-Marc Andreessen: Predictions for 2012 (and beyond) – From CNET. Yes, I still check out news.com, although not as much as I once did. The article is a follow up to Andreesen’s WSJ article from August about Why Software Is Eating The World. I had a bit of a problem with a statement I thought he was making that because of smartphones “we saw the rise of a whole category of e-commerce category killers in verticals that 5 or 10 years ago couldn’t support high growth companies because the markets weren’t big enough,” but I’m probably just reading the article wrong. In any case, Software is Eating the World. He makes the great, albeit obvious case for why we’ll see more verticals eaten by software in the coming years. 6 billion smartphones in the next 3-5yrs. Wow.

-CEO of Forrester Research, George Colony put forth the thesis that the Web is Dead during his talk at Le Web (see above video). Fred Wilson picked up on it. And Mark Suster said ‘don’t bet on it.” Great to have George Colony put out something different and hear Suster walk through software development over the past 30 years in his criticism.

Point #1 was the focus of the article: “50% of visitors to ecommerce sites are currently logged in to Facebook.”

Point #2 was a soundbite from Facebook: “88% of Internet Retailer Top 200 retail sites are integrated with Facebook.”

I threw out Point #1 as normal Techcrunch drivel as the article could have said 50% of visitors to health sites, porn sites, banking sites, news sites, or travel sites are currently logged in to Facebook. We all know visitors to any sites are currently logged into Facebook. It’s becoming unusual for people to log out of Facebook. What retailers – and health sites, porn sites, travel sites, etc. – need to think about, though, is why their visitors aren’t logged into their own sites.

I’ve always thought that the holy marketing grail for ecommerce sites wasn’t PPC or SEO (or to a lesser degree, Display/Retargetting, Social, Affiliate Programs, Lead Gen, etc.) but rather the in-house email list and the retention and engagement that comes along with the people on that list. You have names, purchase history, interests, demographic information like age, gender, income, and address, and much more. Slicing and dicing this information (and using big words like Business Intelligence) allows you to intelligently build a lifetime relationship with your customers.

But unfortunately, all that powerful data about your customers is often overlooked in deference to that next acquisition through Google AdWords. In this way, merchants aren’t typically developing a relationship with their customers. They acquire visitors, try to get them to become customers, and then send them a coupon every once in a while or a holiday promo. And that’s about it. The utopian land of really engaging with customers to build a life long relationship (read LTV) doesn’t exist for traditional ecommerce sites. Yes, that’s a bit of a generalization, but think of how many people you have in marketing dedicated to acquisition compared to how many people dedicated to building a relationship with your customers.

But now, my opinions of email have changed. Email should be a part of everyone’s engagement strategy, but email kind of just sucks. I’ve been heavily influenced over the last year living in the land of everything social through my work with Kontagent, being a Silicon Valley entrepreneur, where local/mobile/social is hot hot hot, and understanding that kids these days just don’t use email…and I’m pretty sure that’s where adults are moving to as well. So if email isn’t where it’s at, where is it at? Well, as the Techcrunch article says, 50% of your users are logged into Facebook. They’re posting on friends’ walls, messaging, and playing games. Your customers are using their mobile phones to text, chat, and use lots of apps.

Another email is not going to cut through the clutter, but more importantly, it’s just not going to be the way to communicate in the future.

Which leads me to Point #2 in the Techcrunch article. According to a Facebook spokesperson, “88% of Internet Retailer Top 200 retail sites are integrated with Facebook.” Well, that sounds great. Big number. Merchants are doing exactly what they should be doing to engage with their customers in this social/mobile/local world. Right? WRONG! Unfortunately, the Facebook spokesperson doesn’t define that ‘integrated’ means. Not surprising that the Techcrunch reporter didn’t dig for more information…but I digress. So I did some research to find out what Facebook was talking about and discovered that ‘integrate’ to Facebook means adding Like buttons.

