Archive for the ‘Internet Marketing – eCommerce –’ Category

Jet: Start-up targets Amazon and Walmart … say, what?

July 29, 2015

After months of testing and and network-building, the e-commerce start-up Jet.com opened its digital storefront last week, marking the official kickoff of the company’s ambitious effort to battle Amazon and Walmart for price-conscious customers.

According to the Washington Post, Jet is taking a new approach to pricing. Its algorithm doesn’t simply look at the price of each individual item in your online shopping cart.

It looks at all the items you want to buy, as well as your Zip code, to determine which retailer or warehouse can ship that unique combination of items to you the cheapest.

Shoppers can only buy things on Jet if they’ve signed up for a $49-per-year membership.

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Let’s dig a little deeper and assess the odds …

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Where does Amazon collect sales tax? Why?

July 28, 2015

One of the things that I about Amazon was that my orders didn’t get dinged with sales taxes.

That was then, this is now.

In 2013, I was disappointed to see Amazon start collecting sales taxes in Virginia (my home state).

But, no collected sales tax in Maryland – next state over – where we have a summer vacation shack. shack and a branch of the family tree.

Hmmm …

The arbitrage opportunity evaporated in 2014 when Amazon started collecting sales tax in Maryland.

Nuts.

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Some recent purchases sparked my curiosity .  What’s going on?  Are there still arbitrage opportunities?

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Remember when e-commerce was going to take over the planet?

August 26, 2014

From the HBR blog site: “The Myth of E-Commerce Domination” …

Forrester’s data on the top 30 product categories (which account for 97% of total e-commerce sales) indicates that e-commerce growth is clearly slowing overall:

 

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If historical trends continue, e-commerce’s share of retail will rise from 11% today to about 18% in 2030, way below projections from a few years ago.

Of course, 18% isn’t shabby, but it’s not exactly world domination.

What’s going on?

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“Numbers aren’t available” … except every night

November 1, 2013

Even Jon Stewart was flabbergasted when HHS Sebelius said she didn’t know how many people had enrolled on the ObamaCare exchanges.

Zillions of site hits, but no idea how many orders were placed.

Sounded fishy to just about everybody, right?

Any online marketing program – and, no doubt about it, this is a marketing program —  tracks orders by the minute, hour, day, week, month, campaign duration.

Now, CBS reports that HHS has been getting real-time reporting  … and a daily dashboard that includes, well, enrollments.

 

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So, why would Sebelius and the CMS head lie about not knowing the numbers?

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NetTrax: What’s the fundamental difference between designer shoes and cars?

May 22, 2013

From an online retailing perspective it’s simple …

Once you buy a car you’re probably out of the market for awhile

… but once you buy a pair of designer shoes, you’re probably going to buy more of them.

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Why does that matter to an online retailer?

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NetTrax: You’re leaving cookie crumbs on the net … lots of them

May 8, 2013

What happens when you click to a web site?

Short answer: you have new cookies installed on your computer or have old cookies modified  … whether you know it or not … and  you then spew crumbs all over the Internet … letting companies track you, profile you, and hard sell you stuff.

Here’s a visual of what a couple of clicks can do … each dot represents a  site or company that can grab your information … just because you innocently clicked.

Later we’ll explain the graphic and what’s going on.

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First some background on web tracking …

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Pssst: Facebook is stalking you in stores ….

April 16, 2013

Why?

Ostensibly to see if its sponsors’ ads are working.

But, some skeptics (e.g. me) think that there may be other motives, too.

Here’s the scoop.

Last year, Facebook entered into a partnership with a company called Datalogix.

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Everybody knows what Facebook does.

Datalogix, not so much.

Datalogix is a firm that records the purchasing patterns of more than 100 million American households.

When you stop by the supermarket … you probably hand the cashier a loyalty card to get a discount on your items.

That card ties your identity to your purchases.

Your sales data is sent over to a server maintained by Datalogix, which has agreements with hundreds of major retailers to procure such data.

Source: Slate

Hmmm.

Facebook and Datalogix … why the hook-up?

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Nums: What percentage of Facebook users click on the ads?

April 15, 2013

According to an AP-CNBC poll

User clicks are a critical part of an advertiser’s calculus when gauging the effectiveness of those ads and how much they’re willing to pay for them.

So, how does Facebook do?

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Here are some survey results …

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USPS: When you absolutely, positively need it today … say, what?

February 13, 2013

It’s the internet’s fault that you may no longer be getting letters delivered on Saturdays anymore.

Yet, the internet could be the USPS’ salvation as Amazon and others look to offer same day delivery.

 

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Here’s what’s happening …

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No lights, no problem: Dunk (and tweet) in the dark

February 5, 2013

Oreo’s quick thinking during the infamous Super Bowl blackout generated a spontaneous twitter ad that caught the attention of millions. 

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Anyone watching the Super Bowl this evening saw a great game — and one of the greatest embarrassments in pro sports history: a power outage that halted play for a full half-hour.

As both teams, tens of thousands inside New Orleans’ Superdome and millions watching on TV waited, Oreo came up with an idea so brilliant and bold that it out and out won the night.

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Dopes: A-Rod on juice; Ray Lewis on deer spray … say, what?

January 30, 2013

OK, let’s start with the garden variety doping allegation.

Several news sources reported that Alex Rodriguez of the Yankees was “ensnared in a doping investigation once again when an alternative weekly newspaper reported baseball’s highest-paid star was among a half-dozen players listed in records of a Florida clinic the paper said sold performance-enhancing drugs.”

Technical question: What the heck is an “alternative weekly newspaper”?  What is it an alternative to?

The Miami New Times said the three-time AL MVP bought human growth hormone and other performance-enhancing substances during 2009-12 from Biogenesis of America LLC, a now-closed anti-aging clinic in Coral Cables near Rodriguez’s offseason home.

Another technical question: What the heck is an “anti-aging” clinic?  Glad to see it closed.

The New York Yankees third baseman issued a statement denying the allegations.

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Now let’s move to the jaw-dropper: Raven’s LB Ray Lewis Accused of Using Performance Enhancing Deer Spray.

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Happy Birthday from Facebook and your lazy friend …

January 18, 2013

Punch line: Facebook takes a crack at monetizing the site for retailers, adding a ‘Gifts’ feature that allows users to purchase and send an actual gift to friends. 

Facebook uses that friend’s profile to suggest gifts based on their interests and ‘likes.’ 

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Excerpted from Adweek.com’ “Facebook Unwraps Gift Products”

Remember when giving someone a gift on Facebook was like sending them a really intricate emoticon?

Yeah, people stopped doing that, and so did Facebook.

Now the social network is hoping people will start sending each other actual gifts.

Here’s how FB plans to do it …

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Price War: Targeting online retailers

January 11, 2013

Target is sick & tiered of being “showroomed”.

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According to USA Today

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Gotcha: Hosed by “dynamic pricing”

December 26, 2012

In a prior post My computer’s algorithms tell me that you’re willing to pay higher prices we reported that online retailers were using software that helps them detect shoppers who can afford to pay more or are in a hurry to buy … and, present pricier options to them or simply charge more for the same stuff.

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For example:

Cookies stored in shoppers’ web browsers may reveal where else they have been looking, giving some clues as to their income bracket and price-sensitivity.

A shopper’s internet address may be linked to his physical address, letting sellers offer, say, one price for well-to-do zips, another for low income zones.

