Direct-to-Customer Commerce


Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

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, , , , , ,

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, , , , , ,

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, , , ,

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, , , , , ,


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