As an increasing area of focus for retailers, today we’re launching a brand new research study focused specifically on payments. We’ve partnered with Javelin Strategy & Research to explore which payment forms retailers currently offer their customers (and what they plan to offer in the future), how much usage various payment forms are getting at this point, the degree to which alternate payments influence customer acquisition, where payments fits into the overall development budget and priority list, and more.

The success of this research, of course, depends on you, the online retailer. If by end of day tomorrow (Thursday, July 29) you don’t receive an email invitation to participate in our survey, please let me know. The deadline to participate is just two weeks from now – Wednesday, August 11. Please help us develop the benchmarks you need on this important topic. As always, we only report results in aggregate, and all retailers who complete the survey by the deadline will receive a complimentary copy of the results.

Please let me know if you have any questions about this or other Shop.org research. Thank you for supporting this new research endeavor!

BIGresearch generously provided Shop.org a more detailed analysis of those online shoppers to understand this segment in more detail.  Shop.org members can now download the full results, and herewith a couple of highlights: 

• Online BTS shoppers will shop not only online, of course:  approximately three-quarters plan to buy also in clothing stores, discount stores, and department stores (and that’s quite a bit more than their offline-only counterparts).  Close to half will also buy in an electronics store, or twice the number of offline consumers.  A reminder of just how important the multichannel shopper really is to the multichannel retailer. 
• Almost half of online BTS shoppers plan to start their shopping 3 to 4 weeks before school starts, although well over a quarter already started their shopping as far back as late June or early July.  (Once school is out, it appears that BTS messaging almost can’t start too early.)
• The overall news about total spend for BTS this year is certainly good:  BTS shoppers  in general expect to spend a combined average of $606.40. But the news gets better:  people who plan to do at least some of their BTS spending online plan to spend a combined average of $871.99, or 44% more than offline-only BTS shoppers. 
• Part of that impressive spend difference certainly has to do with significantly higher expected net average spend among online BTS shoppers for electronics or computer related goods.  That said, online BTS shoppers are anticipating a higher net average spend for clothes, shoes and school supplies as well. 
• As to how the state of the economy is impacting BTS shopping for online consumers, over half noted that they are shopping for sales more often and doing more comparative shopping online, whereas close to half are buying more store and generic brands, spending less overall, consulting ad circulars and newspapers (there’s that channel –agnostic customer again…), and using coupons more. 

As always, I welcome your thoughts and feedback.

So advised speaker after speaker at the Shop.org Merchandise Summit held earlier this month in sunny Huntington Beach, California. Despite the pleasant weather, attendees stayed focused in the conference rooms (strategically chosen for their lack of windows!). It’s clear there is a pressing need to optimize the use of both new and old technologies to create compelling customer experiences, especially in today’s socially connected marketplace.

It’s a marketplace that rewards rapid change and adoption of new channels. Consumers and business professionals research online – usually not on our own websites – and come armed with opinions, preferences and, perhaps more importantly, options. They want to do business across multiple channels, and even on the go. Chris McCann, President of 1-800-Flowers, advises retailers to expand to new channels in order to “Fish where the fish are.” For his company, those waters includes Facebook, mobile devices, email, the web and yes, even brick and mortar stores. Known for being a first mover, 1-800 Flowers had the first transaction via Facebook, but has since updated their store. They have also opened a mobile commerce offering, with limited SKUs and a log-in to access address book and payment options.

While every channel opens up the need for new technology, new data integration and new ways to optimize customer experience, the approach is always the same. In his opening keynote presentation, he said, “Build relationship first, do business second. Connecting with customers is basic, and central to success – no matter what the channel.” No marketer focused on customer satisfaction would disagree. However, it can be overwhelming to consider the myriad of technologies, platforms and social networks.

In fact, the theme of the entire conference was around “harmony” between balancing the need to optimize current assets and investing in new technologies. “It’s like walking a tightrope,” says Shop.og Director of Content Larry Joseloff. “On one side, I must embrace new tools, but on the other hand, I have an opportunity to optimize what I already have in place. How do I choose?” It’s particularly hard when marketers consider the vast number of new vendors eager to help them.

