In the 1980s and 90s during the early years of the PC industry, there was alot of discussion of the economic impact of slow computers on user productivity. This was driven by some IBM research out of its Thomas Watson center in 1982: The Economic Value of Rapid Response Time by Walter Doherty and Ahrvind Thadani.
“When a computer and its users interact at a pace that ensures that neither has to wait on the other, productivity soars, the cost of the work done on the computer tumbles, employees get more satisfaction from their work, and its quality tends to improve. Few online computer systems are this well balanced; few executives are aware that such a balance is economically and technically feasible.
In fact, at one time it was thought that a relatively slow response, up to two seconds, was acceptable because the person was thinking about the next task. Research on rapid response time now indicates that this earlier theory is not borne out by the facts: productivity increases in more than direct proportion to a decrease in response time. This brief describes some of this research and the implications for increasing productivity and cutting costs that are among the chief challenges of business today.”
Then ten years ago Eric Horvitz at Microsoft started looking at the impact of interruptions on PC users and how long it took them to get back on task. The entire science of interruption is interesting,. especially for the lifehacker movement that tries to deliver great productivity via various hacks and techniques to reduce interruption.
Delays and interruptions are arguably related. While you wait for a slow site to load in your browser your mind seeks something to do rather than stare at the screen, a buffering warning, or some icon of an hourglass. You switch tabs, change screens, or just give up on the poky site or service and move on to the next thing, subconsciously annoyed at your old laptop, bad internet connection, or the general crumminess of the pipe between you and your destination.
My partner Ben shared this interesting fact buried in a five-year old presentation by Amazon’s Greg Linden on the economic impact of “latency” on ecommerce. This blew me away. In a presentation he claimed “Every 100ms delay costs 1% of revenue.”
You can get the presentation at Strangeloop, a vendor in the site optimization space. Here are some other impacts of site speed on key performance indicators:
I’ll take the liberty of extrapolating that from Amazon’s most recent reported revenue of $48 billion in 2012 to mean that 100ms of performance is equivalent to half a billion dollars a year.
In my experience CTOs and CIOs at web-centric companies have tended to give more weight to availability than performance, stressing fault-tolerance and uptime over site performance. While they may be driven by how many “nines” their infrastructure is rated at, I wonder how many are making the investment in monitoring services and tools to determine their site load times. For ecommerce operations focused on converting browsers to checked out carts, I would argue response time as valid a function of success as A/B testing and strong content marketing and audience development.
There’s a scene in Fight Club when Edward Norton mocks his meaningless materialistic existence defined by his addiction to Ikea. His apartment transforms into a movie version of a catalogue — with every napkin, bookcase and rug identified, tagged, and described as he moves amongst it all. The scene expresses a lot of the stupidity expressed in the early 1990s when the “Interactive Television” geeks bubbled on about how you’d be able to click on Jennifer Aniston’s sweater during an episode of Friends and receive a package from the Gap a couple days later with that exact same color sweater inside(in your size of course) . Didn’t happen. None of it happened: pick your own alternative ending, find a different camera angle … couch potatoes are inert by nature and only move their hands to pop another Cheesy-poof into their mouths. If they want to shop through the TV they switch the channel to QVC and pick up the cordless phone to order some zirconium.
Shopping interactively against a television show, movie, even video game is far-fetched and a long walk off of the proverbial short pier.
Shopping off of a story is a different subject altogether. Let’s start with an early example of “story commerce” most are familiar with, the J. Peterman catalogue, perfectly mocked by Seinfeld. J. Peterman was a brilliant mail order operation that delivered a tall non-glossy catalogue entitled “Owner’s Manual” with breezy sketches of Peterman’s travels around the world sourcing classic pieces of clothing and accessories from Australian dusters to a long-billed swordfishing cap just like “Papa” Hemingway wore. There are no photos, no customer reviews, just artsy sketches and short little “English-Patient-Meets-Mark-Helprin” purple paragraphs written by a copywriting genius. To wit:
“He probably bought his in a gas station on the road to Ketchum, next to the cash register, among the beef jerky wrapped in cellophane. Or maybe in a tackle shop in Key West.
