eCommerce and

A Business Process is a way of defining what steps to take, what responses are required, and actions that need to be taken for any given task. As I prepared to create a Warehouse Process and corresponding flowchart I realized that finding a starting point was just as difficult as the task itself. What I found that helped me the most was creating and documenting the process in the form of a Business Process. I am not quite done with this project, but these steps are making it a lot easier for me to stay focused and clearly work toward the end result. There are three steps that I found to be the most helpful in creating our processes and flow chart.

Identify

The first step is to identify the processes. For example a Warehouse Process Map will need sections for inbound, outbound, inspections, etc. Figuring out all of the processes to identify in a process map will make the process organized. It is recommended that the processes be outlined in the way the processes are played out. A Warehouse Process Map would have the first process be Outbound, then Inbound, then Inspections and so forth, all in which the order of operations is performed.

Discuss and Document

The second step is to discuss and document. It is essential to get a full understanding of ALL the steps involved in any given process. Often times a process map creator, like me for instance, lays out the steps without fully understanding them. Discussing the steps with employees that carry these functions out will ensure that the process map is as accurate as possible. This is often the most time consuming portion of the project. Obtaining the required information involves sitting with employees and having them describe what they do step-by-step. After this, time is spent in documenting the steps in a word format. Below is a simple example:           

I. Inspection
        1. Don’t Want Returns
            a. In Resalable Condition:  Check Qty Approved → Check Qty to Stock → Click Process
                  →  Refund Tab → Add to Warehouse Inventory → Complete

Chart

The third step is to create a flow chart. A flowchart is a visual presentation of the steps involved in the process that is being mapped.  The process map consists of many different symbols that indicate a decision, or the beginning and end of a task. The flow chart is the tool that can be used to train new employees to clearly explain the tasks that need to be followed in order to complete a task.

Sample Flowchart

Review

The final step is reviewing the process map and flow chart. The easiest way to do this is to again take time with each employee and get their thoughts or suggestions in making the process map and flowchart better, more accurate, inclusive of process responsibilities, and amend it accordingly. Remember that these processes are not set in stone. Methods can change periodically, especially if new technologies or tools are obtained.

The time taken to create a process and flowchart may be substantial, but knowing that each employee has a tool that diagrams exactly what is expected of them is beneficial not only to the employees, but to the company, and ultimately to the customer. 

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.

Managing any area of business invariably means pouring over a myriad of reports. Reports created from queries with sophisticated refinements like sales by criteria, supplier, manufacturer, and date ranges, or downloaded as raw data into excel to be manipulated with “Vlookups” and array formulas, to numbers pinned on Staples yellow note pads.  If yellow note pads are your preference I suggest the five by sevens.  Whether generated monthly, weekly, or daily for performance or projection; the bottom line when reviewing many reports is identifying areas for improvement.

My confession here is that I’ve looked at all the aforementioned reports in both numerical values and colorful charts and at times have been less than clear on how to use them effectively to improve performance and not head into a finger pointing session, particularly when attempting to advance supplier performance. With the current economic environment Cash is King.  Not that it hasn’t always been, but it’s much more pronounced in this climate.  In focusing on driving net cash I was able to find a reporting motivator by combining several individual reports, “Ready to Ship”, “Open Orders”, and “CRAC” (Cancellations and Returns), into one cohesive performance report.

Understanding the Data:

Ready to Ship - Identifies the suppliers communicated inventory as a percentage of total inventory.  (SKUS In Inventory  / Total SKU Offering = % Ready to Ship)  It should be anticipated that these orders would ship within a predetermined timeframe based on warehouse fulfillment rates, let’s say 48 hours from the time in which the order was received.

Ready to Ship Cancellations - Identifies the total dollars cancelled as a percentage of total volume sold ($ Cancelled / $ Sold = Cancellation %). The total lost dollars are included.

