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Wednesday, July 22, 2009

Long Live Zappos

Zappos is a great company. I know folks in ecommerce who model their very own "customer obsession" after Zappos'. So as for the Amazon acquisition: it couldn't have happened to a nicer company.

And you just have to love Tony Hsieh's "CEO letter". Especially the part at the end where he models a typical question:

"Q: I'm a business/financial reporter. Can you talk like a banker and use fancy-sounding language that we can print in a business publication?"

The answer, of course, is less interesting:

"Zappos is an online footwear category leader and Amazon believes Zappos is the right team with a unique culture, proven track record, and the experience to become a leading soft goods company; Zappos' customer service obsession reinforces Amazonís mission to be the earth's most customer-centric company; Great brand, strong vendor relationships, broad selection, large active and repeat customer base; Amazon believes Zappos is a great business -- growing, profitable and positive cash flow; Accelerate combined companies' scale and growth trajectory in the shoe, apparel and accessories space; Significant synergy opportunities, including technology, marketing, and possible international expansion."

And he goes on:

"Q. Can you talk like a laywer now?"

A unique culture, indeed.

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Posted by Andrew Goodman




Wednesday, December 24, 2008

The Best Gift Is A Platform?

So the frenzy of retail gifting (e- or otherwise) is now nearly finished, save for the post-Christmas bargain shopping, all-important "shop for yourself" me-time, and gift card redemption period of course. The collisions in the liquor store parking lot are slowing to a trickle. Stockings are being hung. Flights are still delayed.

If you're a digital freak you may have found yourself shaking your head even more than usual this year when faced with the madness of real-world shopping. Especially on a day like today. Here in Toronto we had a heavy snowstorm with the usual "no place to put the snow" problem, followed by today's rising temperatures and heavy downpour. Combine with chock-full parking lots and harried shoppers, and you get a true test of holiday spirit.

If you're a digital freak like me, you probably:

  • Have trouble getting past your tendency to see "gifts" as just data or information.
  • And why buy a single SKU when you can give someone their own password and some monetary assistance towards the particular SKU that'll satisfy what they want, rather than your unlucky guess?
  • And wouldn't the best place to get a full selection be in a place that covers the full Long Tail of available options?
  • And wouldn't that place be searchable? Try searching for a book title in a bookstore. Sure, you can try to grab someone on staff, and they can look for the item on their computer. And then, they'll tell you, nah, it isn't in stock.
  • Hey, the Lacoste Store doesn't even carry the Lacoste bathing suits for anyone planning a trip. Shelf space is too precious. I think these "not much in stock" brand stores are some kind of exercise in "branding" and "high price maintenance," but I don't know. All I know is I went to another store and bought the Nike bathing suit... because they actually stocked bathing suits there.
On the upside, real world retail has this much going for it: there is, as yet, no "Bromance" section in the physical bookstore. Online, I wouldn't be able to guarantee that.

Brothers and sisters, have a joyous and festive holiday.

Digitally yours,

Andrew

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Posted by Andrew Goodman




Saturday, June 21, 2008

"Dumb Ladies" to Blame for Ruining Canadian E-Commerce: Goodman

Whereas British-Columbia-based search marketer Gord Hotchkiss of Enquiro has recently blamed C-level execs executing perverted yoga positions for the current anemic state of online commerce sites in Canada, Andrew Goodman, author of this post and founder of Toronto-based Page Zero Media, has recently concluded that in fact "dumb ladies" are to blame for the digital malaise.

"Chicken and egg, tail wagging dog, or a playing card with a picture of a row of houses on the back, slowly falling from the top of the CN Tower; however you want to describe the situation, I assure you that Canadian CEO's aren't to blame for it," argued Goodman in a barely intelligible interview earlier this morning.

Goodman's account of the situation suggests that weak demand for "sweet spot" online items, such as drugstore-based supplies, comes from "dumb ladies" who refuse to learn how to use a computer. A full transcript of his story follows.

"Today I was walking in Bloor West Village and turned into a nutritional supplements wellness organic niceties store, because the door was open. I attempted to buy a small bottle of green tea capsules, and was told that before tax, the item would cost $45.00. I didn't hesitate to tell the shifty-eyed shop owner that I'm sorry but that is way too much, and I guess I'm used to buying this kind of stuff from a warehouse in Arizona. I don't like to buy from the Arizona place anymore because of the surprise shipping, duty, brokerage, and/or tax charges that so often sting us when we buy cross-border. So as my mind drifted to SNDCanada.com, a reputable, fast, Oakville-based retailer, the owner's faint plea penetrated just enough: 'Well these are high-potency.' I replied somewhat rudely: 'That is, if I believe the claim.' Truth is, I believe label claims somewhat in a major drugstore chain from major brand names, and I actually believe them from certain online outlets. But in a brick-and-mortar store in a 'hood full of gullible subjects I really don't think I'm getting my $45 worth.

