For a fee businesses large and small can use Workplace by Facebook as an office collaboration and communication tool. It puts all of Facebook’s features, such as workplace discussions, internet voice and video calls and a company news feed, behind the corporate intranet wall. It’s totally private and intended only for employees of the business, not the general Facebook world.
Facebook says that they have used an internal version of this app for themselves and their roughly 15,000 employees for years. Last year, when the app was called Facebook for Work, they started testing it with a few other businesses and they now have over 1,000 organizations using Workplace by Facebook.
They say that people have created nearly 100,000 groups and the top five countries using Workplace are India, the US, Norway, UK and France.
“We’re excited by the progress we’ve made and the level of adoption and engagement we’re seeing,” says Facebook in their announcement. “We’ve been amazed by the breadth of organizations who’ve embraced Workplace — from a shipping company that can now connect with their ship crews using Live video, to a bank that now uses Workplace instead of fax machines and newsletters to share updates with its distributed bank branches.”
“Large multinational companies like Danone, Starbucks and Booking.com, international nonprofits such as Oxfam, and regional leaders such as YES Bank in India and the Government Technology Agency of Singapore have all embraced Workplace. People work in different ways, around the world, and Workplace’s mission is to help them stay connected,” they said.
Includes Some New Features
Most of the features of Facebook are available within the workplace version, such as posting to a News Feed, creating Groups for niche collaboration as well as Facebook Live video to all employees or just to certain group.
They’ve also added some additional features and are working on more. One new tool that businesses will like is an overall corporate dashboard that includes analytics and tools for integrating Workplace with IT systems.
Facebook also announced Multi-Company Groups, which enables companies to collaborate with Groups from other companies on the platform, while still remaining private to only the employees of the two groups. For instance, in a B2B scenario a company that designs and manufacturers furniture for a retailer, could form a Workplace collaboration and communication Group so that the retailer can be more connected to the entire creative and building process.
Businesses retain the ownership of the data their employees post into Workplace, and have mechanisms to export and manage all data added to the platform.
What Businesses Are Saying
Facebook says that the platform offers these specific benefits to businesses:
Companies find that they can eliminate or drastically reduce their need for internal collaboration tools such as their intranet, telephony systems, video conferencing and distribution lists.
Many companies find Workplace helps them do more than just simplify communications — it inspires all levels of the company to embrace digital and mobile.
In addition, Workplace is easy to use because it’s based on familiar Facebook features like News Feed, Groups and Messages. There’s no training required.
They’ve also provided some stats and quotes of various businesses that are already using the platform.
“Workplace helps our employees connect and visually showcases our global teams,” says Richelle Luther, SVP & Chief Human Resources Officer of Portland, Oregon based Columbia Sportswear. “We’re breaking down silos, communicating across functions and driving engagement, especially amongst our remote employee populations. It has definitely ignited our spirit of fun.” She says that Workplace has helped them reduce internal emails by a third.
“Workplace allows our most important asset — our people — to be effective and productive,” says Sunil Kanchi, CIO of UST Global. “Within the first week, a post in the 6,000 member “Innovation” group shared information on a new technology under development in the field. This eliminated the need to complete a pending acquisition of a similar technology.”
“Workplace has helped our business grow and improved efficiency by reducing unnecessary email. It helps our employees communicate across countries and has brought us closer together,” said Sebastián Fernández Silva, VP of Human Resources at MercadoLibre, a Latin America based ecommerce platform. “Several business units grew significantly simply because people found it easier to meet deadlines and get work done.”
Facebook announced today a formal buy and sell platform called Marketplace, which is likely perceived by Craigslist and eBay as a new hugely powerful competitor nudging into their space. There has always been some buying and selling via Facebook Groups, but this is the first time that Facebook has focused this activity into a single feature. At launch, the goods available to buy and sell will only be viewable to people in your local geographic area.
Although Marketplace is free (at least initially), it’s not hard to imagine that over time Facebook will add payment and shipping features that make it an eCommerce competitor to eBay. With Facebook’s tremendous reach and the massive amount of buying and selling already happening in Facebook Groups, it already is a competitor with Craigslist and classifieds. Facebook says that more than 450 million people visit buy and sell groups each month worldwide.
Marketplace will be part of the Facebook mobile app, easily accessible by tapping on the shop icon at the bottom of the screen.
How To Buy Stuff via Facebook Marketplace
Both selling and buying items on Facebook Marketplace is very easy. “Marketplace opens with photos of items that people near you have listed for sale,” notes Mary Ku, Director of Product Management, in a blog announcement. “To find something specific, search at the top and filter your results by location, category or price. You can also browse what’s available in a variety of categories such as Household, Electronics and Apparel. Use the built-in location tool to adjust the region you’re looking in, or switch to a different city altogether.”
Once you find something you want, you simply send the seller a direct message right from the Marketplace feature and make an offer. All further negotiation takes place via DM and you will have to work out payment logistics.
How To Sell Stuff via Facebook Marketplace
Facebook provided this list of how to sell::
Take a photo of your item, or add it from your camera roll
Enter a product name, description and price
Confirm your location and select a category
Post
Rolling Out to 4 Countries
Marketplace is launching in US, UK, Australia, and New Zealand on the Facebook app for iPhone and Android. “We will continue expanding to additional countries and make Marketplace available on the desktop version of Facebook in the coming months,” says Ku.
Facebook is getting better at competing for brick & mortar ad dollars, announcing an ability to tie a retailers inventory into their product ads, so that they aren’t advertising out of stock items. Very smart and necessary to compete with Google for online retail ad dollars.
Just this past June, Facebook added features to track in-store purchases prompted by a retailers Facebook ads. We wrote at the time:
This is the holy grail for convincing brick and mortar advertisers that Facebook is an effective platform to drive in-store business, assuming the data shows their advertising working. It could also be Facebook’s achilles hill if advertisers discover that their ads aren’t driving business.
Tying ads to inventory is a way for Facebook to increase click to conversion percentages. This lowers a marketers ad cost per sale, and is an especially important metric which retailers use when considering their ads effectiveness.
The inventory feature is targeted toward large retailers like JC Penny, Nike and Coach, of which many have been insisting on connecting their local inventory availability before they make large Facebook marketing commitments. Facebook is still in the very early stages of their attempt to make their platform a local retail sales channel.
