The Ecommerce Manual For Your Business

The eCommerce 2.
0 Handbook
How to Prosper in the New Era of Online Selling
by Ralf VonSosen
Copyright 2007 Infopia, Inc. All Rights Reserved.
Foreword
1.0, 2.0, even 3.0these numbers have been shooting around the technology industry for the past several years. They are related, in one way or another, to the Internet as a whole and software solutions. I kept asking myself what they have to do with the practical day-to-day efforts of eTailers? When looking towards the future of eCommerce, many discussions seem to be centered on rich website experiences, social networking, or new analytic tools, but never on a holistic view of the future of eCommerce. A few years ago, Tim OReilly made sense out of what was next for software solutions. He did this with his introduction and discussion of the Web 2.0 concept. Web 2.0 explains how the realities of tomorrow will change how software solutions are designed, created, and used. By examining and extrapolating Web 2.0 principles, I began to see that they had important implications for online retailing. This is ultimately where the concept of eCommerce 2.0 comes from. Understanding the new possibilities for softwareand what principles are applied in creating itis the foundation for understanding the future of eCommerce. It is also the foundation for taking advantage of eCommerce 2.0 principles and the new trends they drive. This handbook serves as a summary and practical guide to eCommerce 2.0 principles, and how youas an online retailercan apply them in your business today. Each principle is discussed in detail, covering changes in eCommerce and how to adapt to them. At the end of this handbook, you will find helpful tips on getting started and questions to ask yourself before diving into each unique principle that makes up eCommerce 2.0. Ralf VonSosen
Table of Contents
The Future of eCommerce Web 2.0 eCommerce 2.0 Sell Everywhere Be Seen and Be Shopped The Long Tail Target Niche Markets Customers Rule Build a Community of Raving Fans Personalized Shopping Make It Fun to Shop and Easy to Buy Mash-ups Integrate and Collaborate Data is King Collect a Wealth of Opportunities Getting Ready for eCommerce 2.0 Sell Everywhere Case Study : Patriot Surplus Charges Into New Online Markets The Long Tail Case Study : HiFi Sound Connection Amps Up for Search Engines Customers Rule Case Study: Shoplift.com is All About the Customer Personalized Shopping Case Study: Visibility Unlimited Sees Crystal-Clear Success Mash-ups Case Study: NextWorth Takes iPods to the Next Level Data is King Case Study: The Product Exchange Boosts Profits Through Data Bringing it All Together Appendix A: 10 Tips for Starting with eCommerce 2.0 Appendix B: Are You Ready? About This Handbook 5 9 13 14 15 15 16 16 16 17 18 22 23 28 29 34 35 40 41 46 47 52 53 57 60 64
1
The Future of eCommerce
The eCommerce 2.0 Handbook
The Future of eCommerce

eCommerce is nowhere close to reaching its potential. The selling capacity of the Internet, along with the technology that drives it, is still in its infancy. What is interesting at this juncture in eCommerce is that we are on the verge of a new era in terms of technology, relationships that drive business, and information that will put more control in the hands of both eTailers and consumers.
Today, eCommerce is primed for rapid growth that will push the limits of your technology and potentially net you significantly more revenue and higher margins than you have seen in the past. In 2006, Bear, Stearns & Co. Inc. estimated the total eCommerce market in the United States was less than 3% of the overall retail market. That 3% equates to $110 billion. By 2011, with a projected 16% compounded growth rate, Forrester Research estimates the eCommerce market will expand to $265 billion. eCommerce strengths are propelling continued online buying. Shopping convenience and the ability to compare productsin terms of features and priceis giving consumers a measure of control over buying decisions that does not exist in the brick-and-mortar world. It is important to note that as Internet technologies have improved, consumers have gained greater confidence in and comfort with online technology. This includes greater confidence in Internet security, in trying new products, when buying for the first time from a new merchant, and in buying items related to a main purchase. As shopping control for buyers has increased, so has control of a different type for eTailers. Previously, complete eCommerce data was only available to the industrys largest brands. Now this data is available to eTailers of all sizes. This level of empowerment in the industry is helping drive more aggressive business plans. With better eCommerce data, eTailers are getting the visibility necessary to make better decisions and increase online buying through various channels.
In 2006, eCommerce was only 3% of total retail sales in the US. By 2011, eCommerce sales will expand from $110 billion to $265 billion.
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As buyers become more experienced and sophisticated, their demands become more complex.
But as buying has increased, so has competition between online merchants. If you have sold online for any length of time, you have undoubtedly experienced this. The number of eTailers serving the growing base of online buyers has risen to extraordinary levels. Competition in many market segments has become spirited to say the least. The many options buyers now have has resulted in challenges for sellers. These challenges have grown exponentially more difficult to address.
More Buyer Options

Online Stores Marketplaces Shopping Channels Search Engines Payment Methods Shipping Choices
More Seller Challenges

Visibility into Business Usability Expectations Reducing Costs Service Quality Competitive Offers Targeted Promotion
The rate of change in eCommerce is unprecedented and is affecting fundamental areas. Only four years ago, 65% of purchases were initiated by customers coming directly to a merchants website. Only 13% of purchases were initiated through a search engine such as Google, or a comparison shopping engine such as Shopping.com. A massive shift has occurred. Today, only 24% of purchases are initiated by customers coming directly to a merchants website, while 50% of consumers come to a website after searching for a product. As buyers become more experienced and sophisticated, their demands become more complex. This is why the dynamic interaction between applications and data sources has become so importantit helps you build solid solutions and processes that create value and help you adapt to market demands. If you offer a limited number of shipping or payment options, you run the risk of abandoned carts or buyers who never get past reading about your
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options. Ultimately, if you fail to reinvent yourself in the changing world of eCommerce, you run the risk of becoming dated and irrelevant. Look below at some of the changes in eCommerce over the past several years and where eCommerce is headed in the near future.
Past eCommerce
personal websites domain name speculation page views publishing stickiness seller/manufacturer product descriptions static catalog mass emails mass marketing seller/manufacturer support website selling system integration reports research and shopping as work a a a a a a a a a a a a a a
Present and Future eCommerce

blogging search engine optimization cost per click participation syndication peer product reviews dynamic configuration personalized offers niche marketing user communities multi-channel, online selling mash-ups analytics research and shopping as entertainment
*Some of the observations above were taken from Tim OReillys article titled What Is Web 2.0. Incorporating and adapting to change in eCommerce through adjusting your own online retail strategy is critical. One place to look for guidance on eCommerce change is Web 2.0.
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2
Web 2.0
THE LONG TAIL // DATA I S THE NEXT INTEL INSIDE // USERS ADD VALUE // N E T WO R K EFFECTS BY DEFAULT // SOME RIGHTS RESERVED // THE PERPETUAL BETA // C O O P ERATE, DONT CONTROL // S O F T WA R E A B OV E T H E L E VEL OF A SINGLE DEVICE //
Web 2.0
For the past several years, Web 2.0 has been a buzzword that is seemingly everywhere. But what exactly does Web 2.0 mean, who is defining it, and how will it affect you in coming years?
The term Web 2.0 was first introduced by computer publishing mogul Tim OReilly in 2002. It is more of a philosophy than a science and more of a concept than a tightly defined description. Web 2.0 essentially describes how software and systems should be developed to address the new age of the Web. It addresses how applications are created, published, and sold. Web 2.0 also proposes how this new era of technology development creates value for users. Web 2.0 can be applied to all facets of software and technology, and is encapsulated in eight principles for the purposes of this book. These principles are taken from Tim OReillys article titled What Is Web 2.0.
Web 2.0 describes how software and systems should be developed to address the new age of the Web and create new value for users.
The Long Tail

