WebSphere Commerce 7 is here!

On Friday WebSphere Commerce v7 GAed and we've received some great press. Here are some of the articles below:

InternetRetailer Coverage: IBM's WebSphere Commerce 7 supports mobile and social commerce

With the WebSphere Commerce 7 e-commerce platform IBM Corp. released yesterday, shoppers can use a synchronized shopping cart across conventional and mobile commerce sites, says Errol Denger, director of business and product strategy for WebSphere Commerce. Retailers can coordinate marketing across web sites, mobile phones and social networks, he adds.

“We’re enabling large and small retailers to deliver an optimal branding experience, whether it’s on the web or mobile commerce device,” Denger says. “This is being driven by our clients who are saying they don’t want their mobile commerce channel to be separate.”

The overall idea, he says, is to help retailers connect with customers however shoppers want to buy online. Shoppers with a web-enabled mobile phone, for example, will be able to browse an online store built on WebSphere Commerce 7, conduct side-by-side product comparisons that a retailer makes available, and make an instant online purchase. Delivery can be to the shopper’s home or, if the retailer has integrated its store systems into its e-commerce platform, for pickup at a store. Shoppers would also be able to use their mobile phones to check the availability of desired inventory in the retailer’s nearest store and upload directions before opting for in-store pickup.

WebSphere Commerce 7 also supports new levels of personalized marketing, Denger says. For example, retailers will be able to use it to design merchandising and marketing campaigns that make product offers based on such behavior as the average number of product reviews a shopper is known to post each month. Shoppers who are prolific review writers have been known to spend more online than shoppers who don’t write reviews, Denger notes, making them prime candidates for a retailer’s offers.

In another example, he says, an offer could be triggered by the type of social networking site a shopper was on before arriving at a retail site. If a shopper came from a Facebook or Google search page about Harley-Davidson touring-style motorcycles, for instance, a retailer using WebSphere Commerce 7 could present her with a customized landing page based on the particular interests expressed on that Facebook or Google page.

Although other e-commerce technology companies are integrating mobile commerce into their platforms, IBM stands out with a platform that also strongly integrates with store point-of-sale terminals and kiosks, says Nikki Baird, managing partner with research and advisory firm Retail Systems Research LLC. “When enabling a cross-channel strategy, WebSphere Commerce can now better become a cornerstone in a multi-leg strategy,” she says.

IBM is still in the early stage of cross-channel technology development, the company says. In June it announced a five-year, $100 million research initiative to improve mobile commerce services worldwide. “Advancements in mobile devices are reshaping the way customers interact with brands, expanding beyond mere information exchange to true online commerce,” IBM said in announcing WebSphere Commerce 7. “Increasingly, the beneficiaries of this growth are online retailers.”

Other Coverage:

http://www.siliconvalley.com/search/ci_13767303?nclick_check=1

http://www.v3.co.uk/v3/news/2253062/ibm-talks-mobile-shopping

http://www.siliconindia.com/shownews/IBM_eases_online_shopping_experience-nid-62811.html

http://www.techcrunch.com/2009/11/11/in-time-for-holiday-shopping-season-ibm-upgrades-e-commerce-software-for-retailers/

Smarter Retailers are redefining the customer journey

The proliferation of new digital mediums, interaction models, and touch points has transformed and fragmented the customer journey. This creates a new opportunity for innovative marketers and spells disaster for those that are not prepared.

The New Customer Journey

Customers are embarking on a new journey traversing a complex web of new impression and interaction points. This journey begins long before most companies have the opportunity to deliver their carefully crafted brand messages. Brand awareness is now influenced by new impression formats such as heated community discussions while product discovery is driven by affiliate sites and visual shopping engines where shoppers assemble new looks. The actual shopping process now includes powerful new touch points such as mobile which offers instant access to information and transactions that span multiple channels such as buy on mobile pick up at your closest store.

Thus, the traditional marketing funnel and ecommerce as we know it has been eclipsed by this new paradigm -- an extended web of influence that traverses new interaction mediums and is being executed across numerous touch points.

A New Set of Customer Expectations

This customer journey will continue to fragment and evolve continuously raising customer expectations. Jim McCain, CEO of 1-800Flowers.com has embraced this reality and built his business around it. “Customers seem to change every day. It is their expectation set that has changed which is driven by the technology change”. 1-800-Flowers.com aggressive strategy to leverage technology is continuously enhancing the customer experience with innovations such as an optimized mobile purchasing experience, a transactional Facebook store, and cross channel initiatives like their incredibly successful “Spot A Mom” campaign that was simultaneously executed across all of these mediums.

Changing the way we market, build relationships, and deliver brand value

Today’s successful brand experiences don’t happen by accident, they are carefully planned and executed. Moosejaw Mountaineering knows this better than anyone. “Every customer interaction is a planned marketing event specifically timed and focused on building relationships and differentiating the Moosejaw Brand” says Jeffrey Wolfe, Founder of Moosejaw Mountaineering. “Whether they’re interacting with our Facebook page, receiving an SMS, or visiting our website they will experience a carefully orchestrated brand experience”.

Customers now expect a highly personalized, integrated cross channel brand experience that retains context as customers jump across touch points. The next generation ecommerce platform is designed with this in mind. Precision marketing capabilities now enable marketers to establish rich dialogs with shoppers that span multiple channels. Marketers can finally respond to new interaction behaviors such as rewarding shoppers after they have written their fifth review. E-commerce is no longer a web cart and catalog, but instead, a cross channel customer interaction platform that optimizes every brand touch point and cohesively links them together.

As marketers, we must redefine the way we look at traditional ecommerce and marketing. Our marketing strategies must now focus on optimizing every customer interaction across the new fragmented customer journey.

