From the eCommerce decade to the multichannel present: looking at the growth of online retail and social commerce plus some examples of who is innovating

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2. Dropping the e in eCommerce.
e
e
o The eCommerce decade.
- The first plateau, likes & dislikes, range & recommendation engines
o eCommerce atomises.
- Multichannel fragmentation & new opportunities
o Social Commerce
- Everyone is a salesman
o Who are the Innovators?
- Content, experience & there’s more to the product than price

3. A forecast for eCommerce in the UK
after 10 years* of online retail development.
in online sales in 2014**, which per annum, faster than all retail
amounts to 9.1% of all retail sales. sales over the next five years.
Source: Mintel
*eCommerce actually began in the 1970s with EFT before evolving to what we now recognise
as online retail in the early 1990s, but it is the last decade that saw the birth of profitability.
**The world's first recorded online home shopper was Mrs Jane Snowball,72, of Gateshead,
in May 1984. She bought groceries from Tesco. http://www.aldricharchive.com/snowball.html

4. Market influencers.
Consumer recession will be Increasing need &
much worse in 2010/2011. acceptance of being online.
Increasing concerns about Ageing population boosting
security & privacy. numbers of older people online.
Problems with delivery, Perception that online is
fulfilment & returns. cheaper than offline.
User experience not living up to Comparison culture has
Source: Mintel
needs & expectations. become a mainstream activity.

5. THE NEW PLATEAU.
The days of dramatic volume growth due to broadband penetration
increases are over, but online buyers are spending more per person.
80
Percentage of people in UK buying online
75
70
65
% 60
55
£17.8
in online
ret
es
billion
in ‘09.
ail sal es with
al
etail s 05.
r
6.6% of all since
’
h
growt
50 150%
45
40
‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09
Online accounts for almost 40% of all non-store retailers’ sales (i.e all mail order,
pure-play internet retailers and markets). Share of store based retailing is lower, even
so, it accounts for 2.8% of food retailers sales and 3.3% of non-food retailers’ sales.
SOURCE: Ipsos Mori/Mintel

6. THE NEW PLATEAU.
The days of dramatic volume growth due to broadband penetration
increases are over, but online buyers are spending more per person.
80
Percentage of people in UK buying online
Maturity & Greater Competition
75
70
65
% 60
55
£17.8
in online
ret
es
billion
in ‘09.
ail sal es with
al
etail s 05.
r
6.6% of all since
’
h
growt
50 150%
45
40
‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09
Online accounts for almost 40% of all non-store retailers’ sales (i.e all mail order,
pure-play internet retailers and markets). Share of store based retailing is lower, even
so, it accounts for 2.8% of food retailers sales and 3.3% of non-food retailers’ sales.
SOURCE: Ipsos Mori/Mintel

7. Real world retailers versus Pure Plays?
Only three* of the top 10 retailers by sales are pure plays.
Off-shore Mail order
retailers 23%
23%
eBay
3% Other
8%
Grocers
20% Other
store-based
retailers
23%
*Amazon, Dell, eBay

8. Who, what & how often?
Frequency of browsing, by age and socio-economic group Products bought online in last 12 months
47 CD/DVDs
Books
Women’s clothing
46
Men’s clothing
Couple of times a year Computer hardware/software
45 Electronic gadgets (eg iPod)
Toys and Games
44 Music downloads
Average age
Footwear
Never Grocery shopping
43 Every couple of months Housewares
Home electricals
42 Once a week Cosmetics/Toiletries
Once a month
Gifts/cards
Mobile handset/accessories
41
Sports and leisure goods
DIY and garden products
40 Children’s clothing
Every day Jewellery
39 Furniture and furnishings
Lingerie
SOURCE: GMI/MINTEL (November 2009)
Video downloads
38
More Less 0 10 20 30 40 50 60 70
Affluence
%
25-44 years-olds are the most active users of eCommerce, with books,
CDs and DVDs being the most frequently bought products (the Amazon
legacy). Despite press coverage music downloads are less common and
concentrated among the young. Fashion is the biggest recent success.

