The announcement and the CleverSet site have plenty of detail about why we think CleverSet has the best technology of its kind on the market. But for years we have touted ATG’s rules-based approach as the optimal way to personalize the online shopping experience, so you might (quite logically) ask if this acquisition of an automated personalization vendor signifies a shift in ATG’s philosophy. The short answer is “not at all!” But I suspect you might like a little more detail, so here’s the story…

The two approaches to personalization are actually highly complementary. The rules-based personalization on the ATG platform can be ubiquitous across the site, and its flexibility allows companies to apply personalization strategies in many different ways. ATG’s personalization is most effectively used in situations where the merchant has a defined and well-understood market segmentation, and understands what the likely best cross-sell offer would be for particular purchase histories and behaviors. ATG allows the merchant to take total responsibility for and total control over creating, managing, and adjusting those business rules.

CleverSet personalization is different from ATG’s in that it is automatic. It “learns” based on the statistical relationships of data. Today, CleverSet focuses on automating product recommendations, and is extraordinarily useful to merchants who don’t necessarily have strong knowledge about what the best cross-sell offer might be for a particular customer. CleverSet is also valuable to merchants who simply don’t have the time, resources, or inclination to build and manage their own rules.

We expect that our customers will continue to use ATG personalization when they want to have close control of their personalization rules and integrate personalized search (show this group of sweaters to fashionistas and another group to others). They will likely use CleverSet more broadly to fully automate the personalization of offers and content when rules aren’t defined explicitly. And these are not mutually exclusive – we actually expect companies to use both implementations together. For example, a merchant could write a rule to do targeted cross sells to a particular segment and also use the CleverSet recommendations on the same page to help drive some other recommendations.

Similar to our eStara brand of products, CleverSet is platform-agnostic and will be offered on demand, delivered in a Software as a Service model. This makes CleverSet an easy add-on to any e-commerce Web site, whether or not it is built on the ATG platform.

We are absolutely thrilled about this acquisition – not only because we are getting great technology, but also great people who fit well with our organizational culture. I look forward to sharing more details when the deal closes. 

There is no denying the value of ratings and reviews in driving better shopping experiences for consumers, and better results for online sellers. (Note to readers: see this post from Brant if you need convincing!) How prevalent is technology like Bazaarvoice’s on shopping sites today? How soon will it be ubiquitous? What was/will be the tipping point for adoption?

When we started Bazaarvoice in 2005, Shop.org and Forrester reported that just 26% of surveyed online retailers offered customer ratings and reviews on their websites, but 96% of these retailers rated the feature an effective method for improving conversion rates.  In that statistic, we saw opportunity.  Today, the technology is ubiquitous.  With leading shopping sites like Walmart.com, Best Buy, Sears, The Home Depot, Dell, and many others, not to mention Amazon.com, all using customer ratings and reviews, the vast majority of online shoppers are interacting with this technology.  Based on this, many brands now regard customer ratings and reviews as a mandate, it’s just a question of how and when they implement the technology, which is where we can help!   

How does the rise of “social shopping” sites like ThisNext, Yahoo! Shoposphere, Stylehive.com and Crowdstorm.com affect individual online sellers? 

As social shopping sites become a more significant driver of website traffic and sales for online sellers, I think they help accelerate the social evolution of these companies in a big way, which is fantastic from our perspective.  For one, social shopping sites at their best are active communities entirely devoted to sharing opinions about brands, products, and services.  Engaging with consumers in that environment is very, very different from acquiring them through an AdWords campaign, for example.  Second, social shopping sites are effectively “placeshifting” the shopping experience.  Your website isn’t the only or even primary interface that devoted social shoppers are going to use to research and buy your products.  Not only does your online marketing strategy need to address the increasing socialization of the online shopping experience, your online merchandising  strategy needs to evolve as well.  And, our multi-channel clients are even integrating reviews into offline media, adding yet another social interface for brands to consider.   