"You see, in my neighbourhood there are a lot of underemployed, middle class (not rich, that market isn't big enough) women who concern themselves with personal grooming to the point of making it into a profession. They are, unfortunately, almost universally dumb. Rising asset values in their homes have allowed them to make overinflated purchases in local shops, and because they aren't genuine consumers like the rest of us, they don't question label claims. And unfortunately, they refuse to use computers. As anyone in business knows, dumb ladies are probably the highest-margin demographic short of New York State Governors. Sicko shop owners take advantage of the situation, making hyper-profits, and the owners of e-commerce properties don't make any money."

"I decided to take a stand today. I walked out of the store. I was about to try SNDCanada.com, but instead remembered my new friend Ali - owner of Well.ca, a recent startup in the drugstore supplies space. My assessment of the price and convenience benefit of using Well.ca is definitely mixed at this point. A bottle of the higher-potency green tea caps from reputable supplement maker Holista runs $19.59 plus $3.00 shipping. (The "Add $79.41 more to your cart to qualify for free shipping" message does not act as an enticement.) And I'll always be in Shoppers Drug Mart in any given week so the convenience element is nearly nonexistent. In fact, it's a pain to buy online what with the forms & card info and all - and then the box comes to your front door when you're not home. What I'm really looking for, to justify the online effort, is a great deal on high-potency green tea capsules in a 1,000 or 2,000 count tub.

"Whatever I do, though, honestly, for spite alone I would never buy the small bottle from the shifty shop owner for $45.00. I mean what's next, buying protein powder at GNC in the mall? The only thing worse than dumb ladies? Dumb teenagers. They keep half the stores in the mall in business, and also refuse to learn how to use a computer."

Postscript: the water meter reader who just came by is a smart woman. She uses a computer while walking house to house! I wonder if that device could be used to zap some sense into those Canadian CEO's or dumb ladies, whichever came first.

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Posted by Andrew Goodman




Sunday, April 27, 2008

Killer Verticals

Going back over some posts on Marc Andreessen's fantastic blog, pmarca, I came across this post that places market (and granular product-to-market fit and timing) ahead of "team" and "product per se" as a determinant of eventual success. In other words, a good product with an average team can still win if the market "pulls them along." I always thought of AOL as a company like that. You can probably think of many others. (Some in my field will say GoTo.com/Overture and Google AdWords were like that for awhile - they got better later.)

Cross-referencing these thoughts with some of the notables that show up on comScore's recent leaderboard of top web properties, I get some ideas.

Some markets are just so big, you can't dismiss them. Startups with a shot at doing something different in a vertical are not in a space that's "too crowded," arguably -- they are in the right place, with at least a solid chance of success.

Seeing Careerbuilder in 38th place, I think that startups like SimplyHired have a good shot at carving out a more than respectable sliver of a huge market, no matter how huge it seems.

In such verticals, international expansion also makes a ton of sense. Italy, Greece, Turkey, Singapore, French Canada, Mexico, "small" markets compared to the U.S.? Not if the category is big enough.

Seeing American Greetings in a ridiculously high position, I think that a greetings *feature* should probably be rolled out by Flickr, YouTube, gapingvoid, and others. If companies already have such things it may be worth pushing them a little harder. Greetings sound boring. But how many other categories have a whole store in the mall? Hallmark has a whole store in my mall.

Target (#20) and Wal-Mart (#22) are of a different ilk entirely. They actually sell "stuff." Those are some gaudy user numbers, though. Just imagine how many retailers in how many categories never thought e-commerce was worth the level of investment that could take it to that level. There are category winners in online retail still waiting to be decided. $1 million in up-front investment (or so) is all it would take some current laggards to dominate their niches. What are they waiting for?

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Posted by Andrew Goodman




Monday, January 28, 2008

Canadian E-Commerce Nightmare (cont'd)

On one hand, Canadian consumers should be grateful that canada.zappos.com is actually out there, showing the way it should be done to a largely underserved market and clueless sector... on the other, as this screen shot shows, when the default pricing is in USD on a site subdomained "canada...," maybe this could have been thought through a little better. The "US" is still in the upper nav, too. I mean, if this is Tuesday we must be in Cleveland, right?

