eCommerce and

• With the $100 million in funds that Twitter is reported to be receiving in venture capital funds the company’s valuation has nearly quadrupled this year to an astonishing $1 billion.


• The Harvard Business Review has put together five rules that have decoded what it truly means to identify leadership.  Their research concluded that 60-70% of effective leaders share these common traits:

-Rule 1: Shape the future.

-Rule 2: Make things happen.

-Rule 3: Engage today's talent.

-Rule 4: Build the next generation.

-Rule 5: Invest in yourself.

• Interested in what’s going on with one of the most exclusive online shopping clubs?  Shop.org interviewed Susan Lyne, CEO of the Gilt Groupe, who reveals their 104 job openings, plans for the future and more.


• Getting Retweeted is scientific.


• Can your search share help your customers?


• Since this article came out Lisa Barone has had to defend her position, on Seth Godin’s Brands in Public release.  The crappy thing is I think most people agree with her it’s just no one has ever said anything bad about Seth Godin before.  Someone had to call him out on this and her points are all valid.  Yet when you are Seth you are going to have a faithful following regardless of what you do or how you do it.  If people didn’t call others out just because of previous reputations than where would we be giving former President Jimmy Carter the time of day?  Asking Milli Vanilli for singing lessons?

Kohler is arguably one of the most innovative brands in the home improvement industry. The new Karbon faucet has completely transformed the kitchen and more specifically revolutionized the kitchen faucet. Meanwhile Kohler seems to effortlessly create bathroom fixtures that are not only sleek but save water, like the Escale toilet.

• eBay is scheduled to make quite a few changes this Spring.  Scot Wingo of ChannelAdvisor has prepared a White Paper on the changes for those of you still selling on eBay.


• Chris Barr highlights the importance of consumer trust.


• Rachel Hirsch reviews a recent eMarketer report and explains why men and women aren’t created equal, especially when marketing to each gender.


• SKTool, Google’s new search based keyword tool, was reviewed by Practical eCommerce and the assessment looks positive.
  


• Search Engine Land’s Just Behave column reminds us merchants that consumers are “more than skin and bones with credit cards”.
  

Kohler is arguably one of the most innovative brands in the home improvement industry. The new Karbon faucet has completely transformed the kitchen and more specifically revolutionized the kitchen faucet. Meanwhile Kohler seems to effortlessly create bathroom fixtures that are not only sleek but save water, like the Escale toilet.

Happy New Year all!  I am out for the rest of the week so the variety is early.  There are some new posts that I wanted to share, but in addition to that let’s take a look at some of our favorite posts, top stories, and some of the biggest developments in the industry from 2008.

• Google Product Search up 786% in the category of shopping search.
• The Silicon Alley Insider reports on Digg’s revenue losses and why ad targeting, or the lack there of, could be a major factor in these losses.
• Have your 2009 wish list ready for Google?  I know Zach does and Matt Cutts’ parents do, but submissions are coming in fast so add yours soon.
• Jennifer Laycock released her second installment of “Six Lessons from a Wooden Boy”, but I recommend starting from her first post on the subject.
• A legend about the inventor of chess may provide insight into internet retail growth.

2008 In Review

• Election news spreads and bloggers highlighted Super Tuesday.
• eBay jolts sellers by changing fees.
• eCommerce celebrates its 25th birthday.
• OutdoorPros.com launches!
• Mercado rebrands one month and then sells to Omniture a few months later.
• April Fools jokes get better and better every year so it would seem.
• eBay adds a merchant dashboard so sellers can track best match search placement.
• Amazon goes down!
• PCI updates Data Security Standards, again.
  
• The iPhone is released.
• Google adds shopping list to Product Search.
  
• The Top 100 Web Celebrities is announced.
• Yahoo and Google team up.
• Brian gives a lesson on forecasting.
  