Small sites make up the bulk of the Internets content; narrow niches make up the bulk of the Internets possible applications. Therefore: Leverage customer self service and algorithmic data management to reach out to the entire Web, to the edges and not just the center, to the long tail and not just the head.
Data is the Next Intel Inside

Applications are increasingly data-driven. Therefore: For competitive advantage, seek to own a unique, hard-to-recreate source of data.
Users Add Value

The key to competitive advantage in Internet applications is the extent to which users add their own data to that which you provide. Therefore: Dont restrict your architecture of participation to
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software development. Involve your users both implicitly and explicitly in adding value to your application.
Network Effects by Default

Only a small percentage of users will go to the trouble of adding value to your application. Therefore: Set inclusive defaults for aggregating user data as a side-effect of their use of the application.
Some Rights Reserved

Intellectual property protection limits re-use and prevents experimentation. Therefore: When benefits come from collective adoption, not private restriction, make sure that barriers to adoption are low. Follow existing standards, and use licenses with as few restrictions as possible. Design for hackability and remixability.
The Perpetual Beta

When devices and programs are connected to the Internet, applications are no longer software artifacts, they are ongoing services. Therefore: Dont package up new features into monolithic releases, but instead add them on a regular basis as part of the normal user experience. Engage your users as real-time testers, and instrument the service so that you know how people use the new features.
Cooperate, Dont Control

Web 2.0 applications are built of a network of cooperating data services. Therefore: Offer Web services interfaces and content syndication, and re-use the data services of others. Support lightweight programming models that allow for loosely-coupled systems.
Software Above the Level of a Single Device

The PC is no longer the only access device for Internet applications, and applications that are limited to a single device are less valuable than those that are connected. Therefore: Design your application
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from the get-go to integrate services across handheld devices, PCs, and Internet servers. The question you may be asking yourself at this point is how all this applies to eCommerce? While eTailers do not usually count software development or distribution as core competencies, Web 2.0 has important implications for eCommerce. Specifically, by applying these principles a little further downstream in the business cycle to the eCommerce cycleyou can take advantage of the changing landscape of the Web and the expected growth in eCommerce before your competitors do.
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3
eCommerce 2.0
S E L L E V E R Y W H E R E B E SEEN AND BE SHOPPED // T H E LO N G TA I L TARGET NICHE MARKETS // C U S TO M E R S R U L E B U I L D A C O M MUNITY OF RAVING FANS // PERSO N A L I Z E D S H O P P I N G M A K E I T F U N TO SHOP AND EASY TO BUY // M A S H - U P S I N T E G R ATE AND COLLABORATE // DATA I S K I N G C O L L E CT A W E A LTH OF OPPORTUNITIES //
eCommerce 2.0
With the evolution of applications and Web capabilities described by Web 2.0, there are very important changes implied for eCommerce. These changes represent a new creative frontier where some eTailers will thrive and some will be left behind. It is a frontier where new competencies, technology, and partnerships are requiredwhere great things for both eTailers and buyers will be possible.
Just as Web 2.0 is altering the software development landscape, the principles of eCommerce 2.0 will define how eTailers do business online. These eCommerce 2.0 principles loosely track to those found in Web 2.0, but take on a whole new life given the unique eCommerce selling cycle. Below are the principles of both Web 2.0 and eCommerce 2.0, with further information on those found in eCommerce 2.0.
eCommerce 2.0 represents a new creative frontier where some eTailers will thrive and some will be left behind.
Web 2.0
The Long Tail Data is the Next Intel Inside Users Add Value Network Effects by Default Some Rights Reserved The Perpetual Beta Cooperate, Dont Control Software Above the Level of a Single Device
eCommerce 2.0
Sell Everywhere The Long Tail Customers Rule Personalized Shopping Mash-ups Data is King
Sell Everywhere Be Seen and Be Shopped

Customer expectations for how and when they buy products have changed substantially over the past few years. Multi-channel selling was once limited to managing direct sales, a call center, a
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website, and possibly a partner channel. With eCommerce 2.0, this has been expanded and refined to include various online channels. These new channels include additional branded websites, various online marketplaces (such as eBay, Amazon. com, Overstock.com, and others), and online shopping comparison engines (such as Shopping.com, PriceGrabber.com, and others).
The Long TailTarget Niche Markets

eTailers who can connect with niche markets and provide a better online experience are capitalizing on new-found revenue. In the past, the obvious strategy was to find the bulk of the market and then mass market to them. With so much competition, many online merchants have adapted by discovering new methods and tools that target specific niche markets. These niche markets are not flooded by the big brands and respond well to content and online experiences directed specifically at them. In many cases, the demands of these niche markets are simply not being met by big brands. The Long Tail principle of eCommerce 2.0 is about being able to reach beyond the traditional prospect base and tap the potential of niche markets.
Customers Rule Build a Community of Raving Fans

Buyers were once along for the ride in the eCommerce process. Now they are in the drivers seat. The content buyers create through forums such as product reviews, blogs, and social networks influences other buyers as much or more than any promotion eTailers create. Forums like YouTube and MySpace underscore how content created by consumers has become a viable and valuable part of the promotional and sales cycle for retailers. The most frightening aspect of these forums for many eTailers is the perceived loss of control over content being published.
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Personalized Shopping Make It Fun to Shop and Easy to Buy

Shopping has long been considered a recreational activity by many. Shopping online is no exception. In fact, with the sophistication and speed of online shopping tools, consumers are spending more and more on eTailer sites. The best of these shopping tools takes into account that buyers want to be entertained and pleased. Buyers alsojust as in the brick-and-mortar worlddo not like long checkout processes. When building your online brand, regardless of channel, remember that speedy checkout equates to happier buyers who are more likely to return and buy again.
Mash-ups Integrate and Collaborate

Integration is nothing new, but what is new is how dynamically these integrations need to be initiated, modified, and used. The eCommerce 2.0 environment is built upon many interrelated systems and processes that require information to be exchanged dynamically. This happens between many systems based on individual user experience and the context of a particular customer interaction or order. Seamless access and interaction between systems is what promotes increased conversions and buyer loyalty, as well as attracts new buyers.
Data is King Collect a Wealth of Opportunities

Gone are the days of looking at purely operational reports. Seeing how many listings you have in a marketplace is fine, but it does not tell you how you compare to other eTailers, what your performance is like over time, or what other channels may be more profitable. eCommerce 2.0 is about collecting and managing data from all online channels to enable better business decisions. Discovering product opportunities relies on being able to define business objectives carefully, identify related key performance indicators (KPIs), and receive continual data to act on it.
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4
Getting Ready for eCommerce 2.0
SELL EVERYWHERE // THE LONG TAIL // CUSTOMERS RULE // P E RSONALIZED SHOPPING // MASH-UPS // DATA IS KING //
Getting Ready for eCommerce 2.0