Thriving in Today’s Economy: Online Strategies that are driving real results (Part 1)

The rapidly changing business conditions (and the birth of my daughter) have kept me away from this blog for a while, but I’m now refocusing and want to share what’s on my mind (and everyone else’s minds). Online retailing strategies for today’s economy.

The global economic crisis has driven consumer confidence to new lows. In January, the Consumer Confidence Index fell to 37.7 representing an all-time low since the index's inception in 1967. This has had a huge impact on consumer behavior and spending patterns. Most notably shoppers are turning to the web.

Needless to say, today’s shoppers are price conscious. According to a comscore report, 76% of shoppers said that the web would be either somewhat or a lot more important as a tool for finding pricing info in this challenging period. A similar Q4 Forrester study revealed that 33% of shoppers will do more research online before purchasing and 17% will do more shopping online rather than offline in 2009 .

The growing importance of the Internet means that every retailer who relies on the Internet for sales will face more competition online. Two-thirds of consumers are postponing purchases or buying fewer items overall… so when they are ready to buy, it’s critical to get them to visit and buy on your site.

In this multi part series I will look at core strategies and best practices that are driving real results in today’s economy. We’ll start by examining online marketing strategies and tactics.

• Marketing is a science. First look at your marketing and merchandising strategy. Does your organization treat it as a measurable science or a loose process? If you don’t already use analytics, it’s time to explore analytics packages and apply scientific rigor to every measurable campaign, promotion, process, and marketing element. Our customers have seen huge impacts from subtle changes such as colors, button placements, and verbiage. If you have a few ideas, use multivariate testing and marketing experimentation technologies to find the best option.
• Reevaluate the 4ps. As consumer attitudes change in lieu of their economic situation, determine if you’re offering the right values, products, and services for today’s market.
• Pricing. This is obvious, but examine your pricing strategies and integrate with shopping engines. According to Magid Abraham, ComScore’s founder and CEO, consumers are using shopping engines and the web as their primary comparison shopping tools. Abraham shared data from an April survey of 1,000 U.S. comScore panelists, and found that some 76% said that the Web would be either "somewhat" or "a lot" more important as a tool for finding pricing info in the coming months. Ensure that your pricing is still relevant and consider creative pricing/packaging strategies such as bundles (especially those with high margin accessories) or low cost leaders.
• Refocus on Segmentation. First focus on your most loyal customers and segments (if the 80-20 rule impacts your business, you need to be very targeted with your marketing efforts). At the same time, create targeted offers and messages for those segments that may take some extra prodding.
• Is your site social? The majority of online consumers rely on consumer driven content such as ratings, reviews, and community information to guide their purchase decisions. In fact, the Trust in Advertising survey of 26,000+ found that Consumer Recommendations are the most credible form of advertising. [More stats here]. If you don’t already use consumer content, now is the time to consider it. If you are using consumer driven content, now is the time to optimize it. Can your shoppers browse by top ranked products? Are you leveraging customer quotes in your copy? Have you incorporated rankings into search
• Content is [still] king. Create compelling and attractive content that engages consumers to interactive with your site. Don’t simply rely on manufacturer copy: spice it up, add video and user uploaded pictures. Provide adequate supporting information to help educate the consumer and convert the sale.
• Coupons. Digital coupons are becoming more popular with price conscious consumers. According to comScore Media Metrix, traffic to coupon sites and saving sites increased 33 percent in 2008 from the previous year. The ecoupon category grew 11 percent to 24.5 million visitors during the month, as each of the top five sites in the category experienced double-digit gains.
  

In my next posting, we’ll look at market expansion and revenue diversification strategies that wadd economic resilience and growth to your business

Luxury Retailers: Stay Chic, but Sell Cross-Channel

Drew Wofford is the Lead Product Manager responsible for WebSphere Commerce In-Store Solutions. He has over 30 years of retail experience and recently spoke at the Luxury Interactive Conference in New York. I have invited Drew to share his insights on luxury retailing:

Luxury Retailers: Stay Chic, but Sell Cross-Channel

By Drew Wofford

No other segment in retail places a higher value on service, quality, brand integrity, and most importantly, the customer, than the luxury and premium brand segments. While mainstream retail today is working overtime, trying to get a "single view of the customer," trying to personalize the shopping experience, and implementing various forms of customer relationship management, this segment has never done anything but that. They have always placed the customer first, by knowing the customer’s preferences and habits and exceptional service; it is the core of their business strategy. And that, in fact, sets up the basic challenge luxury and premium brand retailers face with e-commerce. They have struggled to see how they could continue to provide that same level of service in what they have seen as a far less personal channel.

Imram Amed, the founder and CEO of Byesse Group Ltd., has been quoted as saying that customers in the luxury segment are already making their buying decisions on the web – already using e-commerce sites to augment their buying experience. But most executives of luxury goods believe that from the retailers’ perspective – the jury is still out on e-commerce. The problem is – and really, more importantly, the opportunity is – the jury is NOT out from the customers’ perspective. Customers have already embraced the web and the e-commerce channel; it is now time for luxury retailers to embrace the web, and even more importantly, a cross-channel shopping experience.