What are some best practices for sellers to consider when implementing social commerce technologies like yours? 

Two of the most important and overlooked best practices that come to mind are (1) tactics for promoting and driving adoption of social commerce technologies like ratings and reviews, and (2) leveraging customer-generated content beyond your website.  

On #1:  Bazaarvoice’s most successful clients are those that take a proactive approach to earning customer participation.  There are a number of effective tactics to do this, including promotions, post-purchase “write a review” emails, and working closely with our Community Managers.  The bottom line is that you need to support your social commerce initiative with a strong participation campaign.  The greater the participation by your customers, the greater the return.  

On #2:  The marketing and merchandising value of customer-generated content, specifically ratings, reviews, questions, and answers, is immeasurable.  As an example, our most successful customers have  deployed “Top Rated Product” campaigns on their websites to promote highly rated products.  These campaigns consistently deliver higher than average conversion rates and order values, multiplying the ROI customers realize from our solutions.  This is just one example of many.   There are so many unique and valuable ways to leverage customer-generated content , from customer segmentation marketing (based on frequency and polarity of ratings and reviews) to feeding customer reviews into advertising media, including print catalogs, store signage, and display ad campaigns.  The key objective here is to think beyond the product page, the place that customer ratings and reviews typically call home.  It’s the Metcalfe’s Law of social commerce – the more (in number) and more varied the uses of your customer-generated content, the greater the return for your business.  

What makes one company’s ratings and reviews technology better than the next?

When selecting a social commerce partner, a seller should consider much more than just the technology.  Functionality is always part of the evaluation, of course, but sellers need to consider the partner’s business model, service offerings, product roadmap, multi-channel strategy, partner ecosystem, leadership, and I’ll stop there because I could keep going!  We believe that social commerce is a truly strategic investment and source of long-term competitive advantage for your business.  The decision is not simply to add ratings and reviews to your website or not, it’s are you ready to become a more customer-centric and customer feedback-driven organization?  

To make this transformation, sellers need a social commerce partner whose industry vision and path to success is well-aligned with their own, whose solution will rapidly evolve with the pace of industry innovation and ever-changing consumer behavior, and whose supporting services, like content moderation, community management, and analytics, are robust enough to both protect the brand (i.e., ensuring that truly inappropriate comments do not post)  and deliver deep insight into what customers are really saying.  

I specifically mention content moderation, community management, and analytics, as these are important decision factors for nearly all of our customers.  We manage an inflow of over ten thousand (and rapidly growing) unique pieces of customer-generated content every day and succeed at meeting the most stringent SLAs and content tagging requirements (i.e., we tag reviews based on the business intelligence they contain, such as having a reference to a competitor or noting a product design flaw or defect) of our customers.  Our Community Managers work closely with each customer to design, launch, and optimize participation campaigns to drive ROI.  And our Workbench, a web-based reporting tool, enables our customers to access detailed executive, brand, category, and product-level reporting on demand.  That’s robust! 

In what areas should we look for innovation from Bazaarvoice in the coming year? 

This year we launched two new social commerce solutions that complement our flagship Ratings & Reviews solution – Ask & Answer and Stories.  Ask & Answer is a user-generated question and answer solution.  Think Yahoo! Answers but for your own website, fully hosted and managed, customizable, and designed to seamlessly integrate with your branding.  Stories is a solution for capturing rich, descriptive customer experiences – the “why” behind an important purchase.  

In the coming year, you can expect us to really focus on making Ask & Answer and Stories as successful in the field as Ratings & Reviews has been.  We’ll do this by signing up new customers, publishing case studies on the measurable impact of both solutions, and working with early adopter clients to leverage Ask & Answer and Stories content beyond their websites and in other online and offline media.  In addition, our solutions are rapidly evolving to serve new industry verticals beyond retail, such as manufacturing, financial services, and travel, as well as new international markets.  