I had to go to some trouble to have this one made for you and me but it had to be done. The long bill, longer than I, at least, ever saw before, makes sense. The visor: leather; soft and glareless and unaffected by repeated rain squalls. The color: same as strong scalding espresso, lemon peel on the side, somewhere in the mountains in the north of Italy. Cotton blend canvas. 6 brass grommets for ventilation. Elastic at back to keep this treasure from blowing off your head and into the trees.
(He probably got change from a five when he bought the original.)”
I bought one. I admit it. I looked like a total assclown with a foot-long leather duck bill sticking out my forehead. I immediately went back to Red Sox caps to provide me with glare protection while fishing in the sun and that was that. But I bought it, because I was buying the story. Not the hat.
The late publishing genius Bill Ziff told me during a Forbes interview in the early 1990s, that Ziff-Davis move into speciality magazines was driven by the insight that everyone has their own personal “porn.” In his case it was sports “porn” (the man read baseball statistics), Civil War “porn” (he knew his Civil War history like Shelby Foote knew Civil War history) and gardening “porn” (he had amazing taste in gardens). As he put it, pornography is derived from the Greek words porni: prostitute and graphein: to write, hence the original porn was writing about the oldest profession in the world. Ziff applied that insight to speciality magazines like Skiing, Stereo Review, Modern Bride, with the realization that a magazine focused on a hyper-passion — a reader’s personal taste in “porn” — made the relationship between the advertising and the editorial very different than the interruption-based relationship found in a TV ad or a general interest magazine. If you were really into expensive high fidelity stereo equipment in the 1960s, you would probably be very interested in the content of the ads by the equipment manufacturers as you were in the objective reviews by the editorial staff. You trusted the reviews to be objective and untainted, but the ads, with their specifications and gorgeous beauty shots of glowing dials and vacuum tubes, well; that was stereo porn and there was a reader service “bingo” card at the back of the magazine where you could check off a page number and receive even more stereo porn directly from the advertiser.
Ziff extended the insight to computer magazines and found amazing success with the formula of combining advertising and editorial together in a “porn model” where he was broker between the advertiser/prostitutes, the writers, and the readers.
Now all his magazines are pretty much gone as he called the top of the market in the early 90s and unloaded his print assets with the foresight that the Internets were going to thoroughly change the broker relationship of publishers controlling audience access to advertisers.
There have been some magazine launches — in the 1990s — of print publications about …. shopping. Lucky comes to mind, a Conde Nast launch that touts itself as “The Magazine of Shopping and Style.” But put the magazines down and look at what’s happened to eCommerce, the money side of the digital revolution.
eCommerce was available right out of the gate following the commercialization of the Internet by the National Science Foundation back in 1994. Both Amazon and eBay are, in Internet-terms, ancient brands. Once security issues (SSL, HTTPS) and online credit card processing got worked through, it was off to the races for the first round of online stores. eCommerce was difficult to implement in the early years, certainly a much bigger challenge than launching an online publication, but platforms started to be standardized, operational processes defined, and the entire order management/supply chain thing came together in fits and starts.
Skip a lot of well-known milestones like PayPal, and it is 2012. eCommerce is no longer a big boy game focused on behemoths like Target, JC Penny, Dell, and Amazon. From Etsy to Shopify to the WordPress of commerce — Magento — there is essentially nothing standing between a very small business and an online storefront. The days of needing a $100 million in revenue to justify a big Sapient ATG or IBM Websphere deployment are long gone. Anyone with the gumption can build their own online store without sacrificing their brand to Amazon, eBay or Yahoo.
I believe the leading edge in online commerce is not the technology — but the content and strategic approach. J. Peterman meets Lucky meets Magento meets Blogs and the result is pretty compelling.
The first place I really discovered story-based ecommerce was in the fashion sector. My favorite example, hands down, is Mr. Porter, part of the NYC fashion etailer, Net-a-Porter.
