Amazon own brands due to grow in 2018

Most people think that Amazon is just an online store for other companies and their products. Starting from humble eCommerce beginnings just selling books, the modern day retail behemoth now sells nearly everything from fresh produce through to antique furniture.

But most people don't realise that Amazon also currently owns about 45 brands and gets around 15% of its private-label sales come from them. For a breakdown of these see my earlier post: Amazon's own brands

And 2018 looks to be the year that Amazon truly evolves from a marketplace that just sells other brands, into a fully-fledged super retailer that owns the entire retail supply chain.

For more detail on this, take a look at the recent report from One Click Retail:

http://oneclickretail.com/amazon-private-brands-year-end-review/

Whatever next? 
How about Amazon buys Costco, the $83 Billion global retailer who has its own Kirkland brand sold predominantly across its stores?

Amazon's own brands

Did you know that when you shop on Amazon you are now increasingly likely to see Amazon's own brands appear?

Do any of these seem familiar?

Digital roles overlap even more

Last year I posted how digital roles now overlap so much, it is becoming harder and harder to understand them. And provided a diagram to show this overlap between: social media, PR, website management, ecommerce and marketing

I therefore thought I would extend this diagram to other digital roles, including analysis, architecture and operations.

I think its therefore fair to say that, a year-on, roles in this sector increasingly overlap.

Pay Your Amazon Marketing Costs With Your Amazon Revenue

It is now possible to automate your Amazon Marketing Services payment in a new way... with your own Amazon revenue.

Amazon offers those customers who advertise on their global eCommerce platform the ability to deduct their marketing costs from the payment that Amazon makes back to them.

Yes, this can be a double edged sword... in that you don't need to separately fund your AMS spend, but it is also a lot easier to spend money on marketing in Amazon.

More payment options could improve eCommerce conversions

According to a recent survey by PayPal, the average consumer in the UK has abandoned a purchase twice in the last month because they couldn’t pay the way they wanted to.

When businesses introduced a new payment type, a quarter saw an increase in sales.

Digital Roles Overlap

I think it is becoming harder and harder to understand all the roles a modern and competent digital organisation needs. In my opinion this is because each specific skill-set now overlaps others.

This makes is difficult to classify some roles and the people that could fill them. 

Hopefully this diagram goes some way to explain things.

The benefits & pitfalls of Scottish companies selling online

As a specialist digital consultant, I speak with a lot of Scottish businesses of all sizes about the opportunities that eCommerce can bring. Most agree that using the Internet to open up new markets and sell a greater amount of products is of commercial interest to them – who wouldn't want more customers and more revenue?

However a lot of businesses have still to venture into eCommerce and time after time the same key reasons for not doing so keep cropping up:

• Concerns about the cost of setting up and running an online business
• Concerns that “you need to be technical” 
• Concerns about online payments and security
• Concerns about distance selling and the appropriate regulations
• Concerns about delivery, returns, etc.
• Concerns about getting & keeping customers

However, help is on-hand from Scottish Enterprise for those organisations who want to learn more about how to go about setting up an online store and grow their business via electronic means. Courses, workshops and dedicated digital and eCommerce expertise via specialist consultants are all available.

Plus it is important to remember is not just about selling to the home Scottish market, eCommerce opportunities also lie abroad. In fact, back in 2013 a report on Scotland’s Digital Future stated that more than 90% of eCommerce in Scotland was already being conducted with other UK or overseas customers. It is therefore unsurprising that in the last few years a Scottish Enterprise workshop on the topic of International eCommerce has been run in many locations across the country. I sometimes help take this popular workshop and it covers topics such as: researching new markets, translating content, global payment methods and international digital marketing techniques.

So what are you waiting for?

What’s in store for digital retailing and Scottish companies?

There’s been a consistent growth in UK one retailing for over a decade now. In fact, the number of UK citizens ordering goods electronically has increased significantly from an already impressive 44% in 2005 to a huge 79% in 2014. This means that nearly everyone with an Internet connection in the UK has now bought something online and actually makes us the biggest adopters of eCommerce in the EU.

This increase also shows no signs of stopping any time soon. All predictions are that more & more products of increasing complexity will be purchased via a browser or app in the future. You only have look back at the types of products bought online just a few years ago… cheap, simple, off-the-shelf, branded and easily packaged- such as books and CD’s (which is how Amazon started off). But now practically everything gets bought online including: complex, expensive, bespoke and considered products – from cruise packages thought to tailored fashion clothing and hand-made furniture if you so wish.

So in my view, the eCommerce future for Scottish companies is very bright and Scottish companies should be no different to any other in the UK when it comes to online selling. There’s still huge opportunities to sell products (and even services) to customers in the UK, Europe, North America and even further afield. Whether you come from the suburbs of London or the shores of Loch Ness, it is possible to sell to the global village of 3.2 Billion online users (which is about 40% of the world’s population).

