E-Guide HOW A TOP E-COMMERCE STRATEGY LEADS TO STRONG SALES

E-Guide HOW A TOP E-COMMERCE STRATEGY LEADS TO STRONG SALES

A ccording to Forrester Research, e-commerce efforts will bring in $280 million in 2015. Companies who want a part of this growing market will need to invest more resources into providing exactly what their e-commerce customers are demanding. This e-guide will provide six key factors that can make or break a customer s shopping experience and, ultimately, an e-commerce business. Plus, readers will also find information about ebay s X.commerce platform and how that is e-commerce application. PAGE 2 OF 13

A TOP E-COMMERCE STRATEGY SEEN AS TICKET TO STRONG SALES Sue Hildreth E-commerce is a big market that s growing bigger every year. In 2015, U.S. companies are expected to rake in $280 billion in sales through e-commerce efforts, according to Forrester Research Inc. in Cambridge, Mass. Only two years ago, U.S. online retail sales amounted to $176.2 billion. Business owners who want a part of this growing market will need to invest more resources into providing exactly what their e-commerce customers are demanding, industry observers say. Online customers expect useful product information, access from any mobile device, intuitive interfaces, full support, a fast checkout process that accepts all payment methods, and a place to rate their experiences. They don t tolerate screen freezes, transactional snafus or confusing menus. "Customers today expect their [shopping] experiences to be relevant, to meet their needs and to not require a lot of time," said Haluk Nural, a senior PAGE 3 OF 13

vice president for dunnhumby, an international retail consulting firm with headquarters in London. Those expectations sound deceptively easy. But they require a wellhoned e-commerce strategy and a large investment in time, not to mention technology. What should an e-commerce strategy contain, and how should a business go about evaluating its website? Experts point to six key factors that can make or break a customer s shopping experience and, ultimately, an e-commerce business. Navigation. A site that is hard to use or confusing to navigate can cause a visitor to give up and leave, so any customer experience strategy needs to start by taking a look at website design, said Brian K. Walker, an analyst at Forrester. Ask employees and customers to give feedback on how easy or difficult it is to find product information, connect to customer service or navigate the checkout process. How many clicks does it take to buy something? Are the menus clear and comprehensive or confusing? "Look at the usability of your interfaces as well as customer abandonment rates," Walker advised. "There s a lot of low-hanging fruit to be had by improving simple things like that." PAGE 4 OF 13

Integration. To provide a seamless e-commerce experience, the site must be integrated with back-end enterprise systems, including CRM, billing and order fulfillment. "You have to have to have control over all your data in order to deliver consistent and relevant experiences across various touch points," Walker said. "It s no longer OK to have e-commerce be a standalone system." Personalization. This involves anticipating a customer s needs and automatically serving up information and products that match those needs. Personalization can be done at a very basic level using cookies and IP tracking, which can show the visitor s geographic region. At the high end, personalization technologies use rules engines and realtime analytics to match unknown visitor data and existing customer CRM data with product characteristics and marketing offers. How sophisticated the personalization needs to be depends on how many different products a business has and how many consumers it targets. Dunhumby s Nural creates informational content such as videos, blogs and articles for consumer goods manufacturers and their retail partners e- commerce sites. To maximize the value of that information, Nural and his colleagues use pre- and post-purchase data to estimate customer needs and PAGE 5 OF 13

provide customized Web views. "Some consumers are looking for value or diversity of selection or best price or convenience. We want to understand the customer s needs state and make sure that the right communication happens at the right time," he said. Denis Pombriant, CEO of Beagle Research LLC in Stoughton, Mass., added that he would like to see more businesses collect and study customer information for better business insight. "We need to work at capturing and analyzing customer data for unmet needs," he said. Product associations. Nural also uses data to provide complementary product options to businesses so they can entice customers to buy more. These complementary products might urge the customer to purchase organic maple syrup to go with their organic waffles, for example, or wrapping paper to match party plates. "Retail e-commerce sites that can link multiple products into a complete solution will be the most successful," he said. Mobile access. Yankee Group Research Inc., a Boston research company focused on mobile technologies, found that 54% of consumers downloaded a mobile shopping application last year, while 83% were "interested" in mobile e-commerce. PAGE 6 OF 13

