Hello everybody, it has been a while since my last post. There are two main reasons: I was on vacation all August and I was very busy with my jog all September with little time for my family so I decided not reduce that time more by working on the blog. Now, it is getting better and I have a bit more time.

I decided to start posting again with an article about conversion rate. This is an highly important subject for any online business because this is the best way to increase any online business. It commonly accepted that conversion rate in the industry is between 2% and 3%. At a first glance, that number makes me desperate. Only 3% of the traffic of any web site generate a sale! But if you consider it, I find it very interesting: It can only be better.

The fact is that increasing conversion is a very difficult and complex task to achieve. The biggest problem in my point of view is that there isn’t only one thing to do to increase conversion but a multiple tasks to be performed, sometimes in parallel, sometimes one after the other. I am not pretending giving any “magic” in this article, just some ideas and most of them are obvious ones.

Before we start our journey, let me add that increasing conversion rate is not a task which should be done ones and then forgotten, it has to be a continuous activity otherwise the benefits won’t be visible.

I would say that there are four main activities to be performed in order to improve conversion: Analysis of your website, users and traffic; optimization of your website and processes and measurement of success.

1. Analysis

This is obvious that the first step to increase online conversion is to understand your business and your customers as well as defining what you want to achieve. And this understanding can only be done based on analyzing your business.

Before you start your analysis process, you should define clear goals. This is like athletes, they need to have clear objectives in order to adapt their preparation and be ready to succeed. Take a piece of paper and define the major objectives you want to achieve: Do you want to increase your sales in a given category of customers or a specific category of products? or do you want to increase the number of customers subscribing to your newsletter? Defining your objectives will help define the strategy to achieve your goals.

To be able to measure the success, you should also define your KPIs (Key Performance Indicators). KPIs shouls be some easy figures to monitor which will help your understand if your strategy is successful. Here are some examples of KPIs:

• Traffic should increase by 3% year over year
• Attach rate (percentage of accessories sold with a parent product) should be at least at 6%
• Conversion rate should be 5% within 12 months
• Marketing campaign conversion rate should be 15% in 6 months

As you can see, this is not rocket science, these are clear and simple objectives. The more these KPIs are simple and understandable by everybody, the more chance you have to monitor them on a regular basis.

When you have clear objectives, this is the right time to analyze your customers and their behavior. You can use any analytic tool in order to see how your customers behave on your web site. Are they always leaving on the product page, do they add products to the shopping cart but they never check out … This is key to identify where your customers are leaving your web site because you will understand on which part of your web site you will have to focus your efforts. I know this is obvious but how many of us do it on a regular basis?

You should finish that step with a list of things to improve. Of course, you will probably end with dozens of needed improvements and nobody has unlimited resources. This why it is important to categorize improvements by priority.

The last step in my opinion would be testing some improvements on your web site. The best method in my point of view is using A/B testing and analyzing the results on a web analytic tool. It doesn’t mean that you have to develop all your ideas completely but you can try some little change, not consuming lots of resources and see how your customers react to changes.

On key rule is that you should do testing with an open mind. That means that on the paper, an idea could seem perfect and brilliant but the results could show very bad results. Don’t think your idea is good but your customers are stupids, this is probably because you did not consider every aspects of the problem. And you customers are always right, they are the one paying

2. Optimization

When the analysis phase is finished (including of course some testing to validate some ideas), this is the time to make the most of the data collected. This is also the right time to think about your overall strategy. Here are some clues where you could optimize the conversion.

Stay in touch with your customers by creating a mailing list. You could use that list to inform your customers about new products, promotions or events. It is highly important to offer different ways to subscribe to a newsletter like having a lightbox displayed at the end of the checkout process or a box always visible inviting your customers to subscribe to get special deals.

You second focus should be to reduce the number of customers abandoning the checkout process. As this is part of the first phase, you should now have understood where, when and why customers are leaving during the checkout process. It could be that your force your customers to register on your web site: this makes sense if you have a strong email marketing strategy but if you don’t use that emailing, why bothering them with registration. Or it could be that your checkout process is unclear or too long: A good way is to have a maximum of 3-4 steps with a progress indicator so that your customers can visualize where they are at a given step. Finally, your basked should be easy to use and clear: delivery cost should be visible, quantity and link back to the product page should be there as well and also, this should be easy to remove a product or change the quantity. I have seen some basket where it is nearly impossible to change anything in it: this is a good way to loose customers as nobody would like to read the help manual to remove a wrong article.

3. Measure the results

The last and final stage is to measure the success of your improvements. The best way is to compare analytic data over a similar period of time as well as during a similar business activity. It doesn’t make any sense to compare one month of sales conversion one during July (assuming a low period) and the other one during December (assuming peak season). Of course, you should measure your success based on the KPIs defined during the first stage.

Another good way to measure is to perform regular customer’ surveys. You can use the same survey and run the survey on 25% of your customer base every quarter. That means that every customer will be requested to answer a survey once a year.

I tried to keep the article as short as I could but there are a lot of things to say about conversion. If you are interested in getting a more detailed article, let me know and I will spend some time working on a longer and more detailed version.

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I bought an iPad to see if this a good device to manage the blog while I am abroad. At a first glance and after 10 minutes of usage, i can say that the screen is wonderful and the keyboard is very easy to use in landscape mode. I already saw a problem with word press as this is impossible to use the HTML visual editor. I have to use the HTML editor otherwise this is impossible to enter any text.

That said, there are also some other limitations. As you probably noticed, there is no picture attached to that article. The reason is that I haven’t found yet an application which could be used to work on pictures.
Another limitation is that Safari doesn’t allow multi tab navigation, you have to switch from one instance to another. This is very annoying in my point of view.

Otherwise, it seems like a good device to update the blog from time to time but I don’t think I will write very long articles.

What’s your experience with the iPad? Did you try to use it from professional purposes?

PS: I finally found a way to upload pictures but it requires uploading the image manually from the iPad to the blog via FTP. Not that easy, isn’t it?

PS2: There is also an iPad app for WordPress which seems very easy to use. I’ll give you more feedback when I would have spend more time using it.

Be informed about major articles & White Paper releases by subscribing to the newsletter. You can always easily unsubscribe if you want.