“Everything sounds really wonderful and valuable in concept, but the hard part is figuring out how to prioritize, synergize and make existing investments more valuable,” says Shop.org Board Director and long time retail marketing executive Anne Ashbey. “The technology can sometimes mask the art of merchandising – the part that relies on us really knowing our customers, helping them uncover new needs or find the perfect item or gift. The science can be so overwhelming, but we must be careful to use digital platforms and all that data intelligently in order to empower and nurture the art that retail merchandisers do so well.”

Not only are vendors eager to help retailers, but consumers seem eager to help themselves. “Does anyone make a buying decision on their own anymore?” lamented McCann of 1-800 Flowers. The social nature of buying has changed how consumers interact with brands. Retailers that enable social buying are finding some success. Wet Seal offers their teen buyers a group chatting feature so that choices on the best outfits can be made with inputs from friends.

Jeremy Stayton of Adgregate Markets showed some very cool social sharing and group buying features enabled in their Facebook store platform. For example, I can invite several friends to join me on a virtual shopping trip and to earn a major discount when we all buy the same items(s). Retailers can now take full advantage of the unique power of a Facebook store to increase sales and grow the customer base by creating ambassadors of existing fans.

Across all channels, it’s imperative to balance both your marketing and your merchandising needs, says September Fleming, Internet Content Manager at Woodcraft.com. “Customer acquisition and conversion efforts go hand and hand,” she says. “Both are important, especially if you’re spending money to send people to a landing page. Marketing can drive all sorts of visitors to a destination, but without coordination with the merchandising team, conversion could suffer. A great landing page experience is about answering needs – which is specific to the customer source, need and the channel.”

Conversion optimization is different between channels, even when channels support each other, Fleming says. “My needs when I shop online from a catalog are different than when I shop via the internet or come in via an email promotion,” she says. Everything from customer service links, to the wording on a button, to cross promotions can impact order size and conversion.

Optimization and search expert Bryan Eisenberg agrees. In his keynote, he offered dozens of site optimization tips based on testing with many retailers. “Acquisition is not about targeting. It’s about experience and conversion,” he says. “Budget where the customer experience happens: On the website. The website is the center of the universe for your customer experience.” His advice: Just start. “Next week, do something to improve conversion. When you start it will be hard. It will be a huge effort. But it gets easier. Keep practicing. Keep doing it.”

He offered a five step process:

1. Identify a hypothesis (a problem and opportunity).
2. Create a to-do list of what you would like to improve.
3. Document your hypothesis. (e.g.: Screen shots of competitors, case studies)
4. Prioritize based on potential ROI.
5. Start testing.

That is inspiring advice – we’d all like to be proactive when it comes to higher conversion. However, testing is complicated and hard to do well. “Who wants to be the one who suggested the idea that lost 10 points on conversion?” Woodcraft’s Fleming laughed. Having a testing methodology and getting support within the organization is still a challenge for many marketers. Too many organizations are not supportive of failure, even when it helps move the needle on conversion in future. Plus, ensuring that hypotheses are measureable and provable is not trivial.

Still, the only way to improve is to innovate – which is, perhaps, reliant on a combination of that “innovation attitude,” access to powerful technology, and some honest perspiration.

If you were at the event, what did you learn that you’d like to share? Or, comment on these learnings and please share any ideas or comments below.

To those who may be curious about how I came to this decision, the answer is pretty simple:  I’ve been surrounded by innovative, entrepreneurial people and companies for over a decade.  At Shop.org, I’ve had a front row seat to all the excitement of the digital retail industry.  It’s been fun and intellectually stimulating, and the growth of Shop.org is an enormous source of pride for me.  Now, I have an opportunity to jump into the game.  Thanks to a super supportive wife and family, I have the opportunity to scratch an itch and eliminate any regret later in life that I didn’t try something like this.

I am eager to share more information about my next adventure, the details of which will be available in September.  What I can say for now is that I will be the co-founder of an early stage start-up that ties virtual goods to retail.

In the meantime, I still have almost a month left at Shop.org. During this time, I will be busy helping to make the Annual Summit bigger and better than ever (like everything else in Texas) as well as working on a variety of transition-related activities.

I want to thank NRF CEO Matt Shay for being gracious and more supportive than one could ever expect from a boss in this situation.  The same goes for the amazing team at Shop.org and the Board of Directors, who are the heart and soul of this organization.  With such a talented and committed infrastructure, I know that Shop.org’s best days are ahead of it.