• Amazon is finally able to ship Kindle.
• Big companies continue to try and squash the little guy.
• Vanessa, yeah that’s me talking in the 3rd person, goes on a rant about employee responsibility.
• The Olympics!
• Google News causes a 75% drop in United Airlines stock.
• Bill Gates retires from daily role at Microsoft.  Little did we know the extra free time would be spent with Jerry Seinfeld.
• Spore, the most copyright protected game, also becomes the most pirated game.
• Barack Obama becomes the first “Internet President”.
• Macy’s requires online shoppers to “wait in line”.
• Reputation management becomes increasingly important as social networking becomes more popular.
• Internet retailers have to respond to declining economic conditions.

• The Internet star rises in a down economy
• E-commerce on the move
• How the Supreme Court Fractured Online Pricing
• Retail Explorer
• We-commerce
• The Power of Customer Reviews
• Advantage: Amazon
• Merchandise sold on eBay falls 1%, the first decline in company history
• Exit Strategy
• Target.com supports site design for blind people under legal settlement

I know this couldn't possibly be everything, which events in 2008 were most memorable to you?

While performing a little research I came across something which both amazed and shocked me. Apparently there is at least one internet retailer out there who can afford to turn away customers in an effort to provide a better user experience for those already on their website. It’s very red carpet. Like a bouncer in front of a gated entrance, with clipboard in hand referencing a list that you may or may not have gotten on.  I am talking about Macy's site governor (pictured below).  The feature keeps new visitors to the website at a temporary holding page until current users finish what they are doing and leave the website. Apparently they have some kind of user or performance based cap that kicks into effect to control the traffic and/or load time on their other pages. I am not sure if they simply don't have the capacity to handle all of the traffic they would normally receive or if there are other reasons to throttle users on their website but I found the solution both annoying and frustrating. If I was a “normal user” I would simply go to another website to find what I was looking for (who has time to wait around?). Since I was interested in this practice I held on to see when I would be let in. After waiting more than 10 minutes I was finally let in and forwarded to the normal Macy's homepage and was able to continue with normal use of the website.

While I am not sure what the reasons or results of such a feature on an eCommerce website might be, I also can't imagine what it might do for their bottom line and conversion rate. I started thinking about it, but was unable to test if the feature restricts visitors to non homepage pages, users from paid marketing channels, organic traffic or just direct traffic like myself? Regardless, it’s hard for me to grasp why an eCommerce website would enable a feature which deliberately turns away shoppers?  Comments are welcomed and encouraged, I would love to hear what others have to say about the subject.

Here's my picks for the week:

• This is a great little piece if you want a laugh.  The media can make anything seem scary, now stories like this want to convince us that online shopping can be dangerous to our pocketbooks.  I think it’s funny that they worded the story in a way that reflects online shopping to be risky because you may not remember it the next day.  Hello!  The reason why these people are waking up and realizing they spent $700 the night before and don’t remember it, isn’t because of the availability to shop for the items online, it’s the overkill of vodka-tonics and wine.  Bottom-line friends: Don’t drink and shop online.
• Looking at the competition can be crucial to the success of a business.  This week two stories came out about two direct competitors, two competitors that I have viewed as equals in their respective niche, Channel Intelligence and Channel Advisor.  Channel Intelligence announced an influx of new hires, while sadly Channel Advisor was scrutinized for layoffs.  Both companies are known for their data management technologies, but it should be interesting to see if both companies are seen as equals in the future. 
• Google News snafu leads to airline stock plunge 
• Linda Bustos gives her take on the new book Always Be Testing.   I was glad to see it as I have been anticipating the book since Shop.org! 
• Last week I debuted one of the new Microsoft commercials that feature Jerry Seinfeld.  I wanted to add that his salary for this campaign has been published, and it’s estimated at $10 million.
  Here is the newest commercial where they admit that they are disconnected from the average person.
  

Several months ago, we, the staff of Gordian Project, set out to author a blog. Not that all of us immediately found the prospect as inviting as others, but we generally engage a team spirit; thus the eCommerce and Entrepreneurship Blog.

