September 30, 2014

How Amazon’s Search Engine Works

Retailers are always vying for top position on Amazon, but what does the marketplace look for when it compiles results? Given the many options for customers, we’ve identified what retailers can do to improve their listings and ranking on the marketplace giant.

How Buyers Search

Buyers scan results pages very quickly. They spend a fraction of a second on each result, taking a longer look if something is worth it. With this in mind, it’s important to optimise your titles and photos to capture attention. Buyers are also interested in words related to the terms they type in Amazon’s search engine. For example, a buyer searching for a MacBook will likely notice words like ‘Air,’ ‘Pro’ or ‘Retina’.

Amazon Search Blog 1

How Amazon's Search Engine Works

AmazonSearchBlog2When a buyer types a query into Amazon’s search box, the search engine looks up those words in its index, finds all the results and then ranks them accordingly. This ranking system uses several factors to identify which results are relevant. When doing this, Amazon is assessing the quality of the product and listing, the degree of text match and customer feedback.

It’s a sophisticated engine that excludes common words like ‘the,’ and it also learns common misspellings automatically — and provides spelling corrections. It’s not case-sensitive, so it ignores uppercase and lowercase letters. It also ignores punctuation, so there’s no need to list different variations in a listing (‘t-shirt,’ ‘tshirt’ and ‘t shirt’).

AmazonSearchBlog3

How to Improve Titles

Because buyers spend only a fraction of time on any result, you should keep your product titles short. A minimal amount of information is needed to identify the item. A title of 60 or fewer characters is highly recommended, but the shorter the better — especially as many shoppers now search from mobiles. It’s harder to read long titles, so buyers may just skip them. Plus, they take up more space, showing fewer results.

Ask yourself which words are likely to be relevant when buyers scan results. Once you’ve identified these, you can assess what information you may not need to include. Titles shouldn’t include full item descriptions. You can use the descriptions and bullet point areas in your listing to provide this additional information.

Screen Shot 2014-09-29 at 15.54.01

These examples of good titles are effective because they’re short, rich with keywords and relevant to what consumers tend to search. The examples of poorly constructed titles are less successful because the titles are effectively product descriptions. Titles shouldn’t include details such as compatible model numbers, testimonials, packaging details or other options.

AmazonSearchBlog5

Amazon provides recommendations to sellers about titles within category-specific style guides. It’s a good idea to look this up for your category to see learn the recommended format. In general you’ll see Amazon suggesting the following: 

[Brand] + [Series] + [Model] + [Product] 

At ChannelAdvisor, we strongly recommend doing an audit of your listings to make sure they’re optimised. To get started, review titles, starting with the longest ones, and identify where you can condense them without losing impact. If you are following a title format like the one suggested by Amazon above, you can even utilise ChannelAdvisor’s Data Transformation Engine to build titles in the format shown by using Business Rules.

Let’s take a look at this example:

Current Title (146 characters):

Pixnor USB AC Power Adapter Home and Travel Charger with US/EU/UK/AU Plugs for Apple IPAD / IPHONE / SAMSUNG / BlackBerry / HTC / Nokia / Motorola

Assess which words in your title are the most important, then move these to the front so it’s easier for your buyer to spot them. In this example, ‘AC Charger’ and ‘USB’ are the critical points to highlight. Information such as the fact that the item is universal and that it can be used when buyers ‘travel’ or stay ‘home’ are not as important. Shoppers are less likely to search for those points, so remove these from your title and include them in your product description instead. You should also clean up capitalisation to make your listing look more professional. Here’s our suggested update: 

Optimised Title (53 characters):

Pixnor International USB Power Charger for Smartphones and Tablets

How to Improve Keywords

Keywords are one of the primary methods buyers use to find products on Amazon. Your keywords should include product attributes — such as model numbers, materials or specs — and alternative ways of describing the product.

Amazon’s algorithm uses a ‘match score’ to promote the most relevant search results, so relevancy is key. Your match score will be better if the words you use are in the same sequence as the buyer’s query. We also recommend listing different phrases as different entries, instead of together on the same line.