“Price customization” software can collate such clues with profiles of individual shoppers that internet sellers buy from online-data-aggregation firms … All fairly cheaply.

For example, Orbitz detects whether people browsing its site are using an Apple Mac or a Windows PC and recommends pricier hotels to Mac users.

Some online firms charge people different rates for the same products … for instance, by charging full price for those assumed to be willing and able to pay it, while offering promotional prices to the rest.

Allocating discounts with price-customization software typically brings in two to four times as much money as offering the same discounts at random,

One way to do this is to monitor how quickly shoppers click through towards the online seller’s payment page: those who already seem set on buying need not be tempted with a special offer.

Similarly, companies are beginning to scan Twitter for info on the shoppers since their tweets give useful hints about whether a discount is needed to clinch the sale.

Well, a WSJ investigation revealed that the online pricing tricksters are getting even trickier …

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High frequency: You’re the asset being traded …

December 7, 2012

Punch line: In milliseconds, advertisements are being served based on your browsing habits.

Behind the every one of these ad placement opportunities is a sophisticated tracking system that allows access to the highest bidder.

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Excerpted from New York Times’ “Your Online Attention, Bought in an Instant”

ad-impression - image from The Gaurdian

The odds are that access to you — or at least the online you — is being bought and sold in less than the blink of an eye.

How it works …

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Social media drove Cyber Monday, right?

November 29, 2012

Wrong !

Cyber Monday sales nearly doubled from last year, with mobile shopping playing a large role in those numbers.

Despite high mobile numbers, social media drove very few sales during Cyber Monday.

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Excerpted from Adage.com’s, “Cyber Monday Mobile Purchases Nearly Double From 2011”

Cyber Monday was the biggest online shopping day ever and mobile shopping played a significant role in its growth.

Spending increased 30.3% from the previous year, with mobile devices accounting for accounted for 12.9% of all sales. That’s a 96% increase from 2011.

Mobile sales were lower on Cyber Monday than on Black Friday, however, a change that IBM attributes to more customers returning to work and shopping from their PCs.

Both mobile traffic and mobile sales fell by 20% from Black Friday to Cyber Monday.

Despite the overall spending increases, the average order size dipped 6.6% to $185.12, the report said.

Social sales also decreased, as Facebook, Twitter, LinkedIn and YouTube generated just 0.41% of all online sales, a 26% drop from 2011.

Below is a neat summary infographic
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Are Mac users easy pickings?

July 19, 2012

Punch line: Online retailers are using sophisticated analytics and web tracking methods to tailor their offerings… and to get folks to pay higher prices.

To get  the lowest prices: (1) Use a PC (not  Mac or iPad), (20 don’t sign on from a ritzy location, (3) pass thru a price-shopping site on your way to the destination site, (4) ask to see items sorted by price — from low to high, (5) check out at least one cheap item — maybe even put in your cart — then delete it later

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Excerpted from WSJ

Retailers are becoming bigger users of so-called predictive analytics, crunching reams of data to guess the future shopping habits of customers.

The goal is to tailor offerings to people believed to have the highest “lifetime value” to the retailer.

Online, seemingly innocuous information is available to predict shoppers’ tastes and spending habits.

For example, The average household income for adult owners of Mac computers is $98,560, compared with $74,452 for a PC owner.

Drilling down, Orbitz  has found that people who use Apple spend as much as 30% more a night on hotels, so the online travel agency is starting to show them different, and sometimes costlier, travel options than Windows visitors see.

More specifically …

  • Mac users on average spend $20 to $30 more a night on hotels than their PC counterparts, a significant margin given the site’s average nightly hotel booking is around $100
  • Mac users are 40% more likely to book a four- or five-star hotel than PC users,
  • When Mac and PC users book the same hotel, Mac users tend to stay in more expensive rooms.

Other factors that have influence over results include

  • A user’s location (e.g. geo-targeting high wealth zip codes)
  • A shoppers history on the site (e.g. purchases at list price or at discounts).
  • The referring site (e.g. Kayak delivers price-sensitive shoppers to travel sites)takes those properties into account.

Caveat emptor !

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My computer’s algorithms tell me that you’re willing to pay higher prices …

July 18, 2012

I was interviewed by a reporter from the Economist a couple of week’s ago.

Though I served up some prime material (and some red meat), my quotes didn’t make the cut

Dear Ken:
Unfortunately I was not able to use the information you provided, as what we needed was specific confirmation of actual examples of dynamic/custom pricing. Thank you once again for your willingness to share your expertise

OK, enough whining … here’s the gist of The Economist’s article Personalizing online prices

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Commerce 3.0: research online, buy in-store

June 15, 2012

Excerpted from Jones Lang LaSalle Retail Research: Digital Dynamics

With rising gas prices – many consumers are buying more products online, as a way to get low prices and save gas – especially when shipping costs are low.

But, the trend toward consumers researching products online, reading reviews and searching for the best deals locally, is growing.

The attractiveness of this practice lies in consumers’ desire for immediate gratification as well as the ability to save on shipping costs by buying local.

Researchers estimate that this trend – aptly called “web-influenced sales” – will generate almost $1.1 trillion in U.S. sales this year and by 2015 will represent approximately 44 percent of total retail sales, or $1.6 trillion.

The most important actions for local retailers are to ensure their products show up online, that the site reflects accurate availability, and that the online and in-store experiences are as seamless as possible.

The rewards are direct – not only do shoppers come in for the researched product, they also stick around to buy other items once in-store.

Forrester Research reported that 45 percent of shoppers interviewed said they bought extra items once in a store, spending, on average, $154 on additional purchases.

Side note: By coincidence, I just had a so-called “cross channel” experience. 

My cable modem died and I didn’t want to wait a couple of days for an online purchase … so, I reluctantly trekked to Best Buy. 

As expected, BB’s prices were a tad high …  but, the salesperson was quickly  authorized to meet Amazon’s online price …  so, my cost adders above Amazon were gas to the store and  Maryland’s 6% sales tax (ouch).

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So much for the ‘wisdom of crowds” and friends’ recommendations … be careful who you ‘like’.

June 7, 2012

Punch line: Companies flock to social media, hoping that people will ‘like’ them and provide them with close-bud references.

Well, it didn’t take long for social network pool to start getting polluted.

Now, when you click that like icon, you may be signing up for spam or triggering a virus.

That might dampen some social media enthusiasm …

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Excerpted from Business Week

Two years ago, e-mail was the format of choice for spam peddling diets, sexual enhancement, and get-rich scams.

Better filters have since banished many of the unwanted missives from in-boxes.

Instead, scammers are turning to social media sites that are often poorly equipped to deal with the influx.

“Social spam can be a lot more effective than e-mail spam”

Spammers create as many as 40 percent of the accounts on social-media sites.

About 8 percent of messages sent via social pages are spam, approximately twice the volume of six months ago.

Spammers use the sharing features on social sites to spread their messages.

Click on a spammer’s link on Facebook (FB), and it may ask you to “like” or “share” a page, or to allow an app to gain access to your profile.

By clicking on a link, some users may unwittingly “like” the spam, a practice security experts call “likejacking.”

On Pinterest, spam often lurks in the embedded links attached to photos, making it tricky for users to spot.

Be careful who or what you ‘like’ …!

