In 2008, I started to ask retailers whether they thought an online resource for internet retailing (internetretailing.com.au) would have any value.
My idea was met with resistance from almost every traditional retailer who suggested that the top end of town had been burnt by eCommerce in the dot com bust in 2000 and that Australia would not lend itself well to eCommerce.
Well, I ignored these comments, and went ahead and persevered. Five years later, I sit with a smug grin on my face as I read an article published in the BRW titled ‘Australia leads the world in online start-ups’.
Things have changed drastically in the past five years, so much so that it feels like a lifetime. This led me to question, what is in an internet year? A year equates to seven in a dog’s life roughly, so there must be some logic, just like Moore’s law, that the number of transistors in a silicon chip doubles every two years? I figured I was going to do some research and define the assumptions to calculate an internet year.
Alas within three minutes of doing research online, I found an article by a gentleman named Eric Reiss. Eric had kindly done all the hard yards, and I am proud to say he came up with the mathematically derived number of 4.7 years (don’t believe me? click HERE to see for yourself).
On reflection that seems about right, especially when I look in the mirror and see how I have aged! Seriously though, a lot happens each year in this dynamic industry.
Back to the topic, this means that the last five years in internet years equates to 23.5 years. To put this into relative terms, three months equates to 1.175 years; that means if you are building a website from start to finish in three months means you have lost a little over an internet year just in that time.
This demonstrates how fast things change in this space and is a very clear reminder you need to act fast and act now to get things done. This is where corporates fall over! Too many board (bored) meetings to decide on trivial things such as whether a line should be one or two pixels thick. eCommerce is for the fast and agile.
I recently attended the PESA 2013 Professional eBay and eCommerce Sellers Association. The event occurs once a year at the Gold Coast Convention Centre and is a must-attend event to add to your calendar. It is two-and-a-half days of networking and learning and is well worth the visit.
Ruslan Kogan, as entertaining as ever, demonstrated Google Trends to the crowd who were in awe. It is a must-have tool for any business, and I was somewhat surprised how many people didn’t know about the tool.
He demonstrated the comparison between heaters and air conditioners, highlighting how important it is to know what your customers are searching for. He also commented on the minimal effectiveness of AB testing whereby it only gives a 1-3% increase in sales.
I alluded to this in a previous blog post, where a 1% increase in turnover for a business doing hundreds of millions online is huge, but to a small business it’s almost negligible.
Here are some of the key trends and issues to come out of the conference:
Social proof
Ever see two coffee shops next to each other with similar offerings, one is empty, the other is full. Which one do you choose? The full one, right? This is social proof.
People tend to gravitate to things that interest other people; it’s demonstrated online in a variety of ways.
The Book Depository has a world map showing where sales take place as they happen. Kogan’s site has a pop up: “Someone just bought a Widget X.”
This is social proof other people are buying.
Personalisation
This is done well on Kogan’s site. Add a 55-inch TV to the cart and you’ll notice that the relative add-ons and offering on the site change. Treat each buyer as an individual. This no doubt costs in web development but has competitive advantages long term.
Price
There is no better marketing than the world’s best price. Low price without margin is a race to the bottom, and a willingness to work for less is not a sustainable competitive advantage.
Google Shopping
Google Shopping replaces Google Product Search (which used to be free) and is now being replaced with Product Listing Ads (PLA). This format allows you to include specific product information like an image, title, price, and your store or business name.
PLAs appear in their own box on search results pages, separate from standard text ads. The benefits are increased traffic, higher click-throughs and better-qualified leads. Tool King in the US, for example, had a 55% increase in conversions and larger shopping carts.
Currently the cost-per-click is cheaper than Google AdWords, but I doubt this will stay this way for long, so act quickly.
Interestingly, 15% of the billions of searches per month are new words, so you should:
eBay
Jim Griffin, a very likeable and larger-than-life man who also happens to be head of listing practices at eBay, suggested that sellers should attempt to emulate as close as possible, the customer experience. He emphasises descriptions of products, asking how would you greet a customer in store and mimic this with:
Soon to come on eBay: managed returns, which will allow a refund to take place automatically; also coming soon, coupon codes.
Mark Freidin is an experienced chief operating officer, eCommerce pioneer and consultant to fast-growing companies in Australia. Email: mark@internetretailing.com.au.
Mark Freidin is an experienced chief operating officer, e-commerce pioneer and consultant to fast-growing firms with his company internetretailing.com.au.
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