Keywords should not include:

  • Information that is already present in other fields, such as your title or brand
  • Subjective claims about the quality of the item (‘best’)
  • Statements that are only temporarily true (‘new,’ ‘on sale’, ‘available now’)
  • Information that is true of most or all items in the category (‘book’)
  • Common misspellings of the product name
  • Variants of spacing, punctuation, capitalisation and plurals (both ‘80GB’ and ‘80 GB’, ‘computer’ and ‘computers’, etc.). 

Keywords should never include information that misrepresents the product, such as a competing brand or a different author. Doing so violates Amazon’s policies.

Summing It Up

When building or reviewing your keywords, remember that the aim of the game is to have keywords that help buyers by providing additional information that wouldn’t otherwise be searchable. Keep that in mind as you review yours.

Screen Shot 2014-09-29 at 16.01.10When selling on Amazon, it’s in your interest to spend some time focusing on your data to attract more customers. If you’re interested in learning more about the latest from Amazon, join our ‘What’s New with Amazon’ webinar on 30 September at 7 p.m. BST/ 2 p.m. EDT. For more information and to register, please go here: bit.ly/ECOMAmazonWebinarSeptember

Blog post by David Le Roux, account manager, ChannelAdvisor EMEA

September 29, 2014

Navigating E-Commerce Channels: Are You Prepared for the Holiday Season?

Retail Blog Header

With the assistance of Redshift Research, we conducted the Multichannel E-Commerce Study with more than 200 respondents — US and UK retailers that already sell products online. Respondents were e-commerce decision makers at companies that averaged $3-5 million in revenue in 2013. The survey was intended to pinpoint e-commerce trends, as well as help identify opportunities and challenges in the online market.

 

’Tis the season…for retailers to maximize their online holiday sales, that is. Retailers plan for the holiday shopping season all year long, and now, it’s just around the corner. In our Multichannel E-Commerce Study, we asked retailers to answer a number of questions related to the holidays. This portion of this study was intended to gather retailers’ expectations and associated strategies they’re using to maximize sales for the 2014 holiday season.

Thanksgiving falls during the last week of November again this year, and Cyber Monday will be in December. With a compressed holiday season on the horizon, retailers are rolling out their holiday promotions early, and focusing on customer service features to help increase sales.

Retailers Expect a Successful Holiday Season

E-commerce holiday sales are outperforming those of brick-and-mortar stores, and retailers expect this trend to continue in 2014. Despite the shortened shopping season, 86% of retailers expect to increase their year-over-year online holiday sales in 2014. Over a quarter of retailers (27%) expect an 11-15% increase in holiday sales this year, and 46% expect an increase between 1-10%. Not a single retailer surveyed reported that they expect their online holiday sales to decrease this year.

Holiday Promotions Are Starting Early

As we expected, retailers are addressing the challenge of a shortened holiday shopping season by starting their holiday promotions early. Creating a sense of urgency will help encourage consumers to make their holiday purchases sooner. Roughly half (42%) of retailers surveyed planned to start their holiday push this month, and 20% planned to begin their holiday push in August or earlier. Almost a quarter (23%) of retailers surveyed planned to start their holiday marketing promotions earlier this year compared with previous years.  

Customer Service Is Important for Driving Sales

Retailers seeking a jolly holiday season need to find ways to create a pleasant shopping experience for consumers and offer exceptional customer service. Almost half (41%) of retailers surveyed plan to offer free shipping and returns as a strategy to increase holiday sales, and free shipping was named the most successful service feature for generating a higher level of customer satisfaction. One-third of retailers plan to stock higher product quantities to increase holiday sales this year, and 27% plan to offer discounts for select products. Most retailers (67%) said that offering these customer service features has resulted in increased sales, followed by increased online traffic (60%) and increased repeat shoppers (42%).  

Retailers Are Embracing Trends, Including Digital Marketing

The e-commerce landscape is constantly evolving, making it critical for retailers to evaluate and modify their holiday strategies each year. Digital marketing is mandatory in the e-commerce world, especially during the holidays. More than three-fourths (77%) of retailers surveyed plan to change their holiday strategy in 2014. More than a quarter (27%) plan to increase their overall digital marketing and advertising budgets to boost holiday sales this year, and a quarter of retailers plan to launch new digital marketing initiatives.