The design gestalt is a hybrid between a catalogue and an online magazine. The navigation header even points to an editorial area, “The Journal.” Even the home page hero about belts, is identified as coming from a standard editorial element, “The Edit.” Every call to action — the copy on the purchase buttons — doesn’t say “Buy Now!” — but “Read & Shop Now”
I suggest if you want to experience the bullseye point of this blog post, then go to Mr. Porter, hit The Journal “This Week’s Issue” and click through the eight-slide history of khaki. The formula is brilliant. Illustrate the piece with vintage black and white photos of legendary style icons. Steve McQueen is the cliche in this model, but the khaki piece has photos of Alain Delon, James Mason, James Dean, etc.. Under the slideshow, a bylined “story” that leads off like any fashion magazine with the usual fashionesque prose:
“Endlessly versatile, casual yet elegant, hardwearing and laid-back – it’s easy to make the case for chinos. That’s why, this spring, we’re looking forward to reaching for them again. Their great appeal has always been that they can be, and are, worn with everything from T-shirts to tweed jackets, which is how we justify updating them on an annual basis. Click through the gallery above to see how to wear them this season – easy and relaxed are the watchwords here – and to read about the history that’s taken them from colonial military uniform to preppy classic via Hollywood and 1950s-era hipsters.”
Throw in some historical nuggets (khaki is the Pakistani word for “dust”; British Red Coats were easy targets so they switched to khaki to better blend in with the dusty walls of the Khyber Pass, etc.), and make sure every page has a product that the reader can buy.
The call to action (what graphics people used to call “CHA” or “Click Here Asshole”) is brilliant: Shop the Story.
Shop the story and live the dream. Buy those $495 Loro Piano khakis and you are one step closer to becoming James Dean. It’s the next evolution in a long tradition of catalogue copywriting that began at Sears, was taken over the top by J. Peterman, and is now infesting the flash sale fashion sites with the new Catazine movement.
The transformation from the ugly catalogue pages of most online stores to a fully integrated editorial/catalogue model is, I think, going to revolutionize commerce operations in the near future. The challenge of the old eCommerce 1.0 model was order management and integrating one’s act with the Borg’s ERP and MWS and CRM and ….. No more care went into the presentation of the product than the upload of an err0r-prone spreadsheet containing SKU numbers, price, and specs.
This drove me crazy at Lenovo, where the complex configure-to-order world of selling laptops yielded product pages as interesting as the ingredients list on a bottle of shampoo. “We sell black rectangles,” I would bitch as I pointed to web pages filled with the same half-opened clamshell forms of black ThinkPads. Other than price, prominent messaging around free shipping, the meat of the experience is either in the specifications — “speeds and feeds” — or catalogue-copy: “This slim, lightweight stunner, delivers the graphics impact you need to supercharge your gaming experience …” etc. No aspersions meant to my former colleagues — but the catalogue experience at 95% of most online stores is driven by a spreadsheet and a template with little to any editorial either trying to build some drool factor for the shopper, or a valuable experience worth revisiting. Commerce needs to move from demand generation, sloppy affiliate commission programs, attribution and optimization, and closer to an experience worth experiencing. Don’t do it and you might as well just publish the spreadsheet and hope your SEO efforts and the price comparison engines treat you well.
The latest revolution for the old guard in ecommerce is toappend user generated content — reviews — to their product pages. Hanging a five star rating system with a paragraph of semi-literate user rave or rant (that I always suspect has been astroturfed and sock puppeted by the vendor) to every SKU using a service such as the recently IPOd Bazaarvoice is by and large a semi-smart move doubtlessly justified by some analyst on the basis of cart conversions and attachment rates and other ecommerce drivers. I like customers reviews as much as the next guy. Amazon has transformed them into a literary genre of their own, the most famous being the first satirical review of the legendary “Three Wolves T-Shirt” :
“This item has wolves on it which makes it intrinsically sweet and worth 5 stars by itself, but once I tried it on, that’s when the magic happened. After checking to ensure that the shirt would properly cover my girth, I walked from my trailer to Wal-mart with the shirt on and was immediately approached by women. The women knew from the wolves on my shirt that I, like a wolf, am a mysterious loner who knows how to ‘howl at the moon’ from time to time (if you catch my drift!). The women that approached me wanted to know if I would be their boyfriend and/or give them money for something they called mehth. I told them no, because they didn’t have enough teeth, and frankly a man with a wolf-shirt shouldn’t settle for the first thing that comes to him.”