Beyond these three dimensions of innovation – new products, new verticals, and new geographies – we are continually looking for ways to help our clients tap into the powerful “undercurrent” of less explicit customer word of mouth that drives so much of our behavior as consumers.  One example of this is a feature we recently launched called Shout It!, which allows a customer to share a product or even a specific review of a product within their social networks.  Sharing a recent purchase or a review you wrote yourself with all of your friends on Facebook is a very powerful word of mouth recommendation that could influence 1, 5, or 10 or more of those friends to run out and buy the same product because of their trust in you.  The social graph holds enormous potential for word of mouth marketing, so we are very much focused on innovation in that area. 

Aside from ratings and reviews, in your opinion, what is the biggest ‘make it or break it’ feature an online store must have? 

In my opinion, an effective “product finder” feature is mission critical.  Some call this search or navigation, others call it personalization or discovery.  Whatever the label or underlying technology, the feature must facilitate the most relevant product selection possible.  Customer ratings and reviews, and customer-generated content in general, are very complementary to this process.  Whereas product finding features drive a shopper to the decision point – I found the product, do I buy it now, later, or never? -  customer reviews give the shopper the confidence to make that decision without regret. 

Anything you care to add?  

Bazaarvoice is a proud partner of ATG’s and has successfully launched many ATG customers on our social commerce platform, including Cabela’s, The Finish Line, A&E Networks, Coca-Cola, and many others.  We work with over 160 of the Web’s leading brands and are helping these companies bring the customer voice closer to the heart of their business, helping them make smarter and more customer-centric decisions about how to market, sell, and support their products and services.  We’d love to tell your readers more about how we can help them, so please don’t hesitate to contact us!  Visit us at www.bazaarvoice.com and learn more about social commerce and the power of word of mouth marketing at www.bazaarblog.com, our company blog.      

Technorati Tags: ATG, ecommerce, e-commerce, Bazaarvoice, ratings and reviews, ratings, reviews, social commerce, web shopping, online shopping, word of mouth marketing

If you spent any amount of time in front of your television this weekend you inevitably saw many an intrepid reporter documenting the crowds at the mall - all while riding an escalator (for those of us in New England, we will soon see these same reporters standing in front of the season’s first mountain of road salt).  This evening’s newscast will likely lead with a story of the US workforce eagerly shopping away on the company’s broadband and taking advantage of the growing number of discounts and free shipping available online.  Black Friday has officially gained a sister in Cyber Monday.  But while Cyber Monday is a great promotional angle, the real story is in the shifting season. 

As many have documented, this holiday season is projected to see lower total retail growth than each of the past 5 years.  The NRF has projected a 4% growth rate overall which has kicked the retail world into the full promotional zone.  However, online sales are projected to see growth rates near or above 20% this season.  Whether gas prices, crowds or convenience are keeping them home, more Americans will shop online and returning Web shoppers will spend more of their budget online this season. 

Early estimates from Black Friday support the projections as stores saw an estimated 8% increase over last year while web sales outpaced last year’s same day by 22%.  And we’re just getting started.  The peak online shopping days likely won’t be seen for another week or two.  Last year’s peak days fell in mid-December and given a higher penetration of broadband to the home and increased consumer confidence in shipping systems, we expect to see that trend continue this season. 

So, enjoy the increased attention from the press on Cyber Monday and use it to drive increased attention from shoppers throughout the season.  Target your promotions to deliver value where warranted while maintaining margins.  Learn from the early shoppers to drive more relevant recommendations and offers for the procrastinators.  Optimize your category and search pages for each shopper so that they can find just the right present for each person on their list.  The satisfaction shoppers will get when their gift is opened and enjoyed will drive them back into your stores post holiday – especially when they receive your personalized, gift card promotion. 

Merry Cyber Season!   

Technorati Tags: Cyber Monday, e-commerce, online shopping, e-tail, e-tailers, Web retail, holiday shopping, Black Friday, ATG, holiday promotions

Today’s post summarizes a chat I had recently with ATG’s VP of product strategy, Barry Coleman.