9. What do people like (& dislike)
about eCommerce offerings?
Like Dislike
Convenience Navigation
“you can shop at any time “It’s hard to browse & find
and expect delivery within 36 what you’re looking for.”
hours – if you are prepared
to pay for it.”
Immediacy
“Latest products at Product Display
the latest prices.” “Colour, picture quality
Low Prices and size can be bad.”
“Sometimes, not all the time,
people are wising-up.”
Comparison Experience
“Ability to compare
“You can’t try on or
Range products and prices.”
try out the goods.”
“Far more than any store,
esp. ASOS & Tesco Direct.”

10. A decade of dominance.
Since 2000 Amazon.com and eBay have dominated
the online retail market in the United States and
influence how many eCommerce site owners think...

11. ...1-Click,
#1
#2
RANGE &
Recommendation.
#3

12. #1
Enable Single-Action
Ordering
301
Retrieve client ID
U.S. patent no. 7,222,087
1-Click ordering. Set client ID/customer
mapping
302
A broad business method patent
governing the process by which 303
online shoppers make Set single action
purchases with a single ordering for client
click, having previously ID/customer
entered their payment
and shipping information.
304
Return confirming
web page
Ease of use and speed to task completion are key
eCommerce competition areas, Amazon’s patent has
given it a unique advantage over competitors (like Done
Barnes & Noble) and been licensed to Apple.

13. UE, forms & baskets
became battlegrounds.
•Minimize the pain •Familiar vs. foreign info
•No one likes filing in forms •Frequently used vs. rarely used
•Smart defaults, inline validation •Progressive disclosure
•Illuminate a path to completion •Errors, Help, Success
the details.
REFINING
Top aligned
For reduced completion times & familiar data input
Right aligned
When vertical screen space is a constraint
Left aligned
For unfamiliar, or advanced data entry Source: Luke Wroblewski

14. #2
Expanding the range
& consumer choice.
Pure-plays first drove attention by offering
a range of books, CDs & DVDs that no
store could physically stock at lower prices.
Retailers responded by using eCommerce
to extend their reach and protect market
share – a cost rather than an opportunity.
Now it is about integrating
stores & a multi-channel
experience to offer the
widest range in best of
£9.7
is wh
ou
hi n
millio
n
t to
ld cos nes.
at it w g on iTu
buy everyt
both worlds.

15. *
Range is still a USP.
Traditional food retailers like Tesco & Waitrose
and even catalogue retailers like Argos have used
online to expand their range and category offering.
Tesco Direct >11,000 lines
Ocado >21,000 SKUs
*But increasingly a consumer expectation & a user experience challenge. eBay’s early
work on category taxonomy and aspect tagging influenced many site structures.

16. Web Exclusive Ranges
FOR DEAL FOCUSED PEOPLE.
Supp
that o
nline
e
is
belief
orts th “cheaper”.

17. #3
Cross-sell & competitive advantage
through recommendation systems.
OPPORTUNITY TO MOVE PEOPLE’S MINDSETS FROM:
SEARCH & BUY. BROWSE & DISCOVER.
A consumer knows what they are A consumer knows generally what
looking for & use keywords to they are interested in or has
search for it. Speed, ease of use, purchased but not left the site.
result accuracy & price are the key Relevance & engagement create
influencers leading to purchase. opportunities to up-sell.
Single transactions are Repeat relationships are
harvested by search. built during browsing.

18. 4 recommendation systems.
Personalised recommendation Recommend based on the individual's past behavior
Social recommendation Recommend based on the past behavior of similar users
Item recommendation Recommend based on the item itself
4th? Amazon Approach; combine all 3 with browsing & purchase history.
Browsing history Purchase history
Items viewed New releases (for you)
Related Items (Item recommendation) Related Items (Item recommendation)
Other people viewed.... (Social) Other people purchased.... (Social)

19. Amazon are keen to involve visitors
in refining recommendations...
...the aim of it all is to get you to add
more things to your shopping cart.

20. eCommerce
ATOMISES.

21. “People will interact
with any channel they want,
when they want.”

