Internet Retailer 201302

FEBRUARY 2013 www.internetretailer.
com
Is responsive design the answer to the multi-screen challenge?

E-commerce strategies for b2b merchants Online video takes center stage
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COVER
The all-in-one solution 26

Is responsive web design the answer to the multiscreen challenge?
What holiday 2012 can teach e-retailers as they prepare for a 2013 holiday shopping season with six fewer prime selling days.
Unwrapping the holidays 34
26
Procurement managers are consumers, too, and they expect Amazon-like ease of use from b2b e-commerce sites.
A new way of doing business 40
FEBRUARY 2013 Volume 15 Number 2
34
newsline 6
Mobile and social drive e-commerce growth in India; Target rolls out a price-match policy; Amazon takes on iTunes; U.S. m-commerce sales hit a new high; more. U.S. mobile ad spending; how many consumers read e-books; top e-shopping days of 2012; more.
didyouknow? 12
m-commerce Its a small world 14 marketing&advertising Fast forward 18 ops&tech Making conversation 22
40
Designing sites for the smartphone screen requires a rethinking from the ground up. No longer a supporting actor, video stars on some retailers e-commerce sites.
With more shoppers turning to live chat for answers, these simple tips can help turn chats into sales.
52
corporatestrategies Beyond daily deals 52
There are more ways for the store next door to reach shoppers via the World Wide Web.
When it comes to getting packages through customs, online retailers need to sweat the details. Nikki Baird of Retail Systems Research explains how e-retailers can appeal to in-store shoppers.
ops&tech All clear 55
websellingviews Up for grabs 58
55
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How to sell internationally . . . . . . . 45
websellingstats E-commerces market share is growing 64

2 Internet Retailer February 2013
New data from Javelin Strategy & Research show that e-commerce is taking a bigger slice of the overall spending pie.
www.internetretailer.com
New thinking
-commerce is inhospitable to laziness. The industry moves so quickly to adopt and adapt technologies that phrases like its how weve always done it dont hold water. Reinvention is a key to relevance in online retailing, and it is what ties together the stories in this issue. First, this issues cover story (page 26) tackles the issue of web design and how e-retailers are trying to tailor their web sites to operate effectively on the devices consumers are using to access them today. Just think: Three years ago, Apple Inc.s iPad was still a rumor, and the iPhone, which effectively made mobile commerce possible, is not yet six years old. In December, IBM Corp. says consumers using iPads accounted for more than 8% of traffic to its clients e-commerce sites. Other tablets and smartphones accounted for nearly 14%. Its pretty wild to think that in less than six years more than a fifth of web traffic has shifted to mobile devices. E-retailers have to be quick to rethink their design approaches to accommodate such dramatic shifts in consumer behavior, or lose ground to others who do. The trouble facing e-retailers today, and what requires new thinking, is that the path forward in some cases hasnt been cleared. A lot of retailers hope someone else will do the trailblazing. The cover story introduces some retailers who are whacking at the weeds using a design approach called responsive design and finding solutions to the problems that inevitably come up with any new, untested approach. Following that theme, another story shows how two e-retailers, Ice.com and e.l.f. cosmetics, designed their m-commerce sites (page 14). Each says it is important to first devise an m-commerce design philosophy to guide the decision-making process, even if there is no solid proof that the approach taken is the best. Start with a philosophy, they agree, but dont get locked in, and leave room for change. Switching gears from mobile, on page 18 youll read about a handful of e-retailers whove decided traditional web designif there is any such thing as traditional in web designisnt the right path for them. Theyve designed their sites to merchandise primarily through video to give themselves a competitive edge. And finally page 40 features a story about business-to-business commerce, another area of retailing where the Internet and e-commerce is forcing the development of new approaches. These days its increasingly common for buyers working for corporations and government agencies, who buy everything from machine tools to office supplies, to discover b2b sellers of those goods first online, rather than by answering a phone call from lead-nurturing sales reps. Theyre placing their own orders online through e-commerce platforms adapted to allow for the intricate pricing and often-customized requests of b2b buyers. Internet Retailer mostly covers business-to-consumer e-commerce, and reading this b2b-focused feature sparks a lot of questions about how advances in b2b may inform b2c. For example, b2b sales teams know all about wooing prospects and engaging customers. How theyre doing that in an online environment may provide lessons to retailers. If you are a b2b e-retailer or are thinking about getting into b2b and have questions youd like answered, please e-mail me at allison@verticalwebmedia.com and let me know whats on your mind. That will help us provide better coverage about this important and growing area of e-commerce. Allison Enright, Editor
Publisher: Jack Love jack@verticalwebmedia.com Associate Publisher: Molly Love Rogers molly@verticalwebmedia.com 312-572-6254 (phone) 847-543-1570 (fax) Executive Editor: Kurt T. Peters kurt@verticalwebmedia.com Editor in Chief: Don Davis don@verticalwebmedia.com Editor: Allison Enright allison@verticalwebmedia.com Managing Editor: Zak Stambor zak@verticalwebmedia.com Chief Technology Editor: Paul Demery paul@verticalwebmedia.com Managing Editor, Mobile Commerce: Bill Siwicki bill@verticalwebmedia.com Senior Editor, Conferences: Mary Wagner mary@verticalwebmedia.com Senior Editors: Bill Briggs, billb@verticalwebmedia.com Katie Deatsch, katie@verticalwebmedia.com Thad Rueter, thad@verticalwebmedia.com Kevin Woodward, kevin@verticalwebmedia.com Associate Editors: Amy Dusto, amy@verticalwebmedia.com Jonathan Love, jon@verticalwebmedia.com Research Director: Mark Brohan mark@verticalwebmedia.com Senior Editor, Research: Stefany Moore stefany@verticalwebmedia.com Research Analyst: Sylvia De Oliveira, sylvia@verticalwebmedia.com Production Director: Thomas Chambers tom@verticalwebmedia.com 312-362-9531 Northeast Advertising Manager: Nancy Bernardini nancy@verticalwebmedia.com 312-572-6276 (phone) 866-979-4389 (fax) West Region Advertising Manager: Dave Cappelli dave@verticalwebmedia.com 312-362-0063 (phone) 866-979-4392 (fax) Southeast Region Advertising Manager: Judy Dellert judy@verticalwebmedia.com 312-572-6279 (phone) 866-979-4394 (fax) Midwest Region Sales Manager: Cindy Wilkins cindy@verticalwebmedia.com 312-572-6247 (phone) 866-979-4510 (fax) Classified Sales Manager: Oliver Love oliver@verticalwebmedia.com 312-572-6251 (phone) 866-979-4504 (fax) Advertising Manager, Research: Elizabeth Riley-Green elizabeth@verticalwebmedia.com Director of Marketing: Erin Dowd erin@verticalwebmedia.com 312-572-6280 Web Production Editor: Farnia Ghavami farnia@verticalwebmedia.com 312-362-0804 Director of Administration: Sue Kroeger sue@verticalwebmedia.com 312-362-0076 Circulation Manager: Chaz McCrobie-Quinn chaz@verticalwebmedia.com 312-362-0107
editorsletter
President: Jack Love Executive Vice President: Kurt T. Peters
Vertical Web Media
Internet Retailer (ISSN 1527-7089) is published monthly by Vertical Web Media LLC, 125 S. Wacker Drive, Suite 2900, Chicago, IL 60606. Periodicals Postage Paid at Chicago, IL, and additional mailing offices. (USPS 019-477) POSTMASTER: Send address changes to Vertical Web Media, P.O. Box 29, Congers, NY 10920. For advertising information, call 631-329-7024. Mail subscription orders or changes to Vertical Web Media, PO Box 29, Congers, NY 10920. For subscription information, call 800-371-1777. For editorial reprints or web rights, call Ellen Gribbin 631-226-1404 or e-mail ellen@verticalwebmedia.com
The views expressed herein may not be concurred in by editors or members of our editorial board. No part of this magazine may be reproduced in any form by microfilm, xerography, or otherwise, or incorporated into any information retrieval system, without the written permission of the copyright owner. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering financial, legal, accounting, tax or other professional service. Internet Retailer is a registered trademark used herein under license. Subscription prices: USA, U.S. possessions: $102.95 annually; Canada: $123.00 annually; Foreign: $148.00 annually. Direct any editorial inquiries, manuscripts, or correspondence to Internet Retailer, 125 South Wacker Drive, Suite 2900, Chicago, IL 60606. Phone: 312-362-0107. Copyright 2013 Vertical Web Media LLC. All Rights Reserved.
Volume 15, Number 2
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Mobile shoppers and social media drive growth in Indias emerging e-commerce industry
ine thousand miles from the United States on the shores of the Arabian Sea and in Mumbai, a city of 20 million people and home to Bollywood and the legacy of peace activist Mahatma Gandhi, e-commerce is alive and growing in India. During the week of Jan. 8, Internet Retailer had an opportunity to assess the progress of Indian online retail by attending the eTailing India Expo e-commerce conference in Mumbai. Compared to the more mature and far bigger online retail markets in the United States, Europe and such Asian markets as China and Japan, Indias e-commerce sales are small. ey are estimated at about $1.6 billion by market research rms such as Forrester Research Inc. and some Indian e-commerce venture capital rms. But the Indian direct-toconsumer e-commerce market is likely to double in size to more than $3 billion within three years, and could grow to $15 billion by 2017, says Avnish Bajaj, co-founder and director of Matrix Partners India, one of Indias most established e-commerce venture capital rms. Speaking to Internet Retailer at eTailing India Expo, Bajaj says Indias online customer base of around 20 million shoppers could increase as much as 1400% and reach 300 million shoppers within 10 years. Its an exciting time to be in e-commerce in India, because even though the market has been developing since 2000 its still very early on in the development stage, he says. As a developing economy and early-stage e-commerce market, India faces several hurdles, Bajaj says. Retailing in India is fragmented and dominated by tens of thousands of mostly small proprietors.
newsline
Secure payments processing remains a challenge, order fulllment is problematic when delivering packages to the 60% of the Indian population that lives outside of major cities and few carry credit or debit cards compared with North America and Europe. On the plus side, the number of Indian consumers with a smartphone connected to the mobile Internet could approach 220 million within 10 years, Bajaj says.
A new generation
With the market years away from maturity, there is also ample opportunity for online retailers to build a lasting business, says Harish Bahl, an Indian e-commerce entrepreneur and founder of Fashion and You India Pvt. Ltd., one of Indias largest private-sale sites. Within a decade Indias online retail market could increase by as much as 50% annually, Bahl told attendees in his eTailing India Expo keynote address. Driving that growth will be the swelling ranks of educated men and women under the age of 25 with growing disposable income and more web-enabled mobile devices. Despite payments and logistics challenges, Fashion and You India has been able to build up FashionandYou.com, a three-yearold private-sale site, into a viable
e-commerce organization. Today, Fashion and You India says it has more than 3.6 million members, and FashionandYou.com generates monthly trac of about 2.8 million visits, according to web measurement rm comScore Inc. Bahl didnt disclose annual sales, but says Fashion and You is growing because the company is taking advantage of Facebook and other forms of social media to reach out to fashion-conscious online shoppers. Fashion and You, which has more than 1.1 million Facebook fans, also oers Indian consumers a diverse shopping experience, Bahl says. Fashion and You India has been able to add more inventory and grow to 1,200 the number cities across India where it makes deliveries in part because it has attracted more than $48 million in outside investment. ere are obstacles to overcome in Indian e-commerce, Bahl says. But retailers can overcome obstacles by earning trust from shoppers and that happens by giving very long-term value.
mark@verticalwebmedia.com
Want to learn more?

Internet Retailers Asia 500, out in March, is a research guide that ranks the largest e-retailers in the region according to sales. Visit www.internetretailer.com/guides for more information.
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Target hires an online chief, extends price matching and unveils web-only brands
ith its same-store sales at in December after dipping 1% in November, Target Corp. is sharpening its competitive edge by promising to match in its stores prices oered online by its competitors as well as by Targets own e-commerce site. Target, making permanent a price-matching policy tested during the holidays, promises its stores will match prices on qualifying items sold on rival e-commerce sites Amazon.com, BestBuy.com, Walmart.com and ToysRUs.com as well as on Target.com. We know that our guests often compare prices online, chairman, president and CEO Greg Steinhafel says. Sucharita Mulpuru, vice president and senior analyst at Forrester Research Inc., says price-matching is becoming a cost of doing business as retail chains ght showrooming, the trend of store shoppers checking for better deals online and buying on the web instead of in the store. But retailers should be wary of price-matching policies, which can cause them to unnecessarily forfeit prot margins, warns Susan Lee, partner with retail consultants Simon-Kucher. Price is rarely the predominant factor when consumers make their decision to purchase online or in a physical store, she says.
newsline
e brands are: Labworks for womens apparel; Zutano Blue for infant clothing; Room 365 for colorful bedding products; Boho Boutique for table linens, bedroom and bath products; Too by Blu Dot for home dcor products; and MudHut, which features bedding and other products. e web-only brand strategy is getting mixed reviews from industry analysts. Target has always done well in telling a good brand story in its stores, and this is an extension of that strategy, says Jim Okamura, managing partner of retail consultancy Okamura Consulting. But Paula Rosenblum, managing partner at research and advisory rm Retail Systems Research LLC, contends that selling online-only brands doesnt make sense for a retailer that sells primarily through stores, and that web exclusives are better suited to testing new brands before oering them in stores, or clearing out excess merchandise.
e task of making these new policies work will fall to Jason Goldberger, hired last month as the new senior vice president of Target.com and mobile. Goldberger most recently was executive vice president of home, kids, taste and business development at members-only e-retailer Gilt Groupe Inc. Before that he spent four years at e-retailer Hayneedle Inc. and eight years at No. 1 web retailer Amazon.com Inc.
zak@verticalwebmedia.com @ZakStamborIR
With a free digital music archive, Amazon undercuts rivals, again

mazon.com Inc. debuted last month a service that could be said to symbolizeand perhaps bridge generational divides in music. Amazons new Amazon AutoRip service lets consumers receive digital versions of CDs bought from the e-retailer. Whats more, the oer applies to CDs purchased from Amazon as long ago as 1998. After a CD purchase, Amazon immediately loads the MP3 les in consumers Cloud Player libraries, part of the e-retailers Cloud Drive service. Music fans can listen to their Cloud Player songs on such devices as Kindle Fire tablets, Android phones or tablets, iPhones, iPod touches and Samsung TVs, as well as via web browsers. e e-retailer says more than 50,000 CDs are included in the AutoRip service. is move represents Amazons latest push to extend its inuence in digital entertainment, and take on rivals like Apple Inc. and Google Inc. Amazon in January announced a deal with A+E Television Networks that brings the e-retailers total number of streaming videos oered through the Amazon Prime shipping service to more than 33,000. For $79 a year, Amazon Prime members get free two-day shipping plus access to that entertainment.
Six new web-only brands