>> Latest Posts

Novel idea: Hulu promises advertisers that they’ll get what they pay for …

April 23, 2012

TakeAway: Hulu is challenging online advertising pricing by only charging for fully viewed ads.

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Excerpt from AdAge: “Hulu’s New Guarantee: Someone Watched Your (Whole) Ad”

Advertisers are generally charged when a beacon is fired as an ad begins playing. But Hulu is moving that notification to the end, meaning that and ad that isn’t completed won’t count.

“If you pay for a full impression, you will get an impression, full stop.”

The company said its completion rate for ads is 96% — extraordinarily high for online video, where the average completion rate is closer to 88% for long-form content and 54% for short clips.

“Vendors with greater video completion rates [see] greater brand lift and greater message recall.”

Though the move will cost Hulu some volume, the company’s idea is that it will be made up in higher rates resulting from competition for fewer available spots.

It also means advertisers get some partial impressions free, as a number of viewers will be exposed to a portion of the ad before they click away.

Edited by ARK

Uh oh: Groupon forced to revise its financial results again.

April 2, 2012

To refresh you memory …

Prepping for its IPO, Groupon had to cut its reported revenue in half to satisfy questions from the Securities and Exchange Commission.

Then, the company  IPO’d in November for $20 per share.   Last Friday the shares closed at $17.20.

What happened ?

Well first, according to the WSJ:

Groupon reported an unexpected loss of $37 million on revenue $506.5 million for its fourth quarter —  its first period as a public company.

The news triggered a selloff in the stock as investors had expected the company to post a profit.

To make matters worse, the loss was understated by $22.6 million … because auditors discovered that the company “ failed to set aside enough money for customer refunds.”

Oops.

Here’s the story:

Groupon offers discounted deals to its subscriber base, and then splits the value of the deal with the merchant that offered it.

For a $10 purchase at a sandwich shop, for example, Groupon might take $5 and give the rest to the merchant.

The company makes a point of telling users that refunds won’t be a hassle.

Groupon emphasizes something it calls “the Groupon Promise,” which means “if the experience using your Groupon ever lets you down, we’ll make it right or return your purchase.”

Groupon had more customers seeking refunds than it expected.

The company also said the higher rate of refunds has persisted in the first quarter ending March 31.

Also according to the WSJ: “The surprise announcement raised questions about the reliability of Groupon’s numbers.”

You think ?

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Once mighty AOL now selling off its patents … ouch!

March 26, 2012

Punch line: AOL has hired Evercore Partners to help it shop around its patent portfolio in hopes of offsetting lost dial-up business and  “accelerating shareholder value creation.”

Meanwhile, Facebook has acquired around 750 patents from IBM in order to “bolster the social network’s defenses against litigious rivals”.

Excerpted from: CNET: AOL, lacking better options, hires firm to sell its patents

Citing three people with knowledge of the hire, Bloomberg says AOL tapped Evercore to find a buyer for more than 800 patents and to “explore other strategic options” — code for a possible sale or private buyout of the entire company.

Last December, AOL announced plans to reorganize the company, combining its declining dial-up Internet service business and its Web services arm, the latter of which was recently scaled back with layoffs in the Instant Messenger group.

AOL has previously said it’s looking for ways to raise cash from its patent portfolio and is making efforts to “accelerate shareholder value creation.”

AOL’s move follows Facebook’s acquisition of some 750 patents from IBM, a deal made to bolster the social network’s defenses against litigious rivals.  Facebook has been targeted by Yahoo for allegedly infringing on a number of its patents that cover customization and advertising.

Easy to pile on AOL for its strategic mis-steps over the years (e.g. hanging with the “walled garden” too long, failing to find a way to migrate to high-speed internet service), but gotta give the company credit for its role in the Internet explosion.

And, in a timely fashion, the original owners dumped the bag on Time-Warner … walking away with a fortune …

>> Latest Posts

Forget price, what’s a company’s stance on, well, whatever?

March 2, 2012

TakeAway: The OpenLabel app allows consumers to make socially responsible shopping decisions real-time by simply scanning a barcode to read and contribute crowdsourced information.

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Excerpted from psfk.com “Add Crowdsourced Reviews To Scannable Barcodes

OpenLabel is inviting consumers to add reviews and information to everyday product barcodes to make socially responsible shopping much easier.

The app can scan barcodes and bring up crowdsourced information such as the company’s stance on workers’ rights, social justice, environment, health, and other corporate social responsibility aspects.

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Peter Kirwan, an investor of OpenLabel, explains that the app is “everything but price, we’re about actual information.” Although the app does allow consumers to submit pricing details, it hopes to deliver more in-depth information to help consumers decide if they should buy or avoid the product.

Edit by KJM

But, when do they ask you if you want the insurance and other price uppers?

February 10, 2012

TakeAway: Convenience is key – especially for busy consumers. Now, French consumers can rent or share a car by simply sending a text message.

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Excerpted from psfk.com, “Rent Or Share A Car Just By Texting

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Leading mobile commerce company Netsize has launched a peer-to-peer car sharing social network in France that allows users to rent a car simply by sending a text message.

CityzenCar is the SMS-based service that simplifies the car rental process for consumers and enables 12,000 members in 2,000 French cities to conveniently book a vehicle with their handset.

Car owners receive rental notifications via SMS and if they approve it, the driver will receive a text message back with information on the car and location. The car owner can choose to deliver the keys to the driver in person, or authorize a CityzenCar personnel to unlock the doors.

The CEO of CityzenCar explains that, “We wanted to make it as easy as possible for our customers to interact with each other and make the best use of our service. Netsize’s flexible and highly dependable SMS solution is crucial to ensure the quality of our service”.

Edit by KJM

Virtual pin boarding woos the ladies and attracts big brands

February 3, 2012

Punch line: With 4.5 million users – mostly under 45, socially and digitally savvy females – Pinterest is a unique virtual pin board for sharing and promoting consumer brands.

Even big brands are catching on and seeking to get on this website.

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Excerpted from brandchannel.com “#Pinning: Brands Get Pinteractive and Engaging on Pinterest

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Pinterest, the virtual pin board at the crossroads of social and style, has burgeoned into a marketplace for consumer brands, offering a visual and demonstrable platform for engagement.

From small brands to other big brands, including Martha Stewart, Better Homes & Gardens, Real Simple, Bergdorf Goodman, Chobani and NBC’s The Today Show are also active on the site,

Pinterest is attracting brand marketers to allocate part of their interactive bandwidth to its 4.5 million users — primarily female, under the age of 45 and socially-, digitally-savvy.

Mashable breaks down the stats: “70% of pinners are female. Pinterest has a highly engaged audience — a reported 3.3 million users logging more than 421 million pageviews — so there’s plenty of opportunity for brands to flesh out pinboards and catch pinners’ eyes.”

Hitwise parsed the site’s popularity in a blog post that noted: “Pinterest content has something for everyone, but the site is dominated by images featuring home décor, crafts, fashion, and food…

‘Pin Etiquette’ is the term for the site’s golden rule: Pinterest is not a playground for self-promotion, challenging marketers to come up with content that engages, not just promotes (think “Pin unto others…”) It’s no surprise that one of Facebook’s new bevy of 60 Timeline-integrated apps is a Pinterest app.