Facebook, with this new feature, gives retailers the ability to create customize creative for every store location based on local product availability, pricing or promotions. This is a major step toward attracting the big brands and is a continuation of where they see most of their ad revenue coming from in the future.
Consumers are now using their mobile phones to price check, look for coupons and compare products while in the store and they are also continuing to engage in social media. Facebook aims to take advantage of this and over time change the mind-set of their users about Facebook, making it about both social exchange and ecommerce and in-effect combining the two.
“If a fashion retailer wishes to advertise a nationwide sales event happening at every store, dynamic ads for retail will only showcase products that are in-stock at a nearby store and display the price found at that location,” said Facebook in a blog announcement of this feature. “As the ads are linked to the local product catalog, if a product sells out in one store the campaign automatically adjusts so that people in that region will no longer see it advertised. Product selection for each ad can be optimized based on people’s online and mobile shopping behavior.”
Facebook describes their dynamic retail ads this way:
Local availability: An availability indicator on the ad shows people that a product is available at a store near them, and the store locator makes it easy for people to get directions.
Product summaries: Advertisers can use Facebook-hosted product summaries to give potential shoppers the information they need without leaving the Facebook app.
Different actions: Product summaries include ways for people to take actions like contacting the nearest store, buying online, or saving the product for future reference.
Similar products: Similar products available at the nearest store are featured so people can browse the aisles right from their phone.
Facebook says that they are currently testing dynamic ads for retail with advertisers including Abercrombie & Fitch, Argos, Macy’s, Pottery Barn and Target. They will be expanding to more retailers in the coming weeks.
“Extending the power of Facebook’s dynamic ads to in-store inventory opens up exciting new possibilities for Macy’s as an omni-channel retailer,” says Serena Potter, Group Vice President Digital Media Strategy at Macy’s. “We were excited to be the first up and running with Facebook’s dynamic ads for retail as it truly allows us to personalize product ads based on online behavior and inventory at the nearest Macy’s store. This bridges our online and offline channels to deliver a more engaging, relevant, and useful experience to shoppers.”
Facebook Also Introduces Store Visits Objective Options
“We’re also introducing our first marketing objective built specifically for advertisers to drive more people to their stores or business locations,” noted Facebook. “The store visits objective builds on the geo-targeting and ad format features of the local awareness ad solution and introduces store visits as the primary reporting metric and a new optimization model.”
They have added features to let retail brick & mortar advertisers add an objective defined by the marketer in order make their marketing more efficient. They said that Albertsons grocery store used this in beta tests that decreases their cost-per-store-visit by 40 percent.
Also added were improvements to geo-targeting, where advertisers can now define a geo radius based on population density and desired reach.
All of these features are only available in mobile Facebook advertising.
Pinterest rolls out Promoted Video, available only on mobile devices, to make them an even better marketing platform for brands. The trend toward video advertising with social media platforms and the internet in general continues with this Pinterest announcement. According to business intelligence firm L2, Marketers are projected to spend $12.82 billion on internet video advertising by 2018, which is up from $7.7 billion spent in 2015. All of the other major social platforms, Facebook, YouTube, SnapChat, Instagram and Twitter have already launched video ad platforms. It’s about time for Pinterest to jump in, especially considering its focus on ecommerce.
Pinterest, being a very visual medium and already brand focused seems to be a perfect match for video advertising. “Over 100 million people around the world come to Pinterest every month to discover ideas to try,” said Pinterest Product Manager Mike Bidgoli in a post. “One of the best tools for bringing those ideas to life is video, so it’s no surprise this format has been popular on Pinterest. In the last year alone, we’ve seen a 60% increase in videos on Pinterest featuring everything from workouts and home projects to hair & beauty tutorials. That’s why we’re excited to roll out Promoted Video.”
Bidgoli noted that of the 100 million monthly Pinterest visitors, 55% use the platform to find or shop for products, according to the 2016 Internet Trends Report. Only 12% of people view other social media platforms as places for ecommerce. Pinterest clearly sees its future revenue source coming from video advertising.
Pinterest has tied Promoted Video with its Featured Pins product in order to differentiate itself from other social platforms that are focused on just views. “While other platforms primarily offer video views, we’ve coupled Promoted Video with featured Pins below the video,” said Bidgoli. “Now the 67% of people who say videos on Pinterest inspire them to take action can experience your brand and then simply click below to do more with your products and services.”
Pinterest won’t auto-play their video ads in a users feed, it will first play a Cinematic Pin format that they already have to give users a silent teaser of the marketing video. Once people tap on the Pin the full video will open up and automatically start playing with sound. Businesses can run video ads as long as 5 minutes, infomercial style. It will be interesting to see if Pinterest is actually planning on the long-form video marketing concept because of its proven success on TV of driving actual sales. For instance, a person perusing cooking posts could be presented with the Copper Chef ad. Well it convert as good as it does on TV? If it does Pinterest will have discovered a marketing gold mine.
According to Bidgoli, Pinterest will charge marketers based on impressions of the preview Pin on a CPM basis and not just for after click video views. Advertisers will see both the impression numbers for their teaser gif video views, the number of clicks the teaser Pin received, the number of times their full video was viewed at least partially and breakdowns on how far people watched the video (25%, 50%, 75%, 100%) and how many clicks the Featured Pin under the video received.
A Millward Brown study commissioned by Pinterest found that Old El Paso Promoted Video ads were 4x more memorable than a non-video ad. At launch, Pinterest has partnered with bareMInerals, PURINA, kate spade, Lionsgate and BEHR to proved the value of Promoted Video. “We’ve run several campaigns with Pinterest and consider video a natural evolution on how we want to connect with our Pinterest audience,” said Meredith Schaffner, Marketing Manager, Old El Paso. “Our customers come to Pinterest with high intent and the ability to show a recipe and our products through video is a unique opportunity to drive higher performance.”
Video Advertising Trend Toward Social
At Fortune‘s Most Powerful Women International Summit in London, Nicola Mendelsohn, VP EMEA at Facebook, predicted that the Facebook newsfeed will be all video in 5 years. “It will definitely be mobile. It will probably be all video,” Mendelsohn said. “I just think if we look, we already are seeing a year on year decline in text. We’re seeing a massive increase as I’ve said on both pictures and video. So yeah, if I was having a bet, I would say video, video, video.”
