Electric Thoughts in a Digital Era

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  • decide.com – the language of ecommerce

    Backed by science, not marketing.
    Decide.com

    Decide.com – make a note of that name. 12 months ago I found the Seattle startup after doing research on ecommerce recommendation engines (This was prior to Hunch being acquired by eBay, whom I thought was onto something). Recommendation services for ecommerce products are high on the agenda for ecommerce powerhouses whom I believe are looking to acquire these service providers or startups.  When you have the user’s attention and willing to pay then a recommendation could lead to an addition into the shopping cart. Upselling is a classic retail strategy yet in ecommerce it is not something many execute well. Lets all agree that Jeff Bezos was well before the time when Amazon rolled it out. The truth is that it needs to be refreshed.

    Anyway, what is the one thing that all ecommerce users fear? Besides the courier losing the product, it is buyers regret. I am honest, I have had one occurrence of it and it hurts real bad. Suddenly a joyous event hurts right into your credit card. So, recommendations and additional references can ensure that users know that they are really getting the latest, highest rated and best price for a product they wish to acquire. Decide.com tick all three boxes and I believe that clever shoppers will realise that decide.com is a real hero in the purchasing process.

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  • The key differences between Google Product Shopping and other CSE’s?

    An ominous “warning” from Google to other Comparison Shopping Engines.

    Q: From a retailer’s perspective, what are the key differences between Google Product Shopping and other CSE’s out there? How should I allocate my CSE budget?
    A: The main difference between Google Product Search and other comparison shopping engines is that Google gets the most traffic and spends the most money on their engine.  If your budget allows you to be on only one engine, it should be Google Shopping. However, it’s better to be on a variety of other engines because they can all be profitable with the right datafeed management.  If you are able and budgeted to expand and are willing to spend the time to manage them all, you should enlist on other CSE’s, notably the Big Four: Nextag, Shopzilla, Shopping, and Pricegrabber. Luckily, you can refer to lucrative channels on our quarterly rankings of big CSE’s.

    The high level of traffic is the product of providing a service for free.  Spending the most money on the CSE is a very interesting tidbit from Google. I am aware that they have acquired Like.com, moved all the technology from boutiques.com to Google Product Search. Then they also acquired Sparkbuy which was a very good recommendation engine and British financial comparison service BeatThatQuote.

    So Google Product Search at the moment = Like.com + Sparkbuy + BeatThatQuote + Google technology

    I can most probably also add the ITA acquisition as well as that has to do with flight comparison technology. It is pretty clear to me that the changes in progress to Google Product Search will have a large set of implications for  Google.

    I am of the belief that online retailers should list with all comparison shopping engines and then determine for themselves which CSE converts the best. Trying to list with just one comparison engine (if it is not the most dominant one in a particular region) is a bad idea. Your conversions should make the decisions not the talk from the account or product manager from a particular Comparison Shopping Engine.

    Disclaimer: I have issues with how Google operate.

  • What is under the hood at Zalando.de?

    Amazon.com is well known for creating custom software for their platform due to  scale. Millions of products, transactions and real time pricing and data that is used by Amazon internally ensured that off the shelf software would be totally inadequate. I for one, can only imagine that petabytes of data is consumed in Seattle.

    Generally, technology companies like to keep the opposition guessing. What is under the hood and successful is not shared with the public. Yes, legal will most probably have a heart attack if you share technologies used. Employment contracts ensures that Intellectual Property is protected to the T and any disclosure could lead to immediate termination.

    However, Zalando (the fashion business inside the Rocket Internet Empire) thought they would share their technology by means of an Infographic. To be clear, it provides an idea of the technologies used by the Zalando technology team.

    Big Sales need Big Software. Discover Zalando’s E-Commerce Platform.

    While Zalando is well-known for it’s massive and unique growth as a retailer since 2008, little was known about our technical platform yet. Time to give some insights into how Zalando uses technology and mindset to produce and run excellent, fail-safe and scaling E-Commerce APIs and applications for millions of demanding customers.

    The entire image can be seen here: Zalando Technology (The image is interactive, so when visiting the Zalando Technology website, expect that every division has a roll over)

    Why is this a big deal? Why do you share this kind of information on the same day that investment from J.P. Morgan Asset Management and Quadrant Capital Advisors is announced?

    “The company has quickly established itself as a leading online fashion retailer in Europe. We are impressed with Zalando’s large, growing, and loyal customer base as well as the breadth of products offered on the company’s eCommerce platform. Zalando’s world-class fulfillment resources and dedication to superior customer service should enable the company to expand upon its leading market position.”

    I would think that you keep as much of this inhouse to ensure that you retain the competitive advantage of the technologies used..

    Hat Tip to Exciting Commerce for the highlighting this information on Zalando.

  • The 10 e-commerce stories for the week ending 17 August 2012

    Rocket Internet pruning their investments, LivingSocial to pull out of the Middle East and become.com redesigns.

    The e-commerce stories for the past week is dominated by Rocket Internet. The German clone factory raised additional capital for its European fashion company Zalando. They added J.P. Morgan Asset Management and Quadrant Capital Advisors as its newest backers and I believe Zalando will over time become more important for the Rocket Group… It seems from the outside that something is going on at Rocket Internet. More on that later.

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  • Subscription e-commerce in South Africa

    Subscription e-commerce / commerce is something that I find fascinating.  When I wrote about it in September 2011, I must confess I wondered whether the vertical would be making an appearance in South Africa. (The change in date to my initial post is related to an issue I had in middle January 2012)

    Globally the vertical is at the moment in a transition. Some like Shoedazzle have gone to pure ecommerce and in March I started thinking that the model was in trouble. Truth is that I think the exceptional startups like Birchbox is going into a more mature phase and are starting to add additional channels to their offering. (Another gender or more products to pick from)

    Brian O’Malley writing for All Things D states why this vertical is attractive for investors:

    Investors love the concept of repeatable revenue, but with high churn rates and the ability in several models to skip deliveries, retention may be only a function of how hard sites make it to cancel.

    So, it all sounds like this a vertical with potential right? I think so, but the founders of the companies need to their homework and ensure that their offering is capitalizing on the laziness of their users. The counter to that is to produce an experience that is one that rewards the user for being a member of subscription service (more on this in a bit).

    So what has happened in South Africa?

    Well for starters, I have found 5 different startups in this space that cater for 3 different areas.

    The five companies are:

    Glambox – The Johannesburg based company focuses on cosmetic samples for both women and men (The Box For Men). R100 per month.  The men’s box is done every 3 months at a cost I have not been able to determine.

    Glossybox – Part of Rocket Internet South Africa. They are based in Cape Town and focus on cosmetic samples for women.  R130 per month

    Rubybox – They are also based in Cape Town and focus on cosmetic samples for women and men. R100 per month, Manbox is R150 per month. Rubybox also does market research for brands.

    Lingerieletters – They are based in Cape Town and cater for ladies underwear. My research shows that this is part of a ladies online fashion store which makes sense. R95 per month.

    The Ooh! Box – The Ooh! Box is a curated taste club with a membership limited to a 1000 members. R495 per month and they really surprise you every month, I can attest to that. Members are locked in for 3 months and then they can decide to end the subscription service.

    The issue I have at the moment for these start-ups is scale. South African ecommerce is growing and these businesses need members to retain membership for it to be a profitable exercise. Can they be profitable since day one and secondly, how long until user fatigue leads to a drop in revenue potential?

    Update: Rubybox has raised a round of funding from Hasso Plattner Ventures Africa and have acquired GlamBox to become the marketleader in the online beauty box market in South Africa.