I understood the blog’s driving purpose to be sharing our personal experiences within our given area of discipline as it relates to all things eCommerce. After several months of participation, I thought I would review our blog.

Caveat: I’d never read a blog going into this project, nor had I any desire to. The actual thought of sitting around reading peoples random thoughts makes me feel a bit voyeuristic. After reading Wikipedia’s definition of voyeuristic, it certainly isn’t that. Still, to this day, I’ve had no desire to read blogs other than for the purpose of this review.

I’m not sure it counts as “reading” but the one key area I check out on our blog each month is the Authors section of the home page. The key here is to identify how many posts I have in relation to other staff. I’m not sure what about life turns everything into a competition. This post will launch me forward to eight posts, however, I know I’ve written a couple that haven’t yet made it past the cutting room floor so this number isn’t hard and fast. But going with eight puts me in a respectable position.

Vanessa’s an over achiever at 40, but in all fairness she administrates the blog. I doubt any of her posts have hit the cutting room floor. If light reading and interesting tidbits is your thing, Vanessa’s Variety for the Week delivers. She shares what’s going on around other blog spaces, here at the office, and perhaps her life more than any other contributor.

Matt is our Development Manager. We’re among the elders of the office so I’ve truly appreciated our friendship. I don’t read his posts. I don’t understand what he does beyond the fact that I know he can fix or improve just about any internal process. Any time I walk past his desk he has a monitor filled with gibberish. I simply figure I won’t understand his posts either. Nice picture of his son in his most recent post though.

You might also notice Zach has 11 posts as of today. I’d read his if you only have a few minutes each day. Scanning through his titles, (that counts as reading I don’t care what anyone says) I find his posts most on topic: They include Website Improvements: Test Basic Usability Before Advancing, Google Sitelinks: Capturing My Proverbial Moby Dick, and Google Search Engine Results Pages Illustrated.

As a partner of Gordian Project I have to say bang up job Brian! I particularly enjoyed your Soft Economy Priorities? Time to Paint Your Parking Spaces; that’s leadership.

I’d like to thank Josh for his most recent post, The iPhone 3G Saved My Life. It truly inspired me to write this post. All this time I’d banged my head against the desk trying to come up with another post showcasing the thrilling world of Supply Chain, when all I needed was an iPhone post. Below, the desk I bang my head on as taken with my iPhone.

Over time, you’ll notice that Elizabeth stopped contributing as often. I have mixed emotions on this one. Elizabeth so desired to be a mother and now she is enjoying that gift with her daughter, Kara, as a stay at home mom. Congratulations Liz! However, Elizabeth also worked in Supply Chain and guess what that means, I’ve had to cover Supply Chain blogging without her. Thanks Liz!

I’ve actually loved reading Ellen’s posts for the first time as I prepared for this post. Ellen has taken the reins of a department that everyone loves to hate, HR. She sifts through all the big issues like food programs and political sensitivity. What a fun department to be in. Blog post ideas just shoot across Ellen’s desk, I’m sure. Ellen also manages Accounts Payable but I’ve yet to see a post with any real hard numbers.

Ryan takes his job seriously. He’s building a career, a future. He’s a smart guy who understands this isn’t just a 9 to 5 but an opportunity for him to build a foundation for his future. He’s always learning and looking for how to add value to the company. His posts are read as a “Where’s Ryan?” I just hope he’s not building his resume based on Ryan’s Randomness for the Week of June 20th, 2008.

Tim, as partner, bang up job! Please don’t break your run on providing an image in every post. No one does it better than you.

Our blog was launched just prior to Simon’s moving on to launch his own business. Nice work getting in a post you can use as a business card.

Before you jump to any conclusions about why Emily posted her first and, to this day, last post May 19th 2008, I dare you to read it (Dealing with Difficult Customers: Best Practices for Addressing Customer Complaints). She is right now over there fighting the good fight. Without her and her team keeping those customers happy there’s no need for this eCommerce and Entrepreneurship blog.