Some pinned-and-true ways for brands to engage with users include:

  • Hold a Contest
  • Conduct Market Research
  • Feature Customers
  • Put a Face to Your Brand
  • Sell More Products
  • Present Concepts in a New Way
  • Promote Your Image Content

Edit by KJM

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KJM editorial comment: my best friend sent me this link – and I was immediately hooked! Forget Facebook, this is my new method of procrastination and idle entertainment)

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Target flexes muscle to thwart “showrooming” … good luck!

February 1, 2012

TakeAway: Target is flexing its buying power over suppliers to ward off increasing competition from online retailers such as Amazon.

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Excerpt from WSJ: “Showdown Over ‘Showrooming’”

Target is asking suppliers for help in thwarting “showrooming” — that is, when shoppers come into a store to see a product in person, only to buy it from a rival online, frequently at a lower price.

Target suggested that suppliers create special products that would set it apart from competitors and shield it from the price comparisons that have become so easy for shoppers to perform online. Target asked the suppliers to help it match rivals’ prices.

Vendors are likely to have little choice but to play ball with Target because of its clout as the second-largest discount chain.

Some analysts said Target’s new tactics are unlikely to reverse the showrooming trend.

Online-only retailers have significantly lower labor costs and, at least, for the time being don’t collect sales tax in most states.

Amazon can sell products so cheaply because it uses its other profitable units — such as cloud data storage and fees it charges others to sell on its website — to subsidize the rest of its business.

Edited by ARK

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Maybe Amazon (not Google) will control internet…

December 20, 2011

A real “hmmm” graphic from   CPC Strategy

Their take:Amazon has come a long way from *just* being the world’s largest bookseller.

This year alone the company has launched three new products or service offerings that challenge the market dominance of an established player.

CPGS may be onto something …

Amazon v. The World - An Infographic

Thanks to Tags feeding the lead

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Pay for shipping? I don’t think so …

December 1, 2011

TakeAway: Retailers, in an effort to compete online, offer free shipping.  It may hurt their margins, but they hope to make it up in volume.

A few years ago Amazon tested free shipping in the US and cut-rate shipping in the UK.  UK sales increased, but by a far lower percentage than US sales.  Amazon fully implemented free shipping in both the US and UK.

Draw your own conclusion.

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Excerpt from WSJ:
“Ship Free or Lose Out”

Traditional retailers are taking the expensive step of offering more free-shipping deals this holiday season, as they seek to lure the growing number of Internet shoppers to their websites and away from online-only rivals, particularly Amazon.com .

Toys “R” Us has made its entire on-line inventory eligible as long as customers spend $49. Similarly, Wal-Mart Stores Inc. has made every consumer-electronics item on its website available for free shipping through Dec. 19 with a minimum $45 purchase. And Best Buy Co. is offering free shipping for every product it offers online, including giant TV sets.

“Free shipping used to be a way to entice customers to your store over another site, but now it’s just the price of entry.”

High shipping costs can turn off customers altogether. Amanda Lordy recently canceled an order for $30 of gourmet cheese because the site was charging $14 for shipping.

Nordstrom., which in August, began offering free shipping and returns on all online orders, estimates that the free shipping cut its gross margin by about 0.15 percentage point.

Amazon, however, is expecting its fourth-quarter sales to jump between 27% and 44%. The company loses more than $1 billion a year in shipping costs. Its operating margin shrank to 0.7% in the third quarter from 3.5% a year earlier as expenses rose 48%.

Edit by ARK

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Groupon: “You’re check is in the mail” … not!

November 10, 2011

Though IPO investors disagree, I still think Groupon’s business model is suspect and market valuation is wacky.

Here’s the latest from the WSJ:

Rivals of Groupon  are threatening the daily deal site leader by offering quicker payment to merchants, potentially jeopardizing a key part of the company’s business model.

Groupon, which offers online deals for local merchants, keeps itself in cash by collecting money immediately when it sells its daily coupons to consumers while dragging out payments to the merchants over 60 days.

For instance, a hair salon might run a deal offering $100 of services for just $50 on Groupon’s website, which then keeps as much as half of the total collected and sends the remainder to the salon in three installments about 25 to 30 days apart.

“You want to get paid in full as quickly as possible.  We’re the ones that have to cover the cost of goods for giving away everything at half price,”

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Groupon pays merchants in installments of 33% over a period of 60 days

LivingSocial pays merchants their full share in 15 days.

Amazon Local, pays immediately.

Google Offers promises 80% of the merchant’s cut within four days, and the remainder over 90 days.

Thanks to SMH for feeding the lead …

>> Latest Posts

Stores are yesterday … get your ketchup online.

November 8, 2011

TakeAway: Heinz is launching its new premium ketchup with limited distribution through Facebook … and higher prices that includes shipping.

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Excerpt from NY Times: “Ketchup Moves Upmarket, With a Balsamic Tinge”

In the era of squeeze bottles, patience is no longer required, but to create anticipatory buzz for a new ketchup variety, Heinz initially will limit its availability.

Heinz Tomato Ketchup Blended with Balsamic Vinegar, which substitutes balsamic for the traditional white vinegar, won’t initially be available  in stores.

Rather, consumers will be able to buy the ketchup only through the brand’s Facebook page until the product begins to appear in supermarkets later this year.

The balsamic ketchup will only be sold in 14-ounce glass (non-squeezable) bottles. The ketchup will carry a suggested retail price of $2.49 (plus a $2 shipping charge on Facebook), compared with $1.89 for the original in a plastic bottle of the same size at your local grocer.

Edit by ARK

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Wagging the “Long Tail” by self-publishing …

November 7, 2011

TakeAway: Established writers and new writers take advantage of self publishing with the evolution of digital books.

Good example of the Long Tail Strategy. 

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Excerpt from WSJ: “Secret of Self-Publishing: Success”

Self-publishing has been available for decades.

But thanks to digital technology and particularly the emergence of e-books, the number of self-published titles exploded 160% in 2010 from 2006. 

Amazon.com fueled the growth by offering self-published writers as much as 70% of revenue on digital books.

By comparison, traditional publishers typically pay their authors 25% of net digital sales and even less on print books.

A veteran romance author self-published her first e-book in April 2010. She has since cumulatively sold 265,000 units of 10 self-published titles.

Her total take from those 10 titles since last April: in excess of $500,000 after expenses. Previously, the most she ever made from a book was $33,000.

“One of the big differences between e-books and print is the sales cycle … It’s almost inverted.”

A chain store buyer makes a decision as much as six months before a book is published, and then it has no more than six months on the shelf. At that point, the sales cycle is essentially over.

But with e-books, it’s completely the opposite.

“It’s often six to nine months before your book takes off, and you never take it down.”

Edit by ARK

>> Latest Posts

If you use a tablet pc, you probably spend more … hmmm.

October 5, 2011

TakeAway: Tablet users are making more purchases online at a higher volume per purchase than consumers who shop via smartphones or the internet and retailers are responding to this trend.

* * * * *

Excerpt from WSJ: “Tablets: Ultimate Buying Machines

Tablets still account for only a small percentage of overall e-commerce, but they are punching above their weight.

While the conversion rate — orders divided by total visits — is 3% for shoppers using a traditional PC, it is 4% or 5% for shoppers using tablets…

Many retailers also report that tablet users place bigger orders—in some cases adding 10% to 20% more to the tab—on average than shoppers using PCs or smartphones.

Retailers are trying to take advantage of that trend by tweaking their websites to better accommodate tablets and rolling out catalogs that have been developed for the device.