Earlier this year Forrester Research surveyed 178 retailers in the luxury retail segment around the world, asking a number of questions about how they view e-commerce within their segment and how they believe their customers view it. 32% of the Luxury retailers said that the web does not fit their brand or sales strategies, and 26% said that customers would not use the web to buy their products. By in large, most luxury retailers have a web presence – over 90% said they have a site. Yet only 32% actually sell or transact business on those sites. At the same time, the same retailers responded that they believe 22% of their revenue will come from an electronic channel in 2012, and over 40% believe that the majority of their revenue will come from e-commerce within the next 10 years. To reach growth goals, Luxury retailers will need to make significant investments in building e-commerce solutions, starting now. Further, research conducted by Luxury Institute researchers’ Doug Harrison and Jim Taylor, shows that today’s customers in this segment spend an average of 14 hours per week surfing the web; that over 88% use the web to research in support of buying decisions, and over 50% buy through e-commerce sites. Many luxury customers today are hard working, highly successful executives working in the world of global business. Only 6% of luxury retail customers have inherited wealth. Increasingly, the luxury customer values the shopping experience, convenience and service – just as the 19,600 mainstream shoppers indicated in the IBM Institute of Business Value’s customer advocacy 2007 survey. To paraphrase that famous dialogue between authors Ernest Hemingway and F. Scott Fitzgerald, the rich as NO different from other shoppers, except for having significantly more discretionary income to spend.

Some Luxury retailers are in fact embracing the web and many are deploying exciting and compelling sites. For example, Bergdorf Goodman, a leading luxury Department Store in New York City has created a merchandise search page that reflects their store layout. They assume that shoppers on their e-commerce site know the store layout, and where to find merchandise in the store, so their website reflects the same navigation. And Godiva, the luxury retailer of gourmet chocolate is supporting mobile commerce - and we all know, any problem can be made better with chocolate. You can now buy Godiva chocolates from your mobile phone! Why? Well, I can personally imagine sitting in a taxi, on the way to the airport, and realizing it’s my anniversary or a family birthday. I would value being able to quickly send a gift using my mobile device. As well, WebSphere Commerce® powers all luxury retail sites such as Hermes, Coach, and Maui Jim, as well as premium sites such as Sony Electronics.

To allow modern day shoppers to choose how, when, and where to shop, more of the Luxury retail segment needs to embrace selling across channels - especially leveraging the e-commerce channel, via mobile and web touch points. When luxury goods customers in New York, needs to provide a gift for an associate in Tokyo, and the retailer transacts business from London, there is no channel more appropriate, more convenient, and in fact, more service focused than the web. Capture the opportunity!

Turbulence is the new constant: Expect and embrace change

IBM just released a sneak peak of the 2008 CEO study based on 1,130 interviews with CEOs of leading companies around the world. The goal of the study is to understand what’s on CEO’s minds, where they are investing, and what the enterprise of the future will look like. This global survey provides invaluable insight market that we can draw some strong conclusions from.

The common theme is that turbulence is the new constant. Coping with change is nothing new. What's different is the head-spinning rate of change today and the fact that it's coming from so many different quarters. In 2004, CEOs worried about market factors. In 2008, while the market still dominates the agenda, executives now face additional socioeconomic, geopolitical and environmental challenges including people skills, technology advances and environmental concerns.

48% of survey respondents indicate that market factors have had the most significant impact to their organization. CEOs around the world realize that the key to success in these rapidly changing markets is to listen to and collaborate with their customers. “These new—and existing consumers—are more demanding and knowledgeable than ever. With the billion-user Internet, customers can broadcast their opinions about a product. They can link up with like-minded consumer groups and sway public opinion, not to mention company behavior.”

This is the intersection of customer centric commerce and corporate strategy. The web provides ample opportunity to solicit customer input and even amplify and extend that input. I was first a bit skeptical when read Kelly Mooney’s book The OPEN Brand. Let me clarify this… I’m a huge fan of Kelly’s and firmly believe in the power of active participation and the “iCitizen”. The piece that I was skeptical about was the depth that companies would invite customers into the design and branding processes. I didn’t think today’s brand managers would evolve into brand shepherds enabling customers to define the brand experience. This skepticism was fueled by companies’ resistance to change, lack of executive support, and the inability to put the systems and processes in place to embrace today’s customers. The CEO study proved me wrong.

The only way this will happen is top-down. The key takeaway from the CEO study is that customer centric strategies are recognized as critical to success and are being driven from the top. This promises many new innovations in customer centric strategies and an accelerated innovation of the way brands evolve and present themselves. I look forward to receiving my hard copy of the study once available later this month (register here for your own copy)

The impact of softening economic conditions to online retailing and e-commerce.

The economy and looming recession have become the number one strategic issue for 2008 being discussed from the boardroom through every level of operations. This blog entry will explore the impact to online retailing and e-commerce and the best way to respond.

After a healthy 2007, which grew online revenues at 19%, the question is how will softening economic conditions impact 2008 online revenue? According to Piper Jaffray’s 1Q08 e-commerce survey, low levels of consumer confidence and sluggish retail sales have already impacted consumer spending: 36% of respondents indicated that they are worse off financially today vs. a year ago, 23% indicated they are better off, and 41% indicated their financial condition was the same. Looking forward, 21% of respondents indicated that they expect their financial condition to worsen over the next year, 38% expect their financial situation to improve, and 42% expect their financial condition to remain the same.

But will this impact online spending and what does that mean to us? In every type of economy there is opportunity. Early stats are indicating that online channels are the shining star in a challenging economic environment. In fact, many consumers are planning to shop more online.

According to Hitwise traffic to retail sites this year through the first week in March is up year over year growing from 16% to as high as 24%. Amazon, the No. 1 Internet Retailer and key indicator reported a Q1 net sales increase of 37% to $4.13 billion from $3.02 billion which CEO Jeff Bezos attributes to their low prices.

The online shopping channel offers several key advantages in a down economy such as convenience (time is money!), saving money on gas, finding lower prices on the web, and using the web for comparison shopping.