Dollars Lost - This is an important piece of information to know if you want to effectively move the conversation into a positive light. Communicating the opportunity of dollars lost positively, without getting into the finger pointing that can happen if the cancellation numbers become the focus of the conversation, should motivate the supplier to make improvements. I frequently hear from suppliers that our extensive product offering negatively impacts their cancellation rate because our business model turns their inventory that they consider C’s and D’s, or items that they normally do not have to replenish as often. This is in fact true but the actual impact is seldom a part of that conversation.  This is where “Dollars Lost” data helps turn the conversation back to performance as we are already only considering “Ready to Ship” inventory. This percentage identifies Cancellations as a percentage of Ready to Ship items ($ Cancelled / % Ready to Ship = Dollars Lost). This is where the customer expectation is no longer being met by the supplier.

Overall - By assigning a simple ranking to where each supplier stands, related to the average, in each of the areas reported, you provide a point of reference for how an individual supplier is performing related to your overall business. Again this helps move the conversation from finger pointing, to a more productive “search for solutions” focus as suppliers see their competitive comparison.

You’ll note I’ve chosen to not focus on open orders or returns in an effort to focus suppliers on those improvements yielding the greatest impact to net cash. Aging open orders naturally turn into cancellations.  These are accounted for in our data after refining return’s into their respective categories.  Once the returns have been categorized into “Don’t Want”, “Damaged”, “Defective”, or “Wrong Product”, the impact to net cash, with improved supplier performance, is relatively insignificant as compared to “Dollars Lost”. Don’t get me wrong, in a perfect scenario those dollars would be nice, but prioritize, prioritize, prioritize.

Opportunities to be communicated:

Cancellation Changes - I’ve provided here the average cancellation % and total dollars cancelled at the bottom of each respective column. Rather than discouraging struggling suppliers by pressing them to perform relative to your top performers; encourage them to drive towards the average cancellation rate, in this case we are using 4%.  In order to show the impact of such an improvement, calculate what their numbers would look like if they did meet our set cancellation goal of 4%.   Not only does the supplier then have a reasonable goal, but the available dollars is also clearly represented. Your impact to average cancellation rate is significant, by focusing on only two of the poorest performers in our example our average cancellation rate moves from 6% to 4.13%.

Long story short, ship what you’ve communicated is in stock + stock more = $$.

Stepping into the realm of supply chain I knew there would be a learning curve.  The first lesson I learned? Basic Vocabulary.

I was sitting in a meeting when I began to hear words such as: Manufacturer, distributor, wholesaler, supplier, drop-shipper, and end user/consumer. Not only was the conversation over my head, but my experience in customer service did not even lend a helping hand as to the differences between these roles in supply chain.  In addition to recognizing and understanding the roles that each play in the supply chain cycle I also needed to realize that these terms may be different across channels, lucky for me we are a pure play internet retailer, which means for the time being I truly needed to understand supply chain roles in relation to eCommerce.

Working in customer service at PlumberSurplus.com, I knew of manufacturers like Kohler, Delta, Rheem and others that are among our Top Sellers; but I didn’t know what the differences were between a distributor, manufacturer and a wholesaler. What about those that bought American Standard and re-branded it? Are they a manufacturer? Can we buy directly from a manufacturer? What is the difference between a manufacturer and a brand name? I sat through the meeting praying that no one would ask me a question. When I got back to my desk, I quickly went to Google, hoping for a quick synopsis that would allow me to at least understand my notes from the meeting. Surprisingly, I could not find one single post that explained the basic functions, differences or attributes of these supply chain relationships.

So… here you go. My list is not all inclusive, as I am still on that learning curve that I mentioned; hopefully, if you are ever in a similar situation you will be able to at least get the gist of the relationships here.

