Turbotodd

Ruminations on IT, the digital media, and some golf thrown in for good measure.

Posts Tagged ‘e-commerce

Gladly Pay You Tuesday…

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We’re finally getting some rain in central Texas.  We’ll see how long it lasts!

And on the topic of rainmaking, this just in from our friends at Nucleus Research.

Nucleus conducted an analysis of 21 of IBM Smarter Commerce case studies and their ROI, and discovered that for every dollar spent, companies realized an average of U.S. $12.05 in returns.

According to the research, this payback occurred in an average of 9 months (with a high of 23 months, and a low of two).

The cases Nucleus analyzed included U.S. and European companies and government agencies which had deployed IBM Smarter Commerce technologies.

All the case studies were developed independently by Nucleus, following their standard ROI methodology, and IBM was privy to the results only after the research was completed.

In their analysis, Nucleus also observed some summary conclusions, finding that Smarter Commerce projects delivered both top-line and bottom-line benefits, with roughly 60 percent of returns coming from indirect benefits such as productivity, and the rest from direct savings such as reduced operational costs or hires avoided.

Specific key benefits included the following:

  • Increased productivity. In many cases companies were able to accomplish more work with fewer staff or avoid additional hires as they grew by automating previously manual processes and increasing employee productivity.
  • Reduced costs. Smarter Commerce customers experienced cost reductions in areas such as customer call handling costs, technology costs, and other costs associated with supply chain transactions.
  • Improved inventory management. Greater visibility into customer demand and inventory levels enabled Smarter Commerce customers to gain better control over their inventory, reducing inventory carrying costs and increasing inventory turns.
  • Improved decision making. Greater agility and rapid insight into data for decision making enabled companies using Smarter Commerce to more quickly make decisions and act on them with confidence.
  • Reduced customer churn and increased customer satisfaction. Companies using IBM Business Analytics were able to more rapidly understand customer satisfaction and retain more profitable customers by proactively addressing customers’ propensity to churn. For example, one telecommunications customer was able to reduce customer churn by 8 percent in the first year and 18 percent in the second year by further refining its churn analysis.

Customers Leverage Prepackaged Functionality

Nucleus indicated that the $12.05 average return from Smarter Commerce was at the high end of the range of returns Nucleus had seen from other assessments of deployments such as analytics and CRM, and many IBM Smarter Commerce clients indicated they had achieved high returns by taking advantage of the investments IBM has made in providing integrated solutions, more intuitive user interfaces, and prepackaged industry functionality.

By way of example:

  • Integrated solutions and prepackaged industry functionality accelerate time to deployment and time to value while reducing overall project risk.
  • Usability improvements drive more rapid adoption and make it easier for companies to drive adoption of technologies such as business analytics to casual and business users beyond the data expert specialists that have historically been the primary users of analytics.

Industry-specific functionality and expertise were particularly important in the success of customers adopting Smarter Commerce technologies in the government sector, such as social services agencies and police departments, where IT often has limited resources.

You can go here to download the full report.

Talk To The Mannequin Middleman

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Middlemen have gotten a pretty bad wrap since the Internet came along.

First, it was the travel agents, who were one of the first to be “disintermediated” by sites like Expedia, Orbitz, etc. Why hire a person to do what a computer and network could do?

Although it turns out it wasn’t quite that easy, as we later discovered, and nearly 20 years later there are still travel agents, but they’ve evolved and often moved up the value stack in terms of their offerings. (As an example, whenever I book a scuba diving trip, I typically now use an exclusive provider of scuba vacation travel, and they’ve served me quite well…although, sigh, it’s been far too long since I went diving!)

At IBM, we’re only supposed to employ our American Express travel agents when we’re traveling overseas.  I, personally, don’t mind using our Online Travel Reservation system for planning my travel, but that Web-based system has never been the same as talking to a really good Amex travel agent, and it certainly has never made me laugh.

So this story in The New York Times caught my eye, which explains how e-commerce companies are “bypassing” the middlemen in a variety of e-commerce verticals.

From eyeglasses to office supplies to bedding to nail polish to shaving supplies, there are host of “smarter commerce” e-commerce ventures popping up that are “controlling the supply chain,” providing products and services to end consumers at lower costs than many big retailers while pocketing the disintermediated profits.

But before you leap headlong into a Web server (which, let’s be frank, could hurt!), let’s not forget that physical presence still matters.

CNBC reports that “what’s old is new again” for some e-commerce retailers, outlining that a “growing number of online retail companies are setting up physical stores” in response to trends like “showrooming,” whereby consumers do in-store flybys only to later make a purchase online.

IBM vice president and global retail leader Jill Puleri was quoted in the story with this observation: “If there’s one thing showrooming teaches us, it’s that consumers still want to see what they are buying in person.”

