Summer in Stockholm – a time for Swedish e-tailers to contemplate and to regroup before the stress fest in the fall. Starting with the ”back-to school drive” in September, leading on to the main event of the year, the Christmas craze – starting in early November. At lunch with one sport goods retailer (our client) one internet/ mail order retailer and the leading classified ads site.

On the discussion slate was:

• Multichannel retailing vs. classified ads – similarities in challenges and opportunities
• Product catalog syndication
• Optimization before strategy
• Market expansion (looking east)
• Scripted tests
• Way to grow

Similarities in challenges and opportunities

It is always rewarding to seek similarities in related businesses. If you are in online business, you will always face the same challenges with regards to traffic recruitment and conversion. The same resources and the same knowledge applies. So the managers could probably swap traffic, analytics media planner people between them. Then there are many operational issues which are the same. They face the same decisions about site development, payment strategy, personalization, pricing strategy, product presentation etc.

Product catalog syndication

We will probably see much more of Product catalog syndication in the near future. This is when the e-tailer seek a distributed presence over the traditional ”buy-traffic-then-convert-on-site method”. The challenge is to find the sites and contexts where your target group is already in ”buying mode”, and then distribute your product catalog to this site. The e-tailers site delivers the landing page and the transaction functionality. The syndication site delivers the buyer and the shopping experience. Interesting about this is that you let go of exclusively managing the whole branding and buying process on-site. The price-comparison sites have ofcaurse been around for a long time, but this can certainly be taken to the next level.

Optimization before strategy

An interesting conclusion – The Swedish limited online market requires more focus on optimization, than bigger markets such as UK and Germany. Swedish e- tailers therefore need to be even more streamlined and have even more super efficient sales oriented sites. The e-tailer needs to have an ”Optimization before strategy” orientation. This is important as a cultural statement. This requires a organizational culture which says that optimizing your site is the coolest thing you can do. It also requires in-house development team who can implement the fine tuning that is needed. Optimizing before strategy also means follow leaders rather than of making the big bold moves.

Market expansion (looking east)

A natural geographic market penetration for Swedish e-tailers is to the east. I.e. Ukraine and the Baltic regions. As always new markets requires special arrangements for delivery and payment, and the eastern countries even more so. Decisions about Central control of concept vs. local adjustments needs to be taken. Local rules and regulations have to be taken into account.

Scripted tests

Use Selenium IDE. Useful for regressional tests. Can be applied every time new code is compiled.

Way to grow

Start basic with low overhead. Research customer needs. Launch. Market through distribution to market places, price comparison sites, search engines (applied online marketing and link building) etc. Take care of customer (conversion and fulfillment), make sure she comes come back (loyalty). Optimize!

In only 4 year, sports retailer Stadium, has transformed from being a dominant retail chain in the retail, to a modern multi-channel company with online e-commerce and e-commerce in store.

This webinar recap will talking about the challenges in making that transformation,  with the system and organizational demands of integrated marketing, Synchronized price and assortment,  custom catalogs, direct delivery, multiple shipping and payment methods etc.

About Stadium

• Founded 1974 i Norrköping, Sweden
• 108 stores in Sweden, Denmark, Finland
• 3000 employees.
• Offer active people sport and sports fashion products with good function, design and quality at the best price.
• Key factors for success: Innovation and continuous development of the concept and products.
• Customer database – Approximately 800 000 members
• Website: www.stadium.se, www.stadium.dk and www.stadium.fi

Recap Key-Note

Why is multichannel important to consider?

• Today’s consumers are constantly changing their purchasing behavior
• They are in all possible sales channels and they expect that you, as a trader are there also
• Being in multiple sales channels is one thing
• To have a strategy to activate the channels and to use the channels in synergy benefits is another
• Multi Channel Strategy provides long-term competitiveness and profitability

The New consumer

Before the new consumer makes a purchase –  she has therefore interacted with the brand on the web, in stores, with customer service, discussed with friends and relatives, compared prices, etc. etc.

What we should ask ourselves is therefore:
1. Where are the customers today and what is their buying behavior? We know, for example that pre-buy research (e.g. to collect information on product online before buying) is the dominant purchase behavior in many industries. In several cases up to 70% of all purchases was preceded by this behavior.

2. Where is the most profitable customers? Surveys show that customers who engage in Cross Channel shopping (e.g. Customers who purchase in several channels) buy for more money, than customers who do not, therefore, this segment has a greater total value for the retailer.

3. What do we know if the customer through multiple interaction points? Can we tie the customer closer to the brand by leveraging this information?