During Facebook’s July 2016 earning call, Facebook executives predicted their future will be video, “We see a world that is video first, with video at the heart of all of our apps and services,” said Facebook’s CEO Mark Zuckerburg. “”Over the past six months we have been particularly focused on Live video. Live represents a new way to share what’s happening in more immediate and creative ways.”
2016 has been the year of not only more spending on video ads, but a movement of dollars from TV to internet video, following consumers wherever they are. In May for instance, Magna Global, which buys ads for Johnson & Johnson, Coca-Cola, Fiat and others announced at NewFront that they have agreed to buy $250 million in video ads from YouTube. But that’s not the story, it’s that Magna is shifting these ad dollars from its clients TV budgets.
Also at the NewFronts, YouTube announced a new way for marketers to take advantage of suddenly viral videos called Breakout Videos, which is part of Google Preferred allowing advertisers to reach the top 5% of videos created by YouTube stars. YouTube CEO Susan Wojcicki stated, “This will allow marketers to feature their brands alongside the next big thing”.
Video is also becoming big on Twitter where tweets have incredibly increased by over 50% since the start of 2016!
“We believe retail is at a tipping point,” said Robert Peck of SunTrust Robinson Humphrey in a note to clients. “E-Retailers are leveraging new capabilities in old business models to expand existing and new markets like apparel, grocery and personal care, where e-Commerce had only limited penetration till now.” According to BusinessInsider, Peck calls it “E-commerce 2.0.”
Shopping online is growing fast, but still only represents a fraction of total shopping dollars, just under 8%, according to US Census data.
As of the first quarter 2016, the total amount of retail spending online (ecommerce) was $92.8 billion, which was only 7.8% of all retail sales. Ecommerce is in its infancy, which means that there are huge opportunities ahead, not just for the types of Amazon, but for small merchants and startups as well.
Worldwide retail sales, including in-store and internet purchases, surpassed $22 trillion in 2015, up 5.6% from 2014, according to a study by eMarketer. They say that retail ecommerce sales, those purchased over the internet, will make up 7.4% of the total retail market worldwide, or $1.671 trillion. By 2019, that share will jump to $3.578 trillion, yet retail ecommerce will still only account for 12.8% of all retail purchases.
Even though the internet and technology is the source of major disruption for retailers, brick and mortar is alive and well for the foreseeable future.
The study says that retail ecommerce sales are accelerating faster than previously anticipated and will jump 25.1% year on year in 2015. “Online sales growth will outpace brick-and-mortar sales growth by a more than 3-to-1 margin over our forecast period,” the report predicts.
Amazon Reshaping Ecommerce
Amazon recently passed Facebook to become the the fourth-largest US company based on stock market value. By 2020 analysts Rob Sanderson, Managing Director, Senior Research Analyst at MKM Partners, predicts that Amazon will be the largest US company by 2020.
“Amazon has a significant position in two of the largest secular growth opportunities there are,” Sanderson told Barron’s recently. What he was referring to were online retail and cloud computing.
As I said during my keynote @SohnConf, $AMZN is the most durable business in the world. $3T here we come…ps, you’re welcome.
Venture capitalist and part owner of the Golden State Warriors Chamath Palihapitiya of Social Capital said to a crowd at the Sohn Investment Conference recently that Amazon will be a $3 trillion dollar company within 10 years, almost ten times more than its current $366 billion market cap.
“Consider Amazon’s potential in retailing, said a Barron’s post. “It holds a 35% to 40% share of U.S. e-commerce, on its way to 50% by 2018, according to estimates from Doug Anmuth at JPMorgan published last month. And e-commerce is just 11% to 12% of U.S. retail, not counting gas, food and cars, on its way to more than 30% eventually, and 14% by 2018, according to Anmuth. In other words, Amazon is securing a quickly growing slice of a quickly growing pie.”
Internet Is Crushing Department Stores
There is one simple truth, internet retail is booming while brick & mortar department stores are in a free fall. The chart below from Standard Chartered Research tells the story
“U.S. private consumption has shown ongoing resilience,” says a note from Standard Chartered Plc via Bloomberg, “but this macro story masks sizeable divergence at the micro level, and this explains the wide interpretation of ‘how’s the U.S. consumer doing?’ The micro story is characterized by a parabolic rise in internet sales at the expense of ‘bricks and mortar’ stores, particularly department stores.”
The above stat isn’t as bad as you think considering that every department store also has an online presence and are working hard grow that aspect of their business. But even with that department stores are struggling online. “Digital sales continued strong, still growing double digits, but it too grew less rapidly than anticipated,” said Macy’s Chief Financial Officer Karen Hoguet during their May earnings call (PDF).
Internet business guru and financial analyst Robert Peck sees a shift in online shopping toward specialty boutiques and well run mom & pop stores. He says that as the internet generation grew up they don’t have reservations against online shopping like their parents did.
Presumably, one of the main drivers of online shoppers to Amazon was a belief that you wouldn’t get ripped off or have your credit card info passed around. This fear has dissipated over time but is completely non-existent with those that grew up with the internet.
Online Retail Will Diminish Need for Offline Stores
The Ovis report sees an “increasingly fragmented physical footprint,” with branded products moving to the internet. “Demand for large-footprint physical retail space will continue to fall,” says the report.
“Physical retail will still exist, but it will need a good reason to exist.” according to Dunkin’ Brands quoted in the Ovis report. The report portends that most new retail businesses will start online and later add some physical retail for showcasing products. They note that this is already the case in furniture. Retail will only play a supporting role in the future with new online retail stores in order to add trust with customers.
Existing pure-play online retailers will also continue to create physical locations, primarily to “enhance fulfillment and customer service.” They believe that much of this will take the form of the “click-and-collect models” which are common with UK retailers. “The UK today is the most advanced market for click-and-collect models, examples of which include ASOS and Boots, and eBay and Argos, a partnership that started in the UK and has been extended to Ireland,” says the report.
Click and collect is where the shopping is done online, but the items are physically picked up by the consumer at a fulfillment center or a retailer. Walmart in the US is one of the largest retailers offering this service.
According to the 2016 eCommerce Trends Report by Absolunete, an eCommerce agency based in Canada, depending on the types of products sold and the retailer’s network of physical stores, the proportion of consumers who prefer to pick up their purchase in store can reach up to 40%.