Strategies for increasing sales in this environment include:

• Understand your customers’ mindset and how economic news will impact them. Capitalize on their emotions and behaviors by emphasizing promotions such as free shipping or discounts to attract new customers.
• Utilize creative and targeted marketing tactics. A great example is the Sears Stretch Your Check campaign offering an additional 10% gift card when you apply your stimulus check to a Sears brands.
• Take advantage of the weak dollar to extend your international sales. The dollar is trading at an all time low representing a great opportunity to open up International shipping.
• Use the web as a catalyst for change to quickly modify your assortment in response to shifting buying patterns.
• Since the economic situation will impact each segment differently, now is the time to use even more targeted marketing and promotions to better reach your segments with the right products, offers, and messages.

Why advocacy matters: An interview with Maureen Stancik Boyce

The IBM Institute for Business Value recently conducted an extensive study analyzing the business impact of customer centric retailing strategies and their ability to create customer advocates. Almost 20,000 shoppers were surveyed to determine if being customer focused can drive financial benefits.

We already know that 79% of customers will commit to a deeper relationship with a brand after a satisfying experience, but how do we create customer advocates that consistently spend more and have a meaningful financial impact? Do customer centric strategies create advocates? To find out these answers and learn more about customer advocacy I recently interviewed Maureen Stancik Boyce Associate Partner of the Institute for Business Value and the team leader on this study.

Errol: Welcome and thank you for joining us today. Let me start by asking what exactly an advocate is.

MSB: An Advocate is a customer who 1) recommends their retailer to others 2) would stay with their primary retailer if another competitor opened and was equally convenient and had similar prices and 3) purchase more product if their primary retailer started carrying new items which the customer currently has to buy elsewhere. In short , the three criteria are 1) likelihood to recommend, 2) Staying rate and 3) Purchase intent

Errol: Well, based on that response I think we'd like all our customers to be advocates. What is the financial impact of creating advocates?

MSB: Advocates have a bigger basket size than Antagonists, spend a greater share of that wallet with their primary retailer, and are more likely to increase spending over time than Antagonists. Put together with the staying rate - a longer customer life time, and you get far more valuable customers.

Errol: So how do retailers turn their customers into advocates and what characteristics of the shopping experience drive advocacy?

MSB: (note this is the cross segment answer) Our studies across five different retailer segments, which surveyed nearly 20,000 US consumers found that the Store Experience and Convenience were the top two most important factors. Each retail segment varied slightly, though.

Errol: Many of our readers are primarily focused on the online channel. How do we drive advocacy online?

MSB: For online retailers, consumers told us it was Convenience ie "Online retailer makes it easy to shop" and Customer Service ie "Happy with service from online store employees" that were the top 2 most important attributes. Store Experience, and Assortment came in as the third and fourth most important attributes. We were a bit surprised that Store Experience was that high for online retail; the exact wording consumers rated was "My online retailer is pleasant and enjoyable to shop." We are guessing this includes hassle free logistics, a pleasant interface, logical flow of website, few screens, etc.

Errol: Can you give us an example of a retailer who has successfully turned their shoppers into advocates?

MSB: Barnes and Noble.com actually had the most Advocates of the online retailers with survey data, even more than Amazon. They've made huge advances in the last few years, with big investments in their web presence and triple digit growth over the last year. Focusing more on serving their customer online, as well as in the store, is starting to pay off.

Errol: Maureen, thank you for your time and we look forward to having you join us again in the future.

Join IBM's webcast on February 19th at 2 ET as we take a deeper look at "Why Advocacy Matters to Online Retailers" and explore actionable strategies to turn your shoppers into advocates.

What exactly is Customer Centric Commerce?

Over the past several months I have had many conversations about customer centricity and there appears to be a lot of confusion about exactly what we mean by “customer centric commerce” and why it’s important. So this month, I wanted to clarify my position. Customer centricity is about placing the customer and their needs at the center of the experience. In retailing and commerce terms, this means architecting the entire experience from the customer’s perspective in, and being able to adapt each interaction to the specific shopping occasion.

Customer Centric Commerce translates into different strategies and capabilities depending on the retail segment. At Staples, customer centricity is about being easy to do business with, while at Bass Pro Shops it's about becoming a rich destination featuring an active community.

Creating a customer centric experience begins by understanding and capturing the customers’ needs and preferences. To make this actionable, many retailers translate these needs into personas. This is often more effective than simple segmentation since it enables retailers to tailor the experience to the specific shopping occasion. For example, when buying a printer, the consumer might fit into the “Randy Researcher” persona where the primary need is access to comprehensive product information and high value solutions. But when he returns to buy ink he falls into the “Bill the bargain-hunter” persona who’s priority is to find the best deal quickly.

Customer centric commerce strategies provide powerful foundations for cross-channel retailing. Simple integration is no longer adequate. As customers seamlessly traverse channels, the experience must be optimized for the specific touchpoint and where they are on their path to purchase. As the customer progresses through the interaction, retailers are able to use cross-channel marketing techniques to “listen and respond” to the customer’s needs at each touchpoint and progressive phase of the interaction. Marketing flows and processes must be orchestrated across channels taking customer preferences into account. For example, if a customer has chosen to buy online pick up in store, it is important to pick cross-sells that are personalized for that specific shopper and buying occasion.

Studies have shown that Customer Centric Commerce strategies create advocates. Advocates spend 30% more annually (average basket size) and spend 25% more with their preferred retailer. (Source: IBV Study) Another important benefit is that by understanding the full context of the interaction, retailers are able to deliver a complete solution frequently selling additional high margin offerings such as services or warrantees. Customer centric strategies must be embraced and understood at all levels of the enterprise; they impact organizational structure, solution strategies, and all levels of execution. Over the next few weeks we’ll take a much closer look at how leading retailers are deploying customer centric strategies and what you can do to become more customer centric.

