Direct-to-Customer Commerce

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

Low Cost Digital Marketing leads to Lazy Marketing

Digital Marketing … especially, email and social media … is leading to marketing the easy way.

Marketers are just buying keywords, or blasting emails to everyone on every promotion, disregarding whether any part of the target market is already a customer.

I’ve bought vitamins from the same company for over ten years.  They send them every 60 days.  Once or twice a year, I start seeing Ads by Google for this company, everywhere I go.  Why?

Lazy marketing.

There are two broad categories of lists:  compiled lists and response lists.  In the digital world, we haven’t figured out how to “purge” our existing customers from email campaigns or PPC campaigns, because we perceive that the cost to purge them exceeds the cost of including them.

But, we’re ignoring the cost of irritating our customer base.  Denny Hatch, writes in Target Marketing, this month about getting a promotion from Amazon for two books he’s already bought from them.  How long before Denny just marks Amazon promotional emails as “Spam” and never looks at them?

There is a sense in which the Golden Rule applies to marketing as well.  Your customers are likely annoyed by the same things you’re annoyed by … pay attention out there!

Filed under: Ideas, Opinion, , , , , , , , , , , ,

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, , , , , , , , , , , ,

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, , , , , , , , , , , , , , ,

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, , , , , , , , , , , ,

The fifth step to multichannel commerce

Step five is building a content management system … a nice overview of CMS appears in Wikipedia — click here.

The principle idea behind CMS is to both capture all the content you develop about your company, your products, your services, your people, etc.  And make it available, in a consistent way, for use in any media.

Of course, the most common use is on web sites and in emails.  But it can also be used in the social media … and should be.  Because at its essence, social media is a private publishing solution, which enables you to build your own subscriber base, present your own content, and advertise your own company.

Thus, content becomes a significant asset, which should be created, maintained and leveraged as much as possible.  A CMS enables these functions.

When you consider how difficult it can be to create good content for your company, and the increasing opportunities to leverage that effort across multiple media for multiple purposes, the obvious value of content management simply explodes.

Filed under: Ideas, multichannel commerce, Opinion, , , , , , ,

The second step to multichannel commerce

Step one = a single, unified product master

Now, step two — a cross platform, cross-channel order management system [OMS].  By this, I mean an order management system which can support transactions and customer service in one or more physical stores, in a call center, at a web site, or on a mobile site.

This is a tall order.  And of course, it’s relevant, only if you really use all of these transaction channels.  Maybe you have one I missed — the point is that your order management system should support transactions in every channel thru which you sell.  That should include Amazon or eBay or any other ancillary channel.

This single OMS enables you to have a single view of your customer and allows you to fix in transaction in any channel in any other channel.  That is what your customers are beginning to expect.

Can you transaction on an iPad or iPhone?

Can your customers check themselves out (self-check-out at the grocery store, or self-check-out at Apple Stores)?  Walmart announced they are testing self-check-out on iPhones.  Where do you stand?

The principle here is that customers should be able to transact with you in a manner that suits them, rather than in a manner that suits you.

Filed under: Direct Commerce, Ideas, News, Opinion, , , , , , , , , , ,

Kevin Hillstrom: MineThatData: 16 Multichannel Marketing Myths

Kevin Hillstrom: MineThatData: 16 Multichannel Marketing Myths.

This is a great post, which you should read in detail.  I picked it up from a consultant friend, Ernie Shell, who blogs at Direct Commerce Systems.  Kevin’s post, in effect, reminds me of how much the direct commerce trade press struggles to report real information, rather than the self-interested sales pitches of companies who will benefit from promoting their view of what builds sales via the direct channels.

Read and learn from Kevin’s post.  It’s great stuff.

Filed under: Direct Commerce, Opinion, , , , , , , , , , , , , ,

What will likely happen in Q4

Press reports are starting to come out that:

  • retailers are not hiring as many seasonal employees for 2009Q4.
  • merchandise orders for Q4 may be as much as 20 percent lower than in previous years

What can we concluded from these two facts:

  • customer service in retail, brick & mortar stores may reach an all-time low.  There simply won’t be anyone around to help you.  You’ll probably have a hard time just finding someone to take your money.
  • e-commerce sites will gain sales faster than ever before — for multiple reasons:

First, because you can check yourself out and don’t have to rely on finding someone to help you.