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This week’s interview takes place with Sam Feuer, CEO of MindSmack. I came to know Sam from one iPhone app (see my post about Shopping mall applications) I downloaded. I found the app very interesting and promising, especially for retailers.

I though it would be a good idea to interview Sam and see what he thinks will be the future of this type of applications based on his experience and strategy to develop his own product called FastMall.

Olivier – Can you tell us a bit about you, your background?

Sam – I’ve always been fascinated with the Internet and envisioning amazing possibilities for web and mobile. In 1998, I began working for several successful Internet startup companies. Within one year, I branched off to begin my own advertising and design agency in New York City.

The company quickly experienced its ascent from an entrepreneurial venture into the global powerhouse of cutting-edge design, animation and programming and mobile that is MindSmack.com, MindSmack.tv and FastMall.com

My tenacious sense of business exemplifies the entrepreneurial desire to get things done. Clients include Citigroup, Time Warner, Pepsi, Palmer’s, and 100’s of other clients all over the world.

What is the main business of your company?

MindSmack.com designs and develops elite websites and mobile applications including the FastMall app which is the world’s only true turn by turn navigation system without the need for GPS.

And your role in your company?

President/CEO

What problem does your company face?

We love to take on challenges that bend the limits of creativity and technology. That is what drives us daily.

Did you find innovative solutions to these problems?

FastMall and the MapOS technology we have patent pending is the technology that can be utilized throughout the world to navigate the indoors (and outdoors) without the need for GPS and once you download the map to your device in our FastMall 3.0 version which is launching in the next month, you do not even need a signal (can be in airplane mode for example) and our navigation still works.

Can you tell us how you see the future of mobile commerce, especially what benefits could get retailers from mobile commerce?

The benefits are endless and needed to revamp and grow brick and mortar back to where it should be and beyond. Imagine your at the mall and you check into the GAP and then are asked if you would like a deal at the GAP. That deal can be/will be an exclusive deal for that user because the GAP knows that user is standing at or near their store. Beyond that using AR (see my post about Augmented Reality), 3D and other new technology we are working on we intend to bridge the gap between virtual and real world as a shopping platform and also technologically utilizing our patent pending offline mapping technology to map anywhere in the world without the need for an Internet signal.

What are your new strategic priorities for the next months to grow your business?

Growing FastMall, MapOS and MindSmack and ensuring the education of what our MapOS technology is really all about and how it effects everyone who uses a mobile device anywhere in the world.

FastMall is an iPhone app but how are you planning to address all other smartphone’ manufacturers & deploy FastMall on their platform?

We are nearing our Android launch which will be followed by Blackberry and then Windows 7. Beyond that we are looking at options based on phone quality and demand.

Are you planning to add marketing capabilities into FastMall like targeted marketing campaigns?

10000000% yes. Targeted, exclusive, niche advertisements that really help you save money where you stand.

As you have retailers as customers, can you tell us what added value your company brings to them?

I do not believe you can offer a greater experience or value to your potential customer then FastMall. Lets show users how to find how store, take them there turn by turn, let them shake their phone to find then be taken to the restroom and then take them to the restaurant or movies. Along the way lets give them savings and benefits for using the application and being a part of a true experience.

Finally, can you tell us about your passions in life?

My 2 children and my wife are my passions, I do all of what I do for their lives and to hopefully benefit the people of the world in some very positive way. I just did a radio show for LARRS.org in Los Angeles, CA and we discussed the benefit of FastMall and MapOS technology for anyone in a wheelchair or a parent with a stroller because we have multilevel guidance using our elevator only button as well as escalators only. Our app is also being optimized for the blind so voice commands on the device can guide the user where they need to go confidently.

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Since Tuesday July 27th 2010, Amazon offers to their customers the possibility to link their Amazon’s account to their Facebook profile. That’s a great move but what are the reasons behind it? In a previous post, I presented 3 easy tips to leverage Social Networks. One tip was to use Facebook login to access retailers’ websites. Obviously, Amazon went one step further to offer a better social experience to their customers.

We will see first what are the new functionalities offered by Amazon with the Facebook integration and then I will try to see what are the benefits for Amazon, Facebook and the consumers. To conclude, I will try to predict the future

What are the new functionalities offered by Amazon?

The first obvious change is that you know see your Facebook profile picture on Amazon web site on the new “Amazon Facebook Page”. You can also see, based on your Facebook Fan pages what are you favorite music or movies. In my case, I am a fan on Facebook of a French Rock band called “Noir Desir” and Amazon was able to identify that page a music band & link it to my Amazon Facebook page.

The second change is that I can see my Facebook friends’ birthdays, of course with a suggestion of gifts for my friend (based on Facebook favorites and likes of each friends). The recommendation system works well when your friends have Amazon wish lists, otherwise, it doesn’t work very well.

Then, you have a list of popular items among my friends. It can be books, music or DVDs. Very interesting as I rely on some friends who have the same interest than me to buy books or music.

Finally, Amazon proposes you some recommended product based on your Facebook’s profile. Of course, the more detailed your Facebook profile is, the more recommendations are accurate (mostly based on Facebook favorites and likes).

Benefits for Amazon

This is difficult to say because there isn’t that much details about how it works so all the ideas are pure guesses from me.

First, Amazon becomes much more social than before. That means that consumers will be able to better share information with their friends on Facebook. It was already possible to do it but the direct integration with Facebook will bring it one step further.

Also, Amazon will be able to create a better profile of their customers, not only based on their behavior on Amazon website but also on their point of interest on Facebook. As Facebook is pure social, peoples tend to mirror their real life on Facebook which means that a profile based on Facebook will be much more accurate then just the Amazon’s sales history.

Obviously, Amazon will see an increase in their sales after some time because recommended products will be more relevant for every consumer and then the conversion rate should increase.

Benefits for Facebook

Well, this is more difficult for me to see what will be the direct benefits for Facebook. Apart from traffic increase, I don’t see how Facebook will monetize it.

The only thing I could imagine is that Facebook could become an Amazon affiliate & get a percentage on sales made via Facebook.

If you have some thoughts, please share it with us, I am very interested.