Can a publisher jump on the bandwagon and start to offer an integrated shopping function versus the current model of divorcing the sale from their carefully crafted “objective” words by segregating the “prostitution” into an adjacent banner ad or paid search link? Hey, they tried to muck up their content by using the particularly horrible Vibrant in-text ad gimmick. You’ve been annoyed by it — the double-underlined word links that pops-up an unrelated come-on for some advertiser. Can I imagine Forbes selling mutual funds in its annual dreary Mutual Fund review? “Click here to invest in your future with Fidelity’s Magellan Fund” ….and then receive a bounty on the sale? No. The incumbent press seems boxed out of selling-the-story. No way the New York Times is going to stick buy-it-now links in David Pogue’s latest review of a portable receipt scanner.
I sense the reason the editorial world isn’t getting into commerce comes down to confusion and ethics. The underlying transaction processing engine isn’t an issue. Getting a merchant payment account is pretty easy. Hiring some catalogue managers and fulfillment people to tend to the SKUs and answer the customer service calls is very doable. Where all ecommerce gets hard is integrating the fulfillment piece of actually holding inventory, pulling it off a shelf or out of a bin, boxing it and handing it off to DHL or UPS. Very few people do that well and there’s a reason Amazon is building depots that are so immense they can be seen from space.
I don’t see why a magazine couldn’t morph into a direct commerce operation. They better because the stores are turning into magazines and they aren’t using Facebook or Twitter to find their way forward. Get off the social commerce bandwagon (Fan pages for macaroni just confuse me) and hire an editor with an attitude if you want to increase your conversions.
Why do efforts by brands to get me to “like” them on Facebook strike me as hopelessly shallow and stupid? There’s this totemic fetishism among marketers to show off their likeable prowess by tallying followers and fans like so many ears on a necklace around their necks. And I guarantee you, there are more than a million social media marketing consultants and digital PR drones willing to sit on a conference panel or fire up a SEO optimized blog post and debate the “true value of a Facebook Fan.”
Acquisition strategies that involve baiting a trap with a sweepstakes or other freebie and then requiring the sucker to enlist others in their quest are as old as the hills and a throwback to tried and true email marketing tactics to build direct response database. “Refer a friend” is one step removed from the pyramid schemes that occasionally sweep through forgetful societies who are more than eager to enlist friends and family in their quest for riches. These Tupperware parties seem to be the heart and soul of Facebook marketing tactics.
So assume Amazon succeeds in driving me to the more-and-more loathed Facebook and induces me to “invite” three friends to also pile onto the “win a Kindle for yourself and three friend” come-on. What do they do with the names? This reeks of some shallow brainstorm by a digital marketing agency who is going to declare a specious ROI victory when Amazon’s Facebook fans swells from A to B over the next few weeks. Then what? My “news wall” or “timeline” or whatever the Zuckerborg calls is begins to be ever after polluted with authentically cheesy brand tweets from some junior marketing drone? The fact the Endive Society of America shows up in my Facebook stream every so often makes me wonder if the world has devolved to the point where it’s just more and more noise signifying nothing.
I know I’m overly cranky, and I know Facebook is the biggest walled garden of the moment, a pool of the world’s names so tempting to try to sell to, but as that pool gets shallower and shallower, and more polluted by corporate messages shuffled like so many jokers in a deck of family photos, shared links to headlines, invitations to the latest Zynga MafiaFarm, I just want to stick my fingers in my ears, close my eyes, and rock back and forth to shut it all out.
I’m not a fan of anything I’ve ever purchased. I hate my refrigerator. My car only wants my money. My endives wilt and my laptop likes to crash.
The New York Times has an excellent expose in its Sunday business section about a Russian-emigre scamster who has turned Google’s algorithms to his benefit as he rips off customers with counterfeit designer eyeglass frames; proving in essence that bad publicity is better than no publicity at all, the scheme uses well intentioned customer advocacy sites like GetSatisfaction and RipoffReport to build Google juice through mentions and backlinks — things Google likes in its opaque rankings.
After years of flogging the theme that Google defines brand more than anything, and pushing a “customer is always right” posture on customer service relations as the best way to influence a brand online, I found the Times piece frighteningly propheti about how the underbelly of the Internet, primarily the dim world of domain squatters, virus writers, search engine optimization consultants, affiliate marketing weasels and pay-per-post bloggers, has come to insidiously eat away at good intentioned promises of sentiment and influence to make negative commentary a good thing thanks to robotic search results.
Staggering but true and hence I won’t fall into the scamster’s trap of goading outraged handwringers like myself to mention his site or name.