Unsure what will sell? Well tastes and trends change across the globe, so you shouldn’t necessarily restrict the products that you offer online. There’s also no physical limits on space, so why not put everything online and see what gets bought?

How to get 6800% ROI from a single eCommerce marketing campaign

Back in 2014, my consultancy (Ideal Interface) had an eCommerce client who was having a couple
of major issues:

1. The Return On Investment (ROI) from their Affiliate Marketing efforts using voucher codes was highly variable, having a significant effect on sales margins
2. Conversions rates were falling at key points in the checkout process, as customers were entering invalid voucher codes collected from across the web

The challenge was to take ownership back of the voucher code arena and develop a
marketing programme which would meet the following objectives:

• Test and develop a Voucher Code campaign that users would go to directly and increase the ROI from Voucher Code usage
• Reduce the impact on shopping checkout abandon rates where customers entered a Voucher Code
• Encourage these voucher code users to join the e-mail marketing programme, to subsequently entice voucher code users to become regular customers
• Devise and test a specific e-mail marketing programme for this list of customers that would increase the likelihood of purchasing again

So what happened?

• It was established that users searching on Google for voucher codes were the best group of potential customers to target.
• The first step was to test and develop a Google AdWords campaign based around keyword searches by potential customer using a range of brand name and voucher code related terms such as “<brand> code” and “<brand>; discount code”.
• Then several adverts and discount offers were tested and optimised within the Google advert copy. This was done to see which would provide the best rate of return and to evaluate the propensity to sign up to an email marketing programme.
• The impact on the shopping checkout rate was also monitored.
• An e-mail marketing programme was subsequently devised for this specific list of customers and tests conducted to see which headings, offers and promotions encouraged them to buy again.

The results?

• The Google AdWords Voucher Code campaign produced a staggering return on investment of over 6800%.
• The drop-out rate at the shopping checkout stage for those attempting to use voucher codes halved.
• Over 30% of customers recruited from the Google AdWords Voucher Code campaign went on to join the e-mail marketing programme.
• Over 55% of customers joining the e-mail marketing programme purchased again within 2 months.

How satisfied are you with your eCommerce experience?

Will better distribution help eCommerce in Scotland?

If you live in Scotland, and in particular the West Coast of Scotland from the Clyde Estuary up to the Hebrides, you will no-doubt have seen the Oban Express van as it whizzed past.*


However last week logistics group John Menzies acquired Oban Express with the wonderful claim that it could “transform e-commerce in remote parts of Scotland”.
http://www.scotsman.com/news/transport/menzies-expands-parcel-delivery-with-oban-takeover-1-3960262


The aim is that this take-over should give this large facilities and distribution company a greater geographical reach, by including the 45-strong vehicle fleet that typically runs between Glasgow and the West. This acquisition, driven by online retailing, also follows the purchase in June of this year of AJG Parcels of Inverness.The integration of both companies into the group should apparently "help keep down the cost of deliveries on behalf of national carriers to more isolated areas".


However, in my opinion, there can only be a truly better ecommerce delivery approach in Scotland if:

1. Companies such as Menzies invest in these recent purchases and grow the capacity of their operations in remote areas.
2. Travel networks (e.g. roads) are improved
   E.g. it doesn't matter how far or fast the van goes, if it is stuck behind a slow driver on the single-carriage all the way up to Fort William or waiting for a land-slide to be cleared on the Inveraray road.
3. Big and small ecommerce companies alike stop charging unfair amounts for deliveries to the Scottish Highlands and Islands.
   E.g. I live 12 miles from Glasgow and was recently charged a premium by one company for shipping a small parcel (a mobile phone)!
4. This is accompanied by the roll-out of decent broadband internet, which is still incredibly patchy across a lot of the land north of the English border.

* Dear Top Gear, here's an idea. Stop featuring bloody Italian supercars or unobtainable Aston Martins on your programme and do a piece on the amazing handling & performance characteristics of the Ford Transit and Iveco vans driven by the courier services to the North of Glasgow!

Showrooming or Web-rooming?

Physical retailers have been suffering at the hands of eCommere for years. The ability to browser and buy from the comfort of your own sofa (or bed) has been a growing and compelling proposition, especially compared to the madness of Christmas or sale times.

And now, thanks to in-store Internet connectivity and smartphones online shopping continues to grow at the expense of in-store retail. Consumers are increasingly using their mobile devices (mobile phones, phablets and even tablets) in stores to: get product information, check competitive prices and obtain feedback from reviews & social media contacts. They are therefore using the in-store experience to 'showroom' by looking at, touching and even experiencing a range of products only to then convert online.