Benefits for consumers

Consumers will immediately benefit from that new functionality. They will not forget birthday & being on Amazon would make it easy for consumers to buy a gift & ship it to their friend.

Of course, they will also appreciate the more relevant recommended products and will probably spend more money on Amazon.

The possibility to see what friends are interested about is also very interesting. I always rely on a small group of friends to give me some advice for future books, music or DVDs. With the new integration, there is no need to bother your friends with questions, just go to Amazon & watch what’s they have been talking about in the past days.

So, what about the future?

I don’t work at Amazon but  could think of the following features to be added in the future:

• Amazon could send a reminder email one week prior to your friend’s birthdays with very relevant recommended products based on your friend’s interests.
• Amazon could share on your Facebook profile all the reviews you write on Amazon. Very interesting to promote products in Facebook and reach lots of consumers.
• Possibility to inform you if one of your friend had purchased the same item as you did & help you start a discussion about that product on Facebook.
• Reward consumers who “advertise” products on their Facebook profile & generate sales.
• Amazon can create viral games on Facebook to promote special products.

As you can see, there are probably dozens of possibilities offered to Amazon in the future. In my opinion, the real winner is Amazon but I am willing to listen to any comment from you.

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In my previous post, I spent some time to present the huge NRF blueprint which aims at helping retailers go mobile. This second post is about Mobile Marketing. Mobile Marketing could be the first step a retailer could take to enter the mCommerce world.

This post will focus on the following category, all part of Mobile Marketing:

• Advertising & marketing
• Customer service
• Shopping tools
• Product information
• Loyalty programs
• Promotion & coupons

We will see a lot of different solutions & technologies available for retailers to use Mobile Marketing at its best. Just to name a few, we will approach the following concepts (without technical details) like Quick Response codes, Augmented Reality, NFC tags …

Advertising & Marketing

Mobile Marketing should respect some rules common to any marketing activity to be effective. Mobile Marketing campaigns should be integrated with CRM systems & every campaign should be personalized & targeted to avoid spamming the customers.

Mobile Marketing should use mobile devices to carry the marketing message but not every brand can be present on a mobile phone. But there is always a way to be present on mobile phones even if it means sponsoring an app. For example, Charmin (the toilet paper manufacturer) sponsors an iPhone app called “Sit or Squat” which locates nearby public toilets.

Digital Signage

Digital displays can be used to advertise products & engage with customers via NFC tags or Quick Response code. NFC is a technology which enables wireless communication & QR code is a two-dimensional bar-code. Both technology could be used to provide consumers with more information. We could think of a QR code available on a food product which, when scanned, displays different recipes using the ingredient.

Digital signage could be used in store or in the street without any limitation in size. This is an effective way to engage with customers & start a personalized relation.

Augmented reality

In a previous post, I talked about the new Augmented Reality app offered by IKEA. This type of applications can be used by retailers to help their consumers to locate a store. Mobile phones should have at least a GPS, a compass as well as a digital camera. When used in combination, these 3 features allow any consumers to add a layer to what he views on the mobile screen & we could think of adding directions onto the screen as well as other information.

Customer Service

Applications making customer service information and capabilities available on a mobile phone enable customers on the move to obtain information from retailers. We can see two big usages: Store location/hours and Wish list, shopping list.

Store location/hours

This type of information is very useful for consumers on the move. It is also very interesting to use that in combination with another information: stock availability. Most of consumers are looking to find the nearest store with the product they are looking to buy in stock.

There are various technology available to offer store location/hours from the less sophisticated to the most advanced. For mobile phones without GPS, a consumer can send an SMS containing the zip code of his current location and receives back the address of the nearest store. For mobile phones with GPS, it is even easier as the app can locate the consumer and propose the closest store.

Wish lists, Shopping lists

Consumers commonly create list of goods they would like to buy. Mobile devices offer a convenient method to store items into list & share them via social networks like Facebook. The difficulty is to enter the goods into the list in a convenient way.

Wish lists are lists created by a consumer to store products which would be bought in the future. As these lists can be shared with friends & family, this is a good opportunity for retailers. Prices & availability of products in the lists should be updated on a regular basis. Knowing what a consumer want to buy is a huge opportunity for retailers to push personalized offers. This is also very good information for retailers to adapt their business to their consumers’ needs.

Shopping lists are slightly different in the way that shopping lists contain only products which should be bought by the owner of the list and not shared with others. But the same possibilities are offered to the retailers. Shopping lists should be integrated into the mCommerce strategy to allow consumers to buy easily the product they want.

For both type of lists, one interesting features is to suggest new products based on the previous purchases.

Shopping tools

These tools are available either from retailers or third parties. They are used to facilitate the life of consumers and a offer a good opportunity to influence them. We can list the following tools:

• Reservation & product holds – Those tools enable consumers on the way to a store/restaurant to book a table or reserve a product before arriving at the store.
• Card aggregation – We all have dozens of cards in our wallet and this isn’t something I like very much. Card aggregation tools allow consumers to aggregate all their cards into a simple app & use them via their mobile device.
• Nearby search – As smartphones equipped with GPS can localize precisely a consumer, the app can search for local stores and guide the consumer to them.
• Recommendations – Those mobile apps can provide product recommendation at the time of purchase and therefore influence consumers at the point of sales. Retailers who can become trusted advisors will establish a long term relation. Just think how Amazon’s reviews have change the online business.

Product Information

Since the introduction of e-Commerce, consumers have to come to expect rich product information, including images, detailed product descriptions, product comparison, product specifications and reviews (either professional reviews as well as user generated reviews). This is all common now on the large retailer’ websites but this is difficult to offer the same experience in a store, mainly because of the lack of space and the workload due to manage thousands of printouts.

However, mobile phones now enable consumers to get rich product information straight on their mobile devices. New solutions now available like NFC or QR codes make it easy for consumers to receive product information on their mobile device. The lack of space is not a problem anymore and the consumer will probably appreciate the possibility to get rich product information to help them choose the best product for their own usage.

With the usage of social medias growing very fast, this makes those applications very interesting. We can think of someone sending the product specification of a good to a friend in order to get advice while he is still in the store. Another great thing is the possibility for consumers to access user generated content like reviews, ratings about a given product.

