The Ecommerce Landscape

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:

-Billing flexibility – Visa, Master Card, and Discover won’t cut it anymore. Merchants have to take advantage of not-so-alternative payment methods like PayPal, Google Checkout, and Bill Me Later.

-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!

Search Engine Strategies San Jose 2008

I’m moderating and speaking on a panel today at Search Engine Strategies.  Topic (of course) is Shopping Search.  Greg Hintz, Brian Mark, and Aaron Shear of Boost Search Marketing are joining me.  Here’s my 1-page presentation.

Shopping Search Strategies - Upload a Document to Scribd

Read this document on Scribd: Shopping Search Strategies

Product Search OneBox Results on the Move

As Barry Schwartz over at SEORoundtable pointed out last week, Google seems to be moving around product search results on Google.com.  I’ve noticed this more and more over the last week.

Here’s a search for ‘red sweater’:

I hope this is just a test. I find this extremely confusing compared to the normal OneBox placement at the top of the search engine results page:

Reading the Tea Leaves – Jobs in Shopping Search

Looks like MeziMedia (Smarter.com) is extending past SEO and PPC.  Is Google finally cracking down?  The company has an email marketing and display media position open.

Become will be adding display media soon.  The company has a display media sales position opening.

Google is looking for a Product Search Associate.  Yes, there are real people who work on Base/Product Search/Shopping/Froogle.  😉

Microsoft needs a BizDev Manager to on-board the IR 50 to its Cashback program.

The Perfect Storm – An Opportunity Squandered by the Shopping Engines

What’s wrong with this picture?

This economy sucks.  Consumers are hurting.  While a temporary ease in oil prices and a once in a lifetime housing bill will ease the pain a bit, it’s not a cure for the economic crisis the US and the world is facing. Consumers are looking to save money. They are thinking about price.

Unfortunately, the shopping engines have fought for years to be known as more than just price comparison engines. Reviews! Search! Cash back! Social shopping! Mobile! Safe shopping! Green!  Well, all those things are nice and should be part of a strategy, but right now, this is the perfect opportunity for the shopping engines to step up their marketing efforts (or at least run some bold tests) highlighting the fact that they save consumers money.

Yes, all the shopping engines are going to once again do a good job of PR and talk about how consumers can save money at the pump by shopping at home, but that story is going to get old and once again NexTag is going to sounds a lot like PriceGrabber is going to sound a lot like Pronto is going to sound a lot like Smarter and so on.

So my tip of the week for the shopping engines: think about talking about your company as a price comparison engine, as a money saving tool, as a place for consumers to go for the best deals online. This shouldn’t be your entire strategy, but should at least be part of it. For example, Shopping.com, take PriceTool and get rid of the whole Epinions angle [shit, if I were a young go-getter at that company, I’d put together a crack team to completely revamp PriceTool around price price price!]. Smarter.com, you have lots of big, pretty pictures in rotation on your homepage. Start with the one for Deals! Shopzilla, you’re testing out your new recently bought scroll bar (very cool, David!), but maybe it should be the recently saved $$$ on X, Y, or Z scroll bar. PriceGrabber, you just launched your version of Woot! which is great, but why are you just giving it a tiny button on the homepage?

The pushback I’ll get from all the shopping engines is that they don’t want to be known as price bots. That’s completely understandable. I’m just encouraging everyone to run some tests. The economy sucks. While it’s nice to see a $329 Bulova diamond watch on the homepage, maybe it’s also time to think about a ‘steals’ section or newsletter.

PS. To be fair to Pronto (the image at the top of the post is from Pronto’s homepage), they did just start up an email newsletter highlighting great deals…although sadly they haven’t learned to put a ‘subscribe to your personal savings newsletter’ option at the top/bottom of each page).

A Fresh Start

Been a while.  Yes, I’m alive.  I really appreciate the emails and support.

When I first started ComparisonEngines, I was just doing a little consulting on the side to pay the bills.  Now I’m running SingleFeed, a venture backed start up which is taking off.  Over the last 6 months, I’ve had to concentrate on strengthening the foundation of SingleFeed.  That left little time for blogging.

While I make no promises on the frequency of posts going forward, there are too many things happening in the shopping search industry not to step back into a role as Analyst.

I’ll probably play around with the style a bit.  Not sure exactly what that means.  I like Rafat’s comprehensive coverage.  I like Om’s incredible insight.  I like Arrington’s bite sized morsels.  All I know for sure is that my interest has never been in regurgitating press releases and that won’t change.

Welcome to ComparisonEngines 2.0!

-b

Shopzilla Promotes Filtering From Top Down

Excuse the image sizing issue. I’m trying out a new system and it’s not pretty. For now, you can just click on the image to see the screenshot in all its glory.

As opposed to the majority of shopping engines which place filters on the left hand side of search results, Shopzilla is now allowing for filtering from the top of the search results page.

Google Product Search/Google Base/Google Shopping is the only other shopping engine which displays filters in this way.

While this might seem like a small change, I’ve been told for years by the shopping engines that people really don’t use the filters. As Shopzilla (and others) have smart filtering capabilities that can drive consumers to make more informed buying decisions, I like that Shopzilla is being a little different. Not sure if this is a test or not.

Some other shopping engines do things differently:
Google Base displays filters on the bottom of the search results page.
Become displays filters on the right of the search results (which I always find a little jarring)

Cashback is not the Answer

Since everyone else has already laughed at Microsoft’s attempt to buy search market share, I was going to try to play devil’s advocate. Can’t do it. Sorry.