22. From the eCommerce decade...
AWARENESS ENGAGEMENT CONVERSION
& ACQUISITION. & RESEARCH. & PURCHASE.
Price Affiliate offers
Search Ad Comparison based site
Website
Basket - BUY
Search on
ONLINE.
Google Return to
Higher-end Higher-end Configurator
brand site brand site
Refine search
terms after bad
search results
Discount
retailer site
See a TV Advert
View
alternatives at Chat with
discount store partner
OFFLINE.
Chat with
partner
Visit to
consideration
set retailer

23. ...to the Multi-channel present.
NEED GATHER ACTIVE SUPPORT POST-PURCHASE
TRIGGERED. & LEARN. EVALUATION. PURCHASE. EXPERIENCE.
ONLINE.
Search on Affiliate offers Price
Google based site comparison site Writes a review
e-mail alert & tweets it
Discount
Basket BUY
Basket - BUY
retailer site
Refine search Configurator
Configurator
terms after bad “First thought”, Experience Customer
Product News search results brand site Microsite service
Article @replies
Hits “Like” Btn.
MOBILE.
Post status on Another friend
Facebook comments &
Read a Twitter mentions an APP Uploads
feed post cameraphone
photo of
purchase to FB
IM chat with APP Store to Unlocks
friend who download the Geo-targeted
comments APP for free coupon
Sees TV Ad
OFFLINE.
with a URL
Chat with
partner Visit to Tries the
consideration options in-store
set retailer
Applies for
Buy review Talk to store card with Tells
magazines co-workers a better online co-workers
discount offer

24. Online-to-Store (O2S):
The New Default.
45% re
ases a h.
purch esearc
of in-sto
inf lue
nced b
re
y
9
87%
use
d the in
of i
t
rs use earch and c
nterne
ernet
o
to
t
mpare
ter 200 se, res year.
onliner : Forres brow st arkete
r
Source pro ducts
la
Sou rce: eM
in g
uer ies us
rand q s
er of Produ ther
c t/ b
s, ra ch, ising i
ncrease
advert
The numb
Map Sear the
ogle ogle ition from Online
e footfall:
Go Go in-stor i
k
n-stoc es.
n g: shoppers trans ding “ search
tha sin
increa e real world
. Google
ad
o mobile
a re
gital t
o th nea rby” t
di

25. Retailers respond with
CLICK &
COLLECT.

26. ...O2S & back again.

27. Reflecting increased
online confidence.
Moms with teens said the internet...
Source: BIGresearch and Resource Interactive, August 2009
Helped me save money through Helped me become a smarter
access to easier price comparisons, shopper; product reviews and
coupons, and deal alerts. ratings, blogs and product
information has helped me make
more informed purchases.

28. Coupon sites have been the second-most-visited
Source: Business Week, HitWise, Quidco/YouGov, BIGresearch and Resource Interactive, August 2009
category on the Internet, behind job sites, for a year.
eMarketer May, 2009
61%
able to sca
n
wa nt to be
bar co n othe
m ation
o
d
des an r
acces s infor .
s
’ price
stores
9%
e
ellphon
ed a c t
us d abou
e a frien .
tm essag hopping
to tex t while
s
ap roduc
34%an on
li
ie
have looked e
a
w at le .
ne rev urchase
p
st onc
6
s
2% rs
l
of UK
consu re buy
hoppe ties befo
e
t onlin ing.
at k in g a ni
be fore m
a
c ommu

29. Online is projected to influence 50% of offline sales by
2012 & by 2020, more content will be consumed by
mobile devices than all other platforms – PC included.
MEANING MORE ENGAGING OPPORTUNITIES
AVAILABLE FOR DIGITALLY ENABLED RETAILERS.
Sources: Jupiter US Online Retail Forecast, 2007 - 2012, Pew Internet & American Life Report

30. mCommerce. M&S “Shop your way” strategy,
one login across web & mobile.
DETECT DEVICE.
DYNAMIC PROXY DETECT CONNECTION.
TRANSCODING. RENDER SPECIFIC SITE.
Amazon provides eCommerce platform, with “Even before the site has launched, hundreds of
Usablenet providing the mobile platform & thousands of customers are already shopping with
us on their mobile phones and market data is telling
Mobile Interactive Group doing the design.
us that this will soon be millions.”
Dave Hughes, Director of M&S Direct

31. What services and content can we deliver at the
content/context cross-section?
Chain-wide localised,
product-specific and cost
effective marketing when the
inventory in more than 70 Adidas
Outlet Stores varies from store to
store – and so do the special
offers. Or Tesco porting its
Clubcard to phones and starting
to make them smarter.