“Better still: offering customers the option to “Purchase & Pick-Up” often increases the average purchase value,” says the Absolunete report. “That’s right: 7% of customers who pick up their purchase in-store increase their spending while they’re on site (7% as measured in net sales). In Canada, where the prohibitive cost of residential shipping is an important challenge (the opposite is true in the U.S., where residential shipping is extremely inexpensive.), Purchase & Pick-Up becomes a win-win proposition!”
Absolunete says that “Purchase & Pick-Up” has advantages to the retailer:
Increasing net sales once the consumers is at the store picking up their online order.
Increasing conversion rates by making it easy for consumers to get their merchandise.
Decreasing return due to in-store exchange options.
Decreasing shipping costs and thereby increasing profit margins.
“We expect further partnerships to be made in order to allow Internet-based retailers to build up physical collection points,” states the Ovis report. “We also foresee noncompeting physical retailers collaborating to allow the collection of each other’s products in each other’s stores. This will allow them to maintain a virtual geographic presence despite the need to reduce their own physical store networks.”
From a showroom perspective, Amazon Books is a good example, where it has physical samples of not just popular books but all of Amazon’s products such as the Kindle, Echo and Kindle Fire tablets.
“The already blurred lines between physical-heritage retailers and Internet-heritage retailers will have been eradicated by 2026,” predicts the Ovis report. “The former will continue to reduce the amount of physical space they hold, switching their investment emphases online, while the latter will invest further in establishing physical presences to support the showcasing of brand and private-label products. While the large pure-play Internet retail brands will survive, the term pure play will be rendered obsolete.”
In-Store Digital
The Absolunete report predicts the rise of what it calls “in-store digital”, where consumers make online purchases while inside the physical store. Technology will be used to improve the customer experience and to make it a personal by “integrated gathering that allows retailers to better understand customers and customer behavior.”
The report suggest that it is increasingly common to see in-store advertising screens and tablets, enabling the consumer to search for products and to make online purchases while in the store, presumably of products that aren’t available in the store itself. “Going forward, customization tools and possibilities will go even further to improve customer experience. Paper posters and printed displays, for example, are being replaced by connected kiosks and displays which allow real-time, contextually-relevant messages to be displayed.”
Absolunete one interesting example by Rebecca Minkoff, partnering with Magento and eBay to create a Smart Dressing Room. They say that the system tracks what customers try on at the store and the sizes tried and what they buy and don’t buy. The store uses this data to send updates to the shopper if an item tried on is now available in her size or color. There are many more customization option being experimented with that may be available in the future. They say, “Think of it as cookies (like in your browser) that follow you around in the real world.”
“Engagement with the technology in Minkoff stores has been greater than expected,” said David Geisinger, who was previously eBay’s head of retail and mobile innovation but now is with Magento Commerce. “Engagement is on the customer’s terms, which I think is key, because it’s not intrusive.”
Technology is the Driving Force
eBay is in full preparation for the next commerce revolution and believes the heart of it is technological advancements coming together to reshape online selling. eBay CEO Devin Wenig believes that it is these innovations that will create an enormous opportunity for companies that are prepared to take advantage of them. And eBay is battle ready to just that, for years now seeing itself as both a great technology company… and a great ecommerce company too.
“We have seen the pace of tech innovation advance significantly — in artificial intelligence, cloud computing and virtual reality, all of which have the potential to reshape global technology dramatically in the next few years,” commented Wenig in a company announcement last week. “We are building eBay to be a vibrant and dynamic global technology leader for years to come, and we are starting to see results.”
“Everything we’ve done so far has been about positioning eBay for a future we can see advancing quickly towards us, in which innovations in technology platforms have the power to dramatically reshape the commerce experience,” Wenig says.
“We are entering what we call the Age of Everywhere — the profusion of cloud-connected devices that will bring the Internet to you, globalize the market, and make things faster and more on-demand,” said Wenig.
A report by Ovum, The Future of E-commerce: The Road to 2026 (PDF), predicts that over the next ten years instant gratification, powered by technology, will be a driving force in ecommerce. The report concludes that online retail today is “largely driven by price and convenience”, but by 2026 consumer expectations of the “ecommerce experience” will change dramatically.
“The desire for instant access and fast turnaround, 24/7, will be the norm by 2026, driven in particular by millennials (born approximately 1980–95) and also by Generation Z consumers (born
approximately 1996–2010),” the report says. “Generation Z are digital natives to the power of 10, with technology use their second nature. These generations are constantly connected and inhabit an online environment where events happen in real time without them having to wait, and where social media enables them to dictate terms.”
By 2026 the report predicts that consumer expectations will force online retailers to vastly improve customer support, will have to live up to expectations on the goods or services being delivered and shoppers will expect free delivery anytime and anywhere.
“Smartphone penetration is reaching new heights around the globe, and we are fast approaching the point where being an internet user means being a smartphone user,” commented Felim McGrath, who is the Trends Manager at GlobalWebIndex, in a blog post presenting the report. “This means that mobiles have the potential to become essential online commerce devices.”
McGrath backed up his comment with examples of how in Asia people are just as likely to shop online with their smartphones as they are a desktop computer. “Last month, close to half of South Koreans used their mobile to shop online,” he said. “And in China, mobile commerce has become the norm, with consumers now almost as likely to complete a purchase online via their mobile as via a laptop/PC.”
McGrath says that even though most consumers in Europe and North America are not mobile shoppers at these levels yet, it’s only a matter of time before they are.
The Ovis Report thinks that the trend toward more powerful smartphones with larger screens will help drive ecommerce and that retailers are optimizine the shopping experience for mobile. “Together, these developments are turning the smartphone into a platform that can support the whole shopping journey, from product search and discovery, to comparisons, recommendations,
and payments,” says the report.
The report notes that Android will continue to dominate iOS and that competition for payment systems won’t just be between Apple and Android, but will include multiple payments sytems on the the Android platform.
Social Media is a Key Driver of Ecommerce
Felim McGrath also believes that social media will be a driving force encouraging online shopping. He says that one third of the world’s population is now on social media, which is up an astounding 10% over last year.
