More on Same Day Delivery

Anyone engaged in ecommerce operations is probably following the trade press reports on same-day-delivery.

It’s a gee-whiz offer, but does it increase sales?  Is it profitable?  Is it cost-effective?

For some merchants, it makes all kinds of sense.  In fact, for some, such as florists, it’s almost a requirement.  It makes sense even for office supply stores, and some high-end merchants — Macy’s, Nordstrom and similar companies.

All of these companies have inventory widely dispersed and can take advantage of local courier services or even, as in the case of most florists, have their own existing delivery infrastructure.

But what about everyone else?

Here’s an interesting story from StorefrontBacktalk.com, reporting on Amazon’s recent experience.  It reports that Amazon saw a conversion increase of 20-25% when they offered same-day-delivery,  but few of customers actually asked for same-day-delivery.

Demonstrating a great point:  Marketing is one-thing, but what customers actually want, need or use may be another.

Now, you just have to figure out where you fit on this new paradigm.

Filed under: Direct Commerce, Ideas, multichannel commerce, Opinion, customers, Direct Commerce, ecommerce, multi-channel, order fulfillment, same-day delivery, shipping

The Inconvenient Truth about SEO

I like this title, in part because of the parody of Gore’s book on the environment.  But this article is a revelation about SEO, warrants your reading and review … here’s a link to the article in Smashing Magazine.

Paul Boag waxes eloquently about what SEO is truly about, and why you don’t need a consultant to optimize your web site for SEO.  You just need the discipline to develop content about your business.  And if you don’t know more about your business than some consultant, then shame on you.

Boag’s also makes the case which I began in an earlier post on this blog … that social media is really about your own publishing business.  You have to develop and editorial plan of action for posting new content daily, weekly monthly … whatever frequency is warranted by your business.  Start slow and build, because it may be a new skill set.  You may even need to hire someone specifically for this task, as Boag suggests.

Content marketing or management is mostly about content development.  Without development, there is nothing to manage, and no marketing.

 

Filed under: Opinion, content, publishing, SEO, smashing magazine, social media

Testing Same Day Delivery

The Wall Street Journal reported, today, on eBay and Amazon testing same-day delivery in a couple of major markets.  Here’s a link to the story.

In the San Francisco area, eBay has hired a crew of people, essentially, concierge shoppers, who will locate the product you want at a local store, buy and deliver it to you within one hour of the time you place the order.  Wow, quite a high level of customer service.

Don’t expect this to be a viable service in Yuma, Arizona.

I’m not sure it would be viable even in all of the top ten markets in the US.  But it will be very interesting to watch it.

Based upon the anecdotes of the article, we can imagine this service being used by customers in major markets (where there may be sufficient aggregated demand for such a service) for whom convenience carries a very high value and who is less price sensitive than average.

I think that’s a pretty limited market … but the beauty of the web / ecommerce, is, in part, it’s ability to aggregate demand in ways we’ve never been able to do under earlier retail models.

The economics of same-day delivery are very difficult to make work.

We’ll know same-day delivery has worked when FedEx, UPS and the USPS begin to offer the service.  But don’t hold your breath!

Filed under: Direct Commerce, Ideas, News, Opinion, Amazon, customer service, demand, eBay, ecommerce, FedEx, order fulfillment, same-day delivery, shipping, UPS, USPS, Web

The Hidden Costs of Ecommerce Platforms

This is the headline on an article at Website Magazine.  Follow the link to the full text.

The article is based upon research funded by Demandware and executed by Forrester.  Probably the key line is that 43 percent of web merchants experience a TCO higher than they expected.  This is often partially justified by merchants claiming that they’ve over-built to support future growth (and that holds some legitimacy).

But it does not negate the more central fact that the sophistication of ecommerce platforms continues to grow at an escalating rate, which makes is increasingly and sometimes unexpectedly expensive to maintain your place in the marketplace, especially compared to your competition.

This situation makes is ever more important to plan ahead, select carefully, and probably not jump on every bandwagon that rolls by.