Being ready, in a real-world sense, for eCommerce 2.0 means going beyond understanding the basic theories behind it. Before implementing eCommerce 2.0 in your business, its important to look at what facets of your business each principle touches, evaluate where you currently are in your ability to adopt eCommerce 2.0, and see how others are using it in their business.
Sell Everywhere
Multichannel selling has been expanded and refined to include various online channels.
Selling through multiple channels has long been a practice of offline retailers. Retail locations, call centers, catalogs, direct selling, and partners have all been leveraged effectively over the past several decades. But eTailers face issues and challenges not previously seen in channel selling. Today, there is a whole new set of these issues and challenges, along with critical success factors, that go hand-in-hand with selling online in multiple channels. In order to maximize the benefits of these new online channels (such as eBay, Amazon.com, and various shopping comparison sites), it is important to give customers what they want. This means enabling buyers to do business with you through any channel they chosesubject to their situation or buying preferences at the time. Buyers do not want to compromise on product selection or the level of service they receive because they have chosen a different channel. Your order fulfillment times should be the same whether they bought on your website or on eBay. Buyers may also want to start an order in one online channel and finish in another. What complicates this further is that you must be able to drive market penetration, targeted marketing, and customer satisfaction efforts in each online marketplace.
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Collaborating Between Channels

eCommerce 2.0 collaboration is about the dynamic interactions between eCommerce websites, marketplaces, comparison shopping sites, natural search, and paid search. Here, natural search refers to sites such as Google and Yahoo!, while paid search refers to payper-click advertising. This collaboration enables you to establish relationships with buyers through a variety of different methods, with the goal of bringing them back to your website for checkout where the margin on each sale is higher. Use a technology solution that allows you to redirect buyers to your website when completing an order on a marketplace like eBay.
EXAMPLE :
Inventory Management
Effective inventory management requires that you manage items in only one place and sell in many. If you have a single source of truth for your inventory across all channels, and real-time inventory updating, you can always have correct inventory information distributed across the online marketplaces you sell in. This requires that you create detailed inventory records. These include unique descriptions, attributes, and images for each item. All this information can then be sent to your appropriate online selling channels. Create an item in your inventory with all appropriate attributes and then list that item to eBay, Amazon.com, Shopping. com, PriceGrabber.com, and other channels simultaneously.
EXAMPLE :
Branding
Being recognized is an essential part of continued online selling success. Because of this, branding must be consistent across all
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online selling channels and convey the critical elements of trust, professionalism, and expertise. Although your company look and feel may begin with your website, it should never stop there. Carry your branding over to comparison shopping engine listings, marketplace listings, search engine advertising, and even the specialized landing pages you create. Regardless of where buyers see your branding, it should enable them to easily identify with you and reinforce positive interaction with your company. Use the same colors, images, and language found on your website in your eBay listings to reinforce your brand.
EXAMPLE :
Merchandising
Optimize the four Ps (product, price, place, and promotion) and establish targeted offerings. Your planning should take into account all online selling channel strengths and weaknesses. This can be a daunting task, but is well worth the effort. By doing this, you can reach the right buyer, at the right time, in the right place, with the right offering. Auction listing templates, as well as a highly functional and flexible website, enables you to create offerings that have a consistent look and feel, and lets you take advantage of the unique characteristics of each selling channel. Sell your products using different promotions and pricing on your website than you do on eBay or Overstock.com.
EXAMPLE :
Consistent and Reliable Service

This is easy in theory, but hard in practice. eCommerce 2.0, at a base level, includes the ability to execute on customer orders, as well as serve customers across online selling channels. No amount of improvement to your selling process can make up for a deficiency in this area. Having consistent and reliable service includes having a consistent, high-level customer shopping experience, good product
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selection, and quick checkout and payment. In addition, you should have processes and tools in place for behind-the-scenes execution of fast order fulfillment. An important thing to note here is that there are fraud dangers inherent to online selling that must be screened for in the order process and addressed proactively. Have a consistent product selection, ability to buy, and customer service experience regardless of whether it is on your website or on eBay.
EXAMPLE :
Are You Ready?

Use the following questions to help determine if you are ready to take advantage of the Selling Everywhere principle of eCommerce 2.0:
q
Do you give buyers the ability to do business on their termsproviding the ability to choose channels depending on their preferences, without compromising on product selection? Do you serve customers in a consistent manner across all channels without compromising quality? Do you allow customers to start a purchase in one channel and finish in another? Do you use a variety of tools to proactively drive market penetration, targeted marketing, and customer satisfaction in market segments?
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Case Study: Patriot Surplus Charges Into New Online Markets
Patriot Surplus sells military surplus goods online. From their humble beginnings in a home basement in 2004selling on eBay they have expanded to two brick-and-mortar locations and now sell online through multiple channels. What motivated this expansion was the need to raise brand awareness and ensure their products were on the radar of military enthusiasts everywhere. At the same time, they wanted to unify and streamline business operations while being able to centrally manage inventory. eCommerce 2.0 Adoption Results
Below are some of the results Patriot Surplus experienced by adopting the Selling Everywhere principle of eCommerce 2.0 into their business. Streamlined and unified eCommerce operations Automated listings with an integrated scheduler Increased traffic on a branded website Increased awareness across multiple marketplaces Increased sales from shopping comparison sites
Sales took off across all online channels for Patriot Surplus. In January 2007, they recorded a revenue increase of more than 600% over the same month the year before. By March 2007, they exceeded 2006 gross revenue, attributing much of the increase to the new shopping comparison site listings.
The Long Tail

The Long Tail principle of eCommerce 2.0 is all about tapping underserved markets and selling highly profitable products. Long tail is a term describing products that are in low demand or have a relatively low sales volume, but can collectively make up a market share that rivals or exceeds the relatively few bestsellers or blockbusters at any given time. For example, selling a niche book rather than a Harry Potter edition may be more profitable if you are able to target the book to a specific market that values it.
eTailers who can connect with niche markets and provide a better online experience are capitalizing on new-found revenue.
Number of Customers
Market / Channel / Offering Segment

The long-standing rule in real estate is location, location, location. In the same vein, the rule for successful online selling is know your customer, know your customer, know your customer. This knowledge allows you to target customers better than big-brand competitors, while simultaneously creating lasting customer relationships.
Target the Entire Prospect Base

Move beyond the standard prospect list and reach the edges of the prospect market. In addition to targeting the most common persona in a given marketplace, create specialized campaigns for specialized personas. Proactively reach out to very specific buyer
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segments through customized messaging that addresses each segments needs and pain points. When selling cameras, move beyond the classification of recreational and expert photographer. Find and market to those with special needs such as photographers who often travel to remote locations.
EXAMPLE :
Leverage Scalable Tools and Data

Ensure you have the tools and skills necessary to execute personalized, specialized, and high-volume campaigns targeted at long tail prospects. Use customer relationship management (CRM) tools to build a single customer and prospect database to manage campaigns Take advantage of multiple online channels based on segment buying preferences Use email marketing to target prospects and customers frequentlyalways with a valuable message Generate scalable personalized offers with marketing tools Know what search terms prospects are using and apply those terms to your search engine optimization (SEO), as well as pay-per-click (PPC) advertising
Customer Relationship Management

Having a good CRM system in place is essential for management of customer and prospect data. Gone are the days when CRM systems required tremendous up-front investments and lengthy implementation times. Systems such as Salesforce are now sold in a SaaS (Software-as-a-Service) model and paid for on a monthly basis. These CRM tools allow companies of all sizes to participate in marketing, sales, and service activities that would otherwise be impossible. With integration to eCommerce applications, CRM technology also gives you a 360 view of customers, including orders, services items, payments, and buying preferences.
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Use Salesforce to manage all your customer, order, and service information. The marketing tools within Salesforce enable you to proactively market to all your customers, regardless of whether or not you acquired them online.
EXAMPLE :
Many Online Channels