Barry, what’s exciting about the e-commerce industry right now?

Of course, the growth in online retail has been tremendous. And now more than ever, competitive pressures are forcing merchants to take a very smart, proactive approach to the way they sell on the Web. The sites they built years ago just aren’t cutting it anymore, which makes it a really exciting time because merchants now need to get more sophisticated in order to be taken seriously.

In many ways, we can now create better, more relevant experiences online than we give customers in stores, because we can allow companies to target their merchandising efforts down to customer segments that are very particular. But the challenge has not been developing the technology—we know how to do that and we have had most of it around for years. Retailers and other merchants have been slow to adopt these capabilities, though. What I’m seeing is that most of our customers are beginning to take advantage of the kinds of personalization that ATG has been able to offer since the early days of e-commerce.

You mention companies are driven by the need to compete more. What are some of the ways that they’re accomplishing this? 

Personalization makes a huge difference. The retailers who are driving repeat purchases are cross-selling, up-selling, but doing it in a targeted way. They’re targeting content based on customers’ market segments, their transaction history, location, etc. —  not just one or two of these, but ALL of them. So companies are doing more than just helping customers find products faster, they’re helping them find what makes sense to individual shoppers at a particular time, based on the sum total of everything they know about that customer.

We took all these segmentation principles to heart in the recent Affinity Selling features we added to ATG Commerce. Most collaborative filtering or recommendation engines don’t take customer segmentation into account when generating cross-sells for a product. They take the sum total of click and/or purchases and generate the cross-sells from there. Segmentation is now such a fundamental part of our customer’s business that we felt it was important to calculate product affinity scores for each customer segment and show the user the product affinities for their segment.

Another way companies are competing better is by focusing on multi-channel interactions and multi-channel transitions. Online sellers are realizing that true loyalty is earned through the entire customer experience, not just the Web buying part of the relationship. Customer service – before, during and after the transaction – plays a huge part in determining customer loyalty. We’re seeing companies taking a much more proactive approach to customer assistance. Things like click to call and click to chat technology (Editor’s note: read more about this on eStara’s blog) help companies move high-value, at-risk online transactions to live agents, who can answer questions and actually finish an online order that a customer may have started. In fact, the entire Commerce Service Center suite we released this summer helps companies tightly integrate their web sites with their contact center.

What else are merchants interested in? Are they embracing mobile commerce?

Yes and no. In the U.S., mobile hasn’t been a big focus for most large brands because they just aren’t seeing a demand worth investing in yet. The technology is all there from an e-commerce standpoint, and we do have those capabilities within the ATG platform. Merchants don’t want to have to manage mobile sites they’d rather focus their efforts on driving conversions in the primary online channel.

As an industry we have been predicting the rise of mobile commerce for the last 7 or 8 years and it really hasn’t materialized. In my opinion there are two important factors as to why it hasn’t happened. Firstly, the networks are to slow. 3G networks are basically the slowest you can go and have a reasonable experience, and none of the US carriers have a widespread roll-out. Secondly, the devices just weren’t capable. The iPhone is a first step in the right direction for device capability. It has a good high(ish) resolution display, but it’s hampered by a slow network and a closed architecture. It’ll be interesting to see if Google’s Android changes the landscape, making it easier for us to deliver compelling experiences to phones, and whether the device manufacturers will adopt it. All of this combines to point to Asia and Europe as the markets that’ll lead the way in mobile commerce.

In the future we are going to see more companies take advantage of mobile marketing and proximity alerts that rely on GPS technology and Wi-Fi access to grab the attention of young shoppers who are used to living their lives on cell phones. There’s a long way to go before those of us outside that demographic will embrace mobile shopping and especially before the carriers put the appropriate infrastructures in place to make it happen. We see phones and mobile devices playing a larger role in commerce, sure, but right now you can’t expect that massive amounts of people are going to load their credit card data onto their PDA and shop with it as though it’s both a PC and an electronic wallet. It’s too easy to lose and consumers aren’t that confident in the security of it all. Maybe if there was a way that you could remotely wipe your phone clean so that if you lost it, there’s no danger that someone else will go shopping with it. But honestly, I don’t see the wireless carriers wanting to take on an added liability like that. Mobile commerce isn’t taking over right away, but it is coming.