And finally I’d like to say welcome to Arianna. She brings so much to the table: customer service experience, multilingual, eye for detail and now she’s a vital part of Supply Chain. FYI Arianna…I’m going to need at least one post a month.

So those are my “collective of experiences, thoughts, processes and updates from people that are not only actively working in ecommerce but are also zealous about the industry.”

A recent supplier addition provided a strong reminder that the definition of A, B, and C products aren’t always the same from one shipper to the next.

Driving Sales and Meeting Expectations

Generally, and this is what got us in trouble in the first place, manufacturer’s class each unique model number based on some understanding of performance, and the market’s demand for that particular model number. The manufacturer experiences this demand as turns, or total number of units sold in a given period of time.

When adding new product lines, it’s important to clearly communicate reasonable delivery expectations to a potential customer. These expectations can be communicated in a number of ways; in stock, out of stock, quantity on hand, or with lead times to name a few. Customers are then free to make their buying decisions based on their specific project deadlines.

It can be difficult to balance driving sales with communicating availability, especially if the product has an unfavorable lead time.  Don’t shy away from this kind of proactive communication solely for the purpose of increasing sales. Communicated or not, note that every customer has some set expectation for what they consider a reasonable delivery time. Right or wrong if you’re unable to meet this expectation the sale will likely result in a cancellation and likely the subsequent incurred transaction fees. Nothing is gained but a poor customer experience. Framing a customer’s expectation of a reasonable delivery time with availability information serves to curb a potentially out of control cancellation rate.

The A's, B's and C's of Product Classification

As part of a recent supplier addition, we built our availability logic around the suppliers communicated A, B, and C classifications. At the heart of our logic was this understanding that an “A” product should experience greater turns and therefore be stocked accordingly; subsequently “B’s” then “C’s”. In less than four weeks a high cancellation rate was raising its head. In an attempt to positively impact our cancellation rate, a meeting was calendared to sit down with our supplier’s purchasing department. It was quickly pinpointed that a far more complicated definition of A, B, and C was at play. Things such as anticipated turns and current marketing efforts were skewing the historical data from which their classifications were determined. Stocking hadn’t necessarily caught up to these classification efforts.

It was apparent that a more real-time solution needed to be established for determining unallocated on hand as well as next anticipated unallocated delivery dates. Building availability logic around this data should prove accurate, translating into a more positive customer experience with a decreased cancellation rate.

A Couple Key Take Aways 

• Consider communicating availability clearly pre-transaction for a better customer experience. 
• When establishing a new supplier relationship, make sure you’re aware of the internal philosophies that establish classifications from which you’ll build your logic. 
• Attempt to peal back a layer from classifications by seeking real time unallocated availability. 
• Always keep an eye on reporting such as cancellation rates. Look for nuances that will help you bring efficiencies to your processes before a potential issue is out of control.

A while back I was perusing through a brick-and-mortar Staples and I saw this.  The "Beauty Bamboo Ceramic" priced at $9.99.

What caught my eye wasn't the beautiful foliage or the simple ceramic pot.  What turned my head was the "FOR SALE" sign in ALL CAPS affixed to the plants branch.

Even though the plant was in the middle of Staples (the largest office supplies retailer on the planet), on a rack chock full of fake plants, in the middle of the furniture section, and product names and prices were clearly posted in association with the plants, someone (maybe the manufacturer?) saw fit to make sure everyone knew that these plants were "FOR SALE".

I wonder how many people are walking through Staples and notice this plant thinking "Man, this is such a great fake plant on this entire rack full of fake plants in the middle of the furniture section with all these price signs everywhere.  I sure wish it was for sale, instead of just decorating Staples.  OH CRAP!  Look at that sign.  It is FOR SALE!  EUREKA!".

What if we had to do this in eCommerce?  What if on product detail pages we had to display a banner shouting "FOR SALE" in order to make sure customers understood that our products were, indeed, for sale.  Shoot, do we?