Definitions

Multichannel
The most straight forward definition of multi-channel is simply:
”To offer the customer more than a way to buy something”

Cross Channel
The Utilization of multichannel synergy

Multi-channel strategy
Strategic framework for defining resources and multichannel opportunity in Company, Customer and Competition

Company
We discuss Cross channel optimization, as a process of systematically trying to find and develop the strength in each channel, but also to dismantle and transfer the inefficient  functionality to a channel that can deliver it to a lower cost.

Customer
Piecing together sales and marketing in all channels in order to meet consumers in a uniform manner regardless of whether it is in a site on the web, the paper catalog, TV advertisements or in a physical store

Competitors
Keeping the competitors multichannel strategy in close review

Multi Channel Effect

If we use the strategic planning and apply it in the right way, then when you can achieve – Multi Channel Effect, where we can:

• Meet the customer at the customer’s requirements
• Strengthen brand.
• Achieve Synergies between channels
• Increase the total transaction.

Information and organization

Multichannel strategy raises new demands and requirements on information systems and organizations.

If a customer does their pre-buy research in a catalog or an e-mail, then seek additional information in search engines and price comparison sites, then order online, receive notice of the cell phone and finally pick up and pay for the goods in stores, then there is a lot of processes that have to go together for this to work.

Examples of information needed:

• Store: signs, promotions, club
• Catalog: Model Images with long anticipation (time of manufacture)
• Customer Service-Call: Promotions, product information, customer information
• Web: Category, cross sell-uppsell, long product descriptions, images for all color settings (if we talk of fashion), product information in distributed format for example Google, Prisjakt
• eMail: Weekly Specials, personalization has content
• InStoreMedia: Last Varmärkesbyggande movie, Retail Promotions, interactive content
• Mobile: Gift, announcements etc anapssade-mobile pages

Involved systems:

• Purchasing System
• PIM with approval flows
• e-Commerce platform (customer, order, product)
• Business – Backend (range, price, balance,
• Stock system (pick, pack and announcements)

The Stadium solution

Stadium saw the opportunity at the place they were in about 4 years ago. It is Sweden’s largest chain of stores in its segment. It has strong traffic on Stadium.se, which is a popular site, but the site only shows parts of the range and it does not live up to user expectations. Stadium  also had plans for further internationalization.

The different channels

In addition to the stores, the additional channel was StadiumTV. It is currently not an integrated solution (but we hope it may be). In 2007, the new e-commerce site was launched on www.stadium.se. The site introduced a lot of integration with the stores. The E-commerce then made possible new e-mail channels and the distribution of digital products via Mobile text.

Stadium also wanted to use the store network and launched a pilot project on e-commerce in the store, in the form of internet terminals or kiosks.

Another possible channel that is not used today is a call center.  Another of our customers, Elgiganten do this today. On a slimmed version of the site, Customer service personnel can receive new orders and also work with upsell on existing orders. The customer service personnel who sell receive a commission for it.

Another channel that is enabled through the e-commerce requirements for product information and direct delivery is catalog.

e-commerce in store

Stadiums (eKiosker) has been out on a pilot in 20 stores. It is an interactive terminal that presents stadium.se with custom functionality added, such as a card reader for login and card, EAN-scanner and touch-screen keyboard.

The eKiosks has several purposes. It can work as:

• Sales support for store personnel (find, present and check balance on an item)
• Education Tools for staff
• Sales Channel (get what is not in stock sent home. Any orders placed from a terminal is logge which enables to work with incentives to drive orders in the store.
• Inspiration (create the stay time in the store)

Stadium is currently evaluating this test and look at how to proceed

Multi Channel Resources Online

If we then take and look at the site (www.stadium.se), the following features are multi-channel integrated.

• Show Stock balance on articles in every store
• In-store pick up
• Order History (all purchases in stores and on the Web)
• Gift Certificates (can be bought and used in all channels)

Additional Features includes

• Auctions
• Shop-in-shop (user’s own product)
• Product Reviews
• Insprational articles
• Buying guides
• Wishlists
• Membership Bonus
• Payment by 4 different payment methods
• Delivery by 3 different delivery options
• Charts on the best sellers in each product category
• Member price
• Product Comparisons
• Cross-sell via related product recommendations
• Product Recommendations (tell a friend)
• Discount driven by product and consumer group

Success

The things that exceeded Stadiums expectation after going live with the site was:

• The number of visits to the site
• More well-informed sturdy visitors in the physical store
• High cut orders
• Complement products. Other product categories was successful online when compared with in-store. So products not suitable for the physical store has a good fit on the web