So, we hear a lot about Web 2.0. How can merchants embrace it?

Web 2.0 encompasses a lot of facets. To some it is about using Ajax and Flex to create richer experiences. This is a really good thing. Excellent site experiences are a differentiator. These technologies allow the web sites to appear more like desktop applications, you lose the long blank page while the site refreshes. We’ve been using Ajax in our management and agent tools for several years now and we are adding widgets to the consumer facing pieces too. To me though, Web 2.0 is so much more than flashy web sites. It’s about building community and fostering contribution. There are many millions of blogs, discussions boards, MySpace pages and the like. Many of them are dedicated to the discussion of products that merchants are selling, but to which many merchants are oblivious or they at least have no reasonable way to capture the richness of the information they contain. Building community by allowing people to share opinions and ideas right at home on the merchant’s site allows the merchant to see the discussions (both the good and the bad), to identify the community thought leaders, to participate and to ultimately build or sell better products based on the discussion. Product reviews is a small first step down that road but there’s much that can be done. That’s an area we’re thinking about pretty hard. I fundamentally believe that you need to let the customers in on the merchandising process, they are the merchant’s most valuable asset.

Anything else you want to add?

Hopefully I won’t get slammed for giving a quick plug to the business plan competition ATG announced recently, but I’m very interested to see what comes out of it. As someone who’s worked very closely on both the technology and the business sides of an e-commerce company, I’m curious to see what kinds of plans are submitted, so I hope grad students, startups and developers will take a chance and submit.

Technorati Tags: e-commerce, personalization, mobile commerce, Web 2.0, business plan competition

Just when some believed the term “personalization” was in danger of becoming outdated, there seems to be a revived interest in it. The term is still misunderstood and for that reason is often not used.  New terms like behavioral targeting, precision marketing, and micro segmentation now come up in common marketing conversations, and often replace the more general notion of personalization. But the concepts are still the same and the value is even greater. Content targeting, collaborative filtering, one-to-one marketing, guided navigation… these are all personalization concepts that have been around since the 90’s. But it seems eTailers have finally moved beyond the early hype cycle and have found practical ways to implement and manage dynamic sites that “personalize” the experience, segment their sites and improve the quality of their recommendations.

By most people’s definition, personalization is about delivering “the right content to the right person at the right time through the right channel”.   What is the right content?  The simple answer… the content that converts the looker to a buyer or the one-time buyer to a loyal customer. 

At the heart of managing personalization is the ability to dynamically modify or configure the content of a web site based on who the user is, what the user is doing, or what the user saw, bought or saved.   Why is this easier today?   The difference today is in the easy-to-use business tools that give marketing managers and merchandisers the ability to easily define online segments, tag content (products, reviews, articles, etc.) and create rules to fully-automate real-time intelligent targeting.  Implementing personalization no longer requires Java PHDs and savvy Java scripting that is hard to maintain.

Why is personalization more effective today?  One theory I have… sites are taking a more basic approach.   Rather than implementing rocket science technology to “guess” at customers’ intents and preferences, eTailers are simply asking web site visitors a few key questions like brand preference, price range, product attributes, lifestyle questions, etc.  This information enables very accurate recommendations. The key: consumers, especially the younger generation, are more willing to share information online in return for this “value”. A recent article in eMarketer.com discusses how consumers generally like personalized offers, at least on e-commerce Web sites.  And although one-third of respondents to an Avenue A | Razorfish study were concerned about the privacy implications of personalized recommendations, more than seven in 10 said they found them helpful.