32. Promotional mCommerce:
Piloting mobile coupons & incentives.
TXT Light data
capture
Mobile site
TXT to Opt in Redeem MMS Coupon Purchase
in store
Light data
capture
Mobile site
On deck/mobile Redeem MMS Coupon Purchase
Banner & Mobile App in store
Advertising
TXT
Bounce Light data
Back TXT capture
Mobile site
In-store leaflets TXT Message Redeem MMS Coupon Purchase
and OOBE in store
Crocs recently extended the limited one month trial across all its 180 US stores,
after customers made 94,000 requests for the 15% off offer.

33. THE PIPELINE?
WHAT IS IN
Deliver a location based
service to iPhone users
that wish to receive
temporary retail and
service-based apps. The
minute you leave the
vicinity the app
disappears so that you
don't clog up your
iPhone with hundreds
of local business apps.

34. “The majority of the real-time search boom will be
in its convergence with another rapidly growing
industry, mobile computing.
[Offering people] real-time recommendations
based on your current location using an
application that aggregates information from
real-time searches as well as social sites like
Yelp and Urban Spoon...... local advertisements
and “limited time” discounts on your mobile.”*
Social Periphery
*Rob Diana

35. Social Periphery &
Mobile Social Networks
Local networks of Global Services
Mobile & mixed media
sensors and devices and Communities
applications/tools
Content &
Context & relationships
Location as filter as intelligence
GPS, location Social Communities
RFID & & bespoke networks & forums
NearField sensors
Blogs, UGC
Barcodes, QR codes
& niche sites
and markers
Dynamic communication
based on action and relevance
(Ambient awareness/Social Peripheral Vision)
Brands as the filter
Physical objects On is off/Off is on
and the enabler.
in intelligent as physical and
Ideas must be “good
environments digital worlds fuse
enough to share”
Helping us plan for now and what’s next.
by David J. Carr davidjcarr.wordpress.com
Based on Nokia’s Mobile Gateway & Jyri Engestrom

36. SOCIAL COMMERCE.

37. THREE ASPECTS OF
Social Commerce.
#1 #2 #3
Brands using social Personal online Directly & publicly
network platforms to selling evolving to harness the heuristics
“fish where the fish networks of people shoppers use to make
are” thus gaining producing for, and intuitive decisions to
incremental revenue selling to each other. make purchase
and network exposure. actions more likely.
universal heuristics of shopping.
Heuristic #1: Social Proof Heuristic #4: Liking
‘Follow the Crowd’ ‘Follow those You Like’
Source: Paul Marsden
Heuristic #2: Authority Heuristic #5: Consistency
‘Follow the Authority’ ‘Groundwork for future’
Heuristic #3: Scarcity Heuristic #6: Reciprocity
‘Scarce Stuff is Good Stuff ’ ‘Repay Favours’

38. Heuristic #1: Social Proof
‘Follow the Crowd’
To resolve the uncertainty of what to do or buy, we often look to what others are doing
or have done, and take our cue from them. ‘Most popular’ & ‘most viewed’ lists,
testimonials provide social proof with a human-interest angle and shared wishlists give
us confidence about what people want, while shopping together offers reinforcement.

39. Enable our commercial
relationships in the context
of their real relationships
and help them to connect.

42. Heuristic #2: Authority
‘Follow the authority’
People have a natural tendancy to defer to the conclusions of a recognised or accepted
authority, regardless of what they say. Recommendations, reviews and even referral
programs use shoppers’ trust and need for decision reinforcement to increase
conversion. People are willing to pay +20% more for a 5 star product than a 4 star one.

43. Google Product
Reviews Program.
Full-length product reviews and user ratings from
participating retailers and manufacturers wherever
it will help users with their shopping, including in
Product Search results and advertising programs.

