Optaros Blogs |

Swoopo Loses Another CEO

jkrisch — Sat, 13 Mar 2010 17:18:08 +0000

After the departure of CEO Gunnar Piening last December, his successor Ralph Werner has also left Swoopo at the beginning of February (after only 8 months).

Frank Han from the US is now leading the company. Since the participation of August Capital in April of last year, there has been no end to the unrest at the company.

Swoopo, with its innovative business model, counts as one of the pioneers of “extreme retailing” and is the catalyst for the global Penny Auction Boom.

Most recently, Swoopo has had to tone down their business model and reimburse users their participation fees after buying a product.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

The Amazon WebStore and the Shopping System of the Future

jkrisch — Thu, 11 Mar 2010 22:55:57 +0000

This is a further post for our loose series on “Shopping Systems of the Future”.

While the next e-commerce generation has long been hoping for new and more sales oriented shopping systems, in the classical warehouse oriented e-commerce world, Amazon is still the ultimate role model for online trade.

It should be then good news now for online and catalog-based shops. Amazon is currently testing a new webstore which will offer many of the Amazon shop functionalities to smaller merchants:

"Shake hands with the leader in ecommerce innovation, and succeed in your ecommerce endeavors."

The current shop systems from Amazon and similar marketplaces are slowly but surely reaching the limits of their conceptional extendibility and have therefore (according to our estimates) a rather short half-life. There is also the valid hope that via Magento and similar efforts, a new generation of solutions will rise over the next years offering e-commerce companies the same potential which nowadays still require custom development efforts.

How will (or must) shopping solutions look like in the next 5 to 10 years?

A few related posts related to this question:

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Webtrends, Facebook, iphone: Social Media Marketing 2.0

mosofsky — Thu, 11 Mar 2010 20:50:04 +0000

2010 is the year in which most Marketers are shifting from social media and mobile dabblers to believers. The challenge Marketers face is that the enabling technology is still designed for dabbling. Nearly every Marketer is forced to create one-off Facebook apps, separate iPhone apps and separate websites with no common content management system, analytics, testing or targeting. This creates a significant challenge as Marketers move to scale their efforts up and measure results.

I recently had a briefing from Webtrends (full disclosure: Webtrends is a partner of ours) and believe their recent announcements show the path forward towards a new, online marketing platform that manages web, social and mobile. Webtrends Analytics 9 is the first to aggregate Facebook (via API) and iphone app (via SDK) analytics together with website data. This provides the first single view for Marketers to see activity across these key online channels. Consumer behavior crosses these channels fluidly and Marketers need the ability to track and measure what is actually going on rather than still focusing on their homepage.

Webtrends Analytics 9 is a great first step showing a consolidated view of analytics across key online channels. Webtrends Optimize holds the promise of enabling Marketers to use a common mechanism to embed and manage content/applications across distributed online channels (Facebook, smart phones, partner websites). No one has pulled this off yet as far as I am aware, but Webtrends Optimize is as close as any to get there. The most likely players are the Testing & Targeting bunch that have largely been acquired by larger players (Omniture, Autonomy, Webtrends, etc.) Currently, it appears to me that Webtrends is picking up the challenge most aggressively, have the fewest distractions and their bias towards openness in their platforms lends itself well to the challenge.

Here's hoping Webtrends completes the vision for the sake of all Marketers. Please share your thoughts if you see other companies heading this way. Who do you think will win?

Extreme Retailing: Change Is Coming to Online Shopping

jkrisch — Tue, 09 Mar 2010 22:31:32 +0000

Everything is suddenly possible again in the e-commerce world. In the US in particular, interest in extreme e-commerce models is rising steeply (“Are you ready for extreme retailing?”).

Joshua Goldman from Norwest Venture Partners gave a short introduction to Swooponomics at the Retail Innovation & Marketing Conference:

Parallel to that, several American innovators met at the First Round Capital E-commerce Summit.

The comments of the event organizer (“Change is coming to online shopping”) corroborates much of what Exciting Commerce has been heralding since 2005 which was also self-evident at this year's Live Shopping Days Conference:

"One of the things that’s surprised me the most over the last decade is how little transformative innovation has occurred in ecommerce.

eBay looks pretty much the same as it did a decade ago. Amazon looks pretty much the same as it did a decade ago. While the top 10 sites on the Internet have changed dramatically over the last decade, the top 10 online shopping sites on the Internet have not.

The traditional catalog/cart shopping model remains pretty much unchanged. I’m not sure of the reasons why so little innovation has occurred – perhaps it is because of Google.