It goes on to cite data from IBM suggesting that “50 percent of online sales were generated after consumers first browesed offline.”

So what’s next? One could easily envision pop-up stores emerging in highly-trafficked areas around the world: airports, train stations, even shopping malls, where consumers could “touch and feel” the merchandise and then get incented to go and make an actual purchase online.

Now if they could just figure out a way to make those in-store mannequins just a little less creepy.

Big Commerce In China

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China's Taobao is just one of thousands of Chinese-based e-commerce properties helping propel China into the world's single largest digital marketplace. So far in 2012, Alibaba (Taobao's parent company) has generated over $157 billion U.S. in gross merchandise volume, making it the largest e-commerce property in the world.

China’s Taobao is just one of thousands of Chinese-based e-commerce properties helping propel China into the world’s single largest digital marketplace. So far in 2012, Alibaba (Taobao’s parent company) has generated over $157 billion U.S. in gross merchandise volume, making it the largest e-commerce property in the world.

You read in my last post about last Monday’s “Cyber Monday” tidings according to the IBM Digital Benchmark.

Well, TechCrunch is reporting from comScore data that the holiday shopping juggernaut continues well beyond Cyber Monday.

comScore’s data found that e-commerce spending for the first 30 days of this November-December 2012 holiday season has amounted to a respectable $20.4 billion, a 15 percent increase over the same time period last year.

During the past week alone, comScore reported three individual days surpassing $1 billion in spending, according to the TechCrunch post by Leena Rao, with the peak, of course, coming on Cyber Monday at $1.46 billion.

Of course, all that might seem like chump change when you hold it up against some e-commerce numbers coming out of China, via a post on VentureBeat.

China’s e-commerce giant Alibaba alone has sold an estimated $157 billion U.S. in gross merchandise volume this year, which VentureBeat observes surpasses Amazon and eBay combined.

In fact, Alibaba is believed to have garnered a $3 billion single sales day earlier this year.

But the real story here may be Jack Ma’s “Alipay,” Alibaba’s payments processing unit, which now has over 700 million registered users.

According to a recent report from the folks at eMarketer, China’s antiquated banking system and low usage by consumers of credit cards is benefiting the e-commerce industry there.

Alipay, now China’s largest third-party online payment solution, essentially provides escrow payment services that not only facilitate e-commerce transactions in China, but also reduces risk to consumers, because with Alipay, they have the ability to verify whether or not they are satisfied with their purchases before releasing funds to the seller.

And Alipay isn’t just limited to the Chinese marketplace. It now handles transactions in 12 foreign currencies, including in U.S. dollars, Japanese yen, and the euro.

According to the eMarketer report, Alibaba is also upgrading its COD payment infrastructure, investing some $79 million U.S. in a portable device that Alibaba says will consolidate logistics records with credit/debit card payment information in a single terminal.

It’s Alipay’s intent to install thousands such devices across China’s first- and second-tier cities (think Beijing, Shanghai, etc.) by the end of this year, which will help with China’s broader goals of fomenting increased internal consumer consumption.

Of course, if you’re News Corporation, and you’re in the iPad publishing business, no amount of Chinese e-commerce facilitatin’ payment devices are going to help a fledgling business model.

Earlier today, News Corp. finally bifurcated its publishing and entertainment businesses, and seemingly as a minor sidebar, also conceded defeat of its The Daily iPad app effective December 15.

The Daily had been News Corp’s digital pride and joy, a valiant attempt at delivering a daily news publication via the iPad only 100,000 people wanted.

At 99 cents a week, that apparently was not revenue enough even close to maintaining a viable business, so The Daily will now be put to bed.

Ever-reliable media critic website Poynter noted The Daily had two key lessons of failure from which we could all learn.  One, they had no clarity on its intended audience (I thought that was supposed to be iPad users!), and two, one platform, the iPad, just wasn’t enough in a multi-device world.

Perhaps they should have instigated a Chinese edition? Surely they could have drummed up a few more hundred thousand from a population of 1.3 billion!

Written by turbotodd

December 3, 2012 at 11:34 pm

Live @ IBM Smarter Commerce Global Summit Orlando: IBM’s Jay Henderson On The IBM Holiday Benchmark Online Shopping Analysis

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Jay leads product strategy within IBM’s Cross-Channel Marketing team. His team is responsible for market analysis, customer insight, and industry marketing functions. He came to IBM through its acquisition of Unica, and has over fifteen years’experience in multi-channel marketing and customer analytics. Previously, he served in various marketing roles at predictive analytics leader SPSS (also part of IBM), web analytics pioneer NetGenesis, and management consulting firm Cambridge Technology Group. Jay holds degrees from MIT’s Sloan School of Management and the Sorbonne (Paris IV).

Jay Henderson has been there, done that, and got the t-shirt when it comes to marketing analytics…one he probably bought online.