Finally, one of the most interesting feature is the possibility to compare products from the store. By scanning bar code of several products, consumers can compare the different products based on their specifications but also on their reviews and ratings.

Loyalty Programs

Typical loyalty programs always follow the same process:

1. Prompt and help consumers to signup for the loyalty program
2. Identify the consumer during check out with different methods
3. Allow consumers to manage their account, mostly via websites

As you can see, there are 3 steps which all happen at different time and require different solutions. The signup process is mainly done either from a website or via a paper collected by retailers in stores. Identifying consumers during check out requires to have a card which is received sometimes several weeks after signup. Finally, managing consumer accounts is done from a website which is not always accessible from a store.

Having the loyalty program conducted via mobile devices is a great improvement for consumers as well as for retailers. Consumers can sign up on their mobile, this is real time & they can immediately benefit from the loyalty program. They can also manage their accounts from their mobile.

Great, but how does that work? Let’s have a look at an example:

1. Consumers can send an SMS to a short code, download a retailer app or even go on a website to signup in the loyalty program
2. After having filled all mandatory information like name, address, email and point of interests, consumers receive a small application containing a bar code. This bar code is in fact the customer number used in the loyalty program to identify a consumer.
3. When consumers are at the cash desk, they just have to show their mobile device with the bar code displayed and the cash agent can scan the code and credit consumers with points or future discount depending on the program

Of course, there are a lot of alternative like using NFC or RF tags but the goal is the same: enrolling as many consumers as possible in the program by offering a simple way to signup and manage their loyalty accounts.

Promotions and Coupons

Mobile marketing allows retailers to propose personalized promotions and campaigns. The possibility to send real-time offers to specific consumers on mobile devices increase the conversion rate. According to a study from Eagle Eye, mobile coupons show a conversion rate of up to 30% when paper based coupons barely reach 0.5%. The main reason is that with mobile devices, consumers can choose which coupons are interesting for them while with paper based coupons, “one size fits all”.

Having coupons available on posters or digital signages allow consumers to request only coupons which are interesting to them. As everything is centralized via the app used on mobile devices, this is also great information for retailers to see which offers are well received by consumers and focus future campaigns on the same offers.

I didn’t want to focus on the technology in the post but only on the business & value added of mobile marketing for retailers & consumers. If you are interested in technical details, I recommend you to read the blueprint as it is full of details on how to implement those solutions. You can find the link to the blueprint on my previous post.

Feel at home here and share your thoughts and ideas with us.

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Did you ever hear about FastMall, an iPhone app that provides interactive mall maps and information about stores in the mall?

If not, this is a very interesting application, developed by Mindsmack, a US based company. Currently, the application supports shopping malls from 20 countries, mainly in big cities but it will expand for sure if consumers start to use it heavily.

Just a few information about FastMall before I try to explore interesting ideas around shopping malls & retailers. For each shopping mall, FastMall provides directions to reach the stores, information about hours of operations and one interesting feature: If you shake your iPhone, the app will show you the nearest toilet. Consumers can also post a review on the shops they visited so it’s getting social as well.

That said, what could we do more in order to provide more values to consumers and retailers?

If you consider FastMall, this is a first step to help consumers navigate in a shopping mall. But more could be done and both consumers & retailers could benefit from it.

Just imagine the same app as FastMall used to communicate special offers to consumers visiting the mall. One could say that shopping malls & stores can use digital signage to promote special offers but there are two limitations in my point of view:

• You don’t have enough digital signage to communicate all offers: some shopping malls have hundreds of stores so it’s almost impossible to relay all offers.
• Digital signage cannot perform personalized marketing. And in my point of view, mobile marketing should be used to do personalized marketing as it brings the best conversion rate.

Now, if you have an app, either developed by the shopping mall or by a third party company, which could be used by all stores in the mall to do mobile marketing, then I find it more interesting. If the app runs in the background, then it’s easy to follow the consumer navigating in the shopping mall & learn about his favorite stores. You can achieve the same by offering virtual loyalty card all stored in the app. The end goal is to follow consumers and learn their habits.

When all the information is gathered, then stores can start communicating special offers only to consumers who use to buy in their shop. What a powerful way to drive traffic & increase sales.

Now the point is to encourage consumers to use the mobile app in the store. There are various ways to do it so I will advert only a few ones: allow them to win a prize based on their visits in stores, offer special discount, alert them about special events which take place in the mall … Imagination is the only limit I suppose.

I know this is a very short post, not developed but I wanted to share my point of view on that type of application. If some of you are interested, please post a comment & I will work on a more detailed post. Now, it’s all yours.

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This is the first interview from a set of interviews. My goal is to publish one interview every week if I get enough peoples interested to be interviewed. If you are interested, please send a mail to wi (at) olivierkrieger.com & I will get in touch with you shortly to explain you how we can conduct the interview. Just a few words about the interview, as I want it to be convenient for you, it’s going to be done via email unless you prefer to do it over the phone or Skype.

This week, Justin Seyfarth from Sports Authority, is going to present his company as well as his role & the importance of good allocation in the retail business. Before we start, I would like to say a big thank you to Justin for the time he spent to answer my questions.

Olivier - Can you tell us a bit about you, your background?

Justin – Recent Graduate from Texas Lutheran University, graduated with a degree in Journalism and an emphasis on Political Science, I got involved in retail when the U.S economy started to curtail and I hopped on the first career path that became available. I came into Sports Authority through their Team Sales Department and have worked my way up through the ranks.  During that time I became increasingly enthusiastic/interested about the retail industry and the systems it uses to deliver the right product at the right time. In addition, I am fascinated on how sales trends can shed light on sports culture trend i.e Soccers Popularity in America….

What is the main business of your company?

The prime focus of The Sports Authority is Sporting Goods Retail/Services. As the only nation wide sports retail chain, our aim is to provide the customer with a wide array of sporting goods assortments and services. We offer market based products and services to increase the consumer’s interest in Sports as well as local community Sports Organizations through grass root marketing efforts.

And your role in your company?

My current role in the company is Allocation Analyst: Team Sports. It is my duty to allocate goods
based on current sales trends/market conditions. In order to maximize the goods that I am allocating, I need to be able to utilize systems that are based around supply chain best practices/ideas.

