Wednesday, July 22, 2009

Zappos + Amazon means game over!

Okay, so it is official: The folks at Amazon have in fact solidified themselves as the preeminent online commerce entity at this point. Their purchase today of brings the extraordinary power of zappos' social marketing machine, integrated warehouse-to-site capabilities to the already superb customer experience and unmatched scalability that Amazon provides. Ladies and gentlemen, we have now seen the completion of the "Next Wal-Mart" of retail.

And yes... I still think they can do this after they start charging sales tax everywhere. :-)

Sad day for, and the other online-only footwear retailers. This combination will be unstoppable in footwear and accessories online only. Only the smart multi-channel retailer will survive this.

Tuesday, July 01, 2008

Time to pay the tax man...

The days of the tax-free retailing online in the US are dwindling. July 1, 2008 marks the start of Destination Oriented tax collection in the state of Washington. This change, means that the old rules of "nexus" no longer apply in terms of whether or not a customer pays taxes on their purchase. You now pay taxes based on the delivery location, not the billing address.

Granted, the implementation in WA is voluntary right now during a trial period but... over 1000 retailers have signed up for it. And, as the sales tax revenue begins to increase based on these purchases rolls in... and with the current downward economic trend negatively affecting local tax revenues, experts are predicting that in fact customers should continue to expect this collection trend to be come mandatory sooner rather than later. I tend to agree.

What does this mean? Well, it is the beginning of the removal of the pure-play "advantage" of avoiding sales tax collection. Given that many pure-plays were "cheaper" from a price standpoint based on their "tax-free" play... many are going to have to compete on their core price of the merchandise, and not on a tax advantage.

It will be interesting to see how this plays out... I imagine that the smaller operations will be hit harder not only from a development perspective (load the local tax tables for EVERY zipcode in the US now) but also from a competitive advantage standpoint. Now the logistics and buying capabilities of a Walmart vs. those of Wally's Widgets are going to make it really tough for Wally to compete.


Thursday, May 22, 2008

Paying for your loyalty... in search

So if you haven't seen it, released on 05/21/08. It is a rebate-based program that gives customers cash back for using Live Search to originate their product purchases.

The move is getting a lot of play in the "Search World." Some see it as an act of despiration to "buy eyes" to the fledgling Microsoft Live Search. Others see it as a "game changer" along the lines of google checkout and its free shipping during the holiday 07 season. One thing the move HAS done... is opened up a very interesting CPA-Based model for online retailers.

CPC vs. CPA is one of those "open source vs. microsoft" or "chocolate vs. vanilla" arguments that can go on forever and usually give me a headache. Bottom line is this: CPC - measureable to a point for a retailer, probably drives more eyeballs but less quality. CPA - more measurable (you can attribute a sale easier) drives more quality eyballs... but... it typically costs more per "unit."

That being said... there haven't been a lot of compelling "search engine" CPA opportunities until now. The ones that have tried in the past... have met with limited or no success. Most of the time, they were designed to be a product to offer for the retailer or "acquirer" and not to have much benefit to the "owner" of the program. In this case... it is really a strong attempt by Microsoft to grow their name in search. This means... the retailer or acquirer could be in a distinct advantage if they get in while the buzz is hot. It also isn't a bad deal for the consumer either!

Consumers... like this type of loyalty acquistion in the short term. But as I once heard true loyalty cannot be acquired... it is attained. So... the bet here is that the consumer will try the product in the "bought phase" and see how things grow from there.
All in all... interesting plan.

In the interest of full disclosure, ORG is affliated with, however is NOT affiliated in any way with this program.

Online Retailers are you THERE?

Welcome to the new online reality: Even if you aren't there, you ARE there. And in this case, "being there" means... you'll be charging and paying local sales taxes sooner than you'd thought.

The economy is hurting, and tax revenue is slumping. With this backdrop, the states have started to step up their efforts to collect sales taxes as brick and mortar or "click n' brick" retailers currently do. Currently, the set of decisions and laws that govern this area operate on the "nexus" principle. This basically means... if you have "nexus" in the state where the sale took place, you are to charge and pay sales tax. Online only retailers have been able to get around charging their customers sales tax in only a few states where they have physical operations (headquarters, warehouses, etc.).

But now comes a couple of significant challenges that look like they're going to have some possible impact.

First, in New York, Amazon is getting challenged by a new law that says their affiliate program has members that "have nexus" in the state of New York. The law says that Amazon needs to collect sales tax for all sales originating in and shipping to NY saying that because they pay out affiliate checks to New York-based affiliates... it is just like having a store in the state and paying an employee.

Next comes Texas. Shortly after the announcement and signing of the New York law, the state of Texas started to investigate Amazon, its affiliate program, and a distribution center that's operated as a "wholy owned subsidiary" of Amazon.

Finally, comes the City of Chicago... now suing eBay and STUBHUB over not collecting local ticket taxes. Stubhub has made the mistake of having an office in Chicago so they're pretty much going to have to pay. It is unclear whether or not eBay has an office within the city limits or not.