Randall Stross in the Sunday New York Times, profiles an Andover, Mass. company called SeeWhy and its forthcoming product Abandonment Tracker Pro.
As a digital marketing guy who was responsible for getting people into an online store, I also led a team that tried to “remarket” to those potential customers who came, looked, and left without purchasing. The remarketing concept reminds me of a shopkeeper who keeps an eye on a customer perusing the goods on his store’s shelves, watches them leave the store without buying, and then follows them out the door onto the sidewalk to say, “Hey! Hey! Come back!”
It’s creepy, but theoretically, if the ecommerce operator is willing to do something dynamic – like lower the price, extend the warranty, sweeten the deal – the benefits can be compelling: close the sale, gain a customer who can be retained into a repeat customer, and keep the virtual cash register ringing.
From the article: “When asked about possibly alienating prospective customers with overzealous remarketing, Mr. Nicholls said: “Tone and manner are important. The message should be something like, ‘Oops, was there a problem? Can we help?,’ versus an out-and-out hard sell, which will just wind everyone up.”
I think the reality is far different and requires a telepathic connection between the vendor and the customer that simply doesn’t exist. The first contradictory behavior in the ideal world where all-clicks-convert-to-a-sale is virtual comparison shopping where the customer fills a cart and configures it with goods, accessories, and services to simply build a price model for comparison to others. Pricing “homework” is a key behavior on my part – where I take the time to seek out the possible pricing permutations of a car or durable good before arriving at a dealer or brick and mortar store for a face-to-face negotiation with a salesperson. Many ecommerce sites, in my opinion, are research tools, not a means to an end, and as such as not going to be converting every customer every time, no matter what incentives are placed before.
The creepiest thing in Stross’ piece, is the disclosure that sites can now capture keystrokes typed into an input filed with relying on a “submit” button. That’s going to bring the FTC down like an avalanche of bricks and is evil. SeeWhy is not going to implement dynamic keystroke capture as a default. This is the technology that lets Google guess ahead on search queries (a good thing).
Ecommerce, in general, is a tired paradigm that needs to be blown up. Think about it. What was the latest significantly new online shopping experience you’ve seen? For me it has to be the Kindle – the ultimate in instant gratification – but on the whole, the cart metaphor is dead and needs to evolve to something different and built around empathy, not the finality of buying and the regrets of the merchant chasing their customer down the sidewalk shouting, “Wait! Wait! Can we talk?”
I need a pair of running shoes — the old Salomon trail shoes are rounding on the heels and a threat to my health. So off I went for recommendations from the CrossFit community and came up with these — Nike Free’s.
When I checked them out on Nike.com I discovered I could customize them — really customize them — so in honor of my Cotuit Skiff, the Snafu II, I went with a yellow body and a green highlight.
Professionally, while these suckers will take a discouraging four to six weeks to arrive, I liked:
1. The customization interface was really intuitive and kind of cool to play around with.
2. The text entry for putting words on the heel cups was capricious — permitting some words: “Sinister”; but dinging others: “Dexter.”
3. The email progress notification is a great example of post-sale-pre-delivery expectation management. Including a photo of my shoe is very smart.
There’s a lot to learn from Nike in the customization and communications process. I know I will probably be horrified at how ugly these are on my feet, will look like I have two lemons strapped to my feet, and have an argument with my wife for not conferring with her before committing the order.
I wonder if there is any empirical evidence that the end of a school year drives any shopping behavior associated with the return of campus notebooks to the home environment. I have two kids home from college, both carrying Lenovo Thinkpads (A Z60 and an R60) and both need some serious hard disk sanitation work.
Being a cheapskate, lesson learned the hard way: “Max out the harddrive when purchasing a laptop that is going to school.”Â The sheer volume of media files, games, and assorted crud is astonishing and will fill all available storage at the worst possible time: namely right before finals when papers need to be written and the mission critical scenario of cramming kicks in.
So, home come these sick and bloated machines and I find myself ready to:
Buy ultrafast, ultra-high volume hard drives.
Buy an external drive with enough capacity to perform the transfer and rebuild of the OS on the new notebook drive.
Potentially replace keyboards if I detect any crud or spillage.
Buy more RAM? Maybe …
Not buy replacement screens like I had to do last summer.