Another way Target hopes to inuence shopping and purchasing decisions is through the launch last month of six brands exclusive to Target.com. Were excited about these new brands and how theyre helping us further dierentiate Target.com from other online retailers, divisional merchandise manager eresa Schmidt says.
thad@verticalwebmedia.com @ThadRueterIR
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U.S. m-commerce sales hit $24.7 billion in 2012, accounting for 11% of total e-commerce sales
hoppers using their smartphones, tablets and other mobile devices to buy online spent $24.66 billion in 2012, up 81% from $13.63 billion in 2011, research rm eMarketer says. e estimate excludes travel and ticket sales. Mobile commerce sales accounted for 11% of U.S. e-commerce sales in 2012, up four percentage points from a year earlier, eMarketer says. e research rm projects that retail sales on smartphones and tablets will continue to represent a larger slice of e-commerce over the next few years. EMarketer expects m-commerce sales to rise 55.7% to $38.40 billion this year, which it projects will be 15% of total e-commerce. Next year sales will jump another 35.8% to $52.17 billion, accounting for 18% of total e-commerce sales. Its m-commerce sales estimates for 2015 and 2016 are $68.29 billion and $86.86 billion, which it predicts will be 21% and 24% of e-commerce spending, respectively. EMarketers m-commerce forecast reects a conuence of three trends, the research rm says. First, the expanding number of smartphone shoppers whose behavior aects commerce in all channels; second, the growing number of smartphone buyers who enjoy the immediacy of purchasing through their phone and are expected to generate just over one-third of m-commerce sales this year; and third, the rapid rise in tablet shopping, which will produce the bulk of m-commerce sales over the next four years. Of the $24.66 billion in mobile sales in 2012, $13.86 billion, or 56.2%, came from tablets; $9.86 billion, or 40.0%, came from smartphones; and $0.94 billion, or 3.8%, came from other mobile devices, eMarketer says.
newsline
Of the $38.40 billion in mobile sales predicted for 2013, $24.00 billion, or 62.5%, will come from tablets; $13.44 billion, or 35.0%, will come from smartphones; and $0.96 billion, or 2.5%, will come from other mobile devices, eMarketer forecasts. EMarketer analyzed more than 120 data sets from dozens of
research sources that track commerce sales and consumer behavior to form its forecast, the research rm says. EMarketers 2012 estimate is in line with projections in the Internet Retailer Mobile 400, which found that the worldwide mobile sales of 400 leading mobile retailers, travel companies and ticket sellers totaled $12.14 billion in 2012. Combined with $13 billion in mobile commerce sales on eBay Inc., which isnt included the 400 because it is an online marketplace, Internet Retailer estimates that mobile commerce sales last year totaled $25.14 billion, not far from eMarketers estimate of $24.66 billion.
bill@verticalwebmedia.com @IRmcommerce
The Sons of Anarchy app drives sales by making its own mobile commerce rules
riving fans of the Sons of Anarchy to buy show-related merchandise is one goal of the popular FX TV shows new app. e show, which follows the lives of an outlaw motorcycle club, launched an app in December that enables consumers to purchase gear they see on screen while watching the show. ey can also take such other actions as sending a tweet or posting on Facebook, accessing new content as the season progresses, and viewing alternate scenes and mini-episodes. Consumers can also watch full episodes, read character bios, view storyboards, check out trivia questions from the upcoming board game and read facts about the series.
e app uses the gyroscope functionality in Apple Inc.s iPhone and iPad or devices using Google Inc.s Android operating system to enable consumers to tilt their devices and get a virtual tour of the Sons of Anarchy clubhouse. e app was built by Magic Ruby, a technology company that builds entertainment apps, and enables fans to watch episodes by See Anarchy on page 11
Consumers wielding iPhones buy more, surf the web more than other smartphone owners
ven though iPhones only account for 34.3% of the smartphone market, according to mobile and web measurement rm comScore Inc., most smartphonebased purchases come from shoppers using an iPhone. And Apple Inc. mobile devices also account for more than half of mobile trac. 68.0% of December 2012 smartphone-based sales at more than 300 retailers using the webhosted m-commerce platform from Unbound Commerce were made on an iPhone or iPod Touch, the vendor says. 31.4% were made on Android smartphones, 0.3% on BlackBerrys, 0.2% on smartphones running Microsoft Corp.s Windows Phone, and 0.1% on other smartphones, Unbound Commerce reports. And the December 2012 average order value for iPhone users was 20% higher than that for Android smartphone users, Unbound Commerce says. Moreover, 60.4% of December 2012 smartphone trac stemmed from an iPhone or iPod Touch,
the vendor says. 37.7% came from Android smartphones, 1.0% from BlackBerrys, 0.7% from Windows Phone devices, and 0.2% from other smartphones, the m-commerce vendor reports. So how is it that there are far more Androids than Apples, yet Apple accounts for so much more revenue and trac? e answer lies with the Apple user, who is more auent and more inclined toward to access the web from his phone, says Keith Lietzke, co-founder and marketing vice president at Unbound Commerce. Consumers
with money to spend are more likely to spend it on an iPhone, he says. Regardless of the device a consumer is using, more consumers are using mobile devices to browse the web. 23.14% of web site visits in December 2012 came from mobile devices, an 84% rise compared to December 2011 and a 283% surge over January 2011, nds a study of 2 million unique web visits across various industries by marketing and public relations rm Walker Sands Communications. Mobile is no longer an option, but a necessity, says John Fairley, director of web services and social media at Walker Sands. Companies must develop a user-friendly mobile site to keep pace with trac that consistently doubles year over year.
ANARCHY
Continued from page 10
syncing their smartphones or tablets with the show when it airs on TV or with the season four Blu-ray disc. Delivery Agent Inc. provides the shopping feature as part of its new technology that enables commerce to be added to mobile, social and web applications tied to television. Magic Ruby works with such entertainment companies as Fox Home Entertainment and lm studio e Weinstein Company. Delivery Agents clients include CBS, NBC Universal, HBO and Showtime.
katie@verticalwebmedia.com
YOU KNOW?
U.S. mobile ad spending, in billions of dollars, with percent change
55% 77% 180%
$4.06 $7.19 $11.14
DID
Key e-commerce data from InternetRetailer.com

32%
42%
$20.89 $15.82
2012
2013
2014
2015
2016
Mobile ad spending increased 180% in 2012, based largely on the success of ad formats such as Facebooks mobile news feed ads and Twitters promoted products, research rm eMarketer nds. Facebook will earn $339.3 million in mobile ad revenue in 2012; Google will earn $2.2 billion; Twitter, $134.9 billion.
Source: eMarketer Inc., December 2012
246 million
There are web domains worldwide
105 million are .com
Percentage of U.S. consumers who read e-books in
2 011 vs. 2012
addresses
Percentage of U.S. consumers who read printed books in
16% 23% 72% 67%
didyouknow?
2 011 vs. 2012
Source: VeriSign Inc., Q3 2012 data
Source: Pew Research Centers Internet & American Life Project
TOP HOLIDAY 2012 E-SHOPPING DAYS

Sales in billions of dollars
Source: comScore Inc.
$1.465
$1.362
$1.275
$1.263
$1.220
$1.219
$1.135
$1.117
$1.110
$1.051
Mon., Tues., Mon., Tues., Tues., Friday, Thurs., Mon., Wed., Wed., Nov. 26 Dec. 4 Dec. 10 Nov. 27 Dec. 11 Dec. 14 Dec. 13 Dec. 3 Nov. 28 Dec. 5
We saw brick-and-mortar stores offering to price match online competitor prices for the rst time. These retailers recognized that consumers are clearly moving towards preferring to purchase products online, and this was an effort to combat the showrooming effect.
SOREN MILLS, CHIEF MARKETING OFFICER, E-RETAILER NEWEGG INC.
Percent of customer servicerelated Twitter posts that 25 top online retailers responded to within 24 hours. Zappos and L.L. Bean responded to 100%.
44%
There is no evidence that a consumer who accesses the Amazon Appstore would expect that it would be identical to the Apple App Store.
PHYLLIS HAMILTON, U.S. DISTRICT COURT JUDGE in dismissing an Apple claim against Amazon
Source:StellaService, 2012 data
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Its a Small World
Designing sites for the smartphone screen requires a rethinking from the ground up
By Bill Siwicki
design, mobile merchants say. obile commerce site Retailers must make a host of design designers dont play by the choices, small and large, always rules. ats not because bearing in mind the mindset and theyre design anarchists, there just capabilities of the mobile consumer. arent any rules to follow because Among these choices is how to m-commerce is still so new. Crafting an m-commerce site requires a retailer to nd a design philosophy. Ice.com Inc. CEO Shmuel Gniwisch had a clear philosophy in mind for the web-only jewelers m-commerce site, which launched in November. He didnt have to look far. Gut instinct told him it should look and function as much as possible like Ice.coms successful smartphone app, which launched in 2011 and generated more than $300,000 in sales for the e-retailer in 2012. ere is no standard mobile guideline that says this is the right or wrong way to design, Gniwisch says. Were still in the very early stages of what mobile commerce should The e.l.f. cosmetics mobile home page look like. Ice.coms features rotating hero shots to advance m-commerce site today promotions and a grid of nine buttons for quick navigation. Product detail pages is rooted in the look and include a bar with a ticker (circled at right) that feel of the app, but can be keeps promotions alive throughout the site. easily changed to t what Ice learns along the way, he says. handle images, which merchants in Mobile commerce is an open m-commerce are nding hold more frontier with few design best weight than text in the highly visual practices or established rules. mobile realm. To guide the way, M-commerce is not e-commerce retailers need a coherent philosophy. and the constraints of smallsized Users expect and demand screens demand a rethinking of a mobile-specic experience,
says Tom Nawara, vice president of digital strategy and design at e-commerce and m-commerce consulting rm Acquity Group LLC. You have to think of it from the ground up. Its not just about making larger buttons, its about thinking of the context of why a user is using a mobile site versus a desktop site, thinking through where and when the users are and the interactions they will have, thinking through all this as part of the ground-up design you need.
m-commerce
Culling what works

When it designed its m-commerce site that launched in November, e.l.f. cosmetics, operated by JA Cosmetics Corp., used a design approach that cobbled together what it believed worked best on its e-commerce site and on the m-commerce sites and apps of other retailers. e m-commerce site, built in collaboration with the retailers e-commerce platform provider BlueSwitch, features a large banner of rotating hero shots on the home page that highlight current promotions (see image). Atop the rotating banner is a site search box. Below the banner is a grid with nine icons for Shop, Best Sellers, New, Videos, Tools, Gifts, Purchases, My Account and Stores.
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We studied a lot of mobile sites e bar is an easy way for people out there in our category and other to navigate through the site and the iconic brands we wanted to emulate, functionality that is most used on says Cory Pulice, vice president of our e-commerce site, Gniwisch says. e-commerce at e.l.f. cosmetics. We You cant do pull-down menus, so we took the best of what is working on did a Shop button to get a customer our e-commerce site; sections like to categories. e Bag you want to Best Sellers and Whats New are where people go most and convert most. It is a blend between everything we had seen, and the non-commerce aspects such as making sure people could check on orders, contact customer service and access their accounts. Pulice cites beauty products chain retailer Sephora USA Inc.s mobile eorts as a particular inspiration. 30% to 40% of all web trac The Ice mobile home page was designed to today at e.l.f. mirror the home screen of the Ice app. Ice went with large images on the product details pages cosmetics stems because it believes pictures communicate much from smartmore than text. phones, Pulice reports. At Ice.coms mobile site, perhaps make as accessible as possible. I put the most noticeable app-like design Wish List there to test it. All the element is the navigation bar that other things on the top navigation bar anchors the bottom of every page like Featured, New and Gifts are nice (see image). It mirrors the apps things but they are not the biggest navigation bar; similar navigation drivers on the e-commerce site. bars are commonly found in retail A look at web analytics for the smartphone apps. Ices version sites rst two months of operation contains ve buttons: Home, Shop, shows the bottom navigation bar is Bag, Wish and More. A narrower a success, Gniwisch says. navigation bar appears at the top e Shop button is the highest of the screen. visited button on the site besides
the Home button, he says. Home is No. 1, then Shop, More and Bag. Im very pleased customers are using the bottom navigation bar. Shoppers are using buttons in the bottom bar four times more often than buttons in the top bar, he adds.
Design choices
Both Ice and e.l.f. cosmetics had many choices to make as they designed their m-commerce sites. ey both stress that decisions must be made through the eyes of a smartphone userwhat will work best for a consumer given a smartphones size constraints? Ice made all of its buttons bigger on the m-commerce site compared with their counterparts on the e-commerce site so there is plenty of room for a nger to touch. It also made windows bigger, so, for example, when a customer enters an e-mail address into a window she can clearly read it. Ice also cut images from the mobile checkout page to speed page loads. Its not like shrinking something. It doesnt work that way. e objective is about simplicity, Ices Gniwisch says. What do we want to highlight when the customer arrives; then deeper into the site, how do we want them to check out? All of these things have to be thought of from the ground up. Ice designed the mobile home page to include four boxes stacked
vertically, filled with content that changes on a regular basis. The home page is clean and simple and follows the content we have on the e-commerce site, Gniwisch explains. When you see a marketing campaign from us you will typically see a campaign that includes a web push and a mobile push.
this week, Klein says. The banners allow us to easily manage marketing. Theyre like the front window of a store.
A ubiquitous ticker
Promotions affected another design element: a thin bar with a running ticker that describes current promotions. This ticker appears near the top of every page but the home page. Whatever our big promotion is for a period, it will follow you throughout the mobile experience, Pulice says. No matter where you are or where you enter the site from, you will know we have this promotion running. Another deviation from the e-commerce to the m-commerce site appears on the home page. Unlike the e.l.f. e-commerce site home page, the m-commerce site home page features the aforementioned nine-icon grid of buttons (see image, page 14). This design choice was made to keep things simple. In a mobile setting you only have so much space you can fit into the screen, so things have to be easy and quick, Klein says. In addition to the buttons, a site search box appears at the top of the page, just under the company logo. We know that people want to move quickly in the mobile world and searching is the quickest and easiest way to find what you are looking for, Pulice says. Our visits with a search convert two-and-ahalf times better than without a search. We want it to be easy when they know what they want to buy.
Hero saves the day