Currently the strategy program director at IBM Cross-Channel Marketing, Jay’s team is responsible for market analysis, customer insight, and industry marketing functions, and I had the privilege of sitting down with Jay last week at the IBM Smarter Commerce Global Summit to talk many things analytics.

Jay’s heritage pre-dates his tenure at IBM, joining Big Blue through its acquisition of Unica.

Jay has over fifteen years’ experience in multi-channel marketing and customer analytics, and prior to joining Unica, he ran marketing for text mining pioneer ClearForest, the technology from which was later acquired by Thomson Reuters.

Jay’s most recent claim to fame has been the preparation of the IBM “Holiday Benchmark,” a near real-time analysis of the e-commerce retail activity during the annual holiday shopping season.

If you want the inside skinny on Black Friday, Cyber Monday, and other key shopping inflection points, the IBM Holiday Benchmark provides some excellent benchmark statistics. During our chat, Jay also made some news when he revealed that IBM is also going to be issuing soon some new reports, including a “back to school” retail analysis.

So, wanna know about major trends in the e-commerce realm? Watch the interview with Jay and find out!

Shopping In The Great White North

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IBM recently announced a big win in its “smarter commerce” initiative. SHOP.CA, Canada’s largest online e-commerce marketplace, is using analytics software from IBM’s smarter commerce initiative to help engage increasingly empowered online consumers in a unique shopping experience, and build loyalty and sense of community.

A recent IBM survey of more than 2,000 Canadians showed friends and family are by far the most trusted influencers on purchasing decisions, but retailers are also gaining trust among shoppers here.

The same research also identified a growing movement among consumers to use social media to build communities with others who share their interests and tastes, and who consume the same. These strangers then help the consumer make more relevant discoveries and satisfying purchases.

SHOP.CA: One Stop Online Shopping

SHOP.CA’s online marketplace features millions of products across 26 categories and billions in multi-merchant inventory. Its website offers Canadians one-stop access to national and international brands, free shipping, free returns and no cross-border fees.

Also hosting a powerful loyalty program, SHOP.CA Rewards Dollars are offered for both purchases and online activities that generate a purchase, such as sharing a link to a favorite product with a friend, or posting written or video reviews to social media sites like Facebook and Twitter.

“With SHOP.CA, shopping will be forever changed in Canada,” says Don Tapscott, author and world leading business strategist. “It’s going to make shopping ‘social.’ People will become deeply engaged in the community. They’ll learn from each other. They’ll be able to collaborate, and because of the loyalty programs, they’re going to want to come back.”

SHOP.CA selected IBM’s technology as the e-commerce engine to power its consumer storefront, multi-merchant product catalog and SHOP.CA rewards program. IBM will also provide analytics on how site visitors behave and interact, as well as track their searching and buying histories. This data will get SHOP.CA insight on how, when and where to reach shoppers with content and offers personalized to their taste and preferences via mobile or social vehicles.

Smarter Commerce: A $20 Billion Software Market

Estimated at $20 billion for software alone, IBM has defined smarter commerce, a new, unfolding market driven by Web, social and mobile technologies which put more power in the hands of customers.

Today, 70 percent of the consumer’s first interaction with a product or service takes place online, and 64 percent of consumers make a first purchase because of a digital experience. Under the terms of the agreement, IBM is providing SHOP.CA with Coremetrics web analytics delivered through the cloud and IBM WebSphere Commerce Professional.

Go here to learn more about IBM “smarter commerce” solutions.

In the video below, Scott Laningham and I interview Don Tapscott at this year’s SXSW Interactive Festival about how digital technology is changing our world, detailing for us mere mortals its impact on business, education, children, and beyond.

Santa’s E-Commerce Play

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Ho ho ho!  Merry Christmas!

IBM Benchmark data revealed that online shopping jumped 16.4 percent on Christmas Day, compared to last year, and the dollar amount of those purchases that were made using mobile devices leaped 172.9 percent!

And apparently, it was.

I didn’t try to track Santa via Santa Norad, but apparently Santa didn’t need nearly the help he might have.

According to some more IBM Benchmark e-commerce tracking numbers from the holiday shopping season, lots of folks were ready for more virtual commerce even on Christmas Day.

I count myself among the guilty.

The IBM data discovered that online shopping jumped 16.4 percent on Christmas Day, compared to last year, and the dollar amount of those purchases that were made using mobile devices leaped 172.9 percent.

IBM tracks shopping at more than 500 websites (other than Amazon.com, which is where *I* was shopping!).

It also found a huge increase in the number of shoppers making their purchases via iPhones, iPads and Android-powered mobile devices. In fact, nearly 7 percent of all online purchases were made using iPads, just 18 months after the tablet computers were released by Apple Inc..