What problem does your company face? Did you find inovative solutions to these problems?

I find that not only our company, but retail companies in general face the issue of providing the “ideal” assortment to the customer; with the flexibility of commerce today, companies need to be able to proactively have goods that the customer wants not what you have. You need to be able to predict sales trends before they occur and build your ideas/assortments proactively by maximizing the company’s personnel and the systems they utilize. This may seem cut and dry but it is a two part problem.
1. Investing in current systems that will provide the most return
2.having your personnel engaged in any system updates/changes. Once the proper systems are in place, you need to be able to promote an atmosphere of excitement around these programs in order to maximize their full potential.

Can you tell us a bit more about the allocation process? Do you monitor trends based on stores sales or from your website or both?

My current position deals strictly with land based stores, the trends I monitor take into consideration several factors that may influence a products performance. I execute look back/forward analysis to determine how products are going to perform based on LY sales and also have the capability to incorporate “like items” that may have similar selling patterns, these can be used when history does not exist on new products. The formulas I incorporate into my allocation calculations do not do all of the work however, you also have to take into consideration environmental impacts such as a big free agent signings (Lebron James), weather trends (Do we have a good market for football goods in 100 degree heat) and other inconsistent conditions that my influence buying patterns.

I know that for some retailers, having a web site competing directly with stores is a problem due to their business model (especially because sales rep in stores get bonus based on their sales but nothing from the online sales). Do you have that problem at “Sports Authority” and if so, how do you manage that problem?

You would think we would, but today’s consumer still demand a standard of service, meaning they like to be helped/told on what to buy. A website can provide all of the products a consumer desires; however, its ability to point them in the right direction is lacking and I think that will always give land stores and advantage. Sport’s Authority has started a program labeled, “The Service Authority”; which empowers our associates to go above in beyond in their product knowledge. This helps them steer the customer towards the products that are right for them both in usage and price point, technology will never have the human touch that is needed for most retail purchases. The same can be said for Best Buy, Bass Pro Shop, and other specialty chains. The customer not only shops at these chains because we have the proper assortments but also because we have the knowledge to equip them in the right way.

Do you have any activity around m-Commerce & Social Medias like Facebook or Twitter?

I do not use these applications on a professional basis; however, I do use them to increase my capacity to learn and understand retail systems/supply chain best practices.

What is your main marketing channel used to reach your customers?

As with most companies, there isn’t one “defined” media channel that is used to reach customers; as I mentioned before the buying pattern of today’s consumer is more complex than it has been in the past, so we have to be able to reach customers on numerous fronts, fortunately the transparency provided by social media and the like has helped out quite a bit. Sport’s Authority and other retail/service companies use their main advertising drives through TV Spots, Radio Spots, and Direct Mailers, but the impactful advertising can be done via social media as it provides the most upside. Twitter and Facebook for example give us the opportunity to advertise on a extremely low rate when you think of the amount of impressions those sites may receive. You can cater your services towards different customers and physically see who is interested in what you have to offer. So I would have to say we use multiple vehicles both old and new. You really have to engage in change to stay competitive and I think we have done that by engaging the powers of social media.

Do you have any loyalty program in place?

We do not have a official “loyalty program” but we do offer Sports Bucks which act like a store credit towards your next purchase. This program continually shows customers we are dedicated to them and we want to reward them with these for their loyalty.

Finally, do you practice a lot of different sports or working all day in the sports business is enough exercise for you?

I do participate in a lot of sporting activities outside of work. Living in Colorado I am a heavy outdoor enthusiast and participate heavily in both Mountain Biking and Snowboarding. I must admit though, my passion lies in soccer and has since I was young, I am a big proponent of the sport, and how it is played. I feel that this World Cup and the excitement it brought to the American bars is what this country needed to truly understand the dynamic of the game itself, the retail business itself supports this claim with record setting sales trends nation wide. I also feel that in order to truly understand the industry you work in, you have to engage it on a level that is not contained in the workplace, for me that is actively participating, keeping up with sports.

“Sports Authority is one of the largest sporting good retailers in the United States. The Company has a rich history, dating back almost a century (created back in 1928), of being an industry leader in providing a wide assortment of quality, brand-name sporting goods. Sports Authority operates 460 stores in 45 states.”

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If you run an online business, you are probably very careful about SEO, Search Engine Optimization. Like most of peoples, I am very focused on getting the best page rank in Google to drive traffic to my blog. But as most of peoples, I forget something critical: Google is not the only search engine used by customers.

I ran 3 queries on Internet (using Google of course) to see if most peoples are really thinking only about Google, here is the result. When I search for “Google SEO”, I get 44,300,000 pages. When doing it for “Yahoo SEO”, I get 42,500,000 pages & for “Bing SEO”, I get 29,400,000 pages. Of course, this isn’t scientific but I have to say I am surprised to see Google & Yahoo so close. Based on that result, I decided to write a quick post about those 3 search engines & also give you some help to increase your page rank in those 3 search engines.

First, let’s have a look at the marketshares of these 3 major players in Internet search. It’s difficult to estimate those numbers but companies like comScore release on a monthly basis an estimate of Search engines market shares.

In June 2010, Google accounted for 62.6% of the search, with Yahoo being second with 18.9% & Bing third with 12.7%. All three accounted for 94.2% so there is no real need to pay attention to the remaining 5.8% as they represent dozens of other Search engines.

First thing you will notice is that Google rules the world of Search. So it makes sense to focus on Google only for your SEO strategy. But if you pay a second look, you will see that Yahoo & Bing accounted for 31.6%. So if you don’t pay attention to these two companies, you will lose more than 30% of traffic to your web site.

If we assume that revenue is related to the traffic on the web site (which seems a valid statement), then the potential revenue loss is more than 30%. I don’t know who can afford to lose 30% of business, do you?

That said, now the question is:What could be done?

The good news is that all three companies have developed what they call “Webmaster tools”. For Google, you should go to www.google.com/webmasters/tools/, for Yahoo it’s https://siteexplorer.search.yahoo.com/ and for Bing this is www.bing.com/webmaster. All these tools offer you the possibility to monitor your web site’s page rank on Internet based on their own index.

