidence that RIO is achieved. Some RIA standards are also emerging for these specific RIA capabilities, making their implementation more straightforward. Specifically these little gems include:

• Dropdown cart – This is the cart that Gap seems to get the credit for popularizing. Here the cart drops down from the top-right of the page. This cart allows the shopper to continue shopping or to checkout. It is minimally disruptive, and allows the customer to keep shopping, not taking them away from the page they are on. The hope is to increase the average size of order by allowing the customers to keep adding items and not confuse them by interrupting their shopping experience. Many retailers redirect the customer directly to a large cart page, and then onto checkout. This is to drive conversion, but at the expense at the average order size. This RIA technique aims to strike a balance, where the customer chooses to checkout or keep shopping. A more advanced cart can show tax and shipping information in the cart to lower abandonment in checkout so the customer is not surprised when they get to checkout. Inventory information can also be shown if it is relevant to the shopping experience.

• Non-wizard checkout – Calling it one-click checkout is a bit Amazon-proprietary and is not what we are specifically after. What we want is a one-page checkout, not a multi-step wizard-type checkout. This is to deter abandonment. The trick is to fit a fair number of checkout questions on just one page. RIA helps. The RIA technique here is to only ask the questions that must be asked. Then allow customers to select additional questions to answer on-demand. For example, RueLaLa.com makes is easy to access store address or add or change an address in the context of the checkout page. Also the checkout page does not show both shipping and billing address fields if they are the same for the customer. Just one is shown, and if the customer selects an option that shipping and billing addresses are different then the other set of fields are presented. The same technique can be used for gift messaging, gift wrap options and changing the shipping type. Additional information, such as the return policy can slide in or a layer can be used to overlay the checkout page to deliver this information upon request. These techniques do allow the essential information to be presented in an above-the-fold page, and these other elements can be presented using RIA techniques on-demand so the page expands on when the customer requires it to.

• Quick-pick modal – This is a modal screen that displays when the customer hovers over a “quick pick” or “quick look” button image displayed over product images on the product catalog page. This modal then appears over the catalog page and displays the critical product information. This page uses some RIA techniques to fit a surprising amount of information on this page, potentially as much as a product details page. Some retailers have considered removing their product details page entirely because their quick-pick modal displays so much product information. The modal allows customers to research products quicker to find what they are looking for, and is also easier to find other items they may be interested in, because the quick-pick modal seems like such a minimal commitment to click on and read about product. This modal is meant to increase conversion and the average order size. A quick technical note: this modal should not be a pop-up, or browser pop-up blockers may prevent it from appearing, and gives a more jarring experience. Instead this should be a layer that has the appearance of a modal pop-up, but is integrated more seamlessly into the page, and will not be blocked by popup blockers. The same technique should be used for the cart. Additionally this is not technically a Web page, but it can act like one by coding your analytics correctly on the modal, and allowing the modal its own URL, so the page is bookmarkable and sharable by URL.

• Inventory integration – The RIA technique required for inventory is to show the customer how different product options selected impacts inventory availability. For example, there may be plenty of size 6 shoes in black, but only two left in red. But there are plenty of red shoes in size 6 ½. To show this effectively, the inventory messaging should changes real-time as product options are selected. So in this example, if the customer chooses a red shoe, it would show that only two are left in size 6. However if size 6 is selected first, then it would show only two left in red. RIA helps here by allowing clever inventory code to run to get the inventory of the specific options (usually size and color) that are available, and present them in an efficient way. This does not have to be a Kayak slider-type of control or a Blue Nile configurator, it can just be buttons and drop downs, but the goal is to display options and messaging that reflect what the customer has done in real-time. This is to drive down abandonment as the customer can more easily choose the items that are available. Other options such as shipping can change too in real-time as the user makes selections to further reduce customer surprises at checkout.

• Increased SEO and Loyalty – Embedding items of interest in your ecommerce site can help drive your brand and increase loyalty. It can also create links to help with SEO. A couple of cool examples include how Alternative apparel clothing includes product imagery of celebrities wearing their looks. Their site also advertises event listings and includes music that promote their brand and the community they are trying to reach.