Like Ice, e.l.f. cosmetics wants its promotions pushed out on both the web and mobile simultaneously, and it also is using the home page of its m-commerce site to highlight special deals. But rather than have a vertical stack of boxes like Ice, e.l.f. uses rotating hero shots at the top of the page. This enables every promotion to get the top spot on the home page and doesnt require a consumer to swipe down to see more, e.l.f.s Pulice says. Web and mobile promotions are handled in an integrated fashion using a single content management system. We are for the most part a value brand and we run a lot of promotions, Pulice says. That hero banner is there to let customers know what promotions we are doing this week, anything new and relevant. We feel like it is a big part of our strategy and success on our main site so we wanted that to translate to the mobile site. Many beauty brands come out with new products on a seasonal schedule, but e.l.f. cosmetics routinely has new productswhich it manufacturesand offers. That requires a design approach that prominently features new products, says Lesley Klein, director of e-commerce at e.l.f. These rotating banners give us space to show the exciting, new items, whats special for us
Picture this
Like site search, imagery is very important in the mobile world, which relies more on visuals than text. Both Ice and e.l.f. cosmetics feature large product images
throughout their mobile sites. Large images have the biggest impact on shoppers because they showcase a product within the constraints of the small screen of a smartphone, the retailers say. A lot of consumers want to see the details of the earrings or necklaces before they purchase, Ices Gniwisch says. Nine times out of 10 when they are purchasing something on the e-commerce site they zoom in on the image. The picture, the Add to Bag, and the Ice pricethose are the three things we want to see pop when you hit that mobile product details page. If the image was much smaller it would be a tougher sell for the customer. Plain and simple, images trump text, says e.l.f.s Pulice. Web commerce is evolving to a more visual world so we wanted to make sure the product image was big enough that it made enough of an impact, he says, adding that incorporating video to tell product stories is next on his m-commerce to-do list. Were moving toward the image and video world, which we think translates better than trying to read a bunch of copy. E.l.f.s mobile design choices are paying off. In the first 20 days we have taken 3,300 orders for $100,000, Pulice says. We know the site and the design are working, people are transacting on it. Mobile commerce site design is all about meeting the unique needs of the smartphone user who is shopping on a very small screen. And that means keeping things simple, clear and usable. Mobile designers who look through the eyes of a smartphone shopper can build successful sites that please mobile consumers and sell. l
February 2013 l Internet Retailer 17
Fast Forward
No longer a supporting actor, video stars on the e-commerce sites of some retailers
By Allison Enright
C
marketing&advertising
says PulseTV co-founder Anisa oming across video on an added to PulseTV.com now have an Ali. Were not afraid to point out e-commerce site these days is original video featuring a PulseTV problems with a product. fairly routine. Of the 100 midemployee talking it up. Ali says that a mix of personality and larger-sized e-retailers tracked PulseTV is part of a vanguard of and honesty is helping set PulseTV by retail consultancy The E-Tailing online merchants that eschew rouapart from the competition, comGroup Inc., 85% used video in 2012 tine merchandising tactics in favor municating to consumers that to merchandise in some way, most of inviting consumers in with video. PulseTV is made up of real people commonly on product pages. But These merchants say video makes with a real customer-service focus. a sprinkling of e-retailers are going the products they sell, and the retailWe are a smaller company trymuch further, making video their ers themselves, come to life online, ing to compete with Amazon, Ali primary sales tool. creating a welcoming, differentiated says. We do it by our service, but Take specialty discount e-retailer environment that encourages conPulseTV.com, for sumers to buy. And some example. The e-retailer merchants are finding whose name refers to its these storytelling videos roots as a seller of video gain them wider exposure anthologies through that draws more traffic. direct-response TV They also say the details advertising, not its focus they can show in videos today on merchandisprompts fewer returns and ing with online video service inquiries because contentbegan creating consumers have a better original video content understanding of what to in mid-2011 after it saw expect, which serves to consumers clicking to drive down overall operaPulseTV.com leads with a product video on its home page. view manufacturer videos tional costs. PulseTV talked up in its Out of the ordinary daily-deal promotional e-mails. it is still not always easy. The videos When its early tests showed that make us real people to our customAnother e-commerce comvideo viewers converted into buyers ers, people they are comfortable pany with a focus on video is at a higher rate than non-viewers, associating with. DailyGrommet.com, whose 10-perthe e-retailer decided to transform For PulseTV, that comfort son production staff records five to the look of its site and put video level is helping drive sales. Ali says 10 videos every Wednesday morning front and center. Visit PulseTV.com customers today who press Play in its offices outside Boston. Daily today and where consumers might on a product convert at a rate four Grommet, an online marketplace see a hero shot photograph on times greater than those who do that specializes in marketing stylish most e-commerce home pages, they not. Sales overall in 2012the first products from small manufacturers, instead see a freeze frame from a full year the e-retailer had video as features one new video each day on video superimposed with a Play its merchandising focuswere up its home page. button. Pressing Play launches a clip 70% in dollars. Video was not the On a day in December, for featuring PulseTV staffers pointonly improvement we made, but it example, the home page video ing out a products merits or uses, has been a huge part of it, Ali says. which is hosted on and streamed and, sometimes, its failings. We And PulseTV projects sales will from Google Inc.s YouTubefealike to tell a story, and get down increase more than 50% in 2013. tured several kitchen tools from and dirty about what it is about, Approximately 70% of products manufacturer Prepara, including
18 Internet Retailer l February 2013 www.internetretailer.com
the shop owner and the consumer a exible silicone roasting laurel sales, Aksas says. We realized that online. designed to elevate a chicken or the views the videos were getting As a marketplace, Daily other food item off the bottom of a were valuable for the brands we Grommet takes a cut of each sale roasting pan. Clicking Play on the were promoting and we started sold through the site; Domeniconi home page took shoppers to the thinking more about the value declined to say how much. product detail page, where the video proposition we were bringing, he appeared at the top, followed says. We could have a mix by text that details its creation of advertising and commerce. story and a product detail tab Usually you are one or the that lists product specificaother. tions. The page also incorpoHe says the new busirated social network modules ness model is proving more and has the manufacturer profitable than the ash-sale answering questions from model. Consumers who view Daily Grommet shoppers. a video on Sharpmen.com Two Daily Grommet as it operates today convert staffers narrate and appear in approximately 3.75% of the the two-minute video. One time, greater than the 2.99% talks about how she tried average of North Americas the laurel during a cooktop online retailers as ranked ing class and how it worked in the Internet Retailer Top Consumers who view a video on Sharpmen.com convert out, noting, for example, 500 and Second 500 guides. how she tossed it in the The top videos featured roughly 3.75% of the time. dishwasher afterward and it on Sharpmen.coms home Sellers are asked to share in Daily came out squeaky clean. The video pagethere are nine that cycle Grommet video production costs, also features one of the products through at any given timeusualthough Domeniconi declined to inventors talking about his design ally run about two to five minutes say to what extent or what an averapproach and the products usefuleach and tell the stories behind the age video costs to produce. After a ness. The video further incorporates brands. These longer, more story-like video is produced sellers can use the some manufacturer-supplied media videos comprise about 30% of the video on their own web sites. assets, commonly called B-roll, like videos on the site. The videos comproduct photos and videos of its prising the remainder are generally A promotional tool creators. about a minute long and are more straightforward, with a host talking E-retailer and marketing platform Telling a good story up product features and benefits. Sharpmen.com takes a similar Sharpmen.com shoots seven storytelling approach with video. The approach is designed to tell to 10 videos a week, usually all on The site, which sells apparel, accesa layered, deep story, rather than one day, using freelance videogsories and gadgets aimed at men, simply show the product like a raphers and editors. Aksas says works with a collection of brands lot of product videos on other Sharpmen.com spent about $15,000 and manufacturers to showcase e-commerce sites do, says Joanne to buy cameras, lighting equipment their products in exchange for about Domeniconi, co-founder and chief and set up the studio space. a 40% cut in any sale, says CEO discovery officer of Daily Grommet. The storytelling approach Yazid Aksas. That cut includes video She says that helps forge a connecprompted several online media outproduction costs. tion between product creators and lets to reach out to Sharpmen.com The site, which launched as a consumers. Building rich media to ask if they could use the longer, video-driven ash-sale retailer less around commerce, and personalizing featured videos on their own sites, than a year ago, quickly morphed and humanizing this experience is Aksas says. Everyone is looking for into a hybrid e-retailer and advertisthe future, she says. Video can content, he says. Sharpmen.com ing platform when it realized it was bring products to life. It helps to now syndicates some of these videos getting more video views than direct replicate the interaction between
www.internetretailer.com February 2013 l Internet Retailer 19
to about a dozen news and lifestyle sites, including EliteDaily.com, which targets Gen Y-aged consumers and MadeMan.com, a site for guys. Aksas says sharing the content free of charge with these sites has helped increase brand exposure and draw traffic to Sharpmen.com. The brands featured in the syndicated videos also pay an additional fee, which Aksas says is low, on a cost-per-thousand basis for Sharpmen.com to syndicate their brand video in these channels.
ing video with a smartphone, then, as it saw results, invested in a better camera. An unused office became a studio. It added acoustical tiles to help audio come through more clearly, then painted the office to convey a more professional studio look. We were really hesitant to spend any money at first, but now we are spending more and budgeting for more, Ali says. She declined to say how much. Between setup, filming, editing and uploading, Ali says each video takes Operational efciency an average of four and a Joyus videos feature hosts so return customers see the same half hours of staff time Daily Grommet handles to produce. That excludes customer service inquiries personalities over and over. the time it takes to write and returns on behalf of original web copy for each product, insert, calls about the issue became its sellers. Although she declined to which the PulseTV team does first nearly non-existent. People just reveal Daily Grommets return rate, to familiarize themselves with the dont like to read, Ali reasons. I Domeniconi says video has brought product. think its the MTV mentality. it down. Our credit card processor Although the videos are largely Like any operational area, was absolutely blown away by how unscripted, the team uses the inforweb merchants at the forefront of low our return rate is, and we credit mation it learns from writing the video commerce work to contain video with that because consumers product description to help it know costs. PulseTV, Daily Grommet are getting a more layered view of what to talk about in the video. and Sharpmen.com all host and the product, she says. We always do the web copy first stream video via YouTube. PulseTV Ali at PulseTV also credits that so we understand the features, and and Daily Grommet both initially retailers video efforts for helpplaying with the product sometimes worked with online video hosting ing keep returns low. Our return makes us think of different ways vendors and say they were pleased rates have always been very low, the product can be used, and then with their services, but they decided under 2%, she says. We credit our we use that when go and film, Ali to move to YouTube because it procustomer service and how, when we says. I feel better prepared to do the vided enough of what they needed have a more complex product, we video after Ive written the deal copy and was free to use. try to show all aspects of it. or read somebody elses. PulseTV, which gradually She says video has had a greater increased its investment in video, effect on the number of calls made Changing channels has 22 employees in its offices, to PulseTVs customer service line. including one multimedia person She describes how, before the video Joyus.com, a year-and-a-half-old in charge of video and graphics, push, the e-retailer sold several specialty e-retailer backed by nearly one full-time editor and a video ashlight models that required con$8 million in venture funding, also editor who works part-time. But sumers to remove the top and pull makes video its primary selling even non-media people pitch in. out a plastic insert before installpoint. The tagline on its home page Everybody who is not camera shy ing the batteries. It included this reads: Joyus is shopping that really goes on, Ali says. information on product detail pages, speaks to you. And it does. A video The retailer first started recordand with the shipped product. Still, automatically starts rolling when
customer service agents regularly received calls from consumers saying their ashlights didnt work. Once PulseTV added a video to the product pages showing consumers that they had to remove the
consumers arrive at Joyus.com, and when they navigate to any category pageor channel in Joyus lingo such as beauty, home and lifestyle. Joyus videos feature hosts, marketed as experts in their category, so return customers see the same personalities over and over. We believe having a trusted personality helps the level of experience customers have online, and better customer experiences turn into better conversion rates, says Surj Gish, Joyus director of marketing. He says consumers who view an entire video buy more than three times more often than those who do not. Joyus, which produces up to 20 videos per week, records videos daily. 90% of all its video production work is done by in-house staff, most of whom came from the TV industry, Gish says. Videos, averaging around two minutes each, have slick production values akin to what consumers see on TV, and largely are recorded in Joyus inhouse studios, or on the streets of San Francisco. Videos are hosted and streamed
by video platform BrightCove Inc. Gish declined to reveal what it pays BrightCove, but the vendor says it structures fees according to the number of videos hosted and the bandwidth required to stream them. It charges $499 per month for 500 videos and 250 gigabytes of bandwidth to stream them, for example. Custom pricing is also available.
A magazine tie-in
The high production values of Joyus videos last year helped spur a 16-week co-branded promotion with Time Inc.s People magazine web feature PeopleStyleWatch.com. In those videos, a People StyleWatch editor showed off fashionable products that consumers could click to buy on Joyus.com. Joyus and Time shared the resulting sales revenue. Without disclosing details, Gish says the promotion, which at times included video placement on People.coms home page, drove a lot of traffic to Joyus.com. He says it was Joyus video quality that helped make that promotion happen. Studios take up about 40% of the e-retailers office space, and
the company maintains individual studios by product category. For example, theres a kitchen studio for food and kitchen product demos. Gish says Joyus.com wants each video to have the Joyus touch that helps convey its brand, and so it rarely uses manufacturer stock B-roll in its videos. Gish admits its rare for a young e-retailer to be able to invest heavily in this level of video production, and that it is probably out of reach for a lot of retailers. But folks can produce pretty good video these days with a simple setup too, he says. After starting with such a set-up, PulseTVs Ali says shes planning to expand the office space dedicated to filming video to include space to record more instructional-type videos rather the single-camera, people-focused videos it typically produces. The videos will still maintain the personable elements consumers have come to expect, she says. Were expanding videos because they work.
allison@verticalwebmedia.com @AEnrightIR
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Making Conversation
As more shoppers turn to live chat for answers, these simple tips can help turn chats into sales
By Zak Stambor
Looking beyond volume, some o matter how much informaabandoning her shopping cart and retailers report live chat produces tion retailers include on their making a purchase. robust results. Web-only diving web sites, shoppers will have She should know. The retailer gear retailer LeisurePro Ltd. says questions. And, increasingly, where last year added a bright orange Live shoppers who use live chat spend on theyre turning for those answers Chat button on the left side of every average nearly 65% more than other is live chat. 67% of U.S. and U.K. page on Whiteflash.com. When a shoppers. online shoppers used live chat last consumer scrolls down a page, the But just adding a life chat year and 21% of U.S. online shopbutton remains locked in place to module doesnt generate this kind pers say live chat is their preferred keep it visible at all times. Since of result. Retailers have to make way to reach retailers, according to doing this Whiteflash has increased strategic decisions about how they a recent survey by retail consultancy the number of chat sessions nearly present chat to web site visitors The E-tailing Group Inc. 45%, making live chat the retailers The reamost popular son is simple, customer Why shoppers prefer live chat says Lauren service format. (Consumers could select more than one response) Freedman, Getting It enables me to get questions answered immediately 79% president of The shoppers to E-tailing Group. chat pays off, It enables me to multitask 51% She says live too: 65% Its the most efcient communication method 46% chat is efficient, of customOnce I used live chat I realized how well it works 38% easy to use and ers who seek saves time. Its assistance via I receive better information than if I used e-mail 29% the customer chat complete It puts me in control of the conversation 29% service method a purchase, I dont like talking on the phone 22% that works best Bailey says. for busy shopMoreover, I can do it while Im at work 21% pers looking to adding the I receive better information than if I called 15% quickly get an Live Chat answer to their button to its Source: The E-tailing Group Inc.s Live Chat Effectiveness report question or a checkout pages customer service has helped and train their agents to maximize issue resolved, Freedman says. the retailer decrease its cart abanresults. Here are six tips for improvYou can multitask throughout the donment rate 35%. In part, thats ing results from a range of retailers processand even do it while youre because nearly 70% of its orders that have generated solid returns working, she says. come from international shoppers from live chat. That helps explain why on who often have questions about Monday, Nov. 26, the biggest online the retailers shipment and delivery 1. Highlight the live chat option shopping day of 2012 according to processes, she says. comScore Inc., live chat technolHaving live chat there to Lets start with the obvious. If ogy and customer service vendor capture customers and give them shoppers cant find a Live Chat LivePerson Inc. hosted 860,000 guidance, answer their questions button, they wont be chatting, says chats on behalf of its more than and provide anything they need to Ashley Bailey, e-commerce direc8,500 retail clients. Thats a 30% complete the shopping experience tor at diamond jewelry retailer jump from the comparable day in makes a huge difference, she says. Whiteflash.com. That may be 2011. the difference between a shopper
ops&tech
Copyright 2012 United Parcel Service of America, Inc.
3 WAYS LOGISTICS CAN HELP YOU SATISFY ONLINE SHOPPERS.

Last year alone, e-commerce grew 14% as more and more people shopped online.* According to comScores Online Shopping Customer Experience Study commissioned by UPS, you can generate loyalty by implementing simple practices.
1) GIVE DELIVERY OPTIONS 2) OFFER MORE CONTROL 3) MAKE RETURNS EASY
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Online shoppers want the flexibility to manage their deliveries. They want clear communication about delivery dates, along with alerts, confirmations and rescheduling options. UPS MyChoice
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51% of those surveyed said they have returned a product purchased online. Almost half of those shoppers would shop more often and even recommend retailers to friends if return options were easier. And UPS offers plenty of flexible return options.
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2. Know who youre talking to

When a shopper clicks to chat on Whiteflash.com, hes required to enter his name and e-mail. The retailers LogMeIn Inc. BoldChat live chat technology is tied into the retailers customer history database, and that enables a chat agent to quickly see whether the shopper is a repeat customer. If he is, the agent sees the customers past purchases, previous chat sessions and other information about his interactions with the retailer. Even if the shopper has never been to the site before, the chat session enables the retailer to establish an account for the customer so that if he returns with more questions, the agent who chats with him can view past interactions. That makes for more personal and often quickerchat sessions, Bailey says. By arming agents with a shoppers history with the retailer, the shopper doesnt have to go back and forth about her purchases or concerns that she expressed in previous chats. It also prepares agents for what the customer might
be asking about. For instance, if a live chat agent knows a customer previously asked about diamond engagement rings, the agent can be ready to answer questions about wedding bands.
3. Agents must know their stuff

79% of shoppers who said live chat is their preferred customer service method in The E-tailing Group survey said they turn to chat because it enables them to get their questions answered quickly. Thats why well-informed agents who know the retailers products are essential, Freedman says. LeisurePro, which sells diving products, only hires chat agents who are experienced divers so that theyre able to answer questions about specialized products such as hookah rigs and scuba octopuses. The retailer works with live chat provider Needle Inc. to find prospective agents from among LeisurePros more than 44,000 Facebook fans and other diving enthusiasts who have noted that interest on Facebook and other social networks.
The agents, who are employed by Needle and who can work from anywhere with a web connection and receive an hourly wage, are trained on the retailers products and internal policies. But often the shoppers chatting on LeisurePro.com are looking for more general information, such as when is the best time to dive, and thats where agents knowledge about diving and diving equipment shines, says Bill Parnes, LeisurePros general manager. They know what theyre talking about, and that comes across in the chat, he says. That helps make the customer feel comfortable about taking their recommendations and completing an order with us. That may be why 25% of shoppers who chat with one of the retailers roughly 20 agents complete a purchase on the site. Thats much higher than the sites conversion rate, which Parnes declined to share but said is typical of other web-only retailers. Web-only retailers in the Internet Retailer Top 500 and Second 500 guides had an
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IR2013
Internet Retailer Product & Showcases cover a wide variety of topics, from Analytics to Search, from Affiliate Marketing to Rich Media. And ask about the combination print and e-mail guides. Zero in on your targeted audience with high impact and great value. Contact:
info@parker-software.com l February 2013 24 Internet Retailer
Tel: (800) 680 7712
Oliver Love
Oliver@verticalwebmedia.com www.internetretailer.com 312-572-6251
average conversion rate of 2.99% in 2011. Similarly, jewelry e-retailer Whiteflash ensures shoppers get the answers they need by having seven accredited gemologists on site to staff chats, many of whom have worked for Whiteflash for years and know the jewelry e-retailers products like the backs of their hands. Given the retailers high average order value, $5,500, and the complex product it sells diamondsthat type of expertise is essential, Bailey says. Our customers are extremely educated and so we need to provide them with a high level of service, she says. That requires our agents to be able to answer any type of question.
4. Look for signals