Filed under: Direct Commerce, News, Opinion, Demandware, ecommerce platforms, Forrester, systems, TCO, Website Magazine

A simplified view of marketing

I realize that what I’m about to say is probably an over-simplification … but sometimes, we can make things so complex that we lose sight of the fundamentals.  That’s the point I’m hoping to make today.

Conceptually, business is pretty simple.  You really only need three things:

1. a product or service that satisfies a buyer’s needs.
2. a process to deliver the product or service to the buyer (which may include manufacturing)
3. something to overcome the buyer’s inertia … that is, the buyer’s tendency not to buy

Point 3 is actually marketing.  And in a very real sense, marketing & sales is about getting the prospective customer to act.  It’s easier, cheaper, less risky for the prospective customer not to buy your product or service.

Perhaps, this explains why so much marketing effort is devoted to promotions.  A promotion is simply intended to provide a prospective buyer with an “out-of-the-ordinary” reason to act … lower price, free shipping, higher quantity for the same money.

JCPenney is currently engaged in an experiment (under their new CEO, Ron Johnson) to see if they can sell as much, without so many promotions, as they could with so many promotions.  It will be interesting to watch the outcome.

However, I expect, the experiment will fail.  Because JCP’s merchandise, by itself, is not a sufficient “draw” to bring in buyers, without promotions.  Promotions give buyers a reason to act … whether the reason is truly “real”, or just “perceived”, promotions provide the motivation to “act now.”  Without the promotion, there is less reason to act.

Product availability is necessary, but it’s table stakes.

Product quality is important, but varies by target market segment.

Overcoming buyer inertia is critical to all business.  Without it every business fails.

Filed under: Ideas, Opinion, business strategy, inertia, inventory, JCPenney, manufacturing, marketing

Keeping Email Marketing in Proper Perspective

Kevin Hillstrom writes today on: Within E-Commerce, Email Marketing is Not Dead.  Using very simple and clear data, he demonstrates the continuing role of email marketing in maintaining customer buying habits.  He also highlights that this same data does not support using email marketing for customer acquisition.

Boy, now that’s a lesson I wish a lot of merchants would learn.

Filed under: Direct Commerce, News, Opinion, acquisition, email marketing, Kevin Hillstrom, retention

When Customer Service is Marketing

This is the title of a post by Ginger Conlon, Editor-in-Chief, Direct Marketing News.  You can read it here.

She writes about the proactive messaging from several companies in anticipation of Hurricane Sandy hitting NJ & NY.  I agree with her point, as far as she goes.  But she doesn’t go far enough.

Customer Service is always marketing.

Every time you have an interaction with a customer, a transaction with a customer, it’s marketing.  The customer is testing whether she/he can trust you enough to do business with you.  It’s hard to gain that trust and easier than it should be to lose it.

If you don’t see Customer Service as Marketing … you’re missing an important factor and may be losing a lot of customers.  Although, if it’s any consolation, there are too many businesses in that same boat.

Filed under: Direct Commerce, Ideas, Opinion, customer loyalty, customer service, Direct Marketing News, hurricane sandy, marketing, retention

Customer Engagement v Customer Service

I’m going to write about this again later, but here’s a link to a blog post by Seth Godin on Customer Service.  It’s entitled, The only purpose of ‘customer service’.

He makes a great point about customer service, so contemplate what he says about customer service.  Then, consider how, when talking about social media and marketing, so many people are discussing customer engagement.

I don’t mean to infer that customer engagement is the same thing as customer service.  I don’t think it is.  But I probably do think customer service is more important than customer engagement.

We’re using words in marketing these days, which suggests we can create a nearly intimate relationship between a business and its customers.  And I think that borders on the ridiculous.

I admit, I’m a real fan of Five Guys, a franchise that sells hamburgers and fries.  Their second store is right near my home and I’ve been eating there for a long time.  But I remain a fan, because their burgers remain among the best I eat.  And they’re a good value, from a price point of view.  So, I’m a fan because they continue to provide me a good product at what I consider a good price.

When they fail to do that, they may lose me as a fan.

If you want to set customer engagement as a goal for your company … go for it.  But only after you get everything else correct, first.

Filed under: Direct Commerce, multichannel commerce, Opinion, customer engagement, customer service, customers, fans, Five Guys, Seth Godin

The eighth step to multichannel commerce

Step 8 is marketing & promotion.