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Posted by Andrew Goodman




Sunday, June 17, 2007

Canadian Search Marketing: Impending Hockey Stick?

Canadian Advertisers, Pull Thy Collective Head Out of Thy Collective Butt? That could have been the subtitle of some recent speeches and writings by Gord Hotchkiss, a well-known Canadian search marketing guru.

This week, in person and in writing, Gord was tearing into the Canadian business community for its poor record on adopting online advertising and especially search visibility tactics. This is juxtaposed with the Canadian people's world-leading Internet usage. This theme's been rolling now for a couple of years, statistically speaking, thanks to reports from companies like comScore, and now buttressed by survey research being disseminated by companies like Yahoo. In terms of quiet rants, it's been out there since 2001 or so, since some of us began seeing the post-bubble surge of quiet interest in search as the most cost-effective direct marketing and public relations tool going... by our US-based clients, who moved quickly on the opportunity and kept us all busy with work. (It didn't hurt that our dollar was very low, so we were low-cost providers who otherwise looked, quacked, and smelled like American consultants.)

Gord pinpoints the problem even more precisely - to Toronto, which holds most of the economic clout in the land, but seems slooow to adopt. Hey Gord, c'mon, I have to work here when I'm not hiding in New York or Glasgow! Easy for you to rant at my neighbors eh?

But this is not so new, Canada being above everybody else on per-capita this, and worse than a lot of countries on per capita that.

There are probably many more reasons beyond just a few businesspeople having their heads up their butts, than Gord and the commenters on his post let on. And even if that's the reason, it would be interesting to explore why that might be, then.


* Market size, chicken-egg, and what are they going to do with those clicks anyway? Larger companies with reasons to unlock big ecommerce budgets would have had less reason to do so until recently, because ecommerce itself had not come of age. Inventory and logistical issues were dealt with more slowly. No shopping engines were really available because the concept of a "comparison" was silly. The fear of online eroding offline margins was allowed to linger longer, because no competitors forced anyone's hand by racing online. Sweet complacency reigned, but this was at the higher level of ecommerce generally, not specifically with search. On ecommerce comparison engines, Google never launched Froogle Canada, for example. But due to not only doggedness but also market opportunity and some willing investors, Shop2It out of Calgary has persevered to build a real shopping engine for Canada (hammering out partnerships with AOL, MSN, Yahoo, and Canoe) -- that has required long effort to encourage adoption by etailers to upload their feeds, improve their stores, and actually try to sell to Canadians! An effort not even Google was up to.

* But why? There are definitely a host of cultural reasons, and reasons of business culture. Here are several sub-points in that regard.

First, small business is not championed or given the resources or encouragement it should have to pursue contemporary online growth. In Toronto the classic small business of a little independent brick and mortar shop is certainly a new Canadian's dream and the one hungry and busy middle-class Canadians are all too eager to applaud, but the other kind of small business, the one about getting a big idea and growing it, is seen as some sort of insane affliction. Family, friends, and neighbors will worry that you should just stop screwing around. Get a job with a big company Mom has heard of, like Bombardier, Nortel, or Microsoft. Doesn't matter if that job is stultifying, structurally set up to fail, etc. - so long as people have heard of it and you get invited to the company box twice a summer, you're part of the crowd. Good job. Luckily, people have now heard of Yahoo and Google, so there is a chance we'll see interest in actually nurturing tech and related startups here. (Next point covers these guys.)

Second, related to the first: big-company culture dominates, and Bay Street dominates. That's why the natural resource and financial sectors are *still* ruling our business pages. If the Street can figure out a way to finance it, then do it. Talk about it, work there, orbit around it. Otherwise, don't. That makes the Web 2.0 and any other high-productivity-oriented, high-achievement-oriented subculture just that: a subculture. The positive thing about that is that subcultures tend to be immune from peer pressure. The negative can be that unless their projects are financed, the world doesn't see the fruits. The other negative is that disgruntled subculture members become expatriates, in body or in spirit. Solution: our business *finance* and moral leaders need to nurture the subcultures, as JLA and Brightspark have done with b5media, and as the Mesh organizers have done organizing a conference around it. It all seems so under potential (b5 seems cool, but seems so alone out there; Mesh is great, but could be better) precisely because there needs to be just a whole lot more of this.

In other words, at a lot of levels there are a lot of great online entrepreneurs out there eager to be part of a community and eager to find markets. Their financiers and their neighbors down the block though could care less about their aspirations and right now are busy ignoring them as they prepare for cottage season. Because why don't you just make your ridiculously high salary in real estate or traditional advertising and shut up about innovation? "Zillow? What's that? Pass me a cold one." But it's only a matter of time before the cadre of Canadian entrepreneurs willing to build an online business, even through the delicious summer months, effects far-reaching change. Incentives and opportunity eventually produce results, but the state of financing is hindering the rate.