Even though my last official day at Shop.org is August 13, I’ll always feel incredibly indebted to and tied to this organization, which means so much not only to me but to thousands of people in our industry.

P.S. NRF is conducting a search for a new executive director of Shop.org.  Feel free to contact me if you want to learn what an awesome job it is.

The Guide draws from the 2009 eHoliday pre- and post-holiday surveys. This annual research, conducted in partnership with BIGresearch, explored what consumers and retailers expected before the season started, as well as what actually happened after the season ended. Additionally, we are able to draw examples of what retailers did from the annual Resource Interactive O.P.E.N. Watch Retail Edition. New this year, we are also pointing readers to other Shop.org resources, from Webinars and research to blog posts and press releases.

So, rather than rattling on with highlights, how about a little quiz testing what you remember of last year’s Holiday season (answers at the bottom) — use them as little reminders of things to think about for the upcoming season. If you’re stumped, you know where to find the answers – and much more.  Also, be sure to register for next week’s Webinar on preparing for the holidays, featuring panelists from Gump’s, Kenneth Cole, and Sport Chalet. 

Happy holiday planning in the meantime!

Shop.org eHoliday Quiz

1. What day of the week during the month of December has been most auspicious for online retailers surveyed in recent years?
a. Friday
b. Tuesday
c. Monday
d. Sunday

2. How many consumers bought at least one gift card as part of their online holiday shopping last year?
a. One quarter
b. One third
c. One half
d. Three-quarters

3. Which did retailers cite as the two most cost effective marketing vehicles for the past two holiday seasons? (Please pick 2.)
a. Email to one’s house list
b. Twitter
c. SEO
d. Affiliate and loyalty programs

4. What percentage of consumers finished their holiday shopping in the last two weeks of December?
a. One quarter
b. One third
c. Half
d. Two thirds

5. How are most consumers likely to find a retailer online?
a. Received an email from a retailer
b. Used search engine results
c. Shopped from the Web site before
d. Go to a set bookmark

6. Which two online marketing channels yielded half of paying customers for retailers surveyed last holiday season? (please pick 2)
a. Email to house list
b. SEO — natural / organic
c. SEM – paid listings
d. Affiliate & loyalty programs

7. Other than free shipping offers, which promotion did consumers use the most for their online holiday shopping?
a. Coupon – dollars off
b. Coupon — % off
c. Free shipping upgrade
d. Loyalty or membership points

8. What percentage of retailers surveyed last fall planned to use email to promote offline (e.g. in store) Black Friday and Thanksgiving weekend specials?
a. One quarter
b. One third
c. Half
d. Three quarters

9. What was the most commonly offered Cyber Monday promotion in 2009?
a. Coupon – percentage off
b. Free standard shipping with conditions / minimum
c. Free standard shipping with no conditions / minimum
d. Limited time promotion

10. Which is the promotion that retailers expect most to offer again this Holiday season?
a. Coupon – percentage off
b. Free standard shipping with conditions
c. Limited time promotion
d. Coupon – dollars off

Answers: 1.c , 2.c , 3.a & c , 4.d , 5.c , 6b & c. , 7.a , 8.d, 9.a , 10.c

I wanted to write a quick note and thank all of the attendees, staff members, speakers, board members, content committee members, and everyone else that made the Shop.org 2010 Online Merchandising Workshop such a success.   I have been helping to direct content for over four years and according to most of the feedback we hit the nail on the head by providing content that is by the member and for the member.

Please check out our recap page that has a brief summary of the event along with links to the blog entries and many of the presentations.   If you came to the Workshop and you have not filled out the survey yet, please do as we ready every piece of feedback and use it to try and make every event the best it can possibly be.   If you missed the workshop, we hope to see you in Dallas for our Annual Summit as this is looking like the best one yet — of course everything is bigger in Texas!

Thanks again and please feel free to contact me with questions, comments, or additional feedback on the Workshop.

Larry Joseloff
VP, Content
joseloffl@shop.org

During his keynote, McCann talked about some of his company’s philosophies on connecting with customers to ultimately increase sales and offered tips for every retailer to use in creating more powerful relationships with their best advocates.