In all of the cases the nexus rules are being stretched and pulled. But, keep in mind that in an economy where people are spending less overall... tax revenue goes down. The states are hurting for revenue... they're trying to get back some of what has been lost by the growing online retail trend. While this has been rumored for a while... and different attemps have been made to start collecting sales tax... this is the first time some of the "larger states" like Texas and New York have been able to make headway. Also, don't forget... "it is all about the economy stupid."

What does this mean? Well for the large guys like the Amazon's, the Stubhubs and the eBays... it is an inconvenience but... not a show stopper. For the smaller online only retailers... they might want to look at how they're going to be collecting taxes sooner rather than later. I'd had hate to be a small retailer that has to write a "back taxes check." In the past, states have proposed amnisty for those who have voluntarily collected sales tax (Dell Computer is one). For affiliates... if an affliate is the ONLY reason that an online retailer is proved to have nexus in a state... I wonder who will be the first to add in the development and administrative costs for tax collection... in the overall ROI proposition for their affiliate program.

Interesting times for sure.

Tuesday, March 11, 2008

Hey shopper... we're tired of trying to figure out what you want. Do it yourself!

So here's one that makes me finally get off the bench and speak up. I don't know whether to laugh, cry or applaud but I have a feeling of all of the above here.

An article on eCommerce Times about a new startup named iStorez has me in this quandary. So what we have here, basically is the ability for the shopper to assemble their OWN store, real-time based on a set of either search criteria... or some other relevent group.

The challenge is... there are a LOT of us consumers out there... building each of us a custom "store front" isn't really scalable. Therefore, the retailer has to "guess" based on the data they have. This has them walking the fine line between what they think "feels" personalized vs. what we think is "down right creepy." This is a tough one you try to "guess" as a retailer. Paraphrasing Carrie Johnson from Forrester in the article Personalization as the buzzword but done right... usually serves the retailer well. But when it isn't... not so much.

We would all love the ability to know our consumer so completely that we could change our stores for each of you... but... the fact is a lot of us never will have that complete understanding. Also... consumers are funny... they ACTUALLY change their minds sometimes :-)

So I like what iStorez has done here. They OUTSOURCED the problem to the consumer! They are letting the consumer do the personalization themselves based on OPEN DATA POINTS... what you're shopping for. They are not some online survey... not some creepy quasi-data-driven guess. iStorez is trying to provide the platform for consumers to personalize on... and let them decide how they want to shop for your goods. They may be onto something here.

My thought... Millenials will flock to this... IF they can get a more "social" component to it. It is like the ultimate mashup of Facebook-shared shopping list, comparison shopping engine, search, and a good old-fashioned eCommerce site. To me, this is as O.P.E.N. as it gets for a consumer/retailer relationship right now. A key for iStorez will be to make it so easy for retailers to participate... that it is "like" any other "product feed" they may have to manage, that the selection of product is there to drive this. IF the product is there, THEY will come.

Finally... someone given control of the "personalization" to the "person." Could be interesting to watch.


Tuesday, January 08, 2008

These shoes were made for walkin'

So there were a LOT of topics in the last half of 2007 that I didn't take time to write about... but as you know one of my interests is in the online footwear battles... having been in that area from pretty much the start of it.

I couldn't help but notice the end of pretty much the last of the experiments of the "separate online shoe" entity... when Brown Shoe announced they were closing their offices in LA and moving all operations to their St. Louis headquarters... and rolling the brand up into their direct to consumer efforts. For those of you who don't know who Brown Shoe is... they are the parent company of footwear brand such as Naturalizer, ViaSpiga, Buster Brown and the Famous Footwear retail chain.

It made nothing but sense to do this... even though some very good people in LA now found themselves "seeking new opportunities." The cost structure of that operation not sharing fundamental core services like merchandising... really made it hard for that operation to make a profit. We'll never know publicly whether or not it did because BWS doesn't report the P&L for the unit individually. But... in light of the currrent struggle on both the retail and wholesale sides of footwear... cutting the overhead was a good move.

I wish them luck as a competitor in the online shoe races... but with Zappos so far ahead now... and talking about breaking the billion barrier in 2008... you have to wonder whether or not it might be time to let fade into the background along with sites like Webvan and BOO. I think it makes a very interesting case proving once and for all that owning what seems to be "the best" domain name... does NOT guarantee success.

Meatball Sundaes, Holiday Shopping and New Year's Resolutions

Happy New Year to all 6 of you that have read this stale blog!!! I've finally decided with a little inspiration from one of my favorite personal blogs... that I needed to push myself back to the keyboard in 2008. I've found myself thinking that I'm "too busy to blog" but in hindsight... like anything else... there's time if you make it a priority. So... my resolution this year is to... make it a priority! I hope your new year is off to a good start... now let's get going!