Second, retailers will likely make sure inventory for their online store is broad and deep.  Because they can sell to anyone, anywhere at anytime.  Thus, they will more likely sell thru online store inventory than physical store inventory.  Plus, they can replenish inventory for the online store faster than they can to physical stores (at least, in most cases).

Third, buying online is less frustrating and annoying than going to a store.  This will be especially true, because there will be fewer sales discounts in physical stores (due to lower inventories) and fewer people to help (see “First”).

*  *  *  *  *

Now, don’t get me wrong.  Total direct commerce sales (as reported by the Commerce Dept) remains about five percent of retail sales, but direct commerce sales are growing reliably, while total retail sales has been in decline for most of the past 12 months.  The bottom-line:  We will see direct commerce (online & catalog) take a big jump forward in Q4.

That in turn will cause at least a short-term increase in activity during the first half of 2010 by companies who will seek to upgrade their online store, or maybe even finally set one up.

Filed under: Direct Commerce, Opinion, , , , ,

Developing a uniform Brand experience across multi-channel

There are two sides to this question — and most see it as a marketing issue.  And certainly it has serious marketing implications.  But the Brand experience is not built entirely upon how merchandise is presented or described.  A huge portion of the Brand experience is based upon customer interactions.

Almost intuitively, we know that we must provide appropriate value to the customer (the combination of price and quality).  However, in addition, we need to treat customers in a way that matches their expectations of the Brand.

And there is a problem with customer interactions across different channels.  After all, it makes somewhat obvious sense that it’s difficult to interact with a customer the same way in a face-to-face scenario, compared to a call center scenario, compared to an ecommerce scenario.

But a truly uniform Brand experience in a multi-channel environment seems to demand more similarity than differences in the nature of those diverse interactions.

So, how do you do it>

I can only suggest a strategy:  deploy a single order management system across all channels.

Boy, that seems simple.  Conceptually, of course, it is pretty simple.  But it’s also deceptively simple and, in reality, very difficult.  And the difficulty is not in the technology, but rather in the management.  It’s likely you will also want a single warehouse management system, as well.  But that’s not as essential, because it’s possible to move inventory & product data between multiple systems and a single OMS.

But the central obstacle to accomplishing this goal is willingness of different internal departments collaborating on a single solution.

In a sense, this is another form of channel conflict — but it’s at the operational level, rather than at the sales level.

To execute this solution, retail operations, customer contact center operations and ecommerce operations must agree on a single OMS to capture sales orders and manage customer transactions at all points of sale — regardless of channel.

Then all these units must collaborate to develop uniform training for staff, based upon uniform company policies.

It’s Change Management 101 — something that almost always gets short shrift.  And, although I don’t mean it personally, it is often the fault of marketing / sales, because they are too anxious to build sales rather than build an enduringly satisfied customer.

Often, only the CEO can solve this, with the patient understanding of the board and shareholders.

Not so simple after all, is it.

Filed under: Direct Commerce, Ideas, Opinion, , , , , , ,

Target announces impending divorce from Amazon

Here’s a link to the story in DM News.

This is just another example of the maturing nature of the ecommerce space.  No longer does Target need Amazon to attract “eyeballs” of customers.  Frankly, it’s long past due, and I suspect it’s happening now, only because their contract is probably expiring.

On top of everything else,  when you do business with Amazon, you have to evaluate the relative value of access to their customers to the relative cost of Amazon having all your customers.  Which has more value to your business.

My personal view is there is a case to be made that Amazon’s reason to exist is narrowing.  Amazon is best at selling commodities to large numbers of consumers.  If you’re not selling commodities, or your strategy is to differentiate your business from your competitors, then Amazon is not the place for you to be.  And there aren’t a lot of businesses who fit that description.

Filed under: Direct Commerce, News, Opinion, ,

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