Social Commerce Interview with Sam Decker, CMO of Bazaarvoice

As part of our series on social commerce and consumer advocacy, I was fortunate to catch up with Sam Decker, Chief Marketing Officer at Bazaarvoice. Bazaarvoice is a leader in social commerce and they are once again proving themselves this holiday season. On Cyber Monday they served up 71 million reviews at a peak of 1,400 reviews per second, and in the last 30 days, their systems have seen 7.4 billion hits delivering 40 terabytes of traffic.

So lets pick Sam’s brain on the latest trends in social commerce.

There is a lot of activity in the social commerce and consumer driven content space. What is Bazaarvoice's philosophy on consumer driven content and what makes you different?

We defined our mission as “Social Commerce”, as opposed to “Social Shopping”, “Social Networking”, or “Social Media”…or simply user generated content. “Social Commerce” underscores our philosophy that customer-to-customer interactions are relevant to businesses only if they drive measurable sales impact. There are three principles core to making social commerce work:

First, social participation – and the resulting user generated content – is created by a minority of customers. This participation should be designed to create content and assets that help your future customers. So for any functionality that creates user generated content, it must produce content that directly enhances shopping activities and the commerce experience.

Second, these interactions, and access to the content should be in line with the purchase path on a site. That is true for Ratings and Reviews and our Ask & Answer solution.

And third, customer created content is a digital marketing asset that can accelerate sales beyond your web site. We develop best practices, partner integrations, data flexibility to enable customer-centric mutli-channel marketing.

That makes a lot of sense. Are there other social commerce capabilities that retailers will want to consider as well?

The key to embracing social commerce is to be open. Open data, open culture, open technology. We’ve developed APIs and feeds that enable retailers to leverage the data in multiple ways. Some of this we power for them. For example, we syndicate reviews from retailers to top 25 shopping comparison engines to drive branding, links and natural search impact. We launched a “ShareThis” functionality, enabling customers to post reviews and products to social networks. From here we are exploring ways to use the customer voice to enable relevant advertising, integration with forums, and profile enhancements. We’re on a learning journey!

That's an interesting perspective, I had never thought of syndicating consumer content beyond the retailer's website. How will this change the online retailing industry?

For retailers to expand the ROI driven from the many forms of social interaction and content, we will see a trend of opening up content to be absorbed by new channels. The online travel industry and Amazon have a head start in this trend. We’ve started to do that with our clients, syndicating to portals.

The purchase process of the future will become a more complex ecosystem of touch points and interactions, mostly occurring outside a retailer’s web site. The retailer’s opportunity to influence within this ecosystem is dependent on its interoperability of product and social content with external applications. The whole point behind RSS, APIs, XML feeds, and other data sharing technologies is that they allow consumers to customize and personalize their online experience. I expect that aggregator interfaces (iGoogle, MyYahoo, web browsers, social networks) will enable commerce from within a customizable interface that represents a mosaic of the consumer’s favorite brands and products. As more consumers purchase through these interfaces, more marketers will win the case to open up and de-centralize their data. In turn, the sharing of this data will drive more external innovation and value consumers and retailers.

How does this decentralization of data impact other retailing functions or touchpoints?

Retailers who are evolving their social commerce strategy are leveraging customer created content to power multiple marketing vehicles. We see it improve the marketing effectiveness in RSS feeds, catalogs, email, kiosks, advertising, and other marketing tactics. According to Jupiter and Forrester, more than 70% of online shoppers seek out reviews online. So it stands to reason that the usefulness and persuasiveness of customer-created content makes other marketing more relevant, credible and authentic.

In addition, we see increasing use of our workbench reports, analytics and key alerts. What this means is that multiple functions in retailers are using the data from the customer voice to impact day to day decision. Retailers thought reviews were a great conversion tactic, and it is in spades…but it has evolved into a customer-centric culture changer! That has far reaching implications and impact.

Finally, the industry is watching Google. What are your thoughts about Google's OpenSocial initiative and how will Bazaarvoice respond?

OpenSocial will fuel this learning journey we are all on. It gives developers more reason to innovate – which some would call destructive innovation, because the majority of innovations will not meet a viable business model.

Our part in this is to provide the flexibility, expertise and capabilities to fuel this innovation. We welcome developers to invent new functionality that leverages user generated content. We will provide the hooks, APIs and feeds on behalf of our clients to enable them to find solutions achieve the promise of “Commerce” in “Social Commerce”.

Social network pumps up average order and conversion

As we continue exploring how retailers are harnessing the power of social networking I thought this article published by Internet Retailer provided a timely perspective on Bodybuilding.com’s social network BodySpace:

More e-retailers are checking out social networking as a way to enhance their site experience, improve brand awareness, increase traffic and, ultimately, boost sales. At Bodybuilding.com, customers are checking out each other via the health and fitness merchant’s social network, BodySpace, where users can post photos of themselves, describe their workout goals and blog about their progress.

Bodybuilding.com did not take a wait-and-see approach to social networking. It dove in a little over a year ago with BodySpace, amassing 117,000 active users since, and now is reporting positive results.

“There is no doubt our community and social networking offerings are making a big difference for sales and conversion,” says Ryan DeLuca, CEO. “Since we added BodySpace, our average order size is up nearly $10 to $92.41, and our conversion rate is 8%, up from 7% a year ago. That one percentage point is huge.”

In addition to BodySpace, Bodybuilding.com offers 20,000 pages of content from experts and consumers, an online forum where more than 800,000 fitness buffs have posted 19 million messages over the past five years (making it the 34th biggest online forum on the web as measured by forum tracker Big Boards), 24 educational online video series, and functionality that enables a user to create his own blog.
Bodybuilding.com LLC, No. 152 in the Internet Retailer Top 500 Guide, reached sales of $65 million in 2006. Based in part on enthusiasm for the site’s social and community features, DeLuca is projecting $90 million in sales this year and $122 million next year.