44. Juicy Couture increased conversion
rates by 162% using CreateTheGroup’s
recommendations & referrals software.

45. Connecting online reviews
with the real world & back.

46. Reviews & social content as part of
NPD & community engagement.

47. You’d be surprised what people
are willing to review....

48. Heuristic #3: Scarcity
‘Scarce stuff is good stuff ’
Time-sensitive, limited access, limited editions increase the perceived worth of products
and services, create a sense of competition to get them, and even generate a feeling of
act now or risk missing out. Deal/Newsfeeds optimised for lifestreams and Social Apps
with exclusives for Fans/Advocates ONLY combine social networking with exclusivity.

49. Time sensitive offers
designed for life-streams.
o Integrated into real-time experience with a sense of NOW.
o Urgency because traditional marketing campaigns
(like TV progs) now can be filtered and time shifted
(and even forgotten as our content collection piles up).
NB: Facebook have changed the rules...again.

50. But value needs to be long-term
or we create “a community of jaded fans who
are only interested in the next coupon”.
Peak of interest
with a sharp fall.
Time sensi
sensitive offers
d
designed for life-streams?
?
fo
o Integrated into real-time experience with a sense of NOW.
real-time
i
o Urgency because traditional marketing campaigns
traditional
(like TV progs) now can be filtered and time shifted
n be
(and even forgotten as our content collection piles up).
our
NB: Facebook have changed the rules...again.
the rules...again.
he

51. Heuristic #4: Liking
‘Follow those you like’
We have a natural inclination to emulate and agree with people we like, admire or find
attractive, partly because it builds social bonds and trust (saying yes is a form of social
grooming) and partly because it acts as a way of pre-filtering our choices.

54. Is there any real value to
RETAIL EXHIBITIONISM?
Increasing opportunities and tools are now available to
broadcast all your commercial actions to your followers.

55. Heuristic #5: Consistency
‘Groundwork for the future’
When faced with uncertainty, we’ll opt for the one that is consistent with our beliefs and
past behaviour. Free trials or low risk commitments can lay the groundwork for future
larger conversions. People are more willing to make a commitment to a brand if it is
consistent with ongoing custom or a previous public gesture or interaction.

56. From fans to customers
OFF THE WALL
End to end eCommerce within Facebook.
o Brand posts an product for sale as
a status update & fans can purchase
directly from their live feed, news
feed or the brand’s wall.
o Complete in-wall checkout process
(product details, customer
information, shipping options).
o Maintains commerce functionality
when shared with friends.
o ECommerce platform independent
& Verisign Certified, Level 1
PCI-compliant.

57. AN OPPORTUNITY FOR:
Use social content to establish a low-risk relationship
pre-sale, seed special (or early) “fan only” offers,
product introductions, limited editions or limited
inventory campaigns, coupons, event support & media
rich demonstrations with video, product selectors, etc.

58. CONSISTENCY & Contributions to user galleries can create a sense of public
Repeat Behaviour. commitment to a brand making it consistent with ongoing custom.

59. Feedback & social pressure combine
to reinforce behaviour change &
commercial relationships.

60. Heuristic #6: Reciprocity
‘Repay favours’
We feel good when we reciprocate favours, partly because reciprocity is socially rewarded
as the social glue that makes cooperation, relationships, community and society possible.
Sampling (reciprocating to uninvited gift with purchase), rewards, local CSR, causal
marketing and sponsorship create a sense of relationship that underpins commerciality.

62. DIRECTLY REWARDING
CONSUMER BEHAVIOR.
Using engaged consumer communities to spread the
word and perform eCommerce business functions.

63. Collaborative Platforms...
...thrive when “reputation (of participants) is a
critical component of the service mechanism.
The reputation of participants will derive from
the quantity (how much, how often) and quality
(how useful) of their contributions.
Accreditation (of content) is provided by
experts and by the community. Recent,
relevant content regarded highly by
participants with a good reputation
becomes the most visible.”
Made by Many

65. Combine community and
commerce to convert using
“helpful suggestions”.

67. RECIPROCITY OR STRAIGHT
PEER TO PEER AFFILATE SELLING?
Widget-powered affiliate
programs for “long-tail”
social commerce.

