ComparisonEngines.com started out by covering vertical search – shopping search, job search, and travel search – but eventually found a voice focusing solely on shopping search. While the focus will continue to be shopping search, this is just one marketing channel which is closely related to many other online marketing channels as well as the overall ecommerce ecosystem. I hope to start hitting on the larger ecommerce landscape and this post is my quick survey course of the industry.
This slide (having trouble embedding at the moment, will try again later) is meant to be the start of a discussion about ecommerce players.
Let’s start from the bottom up.
Ecommerce platform/Shopping cart – This is the core of ecommerce. Ecommerce platforms used to be the complete package – shopping cart (manages catalog/inventory + checkout process) plus WYSIWYG front end) while shopping carts (Mercantec) were stand alone items that just plugged in to a home grown solution. While can still be the case, for the most part, any provider that you approach will enable the core functionality to get a store up and running. The major ecommerce platforms include Yahoo! Merchant Solutions, OS Commerce, eBay ProStores, MIVA, etc. Yahoo! Merchant Solutions (formerly Y! Store), the 800lb gorilla in the space, made getting a store up and running quick and easy and has built an impressive business, with major ecommerce players as well as some 30k+ SMBs utilizing the platform. However, just building a store doesn’t equal success. As businesses expands, so do needs. Proper integration with Analytics, Marketing Channels, and Content Management Systems, becomes critical. Newer ecommerce platforms like Infopia have started to build models around this type of open integration.
Analytics – Once an ecommerce platform is set up, the next step is adding an analytics platform (Omniture, Coremetrics, Google Analytics). I’m a metrics oriented marketer, that’s why I love ecommerce. With the proper analytics package properly enabled, you can track clicks, click paths, conversions, conversion rate, marketing campaign effectiveness, up-sell/cross-sell rate, cart abandonment, and much more. It still amazes me to find merchants who have an analytics solution like Google Analytics activated, but only use the system to track referrals. Especially in these harsh economic times, merchants need to make sure they are analytics gurus. No marketing program should start without proper tracking.
Marketing Channels – Merchants should start with Search Engine Optimization (SEO) and the Pay Per Click (PPC) engines, collectively known as SEM (Search Engine Marketing). From there, email, affiliates, marketplaces (eBay, Amazon, Overstock) and shopping engines can be extremely effective. [Note that marketplaces and shopping engines are looking more alike every day.] If SEM is the platinum standard for online marketing channels (people start their shopping on the search engines), email marketing to an in-house list is the gold standard.
The reason the shopping engines have become such a valuable marketing channel for retailers is that they are some of the best online marketers. Conduct a search for a product on Google, Yahoo!, MSN, or Ask, and the shopping engines will dominate the listings. While the numerous marketing channels might seem overwhelming, merchants need to make sure to track and test to figure out which channel or channels are best for their particular situation.
Within online marketing channels, there are many ‘helper’ companies. ChannelAdvisor started out as an eBay helper company and has since moved to become a one-stop shop for online retailers, helping merchants succeed on multiple online marketing channels. ChannelAdvisor has also moved to other parts of the ecommerce ecosystem: on site enhancements, analytics, ecommerce platform, etc. SingleFeed is also a helper company. While the one-stop shop (ChannelAdvisor’s model) has its advantages and our merchants have asked us to help with other marketing channels, we’re focused on doing data feeds better than anyone else.
On site enhancements – This is a really big area with many players. This is also a significant growth area for ecommerce. While online marketing channels are continually advancing, on-site enhancements are the next step for sophisticated marketers. The goals of on-site enhancements are to increase conversion rate and/or to increase average order value (AOV). Here are some highlights:
-Product Reviews/Ratings – Power Reviews and Bazaar Voice are the main players in the space with surprisingly different business models. Either way you go, the gist is that products with ratings/reviews sell better, create impressive merchandising opportunities (emails with top rated products, for example), and help merchants improve organic search exposure.
-Personalization/loyalty – My first experience at an ecommerce company was in 1995 at the interactive division of CUC International. CUC (later to become mired in an accounting scandal after merging with HFS to become Cendant Corp) was a direct marketing company for membership programs, which means that execs talked about personalization (targeting) and loyalty from my first day on the job. Over the last 13 years of ecommerce, we’ve made some amazing strides in personalizing the shopping experience through creating accounts and tracking past purchases.
Loyalty is obviously different than personalization and is probably better described as a marketing channel, but I feel it’s more appropriate to put it in this section for now. Loyalty is a slew of measures to get that customer coming back. Couponing and rewards are two of the best known loyalty programs. I could highlight a ton of loyalty businesses that merchants can work with, but I’m going to mention just two for now: Microsoft Live Search cashback and Webloyalty. When Microsoft said in May 2008 that it was serious about ecommerce, it’s first initiative in the area was Cashback shopping (through its acquisition of Jellyfish). Microsoft is putting significant marketing muscle behind Cashback shopping.
Webloyalty is run by a bunch of ex-CUC employees. While you might not know the name Webloyalty, the company powers loyalty programs on a ton of sites and is one of the most successful players in ecommerce that you’ve never heard of.
-Engagement – This can be anything that encourages consumers to interact with your site. A rich browsing experience like Borders’ magic book shelf (forgot who powers it) or RichFx’s capabilities are good examples.
-Cross-sell & Up-sell – When I think of cross-selling, I think of accessories. If I’m buying a computer, keyboard or mouse. If I’m buying a digital camera, I might need extra memory or a carrying case. This cross-sell ability is baked into many ecommerce platforms. Up-selling has become way more complicated. With a name like UpSellit.com, you’d expect a straight up-sell, but instead, UpSellit.com is a chat based program that allows an ecommerce site to pitch instant savings to stem off cart abandonment, what they term Save a Sale. I once thought of Aggregate Knowledge as up-sell technology, but now they are pitching themselves as a discovery network. Let me over-simplifiy things and just say that there are many companies that are trying to help the user find the ‘right’ product/make a buying decision.
Page optimization – If I wasn’t in the data feed game, I’d be A/B testing my landing pages (product pages) as well as my checkout process day and all night through companies like Optimost (Interwoven) and Offermatica (Omniture). These incredible systems are like crack for a metrics oriented marketer like myself. Once you have a website, are tracking effectively, and engaged with multiple online marketing channels, multivariate testing can provide the boost that gets a merchant to the next level.
Ok, I’m starting to fade here (I’m about 4hs into my red-eye flight to NYC on my way to SMX East) and I still haven’t talked about a number of other important parts of the ecommerce ecosystem, but hopefully, this will serve as a solid starting point for a new discussion.
Looking forward to getting back in the game!