First, he walked through several different customers who had cemented themselves in his mind from his first days of running a flower shop with his brother on Manhattan’s Upper East Side in 1976. There was Phyllis, the socialite; Ellen, a music industry executive with a “vivacious personality”; celebrity clients like Walt Frazier; and a guy named Big Paulie, who McCann described as “the bookie who ran a shop across the street.”

From those early days working in the shop, McCann realized quickly that merchandising to each customer in a unique way was imperative. (Case in point: Phyllis preferred expensive but tasteful displays, McCann said, while Big Paulie would often leave the shop barely able to carry the huge arrangement he’d just purchased.)

Learning from each of those personalities was crucial as well. “Each customer was different but they’d stop in the store, sit down and have a cup of coffee with us,” McCann said of his lessons during those years. “We learned so much from them in how to run our business.”

While the company still has stand-alone stores, 1-800Flowers.com has a vibrant online presence. And translating the store experience to the online world remains a constant challenge.

Whether the focus is online or offline, retailers have a number of opportunities to connect with everyone from Phyllis to Big Paulie. For McCann, creating a powerful connection with customers means doing the following:

Getting them involved. When launching its Happy Hour collection, 1-800Flowers reached out to customers to help create ad copy for its billboards. The suggestions were beyond what the company had thought up, and provided recognition by placing the person’s name and city alongside their quote. The ads were tremendously successful and were another way to make customers feel connected to the company.

Being relevant to all customers. While many of the company’s customers are women, McCann said, men make up an important demographic of flower buyers. That’s why 1-800Flowers decided to create a “Guys’ Guide to Flowers,” which debuted today. The page helps men choose a flower arrangement by asking them to list the type of person they’re buying for, the occasion, and the guy’s “intentions” before recommending a bouquet. (ie: It’s important for men to sidestep bouquets that say, “I love you” if he’s, umm…not ready just yet to send that message.) The site also features a special “apologizer” section to help men get out of the doghouse.

Leveraging your strengths. Many years ago, 1-800Flowers.com partnered with another retailer to sell jewelry on its website. Though the partnership was profitable, McCann said, it ultimately didn’t last. Why? Because the company realized it needed to focus on its core strength – possessing an authority and expertise on flowers and floral design – without being distracted by other categories.

Being prepared for circumstances where customers aren’t happy with you. McCann shared his simple philosophy: “I deal with a perishable product. Things go wrong in our business. When something goes wrong, it’s a matter of how you respond to it. That’s how you build customer trust. Customers expect things to go wrong. There’s so much power in the consumers’ hands today…you have to figure out how to make it right.”

Not mistaking strategy for execution. “I go nuts in my company – we have so many conversations about strategy,” McCann said. “I say, just execute. If you’re executing taking care of your customers, your customers will tell you what your strategy is.”

Understanding how the customer has changed. The recession brought about a shift in customer behavior, and many of today’s shoppers are focused on value. While value means a lot of things – a unique design, excellent quality and superior service, for starters – there’s one thing value doesn’t mean: price. “Value does not mean the cheaper price,” McCann said. “To different customers, value means different things. Some are looking for value at a $100 price tag, some are looking at $20-$25.”

Making them smile. This summer, 1-800Flowers launched a “Summer of Smiles” campaign, which encourages customers to send in suggestions – in 100 words or less – of who they think deserves a Happy Day bouquet. (A few lucky recipients are surprised with the gift.) In a short time, the company has received hundreds of submissions – and now has a cache of user-generated content they can leverage for years to come.

70 retailers participated in the Q2 survey, which was in the field from July 1 to 7, 2010. Shop.org Members can now download the results summary as well as the more detailed results overview. A few highlights:

• Average gross Web sales growth for Q2 2010 vs. Q2 2009 for retailers surveyed was 15.1%.  
• Almost half experienced growth of 10% or higher. 
• Over half of small retailers ($10 million or less in annual Web sales) experienced growth, as did almost two-thirds of medium size retailers (between $10 million and $100 million in annual Web sales).

Many thanks to all retailers who participated in this survey – despite the many mixed economic signals in the news, it’s good to see online retail continuing to make progress.

The tie-in? The hats were a shout-out for Shop.org’s Annual Summit this September in Dallas, and dozens of online retail execs got in the spirit. With speakers like Urban Outfitters CEO Glen Senk, Shoebuy.com CEO Scott Savits, and legendary online marketer Mitch Joel, it’s no wonder why attendees are already excited to head to the Lone Star State in a few months.