• Manufacturer: The word manufacture comes from Latin roots meaning “to make by hand”. A manufacturer turns raw materials into finished goods. Classic American examples include: Ford, General Motors and Boeing.
• Brand Name: A manufacturer can have more than one brand name. A great example of this is General Mills cereals. General Mills is the manufacturer, while Cheerios, Kix, and Wheaties are the name brands.
• Manufacturer Representative:  A manufacturer representative is the driving force of sales behind a manufacturer’s product. They can be non-stocking, use consignment or have a buy-sell relationship. If a manufacturer has a manufacturer representative, then the representative is the manufacturers face to the public.
• Distributor/Wholesaler: Distributors and wholesalers are the middle-men between the manufacturer and consumers. The terms are used synonymously even though there can be a difference. Both buy in bulk, and then re-sale the products in different channels. The main difference is Wholesalers frequently physically assemble, sort and grade goods in large lots, break bulk, repack and redistribute in smaller lots.
• Drop-shipper: A drop-shipper is a type of distributor/wholesaler. A drop shipper will purchase from the manufacturer, and then drop-ship orders directly to consumers from a third party order.
• Retailer: A retailer is a storefront where consumers can walk in store and physically buy the manufacturers product. Now, with the internet, we have developed e-tailers. An e-tailer is an online storefront that consumers can browse and purchase the manufacturers products over the internet.
• Supplier: The term supplier can be used for any of the above one-to-one relationships, and some industries refer to suppliers as vendors. If the manufacturer has a representative, then the manufacturer is the representatives’ supplier. Similarly, the manufacturer’s representative that the wholesaler purchases from is the wholesaler’s supplier…and on down the distribution chain.
• End User/Consumer: Consumers are those who purchase the products from retailers. Shoppers. When you buy a product for your use, you are a consumer…the end user.

These definitions can be applied across mediums, into your realm of business. Now there are exceptions, like with computers and software, but for the most part, you can use this basic vocabulary list in your next meeting, and be sure that everyone is on the same page when you are talking about a new wholesaler relationship that you have acquired that will drop-ship products for you.

Better late than never...

• Facebook gave the cold shoulder to a family in mourning when they refused to take a profile down based on their policies.  The Consumerist lists the details of the story per correspondence between the deceased sister and she brings up an interesting point about the rights of the deceased in relation to social networking and internet profiles.
• It takes time to build website authority and rank well for competitive keywords, which is just one of the reasons Aaron Wall wrote “Why it Makes Sense to Target Longtail Keywords First”.
• Entrepreneurs that are looking to source their own product line will be interested in a new product, China Trade Database.  The product is a compilation of more than 500,000 Chinese manufacturers that span a huge variety of product categories from furniture to handbags.  These manufacturers are trusted sources which decreases the risk of being scammed for those that don't do business in China on a regular basis.
• Matt Cutts is sharing past conference presentations for those that were not able to attend.  He recently posted State of the Index.
• AdSense now allows custom font selection.
  

Color coding has been used for many years and by many different organizations. A color code is a method that allows information to be displayed by using different colors. Restaurants use them to note what day of the week a salad was made, or when a food package was opened.  Even our Department of Homeland Security uses it to inform us of our government’s national threat level.  So when I was told that a customer’s return had been sitting in our warehouse for an uncaccpetable amount of time before being inspected … I knew that I needed to find a solution.

The Issue:

Large box returns were being delivered and placed in our “Inbound” section of the warehouse, while smaller packages were being positioned on top. When our warehouse manager went in to inspect the returns they would automatically collect all of the smaller packages first. At the end of the day when they were unable to inspect any further returns, the remaining boxes were taken back to our inbound section. The next day as UPS delivered more returns, the smaller boxes were again placed on top of the larger boxes, and so with this continuing cycle our customers return was continually overlooked.

The Experiment:

I remembered how easy color coding was when I worked at a café, and so I decided to experiment. I went to a local office supply store and purchased color coded stickers that were large enough to write on. There were five colors, one for each day of the week. Our warehouse manager was to place a color sticker on every box that arrived on that day. Mondays was a yellow sicker, Tuesdays was green, Wednesdays was brown…etc. That way we knew exactly what day a package arrived at our warehouse. On Tuesdays our warehouse would inspect Monday’s returns, on Wednesdays they would inspect Tuesday’s returns and so on. This seemed to work perfectly! However the cost of the stickers was pretty high.

The Solution:

As we realized how amazing the stickers worked we went in search of some less costly stickers and were able to find them on Uline.com. We began this adventure about two weeks ago and it has been amazing! Our warehouse is more organized, and our customers are made happy when their return is inspected within one or two days of its arrival.

When we first found out about the issue we had no idea how we would fix it. We started talking about getting more warehouse space and even hiring a new employee. Though the stickers solved our issue for now we know that as our company continues to grow this process will have to be reviewed – but for now we love it!