-Cashback sites like David Lewis’ Cashbaq make money and therefore Microsoft will make money. Unfortunately, I don’t think the point of Live Search cashback is just to make a couple bucks off of running a cashback site. If Microsoft thinks it can buy off consumers with cashback deals and get those consumers to come back to search for everything else they are using Google to search for, I think they are mistaken.

–As I discussed with Om this afternoon, the whole idea sounds more like a gimmick than anything else. People don’t want a gimmick, they want an incredible search engine which returns answers to their questions.

-The Live Search cashback announcement was a great PR stunt. Consumers are hurting and no one had ever heard of Jellyfish, so re-branding it Live Search cashback and telling everyone that big retailers are on board with great cashback offers is really cute. I’m sure traffic will spike temporarily and shoppers will buy and Microsoft will run a profitable shopping engine. The leading shopping engines generate revenue in the low hundreds of millions. That’s chump change for Microsoft.

-But what about it’s strategy to do this in many verticals? Farecast integration was the other big announcement today. We’ll hear other ones soon. Ok, now I kinda buy that one. Isn’t that kinda what Google is doing with the navigation links that were added when Universal Search was announced? But as opposed to Google using technology to bring together a better search experience, Microsoft is buying disparate vertical search engines. Has Microsoft just given up and outsourced search?

-If Live Search cashback was more than a gimmick, wouldn’t they have rolled it out for all their shopping sites? Sure, they eventually could, but according to PriceGrabber, their syndication relationship with MSN Shopping and Live Product Search remains intact. I’m sure the PPC model associated with the PriceGrabber partnership is too lucrative to give up anytime soon.

-So the saving grace for this gimmick could be getting retailers to engage with Microsoft’s other advertising opportunities. I’m sure Microsoft will get a thousand additional merchants using Jellyfish – I mean Live Search cashback – because of the buzz.

But CPA based advertising isn’t good enough and Microsoft knows this. Instead of allowing merchants to sign up with an online form and start advertising immediately, as Jellyfish allowed, Microsoft is making merchants fill out an ‘interest inquiry’ form which asks if merchants are using other online advertising methods such as Search, Contextual, Content, and Display. I’d expect Microsoft to use this data and push merchants to sign up with AdCenter just as much as they push merchants to sign up for Live Search cashback. While this synergy of advertising offerings reminds me of In Good Company when Teddy K is talking about the Dalai Llama eating his Krispity Krunch while uploading prayers onto the Net, Microsoft is bringing together a lot of great technologies as it highlighted in a terribly formatted email this morning to advertisers about the new Microsoft Advertising, “our new business-to-business brand unites the power of MSN and Live Search with advanced platform technologies such as adCenter, Atlas, and DrivePM.”

To sum it up, I don’t think the launch of Live Search cashback will change things that much for Microsoft. I like Microsoft’s focus on ecommerce – there’s a lot of money to be made there – but putting Jellyfish front and center isn’t going to solve its search woes.

Microsoft’s main press release of the day, outlining the new search business model says “Microsoft aims to make Live Search the premier search engine for the growing category of search queries that help consumers conduct research and purchase goods or services, and which are critical to merchants aiming to drive online sales of their products.”

Too bad Google is already hard at work on the premier ecommerce search strategy, combining Google Product Search, Google, Google Analytics, Google Checkout, and Google AdWords. Oh, and there’s no reason Google Product Search can’t be run on a CPA based model.

Jellyfish’s Day in the Sun

Yesterday I sent an email to Brian Weigand of Jellyfish asking him about potential Jellyfish integration into Microsoft Search. This seemed like a logical thing to ask considering that Jellyfish recently completed integration with Windows Live and Arrington mentioned on Monday MSFT’s announcement “On Wednesday, we will be announcing a major new initiative that our search teams have been driving. We are getting better and better with our core algorithmic search, and at the same time, we are investing to differentiate in vertical experiences and to disrupt the current model. You’ll hear more about our plans Wednesday.”

So Arrington now has the complete story of Microsoft offering Cashback to search engine users. Live Search Cashback is live and seems to be purely based on Jellyfish’s system – same advertisers, same UI, same cash back model. At the same time, Jellyfish’s own Cashback shopping site has been down for a while (at least a week, I think). Not sure if Jellyfish will just transition to a Smack Shopping only site while powering the back end of Live Search Cashback.

Right now if you try to sign up to advertise, you’re brought to a Microsoft Advertising page with the following notice:

Arrington is framing this as a way for Microsoft to attract advertisers:

Microsoft’s hope is to lure advertisers with a promise to pay only if a purchase is made, unlike Google’s pay-per-click model that carries more risk because a searcher may not complete a transaction. And by offering a percentage of the fee collected from advertisers, Microsoft hopes to convince searchers to take the last mile to a transaction through the Live.com search engine, generating more advertising revenue for Microsoft and simultaneously hurting arch-rival Google.

I’ll comment on this after I listen to the official announcement today.

‘New Media’ Presentation for ECMTA Spring Summit

I’m speaking in a bit. I don’t read off my powerpoints when giving a presentation, so you’re probably missing 50% of my presentation by reading the below doc., but maybe you’ll still find it useful.

Read this doc on Scribd: PeSA Spring Summit New Media Presentation