“With such a significant amount of online time devoted to social media, there’s clear potential not only for advertising and marketing via social networks, but also for directly monetising users via ‘social commerce’,” said McGrath. “The last year has seen some of the world’s biggest social networks, like Facebook, Twitter, YouTube, Instagram and Pinterest, testing or introducing integrated commerce options, acting as the middle-men between buyers and brands. The networks themselves have a clear interest in pushing this trend, both to increase engagement with their platforms and to open up healthy new revenue streams.”
The research from GWI shows that consumers are now becoming brand aware because of social media and are also using it to research products. McGrath sees this as an important step to using social to complete purchases. “Social commerce has a bright future,” says McGrath.
The Ovum report also predicts that the need for people to document their experiences on social media will motivate retailers to “increasingly align not only their brands but also the
shopping experience itself to this consumer desire for encounters worth sharing.”
“This can already be seen with the emerging trend for integrating social media with in-store retail, with the aim of creating socially driven shopping experiences,” the report notes. “In 2015, Victoria’s Secret encouraged shoppers to take selfies in front of displays and show them to sales assistants in return for a free gift – and hopefully share their selfies/experiences with friends.”
“Any doubters about social media’s powerful role in converting prospects into customers need to immediately re-evaluate their position,” notes the Absolunete report. “Like, now. Though their pure conversion rates are lower than those of organic results or Email, they are powerful tools that promote brand loyalty and are a great way to share the brand’s values. Through community-logic, social media is a valuable resource to convert curious prospects into new customers.”
According to Absolunete, with good social media management online stores can generate results that are sometimes superior to search marketing strategies such as Google Adwords. Social platforms such as Pinterest, Facebook and Twitter are working to enhance their value to online retailers by adding functionalities that will guide the shopper towards a products pages with goal to convert their users into online retail customers.
“You may have noticed more and more “direct purchase” options popping up on social media platforms like Twitter, Instagram, Pinterest and most notably Facebook, which is responsible for 64% of social sales worldwide,” noted the report. “Retailers need to move quickly to capitalize on this; once the big, established eCommerce players will have fully implemented these tools, it’s going to be a lot harder – and more expensive – to stand out.”
On Instagram, for instance, you can now go directly from a picture to a product page which are being used by brands such as Banana Republic via StylePick. What’s more, celebrity endorsers are now being used by brands in this process leveraging their huge numbers of followers to create commerce.
93% of Pinterest users have bought something online in the last 6 months, according to Absolunete. They also note that Pinterest is the source of 16% of all social sales, with their “Rich Pins” allowing retailers to fully integrate online stores and automatically synchronizing product pages with the products “Pin”. J. Crew, Gap and Nordstrom all utilize this effective Pinterest ecommerce motivator.
Ecommerce while Messaging
Another emerging trend is the integration of ecommerce into messaging apps, which is already happening in Asia. McGrath notes that Line and WeChat have already integrated multiple commerce features and other “opportunities for monetization.” He believes this revenue opportunity is the “inspiration” behind Facebook’s move to make Messenger a separate app and their motivation to focus on messaging so aggressively. Indeed they are very focused on messaging, having paid $22 billion for WhatsApp in 2014, a startup that only had revenues $10.2 million in the year before its acquisition.
Again, Asia shows the way forward here. Messaging apps like Line and WeChat have pushed beyond simple chat apps to integrate a broad range of commerce options and opportunities for monetization, forming the clear inspiration for Facebook’s recent development of Messenger Platform. All these developments mean that social commerce has a bright future.
Artificial intelligence also plays a role in messaging. “During this time, we’ve seen artificial intelligence reach an inflection point,” Wenig said. “This innovation is already beginning to take hold of the messaging space with the arrival of conversational assistants. Artificial intelligence has the potential to bring an era of deep personalization to the commerce space.
VR, AR and Wearable Devices
“Due to the proliferation of wearable devices and technology, smart TVs, connected cars and household appliances, beacons, and other technologies, the consumer journey in 2026 will increasingly look like a pretzel that twists, turns and loops back on itself,” noted the Ovum study. “Consumers can start and end their shopping experiences on a mobile platform, in store or online. It is a fluid movement that by 2026 will be even harder for retailers to keep up with or predict because it will include a growing number of devices and touchpoints.
It is key for retailers to not only keep track of consumers across many devices and touchpoints, but to also accurately measure where sales are coming from. This will require retailers and their advertising partners to build to significantly improve ad tracking technology.
One of the key drivers of wearable technology is virtual reality and augmented reality. “Virtual and augmented reality will be the next platform revolution,” says Wenig. “This is already prevalent in the gaming world, but it has the potential to be far more disruptive.”
The Ovum report predicts that by 2026 consumers will expect a more “real” shopping experience which will mean an integration of augmented reality into online stores. Consumers will expect an an “event experience” that will rival walking into a brick and mortar store.
“This will translate into interactive, highly engaging online and real-world retail environments where augmented reality (AR) plays a key role,” the report says. “The provision of distinct and tangible shopping experiences, online and real-world, will become a key means to enhance and differentiate a brand’s value proposition.”
One of the key drivers for augmented reality being used by online stores is increasing the conversion rate. Generally, retailers do much better when a consumer walks into their physical store locations compared with internet shopping, because there is no human connection.
Epson’s Moverio smart glasses are one solution for retailers, where an online shopper can click the the “GoInStore” button and a sales associate at the physical store will walk the customer through high value products with wearing the smart glasses. Clicking the button initiates a two way voice call and a one way video stream of whatever the sales person is looking at.
Luxury car dealer Amari in the UK uses the glasses to show off their extremely expensive cars to online prospects. “Our sales team know every single detail of these cars, even to the level of knowing the tyre pressures,” said Sheikh Amari, CEO of Amari SuperCars in an Internet Retailing post. “This knowledge is difficult to bring across online and we have been looking for ways to bring our expertise into the online environment.”
“This new technology enables our customers to travel to our showroom in real-time and experience the cars remotely – giving us a competitive edge and the ability to close sales quicker, providing our customers a totally unique, convenient and trusted car buying experience,” said Amari. “Our customers – who include investors and collectors – are very busy people, based all around the world, who typically know what they want but often have to rely solely on the pictures that are on the website.”