The online shopping increase continued on Monday. As of 3 p.m. Eastern time, shopping was up 10 percent over Dec. 26, 2010, and the expectation was that the pace of buying would increase as the day wore on and consumers clicked on sales at various retailers.

The data did not show what portion of purchases was made using gift cards, which typically see a big bump just after holidays as folks start cashing those gift cards in and make purchases (online and off).

Speaking of online gifts, IBM has been making some pretty heavy duty investments in Santa’s e-commerce play, what we’re calling “smarter commerce.”  Between the numerous acquisitions and continued organic investment, IBM’s smarter commerce effort recognizes that the final sale is just one aspect of the overall commerce experience.

Last year, IBM researchers surveyed more than 500 economists worldwide and estimated that our planet’s system of systems carries inefficiencies totaling nearly $15 trillion, or 28 percent of worldwide GDP.

Much of this waste is found in our systems of commerce — in inventory backlogs, failed product launches, wasted materials and ineffective marketing campaigns.

Today’s customers have no patience for this kind of waste. They will not remain loyal to products or brands while the cost of inefficiency is passed along to the buyer. And it will not take them long to find the same product or service from a competitor.

These customers are empowered by technology, transparency, and an abundance of information. They expect to engage with companies when and how they want, through physical, digital and mobile means.

They want a consistent experience across all channels. They compare notes. And they can champion a brand or sully a reputation with the click of a mouse.

Nowhere is this shift more visible than in the retail industry, where companies are rapidly adapting to this new reality, integrating their  marketing efforts and using analytics to better understand their new, more fickle customers.

But retail is only the beginning. It is merely the front line of a customer revolution that will eventually reshape the entire value chain, from the way raw materials are sourced to the way they are manufactured, distributed and serviced.

Keeping up with today’s customer will take more than an email marketing campaign and a Facebook page.

It’s going to take a better system of doing business. It’s going to take smarter commerce.

Just as with traditional commerce, the customer is at the center of all operations, and smarter commerce turns customer insight into action, enabling new business processes that help companies buy, market, sell and service their products and services and, in the process, make for happier customers.

Smarter commerce reaches deep within the businessto-business supply chain, integrating business partners, suppliers, and vendors, enabling the entire value chain to anticipate customer needs, not react to them.

And it identifies and addresses the unsustainable inefficiencies of our global systems of commerce.

Visit here if you’d like to learn more about IBM’s smarter commerce strategy.

In the meantime, we’ll be sure to keep an eye on Santa’s post Christmas holiday sales!

Written by turbotodd

December 27, 2011 at 4:53 pm

AutoTrader.Com Pulls Into The Passing Lane

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In the market for a car?

AutoTrader.com aggregates in a single location millions of new cars, used cars and certified pre-owned cars from thousands of auto dealers and private sellers and is a leading online resource for auto dealers, individuals and manufacturers to advertise and market their vehicles to in-market shoppers.

Well, IBM announced today that AutoTrader.com, one of the leaders in the online automotive marketplace, is now using IBM technology for smarter commerce as part of its electronic sales order system to simply and accelerate the ordering experience for its dealer and manufacturer customers.

IBM’s Smarter Commerce software makes it easier and faster for AutoTrader’s clients — auto dealers and manufacturers — to promote their vehicles to consumers.

It enables these clients to improve how they sell their cars through AutoTrader.com by simplifying the process to select promotions and configure, capture and complete orders for AutoTrader’s advertising programs.

“Providing access to leading-edge applications of information and technology are core to providing the best online automotive shopping experience,” said Gib Finley, director, Business Applications, at AutoTrader.com. “IBM delivered innovative ordering technology that make it as easy as possible for our clients to do business with us.”

AutoTrader.com is using IBM’s Sterling Commerce Configure, Price, Quote software to simplify the configuration and capture of orders for its advertising solutions.

The software integrates easily with AutoTrader.com home-grown applications to provide customers with easier, more efficient ways of ordering cars online.

It also guides a car dealership on how to quickly and easily put together an advertisement that best flaunts the dealerships’ new, used or pre-owned vehicles for sale — then helps that dealership select the best package to most effectively reach its prospective customers through context-sensitive capabilities.

AutoTrader.com IT delivered its Electronic Sales Order System (ESO) as a component of the company’s overall business strategy to dramatically improve the way people research, locate and advertise vehicles.

With Smarter Commerce, the company has been recognized for its use of service-oriented architecture (SOA), master data management, sales catalog, order configuration, information management and real-time business intelligence.

In fact, AutoTrader.com was named to the 2010 InformationWeek 500 (InformationWeek‘s annual listing of the nation’s most innovative users of business technology) for its work developing ESO.

Visit AutoTrader.com if you’re in the market for a new car, or IBM’s Smarter Commerce site if you’re in the new market for some award-winning e-commerce technology.

Written by turbotodd

November 10, 2011 at 4:42 pm

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