Creating an online advertising and promotion strategy is challenging given the many channels available. Each channel is unique and requires you to look carefully at specific advantages, target markets present, and critical success measurements available in them. Find your own balance among search engine marketing, email marketing, comparison shopping feeds, and marketplace listings. This balance requires you research channels thoroughly to come up with the right promotion mix. Always be sure this mix is in line with your company goals. If you sell bicycles, send an email campaign to all customers regardless of channel, making sure your website has information and keywords specific to season-beginning tune-ups and repairs.
EXAMPLE :
Email Marketing
Email marketing is a great tool for reaching both mass and niche markets. Your email marketing should be tied to and driven by your database of customers and prospects. This enables you to segment your target market and refine messages exclusively for them. This is a perfect way to differentiate yourself from your competitors and address niche buyers in a way that your competitors do not. Email marketing is generally inexpensive and not resource intensive. If you sell golf equipment, target all customers and prospects in your database with a special fall offer. Make the offer that goes to golfers in Wisconsin different from the one that goes to golfers in Arizona.
EXAMPLE :
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Personalized Offers
Customers are regularly bombarded with general offers that leave them unenthusiastic. Your CRM and eCommerce technology must be able to integrate the information you collect to help you interpret your target market. This gives you the ability to create offers that are uniquely positioned and communicated to your target markets. While this requires a certain amount of flexibility when creating offers, the right communication tools make the task a very real possibility. If you are a toy retailer trying to encourage a repeat purchase by a customer who bought a toy truck as a birthday present for a toddler last year, the offer you send could serve as a personalized reminder of the birthday as well as promote new ageappropriate toys.
EXAMPLE :
Search Selling
Selling through natural and paid search has increased tremendously in the past several years and shows no sign of slowing. This type of selling helps you reach customers with specific needs and wants who are searching for products using specialized words, terms, and concepts. It is important that you optimize all your listings and website content so search engines are able to recognize and find your segment-specific information. The same is true for your paid search advertising efforts. Be specific in your ads and continually refine your strategy. If you are an electronics eTailer selling TVs, also have segment-specific information on your website about home theater systems, DVD players, and sound systems.
EXAMPLE :
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Are You Ready?

Use the following questions to help determine if you are ready to take advantage of the Long Tail principle of eCommerce 2.0:
q Do you move beyond the standard prospect list and reach the
edges of the prospect target market?

q Do you create specialized campaigns and offers for segmented
markets?
q Do you use segment-specific content in appropriate channels to
reach prospects and address their needs?

q Do you have the tools and skills necessary to execute high-
volume campaigns that are created specifically for target prospects and/or markets?
q Do you create email campaigns, search marketing campaigns,
and specialized offers for a variety of selling channels?

q Do you capture customer information in a CRM system, and do
you use this information to drive both offers and the campaigns that include them?
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Case Study: HiFi Sound Connection Amps Up for Search Engines
Founded in 2001, HiFi Sound Connection started by selling home theater equipment, car audio equipment, and accessories exclusively through eBay. By 2003, HiFi Sound Connection was doing so well that it launched a new, branded eCommerce website. Thats when the company realized that they would not only need help ramping up their operations, but they would also need help getting buyers to their eCommerce site. This is a top concern for many eTailers who launch new websites. eCommerce 2.0 Adoption Results
Below are some of the results HiFi Sound Connection experienced by adopting the Long Tail principle of eCommerce 2.0 into their business. 243% increase in traffic from Google 220% increase in traffic from Yahoo! 822% increase in traffic from MSN Two years later, the companys rapid success was evident as it became one of the largest online car audio dealers and a successful eBay PowerSeller. Today, if you search for electronics terms on popular search engines, HiFi Sound Connection will be one of the top results.
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Customers Rule
The Customers Rule principle of eCommerce 2.0 is about building a community of raving fans. The communication and feedback from your buyers about both your products and service have a tremendous impact on long-term success. Building the kind of community you want is not a hands-off affair. You can build a solid, loyal customer base if you effectively manage the buying experience. It is also important to give buyers access to tools that enable them to exchange information and experiences. This helps you build a community around your services.
Buyers were once along for the ride in the eCommerce process. Now they are in the drivers seat.
Include Customer Experiences and Input

Make customer input and experiences part of your product offerings. This drives conversion within your website and marketplace listings. Customer input can come in many forms, such as reviews, comments, and blogs. Use a customer product endorsement on an offer landing page that includes the product.
EXAMPLE :
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Build a Community
Give customers the ability to communicate and interact with each other. This can be directly on your website or through promoting an offsite resource. Whatever the case, you should be involved from both a thought leadership perspective and a helpful/consultative one. These communities are not a place to refute arguments, but where you provide value to customers and prospects. If you sell dietary supplements, create a presence on MySpace and build a community for health and fitness enthusiasts.
EXAMPLE :
Customer Relationship Management (CRM)

A CRM system is essential for getting a 360 view of customers, including their orders, service items, payments, and more. As a primary link to revenue, customers are your most valuable asset. It is imperative you maintain a complete, single view of your customers to maximize your return on each and every asset. Complete customer information allows you to execute targeted marketing that includes well-thought-out offers based on data and branding that is present in all your selling channels. If you sell gardening products, use a CRM system such as Salesforce to see which type of plants and tools a market segment is buying. Then use that information to create offers and informational messages that target customer needs.
EXAMPLE :
Transform Transactions Into Relationships

Successful eTailers understand the importance of customer lifetime value. This value is realized by focusing not only on creating more online transactions, but also by having visibility into and measuring the success of repeat purchases. Improving customer lifetime value comes from leveraging CRM and eCommerce data to enhance relationships. If you are a photography eTailer, send information on how to improve photography skills to customers who bought
EXAMPLE :
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intermediate-level cameras. This improves your relationship with these customers and encourages future purchases.
Understand Content Purpose and Usefulness

It is critical to understand both the purpose and usefulness of content being contributed by customers. Things such as recommendations, helpful hints, and stories are all created for different reasons. Find out where your products and company are being discussed, who is reading and leaving information, and why they are doing so. Being aware and involved helps you influence these things in a positive way. Set up a Google Alert for your companys name. Click through to community site links to find places you are being discussed. Think carefully about your responsesalways keeping in mind the goal to provide value or assistance to customers.
EXAMPLE :
Customer Reviews
In the past, buyers relied on product reviews by manufacturers, vendors, and independent outlets such as Consumer Reports. Now, buyers tend to trust peer reviews more than these traditional sources of information. Customer reviews have tremendous impact on whether a buyer will complete a purchase. Because of this, you should provide the ability to post and read reviews on products. Be sure you keep up on which customers are leaving reviews and why they are leaving them. Also be aware of who is reading these reviews and why they are reading them. Use a solution like PowerReviews so customers can post reviews on products and provide prospects with first-hand experiences.
EXAMPLE :
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Blogs
Blogs are a strong foundation on which to build perceived expertise. Over time, they can help you become a trusted advisor in the market. By providing valuable information and advice, as well as answering questions and soliciting comments, you become a part of the community as opposed to a vendor selling to the community. If you sell pet supplies, use a blog to discuss topics like training, health issues, and traveling with pets. You can provide tremendous value to customers and prospects while establishing yourself as a trusted source for information.
EXAMPLE :
Forums
Forums are an excellent way to build a communitygiving customers and prospects value far beyond what you could create by yourself. Active forums help you get valuable information that may go beyond your areas of expertise, provide a high level of implied credibility, and be very timely about discussing current market issues. Forums also give you a place to proactively insert your recommendations and clarifications. They are an active communication mechanism not only among your customers, but between you and your customers as well. If you are a sports equipment eTailer specializing in triathlons, create forums that help athletes ask and answer questions, share training plans, and coordinate for upcoming races.
EXAMPLE :
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Are You Ready?