However this is only part of the story, as the reverse experience is also true. In a recent PWC survey, 70% of the respondents stated that they started the purchase process online, but converted in-store.

This process, now know as “web-rooming" is a growing trend that has benefited from the factors such as:

• a focus by retailers on an improved in-store experience 
• better staff training, to help customers purchase rather than put them off 
• better and immediate stock availability 

The graph below, taken from the report, outlines the specific reasons why the respondents prefer to buy products in-store instead of online:

Scottish eCommerce Charges Are Unfair

If you are a Scottish resident in one of the Highlands and Islands regions, then you'll be only too aware that a lot of eCommerce sites charge you more for your delivery.

Well this fact hasn't gone unnoticed by Citizens Advice Scotland, who a published a report this week on this subject. They found that although fewer online retailers now charge additional fees for delivery to the Highlands and Islands... those that still do are unfortunately charging more than they did in 2012. On average Islanders are now paying 15.8% more and Highlanders have to pay an additional 17.5% for their goods to be shipped to them.

Citizens Advice Scotland identified that only 3.8% of the surveyed retailers now exclude some part of the Highlands and 10.9% exclude some of the Scottish Islands from their delivery offering.

Whilst it is understandable that there's more effort involved in getting a parcel to the remote regions of the UK, has it really become harder in the last 3 years? Or are these retailers (or their fulfillment parrners) using unfair ecommerce delivery pricing to increase their profits?

eCommerce Must Put Mobile First

In my mind there's no doubt that the main device to design a company experience for (both now and in the near future) is the smartphone.... especially as far is eCommerce is concerned. This is what Forrester calls "The Mobile Mind Shift" - the customer need to browse, buy and engage with a retailer vie their device of choice. And these days this is typically their mobile phone.

Consumers are increasingly demanding online experiences that work on any device at any time.  But with smartphone decision making and purchasing on the increase... the mobile web must now be the primary concern of any retailer. 

It's my observations that:

• Regardless of where the customer is (at home, at work, on the go, in a store, etc.) they use their smartphone to shop. Sure, they may still use a tablet or desktop & laptop PC, but the mobile is what they have immediately to-hand... literally.
• The customer is often either cautious about downloading retailer apps or doesn't update them often when they have them. This is different for essential apps they my use day-to-day (e.g. Social Media platforms) which preoccupy their mobile time.

So where does this leave a retailer that doesn't deliver a site that works correctly on the small screen?

Lagging behind.

Digital Leadershift - get ready for a BIG BANG

Transforming your organisation from an analogue dinosaur to a Digital First one is hard, very hard. You not only need the right team of people, the right technology and the will to change internal processes, you need this change understood & supported at the senior level too.

But this isn't about getting the CEO to blog or the Managing Director to Tweet (they should know how to do that already), it is about having the right drive from on-high to correctly sponsor and if necessary push through the required changes that a digital transformation needs.

In short, it needs a shift in the mindset of the leaders to a digital way of working... or a digital leadershift.

However different market sectors and industries are affected by the disruptive effects of digital in different ways. And to illustrate this best, a recent report from Deloitte Digital depicted a 'Disruption Map' that shows the extent to which 17 industries are affected across two dimensions: Degree of Impact (The 'Bang') and the timing (The 'Fuse').

As we know... some industries are already in the middle of their shift. Sectors such as retail (High Street eCommerce has been a beacon of online innovation for the last few years) and Leisure (The consumer travel sector has both blossomed and suffered as online acquisition, customer self-service and aggregation has affected airline travel, etc. - and just look what the likes of AirBnB and to a certain extend Google are doing to the hotel market).

So it is probably no surprise that the leaders in those industries that have already been affected are nearly all digitally savvy. But what about other sectors where the fuse is much longer?

Well in a lot of cases key individuals from shorter fuse industries have moved across to help other verticals understand and manage their way through this disruption. For example, senior staff from tech start-ups are now finding roles in Financial Services and Professional Services.

But other senior managers in those where the disruption hasn't really hit yet are less aware and prepared for the changes that are bound to come. Some may know the Big Bang is coming, but for others it could be a big shock.

Serious About Channel Shift?

The whole topic of Channel Shift is something that is being discussed in most businesses. Yet very few organisations I speak with actually have a documented strategy of how this shift will be realised.

Firstly, what do I mean by the term?
In my opinion... Channel Shift is the managed process of migrating customers to self-service channels (typically digital ones) to reduce cost and increase availability of service.

Reduced cost:
Back a few decades, it was humans that were cheap and computers that were expensive. Now, computers (or more specifically: computing power) is cheap compared to the cost of a person. Using self-service functionality via websites and mobile applications has a much lower cost-to-serve than a trained person, even a lower paid one in an off-shore outsourced contact center.