I was completely proud of the fact that we were able to solve the issue with color coding stickers! I’m sure that there have been many companies that were faced with an issue and found a pretty simple and cost effective solution. Feel free to tell us about your cost effective solutions – we’d love to hear about them!

Till next time, remember that a problem is only an opportunity for an excellent solution! 

Once a quarter I take a few minutes out of my day to read about what UPS is up to in their Compass publication: “The Quarterly for UPS Preferred Customers.” Each volume includes an individual success story that covers what businesses partnering with UPS are doing to integrate solutions for their everyday shipping needs. These articles generally end in quotes similar to Wil Kovacs, “There’s no doubt about it – we couldn’t have done it without UPS” (Vol. 2, NO. 2 | Spring 2008).  I’ve read these articles over the past couple years picking up useful tidbits along the way, all be it as much for a mindless moment in the middle of an otherwise busy day. Never have I felt we had a nugget to contribute along the way until we were recently approached by our account manager Kia. I’m not sure her actual name would make it past the Compass editors, but I wanted to make sure she was given credit for our success story.

To appreciate the nugget you must understand our humble beginnings. With little more than a dream for bringing customers together with everything necessary to realize their home remodeling desires, our negotiating options at UPS’s table were slim. Success hinged on collaboration between multiple shipping points spanning from west to east coasts, each with their own unique fulfillment system. This collaboration was met with a single UPS account number, in concert with UPS WorldShip allowing “installations” of our individual account number across a maximum of 13 separate shipping points. WorldShip provides our supply base the opportunity to ship directly on our account number’s which results in tracking information that seamlessly populates in our system and back to our customers.

From our inception we’ve enjoyed continued growth. It wasn’t long before we’d maximized our initial account. Additional account numbers were eagerly provided and consolidated to our original primary account number. With the number of shipping points growing, UPS ran into an interesting problem, sourcing. UPS’s visibility showed the volume for each account number’s 13 shipping points as originating from the account number’s physical address; our headquarters in sunny southern California. Now if you did the math you would realize that we had well over 30 shipping locations.  So why does this cause a headache for UPS as well?  A shipping point’s local hub wasn’t prepared for the actual inbound volume, while our southern California hub was over prepared. Meaning that as UPS was capturing our shipping data their system showed that all of the shipments were coming out of a southern California branch, when in actuality that particular branch wasn’t going to see nearly as many shipments as they were expecting based on the data.  On the flip side a UPS branch in Maryland may be struggling to keep up because of the unexpected number of packages to ship.  This not only affected the workers and resources at each individual branch, corporate was also using this data to allocate budgets to branches, again this southern California branch would be over budgeted, and another branch would be under budgeted.  Several additional issues have rose from this early solution.

Enter Kia. Once we addressed our concerns about making any changes to our shipping accounts, i.e. minimal disruption to our supplier’s processes, consolidated electronic billing (4 years better negotiating position), etc., we began creating unique account number’s by shipping point. Mind you someone from our office, that would be me, would find themselves over the course of several days traveling to supplier after supplier insuring a successful account transition; a very real cost burden. The removal of the original account number from WorldShip proved stifling. We had to insure our suppliers didn’t inadvertently ship on old account number’s lingering in WorldShip. You’d think a simple remove option would be present from WorldShip’s Shipper Editor Menu?  Surprisingly it’s not. Kia went back to the drawing board and not only provided a solution for removing lingering account number’s but did so with the help of UPS’s technicians remotely. No longer did I have to travel all over the country to resolve our current problem and implement the solution.  I spent one long day with members of their technical department working from our office remotely to transition our complete supply base over to our new account structure. Baring the normal technical hurdles experienced throughout the course of the day Adam, Enrique, and Scott successfully brought our shipping solution up to par with our current volume, provided UPS the visibility they desperately needed, as well as providing internal efficiencies without a single issue.

My Compass story would end as my email to Kia did, “We have a couple things to complete the transition, but all in all I’d say it was a success.”  A small nugget certainly, but who had the time to blog back then?

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?