“We are building something that is not just based on making money,” he adds. “Everything we add to our site is based on helping visitors reach their goals. Helping our visitors stick to their programs and reach their goals will ultimately lead to much higher revenue, a much more valuable brand based on emotional connections, and more profitability based on increased customer loyalty.”

Harnessing the power of Social Commerce and Consumer Advocacy

Lately there has been a lot of talk around social shopping and Social Commerce. With over 86% of all online users engaged in some form of social activity it’s clear that the age of the Socially Connected Consumer is here. Power is shifting from institutions to the consumer and it’s critical to capitalize and embrace this trend. The question is, how?

Over the next few weeks we will examine the Socially Connected Consumer and explore the hottest trends and technologies in social commerce. Upcoming posts will include an interview with Sam Decker, CMO of Bazaarvoice as we look at the next generation of consumer driven content, we’ll then explore best practices to harness the power of active participation, and finally a look at how social networking technologies are evolving to drive sales/transactions.

So lets start by looking at the basics.

Social Commerce will impact more than just websites; it will become the new DNA of the customer interaction. A recent study conducted by the e-Tailing group, (Social Shopping Study 2007), uncovered some insightful trends. We already knew that ratings and reviews have become the number one buying aid with 71% (Forrester) to 79% (Jupiter) of shoppers using them. The study corroborated these facts, but also revealed that “82 percent [of shoppers] found reading reviews better than researching a product in-store with a knowledgeable sales associate.” This statistic has huge implications to multi channel retailers: if consumer-driven content is more effective than your most knowledgeable sales associates, perhaps it’s time to incorporate it into the in-store shopping process. This can be accomplished via a kiosk or mobile device, but it’s critical to do so in the context of the overall shopping experience. Don’t just throw your web-site on a kiosk in the store; instead focus on keeping the customer on the path to purchase by placing very specific reviews and product information related to the department or category where the kiosk is placed.

So now that we're thinking beyond just the web site and ratings and reviews, lets look at how Social Commerce is impacting key stages of the shopping process.

80% of the shopping process is spent in the “browse and research” stage which has been heavily impacted by a broad range of social commerce technologies:

• Social shopping engines such as MyShoppingPal aid in the product discovery process by employing collaborative filtering technologies and algorithms to generate “social” recommendations based on what similar users were interested in.
• Public shopping communities such as Kaboodle, Yahoo’s Shoposphere, and eBay Neighborhoods or private communities such as Netflix’s community enable shoppers to share lists, recommend favorite products, and discover new products.
• There are also SEO implications since searches typically focus on ‘problem oriented’ phrases that are frequently contained in consumer content.
• Social tagging or folksonomies enable shoppers to assign their own product tags. This is particularly effective to tap into the hippest lingo of your teen segments that traditional marketing hierarchies don’t support.

Once customers have established their short list and have moved into the research phase we see ratings and reviews come into play:

• 81 percent of consumers use customer reviews to decide between two or three products or to confirm that their final selection is the right one.

The product selection and configuration process may also be enhanced through social interaction

• Providing customer driven FAQs help close the sale by augmenting the selection and configuration process (not to mention reducing call center volume.) According to Bazaarvoice, "Online businesses lose as many as 67% of consumers due to a lack of online product information". To solve this problem they have launched Ask and Answer a hosted social commerce service that gives shoppers the answers they need.

The next generation of Service and Support will also be driven by the consumer:

• Your customers are the product experts and typically have more ‘hands-on’ time with the products you sell than your CSRs. Many brands have tapped into the collective intelligence of their customers to drive the next generation of customer support. Open up knowledge databases and enable customers to share and add their product expertise (in a moderated fashion) since your support representatives can’t possibly master all of the different configurations or usage scenarios. For example, networking a DVR into a home network/theater or configuring a product for a specific use case. This is an excellent example of cross-channel optimization since it’s significantly more cost effective (and more efficient) to drive customers to online support than to a call center. Brands should also use this information to close the loop -- learning more about key usage scenarios and challenges, while better arming call center representatives.

Building loyalty and driving repeat business

• Finally, many retailers are using community and social features to bring customers back to their sites to share experiences. This pull strategy leverages capabilities such as forums and photo boards – a favorite example of mine is Bass Pro Shop’s OutdoorSite Library. Their customers come back to share stories and post pictures to the Braggin' Board from the weekend’s outdoor adventures… and while they’re there, Bass Pro Shops is not just building brand awareness but can actively sell. Jeep is another great example, they're not only building brand loyalty with their customer photos but they're using them as the foundation for print campaigns.
  

But successfully harnessing social commerce requires you to think more broadly than just your website. Progressive retailers already have Facebook and Myspace pages. Who would have ever thought that a retailer would have over 6300 BFFs, (that’s Best Friends Forever for us non-millennials). Other brands are employing viral marketing strategies to publish content, photos, and video on existing social networking sites and sharing sites like YouTube. An entire viral marketing industry has emerged that’s focused on exploiting social and customer content and advocacy. eBay has embraced Marsha Collier as one of their leading advocates and Diesel leveraged the influence of social web star Ze Frank.

Brands are just starting to harness the full potential of social commerce and consumer advocacy. In the future, customers will be accustomed to actively participating and collaborating with brands while relying on each other for product discovery and as the most credible source of brand and product information. Join us over the next few weeks as we dive more deeply into this topic

What are you doing in this space?