Increased availability:
The web never sleeps and your customers expect that they can now access your site at a time that suits them, not your company. Whereas a decade or so ago you may have had a telephone line staffed to deal with purchases, amends and refunds... not most of this functionality has now moved to a 24/7 online presence. In fact, as far as seasonal eCommerce goes, some of the most high volume times are public holidays (e.g. Black Friday and Christmas & Boxing Day) - days when most staff are either on holiday or otherwise unavailable.

So if your organisation is serious about Channel Shift, what should it do?

The first thing, as I mentioned in my opening paragraph is to have a written strategy. This needs to clearly document:

1. Who are your user & customers?
   Think you know who your customers are? Think you know what motivates them to engage with your organisation and purchase from it? Think all your customers are the same and have the same needs? Think again! 
2. What are the user tasks your want to move to lower cost channels?
   It may be easy to say "all of them", but in reality this may be either too much to do at once, or there may be business rules & restrictions that stop you from doing this. It may therefore by better to prioritise and understand the dependencies between these tasks first.
3. What channels do your customers use?
   This may not be as simple as you think. Different customers may use a specific mix of channels to: build awareness, inform & educate themselves, transact and then carry out subsequent self-service tasks. 
4. What are your actual current cost-to-serve figures?
   For example, what does it actually cost to serve your customers via each of your channels

This is the easy part... once you have this, the hard part is then working out what you want these customers to do in the future and what channels you actually can manage them to.

The O2 shop is busy - come back soon

What message do you give your online eCommerce customers when your site gets too busy?

Here's an example from mobile phone provider O2.

Oh, it should be noted that this wasn't midday during a sale / promotion or part-way through a new product launch, but around 11pm at night on a normal trading day...

Guest blogging on a new site - why do it?

My guest blog post for SEMRush.com went live today.
How to Get 6800% ROI from a Single E-commerce Marketing Campaign

It is already getting quite a few mentions on Twitter and the post has had one positive comment so far.  This is my first post for this site and it will be interesting to see if this builds followers or traffic to my site.

One question I have mostly asked myself recently is why I decided to write this post for SEMRush rather than: my own blog (this one), my column on The Drum or even as a direct post on Linkedin (which I have yet to do yet, but for some reason I am apprehensive about doing).

In short.. I wanted to try something different and in a slightly vain way I wanted to be read by a different audience.

Let's see if this actually happens

#blackfridayfail - eCommerce sites struggle under high volumes

So, Black Friday fever really looks to be kicking in, as a number of websites seem to either be having issues or are down entirely.

Argos

As of writing, the multi-channel catalogue-based retailer claims to be "experiencing a very high volume of visitors"

River Island

Apparently failing to cope with the pressure of the pre-Christmas bargain hunters, the fashion retailer seems to be having a few issues delivering a homepage.

Tesco
Although this site is up right now, at certain points late last night the UK's biggest retailer was only able to display a waiting page

What does Black Friday mean to the UK?

It seems to me that the use of 'Black Friday' as a retail promotional tool is now everywhere in the UK. From Glasgow to Manchester and Plymouth to London it seems to have sprung up from almost nowhere just few years ago into a few days of serious high street and online discounting.

But why is it especially this year that a lot of UK retailers have embraced an American holiday?

Here's a few suggestions:

1. The high street needs to stimulate sales
Following a mild autumn, a lot of people have not raced out to the shops in September and October to buy items such as a new Winter wardrobe (if you don't believe me, ask your peers if many have bought a big coat recently).Consequently year on year takings are down across a number of sectors, including clothing.
2. Autumn sales aren't a new thing
Discounting around this time isn't a new concept and many stores have been having 'mid-season sales' for decades. Yes, a lot of retailers have been dropping prices of specific products and ranges in mid-to-late November, it's just that...

3. Black Friday sounds cool
It's good to give something a catchy name and it seems that yes black is indeed the new black.  I suggest the fact that it refers to the day after the US commemorate a harvest festival celebrated by the Pilgrim Fathers in 1621 is pretty irrelevant to the average Brit.

4. The UK is becoming more and more American-ized
As reflected in: the recent growth in Halloween over this side of the pond, the increase in Seattle style coffee shops that sell huge capacity cups of caffeine and the gradual use of "Tuxedo" (an American club that adopted the use of the black suit and tie) over the "Dinner Jacket".

5. The Internet is reducing cultural barriers
I first noticed the use of 'Black Friday' on Amazon.com about a decade ago, when just like today, I couldn't find anything interesting to buy on the site. The increasing use of global eCommere sites like Amazon, eBay and the like have created a boundary-less society that is only too happy to embrace different retailing concepts.

Which leads me to a slightly cynical further idea... Could it be that Black Friday is just another ploy adopted by savvy retailers across the globe to get rid stuff that would never have shifted at full price anyway?