I advice you to spend some time to explore all 3 tools & then to optimize your site to each of these Search engines. I won’t give you any advice on how to optimize your web site now as it needs a lot of knowledge (which I miss) & a lot of time to prepare a relevant and helpful article.

I can only refer you to the book below which is a very good start to SEO. Enjoy!

[avhamazon locale="US" asin="0321526287" linktype="pic-text" picsize="medium"]

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In a previous post, I presented the National Retail Federation as they just released a blueprint to help retailers go mobile. As the blueprint is huge (177 pages), I decided to split it into 7 posts (see in the previous post the table of content).

This post will focus on presenting the blueprint to understand what the NRF wants to achieve with the blueprint. Most of the content of that post is based on the blueprint but I will take sometimes the opportunity to add some comments or ideas. Now, it’s time to start !

Executive summary

The blueprint starts with a short but interesting overview of the mobile phones market (with more details at the end of this post). There are 4.6 billion mobile phones in the world. There is no limitations (age, nationality, economic status) to own a mobile phone which makes mobiles a very attractive new channel for retailers. In 2015, m-Commerce business worldwide should account for $120 billion, about 8% of the total e-Commerce market (ABI Research).

Mobile commerce should not be seen only as the fourth retail channel (the four channels are Store, Catalog, Web & Mobile) but also as an enabler for all other channels. This is what I described in my post about multi-channel strategy. Consumers can use their mobile to locate the nearest retail store of their choice, order for example a coffee at Starbucks 3 minutes before picking it up at the Starbucks store.

Another very important aspect is around mobile payments. Mobile payments are beneficial for both retailers & consumers as it speeds up the payment process & make payments much more easier. One of the key for mobile payment success is that mobile manufacturers enable all their devices for Near Field Communication. NFC is a technology which allows short-range wireless communication. The second key in mobile payments is standardization. All the organization involved in mobile processing should all agree on standards & apply them to their own products.

The success of the mobile channel will affect all the retail organization. It will impact marketing, sales, operations & customer service and every team will have to be involved to ensure the success of the mobile strategy.

The blueprint has been created in order to help retailers answer the following questions:

• How can mobile retailing improve my business?
• What capabilities do mobile phones currently offer?
• What types of mobile applications help consumers shop?
• What are the choices for mobile payment?
• What type of mobile applications help associates be more efficient?
• What technologies and standards apply in the mobile field?
• What implementation options should be considered?

What is really Mobile Retailing?

In simple words, Mobile Retailing is the new channel used by retailers to communicate & engage with their customers. The eCommerce has open more than a new channel for retailers, it offers new capabilities to do business & interact with consumers. One additional value offered by eCommerce is the possibility to communicate with consumers in a more personalized way. It has also helped retailers to analyze shoppers’ behavior much more easily than before & therefore offered new ways for marketing & communication.

Now, mCommerce brings other values to shoppers & retailers such as detailed product information in physical stores, contactless payments, customer reviews & immediate rewards for customers at the point of sales.

Before going into details, let’s also clarify what is a mobile device. This blueprint is mainly focused on mobile phones but the concepts explored in the blueprint are applicable to any mobile devices connected to Internet.

According to a report from Millennial Media (April 2010) conducted on US mobile phone users, 45% of users own smartphones, 35% own feature phones & 20% connected devices. On the 45% smartphone owners, 62% run iPhone OS, 17% Blackberry OS, 10% Android & 5% Windows Mobile OS. The remaining 6% run various other OS.

Most of the smartphones includes the following features: Bluetooth, Camera (still or video), Compass, emails, large screen allowing Internet navigation, GPS, MMS & SMS, NFC. If you consider what smartphones do nowadays, they are more like handy notebooks rather than phones, don’t you think? All those features clearly open new possibilities for retailers.

The different Mobile Application technologies

There are 4 different technologies available to offer mobile applications. Let’s have a quick review of each of them so that we could refer to them later in the blueprint.

Browser-based Applications

Browser-based applications are applications directly inherited from Internet-based applications. But as the mobile devices have smaller screens & keyboards, there is a need to adapt the normal websites to mobile devices. Most of the time, retailers will adapt a subset of their website to mobiles. One example is American Airlines. You can access www.aa.com from any browser but if you use a mobile, you will get redirected to www.aa.com/mobile. This is any easy way to offer better experience to consumers without having to develop a completely new mobile website in full.

Message-based Applications

Message-based applications use SMS or MMS to exchange messages with consumers. Even if the user experience is not as good as other applications, this technology has one big advantage: 96% of the phones in the world are SMS or MMS enabled.

Downloaded & Native Applications

These applications, either downloaded from application stores (Apple App Store, Android Market or BlackBerry AppWorld) or natively pre-installed on mobiles offer the best user experience because they are developed for a specific device. The drawback is that development costs increase exponentially as you have to maintain an application for each device. NFC enabled phones could be used to download apps from a store for example which make these phones very attractive for retailers as they can offer specific apps at the point of sales.

Mobile retail & Social Media

Social Media will become a standard in the retail industry. The main reason is that it facilitates the communication between consumers & retailers. Facebook, through a fan page, as well as Twitter through an account should be used by retailers to interact with their customers. This is a more cost effective way to communicate marketing messages to customers compared to the mass media used in the past. The number of active users of mobile social networks will grow up to 730 million in 2013, a huge opportunity for retailers. However, retailers should think now about their mobile & social strategy to be ready on time.

As customers have to opt-in when joining a Facebook fan page or Twitter account, they should be rewarded immediately with an immediate incentive. This immediate reward will help to increase the number of customers joining retailers social programs.

The social & mobile strategy should also include a close monitoring of the activity on these two channels. Being able to understand how customers use & interact will help retailers to create more successful marketing campaign.

Mobile Market Statistics

To conclude this first post, we will have a look at some statisctics from the mobile market. We will cover the following:

• Smartphone market shares
• Current retail priorities
• Mobile payment statistics

All these statistics are very important for retailers to make the right decisions. Retailers don’t want to invest in technologies which will never take off & long-term planning is important when a retailer plan a complete new strategy.