Edit by ARK

>> Latest Posts

Guess which domain name sold for the highest price…

September 29, 2011

According to the Domain Name Journal, Social.com sold for the highest price so far in 2011 ($2.6 million) … a mere pittance compared to the $13 million paid in 2010 for – you guessed it – Sex.com.

Below are the past 2010-2011 years top 10s … and links to the full lists.

Note: the lists are only domain names sold in the past 2 years … that’s different from “most valuable”.

DN’s Top 10 Domain Name Sales – 2011

image

DN’s Top 10 Domain Name Sales – 2010

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>> Latest Posts

Dot-com is so yesterday … now, dot-brand is what’s happening.

September 26, 2011

Punch line: You can register a dot-com domain name with GoDaddy for about 10 bucks.

For an additional $184,990, you’ll soon be able to register a “dot-brand” domain name like “.homa”.

Tempting, but I think I’ll wait until the price drops to $19.99

* * * * *
Excerpted from CnnMoney

Trusty old Internet addresses we know and love — the .coms, .nets, .orgs — are about to get some new competition.

Way back in 2000, the organization decided to expand the domain-name system. Since then, it has gradually rolled out a handful of new domains, including the controversial .xxx domain that got the green light in March.

ICANN (the Internet Corporation for Assigned Names and Numbers) – the Global Internet regulator – is finalizing rules for a major expansion of “generic top-level domains,” that will clear the way for new offerings like .law, .coke or .nyc. Sites with those endings are expected to start rolling out late next year.

Experts think dot-brand sites will be a hit with major companies.

“The decision will usher in a new Internet age … a platform for the next generation of creativity and inspiration.”

In addition to marketing benefits, they could help on the security front: HSBC, for example, could tell customers that a purported HSBC site isn’t legitimate unless it ends in .hsbc.

But these benefits don’t come cheaply — or easily. ICANN charges at $185,000 per domain application, which Crawford says typically must include about 150 pages of policy documents.

Technical setup takes another $100,000 or so, he says, and upkeep can cost an additional $100,000 each year.

ICANN is slated to begin reviewing applications in November or December, and says that new domains should roll out in July 2012.

Thanks to MET for feeding the lead.

>> Latest Posts

“The internet is just a fad” … Newsweek, Feb. 26, 1995

September 15, 2011

Interesting retro piece republished by the Daily Beast

Punch line: Famous quote from some dude in the patent office: “all things have already been invented”

Tom Watson, IBM CEO of long ago, predicted at most 6 computers would be bought.

And, in 1995, Newsweek stepped forward to declare the internet “nothing but a bunch of hype”.

Oops.

Excerpted from Newsweek: The Internet? Bah!, Feb 26, 1995

Hype alert: Why cyberspace isn’t, and will never be, nirvana

After two decades online, I’m perplexed. It’s not that I haven’t had a gas of a good time on the Internet. I’ve met great people and even caught a hacker or two.

But today, I’m uneasy about this most trendy and oversold community – the internet.

Visionaries see a future of telecommuting workers, interactive libraries and multimedia classrooms. They speak of electronic town meetings and virtual communities.

Baloney. Do our computer pundits lack all common sense?

The truth in no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works.

How about electronic publishing? Try reading a book on a computer. At best, it’s an unpleasant chore: the myopic glow of a clunky computer replaces the friendly pages of a book. And you can’t tote that laptop to the beach.

Yet Nicholas Negroponte, director of the MIT Media Lab, predicts that we’ll soon buy books and newspapers straight over the Intenet.

Uh, sure.

The Internet is one big ocean of unedited data, without any pretense of completeness.

Lacking editors, reviewers or critics, the Internet has become a wasteland of unfiltered data.

Then there are those pushing computers into schools.

We’re told that multimedia will make schoolwork easy and fun. Students will happily learn from animated characters while taught by expertly tailored software. Who needs teachers when you’ve got computer-aided education?

Bah.

Can you recall even one educational filmstrip of decades past? I’ll bet you remember the two or three great teachers who made a difference in your life.

Then there’s cyberbusiness.

We’re promised instant catalog shopping — just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obselete.

So how come my local mall does more business in an afternoon than the entire Internet handles in a month?

Even if there were a trustworthy way to send money over the Internet — which there isn’t — the network is missing a most essential ingredient of capitalism: salespeople.

What’s missing from this electronic wonderland?

Human contact.

Discount the fawning techno-burble about virtual communities.

Computers and networks isolate us from one another.

A network chat line is a limp substitute for meeting friends over coffee.

A poor substitute it is, this virtual reality where frustration is legion and where — in the holy names of Education and Progress — important aspects of human interactions are relentlessly devalued.

>> Latest Posts

5 tips to make mobile work for your brand

May 3, 2011

TakeAway: The rapid growth of mobile technology has forced marketers to think about ways to connect with consumers through a new channel: Mobile phones.

In order to make sure your mobile strategies are working make sure you know your customer and are able to give them what they want, when they want.

Don’t be afraid to move first and correct later. 

* * * * *

Excerpted from AdAge, “Making Mobile Work for Your Brand: Five Expert Tips” by Manuela Zoninsein , April 6, 2011

Mobile technology has, …created deeper interactions between people and brands. It’s not always easy to get it right, but with mobile internet usage expected to outnumber desktop connections in the next few years, marketers can’t wait to craft mobile strategies. …

Here, five tips on how mobile can work for your brand:

1) Get data: “You can deepen relationships with data,” …

By gathering and reviewing data, the company can chart user activity by criteria such as time of day and category. For example, it’s been found that dinner-time and food-related updates are most common. Using this information, marketers “can start to predict behaviors” and “use data to figure out where people are and will be at different times…”

2) Know what your consumer wants

“Deliver better experiences based on what you know about a person or interaction,” … experimenting with curating purchasing experiences for customers based on history and preferences. … Once the customer “bumps,” identifying himself, the retailer becomes aware of key facts about him. Perhaps he is a vegetarian, and always likes to buy organic products. He can make an order from a menu of regular options and pay right away, without standing in line.

3) Gratify. Instantly: “The hardest challenge… is giving instant gratification, instant value, to the user.”

Social sharing enters real time; so if people traveling together want to share photos, or a new song, they can do so without connecting over another platform such as email or Skype.

4) Go global

Get rid of U.S.-based mentalities. … “Bump’s” fastest-growing user bases residing in Hong Kong and South Korea. Similarly,

Foursquare’s usage map was notably global, with a strong footprint not just in the developed world (U.S., Europe, Japan) but also in Southeast Asia, the Middle East (Israel, most prominently) and pockets of South America.

5) Move first

A lot of these lessons came by way of experimentation, but that’s not an excuse to sit back and watch the market perfect itself…. “getting customers a few years from now will be more difficult,” so there’s a real need “to be creative and more aggressive.”

Though the technology is not perfect, it works well enough and it’s important to learn as it evolves. … “What you think you know about your users is wrong, and you won’t know until they tell you. So why waste time?”

Edit by HH

* * * * *

Groupon rejects Google’s $6 billion offer … so, here come daily-deals from Google. Let the games begin.