Our Returns Policy provides customers with information on how to request a Return Merchandise Authorization [RMA], how to return a product, etc.  One of the most overlooked sections in our policy is our “Basic RMA Policies” which states that “returns must meet all applicable criteria”.  It later goes on to say: “RMAs must be valid, unexpired, and issued for the product being returned”.  We then go on to explain timeframes and acceptable shipping methods.

Recently a customer returned an item that was received incorrectly, but exceeded our approved timeline, and so their return was refused. I was later asked to review the customer’s RMA and rethink our set timeframes and associated policies in order to improve in the area of customer experience.  In an effort to see where we stand as opposed to other major retailers I began to review our returns criteria and compare it to that of others.  According to consumer world we are more consumer friendly than most of the major retailers reviewed.  This brings me to my next point…

Where do we draw the line between our company responsibility and that of the customers’? As I reviewed the RMA it was clear that we did all we could to get the item back. The customer requested an RMA, and in less than an hour received an acceptance email informing them to refer to our Returns Policies before returning the item. The next morning the customer was sent a return label so that they would not incur return shipping costs [which was never used]. Exactly a month after the accepted RMA email was sent to the customer, they returned the package, which was refused by our warehouse. It is the customer’s responsibility to get the product back to us within the specified timeline, and it is our responsibility to do the best we can to help customers with that process.

It is important to note that if the customer had called our Customer Service department to inform us that they were late in returning their item, the RMA may have been approved for return despite the required timeframe.  We strive to give our customers the best experience we can offer. However, there are times when all we can do is assist our customers, and let them do the rest. We will be reviewing different ways of improving our RMA timeframe; for now we hope that customers will understand that we want to help them as much as we can, but in the end we can only help them as much as they allow us to do so.

I encourage feedback and comments from others dealing with similar issues.  When should we meet the customer in the middle and when does it become completely unprofitable to do so?  According to Maxim Mironov’s Optimalogica blog “1 % returns costs you 0.45 % of sales”.  What is even more interesting is the question he then poses “On $10 million sales 1 % returns increase means $45,000 lost in costs. At 4.5 % margin to off-set this loss you need $1 million extra sales. Are you getting this much because of a nicer policy?”  While these numbers may not match ours perfectly it is good to understand that even with a good returns policy we aren’t able to make everyone happy.  We just have to decide if that is something we are ok with and if the dollars make sense.

We were lucky enough to catch up with Linda Bustos of Elastic Path Software and ask her a few questions that are likely on many retailers minds.  Both multi-channel and web only retailers face difficult challenges ahead, the holidays that are right around the corner, and the global economic downturn that has brought spending to a drastic halt.  The insight she provides may help many overcome this uphill battle.

Tell us a little about your blog, company, and your role at Get Elastic:

My official title is Ecommerce Analyst at Elastic Path Software, a role that involves keeping on top of all the trends in Internet marketing and retail, and translating them into actionable tips for online retailers on the Get Elastic blog in addition to ecommerce consulting for Elastic Path customers.  Get Elastic’s primary purpose is thought leadership rather than talking about our ecommerce software.  Get Elastic exists to communicate with retailers, ecommerce vendors, consultants, analysts and anyone interested in Internet marketing.

What is your approach to evaluating and prioritizing opportunities and aligning resources with these opportunities?

I’d divide “opportunities” into site features/functionality, marketing activities and customer service.  (Fulfillment is impacted by marketing and customer service initiatives).

For site features, first you must determine whether what you want to do is feasible with your current ecommerce platform.  Your hands may be tied until the next upgrade on certain bells and whistles.

Then you need to make sure you’re already doing the basics well.  I consider the basics to be product information, product images, intuitive navigation and good search functionality.  You have no business asking for a virtual fitting room when a customer can’t enlarge images and see multiple views.  Personalization takes a backseat to usability.

After all that, if you’re in a position to add functionality, a good idea is to find out what customers prefer on ecommerce sites.  If you can’t collect enough info surveying your own customers, subscribing to Shop.org’s Smart Brief newsletter and Internet Retailer will alert you to the latest consumer studies.  Bookmark them as you go, so when it comes time to make decisions, you can refer to them.  You may discover customers consistenly cite ratings and reviews as valuable, but they don’t care about wish lists or reading retail blogs.  Use this data to invest in what will delight your customers.