“How do you price your good or service? It’s one of those questions that you have to have an answer for on day one. And you really, really want to get the right answer,” says John Henry, entrepreneur, venture capitalist and host of eBay’s Open for Business Podcast. “It all starts back in 2008 when a guy named Terry Kniess did something on The Price is Right that hadn’t been done in four decades. He did something that every business owner can learn a valuable lesson from.” What the now legendary Terry Kniess did was “guess” the exact price of $23,473 to win the Showcase prizes in 2008.
What did Terry Kniess and his wife do that entrepreneurs can learn from? Study the data. Once Kniess and his wife decided to attend a Price is Right taping they decided that it would be a good idea to study the show by recording episodes and watching the show looking for clues. “After we decided that that was where we were going to go, I said if we’re going to the Price is Right, let’s do it correctly,” Kniess told Henry. “I said, let’s study the show, and we’ll go in the fall.”
“We’d sit down every night and watch the show and look at the prizes that were up for grabs that day, and we started making a little mental list, of ‘Oh, this has been on before,” said Kniess. “And the first thing we noticed, was that the prizes repeated… and the prices never changed!” That key piece of information was the trick that Kniess used to predict the price of his showcase. “Do your homework. Do your homework. Do your homework.”
Lesson One: Do Your Homework
“Do your homework sounds really simple, but it can feel daunting when you’re first starting out,” stated John Henry, the 23-year-old Dominican-American entrepreneur and founder of the startup accelerator Cofound Harlem and the podcast host. “How do you go about taking all the work and expense, the blood, the sweat, and the tears you’ve put into your business, and distilling all of that into a single number, the price of your product?” Henry noted that picking the wrong price can be disaterous, even leading to business failure. He says, “Do your homework. That’s lesson one. Everything starts there. The thing is, doing your homework used to take a lot of time. In the past, companies had to send people to actual physical stores all over the country, in order to get information about their competitors’ prices and set a baseline number. Now there are tons of e-commerce sites that can help you find the right price. And one of those sites is eBay.”
“I like to think of eBay as sort of like the Kelley Blue Book of everything,” stated Zoher Karu, Chief Data Officer at eBay. “We have such a vast number of items for sale. I think it’s around 900 million now, and eBay, of course, has brand new inventory, but it also has, for example, last season’s model. Or it has maybe a refurbished version. The used version. So it’s that breadth and depth of inventory and sales histories that allows us to think of the Kelley Blue Book of everything.”
In essence, eBay should be used to validate all of your product price points before you add them to your ecommerce website or on eBay itself.
“If you do it right, you can bear fruit for a long time, and if you do it wrong, which is what happens in most cases, you’re digging out of a hole for a long time,” commented Mickey Goodman, who has worked for Kraft and Unilever and has taught classes on pricing strategy at NYU Stern and is now a Professor of Business & Entrepreneurship at Savannah College of Art and Design. Henry points out that most small business owners do something called “cost-based pricing,” and it’s a really bad idea. “Let’s take it back to when I was setting prices for dry cleaning at my first company, Mobile City,” explained Henry. “I called all the dry cleaners in the area, and pretended to be an interested customer. I asked how much for a shirt, how much for a blazer. Eventually, they’d get suspicious and stop giving prices to me over the phone, so I’d get my girlfriend at the time to call. And then, once I knew the price range I was working with, I decided to charge just a little bit more for the service than what it cost me to provide it. In business speak, this is called “cost-based pricing.” And in my case, and lots of other cases, it’s a mistake.”
“That’s what people intuitively do because it kind of makes common sense, which is you take your costs and you say ‘I’d like to make a 20% profit,’ you know, whatever it is,” replied Goodman. “And you add 20% to your costs and you say here’s my price.”
Henry drives the point home with a personal story that all business owners can learn from:
“If you go the cost-based route, you risk underselling yourself and leaving a lot of money on the table. It can cost you your business. It nearly cost me mine. I remember sitting in the living room with my Pops. I was crunching the numbers. I usually did it every Sunday and I realized I was gaining customers, but actually losing money. And that’s because I simply was not charging enough. I called a mentor of mine, and I’ll never forget what he told me. He said, ‘John, you’re delivering five star quality at McDonald’s prices.’ That conversation saved my company. The very next day, I immediately raised my prices. And while I lost a bunch of my customers at first, I ultimately found a new clientele that weren’t as price sensitive. They were happy to pay a premium for the service I provided. This brings us to lesson two: don’t set a price based on what it costs you to make something. Instead, set the price based on what your customers think that thing is worth. This is what Mickey calls “value-based pricing.””
Lesson Two: Use Value-Based Pricing
“It’s based around the concept of you know when people are buying a good or service it’s ‘cause it’s fulfilling some need for them,” stated Goodman. “Now at the most basic level if they’re thirsty and they buy a bottle of water the need is that they were thirsty.” Henry replied, “So lesson number two: value-based pricing. Price your product based on how much it’s worth to your potential customers.”
There is also the question of how to determine value. Jon Wirt, Head of Marketing for Pushd, tests the market for its new products by having people come in and give their feedback on the product, price and value. “How much do you think this costs to buy and what is the max you personally would pay for it,” Wirt asked a beta tester in reference to their new digital picture frame product called the Aura.
Tester: “I think something like this is probably worth $150. I would not pay more than more than $225.”
Wirt tells the beta tester the actual price is $399.
Tester: “Yeah, that’s expensive for the size. I could see if it bled all the way up to the end, I would consider paying $399, but as-is I wouldn’t pay $399.”
“It’s a weird experience to come in and do that,” Wirt said. “Like, you came into a beta test, you’re getting paid, you’re using something that’s half finished in a room where I’m videotaping you and writing down notes. It’s like an awkward experience. And then you’re like guessing this number. I don’t expect them to get it right.”
“I have to ask, you’re framing it like they’re getting the answer wrong,” stated Frances Harlow, Branded Content Producer at Gimlet Media and one of this podcasts producers. “But what if you guys are getting the answer wrong and how do you know that you’re not getting the answer wrong?” Wirt replied, “Until you launch, you don’t really know.” Harlow added, “What Pushd is facing is a problem that lots of business owners face. When we consumers are presented with a product, we naturally and immediately make mental comparisons. We ask ourselves, ‘What is this thing like?’ And then we form our opinion about what the price should be. And in the beta testers case, I got a clue about how this works when Jonathan brought up the iPad, and the tester described his mental comparisons.”