April 26, 2011

TakeAway: After having its acquisition bid rebuffed by Groupon, Google is  launching its own daily-deal service offering, Google Offers, in NYC, the Bay area, and Portland.  Google aims to snatch market share from Groupon (No. 1) and LivingSocial (No. 2) … 

Ken’s Bet: Google will be a force in this market and hug Groupon for rejecting its almost $6 billion offer …

* * * * *

Excerpted from WSJ, “Google’s Groupon Rival Launches in NYC, Bay Area,” , April 21, 2011

Google’s rival to daily-deal services such as Groupon and LivingSocial, called Google Offers, officially launched today in New York City, the Bay Area and Portland.

Like its competitors … Google Offers will alert consumers to local-business deals on things like restaurant meals, promising “50% off or more” than the regular price “at places you’ll love.” …

Google Offers, which became public in January, comes several months after Google failed to acquire Groupon for more than $5 billion.  Meanwhile, Groupon is planning a public offering of its shares later this year …  between $15 billion and $20 billion.

… a Google spokeswoman said, “Today we launched a marketing campaign inviting Portlanders to sign up for a test of Google Offers — to get great deals delivered right to their inboxes. Offers is part of an ongoing effort at Google to make new services that give consumers great deals while helping connect businesses with customers in new ways.”

Edit by KJM

LivingSocial Gains on Groupon … but analysts say neither may be a long-term bet.

April 22, 2011

TakeAway:  Today, LivingSocial — the No. 2 player in the rapidly expanding market for online discounts — is still David battling Goliath (i.e. Groupon).

But the great chasm between the companies is narrowing, as the upstart gains more subscribers and collects more cash.  At the same time, it is trying to differentiate its brand.

* * * * *

Excerpted from the NYTimes, “In Race With Groupon, LivingSocial Raises $400 Million By Evelyn Rusli, April 4, 2011

In recent months, LivingSocial, which like its larger competitor serves daily deals to subscribers based on their location, has started to roll out new features. LivingSocial Instant, a mobile application that delivers time-sensitive discounts to users on the go, is a product that is currently only available in the Washington, D.C., area, where the company is based.  It has also introduced Escapes, a dedicated page for travel deals, an area on which Groupon has not focused heavily.

In its marketing campaigns, the company retains a youthful attitude with an “approachable sophistication,” said the company’s vice president for marketing.

Since the beginning of 2011, LivingSocial’s staff has roughly doubled to 1,300 employees, scattered across 250 markets in about a dozen countries. The number of LivingSocial subscribers now exceeds 26 million, about a third of Groupon’s audience.

One deal in January, a national promotion for a discount Amazon gift card for $10, attracted 1.3 million purchases in one day, or about $13 million in sales. Those returns surpassed Groupon’s first national deal with Gap in August, which generated about $11 million.  By the CEO’s estimates, LivingSocial is on track to reach 400 markets in 2011, with a staff of 3,000 people. In the last few weeks, he has also doubled his revenue goal, to $1 billion.

But as LivingSocial’s statistics climb, some analysts warn the industry may not have a big upside over the long term.

Several local vendors have publicly expressed dissatisfaction with daily deal services, which often attract discount-seekers instead of repeat visitors.

Edit by AMW

>> Current Posts

I spent $1 million on digital advertising … did it work?

March 23, 2011

TakeAway: With the move to digital, companies are unsure how to ensure their digital marketing dollars are being spent effectively.

Companies are spending more and more on copy testing for digital ads even with the criticism that copy testing kills creativity.  

* * * * *

Excerpted from AdAge, Copy Testing Coming to Digital Marketing” by Jack Neff, February 27, 2011

As … marketers are investing more in digital, they’re bringing with them one of their time-honored processes from TV advertising: copy testing.

… despite criticism that copy testing leads to bland ads that avoid risks, and that the storyboards or animatics used in copy tests don’t capture the magic production can create. …

…copy-testing houses have years of research showing copy-test results predict sales impact from ads. But expansion of copy testing to digital adds a new layer of controversy: Some critics believe tests developed for TV won’t work on digital ads.

… people close to P&G say it’s “TV testing” most of its digital ads now — video and other formats alike.

…”A home-page takeover on Yahoo can cost a million dollars a day,… The traditional thing with digital was if it’s not working, we’ll take it down. When you drop a million dollars in a day, you’d better be sure it’s working.” … “even if copy-testing squelches creativity …the world’s largest advertisers see value in doing this.”

…”All of our communications testing is designed to increase the odds of success in market, … We often conduct early learning with prototype production, increasing our ability to produce communication that really resonates with consumers.”…

… believes creative inconsistency has hurt digital ad effectiveness and applauds marketers for seeing they need to test copy. …But…”to try to force fit the old TV pretesting model into digital is kind of idiotic.”

… the context and content of where digital ads run affects how they work, …

Making small digital buys to test creative is no longer tenable for brand marketers because online survey response rates have plunged in recent years. Clicks and conversions in small tests are meaningful for direct-response advertisers, …but not brand marketers, … no links between clicks and offline sales, brand awareness or purchase intent.

…more packaged-goods clients are spending on digital copy testing, though most don’t have specific budgets for it and many are hesitating because of a lack of adequate research options. “Digital is not a single advertising medium, but rather an accumulation of media and should be addressed as such.”

“Once brands and researchers fully understand the digital space digital advertising research will become more actionable.”

 

 

 

Edit by HH

Brands and Buddies, the new way to Bing

March 22, 2011

TakeAway: Visual “tiles” that come up with Bing’s search results are part of the Bing’s innovations  to make the search platform more interactive and relevant to its users.

It is also showing the searcher’s Facebook friends’ Likes as another way to for users to validate the results. 

* * * * *

Excerpted from BrandChannel, “Bing Enhances Search with Brands and Buddies”  by Sheila Shayon, February 25, 2011

… search with Microsoft’s Bing lately, noticed the tiles now included with dynamically rendered visual info from brands in the entertainment, local, travel and auto categories. … enhancing Bing to be more relevant to users.

User queries trigger them to appear on the right side of the screen from one of 45 launch partners including IMDb, Yahoo Movies, Rotten Tomatoes, OpenTable, Yelp, CitySearch, Urban Spoon, Cheap Flights, YouTube, MTV, Last.fm, Rhapsody, Pandora, MSN and dozens more.

The tiles are interactive and click-through on a Pandora or Rhapsody tile brings up a song or checks the number of plays via Last.fm.

… the tiles are “going to be pulling in metadata from those sites. …figure out the results they’re looking for if you append some kind of visual cue onto the page.” … And enable users to “ingest third party content more successfully,” …

… “an innovative move to add images to the organic results. But … innovations must come from the ranking results vs. making adjustments to the aesthetics of searches…

… not so much intrusive as a value add to the search and/or social online experience: …feel Bing as a search engine is more user-friendly, smart and reputable. Consumers are intrinsically drawn to visual references and respect and trust this type of added feature when looking for a product…

… Bing tiles are the latest ingredient in a richer mix evocative of Microsoft’s Windows Phone 7 interface with alerts on homescreen tiles updated real-time.

Add to the mix that Bing also now displays your friends’ Facebook likes in your search results, …

Edit by HH

Illinois adopts “Internet Sales Tax Law”

March 17, 2011

Last week, Illinois’ governor signed into law controversial legislation requiring Internet retailers like Amazon.com and Overstock.com to collect Illinois’ 6.25% sales tax if they have affiliate sellers in the state.

Previously,, internet sellers were only compelled to collect sales taxes if they had a physixL presence in the state – e.g. stores or distribution centers.