I took the Internet Retailer Top 500 list and visited the Top 100. I threw out 12 of the Top 100 for various reasons: they had too many brands to cover (Orchard Brands has 17 websites, Colony Brands has 11 websites, eFollet has 100s, etc.), were membership sites (Ancestry, Netflix, Weight Watchers, Nutrisystem), or just were anomalous (Build.com didn’t work, Peapod & Freshdirect don’t fit the mold, etc.).

For each website, I went to at least two product pages and noted what ‘social integrations’ they had: Facebook Like Button, Facebook Share/Send Button, Tweet Button, Google +1 Button, Email This Button, and Facebook Connect log in option

Here are the results:
-78% of the sites had either the Facebook Like or Facebook Share/Send buttons on their product pages
-56% of the sites had the Tweet button on their product pages
-25% of the sites had a Google +1 button on their product pages
-42% of the sites had an Email This button on their product pages
-9% of the sites had Facebook Connect log in option

If I continued down the list to the Internet Retailer 200 – 299, I assume I would have been able to move the 78% up a little bit. Not sure if I would have reached the supposed 88% integration rate that Facebook claims, but maybe if you classify Facebook Pages as ‘integrated’ you could reach that number.

My point, though, is that just adding those Like and Share/Send buttons to your ecommerce site and/or creating Facebook Pages is not a real integration, it’s a pathetic excuse for one. It’s a pathetic excuse for one. What you have to do is integrate with Facebook through leveraging Facebook Connect.

Coming from 6 months of thinking about nothing but persistently logged in applications – think social games, flash sale sites like Gilt, and daily deal sites like Groupon, membership sites like ShoeDazzle and JewelMint, I’m disappointed that traditional ecommerce sites aren’t at least offering the option for visitors to log in through Facebook Connect. Instead, I get a big fat pop up when I first visit saying ‘Sign up for Email’ or I search for a place to log in and all I see is ‘My Account’ as opposed to ‘Login’ or ‘Register’ or something related to becoming a member. The flash sale sites, daily deal sites, membership sites, and social games require you to log in from day one to see or do anything useful. Ecommerce sites don’t need to require this action, but it should be encouraged and rewarded. Customers grant you access to their social graph and interest graph as well as the ability to post to their wall. With this information, you can reward visitors for inviting their friends, start to customize each visitor’s experience and importantly, track the lifetime of the user.

But don’t take my word for it. Just look at Amazon, by far the largest internet retailer (at $34B in revenue as of 2010). For years, their business has been about developing a relationship with their customers. They want you to log into Amazon.com ASAP and they want you to stay logged in. And you you want to log into Amazon to get a personalized experience. You want to know what to get your friends for their birthdays. Or you want to join Amazon Prime (membership) to get great benefits (free two day shipping, free video streaming, kindle book borrowing). Amazon has built their business around creating a relationship with their customers. It’s also reflected in their acquisitions of Zappos and Diapers.com.

And Facebook Connect allows ecommerce sites to do exactly what Amazon is doing. [Note, Amazon is also futzing around with Facebook Connect.]

So when you think about being ‘integrated’ with Facebook, know that the Facebook Like button or the Facebook Page or the Facebook Store (don’t get me started on this one!) is a cute little baby step. Good for you. But if you want to supercharge your business (look at what’s happening with BeachMint, Zulily, BirchBox, ShoeDazzle, Modcloth, etc.) and build a brand that has a visceral relationship with its customers, look into Facebook Connect.

consulting for kontagent, helping them attack new verticals with their powerful social analytics platform…or what i’m starting to understand as analytics 2.0. it’s about user centric data. understanding interactions, determining influencers, and getting to the bottom of what really works and what really doesn’t (there are a lot of holes in current analytics solutions). more to come. impressive team, cutting edge product, and a big market.

have dug really deep into the completely undefined world of social commerce. it’s a wild west with an incredible amount of buzz, but not much bang. it seems that slapping social on top of commerce (which is what most have done) is not the way to go…at least not yet. flip your thinking, though, and it opens up opportunities.