• The use of Multimedia – Creating a more dynamic interaction with the customer is a key benefit of the use of multimedia in ecommerce. On-line customers have the obvious disadvantage of not having a tactile experience with the product to make buying decisions. Multimedia can help fill this void by allowing the customer to see the product ‘in-action’. For example within the Novara bikes section of REI’s site, there are videos of the various bikes in real-life settings. This helps to brand the product and allows the customer a more engaging experience.

Another good example of multimedia is Martin + Osa’s shop by outfit section. Here if the customer keeps their cursor over a specific outfit, the modal spins and twirls to show the look off. The customer gets a better idea of the overall look, including how the fabrics fit and move with the body. Also the models walk in and out of frame as the customer filters various looks. A nice effect to show brand, and informative for the customer to get a better view and feel for the outfit.

The following table shows some of the other popular RIA capabilities and their business benefits:

These specific RIA capabilities are gaining traction. These capabilities do not require an architectural overhaul to implement them. They are user interface widgets that can be added to almost any existing Web site. If your organization’s current ecommerce infrastructure is good, then you can just include AJAX JavaScript libraries such as Prototype.js, Script.aculo.us, Modalbox, Validation, Prototips or Prototabs to build these widgets. Flash and Flex are not required for this level of RIA. You should be able to bring these capabilities to life relatively quickly on your existing ecommerce site, perhaps in a couple of months, well in advance of next holiday.

Adam Michelson is the Director of ecommerce at Optaros, Inc.

Successful, Daring Marketers are Focusing on Authentic Forms of Persuasion to Win & Keep Customers.

Customers today have access to so much content — and have so many ways to gather news and information — that the likelihood of your corporate message penetrating the clutter is virtually nil. Instead, if you engage the audience in a conversation and learn what the social community is looking for and concerned about, you might be able to persuade them to hear your message.
In other words…

“There is no market for your message.”

David Weinberger at the 2007 New Communications Forum

Let’s take a big step back for a moment and realize how selling on the Web is quickly becoming less about marketers’ supply meeting up with customers’ demand, and more about customers themselves actively bringing their demand toward supply. In fact, they’re CREATING supply in many cases… and taking action to monetize that supply in a niche community setting.

Given the Web’s increasingly social nature, today’s customers are bypassing “interceptive” strategies like search and, yes, affiliate marketing. No, affiliate marketing isn’t dying or threatened but it IS challenged to change. How? Affiliates are challenged to do more than just shuttle traffic and get ‘in between’ demand and supply. Affiliate networks are challenged to house more than just ‘helpful interceptors.’ Marketers expect networks to provide value-added resellers. Or as blogger, David Lewis refers to them, “value added pre-sellers.”

Getting back to the consumers… they’re increasingly choosing a variety of non-traditional paths to discover products and services – faster and easier than ever before. Says Jupiter Research:

Social and community sites affected the purchase decisions of 51% of online shoppers aged 18-24. This is far beyond any other age group, which averaged less than 26%. A total of 36% of online shoppers influenced by social/community sites said they buy offline even though they use online social/community sites to make their decisions.

So what’s a savvy marketer to do? The answer may seem radical. Today’s marketers must help customers find, consider and purchase products and services by creating authentic digital experiences. That’s the new twist – and it’s not just a load of hyped-up social media spin.

This new paradigm will be fueled by the recently announced Data Portability Working Group. This consortium of unlikely partners (including Plaxo, LinkedIn, Google, Sixapart, Facebook and Yahoo’s Flickr) are banding together to ensure users of the “social Web” can have power over the data they’re putting out there. By making sure social media sites and services are interoperable the user experience becomes simple, the social information portable and shared. It’s the first step toward providing marketers with a serious “social marketing platform.”

How exciting is that?!

Hi

 First of all I wanted to thank all of our speakers and attendees who spent a few days in beautiful Arizona at our Online Marketing Workshop.  All feedback is welcomed so please drop me a line at joseloffl@shop.org with any thoughts, opinions, and ideas for content moving forward.    I want to make sure that the content at our events fits the needs of our members.

 One of the highlights of the Marketing Workshop was Mitch Joel’s two-hour intensive Web 2.0 University.  As a follow-up he has written a blog with a curriculum and links to some of the sites that he covered and he wanted me to distribute it to the Shop.org community.  Click here to check out Mitch’s blog.

Also, special thanks to our sponsor ChioceStream for their support of this session!

 Thanks everyone!

 Larry Joseloff