So, Borders.com would have to collect sales taxes, but Amazon.com didn’t.

Hardly a level playing field.

But, Amazon has over 10,000 “affiliates” based in Illinois – companies that hawk their wares through Amazon. 

Now, these affiliates count like physical outlets.  So, if Amazon has a single affiliate based in the state, it is compelled by law to collect sales taxes

Amazon’s plan: terminate all affiliates located in Illinois.:

My take:

First, the law has nothing to do with level playing fields – it has all to do with tax revenues.

Given that, consider the so-called “second order effects”.  Many Amazon affiliates are likely to move out of Illinois – across the border to Indiana or Illinois – taking with them jobs and, oh yeah, corporate tax revenues.

Hmmm …

Suburban moms — armed with iPads — spur mobile commerce …

March 17, 2011

TakeAway: If your company is utilizing ecommerce, you will want to make sure it is iPad user friendly.

More and more shopping is being done on tablet devices and is stealing its share from pc based purchasing especially as women are becoming heavier users than men because of the inability for the manpurse fad to stick.

* * * * *

Excerpted from AdAge, “How the iPad is Reshaping Ecommerce”  by Patti Ziegler, February 22, 2011

The growing cohort of iPad owners — wealthy, tech savvy, and increasingly female — is emerging as a powerful driver of online retail sales.

iPad has become a must-have mobile device for many suburban moms, who seem especially fond of shopping (and playing Scrabble) …

…counterpoint to common technology stereotypes, women appear to be gaining on men as the fastest growing segment of early iPad adopters. In fact … the female-to-male ratio of iPad users shifted from 1:2 to 2:3… This finding is particularly significant when one considers that women control between 70% and 85% of household spending in the U.S…

…the iPad has emerged as …the poster child for a new class of mobile commerce. Many retailers report that over 50% of their mobile traffic is now coming from the popular tablet device, …

…rather than creating new incremental sales, tablet-commerce will largely grow by …cannibalizing traditional PC-based retail traffic.

… smartphone-based “m-commerce” also remains highly relevant for retailers. Smartphones are less likely to be used to browse products and make actual purchases, yet mobile devices are increasingly supplementing the in-store shopping experience …to find nearby locations, check hours, and obtain price comparisons. …m-commerce activities are not transactional, they do have the potential to drive incremental sales offline.

… E-commerce is growing at a double-digit pace and many retailers are ramping-up their presences on mobile and online platforms to offset a simultaneous decline of physical store sales. … creating opportunities for retailers that create shopper experiences that seamlessly extend across smartphones, laptops, tablets, in-store kiosks and, yes, the iPad.

The iPad’s nearly 10-inch display is comfortable … for web-surfing and product consideration, overcoming the size restraints frustrating shoppers on mobile phones. … the touch-screen functionality provides a more immediately satisfying and tactile shopping experience. …free from the constraints …they can be comfortably schlepped from commuter trains to airport lounges to kitchen counters, facilitating purchases at every venue.

Little wonder then that tablet sales — as a share of total PC sales — are forecast to nearly quadruple from 2010 to 2015…”To that end, retailers need to ensure that all pages, transaction forms, and form fields render as well from tablet devices as from any other browser,”…

In addition to the iPad, new offerings include the Android-based tablets Samsung Galaxy Tab and T-Mobile G-Slate. …The demographics are particularly attractive … typically affluent and more likely to be spending money online in the first place. Nearly 95% of iPad owners have “solid wealth and strong incomes,” …

Meanwhile, among men with means, there’s been speculation that the iPad will finally make “man purses” an acceptable accessory. …Good luck with that, guys! Perhaps an iPad-equipped woman could help you buy one online.

 

 

 

Edit by HH

 

* * * * *

Want the impact of Facebook? Then, pay up!

March 16, 2011

TakeAway: Brands trying to get in front of their customers by utilizing sponsored stories may be surprised to find out where their stories are ending up. 

This latest attempt for brands to utilize free promotions via Facebook prove that there is still a need to pay for the customers’ attention.

* * * * *

Excerpted from AdAge, “How Brands are Getting Lost on Facebook”  by Brad McCormick, February 22, 2011

… Facebook recently announced the launch of sponsored stories … which allow marketers to insert certain user updates into paid advertisements … another blurring of the line between paid and earned media.

But …brands are stumbling in their quest to be heard on the world’s most popular social network.

… Not all friends are created equal … a principle that social networks have struggled to properly put into practice.

Facebook actually attempted to correct this with…”Top News” featuring the news and updates from your friends that Facebook’s thinks you will be most interested in. … a brand’s presence within a user’s “Top News” is as good as gold because it is the default page.

“Recent News,” is fast becoming the spam folder of Facebook. …with an overflow of updates from “friends” with whom you rarely interact …this is where branded updates are appearing.

… While Facebook’s marketing department may tell Starbucks that another customer’s affinity for a Double Espresso Venti Mocha holds value to its fanbase, Facebook’s Edgerank algorithm may be saying something entirely different. Otherwise, there would be no need to “ensure your fans see the content that your Page publishes” via purchasing sponsor stories ads.

More than anything, Facebook’s announcement shows that is still necessary for brands to pay for a customer’s attention. While that’s not astonishing, for brands to truly leverage the power of Facebook, they need to find better ways to earn it.

Edit by HH

How safe are your passwords?

February 3, 2011

Interesting factoids reported in Business Week …

Punch line: Make your passwords 9 characters long with letters & numbers … and at least 1 capital letter and one special character.

* * * * *

Users who choose a common word or simple key combination for a password: 50%

Most-used passwords: 123456, password, 12345678, qwerty, abc123

* * * * *

Time it takes a hacker’s computer to randomly guess your password:

Length: 6 characters
Lowercase: 10 minutes
+ Uppercase: 10 hours
+ Nos. & Symbols: 18 days

Length: 7 characters
Lowercase: 4 hours
+ Uppercase: 23 days
+ Nos. & Symbols: 4 years

Length: 8 characters
Lowercase: 4 days
+ Uppercase: 3 years
+ Nos. & Symbols: 463 years

Length: 9 characters
Lowercase: 4 months
+ Uppercase: 178 years
+ Nos. & Symbols: 44,530 years

* * * * *

Average amount it costs a business to field a phone call requesting a password reset: $10

Proportion of help desk calls that are password-related: 30%

* * * * *

Data: Gartner, Forrester, Duo Security, Imperva, LastBit Software

BW Magazine, The Problem with Passwords, January 31, 2011

40% of companies who have used Groupon won't do it again …

February 1, 2011

TakeAway: Despite the craze over sites like Groupon and LivingSocial, many companies are finding it difficult to maintain sustained growth after using the site.

New research shows that the buzz these sites generate can’t make up for products that do not deliver a good value.

So perhaps the 40% of companies that wouldn’t use Groupon again should reevaluate their offerings.

* * * * *

Excerpted from Bloomberg Businessweek, “What Groupon and LivingSocial Cannot Offer,” January 25, 2011

Last month,Amazon invested $175 million in the number two online coupon site LivingSocial. True to form, Amazon is already using the platform to create enormous buzz: last week, they announced a coupon: $10 for a $20 Amazon gift certificate. Within hours, the offer generated massive interest, giving LivingSocial one of their biggest growth days and selling over $10 million in Amazon gift cards …

LivingSocial is not the first to create a compelling coupon offer. That honor goes to the market leader, Groupon. …Now, thousands of companies are jumping on the latest trend trying to generate buzz for their products.