What a can of worms that is … or at least can be!  And obviously, in a single post, I’m not going to cover this topic.  This is a topic of unending variables.

I really only want to make a few points.  First recognize the difference between the channel or medium and the activity.  You can advertise by mail, market by mail and promote by mail.  Mail is a medium of communications.  Advertising, marketing and promoting are the activities.

Multichannel commerce, it seems clear, by definition refers to conducting commerce (which means generating sales) thru multiple channels.  So, I’m not taking about advertising, which is just sending a message.  I’m thinking about making an offer to a customer or prospective customer to conclude a transaction with me.

We have more channels than ever, for commerce:

• brick and mortar stores (fact-to-face)
• paper mail (flyers, postcards, letter packages, catalogs)
• electronic mail
• social media
• web store
• smart phone app
• tablet app
• telephone
• direct response broadcast (radio, television)

… and I’m probably leaving something out.

So, in the ideal world, your marketing & promotion efforts will generate commerce transactions with your customers.  And it should be your customers choice to use any particular channel.  Your offers, products, promotions should all be visible to your customers across all channels.  And that takes no small effort.

Here’s the next important point:  If you can’t measure it, consider not doing it.  The beauty of direct marketing, direct commerce, whatever you choose to call it, is that it’s measurable.  And with technology you can almost measure everything.  But not everything is worth measuring.  But if you’re not measuring anything, you’re wasting a lot of time and money.  And if you’re measuring so much you can’t comprehend the data or analyze the data, you’re still wasting a lot of time and money.

So, be deliberate about what you measure.  The most basic and most useful things to measure are:

• customers who got an offer
• customers who bought
• how much they bought
• how many they bought
• what it cost to make the offer
• what it cost to fulfill the offer

You’ll know a lot, if you keep these six data points for every channel and every promotion.

Think about this … it’s a lot to think about.

Filed under: Ideas, multichannel commerce, advertising, Direct Commerce, Direct Mail, direct marketing, DRTV, electronic catalogs, email marketing, marketing integration, multi-channel, order fulfillment, paper catalogs, Phone, retail sales, social media, Web

The seventh step to multichannel commerce

We’re getting there, slowly but surely.

This is the step where everyone wants to start … it’s time to set up a web site.

Some of my consulting colleagues have reported there are over 900 ecommerce platforms, from which a merchant can select, upon which they can build an ecommerce store.  The variables seem to go on forever … but don’t forget the previous six steps we’ve outlined.  Those are the non-negotiables (or at least, should be).

After those, nearly everything may negotiable.  Merchants all think their business is unique and needs features or capabilities which other merchants don’t need.  Or they need some feature tweaked.  The only thing I would remind you of is that changes, tweaks and new/modified features cost money.  So, before you go requiring lots of customizing, make sure the customization you need will actually make more money for you than taking the feature, the way it comes.

Consultants love to help clients customize things … often makes them more money.  But many, if not nearly every, merchant asks for things that do not increase sales and may even increase cost or have other negative impacts.

There is a lot to be said for finding an ecommerce platform that has:

• experience in your industry
• experience with your other applications, such as Product Master, Inventory, OMS, WMS
• uses a technology your staff is already familiar with, so you can make minor changes and fixes, yourself
• an effective user interface, which merchandisers, customer service reps and others can be quickly trained on
• a plan to stay up-to-date on marketing and technology improvements
• already supports your current marketing activities
• supports your current payment processors
• a good cultural fit with your present staff

When you select your ecommerce platform, you must include every department in the decision.  Don’t let the technology people drive the decision without major input from merchandising, customer service, finance, operations.  It’s very expensive to change ecommerce horses … and the technology itself is not always the most important consideration.

It’s about people and process … the technology is actually less expensive to change.

Then again, take advantage of the technology to improve your processes and perhaps lower your labor costs.

Filed under: Direct Commerce, Ideas, multichannel commerce, Opinion, Customer Care, Direct Commerce, ecommerce platform, inventory, marketing integration, multi-channel, multichannel merchant, OMS, operations, system selection, Web, WMS