Use the following questions to help determine if you are ready to take advantage of the Customers Rule principle of eCommerce 2.0:
q Have you ceded control of content to your customers and
prospects?
q Do you make customer input and experiences (from reviews,
comments, blogs, and elsewhere) part of your product offerings to drive conversions for your website and marketplace listings?
q Do you give customers and prospects the ability to communicate
and interact with each other in a helpful, consultative community?

q Do you maintain a 360 view of your customers by tracking all
your customer interactions, activities, and information?

q Do you understand the purpose and usefulness of content being
created and consumed by customers?

q Are you involved in online discussions about your company and
products so you can respond to issues and influence conversations?

q Do you know who is leaving and reading both feedback and
reviews, and why they are doing so?
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Case Study: Shoplift.com is All About the Customer
Shoplift.com sells brand-name merchandise at clearance prices. As a retail distributor that was losing storefront sales to eTailers, they decided to expand their business to the Internet, taking their retail partnerships along with them. Shoplift.com wanted to expand on current relationships by building a network of loyal online customerswith the goal of providing something of value, while at the same time increasing their bottom line. eCommerce 2.0 Adoption Results
Below are some of the results Shoplift.com experienced by adopting the Customers Rule principle of eCommerce 2.0 into their business.
Increased brand awareness Increased website traffic 20% increase in conversion rates Higher number of repeat customers Greater interaction between customers and the company Better search engine rankings
In May 2007, Shoplift.com launched the community website ShopliftCommunity.com. This is a place where customers and prospects can post information on just about anything from product reviews to service requests. Within two weeks of launching the community site, Shoplift.com received roughly 1,700 hits a day. This number continues to grow.
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Personalized Shopping
Make it fun to shop and easy to buy. When shopping on your website is an informative, easy, and fun experience, customers are more eager to not only buy once, but to return and purchase again. One way to ensure shopping with you is a pleasurable experience is to visit competitor sites and make sure your layout, site navigation, and customer options are more enticing. Empowering your buyers to configure or bundle their own products is an additional enticement.
Shopping has long been considered a recreational activity by many. Shopping online is no exception.
Use Flexible Tools

By using flexible tools for merchandising, listing, and offer packaging, you can make shopping fun and easy for buyers. This flexibility also empowers buyers. All these things are critical elements in addressing buyer needs and will drive higher conversion rates, as well as repeat purchases.
DYNAMIC OFFERS
Empower buyers to build their own solution (a set of products or configuration) with website and online marketplace tools that can dynamically match similar or related products and bundle them into a single offer. Ideally, use technology that allows you to draw
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dynamically on available product inventory information in real time. Dynamic offers are custom offers that enable buyers to tell you exactly what they want. This can increase conversions and give you valuable offer research data at the same time. Be sure you have a flexible dynamic offer tool that lets you integrate with your inventory system, as well as define rules and product combinations. If you sell computers online, give buyers the ability to configure a computer with options, related products, and accessories. Be sure to give suggestions and expert advice on upgrades.
EXAMPLE :
UNIQUE OFFERS
Using offers that are hard to re-create can give you a sustainable competitive advantage. This is often a combination of products and services or information that only you can provide to buyers. Unique offers often draw buyers to you because they provide value that cannot be found somewhere else. If you are an eTailer for golf equipment, establish relationships with regional golfing associations to offer unique packages that include equipment and golfing vacations.
EXAMPLE :
AGILE SELLING
Respond to the behavior of online shoppers in real time by adjusting product selections, promotional offers, website appearance, and processes. Take into account buyer click paths, point of entry, and decisions while shopping. While this provides the greatest personalized shopping experience possible because it adjusts to buyer interestas well as comfort with technologyit requires a sophisticated Web shopping tool and the ability to collect and utilize a great amount of business intelligence data.
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MODULAR PACKAGING
Avoid static, monolithic offerings that are difficult to adapt to market changes. Instead, give your buyers several choices related to the product itself and accessories that could go along with it. This helps you target and sell to buyers more effectively because you are giving them a certain measure of control and choice. If you are a computer eTailer, make several preconfigured computers available across your website and marketplaces, but allow buyers to define the features and accessories they want.
EXAMPLE :
FEEDBACK OFFERS
Customer feedback can be a valuable information source when creating offers. Using customer feedback in this way enables you to adapt quickly to new information and trends. This requires the right customer information systemone that collects data on customer and prospect activities, what they are buying, and what they want that you do not have. If you are a cellular phone eTailer, collect feedback information from customers and prospects to create new cell phone packages that have special calling plans and devices that go along with them.
EXAMPLE :
Build A Better Shopping Experience

There are more than a few websites and marketplaces vying for buyer attention. Capture buyer attention by giving them a complete shopping experience that takes advantage of the latest technology one that facilitates item location and the selection process. Make sure you use inventory attributes for search on your site. This gives buyers quick and complete access to products on your website. Rich Internet applications can help you optimize this cornerstone of your business by enabling you to give buyers a simple, yet more complete shopping experience.
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Provide buyers with interactive advice, recommendations, and product selections based on lifestyle and product needs.
EXAMPLE :
Use Multiple Selling Channels

Buyers in your target markets will always have unique expectations, while marketplaces have unique selling tools. Taking advantage of both requires skillful merchandising. Your offers should be synchronized to manage things like cannibalization across channels and branding that sends signals to the market. Give special, branded item packages and valuable information as a reward for shopping through your website and its entire inventory vs. shopping through a comparison shopping engine.
EXAMPLE :
Collaborate With Merchants

Creating the right partnerships can help you develop more complete solutions that meet a broader set of buyer needs. It can also help you create more loyal customers, as well as define new prospect sources. Find other merchants with complimentary productsand/ or the same target marketand set up partnership activities. These activities should enable you to expand your offers. They should also not make you operate outside your core competencies, but instead help you leverage the competencies of other merchants. Partnerships can also provide economies of scale with suppliers. If you are a sewing eTailer, establish a partnership with a fabric company to give your buyers a more complete solution for their clothes-making needs.
EXAMPLE :
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Are You Ready?

Use the following questions to help determine if you are ready to take advantage of the Personalized Shopping principle of eCommerce 2.0:
q Is it fun to buy something from you? q Do you continuously adapt and refine your shopping experience,
brand, and product offerings as buyer needs and market conditions change?
q Do you empower buyers to create their own solutions by giving
them shopping tools and choices related to modular products and accessories?
q Do you target customers with personalized solutions? q Do you incorporate customer feedback to dynamically change
and adapt your offers?

q Do you create partnerships with other merchants to help you
meet a broader set of buyer needs, create more loyal customers, and define new prospect sources?
q Do you create offers that are hard for competitors to re-create,
and do you set yourself up with sustainable competitive advantages?
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Case Study: Visibility Unlimited Sees Crystal-Clear Success
Visibility Unlimited is a scuba and snorkel retail store that began as a service for a thriving travel agency. The specialty store quickly became known for providing a superior level of service, education, and dive travel experience. After more than 10 years of impressive growth opening brick-and-mortar franchises, the company decided to move online. With so many combinations and accessories available in diving gear, Visibility Unlimited was not sure how feasible online channels would be. There was a wide inventory to manage, specialized products that needed explanation, and a reputation of personalized service to uphold. eCommerce 2.0 Adoption Results
Below are some of the results Visibility Unlimited experienced by adopting the Personalized Shopping principle of eCommerce 2.0 into their business. $80 increase in average selling price for online transactions A database of customers who value personalized shopping Consistent branding that has led to industry recognition Online sales spiked for Visibility Unlimited as buyers were easily directed to additional equipment they needed. The company collected information about their online customers and established relationships with them during transactions. This helped them to create many loyal, long-term buyers. Thanks to ongoing branding efforts across channels, Visibility Unlimited has also enjoyed recognition from companies such eBay, Amazon.com, and others.
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Mash-ups
The whole idea of mash-ups has grown out of the need to integrate disparate data sources. But mash-ups are more than just integration in the traditional sense. Mash-ups take two sets of data and combine them in ways that produce previously unseen value. Mash-ups are also collaboration, on a technology level, that produce amazing results. The early buzz about mash-ups has been primarily focused on consumers and using various data sources made available via the Internet. As the idea of mash-ups has begun to take hold, businesses are looking at ways to benefit. For you to take advantage of mash-ups, it is essential to build or acquire an eCommerce platform that meets your needs today, and takes into account tomorrows possibilities. This is because the velocity at which technology changes continues to increase and customer expectations continue to escalate. Any technology platform you choose must focus on integrating disparate systems and processes, enhancing user experiences, and using many different types of information.
The eCommerce 2.0 environment is built upon many interrelated systems and processes that require information to be exchanged dynamically.
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Build Modular Solutions