Because SamsFurniture.com sells furniture and appliances, the types of products that consumers think carefully about before buying, shoppers often browse the site without any intention of completing a purchase online, says Seth Weissblatt, owner of the Texasbased multichannel retailer. The furniture industry is different than a lot of other forms of e-commerce, he says. When you buy a shirt online, its easy to return. But that isnt the case when youre buying a sofa that is 300 pounds and 10 feet long. When buying something so large and expensive, consumers are going to think about it, he says. But shoppers still provide clues that they have questions, and recognizing those clues can be extremely valuable, he says. For instance, when a shopper clicks to the sites Lease to Own page after spending several minutes comparing two sectional sofas, he is likely
in the final stage of his decisionmaking process, Weissblatt says. The retailer last year deployed LivePerson Inc.s live chat program, which uses an algorithm to dig into the sites Google Analytics and Omniture SiteCatalyst analytics programs to determine which shoppers might benefit from an invitation to chat. The algorithm uses data, such as how many pages a consumer has viewed, his navigation path and how he arrived at the site, to develop rules about when to invite a visitor to chat. Since it began working with LivePerson about half of the retailers chats stem from such proactive chat invitations. The retailers online chat sessions contribute about $50,000 in sales each month from shoppers chatting online, then completing a purchase in one of the retailers two stores. Weissblatt tracks by manually matching the chat logs, which include the name of the customer on the chat, to his sales orders.
would like to share their browser. After the consumer clicks an Accept button, the agent can direct him to other pages to help the shopper find the right product or site information, Bailey says. If we just sent a link they might not click, or it might open in a new window on some mobile phones, she says. This eliminates any ambiguity about what the customer is seeing. It also makes for a better, simpler experience for the shopper. We can guide them where they want to go, she says.
6. Faster is better
Retailers should make chat as simple as possible, says The E-tailing Groups Freedman. The consultancys survey found that 46% of shoppers who said their preferred way to reach customer service is via live chat said they found it to be the most efficient communication method. Efficiency is also the reason the jewelry retailer began using BoldChats software to quickly reply to questions that are asked time and again, such as how long it takes for an item to ship. The technology examines the consumers message as he types to find the most suitable responses from the retailers library of canned replies. After an agent clicks on a reply he can edit the message so that it flows with the conversation. That ensures that all of the retailers agents communicate the same information, while also shaving seconds off agents response times, Bailey says. With busy consumers looking to get answers in the most efficient and effective way possible, every second counts.
5. Make it easy
Helping a shopper find a particular setting or product can be difficult at Whiteflash.com because the retailer offers more than 100,000 diamonds on its site, each with its own product page that features details like the diamonds shape and size, as well as color, cut and clarity ratings. The retailer offers assistance by using LogMeIn Inc.s BoldChat technology that enables a chat agent to take over a consumers computer to show her particular pages on the site. The feature comes standard with all levels of the vendors offerings. When an agent wants to take over a consumers computer, he sends a message to the consumer, A Whiteflash Sales Associate
zak@verticalwebmedia.com @ZakStamborIR
Is responsive web design the answer to the multiscreen challenge?
THE ALL-IN-ONE SOLUTION
BY DON DAVIS
esponsive web design is a method of crafting a single web site so that it will render properly no matter the device a consumer uses, a desktop or laptop PC, a smartphone, a tablet, a webenabled TV, or whatever gadget comes along next. Its a new approach to web design; in fact, the term responsive web design rst appeared in 2010. e technology is not fully mature, concedes the Hertz Corp. chief information ocer Joe Eckroth, but that didnt stop the U.S. car rental company from redesigning its two consumer-facing web sitesHertz.com and car-sharing site HertzOnDemand.comusing responsive techniques. e new sites went live in November. Like many retailers turning to responsive design, Hertz was reacting to the rapid growth in the use of mobile devices by Hertz customers. 12% of Hertz trac came from mobile devices in 2012, compared with 4% the prior year. In 24 months it will be rivaling every other channel weve got, Eckroth says. e advantage of responsive design, he says, is that Hertz can deploy new features and promotions
one time to Hertz.com and know that theyll display equally well whether the customer is sitting in front of a desktop PC, lying in bed with an iPad or on the road with any of the many types of smartphones Hertz customers use. However they come to us, we want to make sure they feel its a great experience, he says. When you think about speed to market, this technology allows us to develop once and deploy across all devices. ats a powerful thing. Hertz claims to be the rst travel company to implement responsive design, and among online retailers the method is more often discussed than implemented. Bazaarvoice, the leading provider of customer ratings and reviews technology to e-retailers, sees perhaps 10% to 15% of its clients implementing responsive techniques, says Neville Letzerich, executive vice president of product. But then youve got a lot of people looking to go after it in the coming 12 to 18 months, he adds. Recognizing that trend, many providers of e-commerce technology are revising their products to accommodate responsive design. For example, the way Bazaarvoice displays customer reviews can change as the size of the users browser window changes, at points switching from two columns to one column to make them look better on small screens, in the latest version of the vendors software released in November. Retailers and their design agencies that have deployed responsive e-commerce sites have learned lessons that will make future deployments easier. eyre also nding, however, that it takes more time to design and operate a retail site using responsive techniques than a single desktop site. Some remain skeptical that responsive design is the best
solution, especially for sites that rely on captivating imagery to sell highend items. But others argue that its the way to go in a world of rapidly proliferating device sizes and types. In the long run its way easier to
RESPONSIVE
only changing based on the device the customer is using, but where the customer is and what she is doing. A dierent web site for a customer in a store versus one at home? at, some say, could be the future of responsive design.
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It works, but
For now, however, retailers deploying responsive sites mainly aim to satisfy customers using all kinds of devices, without having to maintain several versions of their e-commerce sites. For the most part, they say, responsive design lls the bill, though it also presents new challenges. King Arthur Flour Co. Inc., a manufacturer and e-retailer of our and baking products, was among the earliest online retailers to move to responsive design. e motivation was simple. More of its trac was coming from mobile devices22% by early 2012, up from 6% a year earlier and managing separate mobile and conventional sites seemed unmanageable, says Halley Silver, director of online services for the company that generated Internet Retailer-estimated online sales of $17.4 million in 2011. King Arthur Flour gradually has been, Silver says, responsifying sections of its web site for two years. A ve-month project in early 2011 led to the launch of the recipes section using responsive techniques; the e-commerce section followed in August 2012, after six months of work. Having a site that adapts automatically to consumers mobile phones and tablets has dramatically increased the e-retailers mobile sales and trac. Mobile trac quadrupled from November/ December 2011 to the same period in 2012, and sales doubled. Overall sales for the site were up, Silver says, without providing details, but there
Build once: A single site serves consumers regardless of the device they use.
build a responsive site and not have to worry about all the separate ways you interact with your customers, says Chris OConnell, director of engineering at e-commerce design agency Gorilla Group. If hes right, it will have a big impact on retailers mobile and e-commerce operations. Retailers
RESPONSIVE
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CON
More complex build: Designers have to consider how elements will render on many devices.
that have created separate teams for smartphones or tablets will want to go back to a single team, Forrester Research Inc. analyst Peter Sheldon says. At the same time more personnel may be needed to keep up the pace of adding new products or deals. Some envision broader implications. at includes web sites not
February 2013 Internet Retailer 27
This technology allows us to develop once and deploy across all devices. Thats a powerful thing.
JOE ECKROTH CHIEF INFORMATION OFFICER HERTZ INC.
was a clear shift to more purchases through mobile devices. Advocates say responsive design also will boost a retailers natural search rankings, and King Arthur Flour has seen that impact, especially on mobile devices. Visits to KingArthurFlour.com from natural search results were up over 60% overall for the rst 11 months of 2012 compared to the prior year, and 267% higher from mobile devices, Silver says. e reason that natural search results improve for responsive
sites is that a single URL KingArthurFlour.com, for examplegets credit from Google and Bing for all the links, customer reviews, social sharing and other consumer-generated activity that
occurs, regardless of the device consumers use, says Randy Kohl, senior content strategist at Gorilla Group. at would not be the case if some comments were made on a mobile phone-specic site, such as
[With a responsive site], its a lot trickier to do our day-to-day site updates and maintenance.
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How the e-commerce site of Little Black Dress displays differently on a smartphone, tablet and PC. Resource LLC designed the responsive site.
m.Retailer.com, others on a tablet site, t.Retailer.com, and the rest on the PC site, Retailer.com. Responsive design also means retailers wont post duplicate content on multiple URLs, a practice that can lead search engines to penalize sites, Kohl says. And there are fewer redirects, which must be maintained and can impact site performance. For example, Kohl says, if a consumer on a mobile site shares a link to a retailers page on Twitter.com, the retailer must create a redirect so that another shopper viewing that tweet on a PC will click to a page designed for the larger screen of a personal computer.
RESPONSIVE
Its such advantages that led Google Inc.s Webmaster blog to endorse responsive design last year as the best way to present a web site to consumers on multiple devices. While Google did not promise to favor responsive sites in search results one post noted its easier for Google to crawl a responsive site and that can indirectly help Google index more of the sites contents.
Operational issues
Search engine optimization considerations played a role in Australian retailer Kitchenware
RESPONSIVE
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Updates take time: Retailers must test and debug across many devices.
Operational efciency: Its easier to update a single site and to track analytics data.
Direct employing responsive design last year when it launched a new higher-end e-commerce site, Avago.com.au. e e-retailer saw the negative impact having separate mobile and web sites for its main site, KitchenwareDirect.com.au, had on search results. Often we would see our mobile site rank higher than our desktop site, which was not ideal, says Peter Macauley, director of the e-retailer. But the bigger problem is the complexity of maintaining separate product databases for the desktop and mobile sites. Even understanding analytics data is dicult with separate sites, he says. As far as we could see responsive design would solve those problems operationally and lead to cost savings in the long run, Macauley says. As Avago.com.au only launched late in 2012, he says it is too early to say if the e-retailer is realizing those savings. However, hes suciently convinced that the retailer plans to redesign its Kitchenware Direct site using responsive techniques this year.
However, he can also see that his design team has to be more aware when it creates a web page of how it will look on screens of dierent sizes. He says they try to use standard proportions so that, for instance, an image and block of text that appear side by side on a PC site can slide one under the other without resizing on a mobile phone screen. Its a lot trickier to do our day-to-day site updates and maintenance, agrees Silver of King Arthur Flour. She says development time increases about 25% with the responsive site, and testing and debugging time doubles. King Arthur Flour added a developer to its e-commerce team to help with the added work, she says. Still, added costs are oset by not having to maintain a separate mobile commerce site. Many retailers that have m-commerce sites have turned to vendors to create and maintain those sites. A report by Forrester analyst Sheldon in 2011 estimated the cost of hiring an outside company to build an m-commerce site at $25,000 to $200,000, with similar annual maintenance fees.
How responsive design works

In simple terms, responsive design enables a web site to recognize the device the consumer is using and present a version tailored to that screen size. But understanding the technology behind it can help retailers deploy responsive sites most effectively. A key component of responsive design are media queries, a feature of CSS3, the latest version of the Cascading Style Sheets software that dictates where elements appear on a web page. A responsive site uses a single set of HTML code for all versions, and employs CSS to determine which features will display, and at what size, depending on the size of the browser window, or viewport, the consumer is using. Some retailers, for instance, may hide the About Us link to save space on a mobile screen; Hertz Inc. makes sure that the option to view, modify or cancel a reservation is easily visible on a smartphone because thats important for travelers. Retailers typically create breakpoints, showing a limited version of the site to consumers on the smallest screens, and expanded versions to bigger screens. For example, e-retailer King Arthur Flour serves different versions for ve resolutions. One is for screens up to 320 pixels wide and another for 480 pixels wide; both are designed for smartphones, with the wider version for when the phone is held horizontally, or in landscape mode. For tablets, the retailer provides versions for 600 and 768 pixels, and for PCs at 1024 pixels. While the CSS le contains instructions for all versions, it does not download the images for all versions, just pointers to the images stored on servers, says Mariano Ferrario, director of e-commerce solutions at e-commerce software provider NetSuite Inc. Even though the CSS le is slightly larger, the difference in download time from server to the users device is imperceptible, Ferrario says. Once the media query establishes how big the viewport is, the software only downloads images suited to that screen. That way, a large image for a desktop PC does not slow the loading of a page on a smartphone. The crux of responsive design is making sure youre downloading the right amount of information at the right time, Ferrario says. Also important, he says, is to de ne image size by the percentage of a display it will occupy, such as 50% of the browser window, rather than specifying, for example, that it be 200 pixels wide. That way an image can appear slightly larger on the screen of a Samsung Galaxy smartphone than on a smaller iPhone 4, even though they both use the same CSS instructions. To avoid impaired performance retailers should bundle dozens of commonly used elements into a single server request called a sprite, says Chris OConnell, director of engineering at design agency Gorilla Group. With steps like that, a responsive design should take just a few milliseconds more than a standard site to load, just long enough for the software to recognize the device size and request the data it needs. Is that signi cant to an end user? OConnell asks. Maybe. Probably not.
Vendors respond
Sheldon also noted in a July 2012 report called Understanding Responsive Design that the default templates vendors provide with their e-commerce software may predate responsive techniques and require some work-arounds. Both Silver and Macauley had that experience. In the case of Avago.com.au, a plug-in that shows what terms are trending on social media did not fully adapt to the sites responsive approach. Silver says King Arthur Flours site search vendor, SLI Systems, had to rework its software to vary how results display depending on the device. Subsequent implementations after King Arthur
images for smaller screens, addto someone elsewhere or vary the were much simpler, smoother and ing to the work of creating each presentation based on the Likes of quicker, says Ed Homan, vice new campaign. Nonetheless, the his Facebook friends, says Dennis president of SLI. retailer will again employ responsive Bajec, chief creative ocer at Indeed, many e-commerce techniques this year as it redesigns digital marketing agency Resource vendors are updating their software OriginalPenguin.com with a focus LLC, which calls that approach to accommodate responsive design. on tailoring it to tablet users. Responsive Experience Design. He Demandware Inc. introduced a says his agency new version of is working with its e-commerce RESPONSIVE RESPONSIVE clients on that platform in DESIGN DESIGN approach, but November with declines to responsive eleSEO boost: Compromises may name them. ments built in; Hertz is that will also be Natural search rankings be required: May not already conthe case for the improve as all credit be the best choice for sidering how next version of for traf c, links, Likes retailers that want to put to employ NetSuite Inc.s responsive SuiteCommerce and reviews goes each pixel in its place, design to deliver Enterprise to one site. regardless of device. context-relevant Edition due out information to in March. customers, says CIO Eckroth. Hertz Some customization will be Another e-commerce software recently introduced a service called inevitable on responsive sites, provider, eBay Inc.s Magento, says Carrmations that lets a customer and images are a good example, its software is well suited for responabout to pick up a car choose a says Ethan Smith, creative direcsive design, and that its working on dierent vehicle or add options, and tor at Gorilla Group. He advises a visual design editor that will let a presents special oers with mobile retailers to consider whether all designer drag and drop components check-in service Foursquare for elements displayed on a PC site into a page to see how they would customers near an airport. are needed on smaller screens, and look at dierent sizes. A new verWere always thinking about to eliminate superuous elements sion of Adobe Systems Inc.s CQ5 how do we make a more intimate, whenever possible. content management system this personalized event-based experiyear will provide a drop-down menu Whats ahead ence, Eckroth says. is technolallowing designers to preview images ogy allows us to do that. on screens of varying resolution. Even as pioneers work out the If responsive design can help a kinks in early responsive sites, Picture problems consumer-oriented rm like Hertz others are looking at adapting what For all the advances, responsive sites still face some challenges. Resizing prominent fashionshoot images has proven dicult for OriginalPenguin.com, the e-commerce site for designer Perry Ellis Original Penguin brand. e site was redesigned using responsive techniques in 2010. Just making an image smaller doesnt work, says Raul Justiniano, the designer of OriginalPenguin.com. personalize its service, retailers will Our images are selling the a web page looks like not just to want to know more about how they brand, he says. Its very important the users screen but to his context. can do the same. how models are cropped, and how For instance, a retailer might show images are displayed. He frequently one home page to a consumer in don@verticalwebmedia.com has to create dierent marketing the companys store and another @dondavisIR
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Were always thinking about how do we make a more intimate,
personalized event-based experience. This technology allows us to do that.
UNWRAPPING
THE HOLIDAYS
What holiday 2012 can teach e-retailers as they prepare for a 2013 holiday shopping season with six fewer prime selling days BY KATIE DEATSCH
ike Schwarz, founder and CEO of online retailer RibbedTee Designs LLC, didnt wait for anksgiving week to launch a big holiday sale last November. Instead, he promoted a 96-hour sale starting Nov. 7, oering 20% to 40% o all items on his site. is was a winning strategy for us because it kept us from having to compete for e-mail inbox space with other holiday oers, Schwarz says. RibbedTees sales for November and December increased 22% compared to 2011, he says. Schwarz plans to repeat the limited-time sale early in November when the 2013 holiday season rolls around. And other retailers, too, likely will be looking to get an early start on the holiday season, given that this year there will be only 26 days between the day after anksgiving, routinely referred to as Black Friday, and Christmas Eve, 19% less than the 32 days in 2012. at means retailers will have to nd ways to increase their daily sales by 23% every shopping day of the 2013 season to match their 2012 sales, says Fiona Dias, chief strategy ocer for ShopRunner, a two-day shipping and loyalty program that retailers can oer customers. at is not a trivial increase in sales, Dias says. If theyre going to increase sales in a shorter season, online retailers will have to closely evaluate the strategies that helped generate a 13.7% year-over-year increase in e-retail sales in November and December 2012 to $42.3 billion, according to web measurement rm comScore Inc. A review of the
2012 season reveals a blockbuster start around the anksgiving weekend, and some retailers pushing back shipping deadlines closer to Christmas to capture last-minute purchases. Mobile shopping both consumers purchasing and researching through smartphones and tabletswas strong throughout. But there was also a lull in the middle of the 2012 holiday season that likely will have online retailers casting about for ways to keep up the pace of sales in the shorter 2013 season.
Dreary store sales
As online retailers prep for a shorter holiday sales season, at least they can look ahead to 2013 knowing that the 13.7% increase in e-commerce sales in November and December 2012 represented a substantial gain in market share from store-based rivals. Total retail sales, excluding automotive sales, increased 4.1% on a seasonally adjusted basis for November and December 2012 over the same months a year earlier, to $738.7 billion from $709.7 billion, according to estimates released in January by the U.S. Commerce Department. Taking out purchases at restaurants and bars, the National Retail Federation estimates holiday season sales increased 3.0%, including the web and stores, falling short of its prediction of 4.1%. e retailer trade association blamed consumers uncertainty over the scal cli policy haggling in Washington, D.C., for the shortfall. Non-store retail salesmainly sales by online retailers but also merchants that sell through catalogs and TV infomercials increased 11.9% to $77.2 billion
from $69.0 billion, the Commerce Department says. ( e Commerce Department reports online retail sales in mid-February.) at made the season bleaker for stores. Id estimate that the growth in online sales is taking about one percentage point o store sales growth, says Frank Badillo, senior economist at Kantar Retail, which publishes data on retail trac and spending. e disparity in web-versusstore growth showed up in reports from some retail chains. Best Buy Co. Inc., for example, says the web grew 10% over the holidays while comparable-store sales, which include web sales, were at year over year for the nine-week period ended Jan. 5. Web sales rose to $1.1 billion and comparable-store sales stayed even at $12.8 billion. at means without e-commerce, sales would
have been down nearly 1% at stores open for at least one year. December web sales for clothing retailer American Apparel Inc. meanwhile increased 59% year over year, while total comparable-store growth for the chains bricks-andmortar stores only rose 9%. While the apparel retailer, which operates 251 stores, did not provide dollar sales gures for December, based on previously released American Apparel nancial data Internet Retailer estimates the web accounted for 48% of same-store sales growth in December, even though it accounted for only about 17% of total retail sales.
e e-commerce advantage showed up in results for anksgiving weekend. Many retail chainsincluding Wal-Mart Stores Inc., Target Corp. and Toys R Us Inc.decided not to wait until Black Friday to kick o their big promotions, instead opening stores on anksgiving night. At the same time, several of them, including Wal-Mart and Macys, oered shoppers their Black Friday deals online early on anksgiving, undercutting their store sales. e strategy seemed to move more sales to the RibbedTee.com announced a holiday sale Nov. 7 via e-mail. web than to physiThe retailer says that launching a sale early kept it from having to compete with other retailers for shoppers attention. cal stores. Taking
Thanksgiving weekend
anksgiving and the next day together, store sales actually declined 0.18% compared with the same two days in 2011, says payment processor Chase Paymentech, basing the estimate on its retailer clients sales. While total transactions increased 0.15% in stores, the average ticket declined 0.33%, Chase reports, likely a sign of bargain hunting. But it was a dierent story online. For anksgiving and Black Friday online retail sales increased 29.3% to $1.675 billion from $1.295 billion in 2011, according to comScore, which makes its estimates by tracking the online activity of a panel of some 1 million U.S. consumers who agree to be tracked. Online sales for 2012 hit their peak on the Monday after anksgiving, or Cyber Monday as its often called because of the welter of web retailers promotions. E-retailers pulled in $1.465 billion in sales, making it the biggest online sales day in history, comScore says, and a 17.1% increase from the Monday after anksgiving in 2011. Overall, the ve-day period from the holiday through the following Monday produced a 21.0% yearover-year increase in online sales, comScore says.
December slump
e strong early promotions had shoppers polishing o their shopping earlier in the season than in previous years, but that had detrimental eects on December sales. A poll of 8,333 U.S. consumers conducted Dec. 4-10 by the National Retail Federation found consumers had nished 56.5% of their holiday shopping, up from 46.5% at the same time in 2011. 11.3% of consumers in the survey said they were done with their holiday shopping.
Sales for a lot of retailers were soft in December 2012 and thats because companies pushed so many promos in November, says Sucharita Mulpuru, vice president and principal analyst at Forrester Research Inc. All they did was push up transactions earlier in the season that were going to happen anyway, and they cut into their margins as well. Indeed, e-commerce growth rates growth fell to 9% the week of Dec. 3, according to comScore, well o the anksgiving week growth of 21.0%. Among the e-retailers that saw sales fall o before the end of the holiday season was omas Nakios, owner of apparel e-retailer Lilla P LLC. Nakios says sales started o very strong. LillaP.coms Black Friday trac more than doubled, helping to drive a 119% increase in revenue compared to the same day in 2011. Trac on the Monday after anksgiving rose 215% and sales increased 136% year over year. at inux in trac and sales at least partly stemmed from dealminded consumers responding to a 25% site-wide discount plus free shipping promotion that Lilla P ran Black Friday through Cyber Mondayan increase from 2011s discount of 20% with free shipping over the same time period. Sales from mid-December through the end of the month, however, slowed after the web retailer ended the site-wide sale, and from Dec. 15 through Dec. 31 fell nearly 30% year over year, Nakios says. It may be that more consumers were done with their shopping by that time, but Nakios believes economic fears over the deadlock between lawmakers in Washington, D.C., unnerved consumers and the lack of a discount prompted the drop.
Mobile growth from December 2011 to December 2012