Smartphone market shares

Note that Nokia, Apple & RIM represent 74% of the worldwide smartphone market. Even more important is the 67% growth from Q1’2009 to Q1’2010 (33 million units to 55 million units).

But there is another very important point to keep in mind: Smartphones all use Operating Systems. But some mobile manufacturers don’t develop their own mobile OS, they use already available OS from third party companies. Have a look at the chart below to see the mobile OS marketshares (Canalys).

You can see that Symbian OS, developed by Nokia isn’t used only on Nokia devices (Nokia smartphone marketshares are 39% when Symbian OS marketshares are 47%). The main reason, as explained above, is that some mobile manufacturers use third party Operating Systems. Here is the trick: Retailers should develop applications for several mobile OS but they should also, for some mobile OS, develop applications which can handle different hardware devices.

Current retail priorities

A survey, conducted by RISNews & eTail on 75 retailers in January 2010 about mCommerce gives us an interesting picture of the main focus of retailers regarding mCommerce.

Of course, this is a general survey & retailers will have to prioritize projects based on their own customers.

Mobile payment statistics

Mobile payment could be defined as payments initiated from a mobile phone. Analysts predict huge growth in the next coming years. From $8.6 billion mobile payments in 2014 for the really conservatives up to $124 billion in 2014 for the most optimistic. The reality is clearly in between but all analysts at least agree that mobile payment will see a continuous growth in the next coming years.

Another interesting projection from Juniper Research is that by 2014, one in every six mobile phones will be NFC enabled. That means around 800 million mobiles by 2014.

That’s it for the first part. I hope you found it interesting. Second post about Mobile Marketing will follow in a few days.

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The National Retail Federation (NRF) just released a blueprint to help retailers go mobile. Before spending time on the blueprint, let’s have a look at the NRF. What’s his mission? According to their website, their mission is “to advance and protect the interests of the retail industry and to help retailers achieve excellence in all areas of their business“. In fact the NRF is a trade association which represents small, medium & large retailers in 45 countries.

I find it interesting to see that the NRF released such a blueprint to all retailers. It means for me that all players from the retail sector are considering m-Commerce as a real opportunity. I am sure we will see in the next months/years very interesting solutions based on mobile commerce. I talked yesterday about a large French retailer which have released an iPhone App with success. Let’s see if he has followed the recommendation from the NRF.

As the blueprint is a huge document (177 pages) , I decided to split it into 7 different posts published over the next days.

• Presentation of the blueprint content & Introduction
• Mobile marketing
• Mobile commerce
• Mobile payment
• Mobile operations
• Integrated strategy
• Mobile standards

So watch out for the next post, it should come very soon.

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Vente-privee.com, the French leading retailer operating as a “private members’ club” (you should be a member to access the website & order goods) just released his iPhone App on June 17th 2010. Two years ago, vente-privee.com had released a first iPhone app just to display all offers available on the web site but since June 17th, the new App allows users to buy directly from their iPhone. This is an interesting case study and there are two interviews of vente-privee.com’s CEO available here and here but unfortunately only in French. In a previous post about IKEA & Augmented Reality App, I talked about m-Commerce on the iPhone. I am sure you will find that post interesting as well.

As most of the readers don’t probably understand very well French, I will highlight below all the interesting information from those two interviews.

But first, some details about vente-privee.com. The company started his business some 20 years ago as a fashion broker. Vente-privee.com was then founded back in 2001 & grew very fast to where it stands today: $920 millions revenue in 2009, 1,250 employees and operations in 5 markets (France, Germany, Spain, Italy & United Kingdom). Some more? 11 millions members, 16 millions orders planned for 2010 for 45 millions products shipped. To keep it short, this is a huge player in that business.

The first interesting info from Jacques-Antoine Granjon, CEO of vente-privee.com, is the number of downloads in 3  weeks from the App store: 335,000 downloads so more than 3% of their existing database. Not bad in 3 weeks especially if you consider that not all members own an iPhone. 1,5 millions visits for 18 millions pages views with an average of 80,000 unique visitors per day over the past 3 weeks. Good news for retailers, it seems that m-Commerce could work when this is well done & carefully thought.

In 3 weeks, more than 10,000 orders so 1.08% of all orders through the App (16 millions orders in 2010 is around 923,000 orders for 3 weeks). This is aligned with the revenue made through m-Commerce: $650,000 in 3 weeks so almost 1.22% of the revenue made in 3 weeks.

Also very interesting is the point of view of Jacques-Antoine Granjon when asked if he sees this new channel as an additional revenue stream. His answer is clear. For him, this won’t create any additional revenue as customers would buy any good products from their desktop if they have no other solution. For him, m-Commerce is a way to better engage with his customers as his goal is that vente-privee’s customers think at least one time per day about his web site. According to Jacques-Antoine Granjon, having the App in their pocket will help customers to remind about vente-privee.

Finally, Jacques-Antoine Granjon confirmed that they will develop the same app for all smartphones as well as for the iPad.

Well, do you think that you could replicate that to your business? Do you already have an iPhone App available from your organization?

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Domino’s Pizza UK, the famous pizza retailer released yesterday his first 6 months financial report. Needless to say that the results are very interesting and full of interesting learnings. You can find the report on Domino’s Pizza web site. This is also confirming my post about Social Medias as well as my post about the multi-channel strategy.

I found this report interesting because we are in a down time economy but some businesses seem to best withstand versus others. Of course, the World Cup probably helped a lot but Chris Moore, Chief executive Officer, says quite a different things: “It is easy to try and attribute our success to one thing – be it the weather, or Britain’s Got Talent, or the World Cup – but the underlying trend shows a more compelling picture.” So what can we learn from that report?

Well, the first big number is the overall sales increase during the first 6 months of that year: 21%. Yes, this is a number which is would be exciting for a lot of organizations. Despite this big number, there are other figures which are even more impressive.

The online sales accounted for 32.7% of the UK overall revenue with a growth on the first 6 months of 61.4% through the online channel. That’s an impressive number. Can you image a growth of almost 62% of revenue through the online channel?