keeping up to speed with the shopping engines to some extent…especially google product search, which is still one of the biggest, yet under-optimized marketing channels for merchants. thinking a lot about acquisition marketing (which encompasses internet marketing and more) as well.

if you’d like to grab coffee in sf/silicon valley, nyc, or la and catch up, let me know. or just skype me: brismiandrew.

have been in london for the last month. now off to northern france for a couple days (cherbourg-octeville, dday beaches, caen – thanks e!) before heading to paris (recommendations very welcome!). from there, i’m off to spain for a week (barcelona & san sebastian – thanks m!) before returning to france to visit a friend around nice (thanks b!). then making my way over to florence, italy (via the coast – portofino, cinque terre, etc.).

well rested. doing consulting work for an impressive social analytics company. be back soon. miss writing…and so much happening in the ecommerce space.

By now you can understand how your intelligent shopping agent will get its data. You can hopefully also imagine its predictive technology, anticipating what you want, when you want it, and where you should buy it, well before you even need it.

OK, there are many other features of this intelligent agent, but I just want to focus on one more, the purchase process, before tying this together with some ideas of the business model.

Your intelligent agent will have your payment information and permission to automatically make purchases. If you’re not comfortable with that, there will be an option to opt-out of this automation, but it’ll be an opt-out; the general user of the agent will trust it because of how well it knows you.

Your agent will know your buying habits and be hooked up to your bank and credit card accounts, so it will know what you can spend on a purchase. But this doesn’t mean it will willy-nilly spend whatever to get a product for you. That’s unacceptable. Your agent will haggle on your behalf. CUC International (now Cendant Corporation) owns a patent for Hagglezone and once had a site which featured the haggling technology. Read this NYTimes article (which even mentions Mercata.com – oh, the good old days of ecommerce!) from 2000 on how this worked. Merchants aren’t currently setup to haggle, but merchants could be part of the intelligent agent preferred marketplace powered by the haggling technology. While your intelligent shopping agent will always scour the web for the best deal and could have hooks into distributors and manufacturers, it could feature a marketplace (just like the old www.hagglezone.com) with select merchants who want to be part of this bazaar and get first crack at the consumers. In the Hagglezone, your agent could always just set an offer price and wait – as it will know the urgency of your need, it doesn’t need to transact immediately. And if the agent is working for thousands or tens of thousands of consumers, it could haggle or negotiate a great group buying price (back to the Mercata model).

So what does the intelligent shopping agent cost? That’s the great part, it’s free to engage with the agent. There’s no $999/yr price tag. While there could be premium features you could add to the basic model, that’s not going to cut it. There are two possibilities for the revenue stream.

1. Your will pay your intelligent agent a concierge fee for making your life easier. Basically, it will take a very small % on top of each transaction. And I really do mean a small % because if we’re talking about everyone engaging an agent at some point, those pennies can add up very quickly. The % fee would probably be on a sliding scale, so if you spend a lot through the agent, the effective commission you pay will go down.

2. Your intelligent agent will earn a commission from the retailers it engages with.

I think I prefer option 1. I think we’ll get to option 1. But option 2 is already a proven entity. It’s just a typical marketplace. Consumers (through the agent) will get what they want and retailers are willing to pay for that targeted business. It’s lead generation 101.

And if we go with option 2, you can also start to see that this is all easily extensible past the retail space. The intelligent shopping agent should be shopping for your auto/home/health insurance policy, mortgage, student loan, online probability course, phone/internet/cable service, lasik eye surgery professional, personal trainer, SAT prep course, and much more. Anything that the lead generation industry has gone after is a perfect opportunity for your agent. When [insert the service] compete, you win, and so will your agent because it will get paid to make the introduction.