Percent of consumers who used a mobile device to visit an e-commerce site Mobiles share of total e-commerce sales
22.7% 15.8%
% : 55 h t w Gro
14.6% 11.0%
% h: 44 t w o Gr
2011
Peter Cobb, co-founder and executive vice president of bag retailer eBags.com also says sales fell o in early December after the strong spurt around anksgiving which he calls Cyber Weekand were a bit softer than he expected, though he did not provide details. People denitely shopped during Cyber Week but it tailed o after that and then picked up the last week as the procrastinators kicked into gear, Cobb says.
2012
Source: IBM Corp.
Late shipping
Online sales did pick back up again, with procrastinating shoppers spending $3.686 billion online in the ve days from Dec. 17-21, compared with $2.412 billion during the same period in 2011 although part of the increase stemmed from the Free Shipping Day promotion that more than 1,000 e-retailers participated in moving to Monday, Dec. 17, from the previous week in 2011. Still, the heaviest online shopping days
of the season all occurred before Dec. 15, comScore reports. While early deals may have led more shoppers than usual to wrap up their shopping early, e-retailers also developed and promoted shipping strategies meant to convince late-season shoppers that they could still count on e-retailers to deliver in time for Christmas. Retailers that use eBay Inc.s GSI Commerce for fulllment, for example, were able to push their nal shipping cuto for Christmas Eve delivery to 11 p.m. Dec. 22, one hour later than in 2011 thanks to improvements GSI made to its operations during the year. Saks Fifth Avenue, meanwhile, oered free shipping and guaranteed delivery before Christmas on orders placed before 4 p.m. on Dec. 22, complete with a free gift box and decorative bow. American Eagle Outtters Inc. shipped all items for free through Dec. 20. Sears Holdings Corp. shipped items free until midnight on Dec. 20, and Macys promised free shipping through Dec. 20 and
delivery before Christmas on purchases of $99 or more. Shipping strategies have been trending in the same direction for the past few yearsfree-er and faster, says Dias of ShopRunner.
Mobile matters
If there was one feature of the season that was not up and down, it was the growing tendency of consumers to shop with their smartphones and tablet computers. Many retailers reported strong growth in mobile sales and trac this holiday season compared to 2011. IBM Corp. says mobile devices accounted for 15.8% of e-commerce sales in December 2012, up from 11.0% in the same month a year earlier. 22.7% of consumers used a mobile device to reach a retail site, IBM says, with 8.8% coming from Apple iPads, much of it at night and on weekends. Shoppers on the iPad converted at a rate of 4.8%, compared to 3.0% for mobile shoppers overall, says IBM, based on data from 500 e-retailer clients. Flash-sale retailer Rue La La says four of every 10 orders it received over the holidays came from a smartphone or tablet and that mobile sales accounted for 40% of holiday revenue. Two seasons ago, mobile accounted for only about 5% of our sales, Steve Davis, president of Rue La La, says. Our mobile growth has been astronomical. e average order value stemming from smartphones was a little lower than orders coming from computers, Davis says, and the average order value from tablets a little higher. And many Rue La La customers used all three types of devices to complete their holiday shopping. Rue La La registered a 70.1% year-over-year increase in December in shoppers accessing
the retailer from three screens and says three-screen customers are more than 500% more valuable than one-screen customers. ats encouraging Rue La La to raise its investment in mobile this year, he says. e success we experienced this holiday season and throughout all of 2012 has proven to us that this is an important channel for 2013. We will be expanding the team and aggressively testing and releasing enhancements to ensure we are delivering the ultimate shopping environment. Shoppers started consulting these mobile devices early in the season, several retailers report. For eBays marketplace, U.S. mobile sales volume rose 133% year over year on anksgiving and 153% on the day after the holiday. On Cyber Monday, eBays U.S. mobile sales volume more than doubled. Mobile commerce sales doubled year over year over for the long anksgiving weekend at Wine.com Inc. 22% of total sales for the period from anksgiving Day through Cyber Monday came through Wine.coms m-commerce site, its iPad app and
customers shopping the Wine.com e-commerce site on a tablet, CEO Rich Bergsund says. He says Wine.coms mobile conversion rate also increased 15% year over year for the weekend. Tablet sales made up about 90% of mobile sales, with two-thirds of tablet sales coming through the browser and one-third stemming from the retailers tablet app. Such strong results reinforced Bergsunds plans to focus more on mobile this year. e retailer has new mobile products in the works under the Wine.com and WineShopper brands, and it is now working with wine-related apps, such as Hello Vino, paying them aliate fees for directing trac to Wine.coms mobile site. Stronger mobile marketing likely will be on the to-do lists of other online retailers, along with nding creative ways to keep shoppers engaged beyond just the peak days of November and December 2013, and coming up with a strategy to deal with a shorter holiday season. But they better get to work. e clock is ticking.
November and December online sales

$37.17 billion
7% 13. : e g han c t cen Per
$42.28 billion
2011
2012
Source: comScore Inc.
Procurement managers are consumers, too, and they expect Amazon-like ease of use from b2b e-commerce sites
BY PAUL DEMERY
apitol Scientic Inc., as its name suggests, focuses mostly on selling things like hydrometers, optical coatings and other laboratory equipment and supplies to universities, government research agencies and manufacturers. But nowadays its also becoming common for the company to get orders from a new breed of business-to-business customers who nd its e-commerce site during a web search. With our new web site, we reach people weve never targeted before, says Tylee Van Waes, Capitol Scientics senior e-commerce marketing manager. She adds that optimizing her site for natural search,
using paid search marketing and oering promotional information via social media have helped extend Capitols market reach. Among the 70,000 product SKUs on its web site, for example, are cotton-tipped wooden applicators that a doctor or scientist might use to gather and test bacteria. But recently an association of model builders placed a large online order for the applicators to give to its members, and has since put a link on its members web site to CapitolScientic.com. ese people are great customers, but they probably wouldve never found us if not for our e-commerce site, Van
Waes says. It probably never would have crossed their minds that a scientic supplies provider would be a source for them.
A brave new b2b world

ats an example of how business is changing in the businessto-business world. e spread of user-friendly e-commerce sites that have enveloped the consumer-facing retail world is spilling over into b2b markets, as more companies recognize they must provide web sites where customers can easily research and buy, both to keep existing business and win new clients. Its not all businesses, to be sure, and its not
always easy to connect user-friendly web sites to existing business software and policies. But some companies are nding a way. Avoiding the web, many b2b experts like Van Waes say, just isnt an option for companies that want to grow instead of fall behind. Its a dierent game now, says Greg Baldwin, director of e-commerce at Noble Supply & Logistics, which sells to government agencies more than 1 million product SKUs ranging from nuts and bolts to power generators costing thousands of dollars. ese customers today require and look for companies that have a strong e-commerce presence, and we see that as an opportunity to stand out among a lot of our competitors who are still focused on catalogs. But while companies like Noble and Capitol Scientic are making aggressive moves into b2b e-commerce, many others are lagging behind. According to a study released last year by business software provider Oracle Corp., which surveyed 120 business and technology executives, only 25% of b2b companies had an e-commerce site. And just as retailers must look over their shoulders at Amazon.com Inc. and other innovative merchants, b2b players are threatened by competitors aggressively moving to the web. One of the biggest competitors in the b2b space, W.W. Grainger Inc., a provider of industrial and oce supplies, is investing $40 million over the next few years to upgrade its e-commerce technology and operations.
Amazons role
Amazon.com last year launched its own b2b site, AmazonSupply.com, where it sells everything from lab
equipment and metal materials to power tools, janitorial products and oce supplies. at alone should serve as a wake-up call to b2b sellers still selling only oine, technology research and advisory rm Gartner Inc. says. Like Amazons businessto-consumer site, Amazon.com, AmazonSupply provides a complete e-commerce merchant site, including product catalogs, search and merchandising, shopping cart, payment processing and shipping, Gartner e-commerce analysts Chris Fletcher and Gene Alvarez say in the June 2012 report, Prepare Now for the Impact of AmazonSupply on the B2B E-Commerce Market. At Capitol Scientic, Van Waes says shes wary of Amazon but also encouraged by its entry into the b2b market as a healthy source of competition. While having such sti competition is a threat, it also forces us to step up our game, she says. To eectively compete with an e-commerce powerhouse such as Amazon, we need to have a solid, user-friendly e-commerce site that truly provides something of value to the customer. Its not that b2b e-commerce is something completely new. B2b companies have been engaged in electronic transactions for decades through electronic data interchange, or EDI, providing companies with a system of electronically transmitting business documents like purchase orders and invoices and sending payments and conrmations. In a May 2012 E-Stats report, the U.S. Commerce Department noted that U.S. wholesale e-commerce sales, including manufacturers wholesale sales through branch oces and including EDI, totaled $1.42 trillion in 2010, up about 12% from
While having AmazonSupply.com is stiff competition, it also forces us to step up our game, says Tylee Van Waes, senior e-commerce marketing manager, Capitol Scientic
$1.27 trillion in 2009. (Separate direct b2b e-commerce transactions by manufacturers accounted for another $2.28 billion in 2010, up 21% from $1.89 billion in 2009.)
b2bs big promise

Non-EDI e-commerce salesthose transacted over web sites equipped with online shopping carts for processing paymentsaccounted for just less than 30% of the total wholesale e-commerce totals, rising to $402.56 billion in 2010, up nearly 14% from $354.74 in 2009, the Commerce Department reported. By comparison, it noted that total retail e-commerce sales in 2010 were $168.97 billion, up 16% from $145.26 billion in 2009. Forrester Research Inc. conservatively projects that U.S. b2b e-commerce sales will reach $559 billion this year. Even with b2bs big sales numbers, however, industry experts say the b2b e-commerce market is still in its infancy. For the sake of comparison, total wholesale sales compiled by the Commerce Department were $5.77 trillion in 2010. e question isnt whether online b2b sales will keep growing; its which sellers will reap those sales. e answer, says Forrester analyst Andy Hoar, lies within the
B2b web sales on the rise

ability of b2b companies to follow the lead of retail e-commerce sites to provide customer-friendly shopping experiences. B2b e-commerce is now being judged against a largely superior b2c buying experience, Hoar writes in the November 2012 report, rive By Adopting Proven B2C Principles. To succeed, he says, b2b sellers need to build sophisticated and compelling online merchandising techniques along with a strong breadth and depth of available products, while also making it easy to nd products and check out. At the same time, of course, b2b online sellers also need to provide features that go beyond the typical online b2c experience. Many b2b buyers negotiate contracts that provide them with a tailored set of pricing terms, for instance, and they may need to rst request a price quote and route the quotation to several managers, before placing an order. A b2b e-commerce site also needs to mesh with customers order-approval workow.
(In billions)
$559.00* $354.74 $402.56
$25.00 2000 2009 2010 2013
*Estimate Source: Reports on U.S. wholesale b2b sales, U.S. Commerce Department, Forrester Research Inc.
Special requests
B2b buyers also may want to place sizable orders for items not readily available on a suppliers site. While Noble provides about 1.4 million SKUs from more than 1,000 suppliers on NobleGov.com, its site for the U.S. Defense Department and other government agencies, there are still times when a customer needs something the site doesnt carry. In response, Noble designed on its checkout page a Request an Item window that prompts a shopper to enter information about the product he seeks, including a description, product number and name of manufacturer. e web site, which is built on eBay Inc.s Magento Enterprise e-commerce platform, was
customized to route such requests to the most qualied person on Nobles procurement sta, who searches for a supplier. e inquiring customer gets an e-mail conrmation of her request from the procurement staer, followed by an alert within days detailing the items availability, price and expected delivery date. e mostly automated process, which was developed with Nobles Magento systems integrator CorraTech, expedites what would be a much longer process if the customer had to rst request the item through a sales representative. It allows us to meet the needs of customers more quickly, and retain more sales from customers who instead might go to another web site, Baldwin says. CorraTech specializes in developing e-commerce sites using technology from either Magento for mid-size clients or hybris Software for larger ones. Although Magento comes with some b2b e-commerce functionality like contract pricing built into its technology, it also lets companies customize their web sites with technology extensions developed by outside developers to meet additional needs, Michael Harvey, CorraTech CEO, says. Noble uses tiered pricing within Magento that
allows it to provide contract pricing for individual customer groups. Working with CorraTech, Noble automated the process of placing new buyers into their proper contract group based on their e-mail address. New buyers from government agencies with .gov and other letters in their e-mail address identifying their agency, for example, can automatically see products and pricing approved for their buying group. Magento also provides an extension from technology developer Cart2Quote that lets a buyer on a b2b site request a pricing quote for a particular product order not already covered under a contract, negotiate a nal price, then click to buy if buyer and seller agree on terms. e Cart2Quote pricing quote module runs from $399 to $799; installing the Magento Enterprise platform starts at just over $14,000. Capitol Scientic, which runs its e-commerce site on a technology platform hosted on the web by NetSuite Inc., worked with web development rm 360 Cloud Solutions LLC, a certied NetSuite technology partner, to build a custom pricing application that lets each customer log on to see product pricing based on its contract terms, saving
the time of sorting through products marked at general list prices. For customers who request new price quotes on carted products but then abandon Capitols web site before receiving a price quote, Capitol is working with NetSuite technology partner Audaxium Inc. to develop an application integrated with NetSuites customer relationship management system that will automatically send repeated e-mails as necessary after the rst hour, after three days, then after a week. Each e-mail will be personalized based on the product a customer had placed in the cart, with the nal message typically oering a special promotion, Van Waes says.
User-friendlyand fast
As b2b companies seek out technology vendors to support their e-commerce strategies, they face the challenge of getting new applications to work with their existing technologies. at was the case at J.O. Galloup Co., a Battle Creek, Mich.-based unit of Kendall Electric Inc. that sells industrial pipes, valves and related ttings to utility companies and automakers in the Midwest. Several years ago Galloup launched a b2c site on the free Magento Community e-commerce platform, selling small items like thermometers and gauges to learn the basics of operating a shopper-friendly site. It then tested a b2b site, but among other problems, found it couldnt integrate well with Galloups back-end SAP nancial and inventory management software, says Gary Merritt, director of marketing for Galloup. As a result, as the site tried to pull up specic pricing gures according to each customers contract terms, pages loaded painfully slowly, taking up to 15 seconds. So when Galloup decided to build a new b2b site, it wanted to
make sure it had both a b2c look and feel while also integrating well with SAP software. Galloup chose Insite Software, whose e-commerce technology clients include manufacturers, distributors and retailers. e new b2b site, which launched last year, avoids the problem of slowly loading pages and oers a user-friendly interface, including large images of products, site search and images of related items in the shopping cart, Merritt says. It also connects with the SAP software in ways that provide important purchasing features that many customers want, he adds. A Galloup customer creating a new purchase order in his own companys software system, for example, can electronically send the purchase order to the Galloup b2b sites shopping cart, then receive the purchase order back with pricing and shipping details to route through his companys approval process. ats part of what prompted us to work with Insite, Merritt says. Our former e-commerce software couldnt pull that o. He adds that e-commerce accounts for a small percentage of total sales, but that Galloup expects that percentage to grow as more customers get accustomed to using the new site.
Tips for b2b e-commerce growth