But with several great sessions lined up tomorrow on empowering the customer, mining product reviews, and leveraging online photography, attendees were clearly happy to hang out in Surf City for another 24 hours.

Those were the three words by which Bryan Eisenberg started his keynote at this morning’s Online Merchandising Workshop. But after that sobering beginning, Eisenberg offered a bit of comfort. For starters, he said, don’t worry too much: everybody’s website sucks. None of us have unlimited resources to get everything right. Basically, you’re in good company. As if that’s any consolation.

However, your website needn’t suck as much as it does. In fact, he said, he’s learned 21 secrets that make sites suck less. Eisenberg’s rapid-fire session was filled with 21 tips and gobs of examples of companies who were doing at least some of it right. And after that introduction, it’s no wonder attendees paid attention – and why some people in their feedback forms ranked Bryan’s session a 6 on a scale of 1-5.

Since he asked us not to share all 21 tips – after all, there should have been some incentive to actually attend his session today – and because it would have been impossible to transcribe his fast-moving keynote even if he didn’t, I pared down Bryan’s advice for retailers to my five favorites:

1) Realize no brand is universally known. Not everyone knows what you stand for or why you’re successful, he said. As a result, “you must communicate your unique value proposition and unique campaign proposition on every single web page.” It’s not good enough to list your value proposition on the front of your website – it must be reinforced to customers who are drilling deeper into specific categories or products, and also placed on item pages for those shoppers who head directly to specific sections after being directed there from a search. Examples of websites who have done this well include Vita Cost, L.L.Bean, GoToMeeting, and Helzberg Diamonds.

2) Leverage social commerce. We all know reviews are important in gaining trust, Eisenberg said, but companies can use reviews in more powerful ways than just the web. Retailers that are taking feedback from online product reviews and leveraging them in stores and catalogs are able to maximize this valuable content and increase sales. Who’s doing it? Lego, Williams-Sonoma, Barratts (they put reviews on their shoe boxes) and Best Buy.

Side note: Not only does Best Buy place customer reviews on in-store tags, Eisenberg said, the company is taking it one step further. Knowing that bar code apps like Red Laser are among the most popular mobile applications, Best Buy also places the bar code for the products on their in-store tags – so customers who want more information on a bulky TV or refrigerator just need to scan the tag, not try to find it somewhere on the box.

3) Learn and apply the principles of persuasion. Eisenberg asked the audience for a show of hands among those who have read “Influence: The Psychology of Persuasion.” I was one of two people, I think, who raised their hand. (I knew that Communication Theory course my senior year in college would pay off eventually!) What are the principles of persuasion, you ask? The six principles range from scarcity to authority to commitment– the basic, fundamental ways you can convince people to do things.

Two examples of companies using the power of persuasion to convert browsing into buying? eBags’ “Steal of the Day,” which used the principle of scarcity, told shoppers not only the number of items remaining in the daily deal but also the number of people shopping on the site at that very moment. On the other hand, FreshDirect’s recent promotion to include a free piece of peak produce with every order leverages the principle of reciprocity. “This is the concept of the baker’s dozen,” Eisenberg said. “We often forget this in online retail.”

4) Understand the customer buying process. Selling is not about throwing up products on your website, Eisenberg said. Instead, understand who your customers are, what they want, and how they buy. A great example? The Lands’ End swimsuit store. Not only does the site let women shop for suits by style, it gives them suggestions based on their shape, “anxiety zones” and bra size. And if a shopper has a question about fit, return policy, or sizing, the 1-800 number on the site takes the customer directly to a person who specializes in bathing suits. (Every woman I know is probably thinking the same thing right now: “Genius”!)

5) Execute rapidly. Two hours after Michael Jackson passed away last summer, Amazon.com had reconfigured its mp3 store with an image of Jackson and links to his music. The company had a system in place that allowed it to react immediately to outside events. “The reason Amazon is so successful is that they learned how to execute,” Eisenberg said. “How many of you would have to wait two weeks for a committee to approve a decision like that?”

So there’s a taste of what Bryan Eisenberg shared in his session on secrets of the top converting websites. If you were in his session, what takeaways did you leave with that I left out?