Specifically, the fact that online retailers had a scalable, measurable, and predictable source of customer traffic (through both SEO and Adwords) might have reduced the external pressures to innovate.

However, the online shopping paradigm is finally changing. Indeed, I think we’ve seen more innovation in the last 10 months than in the last 10 years.

We’ve seen an explosion of interesting technologies and opportunities that seek to change online shopping"

The American innovators cover a wide range of methods and models from alternative payment systems down to game mechanics.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Oliver Jung’s Global Shopping Club Empire

jkrisch — Mon, 08 Mar 2010 19:08:24 +0000

Brands4Friends Goes the World: It feels almost like there aren’t any more countries where B4F founding investor Oliver Jung and his cohorts haven’t got a shopping club investment stake.

A few days ago an announcement came by email which mentions for the first time publicly the “global shopping club alliance”:

"Australia’s leading by invitation only shopping club, brandsExclusive, announced it has raised substantial Series A funding from Trayas.

Trayas is led by Klaus Hommels and Oliver Jung, who are also invested in a number of leading overseas shopping clubs including Turkish Markafoni.com, the Brasilian Brandsclub.com.br, the Swiss Fashionfriends.ch and the Indian FashionandYou.com.

“The global shopping club alliance, which has a combined membership of several million online shoppers worldwide, creates an amazing opportunity for Australian brands to reach a wider international audience, and for the Australian consumer to access more brands and even greater deals.” Says co-founder Daniel Jarosch."

Besides the known 9% of Brands4Friends that Oliver Jung holds, he also has a stake in Russian KupiVIP (which recently raised $20 million in funding), as well as the Canadian Beyond The Rack, who announced their financing round at the end of January.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Groupon Fever: How Groupon Wards Off Class Action Lawsuits

jkrisch — Mon, 08 Mar 2010 18:37:57 +0000

Overambitious lawyers are the bane of every serious startup company. At the moment, Groupon is finding it necessary to defend against a class action lawsuit in the USA - and is doing so with its customary tongue-in-cheek style (“Groupon Organizes Class Action Against Itself”):

"You may or may not have heard that a lawyer named Jay Edelson from a law firm called Edelson McGuire is attempting to organize a class action lawsuit against Groupon, claiming that our deals’ prominently displayed expiration dates somehow “systematically deceive our customers.”

We can think of two possible explanations for this lawsuit:

The law firm sees an opportunity to exploit our success and make a bunch of money.
We are indeed systematically deceiving our customers, but instead of taking advantage of our 100% open refund policy or telling us about their problems or sharing them in a public forum, our customers are secretly gossiping about them to each other and Edelson McGuire, kind of like Emily Johnson did against me in 9th grade (Emily if you are reading this I want my cabbage patch doll back)."

“Corporate Overlord” Andrew Mason reveals how Groupon would like to ward off self-inflicted lawsuits in the Groupon blog.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Private Sales, Flash Sales, Private Events, Timed Events, how to implement

mosofsky — Mon, 08 Mar 2010 13:58:07 +0000

Private Sales is one of the hottest online retail concepts with:

Rapid revenue growth (Vente-Privee - 0-$1 billion in 6 years, Gilt Groupe 0-$400 million in 3 years)
Extremely attractive financials (e.g. extremely low customer acquisition cost due to viral invitations)
Larger players buying-in (GSI Commerce acquiring Rue La La for $350 million and perpetual rumors of Amazon buying Vente-Privee for up to $3 billion)
Incumbents adding Private Sales to their sites (Neiman Marcus, Saks, Comcast(Swirl))
VCs funding new entrants (BuyVIP, Secret Sales, Private Outlet)

For those looking to develop Private Sales businesses, there is a great opportunity to learn from the leaders. Specifically:

What are the best practices that can be learned from the leaders?
What are predictions for future capabilities that the leaders will offer?

What is Private Sales?

Private Sales has different variations but is generally defined by the following:

Invite-only - requires an invitation from a friend to get in
Name brand merchandise -quality merchandise not just cheap or out of date items
Discounts - compellingly priced to drive impulse purchases and loyalty
Selling Event - timed event at which the merchandise is offered until it sells out or a time limit is reached

Who are the leaders?

Early leaders are emerging in the Private Sales space and are listed below. The space is dynamic, but these companies are early leaders that are the most likely sources of tested best practices.