Test the water with a consumer-facing site to learn how to make a site userfriendly with site search and navigation, images and fastloading pages Let new customers order in small quantities before committing to bulk orders Optimize a site for natural search, while also using marketing via paid search and social media Support customized pricing based on customers contracts Provide good integration with back-end nancial and inventory management software
Freeing up sales reps

Among all the advantages of working with b2b e-commerce technology, none is more important than the support it provides to teams of sales reps, b2b companies say. Most contract customers continue to work with an assigned rep, who routinely check to see that clients online orders are shipped properly, Van Waes of Capitol Scientic says. Capitol Scientic immediately assigns a rep to contact each new online customer, using the e-mail
address a customer uses when signing up for an account. Reps then learn more about a customers interests as well as if and when she needs assistance in placing orders; reps commission models take into account all of a customers purchases. Freed from handling all the details of each order that customers can process themselves online, reps can focus more on nding new customers and building customer relationships, building on their base of sales and commissions, Van Waes says. Other b2b sellers follow a similar strategy. ats one of our goals, Baldwin of Noble Supply & Logistics, says. To free up sales reps to look for new customers.
paul@verticalwebmedia.com
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3 201 ION
EDIT
Primary URL: Zappos.com Total Points 2012 Primary Merc : 435 Primary Categhandising Category: Acce ssories Share of Category Points: 219 ory: 9.31% 2012 Categ ory Rank: 1
7. Zappos.co
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PAID SEAR
Primary URL: Macys.com
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8. Macys Inc
BREAKDO 2012 Avera WN 1 ge 2012 Avera Paid Search: 62.4% ge 2012 Avera Organic Search: 37.6% ge 2011 Avera Search Traffic: 34.4% ge Search Traffi c: 31.3% NDING 2 Average mont hly Pay-Per-C $3,902,000 lick Spending 2012: Average mont hly Pay-Per-C $1,889,000 lick Spending 2011: Growth: 106.6 % Average Cost Active Keyw Per Click: $0.49 ords: 247,4 40 SPE
TRAFFIC
Total Points 2012 Primary Merc : 422 Primary Categhandising Category: Hous ewares Share of Category Points: 150 2012 Categ ory: 6.25% ory Rank: 1 2012 Avera DOWN 1 ge 2012 Avera Paid Search: 46.1% ge 2012 Avera Organic Search: 53.9% ge 2011 Avera Search Traffic: 31.2% ge Search Traffi c: 28.2% Average mont hly Pay-Per-C $2,072,000 lick Spending 2012: Average mont hly Pay-Per-C $1,190,000 lick Spending 2011: Growth: 74.1% Average Cost Active Keyw Per Click: $0.58 ords: 99,67 0
TRAFFIC
BREAK
Primary URL: Uline.com Total Points 2012 Primary Merc : 322 Primary Categhandising Category: Office Supplies Share of Category Points: 126 2012 Categ ory: 5.31% ory Rank: 3 2012 Avera WN ge 2012 Avera Paid Search: 60.8% ge 2012 Avera Organic Search: 39.2% ge 2011 Avera Search Traffic: 41.6% ge Search Traffi c: 40.4%
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The Sear ch ing M a r k et Guide

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RDS Top Keywords: Socks, Mens Shoes, Belts, Athletic Footw Pants ear, Additional Keyw ords 2: shoes swimsuits, mens , swimwear, mens clothing, shoes, kids shoes, belts, cockt ail dresses, north face jacke womens shoes t , TIONS Search Mark eting Marketing Exec Provider: In-house, Kens utive: Alfred Lin, COO/CFO hoo OPERA
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WORDS Top Keywords: Nightstands, Bedding, China Cabinets, Wedding Gifts Couches, Additional Keyw ords 2: jewel calvin klein ry, unde womens shoes rwear, shapewear, , boots shoes sleepwear, keuri , brevi g coffee make lle juicers, rs, wacoal OPERATIO Search Mark NS eting Marketing Exec Provider: In-house, iProspect utive: Kent Ande rson, President
KEY
ING Average mont hly Pay-Per-C $2,774,000 lick Spending 2012: Average mont hly Pay-Per-C $1,067,000 lick Spending 2011: Growth: 160.1 Average Cost % Active Keyw Per Click: $0.98 ords: 42,80 0
2
SPEND
Primary URL: JCPenney.com Total Points 2012 Primary Merc : 303 Primary Categhandising Category: Appa rel Share of Category Points: 131 ory: 5.50% 2012 Categ ory Rank: 2
10. J.C. Penn
TIONS Search Mark eting Marketing Exec Provider: In-house utive: Richa rd E. Uihlein, CEO
Top Keywords: Paper Produ Shipping Supplies, Tape, cts Additional Keyw 2 shelving, boxes ords : labels, custom labels , bags, wire shelving, , storage shelves, stora ge boxes, storage bins, plastic bags
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2012 Avera WN 1 ge 2012 Avera Paid Search: 61.3% ge 2012 Avera Organic Search: 38.7% ge 2011 Avera Search Traffic: 33.4% ge Search Traffi c: 28.8%
TRAFFIC
BREAKDO
Primary URL: Dell.com Total Points 2012 Primary Merc : 298 hand Personal Comp ising Category: Primary Categ uters Share of Category Points: 165 2012 Categ ory: 7.88% ory Rank: 1
11. Dell Inc
NDING 2 Average mont hly Pay-Per-C $2,741,000 lick Spending 2012: Average mont hly Pay-Per-C $1,145,000 lick Spending 2011: Growth: 139.4 % Average Cost Active Keyw Per Click: $0.54 ords: 187,0 50 WORDS Top Keywords: Curtains, Bedd Outerwear, Wom ing, Linens, Additional Keyw ens Dresses ords 2: curta swimsuits, slipco ins, bedding, window treatm vers, swimwear, kids furniture, bedding, ents, sheets, jcpenney TIONS Search Mark eting Marketing Exec Provider: 360i VP/Director, utive: Nick Bomersbac h, JCP.com OPERA KEY
SPE
2012 Avera DOWN 1 ge 2012 Avera Paid Search: 44.7% ge 2012 Avera Organic Search: 55.3% ge 2011 Avera Search Traffic: 31.3% ge Search Traffi c: 25.3% Average mont hly Pay-Per-C $1,297,000 lick Spending 2012: Average mont hly Pay-Per-C $1,287,000 lick Spending 2011: Growth: 0.8% Average Cost Per Click: $0.57 Active Keyw ords: 88,58 0 Top Keywords: Curtains, Bedd Outerwear, Wom ing, Linens, Additional Keyw ens Dresses 2 dell laptops, ords : laptop, laptops, cheap lapto p, cheap lapto dell support, ps, dell desktop comp battery, cheap comp uters, uter, notebook Search Mark NS eting Marketing Exec Provider: In-house, iPros Global Cons utive: Stuart Wallock, Sr. pect umer Online Manager, Marketing
TRAFFIC
BREAK
Primary URL: Nordstrom.com Total Points 2012 Primary Merc : 259 Primary Categhandising Category: Appa rel Share of Category Points: 96 2012 Categ ory: 4.03% ory Rank: 4 2012 Avera WN ge 2012 Avera Paid Search: 24.2% ge 2012 Avera Organic Search: 75.8% ge 2011 Avera Search Traffic: 29.8% ge Search Traffi c: 28.3%
12. Nordstro
m Inc.
TRAFFIC
BREAKDO
SPENDING 2
KEYWORD
Average mont hly Pay-Per-C $1,248,000 lick Spending 2012: Average mont hly Pay-Per-C $789,000 lick Spending 2011: Growth: 58.2% Average Cost Per Click : $0.47 Active Keyw ords: 124,9 40 Top Keywords: Womens Dress Outerwear, Shoe es, Scarves, Additional Keyw s, Bronzer 2 mother of the ords : cocktail dress bride dresses, true religi on, es, stuartweitzman uggs, cole haan shoes , , tory burch handbags mich flats, not your daug ael kors, marc jacobs, hters jeans
SPENDING 2
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1. Experian Hitwise
2 Interne t Retailer
2. ROI Revolu tion For an explanation of Total
2013 Sea rch Mar
Points, Catego ry Points and
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TIONS Search Mark eting Marketing Exec Provider: Efficient Frontier E-Commerc utive: Catharine Trible Holta e & Advertisin g, Nordstrom n, VP, Direct
www.intern etretailer.co m
OPERA
The e-commerce market is ercely competitive. Given the sheer volume of qualied trac originating from search engines, its more important than ever for e-retailers to ensure that their web sites are optimized for ideal positioning in search results. Although they spend billions of dollars on paid search marketing, many online merchants still struggle with maximizing their return on that investment and targeting the keywords that deliver the best results. With so much at stake, web merchants need a solid business intelligence blueprint to build successful search marketing strategies. The 208-page, newly updated and expanded 2013 Search Marketing Guide from Internet Retailer is the best blueprint in the industry, giving buyers an exclusive set of data on keywords, ad spending and top marketing executives to help gain a competitive edge.
The Guide is packed with all-new search marketing keyword and spending data on each of the 500 largest web merchants in the U.S., including the following:
The top 250 Paid and Natural web merchants, ranked by their position in Google searches The top 250 Paid and Natural web merchants share by merchandise category Data on the most frequently used and highest-ranking keywords by leading retail web sites How much the largest e-retailers spend each month on paid search Detailed case studies showing how web merchants solved search challenges and achieved dramatic sales gains The names of 500 executives in charge of the top retail search marketing programs and the vendors they depend on Complete details on more than 170 search engine marketing and site search solutions providers 2011 and 2012 average monthly pay-per-click spending and averasge cost per click
Order your copy today, in the format of your choicePrint, Digital or both internetretailer.com/search-marketing/
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GLOBAL E-COMMERCE
Going global isnt as hard as it looks, but e-retailers should take some basic steps to help assure their success
Sponsored Supplement
Consumers outside North America will buy $1 trillion worth of goods this year online, and there are a growing number of services that can help e-retailers reach those shoppers
ts a big world for e-retailers, what with areas, and same-day deliverya must in 90% of the worlds population living many large Asian citiesas deterrents rather outside North America, and those that than solvable problems. are not yet making the most of reachThere is a myth among many retailers ing consumers beyond U.S. borders are that international sales are too complicated, missing out on a huge opportunity. Global but that is far from the case, says Jaime business-to-consumer e-commerce sales Basagoitia, vice president and general manare projected to top $1.25 trillion in 2013, ager for TransExpress, a provider of internaaccording to the Interactive Media in Retail tional transportation and logistics services Group, a U.K.-based online retail trade to Latin America and the Caribbean. What organization. Consumers outside of the retailers need are partners that can help United States and Canada will account for them understand that overcoming the roughly 80% of those purchases. hurdles to selling internationally is easier Some of the booming overseas markets than they think. include Europe, where e-commerce sales in Localized web sites Southern and Eastern Europe are growing rapidly; Asia, where e-commerce sales Best practices for retailers selling in China alone could surpass those of the internationally start with localizing their United States this year; and Latin America, web sites. While many retailers interpret which many e-commerce experts feel is a this to mean designing a site specific to hidden gem. each country, all it really So whats holdrequires is making sure ing back many U.S. they answer questions e-retailers from cashing international shopin big on international pers might have about markets? Many believe products before they that selling internationclick the Buy button. ally is harder and more Setting up a complicated than it is. customer service center Many retailers look at staffed with agents shipping to countries with who speak the local no postal codes, of which language, translatthere are about 70, overing frequently asked coming the language, questions, offering cultural and consumer international size charts behavior differences, for apparel, and using facilitating convenient high-resolution images Max Niclas Bense, international returns, especially for and displaying multiple business development manager for customers living in rural views of products will Hermes Europe.
answer most international shoppers questions. There are a lot of things a retailer can do to address many of the local nuances of selling to international shoppers without having to create a country-specific site, says Max Niclas Bense, international business development manager for Hermes Europe, a provider of supply chain, sourcing, transport logistics, e-commerce, fulfillment and consumer goods distribution services. The key is to make sure the customer feels confident they are getting exactly what they want so they are not disappointed when the item arrives.
Address formats
One aspect of localization retailers tend to overlook is delivery. The formats used to address packages vary by countryaddresses for packages sent to Brazil require six lines versus three in the United States, for instanceand getting those formats wrong can prevent packages from reaching customers. A lot of retailers shipping to customers in Brazil will compress an address into three lines just as they do in the U.S., which can lead the shipping carrier to deem the address to be incorrect, says Charles Gaddy, business development manager, global solutions, for Melissa Data Corp., a provider of data quality and address management solutions. Germany is another country where retailers often make mistakes formatting the address, Gaddy says. German addresses require the street name to be in front of the house or building number, and
the postal code in front of the town. For example: Herr Karl Schultz, Strassa 123, D-66123 Munich. Many U.S. retailers will invert the address data to fit the U.S. address format, which can confuse German postal carriers. Getting the address right is critical to delivery and if an address is formatted wrong the item may not get delivered or the retailer may have to pay to get the address corrected, Gaddy says. Retailers not only need to step out of their domestic practices when shipping internationally to make sure they have the right address formats, but include the right shipping information, because the cost of an incorrectly addressed package can be a returned item and the loss of that customers business. using TransExpress service include the Walt Disney Co. and Universal Studios. The company also markets its services directly to consumers. The shipping process is the same, only the customer provides the retailer with the address for TransExpress warehouse at the time of order, resulting in a charge for domestic shipping. Consumers provide TransExpress with the address they want their packages sent to and TransExpress completes the order once the package is received. The company has signed up more than 600,000 consumers for its service. A lot of consumers in Latin America prefer to purchase from U.S. retailers because the prices they offer are often much less than what they can purchase the same item for locally, even after shipping and duty costs are added, Basagoitia says. One customer saved 50% off the price of a game available locally, even after shipping, by ordering it from the U.S. as local consolidation centers are often located in businesses that are open in the evening along common commuter routes, such as gas stations and train stations. Hermes, for example, operates 14,000 Hermes ParcelShops across Germany and 4,000 more in other countries, such as Austria, the United Kingdom and Russia. A European shopper can choose to have her package shipped to one of these facilities to avoid multiple delivery attempts. Consumers can also initiate returns via a Hermes ParcelShop. In countries where there can be long lines to pick up a package at the local post office, such as Russia, consolidation centers are a major convenience, because people can wait in line at the post office for as much as two hours on a given day, says Hermes Bense. Consumers can contact Hermes and arrange to have the package sent to the consolidation shop of their choice. This is especially advantageous in peak times like Christmas with record sending volumes having to be delivered successfully on time.
Minimize shipping costs