68. Using helpful content to stimulate
consumer feedback & community spread.

69. Source: Mintel
Half
of British consumers now buy on promotion
but it is not all about money off and discounts,
it’s about value.

70. includes help with making purchase decisions
and rediscovering lost skills so you don’t have
to pay someone else to do it.

71. WHO IS
innovating?

72. CONTENT &
EXPERIENCE.

75. Jessops &
PrismaStar
Product
search tool.
The Camera Selector was created
through a partnership between
Jessops and PrismaStar Software,
and uses PrismaStar‘s AnswerOil
solution. AnswerOil provides
patent-pending consumer product
research data and decision making
technology and prioritises the
importance of any product feature
and gives highly accurate and
unbiased results.

76. Lastminute.com
Pronto search.
Drop-down lists appear for each
search item, helping the user to
make their search as precise as
possible, by enabling them to
specify different attributes of
what they are looking for.

78. INTEGRATING
VIDEO.

79. OPTIMISING ECOMMERCE
WITH VIDEO.
Incorporating product
descriptions, reviews,
ratings, & the ability to
purchase directly into
video content both for
search (meta info) & up to
70% increase in conversion.

81. Direct video
integration as
product image.

82. Combining Brand
& Retail in video.

85. Linked to large scale,
impactful product display.

86. Sharing & use
of third party
option for
registration.

87. Customer
SERVICE.

88. Social Commerce & o Visible staff involvement in problem resolution.
o Reacting and responding to questions and
customer issues quickly and transparently, #twelpforce:
13,000 queries in the first two months.
service o Engaging in real human conversations.

89. a digression
“Please hide/remove the
customer-service number.”
And yet “Our requirement is the reduce
calls to the call-centre.”
“We want people to self-serve.”

90. NDLER TO RESPOND
D HA IN
E AP
AM PR
CEO
N
OP
TO
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EC
CORR T DEPA
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Tech
IG
HR Support
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Customer
Marketing
Service
@Corp
someone@someone.com
DM @Someone
Inquiry/ Immediate/
monitoring auto response &
then hand-over
aknowledgement
Empowered
@Someone
decision-making,
training & investment.

91. Over a month
later the SERP
results for
“Vodafone &
Twitter” are
dominated by
the news story,
not product
information.
Things happen in
real-time but can
stick around for a
long time.

92. GROUP
Commerce.

93. Real-time
eCommerce
o Retailers move closer to real-time
inventory management increasing the
possibility of more widespread dynamic
demand led pricing.
o Consumers can be alerted about price
changes as they happen.
o They can even group together to
negotiate bulk discounts.
o Or use ShopSavy and Compare
Everywhere to find a better price when
out and about.

94. GROUP-BUY DEAL AGGREGATORS.
One deal feed to rule them all?

95. Dell Swarm Singapore
buy in a group and save!

97. The e-commerce opportunity?
Real-time
insight.
“a clothing retailer could identify a spike in positive chat about a
celebrity that is wearing one of their apparel items, and could immediately
feature that piece of clothing on their homepage and launch campaigns
to a targeted audience interested in that celebrity and lifestyle. This allows
the retailer to immediately maximize the new revenue opportunity, and
deliver more engaging, relevant content to its customer base.”

98. Engaging & involving
USER COMMUNITIES.

99. Heriarchy of feature
posts with imagery.
Prominent calls
to “Get Involved”.
Integrated forum
and member posts.
Interactive content
and feedback tool.

100. User generated and
member curated
interest groups.

101. Customer feedback
and suggestions
built into the
community.

102. Recruit members
of the forum or
external bloggers
to generate content.

104. Advertising or
cross-selling
blog content
and signalling
different
categories.
Campaigning
features.

105. Campaigning
features.
Infographics,
multimedia
Using tags to
guides and
generate
how to
additional
content.
navigation.

106. Aggregating
and curating
content to
create a
resource.

107. Commenting
and social
media content
sharing.
Signals
community
involvement.
Two-way email
channels.