What approaches are you taking to increase your holiday sales in 2014? Are you evaluating customer service options with the consumer in mind? Have you considered recent trends? In the weeks leading up to the Cyber Five (the five days between Thanksgiving and Cyber Monday), we’ll be sharing tips to help get your listings in shape for this exciting season. Stay tuned!   


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For a visual recap of our Multichannel E-Commerce Study results, check out our infographic.  

September 26, 2014

Amazon + Twitter = Christmas Wishlist?

Amazon-twitterWhat happened to writing a letter by hand and sending it (physical stamp and all) to the North Pole? Santa’s mailbox has gotten quite slim, now that social media is playing a bigger role in crafting Christmas wishlists. But it does make sense: Social media makes sharing and inspiration-gathering so effortless. Pinterest boards and Wanelo collections are popular homes for wishlists, and now Amazon and Twitter have jumped on board, according to recent news from Amazon.

Amazon and Twitter have launched a hashtag-triggered shopping tool, dubbed #AmazonWishList. When Twitter users see a tweet containing an Amazon product link, they can reply to the tweet with the associated hashtag. In doing so, the product in the tweet will be placed on the user’s Amazon Wish List. Once the item has been successfully added, users will be notified with a reply tweet from @MyAmazon, as well as a confirmation email. To enable the feature, users have to link their Amazon and Twitter accounts.

"Twitter offers Amazon customers a great environment for inspiration and discovery," said John Yurcisin, director of social at Amazon, in the press release. This isn’t Amazon or Twitter’s first attempt at social commerce. In May, Amazon released its #AmazonCart feature and just earlier this month, Twitter announced they will be testing the e-commerce waters with its “Buy now” button.

It will be interesting to see how Amazon’s holiday social push pans out. We’ll be keeping a close eye on it over the coming months.

 

Blog post by Jordan Nowlin, social media & blog manager, ChannelAdvisor



Webinar

Wondering what's new with Amazon and what it means for you? Join us and Internet Retailer next week for a news recap webinar. Sign up now!

 

September 25, 2014

Webinar: What’s New with Amazon? (And What Does It Mean for You?)

Tuesday, September 30 at 2 p.m. EDT/11 a.m. PDT

Amazon
When you think of online shopping, Amazon is probably one of the first websites that come to mind. The e-commerce giant has revolutionized the online shopping experience, paving the way for other marketplaces.

Amazon has even expanded its product line, recently announcing the Fire Phone, which has some interesting connections to e-commerce. Just this past year, Amazon issued over 100 press releases revealing company acquisitions, financial results and new product categories. How do you keep up with all of Amazon’s news? As a retailer, which of these developments directly affect you?

ChannelAdvisor and Internet Retailer to the rescue! In next week’s webinar, ChannelAdvisor Amazon experts join Internet Retailer to recap the latest and greatest Amazon updates that are most relevant to retailers. You’ll leave this webinar knowing:

  • The new opportunities that are available to retailers

  • Recent rules and regulations retailers should be aware of

  • How to best position your business for changes in the future

Don’t miss out! Sign up here to claim your spot! 

Update on Amazon's Fulfillment Center (FC) Network

Every year as we head into the fourth quarter holiday selling season, we roll up our sleeves and update our database of Amazon Fulfillment Centers (FCs).  The job has gotten easier over the years as Amazon now announces most of the new FCs with local press, or talks about them on earnings calls.

In this post there are five Amazon FC related resources for you:

  1. Background and summary of Amazon's FC buildout
  2. North American interactive map 
  3. European interactive map 
  4. Asia Interactive map 
  5. List of newly identified Amazon FCs in the last year

Background on Amazon FCs and sortation centers

Back in ~2009, I noticed that I was receiving many of my Prime purchases on the next day even though I didn't pay for next day.  I explored and discovered that previously most of my packages came from an address in Hebron, KY and the next day packages were coming from an address much closer (we are in Raleigh, NC) in Columbia, SC.  I get to Columbia a fair amount (Go Gamecocks!) and drove by the address shortly after getting the package.  I was greeted by a giant warehouse with no branding or signage at all.  Hmmm.  We started researching and realized that it is quite hard to find detailed information about Amazon's fulfillment center network (especially from Amazon). Since then there have been several resources that have come out and Amazon has become much more open about sharing FC information.