Consider padded sleeves
Even consider NQA replacement plans because I am paranoid and my kids haven’t yet met a notebook they couldn’t accidentally destroy
So, note to self. Push a “Back from School Sale” for accessories and parts.
A very big day for Lenovo.com. We kick off the holiday sales season today. Good piece in the Times this morning about the online version of Black Friday.
“Mr. Hart of BDO Seidman said this yearâ€™s Cyber Monday deals would culminate a series of November promotions intended to drive holiday sales sooner. Sales like Target.comâ€™s discount on more than 60 gift items, he said, helped set the promotional tone of the month for retailers. Free shipping offers for toys sold on Walmart.com and Target.com show how jittery merchants have become since the recalls of toys made in China, he said.”
I am a big ecomm geek — from the first year Amazon was in business when I bought about $500 in books (primarily on Byzantine History, I am a Constantinople geek), to my present gig at Lenovo, where a major part of my portfolio of my responsibilities lies in getting customers in the virtual door of the virtual store, I have been, and continue to be a big fan of online shopping. Will it cure global warming, cut traffic, and drive the Long Tail? Sure, a little bit at least, and all of us, I’m sure, can make some testimonial to our love affair with the old online shoppe and the trips to the stores and malls it has spared us.
Over the weekend the august New York Times sounded the warning buzzer to the ecomm party, saying the progonisticators at Forrester and Jupiter and other crystal ball shops are predicting a slow down in ecomm growth rates. Well sure, we’re now in Year Twelve of the ecomm revolution, and as the venture capitalist Ben Rosen (Lotus, Compaq) once told me, it”s easy to double revenues when you start from nothing. The Times article had an interesting quote from a disillusioned online shopper:
“He and his wife, Liz Hauer, 51, a Macy’s executive, also shop online, but mostly for gifts or items that need to be shipped. They said they found that the experience could be tedious at times. “Online, it’s much more of a task,” she said. Still, Internet commerce is growing at a pace that traditional merchants would envy. But online sales are not growing as fast as they were even 18 months ago. “
Tedious. Memorize that word. Tedious is apt and accurate when it comes to describing the typical shopping experience. How many people dread the same form field fill-out (save those who use the Google auto-complete function), who enter into a shopping cart wondering if they will miss a required field, mistype a character, or run into some strange, opaque security threshold that reject orders that specify a different shipping address from a card’s billing address, or a vendor that screws military and government personnel seeking an APO delivery?
At Lenovo we’ve run in a serious rough path recently because of inaccurate Estimated Shipping Dates (ESDs) which give a shopper a sense of when they might receive their order, a crucial thing for small businesses and individuals who need a product to stay in business or start school. When the ESD is wrong — because the process for updating it is either manual or symptomatic of a broken back end system, then all hell breaks loose.
Dysfunctional ecommerce weighs heavily on my mind. Today, my wife confirmed for me what the Times was reporting. When the novelty wears off, when the sense of adventure in ordering a book online fades, when winning another eBay auction is as routine as buying a cauliflower … when that happens then the grumpiness follows.
So my wife decides to equip the household’s tennis players with some shoes, shorts, rackets, balls, etc.. Her business partner told her to order from a site, I think it is called “Tennis Warehouse” or something, but it doesn’t matter. The upshot is after spending close to an hour shopping, comparing, selecting and de-selecting, then committing the cart to her credit card, she received an email from the merchant asking to see a photocopy of her driver’s license, information about the originating bank, and other personal data that set her “phishing” scam bells a-ringing.
Fuggedabodit, I told her. Screw them. Go elsewhere. No merchant in their right mind asks for anything other than the little security code on the card. She was pissed, so pissed she called information, tracked the merchant down to San Luis Obispo, and flamed the first customer service rep unlucky enough to answer her call.
Turns out any order over $400 triggers the security measures. Solution? Split it into two orders — now she’s going on more than two hours for the transaction — resubmit, pay with PayPal and done.
Why can’t someone make an ecommerce experience that is seamless and secure and semi-fun? Remember when Amex came up with the lame-ass Blue Card? The one with a chip embedded in it? What was that about? Wave it over the laptop and watch the transaction go down? Not likely.
We may be a dozen years into the online commerce revolution, but it still feels like 1995 to me. Let’s “web 2.0-ify” the whole mess and get it to the next level.