Third Quarter U.S. Retail E-Commerce Grows 23 Percent versus Last Year

I've been looking at a lot of stats lately, the most recent was Comscore's press release, announcing that e-commerce revenues had increased 23 percent in Q3 versus year ago to $28.4 billion. This puts us on track to to exceed $174 billion for 2007 with plenty of room to grow. To put this in perspective, that's only 7% of the total retail pie which is less than 50% of what Wal-Mart sells annually. By 2011 we'll hit 10% penetration of the total retail pie. Saturation points will differ by category but are expected to average out at about 20% which means there is plenty of room to grow!

Lets Go Shopping! What's Cool in Commerce

The past 12-18 months have brought accelerated innovation driven by Web 2.0 concepts and technologies, evolving user behavior, and fierce competitive creativity which have redefined the rules of the online retailing.

I am a firm believer that you must stay abreast of the latest technologies, strategies, and best practices in order to respond accordingly. Here is my list of Web 2.0 sites that are transforming the shopping experience by making it more interactive, engaging, and social

Awareness - Do you have a MySpace page? Your competition probably does!

• Moosejaw has over 6200 BFFs (that’s Best Friends Forever for you non-millenials) - http://www.myspace.com/moosejawmountaineering - and a facebook page as well - http://www.facebook.com/group.php?gid=2383739005
• PacSun - http://www.myspace.com/pacsun
• Vans Warped Tour - http://www.myspace.com/warpedtour

Product Discovery and browsing

• like.com - product discovery by presenting products, 100% visual
• browseGoods.com - zooming in and zooming out to find products
• gifts.com - gift selection by persona

Web 2.0 Social Shopping (and browsing)

• lemonade.com - social shopping; host your own store
• kaboodle.com - social shopping network based on personal preferences/characteristics
• myshoppal.com - social shopping network based on personal preferences/characteristics (FAP score)
• Threadless.com - design a t-shirt, submit to the community for their votes
• Netflix - share movie favorites and wishlists with friends
• Tag Clouds: Amazon - http://www.amazon.com/gp/tagging/cloud/ref=tag_dpp_pt_icld/103-6825928-7295855

Select and Configure - Web 2.0 Outfit creators, MVM, Web 2.0 Configurators, Productivity Tools

• LL Bean Mix n Match Bedding - http://www.llbean.com/webapp/wcs/stores/servlet/CategoryDisplay?page=flannel-bedding-mix-match&categoryId=8634&storeId=1&catalogId=1&langId=-1
• Niemen Marcus - outfit creator: http://www.neimanmarcus.com/store/catalog/templates/Entry.jhtml?itemId=cat12750731&parentId=cat000003&masterId=cat000001
• oli Look Book -- http://www.oli.co.uk/Web/main/productdisplay.asp?An=673&A=52E015%5F12&N=426+4294967190&Au=P%5FMasterItem&Nu=P%5FMasterItem&Ns=P%5FColour%7C0%7C%7CP%5FSize%7C0&merch=Oli%20Customer%20Favourites
• Weekenders - dress the mannequin (similar to mvm) - http://www.weekendersusa.com/#
• Sears My Virtual Model - http://www.sears.com/shc/s/MvmControllerCmd?storeId=10153&vid=99&adCell=A12&adCell=A9
• myshape.com - Shop by body type
• zafu.com - Find the perfect jeans
• Home Depot: Design Tools: http://www.homedepot.com/prel80/HDUS/EN_US/diy_main/pg_diy.jsp?CNTTYPE=PROD_META&CNTKEY=Know+How%2fDesign+Tools&BV_SessionID=@@@@1080583293.1177012970@@@@&BV_EngineID=ccchaddkjmkeejjcgelceffdfgidglo.0&MID=9876
• IKEA: Room Planners: http://www.ikea.com/ms/en_US/rooms_ideas/splashplanners.html
• Shaw Flooring: http://shawfloors.com/Hub/Register.aspx?caller=%2fTryOnAFloor.aspx%3fmode%3duyo%26requestingPage%3d%2fFlash%2fyourownroom.swf&activity=&entitytype=&entityid=&entityDataType=
• Sherwin Williams: ever wondered what different paint combinations would look like? -- Launch 'Color visualizer', paint an interior, and pick a room.... http://www.sherwin-williams.com/do_it_yourself/
• Hunter Douglas: Click on imagine design center --> http://www.hunterdouglas.com/index.jsp
• Sears Manage my Home: http://www.managemyhome.com/mmh/common/Benefits.action?eid=HomeFeature

Revolutionize the Experience - Web 2.0 based shopping using Flash

• O2 - http://www.o2online.ie/webapp/wcs/stores/servlet/O2CompareHandsetsView?storeId=10001&catalogId=10001&langId=-1&flowType=P&categoryId=10051&wcmArea=/wps/wcm/connect/O2/Home/Shop/Phones/Compare+phones/&wcmArea2=/wps/wcm/connect/O2/Home/Shop/Phones/Compare+phones/
• Hollister (lifestyle experience) - http://www.hollisterco.com/webapp/wcs/stores/servlet/category1_10251_10201_12555_-1_12551
• Abercrombie (slider bar across bottom, etc) - http://www.abercrombie.com/webapp/wcs/stores/servlet/category1_10051_10901_12216_-1_12202
• endless.com -- Web 2.0 based browsing (left preferences)
• Nau - https://www.nau.com/homepage/index.jsp#/homepage/index&0
• Burton - Dynamic shopping experience that matches brand's personality - http://www.burton.com/Gear/Default.aspx#/mens/boards/matrix/boardMatrix.swf
• Ann Taylor - rich media