Lesson Three: Manipulate Your Comparisons
“And this challenge that Pushd is facing gets to our third lesson,” stated Henry. “As a business owner, you have to manipulate your comparisons.” Henry elaborated, “Position your product in the marketplace so when people inevitably compare it to similar products out there, they’ll feel like they’re getting a good deal.”
“What you want to do is differentiate your offering so much that there is no straightforward comparison,” added Ruth Bolton who is Professor of Marketing at the W.P. Carey School of Business at Arizona State University and formerly worked in R&D at Verizon for years helping them with their pricing. “You have something that’s somewhat unique.”
“There’s always, in a sense, a competitive offering in that there’s some substitute that the customer will make if they can’t buy the service or the product that you’re offering,” said Bolton. “So it really comes down to kind of benefits per dollar.”
“One other point about manipulating comparisons — or the kinder, gentler way of saying it: creating favorable comparisons,” added Harlow.” One way to position your product in the marketplace is to literally position it, in the right environment. So with Pushd, they want you to think “fancy home decor” when you see the Aura.”
“Well if they want to do that, it might just be helpful to put them in a “fancy, home decor” showroom with the Aura, not a startup’s temporary office space,” said Henry. “And there’s one more thing Ruth would do differently, she doesn’t ask open-ended questions about prices, the way that Jonathan does at Pushd. What she would do is ask each customer a single yes or no question.” Bolton responded, “Would you buy it or not and then you do it with somebody else, would you buy it or not?”
“You don’t push back and you don’t ask how they arrived at that number,” said Henry. “And that’s because it’s more realistic. With pricing, it’s almost always a yes or no question. Would you buy it or not?” Bolton added that “you start varying the price and so you can kind of sort of start to figure out, what the shape of that demand curve is.”
“The shape of the demand curve is what we’ve been talking about this whole time… how to set a price,” said Henry. “There is no guaranteed way to pick the perfect price, but there are concrete steps you can take to get close.”
John Henry’s four steps to picking the perfect price:
1. Do your homework. The good news? It’s now easier than ever with all the data we’re gathering from e-commerce sites, like eBay. That will give you a range of prices.
2. Once you’ve found that range, be bold. Pick a number that reflects the value you bring to your customers, not just your own production costs.
3. Create favorable comparisons. Position your product so that customers feel like they’re getting a fair deal, and one way to position your product is to pay close to attention to how you’re physically positioning it.
4. Be prepared to repeat steps one through three. Prices change. They’re dynamic. That’s part of why they’re so hard to set in the first place. Even on the Price Is Right. After Terry’s spectacular win,, the show’s producers switched it up. The show now features all-new prizes, and guess what? Their prices change.
John Mueller, a Webmaster Trends Analyst at Google in Switzerland, confirmed what everybody is thinking, Google and the AMP Team ultimately intends for almost all sites to display AMP versions for mobile devices. “If you ask the AMP team, they will tell you that all websites should be using AMP, “Mueller said in replying to a question from a Hangout participant. “So to some extent, I can see that making sense. It’s definitively one way to make really fast websites, or websites that load almost instantly.”
“If you’ve been holding off because you’re saying, well, my website doesn’t need this, then maybe it makes sense to take a look again and see what it does now,” Mueller said. “So at the moment, we only show it for the kind of in the news, carousel on top, the top stories and that’s something where I expected to kind of expand to other parts of the search results as well.”
Meuller was also asked about the recent news about eBay adopting AMP, “I think with the eBay one, even though it was an AMP, they couldn’t add to cart, or something like that,” responded Mueller. “They didn’t have that functionality on the site.”
“There’s definitely some things that don’t work so well with AMP at the moment,” says Meuller. “But it’s an open source project, so I think people from eBay are active there as well, making new components and that’s something that I expect to evolve over time.” The Webmaster Trends Analyst added, “I am really happy that someone like eBay is taking the time to do these kind of experiments, because even if they’re not showing in search yet, we can’t get there without people actively trying things that kind of go past what’s possible now.”
“I imagine if someone like eBay can get it to work for their site, which is really dynamic, which requires a lot of interaction, then that’s something that’ll be possible for a lot of other sites as well,” concluded Meuller.
Check out the discussion in the Google Hangout video below:
Ebay clearly believes that AMP is for more than just publishers and thinks it would be great for all kinds of websites and especially for ecommerce. “The speed aspect was very critical for us, and we wanted to do more for speed,” stated Senthil Padmanabhan, Principal Web Engineer at eBay. “That is when we ran into AMP.”
The AMP project was announced around the same time we started the initial brainstorming for browse. It seemed to resonate a lot with our own thinking on how we wanted to render the new experience. Although AMP was more tuned towards publisher-based content, it was still an open source project built using the open web. Also, a portion of the traffic to the new browse experience is going to be from search engines, which made it more promising to look into AMP. So we quickly pinged the AMP folks at Google and discussed the idea of building an AMP version for the browse experience, in addition to the normal mobile web pages. They were very supportive of it. This positive reaction encouraged us to start looking into AMP technology for the eCommerce world and in parallel develop an AMP version of browse.
Today we are proud to announce that the AMP version of the new browse experience is live, and about 8 million AMP-based browse nodes are available in production. Check out some of the popular queries in a mobile browser — Camera Drones and Sony PlayStation, for example. Basically adding amp/ to the path of any browse URL will render an AMP version (for example, non-AMP, AMP). We have not linked all of them from our regular (non-AMP) pages yet. This step is waiting on few pending tasks to be completed. For now, we have enabled this new browse experience only in mobile web. In the next couple of weeks, the desktop web experience will also be launched.
“We are excited to partner with Google and everyone else participating on the AMP Project to close the gap in launching a full-fledged eCommerce experience in AMP,” says Padmanabhan. “We have created a combined working group to tackle the gap, and we will be looking into these items and more.” The items Padmanabhan is referring to include smart buttons, input elements, advanced tracking and A/B testing. “With items like these in place, AMP for eCommerce will soon start surfacing.”
“We will also be looking into creating a seamless transition from the AMP view to a regular page view, similar to what the Washington Post did using Service Workers.” Padmanabhan added. “This will enable users to have a complete and delightful eBay experience without switching contexts.”
“We are on our path to making eBay the world’s first place to shop and this is a step towards it,” concluded Padmanabhan.