I’m sure a lot of what I’ve written sounds vaguely familiar. There’s a lot of basic online marketing/lead gen in these posts. There’s a bit of science fiction. And there was even a company called Root Markets way back when which I thought was hoping to be your intelligent agent, but it seems that I warped the idea a lot. At its core, Root offered a secure locker of your personal information and you choose to share as much or as little of that with marketers. If you shared a lot, you’d get lots of offers because Root will be able to facilitate a lot of ‘introductions’ to various companies competing for your extremely targeted business. If you shared a little, you’d still get offers, but they probably wouldn’t be as relevant/targeted, which means they’re less valuable to you, to Root, and to the advertiser, a lose, lose, lose situation which will push you out of the market. Or at least that’s what I remember.

There are a ton of holes in my intelligent agent. And as my first real blog posts in a half a year, I know this writing is not my best. Don’t worry, I’ll get back into a flow.

Now, it’s time for you to comment. It’s time for you to tweet. It’s time for you post a link on your wall. (Yes, I’ll bake those buttons in soon.). Thanks.

Indicators:
-Search. This is a pretty easy one to understand. If you search for ‘red cashmere sweater’ or ‘cuisinart blender’ it makes sense that you might be interesting in acquiring those products. The intelligent agent will start to learn about brands or products that you’re interested in by these simple queries. But the value of search for the agent doesn’t end there. Search queries can make up a very complete picture of your life. We don’t typically think about this on a daily basis, but privacy advocates obviously do. Through my searches, the agent can figure out my socioeconomic status (Wealth. Am I searching for high end goods or coupons? Education. Am I searching for worldly issues or more pedestrian facts and figures? Occupation. Am I searching for computer courses or fundraising tactics?) It can determine my life stage (Am I searching for mortgages? Am I searching for a wedding planner? Am I searching for a SAT prep course? Am I searching for the AARP? Am I searching for income comparisons between two different cities?). There are some generalizations in there, but the idea that your searches can tell a lot about you and who you are today or who you’ll become tomorrow can be pretty powerful, especially when combined with other indicators. Interesting to note that Facebook doesn’t have complete search information.

-Display Ads/Re-targeting. Through the wonderful (old is new again) world of display advertising, we’re all carrying around a lot of cookies. These cookies are great indicators of interest. Each site you visit says a little something about you. The intelligent agent will pick up on your interests in the same way that re-targeting technology from Criteo or Remarketing technology from Google follows you around the web in order to provide ‘interest based‘ advertising. As Google explains, “Remarketing allows you to communicate with people who’ve previously visited key pages on your website, giving you a powerful new way to match the right people with the right message.” Google allows you to work remarketing into your AdWords campaign…think about the potential lift that marketers should experience with proper re-targeting or remarketing campaigns. Tying it back into the agent, all the sites you visit are indicators of something. Tied together with other indicators, your browsing history will become a cornerstone of the intelligent agent.

-Your Social Graph. In particular, I’m talking about Facebook. I could probably write a paper on the indicators which can come from your social graph, but I think everyone groks the value here, so I’m going to go a bit light. Don’t get me wrong, though, as Facebook integrates more and more with the web in general and the time on Facebook (or Facebook powered sites) increases, our social graphs could potentially have the strongest set of indicators about us (one of the reasons that Google is putting over 1000 engineers to work on social). Which is why when I first started to re-visit my intelligent shopping agent a couple months ago, a number of people stated that Facebook is the intelligent agent I’m talking about. I disagree. It’s part of the equation and Facebook probably desires to be the intelligent agent, but without search, it’s just not good enough. We’re not going to stop searching. The best intelligent agent needs multiple indicators, so search without social is just as bad as social without search. Expect Google and Facebook to be not so comfortable frenemies for a long time.