Vente-Privee - originator of the concept in 2001, nearly $1 billion in revenue in 2009, in France, Germany, UK, Italy, Spain,
Gilt Groupe -$500 million in revenue after founding in 2007.
Ideeli - 1.3 million members, recent $20 million VC funding
Rue La La (GSI Commerce) - acquired by GSI for $350 million
Hautelook - $90 million in revenue

We reviewed these sites for key business model design elements that drive their success, as well as some unique elements of each to watch as trends going forward.

Key Design Elements

A successful Private Sales model requires the creation of an exclusive club, a viral invitation only machine, a highly loyal repeat customer base and a powerful demand for impulse purchases. Several key design elements have become best practices to achieve these objectives.

Viral invitations -New customer acquisition is driven primarily through people inviting their friends. This dramatically reduces the traditional customer acquisition cost of SEO, paid search and affiliates. The average incentive is $10 for each person that is invited and makes a purchase. Each site makes it easy to invite friends through either Facebook Connect or adding contacts through Plaxo.
Cart reservation - One of the biggest complaints from Private Sales shoppers is that an item will sell out in the time it takes them to move an item placed in a cart to checkout. The most common approach to address this issue is to provide a reservation time buffer once an item is placed in the cart to allow enough time to checkout. Some of the sites extend the time when another item is placed in the cart. A notable difference is whether the reservation time should be shown; which is a consideration between notifying the customer that they may continue shopping to drive up average-order-volume vs. the risk that they will horde merchandise in their cart.
No site search - Most ecommerce sites offer search or guided search to find products. Most Private Sales sights do not. The goal is to create a window-shopping experience where a shopper spends time looking at each event to create an impulse to buy. Shoppers are not coming to the site with an intent to purchase a specific item. However most of the sites do offer a variant filter such as size and color.
One page event list - A traditional ecommerce retailer may have thousands of SKUs in a hierarchical product catalog broken down by category, sub-category, and product page. Large Private Sales sites may have dozens or even a hundred simultaneous events, but are listed on a single page. The emphasis is on encouraging browsing to create the urge for an impulse purchase.
Sales events always start at the same time - It is important to train customers to come to your site at the same time for each sale to start. This maximizes the impulse purchases, the rate of product sellout and converting return visitors. It does create a huge challenge for IT to support extremely spiky traffic. IT would much prefer to spread the start time of sales events throughout the day to ease the operations - but the business benefits of training customers to come to the site everyday at the same time greatly outweigh the additional IT costs and performance challenges. Cloud-based auto-scaling platforms are ideally suited to address this spiky demand.
Order stays open for a few hours - Compared to traditional shopping, a Private Sales shopper is motivated to check-out before the inventory depletes or her reservation runs out on her cart. This creates a situation where a shopper is forced to checkout soon after adding an item to the cart. This means that buying many items may require several checkouts, inevitably leading to call-center complaints about multiple shipping charges for same-day purchases. Advertising that free shipping is available for additional items purchased within a given number of hours builds goodwill, increases order volume, and most importantly does not create disgruntled shoppers.

Likely Future Key Design Elements

Private Sales is still a young retail concept and rapid innovation in the user experience is to be expected. Listed below are some of the advances we expect to see on leading sites over the next year.

Fashion content - Private Sales sites have the opportunity to influence shoppers through richer content around the products on sale. Many of the sites provide little to no content around the items. Why are they compelling? Why is the price such a deal? Which items could be combined with others for an outfit? This type of content should increase the number of shoppers interested in a specific sales event and drive greater return traffic to the site. For example Rue La La has partnered with Bravo to sponsor Launch My Line. We predict tighter content integration into Private Sales sites as they already drive tremendous daily traffic from loyal customers, providing ‘exclusive' daily content such as fashion articles is a logical next step.
Club for top invitee networks - The most valuable shoppers are not the ones that buy the most, but the ones that have invited groups of people that buy the most. These networked influencers should be addressed separately to keep them loyal to the brand (if they switched to a competitor they could bring a lot of people with them). Private Sales sites could market to them directly with special offers, increased incentives to extend invitations or competitive leader boards to see who is the biggest influencer.
Customer idea community - Which brands are the shoppers most interested in seeing? What site improvements are most desired? Private Sales sites have many loyal customers that are deeply engaged. But none of the sites are fully leveraging the potential value of this community. Poll questions or blogs with comments would be a good start to tap into the open innovation potential of the clientele. This also allows for effective use of Social Networks to extend reach.
Crowd visualization - Part of the power of Private Sales sites is the rush of the crowd at the start of an event to generate impulse purchases. Currently, none of the sites provides a visual experience to shoppers of this crowd. This is a feature that would be turned on during the high traffic first hour of an event.
Social analytics. This is a nascent area, but as Private Event sites learn how to mine and analyze social graph information, a new level of personalization can be explored where ‘customers like you' can truly be identified and marketing effort can not only be focused on conversion, but also on influencers.