According to Chris Moore, CEO, the online growth is mainly due to their initiatives started in Social Medias. If you go to Domino’s Pizza Facebook fan’s page, you will see that there are more than 36,000 fans. Quite impressive if you consider that we are talking about Pizzas. There are no details around the other initiatives but we learn that they run an affiliate program as well as a program with Four Square. All around Social Medias, which makes sense for this business. This is the easiest & cost effective way to communicate & engage with customers.

Finally, Chris Moore concludes by saying that “The battle for sales is won on the TV, the radio” but I also think that it is won on Internet as online sales accounted for almost 33% of global revenue.

Some interesting books related to that post:
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[avhamazon asin=1604942886 linktype=pic-text picsize=medium]

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According to a study conducted by Coremetrics for Sellpoint, Product Tour & Product videos have increased sales conversion by 35%. It is very impressive, especially if you consider how the study has been conducted.

It took place on compUSA website during 30 days. The report doesn’t give any precise details about how it has been conducted but we can assume that A/B testing has been used. This would have bee the easiest way to compare the sales conversion, with and without videos.

But there is also something interesting to learn about the study. The average time spent by consumers on every product page was 2.5 minutes, much more than what consumers use to spend on product detail pages.

Of course, the problem is to get content to power the Product Tour & videos. This is where content syndication could be very useful. Creating videos has a real cost which is hard to justify but if you can use videos from the manufacturers, the cost isn’t a problem. The only remaining problem would be the delivery of the videos but with the new video hosted platform, this is not that much technically difficult.

Monitoring the video usage would be critical to see if consumers consume those videos. A powerful reporting solution should be capable to show if consumers watch just 10% of video or watch the full video to the end. Depending on these results, retailers should adapt videos to their consumer needs. Having music or comments, product usage in real life, reviews, everything should be tracked carefully to achieve the goals.

If I consider my personal experience, I am very demanding of videos because I can have a better feeling about the product. Having only a picture isn’t enough because it’s difficult to estimate the site, hiw it looks like when it is carried in hand …

Do you think that video would help you increase sales conversions? Are you a big fan of products videos?

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According to Forrester Research, 44% of online consumers say that having their questions answered through a live chat with a real agent while they are in the middle of an online sales is one of the most important feature a website could propose.

In fact, this tell us that customers, sometimes, would like to have help from a real person. We all probably experienced an annoying sales person while in a store but in some case customers do appreciate some help. The key is that the sales persons should be available at all time but not too intrusive.

In this article, I will describe the difference between reactive & proactive chat, what benefits retailers can get out of that & finally see how to monitor the chat activity.

Reactive chat versus proactive chat

Chat technology is the same in both cases. It consists of communicating in real time with a real service agent for example to answer questions consumers could have while shopping on the website. So, if the difference isn’t around technology, where does it stand? Well, the only major difference is the way the chat window is displayed.

Reactive chat systems use to display a chat window automatically in all targeted pages (for instance, product details page, customer service page, checkout page …). On the other side, proactive chat use some algorithms to display the chat window only if the system identify that the consumer needs it. As an example, the proactive chat is driven by rules & consumer behaviors. Rules could be very simple like displaying the chat window after 60 seconds on the product detail page up to very advanced logic like displaying the chat window if a consumer has searched 3 different products from the same product group (which could mean that the consumer isn’t yet decided on which product to buy).

On advantage also of proactive chat is that it is less intrusive as reactive chat because the chat window is displayed only when needed.

Benefits for the retailers

We could clearly group benefits into goals: sales goals and service goals.

The sales goals are the following:

• Increase conversion rates from product detail page to final checkout
• Reduce the abandonment on the product detail page or the shopping cart page
• Increase the average order value
• Shorten the sales life-cycle

Service goals could be:

• Reduce the cost of customer service through parallel chat sessions per customer agent
• Improve the customer experience to be as close as possible to physical store experience

Monitoring the success of proactive chat

A/B testing is the best way to monitor the success of proactive chat as it is possible to test different rules & see how consumers react to it. Of course, it is easy to only focus on the sales to estimate the success of proactive chat but I think it is worth also running some surveys to measure consumer feedbacks in regards of proactive chat.

Using an analytic system like Google Analytics is also critical to see if consumers leave the product page or shopping cart after the chat windows has been displayed.

Do you use proactive or reactive chat for your online business? If so, did you a real benefit for your overall business?

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We all have heard about Twitter, this social network used to send short messages to peoples who follow you. But we were struggling in the past years to know how Twitter would be able to really make money from their service. Obviously, we all thought that Twitter will use advertisement to generate revenue. But they also found an alternative way to do it: Twitter has created @earlybird, a Twitter account used to promote exclusive offers. The principle is very straight forward. Advertisers will contact Twitter & propose them a special offer which could then be relayed to all the @earlybird followers. And of course, Twitter will make some money I suppose on every leads sent to the advertiser’s website. You can learn more on the official @earlybird Twitter page.

Very interesting but how retailers could use it?

Well, as you can image, retailers would be have to use the same approach. They just have to create a special Twitter account for their special offers & start posting tweets about these offers.

The tricky part is to promote the Twitter account in order to have as many followers as possible. But I think it’s not that much of a problem if retailers have already some traffic on their web site, they just have to start a campaign to promote their Twitter account & that’s done. Even brick & mortar retailers can do it via a campaign in their flyers or in stores.

Then the question is what would be the benefits for retailers? Well, I can’t answer the question fully as it depends on what the retailers are looking for but we can already list a few ideas:

• Increases sales via special offers.
• Help to sell discontinued products via time bound offers.
• Promote new products.
• Retailers could even increase MDF from manufacturers when launching a brand new product.
• Hire new employees.

As you can see, the list is almost infinite as we could see this Twitter account as just another marketing channel for retailers. What they do with this specific Twitter account should be based on their overall strategy.

There is still one point which isn’t addressed with this Twitter account, the localized offers. In fact, brick & mortar retailers could create one Twitter account per physical store so that customers can be informed from national wide offers as well as local offers, an easy work around in fact.

Let me finish on this @earlybird account. This is only for the US so far & there are no localized offers but Twitter works to address both points.

Please share with us if you have any experience at using Twitter in your organization’s strategy. Do you have other ideas for retailers to benefit from a Twitter account?

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