-Conversations on Facebook and Twitter. A big part of Facebook’s advertising opportunity which hasn’t been realized is conversational marketing. Right now you can target Facebook Ads by a multitude of filters (30-45yr old female who works at Cisco and likes Steve Madden), but you can’t just target ads by the keywords in conversations as Google does with AdWords on the side of Gmail. This will be a huge opportunity for Facebook. Twitter is just starting to explore this type of conversational marketing with their promoted tweets. Basically, if I post on my Facebook wall or tweet that I’m looking for running shoes and friends start making recommendations, my intelligent agent should be all over that (Display ad, notification that there’s a nike store around the corner – assuming I’m ready to purchase, price range I can expect to pay, note about an upcoming 10K that my friend registered for, etc. Too many indicators to talk about when it comes to social.

-Location! 4 years ago we had our cell phones, but we weren’t doing as much with them, and we definitely weren’t indicating what we were doing. We were more passive. Now we’re tweeting about what’s happening around us all day AND checking into various locations. More indicators. So as opposed to talking about the typical shopping experience providing what you want, when you want it, our intelligent agent (though Foursquare’s API, for example) can now add the qualifier: where you want it. If your agent knows you check into a restaurant for a sandwhich a couple times a week for lunch, it should be smart enough to tell you that the store around the corner has the new Donna Karan shoes you’ve been looking for (searching for online? conversation about with a friend? 8 months since your last Donna Karan shoe purchase?) and entice you to take a couple minutes to walk to the store and check it out.

Read Part 3.

Back in 2006, I wrote the following description of the system that I thought would be prevalent by now:

In my vision of the shopping (and a lot of other activities) in the future, I will have an intelligent agent which understands my preferences, knows the marketplace (price trends, consumer sentiment, etc.) and is always on the lookout for products, deals, reviews, recommendations from friends (this is where social networks/communities become really valuable), etc. which I’d be interested in. My agent understands the competitive landscape and makes sure that my buying decision is well informed. My agent would have the authority to haggle with a dealer/distributor/merchant and make purchases according to criteria that I set or that my agent learned over time. It might take a while for the agent to understand my preferences and there would definitely be work involved with setting up such a system, but we will get there.

That was over 4 years ago. While this system might sound like science fiction (Snowcrash – if you want to know what will happen in the future, read the leading scifi writers), we have the platforms to enable this reality. There are a number of components that can come together through powerful APIs, but why not start with just querying users about simple preferences in a creative way.

While privacy will always be a hot button issue, ‘kids’ these days are way beyond this. And I don’t think I’m generalizing too much. With the rise of Facebook, people just share more information about themselves than they ever did before. And I think that if they’re willing to share with friends on Facebook, they’d be willing to share with a ‘secure’ intelligent shopping agent. You’re already seeing women express tastes through fashion 2.0 sites like Boutiques.com (Google) and JewelMint, which require the user to go through a style analyzer to begin. The style analyzer is nothing more than a set of interests. The intelligent shopping agent could begin the same way. Another example would be Netflix. If you remember way back to when you first signed up, you expressed your likes and dislikes so the system could get a foundation for your movie viewing preferences. In shopping, there are a lot of factors which might be important: brands, styles, colors, etc. Asking for this basic information up front is a great start and probably not too intrusive.

But an individual isn’t going to want to go through 80 questions for the system to get to the bottom of his or her shopping taste. Luckily, you won’t have to. We’re all willing to share these days. Think Mint.com. Millions of people are willing to just give Mint access to credit cards, banks accounts, investment accounts, and more. The current equivalent in shopping is Blippy. Again, spurring all worries about privacy, individuals are giving Blippy access to all credit card transactions. Right now the reason to do so is to share purchases with friends and get feedback. But if we’re building an intelligent agent, why not just suck in all your past purchases? In this way, the intelligent agent will quickly understand your favorite stores, your location (more on this later), your demographic (income level), etc. And for you privacy freaks, with Blippy you don’t have to hook up your credit card transactions. Blippy will just scan your email for receipts or link to other accounts like Groupon or Etsy for more information. Not as powerful as accessing all your credit card purchases, but it’s a start.

Read Intelligent Shopping Agent – Part 2