As we head into a holiday season that is projected to be the slowest in our near history what advice would you give online retailers and multi-channel retailers?  Which do you think will be impacted by the economy more (Online only or Multi-Channel retailers), why?

Rather than increasing spending on PPC or shopping engines (buying traffic), work on optimizing landing pages to squeeze more profit out of the traffic you’re already getting (including “free” customers like repeat, type-in visitors and organic search referrals).  Not to mention your email campaigns would also be more profitable, which is a nice segue into…

Market to your existing customers (provided they have granted you permission) and those who have subscribed to your email list and segment, segment, segment.  It’s still true that it costs much more to attract new customers than keep existing ones, and segmentation is key to effectively delivering relevant offers.  If you throw random offers at your entire list, you’ll likely lose subscribers.

Jeanne Jennings’ Really Simple Segmentation Framework is a great resource for segmenting by behavior, but you should also allow customers to self-segment by indicating their preferences.  Disney Shopping and GAP are examples of retailers who do this really well. 

So change your email signup form to allow self-selection of what kind of offers or products the customer wants to receive, and how often they want to hear from you and ask existing subscribers to update their preferences.

It’s also important to have a strong value proposition that is clearly communicated on your site.  Not a slogan, not a tagline, but a clear statement that answers the question: “why should I buy from you and not your competitor.”  If you don’t have a clear value proposition (most retailers don’t) make sure you read up on value propositions at Marketing Experiments’ blog.

To answer the second part of your question, I don’t think one or the other will be better or worse off.  Because we know many people will use the Internet only to research purchases they prefer to make offline, the online retailer with a local store can offer free ship-to-store, inventory lookup and free returns to store – multi-channel retailers have an advantage -- while the pure-play has a small chance of converting that customer, and may even be paying high CPCs to provide the research service to a non-buyer.

But retail stores carry overhead that pure plays don’t have.  Also, multi-channel retailers may treat ecommerce as a separate operation, and the online channel may have to fight to prove itself and win human and financial resources.  Pure plays give their all to their online business and may be more advanced in efficiency and effectiveness.

What are some of your best and worst marketing channels?  What are the best ways you have found to increase performance for a given channel?

In terms of ecommerce marketing channels, it really depends on your market, your strategy, your investment and your execution which channel is going to perform the best for you.  Email might be the top channel for a retailer, but is that because they are sloppy with PPC and have an ecommerce platform that prevents them from maximizing their SEO?  Do they have an outsourced affiliate manager that’s doing a poor job? 

Also, there may be channels that perform better for one category vs another.  If there is much competition in PPC and shopping engines, click costs inflate and it’s harder to remain visible. 

You can even get more granular and say that some products will do better through PPC and others through email.  Again, when you focus on improving landing pages, your performance goes up across all channels.

If retailers are cutting back on spend where do you think costs can be cut or dollars can be saved? Is there any “must have” that retailers should only cut back on if it’s a last resort?

The first area I’d look at is your fulfillment – shipping costs, damage in transit, returns management, where can you improve?  Have a read through every blog post on ecommerce fulfillment, by expert Maxim Mironov on his blog Optimalogica.  Then I would suggest landing page optimization rather than “buying traffic.” 

An interesting thing that may happen is, as advertising spend is expected to go down, it will result in lower prices and less competition.  Since consumers are not flocking away from the internet, you may find PPC and shopping engine marketing is less expensive than it was in healthy economic times.

As we enter into 2009 what do you think will be the next big change in eCommerce (similar to the affects of “web 2.0”, social networking…)

I think video will be important from here on out.  It’s not cheap, so you might not want to offer it on every product you sell, but video can really ease a customer’s fears, uncertainties and doubts about a product when they can see a 360 degree view or see it in use.  Retailers that embrace it early will have an advantage over those who don’t.

Again, first things first.  Product copy and images are more important, get those right, then explore video.

What are some of your favorite online stores, and why?