* Is Canadian talent being insourced to Silicon Valley? Google's office in Canada is just a sales office. One thing about weighing career and business ideas is that it has to seem like a real opportunity and a real lifestyle that other people have. In that regard, you can talk about them being "lower tier jobs" all you like, but the fact of a Google going into Michigan in a big way changes the parent-educator-neighb0r-youth dialogue. A lot of solid jobs equals a platform around which an economic and innovative ecosystem grows. Toronto is identified by Richard Florida as a creative cluster because of sheer scale, tolerance, concentration of educational institutions, and a host of other factors, but we shouldn't be content to rest on the luck and confluence of certain factors to drive growth in online business. Proactively encouraging even more of those things is a good idea. Dalton McGuinty, our provincial premier, is all over continuing our leadership in the auto sector. He's also promised transit expansion that's 15 years overdue, which will no doubt put a fat contract in Bombardier's lap. That's nice, but ... sigh, cars aren't where the puck is going. And in a metro area of 7 million, transit is just basic infrastructure. What else are we doing? Companies like Microsoft have a lot of employees here. Companies like Google strike me so far as uneven in their approach to how they foster and nurture their foreign offices. Isn't that called "insourcing"? Foreign offices can be just push centers that focus on replicating the adoption of the product back home, but those workers are classic account execs and support staff. At the end of their day, do they give much thought to engineers and high-tech startup culture? Silicon Valley is very good at luring those types of risk-takers and top thinkers away from their home countries. So what we can build around here is an important question. That's why companies like Research in Motion are so huge in the Canadian national imagination right now. The founders are literally national heroes. We need many more RIM's. And we'll need a counter-brain-drain and an insourcing revolution of our own. The reality is, you need a critical mass of people with good high-tech jobs to make that seem like the thing to do... and not to do somewhere else. Else, businesses will be run and migrated online without the benefit of new qualified blood. PROFIT Magazine and a few dozen people doing great stuff in government and education, in spite of incentives towards complacency, get it; most other potential influencers don't.

* Meanwhile, traditional advertising and Bubble 1.0 mentality web shops still cling to their perch and their perks in Canada. Large companies continue feeding them and their ranks aren't thinned by much, even though the word about measurable performance and user experience is starting to spread. Usability, business, and the online experience are really holistic phenomena that require stalwart "connectors" or "polyglots" who don't overspecialize but who have deep programming, design, and communications skills available in-house or in-brain too. Case in point, the startup I worked with settled on a web design firm out of Michigan that has Web 2.0 user interface and design savvy. They write real code and do real design; they don't force you into proprietary off-the-shelf boxes. The same job from a traditional web shop would have cost 5X as much. A local Toronto firm doing just the identity work, and none of the other work, quoted us double the price - and they are really good, far better than most in town, and so busy that they probably wouldn't have had much time for our job anyway, no matter what the budget. Demand for competent online professionals in Canada far exceeds supply. ... User experience as part of someone's job. Search savvy as part of someone's job. Basic background on online demographics and analytics as someones' job. This all has to happen. It's not happening very fast because of course you don't learn it in school (yet) and so you would need to go to a "good shop" to learn it, or learn it by osmosis through your particular subculture. I'm optimistic that we will reach the critical mass (in Toronto, Montreal, Vancouver, Ottawa, and Calgary, in particular) or simply see lifestyle/cultural shifts (as we see perhaps most prominently in B.C.) to have institutional and cultural homes for this subculture, but it's not there yet. We won't see it develop in the college and university system adequately, so it'll have to come through ad hoc partnerships and experiments with those institutions. It'll have to be fostered through online community. Through offline communities like the meetups and geek dinners. And through remarkable new conferences put together by selfless connectors.

All that being said, this country will succeed and shift to heavy online spending in spite of itself. Why? It's the big budgets. Big-company culture has its drawbacks, but by 2009 that correct percentage of overall ad budgets will have moved over to online and to search, because eventually top execs will see that logic, will have read my next book, seen Gord's next talk, listened to a presentation by Martin at Yahoo Search Marketing Canada or the new head of Google Canada, and will have jotted search down for 30-40% of nontraditional ad spending, which in itself will grow to 30-40% of all ad spending.