Putting aside whether coupon sites are sustainable, all this begs the question of the value of buzz and being a first mover.

The costs are clearly high, but companies with products that tend to generate early buzz seem to do very well. At least that is the conventional wisdom. But a new study shows that no amount of buzz, excitement or first mover’s advantage will lead a product to sustained growth.

The study … tested whether early buzz could precipitate a product’s ultimate success. Using an online music test site, researchers tested whether music that was highly praised early on would be downloaded more than songs with less buzz. True to form, results from an initial study demonstrated that buzz and social influence generated early adoption and the more a song was discussed, reviewed and downloaded, the more people wanted the song. Success begets success.

But then the research team took that data and dissected it further. When they did, a surprising result emerged: while social influence can give a product an early advantage, that edge is typically not sustainable. “Social cues could convince you to take a look … but didn’t necessarily make you go in the store and buy something.” …

In business, we too often forget that what we are selling is value: we instead try to sell technology, or packaging, or just plain vaporware. To add value, your technology needs to be productized, and to do that you need to offer unique value to a customer. Without a valuable and unique product, viral marketing, social influence and buzz will help initially but will be of no lasting consequence.

No surprise, this is what many companies are finding on sites like Groupon and LivingSocial. There has been a large backlash by companies stating that these sites just don’t work: they cost a lot of money and the initial pop in sales dissipates moments later. A Rice University study found that upwards of 40% of companies who have used Groupon say they wouldn’t do so again. …

Edit by DMG

 

* * * * *

Facebook overtakes Google

January 6, 2011

TakeAway: What once seemed improbable became inevitable in 2010: Facebook is more popular than Google.

While search engines like Google aren’t going away anytime soon, Facebook will become more than a secondary component of many marketing strategies.

* * * * *

Excerpted from Washington Post, “Facebook passes Google as most popular site on the Internet, two measures show,” by Ylan Mui and Peter Whoriskey, December 28, 2010

This may go down as the year that social networking trumped searching as America’s favorite online pastime.

In 2010, Facebook pushed past Google to become the most popular site on the Internet for the first time … It … marks another milestone in the ongoing shift in the way Americans spend their time online, a social change that profoundly alters how people get news and interact with one another …

According to Experian Hitwise, Facebook jumped to the top spot after spending last year in third place and the year before ranked ninth. The company found that 8.9 percent of unique online visits were to Facebook this year, compared with Google’s 7.2 percent. Meanwhile, ComScore, another firm that calculates Web traffic, said Facebook is on track in 2010 to surpass Google for the first time in number of pages viewed. Each unique visit to a site can result in multiple page views. …

Consumers use Google to get to other places, but they log on to Facebook to stay. That helped Facebook account for roughly a quarter of online page views in November, significantly outpacing Google, Hitwise said.

But there is one key area in which Facebook has yet to surpass Google: revenue. The search giant recorded nearly $24 billion in sales this year. Several news reports put Facebook’s revenue at $800 million in 2009, and the company is expected to bring in about a billion dollars this year – though how profitable Facebook is remains in question. …

Edit by DMG

 

* * * * *

Full Article
http://www.washingtonpost.com/wp-dyn/content/article/2010/12/30/AR2010123004645.html

* * * * *

When you’re transacting on line … here’s a security tip.

December 8, 2010

On web sites  that require a password, make sure the web address (URL) starts with “https://” not “http://”.

The “S” in https means “secure”.

Without the “S”, you risk having your password stolen.

Don’t risk it.

Embarrassing pics on Facebook? … No problem – just change your name.

August 23, 2010

From the UK’s Daily Telegraph …

Google’s CEO Eric Schmidt warned that the “young” will have to change their names to escape their ‘cyber past’.

He says that the private lives of young people are now so well documented on the internet that many will have no choice but to change their names on reaching adulthood,

“I don’t believe society understands what happens when everything is available, knowable and recorded by everyone all the time.”

Mr Schmidt said he believed that every young person will one day be allowed to change their name to distance themselves from embarrasssing photographs and material stored on their friends’ social media sites.

Schmidt also predicted that in the future, Google will know so much about its users that the search engine will be able to help them plan their lives.

Using profiles of it customers and tracking their locations through their smart phones, it will be able to provide live updates on their surroundings and inform them of tasks they need to do.

I actually think most people don’t want Google to answer their questions. They want Google to tell them what they should be doing next.”

Full article:
http://www.telegraph.co.uk/technology/google/7951269/Young-will-have-to-change-names-to-escape-cyber-past-warns-Googles-Eric-Schmidt.html

Innovation: USAA says “Grab your iPhone”

March 3, 2010

Using your iPhone to deposit checks in your bank account, to initiate insurance claims from the accident scene, and to go toe-to-toe with car salesmen … now, that’s cool stuff, for sure.

* * * * *

Excerpted from Business Week: Customer Service Champs – USAA’s Battle Plan,  February 18, 2010

The provider of financial services for military families uses remote technology and a keen focus on clients to stay atop our annual customer service rating

When customers want to deposit checks, they don’t need to use an ATM, a teller at a branch, or even a stamped envelope and deposit slip. Rather, they can take a  picture of the check with their iPhone, use an app to send it to their bank, and within minutes the money shows up in their accounts. Giants like Bank of America are just testing a similar service.

In almost everything it does, the financial-services outfit puts itself in the spit-shined shoes of its often highly mobile military customers, many of whom face unique financial challenges.

USAA was the first bank to allow iPhone deposits, it routinely texts balances to soldiers in the field, and it heavily discounts customers’ car insurance while they are deployed overseas.

“They do all this really creative stuff … There is nobody on this earth who understands their customer better than USAA.”

No fewer than 87% of respondents to J.D. Power’s syndicated surveys say they will definitely buy from the company again, far higher than the average, which is just 36%. Its client retention rate? A near-perfect 97.8%.

Reps are armed with software that lets them view a history of the online screens a particular customer has viewed on USAA’s Web site, letting them know what policies or business lines the customer was perusing — and may be ready to buy.

Another high-tech service USAA rolled out in 2008 lets its far-flung customers — a sizable number of whom are young, tech-savvy, and living paycheck to paycheck — get text messages about their account balances before, say, making a big purchase.

Later in 2010, USAA is planning mobile peer-to-peer payments, which let customers e-mail or text-message money to friends or family for immediate deposit, no matter where they are at the time.

USAA was among the first to let customers initiate an insurance claim using their phones from the scene of an accident. And it soon will expand that app so policyholders can attach photos to the claim and complete the entire process via phone. By 2011 customers will even be able to attach voice recordings to their file, immediately retelling exactly what happened.

Also coming this year: a mobile car-buying service that lets customers standing at a dealership snap an iPhone pic of a vehicle’s VIN number and instantly get back insurance quotes, loan terms, and pre-negotiated rates at approved dealerships. “The idea is you can turn that phone around to the salesman and say ‘this is the price I’m going to pay.’ ”

Besides helping policyholders, such technology benefits USAA.  “If you can have the member self-serve on certain parts of the claim, or the entire claim … clearly there’s an efficiency gain.” 

Full article:
http://www.businessweek.com/magazine/content/10_09/b4168040782858.htm