Challenges

Conversion and the combination of multichannel and online sales, product availability and customer support.
Operational.  What happens after go-live, a lot of it is technology driven in a uppstart and it is easy to miss questions on the operational as quickly after the launch

More Challenges

• Organizational and top management buy-in
• Stock and Logistics
• Product Information Management (PIM)
• The stores a place for e-ordering, delivery and returns
• Assortment of the various channels
• Pricing in the different channels
• Coordination of campaigns, product, customer and Marketing
• Suppliers and platforms and other support
• Measurement and monitoring
• Awareness of audience

What will happen the future for Stadium

• Stadium opens e-commerce in Denmark and Finland in the autumn
• Evaluate and make a study into the e-kiosks experiment
• Loyalty Program will be developed with the web in a central role.
• Social media – how can it be used on stadium.se. Development is ongoing.
• Product strategy and inventory to become more effective

Key factors for succeeding with multichannel

• Customer perspective – test the customer experience!
• Organization – for decision and implementation
• Objectives – Ensure that the right things done
• ”Learn by walking” – Develop – Test – Measure – Developing!

More about multichannel

• Google Rob Garf AMR Research and Patricia Seybold
• IBM
• ATG
• Brightstep webinars

You find the re-play of this webinar here

In our last webinar about multi-channel we discussed how to measure the effect of multi-channel. Below you can read the statistics about how U.S. companies do this and how effective they think each method is:

We at Brightstep often get questions about how high conversion rate should I have and what have other e-retailers for conversion rate. As we have previously written about the conversion rate,  the conversion rates are affected by many parameters and there is no precise answer to these questions. But a way to work with the conversion rate as a measurement is to compare it over time with the average conversion rate in a specific industry. Unfortunately, there are not any statistics for the conversion rate in Sweden or Scandinavia, but we will be here on e-commmerceblog present monthly statistic from both fire click Index and Nielsen Online / Marketing Charts.

Top 10 Online Retailers by Conversion Rate: May 2009

1. ProFlowers 38.6%
2. Office Depot 28.0%
3. Online Retail Total 25.6%
4. Vitacost.com 25.0%
5. Quixtar 23.4%
6. Blair 23.4%
7. Roamans22.6%
8. 1800Flowers 20.5%
9. Woman Within19.6%
10. Spiegel 18.20%

In a market survey we did recently we called customers who shopped on a particular site and asked them about their e-commerce experience and if they encountered any problems. It turned out that the last two customers who purchased on the site both had encountered the same problem. The problem occurred at checkout, when they tried to pay for the product. One of the boxes had a vague description and the customers filled out the wrong information. This was the first error, the second error was that instead of getting an error message that told the customer that they had made an error it came an error message that said that there was a server error. One of the customers thought it was wrong with the site and went in and tried to buy every day for a week before he contacted customer service and got help! Customer number two thought that the purchase had gone through and waited a whole week to get the product delivered. When it never came, he contacted the customer service and only then learned that he had not purchased the product.

What can we learn from this? Usability is extremely important. What you label your form fields may ultimately affect whether you sell your goods or not. Error messages are incredibly important and they should explain what kind of errors that occurs. If we hadn’t talked to the customers the chances are we never would have discovered the problem and there would still been a serious error in checkout. But by doing user testing and talk to the real users have a chance to anticipate and address the errors that would otherwise affect the sales.

Another lesson learned is that there are faithful and loyal customers. They actually do not give up and go to another site to buy their goods. Too bad that these loyal customers are so few.
How do you avoid user problems on your site? Do you talk to your e-commerce customer? Do you test the user experience through user tests?

Björn Schröder and Mikael Jacobsson from Brightstep will present a number of steps that can double your online Christmas sales. The presentation will go through how to measure and evaluate last year’s Christmas sales and then take this forward to a strategy.

This webinar will be in swedish

Webinar takeaways:

• Interaction with multi-channel
• Consumer recruitment
• Conversion and additional sales
• Delivery and completion of orders
• Retention purchase

If you have some questions you what us to cover during the webinar please contact me at Mikael.jacobsson @ Brightstep.se

Webinar details:

Practical tips for doubling your Christmas sales 2009

Wednesday, May 20, 2009 13:00 AM – 14:00 PM CET

Register here
(It is a campaign site in Swedish)

We att Brightstep continuously analyze all major standard platforms for e-commerce. Now we are examining and analysing the new version of Commerce Server 2009. Here are some of the key findings and highlights that we so far have found extra interesting in the Microsoft Commerce Server 2009:

• The ability to manage multiple channels, so that one source of information can be used everywhere.
• An out-of-the-box default site with pre-built features, including browsing, searching, site maps, mini-carts, and check-out.
• Engage and interact with your Customers with built-in product reviews and ratings.
• More than 30 e-commerce Web parts and controls, ready building blocks for constructing your Web site
• WYSIWYG experiences for Merchandisers and Marketers. Manage the presentation with point-and-click per page templates and in-site product information editing
• Commerce server is integrated with Microsoft Office SharePoint® Server, Windows Live^TM Services, Microsoft® BizTalk® Server.
• Multi year roadmap and core part of Microsoft platform.