My caution to eTailers: Some of you are abusing this power and using consumer provided information to spam them.  This abuse of consumer information will create distrust with your brand and distrust with the general online shopping ecosystem.  Consumers are willing to partake in an online dialogue with online sellers.  If you focus on returning immediate “value” in return for sharing information, consumers will share.  They want you to help them find the right product or the good deal or the interesting accessory.  But if you begin to intrude upon their lives and take up their scarce time reading junk, they will begin to balk at this sharing.

Technorati Tags: personalization, behavioral targeting, precision targeting, micro segmentation, do not track, e-commerce, online shopping, Web advertising, Web marketing

Today, we don’t want to focus on what we’re doing to usher in this new era. Instead, we want to know where you think the industry is going. We’re announcing what we think is one of the most exciting industry-oriented initiatives we have ever launched.  We are officially kicking-off the call for entries for the 1^st ATG E-Commerce Ingenuity Business Plan Competition. 

We at ATG have always fostered creativity and forward-thinking, and we want to extend this part of our corporate culture to the e-commerce industry at-large. Open to entrepreneurs, start-ups and early-stage companies alike, we’re inviting tomorrow’s leaders to share their well-developed, ingenious, and ground-breaking business plans and make history.
One will win a $50,000.00 prize to make their plan a reality!


Share the link: www.atg.com/ingenuity with all of the most ingenious people you know, or who ATG’s expert panel of judges should know. Think of professional associations, networking groups, friends, mentors, students, and all types of visionaries. Spread word of the competition to your friends and colleagues that need inspiration or who have already started developing their e-commerce dreams - and be a part of this exciting initiative. 
 
Let the competition begin! 

Technorati Tags: ATG, e-Commerce, Innovation, Ingenuity, Business Plan Contest, Thought Leadership, Startups, Entrepreneur, Competition

So now what?
Of course there is a long list of tasks required to deliver the kind of experience the Millenials (and their parents, like me) are after. And only you know precisely what will work for your business and target customers. Yet at the highest level, I believe there are four overarching objectives for merchants looking to sustain - or better yet, expand - e-commerce growth:

• Personalize the Web customer experience to deliver more relevant products and content. Consider “micro-targeting” approaches that use everything you know about a customer to deliver a highly personalized experience. Moreover, use rich media to improve the online experience and make it entertaining (while being careful not to sacrifice efficiency!).
• Give direct Web store control to merchandisers and marketers that will enable a rapid rate of change. And equip those merchandisers with easy access to customer intelligence that will enable them to understand customer behavior, and empower them to create the most effective promotions. Armed with the right tools and access to your online storefront, merchandisers can greatly increase your company’s revenue and lower inventory expenses.
• Arm customer service agents with better information and tools to increase conversions at escalation points. Make it your goal to change your customer service department from a cost center to a revenue generator.
• Build upon a commerce platform that can support increased volume and customer dynamics, yet is flexible enough to support competitive differentiation.

A change in approach
As many of you know, we at ATG are not newcomers to the world of e-commerce. Our platform has been around for well over a decade. But that doesn’t mean we don’t recognize the need to continually change and evolve our offerings. And that is exactly what we’ve been up to. We recognize that delivering the kind of e-commerce experience that I described earlier takes more than a transaction engine with some point products bolted on in an attempt to support merchandising and customer support efforts. It takes a truly integrated yet flexible approach. We’ve been hard at work to deliver the industry’s only comprehensive, highly scalable e-commerce solution to drive the complete customer lifecycle of online sales, marketing and service - manageable from a single platform and delivered by a single vendor. Our flexible, component-based e-commerce software architecture enables you to personalize the online buying experience for your customers, making it easy for them to find desired products, comparison shop, register for gifts, pre-order items, redeem coupons, and much more. OK, I’ll stop there. But I would encourage you to take a look at how our offerings are evolving in an effort to support the changing customer - and your changing business. Better yet, let me know what you think and how we can continue to expand our solutions to best meet the demands you’re facing.

Technorati Tags: e-commerce, ecommerce, Millenials, online shopping