Avoid hard-coded solutions and processes. You need flexibility. The speed of buyer- and market-related change has accelerated tremendously. This is fueled in part by accelerating change in technology. New shopping tools, communication tools, shopping habits, and business models require you to realign yourself quickly to new paradigms. Incorporate a peer review solution into your online selling platform to not only enable customers to post reviews, but to track who is posting the reviews within your CRM systemall with the goal of refining offers for increased conversions.
EXAMPLE :
Create a Network of Cooperating Data Services

All your mission-critical systems should integrate. Get these specialized systems to interact via data services. These services may be specialized for a particular process and data management function, and they often collaborate dynamically with other services to provide a complete and seamless business processes. Use a specialized eCommerce platform to drive online sales in various channels and then integrate that with a CRM system to manage customer service and customer information in those channels.
EXAMPLE :
Use Web Services Interfaces

Web services provide the ideal data flow mechanism for the new interactive processes between applications. Using standardized Web services, you can quickly adjust to new applications and easily interact with both partners and other systems outside your company to enhance business. Use standard Web services to interact with Amazon.com and eBay so you can use a single inventory system to list items on both marketplaces.
EXAMPLE :
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Empower Employees and Buyers

Control of content, promotions, design, layout, interactivity, and analytics should be firmly in the hands of your business users and creative personnel. Mash-ups allow this to happen without the intervention of IT personnel. This frees IT personnel to worry about scalability, reliability, and security. Rich mash-up interactivity is powered by newer technologies such as Flash and AJAX. By using these technologies, you can provide a battery of tools for people across your organizationsuch as brand managers, merchandisers, and analystswhile simultaneously giving customers and prospects better ways to buy from you. Use a specialized solution to manage online selling offers and promotions that integrates with your eCommerce platform. It should be a solution that your sales and marketing personnel feel comfortable using without the involvement of IT.
EXAMPLE :
Data Combinations
Mash-ups give engineers the ability to combine two or more data sources that were not originally designed to be combined. This often promotes unforeseen benefits to those using the mash-up. Ultimately, creating successful mash-ups requires looking at several data sources, finding a combination that has value, and then using tools to create a composite front end. This front end provides a seamless user experience despite the fact that the mash-up is drawing on different data sources. The syndication of information is multi-directional. You can effectively pull information from certain data sources and then publish that information in business tools across the Internet. Mash-ups are the framework that allows this to happen. Provide personalized offers by using order histories, resolved service requests, and qualitative feedback from your customers.
EXAMPLE :
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Reliability And Scalability

You should have confidence that your eCommerce platform will be there for your business and your customers when it is needed. Beyond reliability, be sure your eCommerce platform can meet marketing campaign and listing needs, both in terms of scaling to reach larger audiences and future integration with other solutions. To accommodate growth, it must be able to integrate with financial, inventory, CRM, order management, and other systems. Establish close relationships with all service providers to be sure that you are well aware of any planned outages and can proactively address all those that are unplanned.
EXAMPLE :
Extensibility
Todays eCommerce applications need the ability to easily extend their functionality, without being reliant on any one companys ability to build out that new functionality. Having access to data and functionality from other systems enables you to build a complete solution that is specific to your business needs. Mash-ups have inherent integration strength that makes this a simple and efficient process. They also allow you to quickly take advantage of new tools as they become available. Mash-ups help you build upon the technology foundation you already have. You should not have to replace existing systems, but instead extend them using Web services and online APIs. Ensure that all your technology is implemented using standardized architectures and Web services so you can exchange order, customer, service, and other data.
EXAMPLE :
Business Collaboration
Online channels can create challenges that go beyond IT concerns to branding. If you do not have a cohesive strategy across offline channelssuch as retail locations, call centers, catalogs, and partnersit can create even more challenges. You should have
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a clear business vision and strategy in place to execute across all channels. Having this kind of internal business collaboration results in consistent merchandising, messaging, and service. Thinking externally, business collaboration also includes the new relationships you form with other merchants to provide complimentary goods and services. These partnerships can provide additional reach into your target markets and enhanced value to your existing customers. If you sell shoes online, use standardized technology architecture to integrate systems with a clothing partner to create joint offers for buyers.
EXAMPLE :
Are You Ready?

Use the following questions to help determine if you are ready to take advantage of the Mash-ups principle of eCommerce 2.0:
q Do you have modular solutions with adaptable processes and
information management capabilities?

q Do you have information systems that are able to adapt to
changes in buyer and market needs?

q Do you have a network of specialized systems that cooperate
to provide complete and seamless business processes through standardized Web services?
q Do you use standardized Web services to quickly adopt new
systems that enable you to interact with partners and other systems outside your company?
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Case Study: NextWorth Takes iPods to the Next Level
NextWorth, a small company outside of Boston, saw an opportunity to sell used, high-value products on eBay. They quickly switched from selling multiple categories of electronic items to strictly selling used iPods. As sales increased drastically, so did their customer base. With no customer management tool, they felt some customers were falling through the cracks. eCommerce 2.0 Adoption Results
Below are some of the results NextWorth experienced by adopting the Mash-ups principle of eCommerce 2.0 into their business. Increased ability to search and organize customers 50% decrease in customer response times 30% decrease in customers falling through the cracks 75% reduction in reporting time Improved tracking of customer trends
NextWorth integrates eCommerce, trade-in, inventory, and CRM systems for a complete business solution. As a result, they have significantly improved customer satisfaction, streamlined operations, and reduced transaction costs. By having shipping information automatically migrate to their CRM system, NextWorth can extract key data such as shipping preferences and payment methods. This enables them to target market segments using newsletters and special offer emails that are sent from their CRM system.
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Data is King
If you measure it, you can improve it. Data is the key factor in helping you make the right business decisions because it can give you visibility and insights into how you are doing business now, and how you could be doing it in the future. While the massive amount of data that eCommerce 2.0 produces can be overwhelming, there are ways to approach data that can drastically improve business performance. Data truly becomes king when you can firmly establish key performance indicators and goals for your business, then collect and distribute the right information to the people who make business decisions.
eCommerce 2.0 is about collecting and managing data from all online channels to enable better business decisions.
Make Informed Decisions

To make well-informed decisions, you have to have a solid foundation to work from. Detailed analysis down to the click and dollar level is essential. This means knowing the effectiveness of your product listings, what your product turnover is, what orders you have in the pipeline, and what your presence looks like in various marketplaces. You can also use the knowledge you gain about your selling process and your customers buying experiences. All this information helps you create a sound base from which to make business decisions. Focus your marketing dollars on the most successful product offers and eliminate all non-performing offers to optimize marketing spending.
EXAMPLE :
Establish Your Goals

Before you can establish goals, you need to identify appropriate key performance indicators (KPIs) for your business. These are quantifiable metrics that measure performance. KPIs then tie to strategic objectives such as growth, profitability, market expansion,
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and cost reduction. The combination of KPIs and objectives tell you where to focus your energy and help you refine your business activities.
Create a Complete and Sustainable Strategy

Creating a strategy that is complete and sustainable requires that you consistently execute the performance improvement cycle. The four stages in this cycle include the following: 1) Visibility into your business performance, including information about current and historic KPI levels 2) Insight into eCommerce cause and effect, which leads to understanding what is influencing the current KPI results 3) Improving your performance, which results from decisions and actions taken to adjust KPIs to better levels 4) Measuring your performance improvement, which happens by linking your KPIs to your activities when attempting to improve performance
Send the Right Information to the Right Users