As is the case when shipping domestically, retailers want to keep the delivery costs down when shipping internationally. One solution is to partner with an international shipping company that operates a warehouse where international packages can initially be shipped in the United States, resorted, and then shipped to the customer using the destination countrys local postal service. The process can save consumers as much as 70% off the cost of international shipping through a third-party carrier such as DHL or FedEx, according to TransExpress Basagoitia. Thats a substantial savings, he says. Retailers utilizing TransExpress ship packages destined for Latin America and the Caribbean to the vendors Miami warehouse. From there, the documentation needed to clear the package through customs is completed, duty is calculated and the consumer informed of the tax due and the final shipping cost. The package is then shipped to the customer using either TransExpress own distribution network or the local postal service. TransExpress provides e-commerce support for a number of postal services in the region as well. Consumers are billed by TransExpress for the final shipping leg and pay any duty and tax upon receipt of the package. Retailers
Convenient pickup
Another way retailers can lower their international delivery costs is to work with companies that operate consolidation shops where packages can be delivered; consumers then stop by to pick them up. The service is convenient for customers who are not typically home during the day,
Emerging markets
Being a true global retailer, however, means shipping to emerging markets where the delivery infrastructure is often underdeveloped. In these instances, access to third-party data can help verify an address and a local courier networks can complete delivery. Address verification and geolocation data from reliable third parties are important capabilities to have when shipping to consumers in less-developed economies, because retailers cant always rely on the local postal service to offer address verification applications, Melissa Datas Gaddy says. Some emerging markets dont even have postal codes. Melissa Data provides retailers with geocoding tools that assign a latitude and longitude to international addresses to help identify the final destination where the package is being shipped. The information helps determine if the package is being shipped to a rural area where a delivery agent may be needed to complete the final leg of delivery.
Charles Gaddy, business development manager, global solutions, Melissa Data Corp.
Packages sent to an emerging market services to enable same-day delivery. such as India, for example, may only have Same-day delivery is a must-have in the customers name and the address of the Asian cities with populations of 10 million local post office because his residence may or more, Bense says. Retailers focusing not have an actual address. Nevertheless, the on China need to set up a local warehouscustomer expects ing system for China the package to be separate from the delivered to her. rest of Asia to meet Thats where the delivery expecgeolocating comes tations there. in to play, because Local warehouses it zeros in on the can also help lower address and helps the cost of returns, the retailer deterwhich can be very mine whether a expensive for courier with local international orders. knowledge of the Returned items residents and where can be shipped to they live is needed, the warehouse and Gaddy says. stored until another Melissa Datas order for the item Jaime Basagoitia, vice president and general geocoding tools is placed. The order manager, TransExpress. incorporate spatial can then be filled data from multiple data sources to deterlocally, reducing the retailers shipping mine the most accurate delivery point. The costs on that order, Bense says. interactive service is available via the web Latin American preferences for real-time data, or clients can submit data requests in batches. The companys One region where the risk of returns is address verification service uses data from lower is Latin America. The reason, according international postal services, as well as to TransExpress Basagoitia, is that many conmarketing companies and other third parties. sumers in this part of the world are inclined to Delivering into emerging markets is a keep an item that does not fit, such as apparel challenge, and the better the data retailor shoes, and resell it on their own or give it to ers have when it comes to validating and a friend or relative who needs it. locating addresses the better they will be Retailers need to keep in mind that able to serve their customers and reduce returns for orders from Latin America are costly returns and address corrections after a much lower than elsewhere because of package ships, Gaddy says. cultural issues, he says. Shoppers who want to return an item Delivery in Asia can ship it back to TransExpress warehouse, For many retailers looking to sell in which then forwards it to the retailer. Asia, hiring local couriers to complete the One aspect of international shipping that final leg of delivery is a necessity. Many retailers often overlook is surcharges for Asian consumers living in large cities in dimensional weight exceeding that of the Taiwan and China, for example, expect packages gross weight. Dimensional weight same-day delivery for orders placed by is an unfavorable calculation for retailers that mid-afternoon and, in some cases, as late ship lightweight items in large boxes because as 5 p.m. local time. low-density items take up a lot of space, To help retailers achieve this goal, which makes them less profitable for carriers Hermes stocks and manages local to ship. Subsequently, the carrier is unable fulfillment warehouses for retailers. The to maximize the payload of its vehicles. company then contracts with local delivery Charging by dimensional weight allows carriers to monetize the extra space taken up by large, lightweight boxes. Dimensional weight is definitely an issue and we talk to retailers about it, Basagoitia says. For our consumer customers we do have to pass along the higher costs for when dimensional weight exceeds actual weight, but we work to negotiate the best possible rates with the airlines to keep shipping costs down.
Make it easy to pay

Finally, retailers should localize payment options to meet consumers preferences in each country. Many cross-border shoppers prefer to pay with alternative payment solutions native to their country. In Russia, for example, cash on delivery is a popular payment method. In China, Alipay is widely used. Alipay is an online payment platform created by online marketplace operator Alibaba Group, Chinas dominant e-commerce company. Consumers fund their accounts using a debit or credit card, a money wire transfer or online transfer from their bank account. Retailers should offer the top two local payment options and two to three more internationally recognized options to meet consumer payment preferences, such as Visa and MasterCard or PayPal, Bense says. With more consumers growing accustomed to shopping internationally online, retailers who make the effort to understand the unique challenges of each country, localize their web sites and delivery options, offer competitive pricing and cater to consumers product preferences in each country stand to reap a windfall of new sales. Consumer behavior and cultural practices differ in every international market, even between the U.S. and Canada, and retailers need to take this into account from a marketing, merchandising and delivery perspective, Gaddy says. The retailers that drop their U.S. mindset are the ones that will get the best results selling internationally. l
Beyond Daily Deals
There are more ways for the store next door to reach shoppers via the World Wide Web
By Thad Rueter
isitors to MyRecipes.com, a site for cooking enthusiasts operated by magazine publisher Time Inc., can look up recipes that range from low country shrimp pilaf to beef tagine with butternut squash. Red dollar signs appear before ingredients that are available from local grocers, as determined by the computers location. A recent search from Chicago for the ingredients needed to make the latter recipe, for instance, showed that Garden Fresh Market, a regional chain with ve locations in the Chicago area, carried Kitchen Basics chicken stock, priced at $2.50 a carton until Jan. 22. Visitors can then add the items to their shopping lists before visiting the store. e service, powered by Grocery Server, shows how online retailers are using the web to reach nearby shoppers and consumers interested in regional and local goods. With more than 20% of searches on Google relating to location, according to the search engine, local retailers striving to compete with behemoths like Wal-Mart Stores Inc. and Amazon.com Inc. can hardly ignore the power of the web to make their sales pitches to shoppers who are inclined to shop near home. Internet marketing is a great equalizer for retailers, says Candace Corlett, president of WSL Strategic Retail, a marketing consultancy.
To reach such consumers, many local retailers are looking beyond the daily-deal programs that in recent years have inspired consumers to buy their wares but which also produced complaints from local
merchants about high costs and scant repeat business. A report late last year suggests growth rates for daily-deal programs are cooling o. While the amount consumers spent in 2012 on daily deals, ash sales and other online discounts was set to increase nearly 87% compared with 2011, consultancy BIA/Kelsey says, the year-over-year growth rate will start to slow after this year. After astronomical growth in 2012, the online deals marketplace is
showing signs of maturity, says Peter Krasilovsky, the companys vice president and program director. ere has been consolidation in the space, deal conversion rates may be suering due to overfamiliarity and the market may be near saturation. Some national chains already use the power of the web to reach consumers near their stores, including Wal-Mart, Sears Holdings Corp. and Walgreen Co. Wal-Mart and Sears both run online localized advertisingWal-Marts is through Facebook and Sears is through digital circulars and pharmacy chain Walgreens lets consumers check Walgreens.com to see what products are in stock at local stores. e drug store chain says roughly 50% of consumers who shop Walgreens.com say their next action is to visit a Walgreens store location. ats just one example of how online inuences local shopping. Indeed, while local online marketing remains in its infancy, among the main demands from local shoppers is accessing inventory and storelocation information for nearby merchants, says Steven Roth, vice president of digital strategy for e-commerce marketing rm Channel Intelligence Inc. Wal-Mart stands out for its eort to use Facebook to strengthen the bonds between consumers and their local Wal-Mart stores. Summer 2012 brought a marketing push
corporatestrategies
that enabled teachers to digitally submit classroom supply lists, and online shoppers to buy those items via the classrooms.walmart.com site. Around the same time, the chain gave consumers who Like local stores Facebook pages early access to the chains holiday-only layaway program.
he says. National shoppers tend to be more specically price-oriented, and are more dicult to convert to long-term customers.
Local technology
e image of the independent merchant anchored to the neighborhood may pull at the heartstrings of some consumers, but retailers need more than sentiment to attract shoppers to their stores. Among the most recent tools for local online marketing is a feature released last year by Google for its AdWords paid search program. e feature enables marketers to customize their paid search ads by ZIP code and insert locations and phone numbers into ad textleaving out such information is among the most common
Social jeweler
Local retailers also are using social media in similar ways. Take Calvins Fine Jewelry, a 15-year-old store and web retailer with one location in the Northwest Hills section of Austin, Texas. Owner Calvin Smith says that even with the spread of online jewelry retailing, many consumers prefer to visit local stores to see rings, bracelets and necklaces close up, and to develop a personal relationship with a jeweler. ats one reason behind the retailers Bling Blog, which oers information on diamonds, colored gems, jewelry designers, current jewelry styles and related topics. e blog takes advantage of what Smith considers the nimbleness of small local retailers. National chain competitors are not currently able to track quick changes in customer preferences and trends, and lack the exibility to quickly reach out to customers in a non-commercial way, Smith says. He adds that engaging consumers with content other consumers createCalvins e-commerce site highlights the stories and videos of local consumers who have purchased its jewelryhelps him reach younger consumers. at can be especially useful for those Austin shoppers who, holding true to the citys Keep Austin Weird values, would rather support neighborhood businesses than larger out-of-towners. Once local leads are converted to customers they are extremely loyal, and often consider more than just price when making a purchase,
failings of small, local retailers when they market online, experts say. at means a chain could show a paid search ad with the address and phone number of one store for a shopper in a particular ZIP code and information about another store to a consumer who lives a couple of ZIP codes away. Location targeting within AdWords helped us double our lead volume and cut the cost to acquire new customers in half, says Lois Erbay, marketing director for California Closet Co., a storageproducts merchant that operates an e-commerce site and 77 stores. We plan on building on that success by using ZIP code targeting to create even more locally relevant campaigns for our customers.
Selling a local connection on the web

In late 2012, a consumer in Australia ordered a campre poker from a local merchant that sells via ShopMyNorth.com. The Michigan-based e-commerce operation, located along the shores of Lake Michigan, southwest of where it seems to kiss Lake Huron at the Straits of Mackinac, uses emotive photography and other branding tactics to appeal to the tourists who ock to an area that boasts natural beauty, art shows, recreation and quaint towns. The purchase stands as an example of how local merchants, some of whom dont have their own e-commerce sites, can band together to sell their wares to consumers who are from out-of-town but who feel a connection to a specic region. The 15 or so small local retailers that sell their wares via ShopMyNorth.com were enjoying a strong end to 2012, bringing in at least 134% more revenue in November than in November 2011. The e-commerce site, operated by MyNorth Mediawhich publishes local tourism guides and operates a web sitegenerally charges retailer clients 25% of a products sale price. In exchange, MyNorth handles order processing and payment and promotes retailers products on the web site, which is built with technology from eBay Inc.-owned Magento, says Deborah Fellows, MyNorth president. MyNorth also helps to market those retailers via Facebook, Twitter and Pinterest; an e-mail newsletter with about 50,000 subscribers; and a small paid search drive via Google Inc.s AdWords program. Spending on paid search likely doesnt exceed $7 per day, or just more than $2,500 per year, she says, which means the site must focus on terms specic to Northern Michigan. Such terms include michigan store and northern michigan shopping, Fellow says. Were never going to win on consumers searching for eece jackets, Fellows says. ShopMyNorth.coms online marketing effort is aimed at a very specic kind of consumer. You can buy a candle anywhere, you can buy a cutting board anywhere, Fellows says. Our shoppers are buying those products because they feel like they are buying a piece of Northern Michigan.
E-commerce technology providers are also oering new tools for localized online marketing, including software that helps merchants without experience marketing on the web. For instance, about a quarter of the 1,300 gyms that operate under the Snap Fitness banner use software from Balihoo Inc. to manage online marketing, says Brant Schmitz, the chains online marketing manager. e service costs each location about $200 per monthfranchise owners decide how much of their marketing budgets to allocate to the programand the technology enables them to set up pay-per-click search campaigns with minimal fuss. Schmitz says the national chain provides some guidance, for instance, highlighting about 700 keywords that gym owners can protably bid on. Local managers, however, can come up with other search terms that reect their areas, such as 3rd street gym or gym and uptown. For chains, says Balihoo chief marketing ocer Shane Vaughan, the ideal mix of content on web sites is 60% national and 40% local. Some of that local content can come from blogs on the e-commerce site or via social networks; in the case of a gym, that might include putting a call out for a local run on a sunny day, he says. In fact, the local Snap Fitness managers set their social media strategies. But, Schmitz says, thats less important than Google, which accounts for 85% of the chains overall site trac.
New tools
Local and small retailers seeking to reach more online consumers and strengthen their brands also can take advantage of new online marketing services. At the end of 2012 the mass merchant e-retailer and marketplace Rakuten Buy.com launched BuyTV
Services. Based in Aliso Viejo, CA, and what we do, Hamilton says. BuyTV Services operates a recording ZoeOrganics.com mainly relies on studio where video professionals proword of mouth and product reviews in duce promotional messages. BuyTV magazines, not paid search, to attract Services employees also can travel customers. Hamilton hopes the video throughout North America to record will catch the eye of more shoppers on location, says Sheree Martin, and press reviewersand help to BuyTVs executive producer. BuyTV produce enough business to one day Services is available to any businesses justify a local store in California. that are looking to Another examimprove their online ple of a national presence, as well as e-commerce existing Rakuten player helping to Buy.com merchants, match local retailMartin says. A ers with potential spokeswoman for the customersin company says some this case, online 5,500 merchants sell shoppers looking on the e-commerce for groceriesis site, which recently Grocery Server. For Once local leads are converted changed its name to about a year and to customers, they are extremely loyal. Calvin Smith, owner, Rakuten Shopping. a half, its technolCalvins Fine Jewelry. She says BuyTV ogy has enabled works with clients grocers that range to determine pricing, with costs in size from local mom-and-pops depending on such variables as to national chains to embed oers length, location and general comwithin online recipes available plexity. On average, a 30-second to on MyRecipes.com, Recipe.com, 1-minute video can cost approxiDashRecipes.com and elsewhere. mately $1,500 and a 3- to 5-minute Grocery Server CEO Corbin de video shoot can cost approximately Rubertis says the oers reach about $5,500, she says. Merchants that 1 million consumers per day. Retailers make videos through BuyTV can pay $1 to advertise one item per link to those presentations via the day. A further cost-per-click model production arms platform on videoapplies to grocers that sell products sharing site Vimeo, embed videos online, with costs ranging from about on their own web sites, or receive 25 cents to 50 cents per item. Grocery videos on CDs or USB drives. Server aims to sign up more local Web-only retailer farmers markets in 2013, de Rubertis ZoeOrganics.com, a high-end beauty says. at would give, for instance, the and health products founded in maker of organic honey or spinach 2010, is among the initial merchants produced on a farm just outside a speto post on its site a video produced cic city a broader potential audience by BuyTV. In the video, Heather for its goods, he says. Hamilton, the retailers founder and Local still matters to consumers, CEO, explains why the company was and the web is helping to make founded and its mission, compleneighborhood merchants more menting the written Our Story neighborly. feature on the site. We wanted to thad@verticalwebmedia.com give people a peek of what we are @ThadRueterIR
All Clear
When it comes to getting packages through customs, every last detail matters
By Katie Deatsch
reg Griffiths motives were good. As an employee at a retailer that sells Jeep parts, he wanted to thank a repeat shopper for his business. So he threw a couple promotional hats, a T-shirt and a mug into the customers order. Had the customer lived in the United States the goodies would likely have been a welcome gesture. But the shopper lived in the United Kingdom. And because he lived overseas an act designed to build customer loyalty morphed into a customer service nightmare. Griffith didnt want the shopper to pay taxes or duties for the free merchandise and so he left those items off his invoice for U.K. customs officials. But customs noticed the oversight and held the package. To resolve the issue, Griffith had to send a new shipping invoice showing the items value. The process extended the time it took for the shopper to get his goods by several weeks. And the customer ended up having to pay customs and tariffs. That scenario shows that when it comes to shipping goods overseas, retailers cant let any details slip. Griffith, who is now general manager of auto parts e-retail sites PerformanceParts.com and PowerandPlay.com, learned through
that experience that what may seem harmless can get a package caught in a cross-border customs maze that can postpone delivery and upset customers. Finding ways to simplify international shipments is increasingly important as e-commerce sales outside the United States are booming. Despite a recession
according to eMarketer Inc. Shipping internationally isnt as easy as shipping to Dallas, but e-retailers willing to invest time in figuring out the intricacies say it isnt too hard. Some bootstrap it, using online resources available from the government and major shippers to cobble together the required documentation, while others implement services from online marketplaces and shipping services vendors to handle it on their behalf.
ops&tech
Going it alone
E-retailer PriveCo Inc. has sold and shipped products internationally since its 1998 launch. The e-retailer sells a range of products many consumers tend to keep private, from vibrators to Rogaine. CEO Tom Nardone says the company never specifically pursued international sales, but they came anyway. Over the years, PriveCo has shipped products to consumers in 74 countries, and Nardone says today 14% of company revenue and 13% of orders shipped come from international customers. There have been some bumps along the way, but between working with shipping carriers DHL and the U.S. Postal Service, PriveCo has been able to
in Europe, online retail sales in the European Union rose 18.2% in 2011, from $219.96 billion to around $260 billion, according to the Centre for Retail Research. Thats faster than U.S. e-commerce sales growth of 16.2% over the same period. And e-commerce sales in Latin America grew around 33.6% to $29.70 billion from $22.23 billion from 2010 to 2011,
learn the ways of international shipping. That includes knowing how to prepare packages for shipment, respecting individual countries import rules and being ready for customer service questions. All orders that ship internationally go through several checks before leaving the retailers warehouse. After the international order is picked, the order routes through PriveCos one full-time customer service staffer who verifies the destination address is valid and formatted correctly. He also pulls together all the necessary documentation, such as the packing list and commercial invoice, which is prepared using either DHLs free international shipping software or software from the USPS, and verifies that the destination country is one the State Department says is OK to do business with. Thats not to say there arent hiccups. Some of PriveCos more risqu products sold on Bachelorette.com are prone to problems with customs. Orders to customers in India, for example, sometimes take 30 days to arrive. PriveCos customer service staffer routinely responds to e-mails about delays from international customers. Customer service also has to respond to questions about taxes and duties, which PriveCo does not collect. Customers have to pay any applicable fees upon delivery.
Department offers guidance with its manual Preparing Your Business for Global E-Commerce available at http://export.gov/ecommerceguide/. The guide walks retailers through key points about merchandising, international product coding standards, taxation and tariffs, shipping rules and payments. Major shippers, such as FedEx Corp. and UPS, also have guides that walk new international shippers through the documentation they need to include. They also offer free software that can help in document preparation. A number of documents are required in every international shipment. Those include basic
example, allows kitchen knives but bans hunting knives, according to a restricted goods list maintained by mailing services firm Pitney Bowes Inc.
Navigating the maze