One would hope that any sophisticated internet retailer presents itself in such a manner so that customers understand when they are looking at a product that happens to be... FOR SALE.

The presenter for this session was Raul Vazquez, President and CEO of Walmart.com
(Paraphrased)

Raul was one of the most engaging speakers I have seen at a conference.  I wasn't able to post this right away because thanks to California traffic I missed the beginning of the session.  Through some contacts that I was able to make I gathered others notes and combined them with mine to bring our readers the nuggets of wisdom that Raul was able to impress upon the crowd.

The main focus of Raul's presentation was the 4 things that can be done to improve our websites.  

• Invest in a Key Performance Indicator 
• Be true to your brand and what you have promised your public 
• Be true to your vision 
• Invest in platforms that will support the brand and the vision
  

Walmart.com

The walmart.com team consists of 700 people stationed in Brisbane, CA.  Of the 700 employees 12 are dedicated to merchandising the websites over 100 categories.  The content created for the site is based and centered on site merchandising.  Raul reminds the crowd that “there are no shortcuts”.  The team focuses on improving the site by following a process similar to that of the scientific method.  The process is: Hypothesis, test, measure, optimize and repeat.  This is important because Raul states that continuous improvements will yield results that are not always immediate.

Invest in a Key Performance Indicator

According to Raul and his experience the people that seem to get the most accomplished with the best results get their KPI/KPM score card every day.  KPM refers to dashboards designed to track Key Performance Metrics.  Raul reminds the crowd that when looking at this data it is important to look at it from three different perspectives: Absolute values, relative values, and trends.  He shares that walmart.com tracks a few key metrics: 

• Revenue 
• CTR 
• Conversion 
• Revenue/Page views
  

Under his direction and the direction of the merchandising team leader Mike Simas, he believes that his team is efficient, but admits that they can't do all of the things they want to do, they have to be selective.  He notes that in order to eliminate noise that can skew the KPI data it's important to look at the comps separately.  Some of the comps that walmart.com looks at are: Sales comps, traffic comps, and conversion comps.

Be True to Your Brand and What You have Promised Your Public 

This will be different by retailer, for walmart.com it is “Save money. Live better”.  He uses an example of how they pay attention to this by their use of “from pricing”.  They have to be careful not to violate the trust of the customer, which can happen when using this tactic; it is referred to as bait and switch.  He reiterates this point by giving the example “we don't show a picture of a Rolex and say priced from $119.00, then send the customer to the Seiko section when they click on the ad”.  They also try to bring the store experience online.  They replicate best practices seen in the store like showing more product features, multiple images, plus price and content.  He admits that they are tinkering with going back to single images for certain products, but he believes that if you can show an image that highlights the product features, or the product in use that it makes the online experience more like that of the store.   

Be True to your Vision 

Like the brand promise this will be different for retailers.  For them it is “to be the most visited and valued online retail site”.  He admits that this isn't easy to measure, because value itself is defined by the customer's use of the website features or frequency of returns.  He also reveals that this plays in to his recurring fear of not being able to measure.  He adds that he likes the quote “In God we trust.  Everyone else bring data”.  

Invest in Platforms that will Support the Brand and the Vision 

A key component of this is the ability to “highlight the best and make it easy to find the rest”.  He explains this by explaining the “long tail” side.  The products with the highest velocity and mass appeal fall at the head of the curve with their assortment at the tail end of the curve.  Some of the things that they are currently working on and planning on implementing in the near future support this claim.  They are rolling out a digital asset management system that is linked with in store assets, in order to guide the customer throughout the decision “tree” what we call the buying cycle.  This will also help with access to the “rest” and improve additional browse and search capabilities.  Next they will be investing in a more personalized shopping experience, but doesn't jump on every new technology as he is apprehensive about being able to operationalize the technology.  One of the barriers they have seen to adding this technology and others because of the limited amount of team members.  This is true of MVT testing for this team, they found that it turned out to be too complex to utilize in mass with their over 2-3 million visits per day, hence it has been dumped for A/B testing.  To support the brand promise and vision they invest in rich content which ensures information needed for purchases, ratings, reviews, and product availability for both online and in store purchases.  One of the key values they believe needs to be featured on the product detail page is the value to the customer for them it is the price in big red letters.  In order to be the most valuable and visited store assortment is essential, this is where the “Highlight the best.  Make it easy to find the rest”, he adds “if easy to find it will be easy to buy”.