Because business users and creative personnel have different skill levels and different responsibilities, they need different sets of information. It is critical to present each with the appropriate level of detail to aid in decision making. For some, this means high-level dashboards with aggregated numbers. For others, it means detailed information in several reports that are specific to products, listings, customers, and other aspects of your business. Finally, some people require granular-level detail such as individual transaction records and the ability to move data into other analytics systems. A quick graph that shows the profitability of marketplaces may be the right level of information for an executive with little time to look at details.
EXAMPLE :
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Gather Complete Information

Your business strategies, plans, and decisions should all be based on complete information. To get this kind of information, you need to gather and compile it from across the eCommerce business process (from inventory to orders to payment) and track it across time to recognize trends. Data from all online selling channels must be included. Another critical element is the ability to see the lifetime value of customers. This helps you make strategic decisions about customer acquisition and service. Although sales revenue for a product may not measure up to the level of other products, the profit on that product may be superior based on marketing costs and cost of goods sold.
EXAMPLE :
OPERATIONAL AND PERFORMANCE REPORTS
These reports deal with metrics for profitability, listings, products, orders, and so on. They should help you do the following: Gather summary and detail information Gain visibility into product/category profitability Improve product mix Increase decision-making support Increase operational efficiency Improve resource utilization
CUSTOMER INFORMATION
This is information on customers, preferences, promotion responses, and so on. It should help you do the following: Maximize customer lifetime value Identify repeat purchase patterns Gather insight into service requests Analyze order patterns and history Focus resources on the most valuable customers
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WEBSITE ANALYTICS
These reports give you visibility into website traffic, click patterns, stickiness, and so on. They are available in solutions such as Google Analytics and Omnitures SiteCatalyst. They should help you with the following: Gaining insight into website activity Understanding customer behavior Integrating with AdWords
MARKET DATA
This data enables you to see pricing, keyword, category, selling activity, and other information from specific online marketplaces. It should help you do the following: Enhance pricing and listing decisions Use the right listing features Optimize your listing categories Use successful keywords
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Are You Ready?

Use the following questions to help determine if you are ready to take advantage of the Data is King principle of eCommerce 2.0:
q Do you use analytics in all your business decisions? q Do you use a cycle of performance improvement that draws on
knowledge gleaned from key performance indicators (KPIs) and in turn drives them?
q Do you collect and use both operational reports and performance
analytics when assessing profitability, listings, products, orders, and other aspects of your business?
q Do you collect and use customer information such as
preferences, promotion responses, service cases, and lifetime value to make business decisions?
q Do you collect and use website analytics for visibility into
traffic, click patterns, stickiness, visitors, and other aspects of your website?
q Do you collect and use market data to optimize pricing,
keywords, category assignment, descriptions, and other selling activities?
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Case Study: The Product Exchange Boosts Profits Through Data
The Product Exchange sells discounted, brand-name consumer goods such as golf equipment, apparel, collectibles, and more. In 2005, they started with golf equipment and quickly branched out into other products. With so many product lines, listing strategies often felt like a shot in the dark. They wanted to reduce the typical times listing an item from seven days a week to just two or three a week with the same selling results. eCommerce 2.0 Adoption Results
Below are some of the results The Product Exchange experienced by adopting the Data is King principle of eCommerce 2.0 into their business. Reduced listings fees with the same selling results More efficient business practices A better eye on the competition Better anticipation of market demand and changes Proactive vs. reactive decisions
With market and product data they are using, The Product Exchange is now proactive in finding in-demand products rather than relying on suppliers. They have competitor data to benchmark against and make decisions. In addition, The Product Exchange reduced their number of weekly listings by 30% or more while making the same profit.
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5
Bringing it All Together
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Bringing it All Together

eCommerce is growing and changing at a rapid pace. It is being driven by ever-evolving technology and consumer needs. Keeping pace with this change can be difficult. What eCommerce 2.0 does is give you a guidepost for where you are with your business today and where you can go with it in the future. eCommerce 2.0, with all of its principles, represents a new creative frontier that will test your competencies, technology, and ability to form partnerships. It will also give you better information and more effective branding capabilities, and help you form more profitable online relationships. What eCommerce 2.0 ultimately gives youby adopting its principlesis more control over your own data, processes, and profitability. The following is a review of the eCommerce 2.0 principles to consider implementing in your business:
eCommerce 2.0 Principles Sell Everywhere The Long Tail Customers Rule Personalized Shopping Mash-ups Data is King
By adopting these eCommerce 2.0 principles, you are laying the groundwork for continued growth and optimization in your business. You are also separating yourself from your competition as eCommerce continues to evolve and advance.
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a
Appendix A // B
A : 1 0 T I P S FO R S TA R T I N G WITH eCOMMERCE 2.0 // B: ARE YOU READY? //
This appendix has basic tips for adopting eCommerce 2.0. Use it to asses how well you are tapping into current resources and how you can make general preparations for using eCommerce 2.0 principles in your business.
10 Tips for Starting with eCommerce 2.0

The tips below will kick-start your ability to take advantage of eCommerce 2.0. They are adapted from Serious Business: Web 2.0 Goes Corporate by The Economist Intelligence Unit.
1. eCommerce 2.0 Applies to You

According to the Pew Internet & American Life Project, 50 million Americans receive news online, 73% of American adults go online, and over 50% of all Americans ages 12-17 are part of online social networks. Internet technology is something you and your business need to embrace because your customers and your prospects are embracing it.
2. Bridge the Generation Gap

Look for young people who live with and are intimately familiar with the new paradigm that Web 2.0 and eCommerce 2.0 represent. They can bring competencies to your business that would take years to learn on your own. Tim OReilly suggests that you listen to people coming up in the ranks and be prepared to learn from them.
3. Do Your Homework
Look to leaders in Internet retailing and your specific product categories for ideas and lessons learned. Find out what is working for them. Also initiate and collect research from current and future category customers. Focus on young segments as they are more likely to be wired into eCommerce 2.0.
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4. Borrow What You Cannot Build

Build vs. buy/hire vs. contract decisions obviously need to be made about your eCommerce technology and services. These decisions have a significant impact on how quickly you adapt to eCommerce 2.0. Know, however, that you do not have to build all the components yourself or make permanent hires for all skill sets. Just be sure you have the knowledge and skills necessary for continuous work on your eCommerce 2.0 initiatives.
5. Do Not Mistake eCommerce 2.0 for Advertising

For eCommerce, a significant amount of effort has shifted from traditional advertising to discussions and conversations. This means you need to carefully balance the amount of branding and advertising you are doing with new efforts focused on community building.
6. Give Up Control
This is probably the most challenging tip in this list. Rather than fear what buyers might say about you, realize that they will probably express their feelings in a forum no matter what. It is much better to create an environment where you have visibility to buyer conversations. This way, you have the opportunity to be involved instead of isolated.
7. Make a Straightforward Business Case

Just like all your other business decisions, do not forget to examine return on investment (ROI) for eCommerce 2.0. Look at your longterm business goals and strategies and how eCommerce 2.0 can be incorporated. After doing so, it will be much easier to convince yourself or a reluctant CEO about ongoing investment of time and money in eCommerce 2.0 initiatives.
8. Look in Your Own Backyard

You may have more eCommerce 2.0 expertise at your company than you realize. Those people who are very active online social
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networkers, Internet shoppers, bloggers, and product reviewers can provide invaluable input into your business strategies and give you insight into how your efforts will be perceived by buyers.
9. Avoid the Hype

eCommerce 2.0 takes a disciplined approach to truly benefit your business. Applying eCommerce 2.0 principles just because your competitor is doing so, or because you heard about it in a presentation, will not do you any good. Evaluate which principles to apply based on sound business practices and what your customers, as well as your prospects, are looking for. Many aspects of eCommerce 2.0 need to be genuine or buyers will see through them.
10. Get Your Toe in the Water

Start today. Its as simple as that. Start by evaluating one aspect of eCommerce 2.0 and learning how it is affecting your business. Most importantly, learn about how it is affecting the lives and shopping habits of your customers. eCommerce 2.0 is not an all-or-nothing proposition. It is a new way of thinking about your business, followed by continuous improvement and refinement.
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Appendix B: Are You Ready?