Google launched a cool… and I think very useful feature to Android today called Nearby. Nearby uses Bluetooth to seek out nearby beacons that are connected to Android apps on your phone. Developers of ecommerce or in-store related apps are going to be staying up late working to incorporate Nearby because of its potential to bring in more sales.
Nearby was announced back in May:
Nearby can be used for any app that communicates provides the mobile phone user with real-time data. For instance:
New information and multi-media can open in a museums app as a person passes each exhibit. such as when a person at a museum getting further information and media related to the exhibit they are standing in front of.
As you walk down the aisle at Kroger’s a Kroger app can offer you app-only deals as you pass by items on the shelf.
As you stand in line at the DMV in California it could ask you to feel out certain forms in the app and then direct you to a line number that handles your type of need such as renewing your cars registration.
At the car dealership, an app from the dealer could offer you a deal that isn’t on the sticker, possibly timed by how long you stood close to a particular car.
Print photos directly from your phone at CVS Pharmacy.
Explore historical landmarks at the University of Notre Dame.
Download the audio tour when you’re at The Broad in LA.
Skip the customs line at select airports with Mobile Passport.
Download the United Airlines app for free in-flight entertainment while you wait at the gate, before you board your flight.
Google says that to use Nearby, just turn on Bluetooth and Location, and they’ll show you a notification if a nearby app or website is available. According to Google Nearby has started rolling out to users as part of the upcoming Google Play Services release and will work on Android 4.4 (KitKat) and above.
The Google Developers Blog also provided information for developers to incorporated Nearby within Android apps:
Getting started is simple. First, get some Eddystone Beacons- you can order these from any one of our Eddystone-certified manufacturers. Android devices and and other BLE-equipped smart devices can also be configured to broadcast in the Eddystone Format.
Second, configure your beacon to point to your desired experience. This can be a mobile web page using the Physical Web, or you can link directly to an experience in your app. For users who don’t have your app, you can either provide a mobile web fallback or request a direct app install.
Nearby has started rolling out to users as part of the upcoming Google Play Services release and will work on Android devices running 4.4 (KitKat) and above. Check out our developer documentation to get started. To learn more about Nearby Notifications in Android, also check out our I/O 2016 session, starting at 17:10.
Etsy made two major announcements on Tuesday aimed at improving the selling experience. These are a new paid site-building tool called Pattern and a new redesigned landing page for Etsy shops called Shop Home.
Pattern appears to be Etsy’s answer to ecommerce shop platforms like Shopify and site-building services like Squarespace. The main differentiator is that it’s all powered by Etsy and is integrated with the Etsy features sellers are familiar with.
Pattern shops leverage the seller’s existing Etsy shop and the work they’ve already put into it on their own custom website on their own domain. It includes all shop listings and content, syncs orders and inventory between sites, and provides analytics integrated with Etsy shop stats. It also uses the same checkout and shipping tools sellers are already using.
“The setup is quick and easy—for most shops, it will take only a few minutes—and offers five thoughtfully designed themes that sellers can choose from to personalize their sites,” explains Etsy’s Mike Grishaver. “Sellers can choose from themes that highlight their listings or ones that more prominently feature their brand assets, and they can customize each with shop logos and brand colors. Sellers with Direct Checkout enabled can try Pattern for free with a 30-day trial, after which Pattern is only $15/month.”
“We believe Pattern will deliver a special shopping experience as well—a high-quality, modern and professional-looking ecommerce site with branding unique to that shop,” he says. “Pattern sites feature responsive webpages so they look great at any size, on any device. And, with co-branded Etsy checkout, buyers will be reassured that their purchase is secure and trustworthy.”
The Shop Home landing pages are more customizable than the previous version. They’re mobile-friendly and give more sellers more creative control according to the company. They allow sellers to highlight their brands within the Etsy Marketplace.
The design includes a prominent cover photo and the ability to rearrange listings in the desired order. Here’s the before and after:
This is rolling out to all sellers over the coming week.
eBay just announced its Spring Seller Update, and there are a lot of changes this time. Some of these may not sit well with sellers though the company says the changes will drive conversion across its entire platform.
Some of the changes are specifically in relation to the mobile experience (which has already had a reported shipping display issue).
With the update, eBay will automatically generate shortened descriptions for products for display on mobile.
As Ina Steiner from eCommerceBytes says, “Sellers are already concerned that mobile shoppers are not reading descriptions carefully enough, leading to increased dissatisfaction and returns.”
eBay thinks people will like the change, however, claiming it will help users make faster and informed decisions.
In a blog post, the company says, “This simplifies the buying experience and helps to optimize for SEO – which can ultimately improve your conversion rates…with minimal work by you, since the summaries are auto-generated. However, we’re also adding the ability for you to customize exactly what shows in the mobile summary – I expect you’ll like having this level of control to help increase your chances for mobile conversion.”
eBay is also making changes to how sellers can use active content (like Javascript or Flash). As Steiner points out, many sellers use these things to personalize their stores and/or cross-merchandise items. The company says it’s been resulting in a bad mobile experience, slowing page load times and posing threats. This will go into effect early next year.
Some sellers will also face new or higher fees. Anchor Stores will see a $360 increase per quarter, while Basic Stores will go up $12 per quarter and Premium Stores will go up $30 per quarter. That’s on annual plans for Basic and Premium. Both Premium and Basic Stores will also see increases in zero insertion fee listing allotments for fixed-price and auction listings. All new fee information is available here.
eBay is expanding product reviews to make them easier to read, expanding them to more products, and including a cleaner design with “easy-to-identify ratings” and follow-up emails to those requesting reviews. eBay says supplying review info keeps people on site and increases sales by 18% on average. More on new review features here.
Seller Hub was announced in the Fall Seller Update, but now it’s coming to all sellers as the default way to manage listings beginning in the summer. According to the company, 25,000 sellers are already using it.
There are new category and item-specific updates coming in May, which you can peruse here.
There’s a new user agreement update, which goes into effect immediately for new users and on May 19 for everyone else. One update is the inclusion of indication that sellers who fail to meet minimum performance standards may have their accounts limited, suspended, or downgraded.
Another update states that for new sellers in all listings where returns are accepted, eBay will set a default rule that automates the return process. There are also “minor” changes to the dispute resolution policy. More on user agreement changes here.
If you’re a seller, be sure to take a few minutes and examine the full 2016 Spring Seller Update here.