Like financing a mining play, maybe search and ecommerce in Canada succeeds because of some figures that get sketched out on a napkin and decided at the highest levels. That's not the same as succeeding because the subculture grows, or influential people "see the light" early on because they're forgoing their 30 nights a year in the Air Canada Centre box seats to maybe study up on this stuff. (Fortunately, if Balsillie brings another hockey team here, entrepreneurial online-savvy learning materials will be mandatory reading before entry to the box.)

Search marketing and ecommerce in Canada won't succeed perhaps for all the right reasons, but I'm saying they still succeed. Based on the sheer compelling reasons for moving ad budgets and talents over to online user experiences and commerce, it'll succeed wildly. Budgets will increase in 2009-10 in that hockey-stick way.

And in part that'll be made possible by the unique history of a free, peaceful, diverse country that gave its best minds reasonable space in which to think and develop, and enough reasons to stay that Hotchkiss stays here. Hopefully, at least, some of those reasons include dollar signs. But Hotchkiss is also going to need a few more fellow players in this subcultural sandbox to keep him from picking up his pail in seek of a new playground.

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Posted by Andrew Goodman




Wednesday, April 04, 2007

The Testing Revolution: Multivariate Landing Page Testing

Now that Google Website Optimizer is out of beta, more businesses will begin testing their landing pages to improve conversions.

As I was fairly familiar with the basic product features already, Google's Tom Leung and I had the chance to talk informally about some of the benefits of putting this product in many hands.

One issue I raised was how to weigh "advice sessions" and "clinics" and the like. The analogy might be a bit along the lines of American Idol... it would be very entertaining to see someone donning a Simon Cowell wig and blurting: "That's rubbish! That page will never convert! I mean just look at how small that search box is, and the abominable use of tables. And that paragraph about shipping. So trite. In short, I got nothing out of this and I'm wondering right now why I even bother to sit through this." So in short, Simon's usability advice could be hit-or-miss.

Compare that with the flipside: a distinctly un-Cowell-like Talent Optimizer that would input various pitches, intonations, arm lengths, dance gestures, wardrobe elements, and facial expressions into a virtual performer... and measure the correlations of each element to positive responses from the paying audience. ("Dr. Clark, it appears the optimal arm length for Celine Dion is a full foot shorter than we've been using! Egads! And look at that fingernail data! Midnight blue is kicking butt!")

Everything in its place. Just as we don't really quite want a Talent Optimizer (though record labels and boy band promoters probably have something close to that in the underground lab) judging American Idol, we need to move beyond Cowell-like subjectivity in our ecommerce efforts. A multivariate testing process is just that.

I managed to get a lengthy riff out of Leung on the reason Google doesn't recommend Taguchi optimization. That was something I noticed right away in the Website Optimizer literature, but Leung provided more color on it. The upshot is you really do need to test all potential combinations rather than a reduced combination set, because Taguchi makes poor assumptions around variable interactions. You can semi-Taguchify your process by hand. I won't bore you with the details but rest assured that whether you go with zero Taguchi, semi-Taguchi, or Taguchi on a Taco, this will likely be a step ahead of a simple A/B test, and many steps ahead of not testing at all.

Because testing is almost always better than not testing - and usually so much better that it even compensates for the risk of "messing with" a home page that ranks well organically - it's hard to see a significant downside.

Tom and I scratched our heads a bit trying to come up with an answer for the question: roughly speaking, can you make any serious errors running such tests? Setting aside technical snafus and things you might do to ruin your website by misinstalling code (your problem), basically the answer would be no. The biggest "error" would be to pick the wrong things to test - in other words, not improving as much as you could if you did it better.

The maximum number of variations the Optimizer product will allow for a single landing page test? Leung said 10,000. I recently completed a test that involved 16, and am running one with 24 now. For these particular tests, had I done them using 10,000 combinations, they'd reach statistical significance around the year 2258. Coincidentally, that's about the time they'll have finally perfected Celine Dion.

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Posted by Andrew Goodman




Tuesday, February 06, 2007

Six-Figure E-Commerce

David Berkowitz writes [sorry, MediaPost article behind a reg. wall] that he used the Internet to plan a lot of his wedding engagement - including finding a retail outlet for diamonds via a Google Search. Moderately forward-thinking, but nothing like the venture capitalist I talked to recently, who enthused about buying his fiancee a big rock on Blue Nile.

It's so easy: just select a stone, setting, and box, and "add to cart"!

Click, click, and click, and you have a six figure item in your cart. :) Yes, people really do this.

And here I was balking at personalizing a $200 golf club using the online tool at TGW.com.

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Posted by Andrew Goodman




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