This is the number one question I get asked  I can’t say one store does everything perfectly.  I like bits and pieces of stores like AE.com’s navigation and product pages, Endless.com’s filtering options and Crutchfield’s product finders and informative content.  But if I had to pick an overall favorite online retailer – I’d choose Threadless because of its unique business model, it’s fresh design and it’s active, passionate community.  It’s just all-around fun.

Special thanks Linda!

For the best prices, on the largest selection of faucets, from your favorite brands like Kohler, Danze, and, American Standard shop PlumberSurplus.com 24 hours a day, 7 days a week.

Since my last post, I Stand Corrected: Blogging is More Than Random Thoughts and Voyeurs, I’ve continued to tune in to the content generated by our team. I was recently struck by an entry from Brian entitled, Taking a Step Back: A Business Owner’s Perspective on Letting the Team Take Over.
Brian honestly wrestles with his necessity as a partner to continually pass on the “torch”. He summarizes his conclusion as, “If we’re [leadership] leveraging every resource available to attack the highest priority opportunities in the best way possible, maybe it’s time to let the team carry the torch.” As a manager, a member of the team, I’m both encouraged and challenged by this leadership style.

Everyone Take One Step Back, I’m Taking the Next Bullet

How do you, as a member of the team, in turn encourage and challenge leadership to invest resources to attack the highest priority opportunities within your department?  That’s a question I’ve been wrestling with as it pertains to supply chain.  As I recently worked through this I noted thoughts that I believe are important to consider when making your case.

First, clearly identify what you and your department are actually responsible for.  The lines of responsibility can get cloudy unless there is mutual understanding about the hand off of a project from one department to the next, around the office we’ve begun to understand this as the “Handshake of Responsibility”.  This has been a difficult transition for me. I naturally want to see a project through to “completion”.  I do this partly because I naturally look to retain control, partly because I don’t want others performance or lack of performance to reflect poorly on me, and ultimately I want Gordian Project to be successful. However, this handshake method has been a freeing concept. “Completion” may not necessarily mean seeing a specific project from A to Z, rather my action plan of A to I, with the responsibility clearly being passed at J. This handshake method is about the clearest indicator we’ve had to communicate, “I’ve successfully completed what’s been asked of me.” I’m then freed to focus on other projects and/or processes leadership has asked of me.

Second, clearly communicate your competency of the responsibilities owned. The point of communicating known competencies isn’t to be arrogant, but to add awareness of resources that may be available to provide assistance.  Note that no matter the size of your company resources are limited, and knowing the capabilities of the resources can be the difference between making or breaking deadlines. Everything in business is about prioritizing opportunities with resources. If you can’t communicate competency within your area of responsibility you’re unlikely to be resourced. For each area of responsibility look to communicate:

• Philosophies - I understand why we do what we do.
• Strategic Goals - I understand where we want to be.
• Management - I understand how to get there.
• Processes - I understand what we do.
  

• Strategic Goals - With an understanding of limited resources, limit the strategic goals to those prioritized as the immediate keys to moving your department forward.  Keep each area of responsibility separate in the philosophical vision.
• Resources - Identify specific required resources for realizing your stated strategic goals. Consider as many factors as possible: budget, time, personnel, physical goods, other department’s resourcing, reports, benchmarking, etc. and limit them to the actual need for realizing opportunity.
• Incentives - Provide leadership with reasoning for resourcing your strategic goals. Don’t make them wonder why they should provide the requested resources; spell it out. What are the opportunities and efficiencies you’re going to specifically bring to your department with the provided resources. Go the extra mile and connect your department’s potential successes to the larger company vision.
• Timeline - Should the resources be provided; simply asking for resources demands performance. Set a realistic completion date, company visionaries will appreciate a target for rallying the whole of their business initiatives around. Timelines also set an expectation for response from your leadership.

Talk about calling yourself out; everyone take one step back, I’m taking the next bullet .

In truth, having an understanding of where you are, where you’re going, and how to communicate the process of arriving, will encourage and allow your team to step up and perform.  It also provides the confidence to be held accountable for that personal performance. Brian, thank you for wrestling honestly with your necessity as a partner to continually pass on the “torch”, and in so doing encouraging others, in similar fashion, to do the same.