WPBook 1.5 Released – Let the Streaming begin!

jeckman — Mon, 08 Mar 2010 00:03:34 +0000

WPBook

So for a while I’ve been working on and beta testing the next version of WPBook. Tonight I’ve just tagged it for release, so it will be available for download shortly. (I’ve already been running it here for a while and testing it on a few other test blogs).

The main improvement in WPBook 1.5 is that it now knows how to use stream.publish, meaning that it will automatically post to your wall in Facebook when you publish a post in WordPress. Your friends should see that notification as well in their streams. (We’re not, however, sending application updates or tracking all users’ user id’s – instead you enter your own userid into the settings and it uses that to post to your wall). Included are attachments (first image attached to the post is used) and excerpts (if you hand craft excerpts they will be used in the wall post).

The other main improvement is that WPBook now requires PHP5, and as such can wrap Facebook calls in Try/Catch blocks. For the non-programmer, this means those awful, dramatic “fatal uncaught exception” error screens are gone. WPBook isn’t doing anything terribly meaningful with those errors yet – still working on that- but at least it traps them.

In this release:

WPBook now requires PHP 5
Enables user to post to stream, including to pages. (Must be pages for which you are the admin, to which you have added the app, and which have granted stream.publish permission – link provided in the admin to grant permissions.
Catches exceptions thrown by the Facebook client. (Doesn’t yet surface those in good error messages, but at least they are caught)
Fixed, I hope, issue with comments inside Facebook for some users
Clean up of some admin styles (resized gravatar images as well as some basic hierarchy on options)
Added Page Options as their own section
Allow user to select pages to be excluded
Added option to allow a menu of parent pages at top of the app below the title
Fixed “Facebok” typo in line line 182 of theme/index.php
Option to turn on and off page list under content (independent of menu)
Option to turn on/off recent post under content
Allow user to set the amount of recent post to show under content (default 10)
Cleaned up custom header/footer now only one function instead of two (no reason to have two functions)
Added %tag_links% and %category_links% to custom header footer as well as made archive pages work.
Set smart default for when Blog Title isn’t set

Next steps?

Better error handling code – do something with the messages Facebook returns when an exception is thrown
User selectable theme directory – for users who’ve taken the time to customize their theme
Threaded comments – likely means requiring WP 2.7, though for error handling (and just simplicity) I’m thinking of jumping right to WordPress 2.8
Cross-Posting to a commenter’s wall when they comment inside Facebook. (Because it is in response to a user action, I understand they don’t even have to grant stream.publish permission).

What else would you like to see?

Web Currencies: Facebook Imposes 30% Tax on Credits

jkrisch — Thu, 04 Mar 2010 11:27:52 +0000

Facebook is getting serious with their efforts to create a global web currency. With the start of their closed beta phase, Facebook will burden their Facebook credits with a 30% fee.

Essentially that means that in the future, whoever participates in the Facebook driven economy will need to pay a sort of sales tax for each transaction.

It is still speculation, but the indication is that Facebook is trying to establish a transnational web currency which could someday become the currency standard for the Web.

Although in the official announcement it seems all quite virtual, clearly Facebook wants to earn real money and has last summer executed some tests with purchases of real physical goods.

If Facebook makes headway, significant resistance against a parallel world currency could be expected.

Since 2007 Facebook has extended its American investor circle increasingly with investors from China and Russia, thereby ensuring that the most important global economies are represented.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Game Mechanics: The Gameification of the Web World (video)

jkrisch — Sun, 28 Feb 2010 19:28:20 +0000

At latest since Facebook, the gameification of the (web) world is continuing its steady advance:

"Carnegie Mellon University Professor, Jesse Schell, dives into a world of game development which will emerge from the popular "Facebook Games" era."

What can be learnt with this presentation, amongst others:

How to apply game mechanics outside of the web.
During conception and development of business models you can be much more creative by not neglecting the psychological factors.
That the much vaunted "convergence" doesn’t make any sense, if not from the technical nature of the problem, then at latest when it hits your wallet.

What is exciting about (social) games is that they mostly work with award systems rather than punitive systems. With awards it is often much easier to control or achieve desired behaviour.

Thanks to Florian Bailey for the video tip.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.