Good Web 2.0 Checkout and Carts

• Abercrombie, Hollister & Co, Philosophy.com

Social Commerce

• Bass Pro Shops (Customer Reviews, Consumer content, forums, brag board) http://www.basspro.com/webapp/wcs/stores/servlet/CFPage?partNumber=&CMID=&langId=-1&storeId=10151&catalogId=10001&pageView=image&deptId=000000000&categoryId=000000000&currentPage=0&jumpToPage=1&subdeptId=000000000
• Scholastic: (message boards, forums, blogs) - http://community.scholastic.com/scholastic?category.id=adultBoards
• Moosejaw Community: The Jaw - http://www.moosejaw.com/moosejaw/dept.asp?s_id=0&dept_id=77

Productivity Tools - Utilitarian Experience:

• Staples downloadable easy button: http://www.stapleseasybutton.com/site.php

3D Internet

• Chevy launched the 2007 Avalanche using this 3D site (a very effective use of 3D) http://www.chevrolet.com/avalanche/launch/
• Web 2.0 Design & Build to Order
• Timberland: http://www.timberland.com/product/index.jsp?showConfigurator=true&productId=2050977
• NikeID: http://nikeid.nike.com/nikeid/index.jhtml?sitesrc=uslanding#home

Other

• Natural Language search (have to be invited) - http://www.powerset.com/
• http://www.squidoo.com/browse/homepage
• User Improved Search - http://www.sproose.com/
• Ralph Lauren Window shopping - http://www.news.com/2300-1038_3-6105277-1.html
• An index of other Web 2.0 sites http://www.shambles.net/web2/
  

I’d love to hear from you – what are your favorite sites?

Bazaarvoice Interview with Errol Denger

I was recently interviewed by Brant Barton, Founder of Bazaarvoice on our partnership and industry directions. The original blog is available at --> http://www.bazaarblog.com/2007/09/18/partner-interview-errol-denger-senior-strategist-ibm-websphere-commerce and posted below:

1. E-commerce is evolving quickly. Every year, it seems that our industry is buzzing about a new hot topic. What do you foresee being the hot topics in e-commerce over the next 2-3 years?

Several key trends are converging to shape e-Commerce’s next few years. The new buzz will be all about customer-centricity and experiential retailing. These concepts will be embraced to redefine the brand experience and deliver new value to customers. As retailers apply these strategies to their e-Commerce sites, you will see a continuing transformation from product and catalog-driven sites to destinations that focus on delivering a rich customer experience.

As multi channel retailing continues to gain momentum, you will see a lot more buzz around mobile, kiosk, and other touchpoints. Look at the buzz around the iPhone alone and its ability to deliver a “real” web experience. Other multi channel technologies such as kiosks will be implemented in the store to enhance the purchasing process with richer information such as ratings and reviews. It will be a huge challenge for retailers to consistently and contextually extend this customer-centric experience across all channels and touchpoints, but successful retailers will capture greater market share and plenty of headlines.

2. Can you give our readers an example of what you describe above, a retailer or site that is succeeding at evolving from catalog-driven to a true “rich customer experience”?

Well as I pointed out above, e-Commerce sites are no longer flat HTML catalogs but are becoming feature rich destinations that focus on the customer’s needs. The hottest digital marketing opportunities will be those that extend the online experience. A great example of this is IKEA’s room planner which enables customers to design 3D kitchens and automatically generates a shopping list. Other areas that extend the shopping experience will include 3D Internet, social commerce, and rich digital content such as user created movies.

3. There are e-commerce platforms and there are focused solutions (analytics, email marketing, search, reviews, etc.). What is the role and responsibility of a platform provider in helping customers develop a best-of-breed strategy?

Our goal is to enable online sellers to transform the way they deliver business value by creating a rich brand experience. Because this differs significantly across industries and segments, we have formed an ISV ecosystem enabling us to deliver end to end solutions. The goal is to deliver a pre-integrated, proven solution that our customers can trust their e-businesses to.

4. Bazaarvoice is an IBM WebSphere Commerce partner. How does our solution and expertise complement IBM's e-commerce strategy and vision?

Bazaarvoice complements IBM’s e-Commerce strategy and vision by providing rich social commerce capabilities. This is a critical in today’s Web 2.0 world since retailers are redefining the way they interact with customers. They are actively engaging customers and establishing architectures of participation with sites specifically designed for user contributions. Bazaarvoice helps us meet this requirement and more. As user interactions continue to evolve, we expect Bazaarvoice to deliver new offerings that further extend the relationships that retailers have with their customers.

5. What mistakes do large multi-channel retailers commonly make when choosing an e-commerce platform and solution partners?

There are a few common mistakes which are mostly caused by improper planning and requirements definition processes. One of the biggest mistakes occurs when multi-channel retailers do not incorporate the business’s broader strategies and growth initiatives into their purchase decision. When this happens, the retailer may have a strong e-Commerce site but they will encounter problems when forced to integrate it with the rest of the business or use it as a catalyst to drive growth. Thus, we recommend that companies evaluate their e-Commerce site in context of their multi-channel retailing strategies and also think about how they plan on growing their business to ensure that their e-Commerce platform can grow with them. It is also absolutely critical that these decisions are not made in a silo, and they have full organizational support.

6. Many marketers are still struggling to understand Web 2.0, but I'm already hearing talk of "Web 3.0". What does this mean to you?

Web 3.0 will be about selling to the Digital Generation and the next decade’s consumers. In the next decade, everyone is interconnected, anything goes, everything is available, and nothing is private. Shoppers will be savvy and skilled placing a high level of importance on individualism, self-fulfillment and personal involvement in the creation process. Retailers will use Web 3.0 as the vehicle to sell to this generation of shoppers and to support the new lifestyle formats that will dominate retail. Web 3.0 will encompass a set of concepts and technologies that enable retailers to cater to shoppers that are ubiquitously connected, continuously moving across touchpoints and interaction metaphors (physical, 2D, and 3D), and interacting in new ways through increasingly integrated social networks.

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