"Smartphone shoppers have changed the face of retail," noted Sheryl Kingstone, a director at the Yankee Group. She advised e-commerce companies to stop treating mobile shopping as a separate experience and start integrating it with main e-commerce systems. Otherwise, mobile shoppers will continue to face "dead ends" such as click-tocall buttons that don t work, she said. She also suggests investing in mobile e-commerce apps that natively support smartphones and other devices, as opposed to being limited to supporting a minimized website designed for mobile browsers. Updates. The constant change in products and consumer culture means e- commerce sites must keep up to date on customer sentiment as well as product information and content. Old product information and articles on yesterday s trends can make a site look abandoned. "E-commerce managers must regularly re-evaluate their strategies and update their sites," said Kate Leggett, a Forrester analyst. "You can t publish content then walk away from it." Neglect can tarnish brand image and sales. Walker said, "Consumers don t think, 'Hey that site's not very good,' but rather, Your company s not very good.' " PAGE 7 OF 13

EBAY'S X.COMMERCE CHANGING ECOMMERCE APP DEVELOPMENT Adam Riglian Jeromy Carriere says he conceived the X.commerce platform on a napkin. A little more than a year later, that napkin has unfolded into an enormous fabric, encompassing a wide variety of ecommerce technologies. ebay's X.commerce platform is an initiative for ecommerce developers and businesses, led by Chief Architect Carriere. It incorporates a range of commerce-related applications, from open source ecommerce platform Magento to online payment giant PayPal, with the goal of creating an all-encompassing ecosystem for anyone doing business online, and the developers who make it possible. Developers use theecosystem to sell their own applications and build plug-ins to existing services like Magento or Salesforce.com. Businesses buy those applications and can benefit from third-party of plug-ins. The scope of the plan, its underlying technologies and a growing base of users and partners, is what led Fanplayr, a social couponing platform, to integrate into X.commerce. PAGE 8 OF 13

"What I see it enabling for retailers is really the liberation of technology," Fanplayr Co-Founder and CMO Mark Schreiber said. "Whether they are Magento or Shopify or Demandware, they can leverage X.commerce and now integrate all these incredible technologies from vendors like Fanplayr without a high overhead." X.commerce is built on the cloud using OpenStack and Cloud Foundry and is designed with developers in mind. Carriere talked up the relentless automation, openness, build-for-failure design and DevOps mindset of the fabric. "I give [ebay] a great deal of credit in taking such a bold step in putting forth this type of platform," Carriere said. The "bold step" impressed Schreiber and Fanplayr CEO Simon Yencken. Both said they were excited about the size of the X.commerce ecosystem and the speed at which it was growing. "There's quite a big community of developers, solution providers and partners who are really part of this initiative," Yencken said. "Being part of that community, getting access to complementary services and products is a really big plus, and I can't think of an equivalent community within ecommerce." PAGE 9 OF 13

WHAT IS FANPLAYR GETTING OUT OF X.COMMERCE? Fanplayr's couponing service is based around the idea of gamification. In an ecommerce context, that means they provide social "games" that consumers play to get offers or coupons. Merchants can use the service as a new way of reaching customers. The ability to find those new customers is why Fanplayr chose X.commerce, Schreiber said. "It has accelerated our access to our target, which are Internet retailers. We've seen a phenomenal acquisition through our connection with X.commerce," he said, adding that Fanplayr has brought in hundreds of customers through X.commerce it wouldn't have found otherwise. Yencken said Fanplayr found it easier to reach small to medium-sized retailers that are spending on IT, but aren't looking to compete with the large budgets of big retailers. IDEAS AND TRENDS BEHIND THE X.COMMERCE FABRIC The X.commerce fabric that attracted Fanplayr was designed from the ground up by Carriere. From the start, he focused on building a platform for the cloud, and that meant building a platform with failure in mind. "We have to always be prepared for any given thing to fail," Carriere said. PAGE 10 OF 13

"There's no presumption in any of our application logic. None of our design principles admit the possibility that something can always be available." While failure is planned for, Carriere said the system works to eliminate it through automation and the forced simplicity of NoSQL, a constrained data model. "We've learned through hard-fought experience in building systems at scale that if you need a person to actually touch a server, touch a piece of application infrastructure, touch a firewall, touch a load balancer directly, you can't scale," he said. All those principles combined with a growing network of developers and more than 100,000 merchants has given the platform a lot of momentum, which in turn gives developers the ability to work at high speed through continuous deployment (CD). Carriere sees CD as the logical extension of continuous integration (CI), meaning that anytime something is ready to be deployed, it is deployed. "What that means for the way we build is, as any given component is checked through our source code control system, it goes through a CI test phase and then gets deployed into environments," he said. PAGE 11 OF 13

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