This appendix has the Are You Ready? questions from each eCommerce 2.0 principle section. Use it to find out where you stand in implementing each principle of eCommerce 2.0.
Selling Everywhere
Use the following questions to help determine if you are ready to take advantage of the Selling Everywhere principle of eCommerce 2.0:
q Do you give buyers the ability to do business on their terms
providing the ability to choose channels depending on their preferences, without compromising on product selection? q Do you serve customers in a consistent manner across all channels without compromising quality? q Do you allow customers to start a purchase in one channel and finish in another? q Do you use a variety of tools to proactively drive market penetration, targeted marketing, and customer satisfaction in market segments?
The Long Tail

Use the following questions to help determine if you are ready to take advantage of the Long Tail principle of eCommerce 2.0:
q Do you move beyond the standard prospect list and reach the
edges of the prospect target market? q Do you create specialized campaigns and offers for segmented markets? q Do you use segment-specific content in appropriate channels to reach prospects and address their needs? q Do you have the tools and skills necessary to execute highvolume campaigns that are created specifically for target prospects and/or markets?
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q Do you create email campaigns, search marketing campaigns,
and specialized offers for a variety of selling channels?

q Do you capture customer information in a CRM system, and do
you use this information to drive both offers and the campaigns that include them?
Customers Rule
Use the following questions to help determine if you are ready to take advantage of the Customers Rule principle of eCommerce 2.0:
q Have you ceded control of content to your customers and
prospects?
q Do you make customer input and experiences (from reviews,
q q q
comments, blogs, and elsewhere) part of your product offerings to drive conversions for your website and marketplace listings? Do you give customers and prospects the ability to communicate and interact with each other in a helpful, consultative community? Do you maintain a 360 view of your customers by tracking all your customer interactions, activities, and information? Do you understand the purpose and usefulness of content being created and consumed by customers? Are you involved in online discussions about your company and products so you can respond to issues and influence conversations? Do you know who is leaving and reading both feedback and reviews, and why they are doing so?
Personalized Shopping
Use the following questions to help determine if you are ready to take advantage of the Personalized Shopping principle of eCommerce 2.0:
q Is it fun to buy something from you? q Do you continuously adapt and refine your shopping experience,
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q q q
brand, and product offerings as buyer needs and market conditions change? Do you empower buyers to create their own solutions by giving them shopping tools and choices related to modular products and accessories? Do you target customers with personalized solutions? Do you incorporate customer feedback to dynamically change and adapt your offers? Do you create partnerships with other merchants to help you meet a broader set of buyer needs, create more loyal customers, and define new prospect sources? Do you create offers that are hard for competitors to re-create, and do you set yourself up with sustainable competitive advantages?
Mash-ups
Use the following questions to help determine if you are ready to take advantage of the Mash-ups principle of eCommerce 2.0:
q Do you have modular solutions with adaptable processes and
information management capabilities?

q Do you have information systems that are able to adapt to
changes in buyer and market needs?

q Do you have a network of specialized systems that cooperate
to provide complete and seamless business processes through standardized Web services? q Do you use standardized Web services to quickly adopt new systems that enable you to interact with partners and other systems outside your company?
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Data is King
Use the following questions to help determine if you are ready to take advantage of the Data is King principle of eCommerce 2.0:
q Do you use analytics in all your business decisions? q Do you use a cycle of performance improvement that draws on
knowledge gleaned from key performance indicators (KPIs) and in turn drives them? Do you collect and use both operational reports and performance analytics when assessing profitability, listings, products, orders, and other aspects of your business? Do you collect and use customer information such as preferences, promotion responses, service cases, and lifetime value to make business decisions? Do you collect and use website analytics for visibility into traffic, click patterns, stickiness, visitors, and other aspects of your website? Do you collect and use market data to optimize pricing, keywords, category assignment, descriptions, and other selling activities?
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About This Handbook

The eCommerce 2.0 Handbook is published and distributed by Infopia, Inc. Please send any questions or comments to ec20@infopia.com.
The Author
Mr. VonSosen is a technology executive who has worked for companies such as Siebel, SAP, Nextance, and Infopia. He is currently a Vice President at Infopiaan eCommerce technology companywhere he leads product and communications teams. Mr. VonSosen has also served as a Vice President at SAP, with responsibility for the companys CRM product marketing strategy. Mr. VonSosen holds a Bachelors Degree from Brigham Young University and an MBA from the University of Utah. He is a proud father of four and an active triathlete.
The Company
Since 1999, Infopia has provided eCommerce technology to eBay PowerSellers and online retailers. The Marketplace Manager eCommerce platform from Infopia enables businesses to fully execute the online inventory-to-cash cycle. It integrates a full range of critical success factors and is based on eCommerce 2.0 principles, helping companies optimize product merchandising, manage the shopping experience, and maximize their presence through premier online marketplaces and search engines such as eBay, Amazon, Overstock.com, Shopping.com, Shopzilla, Yahoo!, and Google. Together with online selling best practices, Infopia provides unique and proven value to a wide range of clients. Infopia is headquartered in Salt Lake City, Utah. For more information, visit www.infopia.com.
All products mentioned in this handbook are trademarked and property of their respective owners.
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The eCommerce 2.

Copyright 2007 Infopia, Inc. All Rights Reserved.

The eCommerce 2.0 Handbook

The Future of eCommerce

The eCommerce 2.0 Handbook

More Buyer Options

More Seller Challenges

The eCommerce 2.0 Handbook

Present and Future eCommerce

The eCommerce 2.0 Handbook

The Long Tail

Data is the Next Intel Inside

Users Add Value

The eCommerce 2.0 Handbook

Network Effects by Default

Some Rights Reserved

The Perpetual Beta

Cooperate, Dont Control

Software Above the Level of a Single Device

The eCommerce 2.0 Handbook

The eCommerce 2.0 Handbook

Sell Everywhere Be Seen and Be Shopped

The eCommerce 2.0 Handbook

The Long TailTarget Niche Markets

Customers Rule Build a Community of Raving Fans

The eCommerce 2.0 Handbook

Personalized Shopping Make It Fun to Shop and Easy to Buy

Mash-ups Integrate and Collaborate

Data is King Collect a Wealth of Opportunities

The eCommerce 2.0 Handbook

Getting Ready for eCommerce 2.0

The eCommerce 2.0 Handbook

Collaborating Between Channels

The eCommerce 2.0 Handbook

Consistent and Reliable Service

The eCommerce 2.0 Handbook

Are You Ready?

The eCommerce 2.0 Handbook

Case Study: Patriot Surplus Charges Into New Online Markets

The eCommerce 2.0 Handbook

The Long Tail

Market / Channel / Offering Segment

Target the Entire Prospect Base

The eCommerce 2.0 Handbook

Leverage Scalable Tools and Data

Customer Relationship Management

The eCommerce 2.0 Handbook

Many Online Channels

The eCommerce 2.0 Handbook

The eCommerce 2.0 Handbook

Are You Ready?

edges of the prospect target market?

reach prospects and address their needs?

and specialized offers for a variety of selling channels?

The eCommerce 2.0 Handbook

Case Study: HiFi Sound Connection Amps Up for Search Engines

The eCommerce 2.0 Handbook

Include Customer Experiences and Input

The eCommerce 2.0 Handbook

Customer Relationship Management (CRM)

Transform Transactions Into Relationships

The eCommerce 2.0 Handbook

Understand Content Purpose and Usefulness