Meatball Sundae:
Okay... for the casual reader this one may be a bit much but... I can't wait to get my hands on a copy of Seth Godin's latest book, Meatball Sundae. I'm lucky enough that my employer has a wonderful library of books... and so I've reserved through there. Essentially though... the premise is that you can't "mashup" old marketing tactics with new marketing tactics... and expect to get better results.

I'm intrigued as to how he makes the case... but a blog post I read today about how one of my favorite examples of forcing a new marketing experiment ( really highlighted how a great company like A-B really doesn't get "it" when it comes to the new marketing ecosystem of Social Networking, WOM Marketing... and other "staples" of the new marketing era. Godin has authored some of the best recent marketing books out there... so I'm kind of geeked up here to see what this one will be like. By the time I'm done with this one... it should be time for Kelly Mooney's O.P.E.N. brand book to come out.... so my book reading for the first quarter is pretty much set!

Holiday Shopping:
Well it seems that quite a few of you LIKE to shop online. More than last year apparently. Hmmm... imagine that. :-) The growth in importance of online retailing can be illustrated in a thousand ways but, I think the fact that holiday online retail grew 20% year over year vs. the offline channel performance of about 5%... pretty much says it all. It is no lie that it has become tough sledding out there for even the best of traditional retailers, multi-channel retailers... and even some online only places. The effect of the overall performance of the US Economy and its' direct impact on the US Consumer's discretionary spending is well documented at this point. But... through it all... the retailers that have done the hard work to bring multi-channel marketing/retailing and customer-centricity to their DNA... are the ones that will weather this storm.

2008 shapes up to be the real test for multi-channel retailing in my view. Has it matured enough to be a differentiating factor for retailers? You only find out when the going gets tough... and I think that's pretty much happening now. I don't usually bet... but I bet you can figure out where I stand on this one. :-)

New Year's Resolutions:
So... how many did you make this year? 1? 5? more? I have decided to make one. Here it is. "Get er' dun!" (imagine best "Larry the Cable Guy" voice). Too many things like this blog were left "half done" in 2007. It is time to get up and get it done. ALL of it. We'll see how it goes but... at least we've got a start here right?

I'd love to hear from you any time. You can comment, or MEEBOME anytime you see me online (in the right hand side of the blog!).


Thursday, October 11, 2007

phewwww... what's that smell?

That would be the smell of a STALE BLOG I believe.

Good GRAVY! Can't believe that I've slipped so much on blogging... was it REALLY May 19th since my last post? UGH.

Thanks to all of you who have commented since then... and to the 4 or 5 of you that have stopped by pining for a new post :-) I've got plenty of topics that I want to cover as the last minute holiday plans are prepped. I'll be posting again soon.


Saturday, May 19, 2007

Online research... creates offline sales

More proof that if you as a retailer AREN'T making a seamless offline/online experience the core of your growth strategy (including budgeting, staffing, product strategy, etc.) you should be by now.

This article in BrandWeek sums up the latest Forrester Research on the subject. Tamara Mendelsohn, a Senior Analyst with Forrester said that 51% of consumers are researching all of their purchases online prior to buying offline. That's a HUGE amount... and according to reports... this is an average across all verticals.

What does that mean? A couple of things: First, sharpening search strategy is even more important than ever. Next, you MUST have a web-to-store, store-to-web integrated strategy at LEAST on the drawing boards... if not implemented. Systems and processes need to be able to support this trend (which by the way the report cites as continuing to increase) and you are leaving more than enough money on the table at this point to justify the cost. Finally... the last traces of doubt about an ecommerce site and strategy should be gone from your organization. This is as important as operating your stores... it is VITAL to your overall success as a retailer in the US, and even more so abroad.

Why Cutter & Buck doesn't need 'help'

Okay... I am somewhat ashamed to admit that I'm a bit of a "golf shirt snob." And anyone in the golf business well tell you that Cutter & Buck is one of the best all around shirts you can buy. Their color selections... fabrics... very well done. However, their online marketing efforts sometimes leave room for improvement.

Case in point. I'm on their email list. I get one roughly once a week. It is usually well designed... good links... etc. Here's a quick picture of it.

But... in the address "from" field... the address it comes "from" is Now... I don't know about you, but... when I get an email from "help" at any address... I immediately think of one of two things:
  • whooray! I got my question answered by support. I'm so happy.
  • OR
  • who's spamming me from a help address? I didn't ask for any help.

In this day and age... inboxes are scanned by consumers QUICKLY. They define spam as "everything they didn't ask for, looks like SPAM -> Delete Key."

Which brings me to the point here. I'm normally not a betting man. However, with emails coming from an address like I'm willing to bet they have open rate problems. It is VERY straight forward to get this changed. Working with your Email Service Provider and your network support team, this should be a simple DNS record change. Should be ready to go in 24 hours tops.

I hope they get their act together and get this changed. I want to see them succeed online so I can still wear their great shirts!

Wanna talk about it... MEEBOME or leave me a comment.