If you´re not using Share Point Server at present this might be an issue evaluating Commerce Server 2009. It looks like Microsoft´s made a very serious commitment, but at the moment there are few references in Sweden.

Do you know any e-commerce sites that are on Commerce Server 2009?

Scandinavian Photo is truly taking advantage of an opportunity that not many e-retailers are doing. A week after you have bought something on Scandinaviaphoto.se they send out an email in which they thank the customer for the purchase and ask the customer to come back with feedback or questions.

They also invite the customer to add a comment and put a rating on the product which I think is really good.

This way of working with customers even after the purchases are made on an e-commerce site is something that increases the retention rate and creates more satisfied customers. The format of email is done without any graphic details, which I think is good in that it not be seen as a newsletter, or spam. However, I believe that Scandinavian Photo would increase their sales if they would add some suggestions for complementary products to the product that the customer bought.

Below you can read the email (I have translated email from Swedish into English myself)

Hello!

First, we want to thank you for choosing us as your provider. It has now been a short while since you received your order, and we hope that both product and delivery corresponding to your expectations.

If you have any questions, thoughts or opinions you are always welcome to contact us.

Telephone: xxx-xxx xxx
Email: xxx @ scandinavianphoto . se

Best regards
The team at Scandinavian Photo

PS If you want to help others to choose the right products you can rate and write a short review for the products you have purchased with us. To do so, follow the link:
Digital Camera Coolpix S560 black + 2GB memory + bag

Our stores are open every weekday between 08.30-18.00,
in Stockholm and Bankeryd we are also open Saturday 10.00-14.00.

Welcome!

What your experience or thoughts about retention email?

We’re getting closer to another exciting Brightstep webinar. This month’s topic is Long tail and User Centricity. Our presenter for this webinar is Alexander Neuhausen from the German platform vendor Intershop. Alexander will present how to deliver the right product at the right time for the right consumer.

Webinar takeaways:

• New trends in e-commerce for consumers and merchants
• How to turn the online buying process into a real shoping expirience
• What it needs to improve customer experience, conversion rate and avarage basket value at a optimal cost-revenue-relation

If you have some questions you what us to cover during the webinar please contact me at Mikael.jacobsson @ Brightstep.se

Webinar details:

Long Tail and User Centricity

Wednesday, May 6, 2009 11:00 AM – 12:00 PM CET

Register here

Using the conversion rates to measure whether an e-commerce is profitable is simply wrong. E-retailers that have an extremely high number of visitors can have a small conversion rate and still make money on their e-commerce. E-retailers with few visitors and high conversion rate can also be profitable.

Misconception number 1

E-traders measure conversion rate by divided the visitors with orders while the visitor´s goal with his or her visit does not need to be a purchase. It can be anything from obtaining information about a particular product to whether the e-retailer has a physical store nearby.

Tips

Find out which goals your visitors have when they visit your e-commerce site.
Measure conversion rate on your visitors’ goals with their visit.
Make changes so that more visitors meet their goals and find ways so that the visitors’ goals are in line with your goals for your e-commerce site.

Misconception number 2

Although the average conversion rate for e-commerce sites is around 2% does not mean that your e-commerce site is great because you to have a 7% conversion rate. What conversion rate your e-commerce site has is due to thousands of factors, from which industry the company operates, what image the company has, the e-commerce site structure, your value proposition and right down to which color and design the buy button has.

Tips

You cannot draw any conclusions by just looking at the conversion ratio. This number needs to be put in context in order for you to come to some form of insight. It can be done by comparing the conversion rate over time, with a competitor, on a given campaign, for a given product or for different segments.

Misconception number 3

The conversion rate is not an instrument to measure or produce changes in an e-commerce. Of course the conversion rate can be used in a follow-up but then as a superior ratio.

Tips

Break down the site into micro conversions. A micro conversion can be an event or activity that a visitor can make on e-commerce site. It may be to add a product to the cart, enlarge the product picture, rate or write a review on a product and so on. What you then need to do is create the connection between these micro-conversions, which ultimately leads to the final conversion rate. This allows you to identify activities in your e-commerce site and testing different versions of a page and features.