While the rules and regulations may seem tedious, retailers have to pay heed to them. For instance, Nathan Hartnett, an Australia-based entrepreneur who ships globally from retail sites including VurgeJewellery.com and FascinatorsAustralia.com.au, learned the hard way that retailers have to assign a value to all goods shipped abroad. He shipped a replacement wedding band to a customer in Poland when the customers ring didnt fit. The customer returned the illfitting ring and Hartnett shipped a replacement for free putting a value of $0 on the invoice so that the shopper wouldnt have to pay fees to receive the ring. Polish customs launched a lengthy investigation to see if both parties were trying to escape paying tax. Customs held the package for about a week before they accepted revised paperwork that contained values for all the items so that they could collect taxes. For retailers like Hartnett, who dont rely on help from a vendor, fees can be a major issue when shipping globally. When we ship to a new country, we contact the customer and let them know that we have not shipped products to their country before, he says. We tell them its possible there will be
Tom Nardone, PriveCo CEO:

Our opinion was somebody ordered it. Lets just ship it.
forms like a packing list, complete with the details and value of everything in the box, and three copies of the commercial invoice complete with the Harmonized Commodity Description and Code. The Harmonized Code is an international system for classifying traded products developed by the World Customs Organization. The first six digits describe the product, such as a shoe or a laptop. The last three describe the materials used. For example, a shoe might further be described as a pair of shoes with a leather upper and rubber sole. The code is necessary because various countries place restrictions on certain materials and items from overseas. Australia, for
Helpful resources
There are additional resources available for e-retailers ready to take on international shipping. The U.S. Commerce
56 Internet Retailer l February 2013
additional fees charged by customs, but we will help keep them informed.
explain why hes only had items held by customs a handful of times in the past 13 years.
Selecting a shipper
Michael Hess, founder and CEO of Skooba Design, which sells bags for holding laptops and tablets, says he initially worked with a vendor to help with international shipping but has since dropped it in favor of handling global orders on his own. He says when consumers saw the shipping fees charged by the vendor nearly all of them abandoned their carts. Skooba Design launched a new e-commerce site in 2011 using eBay Inc.s Magento e-commerce platform. Now when a shopper selects a country other than the United States at checkout, the retailer automatically changes the shipping provider to the U.S. Postal Service, which Hess has found offers cheaper international rates than UPS, which he uses for all domestic orders. Hess also offers international shoppers a 25% discount to help cover Value Added Taxes, duties or other fees that the shopper may have to pay when an item hits his home country. The site relaunch took around six months and setting up the international shipping module ate up around three weeks of that, Hess says. It was a fairly substantial project, he says. We had to tell the site that a lot of the required fields for U.S. addresses were not required for international. When preparing an international shipment, Skooba accesses and prints out a customs document from USPS.gov that includes a description of the product, its value and its country of origin. Having a streamlined process helps him avoid potential pitfalls, which helps
Vendor value
After his customs debacle with U.K. customs officials, PerformanceParts.coms Griffith decided to let a shipping service vendor do the work for him. Griffith is in the process of implementing a service from vendor BorderJump LLC that will handle services like duty calculation and shipping and logistics. Soon, when foreign shoppers check out on PerformanceParts.com and PowerandPlay.com, theyll be redirected to a site operated by BorderJump where theyll see the sales total converted to their local currency and all fees so theyll know the total cost to get the goods in hand. BorderJump negotiates fees differently for each client but, on average, charges 10% of the goods sold. When a foreign shopper completes her order, the retailer will ship the goods to BorderJumps New Jersey warehouse and BorderJump ships the goods to the consumer. From the time the package leaves New Jersey, BorderJump says it takes about three to 10 days to arrive at the customers door. Last year online marketplace eBay and Pitney Bowes joined forces to launch a service for eBay sellers to help them more easily sell to consumers in 18 countries, including Australia and Finland. The service, called eBay Global Shipping, is free for sellers. When a foreign shopper clicks to buy an item from a participating retailer, shes asked to enter her postal code. Based on her location, the service calculates the final price, including the items list price, shipping fees andimport charges. Shoppers must
purchase the goods using PayPal. From the sellers perspective eBay Global Shipping aims to make selling internationally little different from selling to domestic shoppers. The seller pays the same fee to eBay he would for a domestic purchase and he ships the packagealong with a form that contains a code, provided by eBay, that identifies the international shoppers address to Pitney Bowes warehouse in Kentucky. At the warehouse the vendor prepares the item for customs, and then ships it out. Most shoppers receive their purchase within a week after it arrived at Pitney Bowes warehouse, eBay says. The program takes the guesswork out of selling internationally, says eBay seller Kevin Clounch, coowner of Kens Sewing and Vacuum Center. When Clounch tried to sell to Canadian shoppers in 2005, about 75% of orders were refused by consumers because of duties and taxes they had to pay to receive the goods once they arrived in Canada. Clounch couldnt account for those fees, he says, because eBay didnt offer a way for him to calculate what the fees would be. And when a package got rejected, Clounch had to pay brokerage and tax fees to get it returned to him. That led Clounch to stop shipping internationallyuntil last year. Since he began using eBay Global Shipping, the retailer has grown its sales by about 30%, and about 20% of the retailers orders now come from outside the United States, Clounch says. Clounchs experience shows that selling internationally offers a huge growth opportunity. But only if merchants have systems that ensure that packages reach shoppers doors. l
Up for Grabs
What Internet-only retailers need to know to better compete for shoppers in store aisles
By Nikki Baird
this is a problem for them. And once heard a retail executive say thats why many are rushing to his mantra for customer engageput mobile technology into their ment is that every touch point employees hands so that they will with a customer is an opportunity be able to access the information for a competitor to steal his cusavailable on the Internet as they tomer away. In other words, if you engage shoppers. dont own every point of contact, As far as retail priorities go, the someone else will. Nowhere is this future of the store is among the top more true than in the store. three for nearly every store-based For example, if you search retailer that I and my colleagues for vacuum cleaner on Google speak with. But oddly, even with today, youll find about 49 million this kind of priority, consumers use results. Included in those results of mobile in stores seems to be a are brands, prices, ratings, reviews, strange blind even inventory spot at the availability at executive level store locations of store-based nearby. But if retailers. 40% you walk into of retailers a store, youll in Retail be lucky to find Systems six or eight Research options that LLCs last you can select pricing survey from, assuming reported that theyre all in they had stock. You may not seen any get a placard evidence of that has the showrooming price and a few activity, such lines of product as consumdescriptions ers checking that probably online prices repeat inforNikki Baird is managing partner at research and advisory rm from their mation already Retail Systems Research LLC. smartphones, printed on the in their stores. box. You wont That blind find ratings or spot offers a huge opportunity for reviews, guidelines on what to look web retailers to steal away one of for in a vacuum cleaner or a guide the biggest touch points in retail that can help you determine which the store. But its important to note vacuum is best for you. And please, that this is not a greenfield oppordont expect to find a knowledgetunity. Several shopping comparison able employee to help you. apps have already made significant Store-based retailers understand
58 Internet Retailer l February 2013
mobile inroads, and many storebased retailers are not sitting idle, either. To win at the shelf, web retailers need to hit a fairly high standard right out of the gate with competitive product research tools and steal-the-sale opportunities.
Product research
While most of the brouhaha in retail around mobile has focused on showroomingthe practice of using a retail store to look at an item that a consumer ultimately purchases onlinein reality consumers conduct a lot of product research that does not focus on price. Retailers that choose to go after ownership of this contact point should keep in mind that there are strong contenders that many consumers use when researching at the shelf. Whether you choose to go it alone, or employ a strategy that takes advantage of aggregators like ShopSavvy Inc. or eBay Inc.-owned RedLaser, youll need some basic capabilities: Search and browse Bar code scanning is a necessity. It is available across most shopping aggregators, alongside keyword search. Beyond that, apps from Amazon.com Inc. and Google Inc. offer image search, which enables a consumer to run a search using a photograph taken with her smartphone camera. But when it comes to products, that image search leaves a lot to be desired. On a recent store visit, pictures of toasters on the shelf yielded matches to things like blade servers, if the app
websellingviews
found anything at all. But once an item or category is searched, how search results display on a smartphone screen can also differentiate one retailer or aggregator app from another. For example, an app like eBays Milo (in the process of rebranding to eBay Local) excels in displaying a concentrated amount of relevant information in a very small space. It conveys a lot of information to consumers without making them take extra steps. Product details Product detail pages are also an opportunity to provide a differentiated experience. In the grocery category, apps like Fooducate and ShopWell do a good job of providing more information than consumers typically get from a product box, including nutritionist-driven health ratings, alerts against a list of allergies or specific requirements like no more than 6g of sugars. Nearly every app offers some kind of ratings and reviews functionality. Product locator For retailers with web and store operations, a map-based display of store locations where the item in question can be found is a basic requirement for product research. To differentiate here, some kind of guidance on inventory availability would be needed, even if its as simple as yes/maybe/no. Price comparison Of course, price comparison cant be ignored, especially when that is the place where online retailers tend to have an edge over storebased competitors. But shopping aggregators are learning that consumers arent using them how youd expect.
For example, mobile shopping app provider ShopSavvy reports that only 30% of first-item scans lead to the shopper purchasing outside of the store she is standing in. Of that 30%, about half take place at another local storenot online. Where online retailers make the most competitive inroads is on the second item scanned. Half of those wont typically convert in stores, and these have a much higher likelihood of converting online. When you think about the type of behavior behind this result, it starts to make sense. Retailers understand which items are most important to them competitively and they stay very sharp on those prices. But they try to make up that margin with add-on items that surround that main purchase. In the vacuum cleaner example, the store-based retailer might competitively price the vacuum cleaner, but lose out when the consumer compares prices on attachments or filters. For online retailers, these add-on sales may be more fertile ground for winning over the storebased shopper.
of the three on display was out of stock. A quick search on Amazon for toaster yielded more than 4,000 results. Narrowing my search to 4 slice toaster still yielded 1,117 results. Thats versus the three that I could actually buy in the store. Does Target only sell four toasters online? Actually, a search on Target.com shows they sell 141 toasters. But were any of those offered or communicated to me in store? No. With the mobile web, theres nothing preventing a customer from seeking alternatives. In focusing on in-store inventory the store retailer leaves the door open for another retailer to walk in, offer those alternatives and steal the customer. For web retailers, a word of caution: This is where search results and filtering capabilities become differentiators. It doesnt do any good to overwhelm a shopper by offering 1,117 four-slice toasters if she cant easily narrow down those choices to the one she wants to buy.
Bringing the A-game

Store-based retailers are rapidly building larger assortments online, with far more information about those products than will ever appear on store aisles. But that bias toward getting the consumer to buy the product thats in stock and on the shelf is holding them backand it poses a major opportunity for more enterprising retailers to come in and steal those shoppers away. Store-based retailers wont take this encroachment lying down for long. For e-retailers, all that means is if you want to take on retailers at the shelf and you bring your A-game, theres a real opportunity today. l
Steal the sale

Retailers can win over shoppers at competitors stores by offering alternatives to a poor in-store selection. This is also the area where stores fail their customers. The point of view of store retailers is simple: I have the product. Its right here, just buy it! But the reality of what shoppers want is different. Lets go back to the toaster example. On the day I shopped, my local Target store had four toasters for sale. Only three of them were on display, a fourth was stocked on the shelf but not displayed, and one
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Oliver Love oliver@verticalwebmedia.com
Internet Retailer Social Media 300 . . . . . . . . . . . . . . . . . Inside Back Cover

http://www.internetretailer.com/social-media-guide/
Melissa Data Corp. . . . . . . . . . . . . . . 47 www.melissadata.com/global NetSuite, Inc. . . . . . . Inside Front Cover www.netsuite.com/suitecommerce NetSuite, Inc. . . . . . . . . . . . . . . . . . . . . 5 www.netsuite.com/suitecommerce Speed FC . . . . . . . . . . . . . . Back Cover www.speedfc.com TopTenWholesale.com, JP Communications, LLC. . . . . . . . . 39 www.toptenwholesale.com & www.manufacturer.com TransExpress . . . . . . . . . . . . . . . . . . . 49 www.transexpress.com UPS . . . . . . . . . . . . . . . . . . . . . . . . . . 23 www.thenewlogistics.com/retail WebLinc . . . . . . . . . . . . . . . . . . . . . . . . 1 www.weblinc.com
E-commerce will account for 9.9% of retail purchases by 2017

U.S. consumers spent $317.9 billion on online retail and travel purchases last year, which was 7.4% of total retail spending, an increase from 6.8% in 2011, according to the 5th Annual Online Retail Payments Forecast 2012-2017, by nancial services research and consulting rm Javelin Strategy & Research. By 2017 that percentage will hit 9.9% as consumers spend $458.0 billion online, Javelin predicts. Despite the gains, 12% of shoppers still dont shop online. The single biggest reason for not shopping online, cited by 32% of those who dont, is that they want to purchase in person so they can see merchandise and avoid returns. But many others are concerned about security. For instance, 26% said they are concerned that personal information will be used fraudulently.
E-commerce takes a bigger slice of the overall spending pie

(Online retail and travel payment volume in billions of dollars, and percentage of total sales)
websellingstats
$318 $282 $202 $215 $234

7.4% 6.8% 5.7% 5.0% 6.0%
$352
$379
$407
$432
9.5%
$458
9.9%
8.0%
8.5%
9.0%
2008
2009
2010
2011
2012
2013*
2014*
2015*
2016*
2017*
*Forecast
Shoppers use their mobile devices to buy online

2012 U.S. online retail spending:
Whats keeping shoppers from buying online

(Respondents could select more than one response)
Prefer to see the merchandise and avoid returns Concerns that personal information will be used fraudulently Concerns that credit or debit card data will be used fraudulently Shipping costs are too expensive Concerns that personal information will be sold to other merchants Cant afford to make online purchases Dont have a credit or debit card
32% 26%
$317.9 billion
Mobile online retail payments
21% 20% 18%

Source: Javelin Strategy & Research
$20.3 billion
Traditional online retail payments
Thats 6.4% of all online retail purchases
15% 13%
Prefer to use a more anonymous payment method than is typically offered online
$297.6 billion
11% 4%
Other
Just Published!
Proudly Introduces:
The Denitive Competitive Data Resource That Ranks the E-Retailers Charting New Frontiers in Social MediaDerived E-Commerce and Marketing
For many online retailers, the world of social commerce is in many ways something of a Wild West, with few universal marketing best practices and a great deal of guesswork involved on what it takes to achieve a return on investment in social platforms. Successful retailers are ones that can leverage their social media presence to drive retail sales and enhance the customer experience with meaningful content and connectivity. So who are the pioneers in the quest to stake claims in this ever-growing e-retailing territorythe retailers who are Tweeting all the way to the bank? Internet Retailer delivers the rst publication of its kind with the debut of the 2013 Social Media 300, the new research guide that comprehensively ranks and analyzes 300 North American e-retailers presences on the major social networks (Facebook, Twitter and Pinterest) based on percentage of site trafc and sales from those social media channels. At 208 pages, the Social Media 300 delivers never-before-published data, including the following: Ranking of online retailers by 2012 trafc percentages from the top three social media channels 2012 social commerce sales gures Average conversion rates and order values for visits from social networks An engagement analysis of merchants fans and followers i.e., how often consumers respond to, share and take action on the content e-retailers push out on social networks Detailed case studies on the leaders in social commerce A comprehensive vendor section that proles the leading social consultants, platform providers, app developers, analytics and other social networking and marketing providers How-to articles from social platform and analytics providers, as well as consultants and other social commerce technology companies
Social Media Commerce and Marketing by the Numbers
4.25%
$1.6 billion
How much trafc, on average, did Social Media 300 retailers generate from social networks? 2012 social commerce sales of the Social Media 300 How many Social Media 300 retailers are active on Facebook?
100%
Visit internetretailer.com/social-media-guide/ to order your print or digital copy of The Social Media 300 today!

Internet Retailer 201302

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FEBRUARY 2013 www.internetretailer.

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