Visual Examples 

Raul showed the audience screen shots of the site to further illustrate the points he has made throughout the presentation.  They use a POV approach; this is what they call the largest product placement on the screen, or the point of view.  The “site to store” function is featured across the site, not only highlighting ease to the customer but the ability to have products shipped for free.  He values consistency in navigation from page to page but explains that it is important to separate attributes by category.  Some interesting attributes that they use by category are: Shop by age for toys, shop by attributes for electronics, shop by ratings, and shop using the television product advisor.  Features like comparison shopping for customers, the top 50 in any category are highlighted and promoted, and savings all play a part in the walmart.com shopping experience.  In addition to the up and coming improvements they plan to improve checkout, localize, personalize, and creating an in store experience that is equaled online. 

Happy Friday readers.  Today is a special day for me, when I leave here today I am heading to the hospital to hold my new God Daughter and my best friend will be a mom.  It is surreal to me, but it was bound to happen sometime, so I thought I would share my excitement.  As you may have noticed I spent some time at Shop.org this week in Huntington Beach for their Merchandising Workshop, I hope my notations helped as I feel like I got a lot out of attending.  So let’s see what else went on this week….

• Tracking the influence of online shopping and research, and the effect it has on in store purchases is becoming a hotter topic.  Multi channel merchants have been trying to analyze this and it seems that ShopLocal has come up with a way to do so.  According to the CEO, Vikram Sharma “The results are clear and the index strongly supports analyst forecasts of the rapidly growing use of the internet for shopping in-store.”
• Pure play internet retailers beware:  “In one city (New York), a judge determines that an Internet retailer’s use of thumbnail product images, even those published by a manufacturer to sell its own products, is permissible “fair use” when used by the Internet retailer to sell that manufacturer’s own products, and hence dismisses a claim for copyright infringement by the manufacturer. In another city (Phoenix), that same fact pattern and the same statute results in a trial for copyright infringement!”  Read the full article here. 
• eBay is slumping while other internet retailers are succeeding, um can I say duh here?  A few months ago they totally change feedback and best match search, essentially killing longtime loyal sellers.  Now they have struck a deal with Buy.com, which seems to be infuriating individual sellers.  Now eBay’s general manager of North America says “Frankly, we are challenging some of the core assumptions that we have made about our business…Instead of focusing on being an auction business, we are looking at what it takes to create the best marketplace out there.”  Really eBay?  I seem to recall you ostracizing a whole lot of your core merchants when you tried to kill them with fees in 2006, and a few months ago with the changes to how seller’s products are returned in search results.  Honestly I am not surprised that eBay is floundering, we are still trying to make it a viable marketplace, but with their outdated UI, poor reporting, and constant changes how are sellers supposed to invest their time, effort and other resources and still make a profit? 
• If you are looking to hire a paid search marketer or agency make sure you familiarize yourself with this list of questions to ask before you sign anything. 
• Watch out Hollywood, there is a whole new breed of celebrities, and guess what, they are nerds just like us.  Techcult just released the Top 100 Web Celebrities.  I was a bit jealous at first thinking to myself, I can’t believe I didn’t get any of the fantastic people that I work with on this list, but then I saw who was number one, and I am not joking it’s Tila Tequila!  When people like Seth Godin are at number five and Jeff Bezos at number 21, and Tila and Perez Hilton get numbers 1 and 2 respectively, it scares me to think of what this world is coming to.