That being said, we like to update our database annually and report on what we're seeing.  Our last post was here if you want to check it out to compare year/year trends.

Naming, purpose, etc.

Amazon's FC network uses a naming system that is usually a three letter code (usually the closest airport) and then a number. For example, in Phoenix, AZ you have:

  • PHX1 - The first Phoenix FC, has been retired (it was smaller footprint)
  • PHX2 -  Dame as above
  • PHX3 - A 1m sq-ft FC that replaced PHX1/2
  • PHX4 - Not exactly sure what happened here, sometimes Amazon gets temp/leased space and gives it a disignator and then moves on
  • PHX5 - 1.4m sq-ft (that's big) facility in Goodyear AZ.  You can see it here to get an idea of what we are talking about
  • PHX6 - 1.2m sq-ft
  • PHX7 - Newest FC in Phoenix - 1.2m sq-ft, came online in 2011

 In addition, sometimes FCs have specific purposes.  For example, some FCs are specialized for FBA receiving, large item storage and fulfillment (think golf bags and kayaks), small media items (books, dvds, etc.) and consumer returns.

Introducing Sortation

Last year after the UPS delivery situation, Amazon started opening a new type of building for their FCs called sortation centers.  Prior to sortation centers (SCs), the way a delivery worked is:

  1. Orders came in and routed to FC that was a) close and b) had the product in stock.
  2. Orders are all placed on a UPS truck - destinations could be anywhere in the US
  3. UPS takes them to local airport, sends them to sorting facility
  4. Packages are routed appropriately, many go through the big hub (Louisville, KY) (good article here if you are a logistics geek)
  5. Packages delivered to consumers.

In their Q2 conference call, Amazon casually said they are building/have built 15 sortation centers.  Once a sortation center is in the mix, here's the process:

  1. Orders came in and routed to FC that was a) close and b) had the product in stock.
  2. Orders are sorted at a sortation center (usually adjacent and/or connected via conveyor belt to a FC) - SCs are 300k sq-ft vs. 1.2-1.4m for FCs, so a much smaller facility, largely conveyor belt and automation driven.
  3. Orders are placed into zip code bands (e.g. NYC-downtown, midtown, uptown, etc.).
  4. Orders are injected into different carriers (USPS if sunday delivery, UPS if not).
  5. UPS takes them to local airport, bypasses  sorting facility.
  6. Packages are routed appropriately, many go through the big hub (Louisville, KY) (Good article here if you are a logistics geek).
  7. Packages delivered to consumers.

So SCs move a big piece of the logistics value chain INTO Amazon and away from the third-party logistics company.  This has allowed Amazon to utilize USPS for Sunday delivery. (Presumably because USPS may not be able to sort and deliver fast enough for Amazon's needs). 

If you want to learn more about sortation centers, here are three resources we have found helpful:

  • Insights into the first SC opened in Kent, WA and here.
  • WSJ article here.
  • Logistics industry article here

Summary

  • North America - 75 existing, 15 in process = 90 FCs 63m sq-ft
  • Europe - 27 existing, 3 in process = 30 FCs
  • Asia - 33+2=35
  • Total - 155 FCs - ~100m sq-ft

 

Logistiscs: Amazon vs. other e-commerce/retialers 

Whenever I talk about Amazon with retailers or at conferences, I always cover the FC network because I have found most people in our industry don't realize how big it is.  Usually the first question I get after showing the maps is 'how does this compare to...X?'  The top X in there is Walmart, sometimes I get Target, UPS, Fedex, etc.  Let's look at Walmart.  

Walmart has ~150 distribution centers in the USA, so has a much bigger logistics footprint than Amazon, just if you compared Walmart US to Amazon global.  However, this is an apples-to-oranges comparison because a Walmart DC essentially is part of a store logistics network - trucks/pallets of products come in from manufacturers, then are sorted out to stores (back out as trucks/pallets).  This is sometimes called cross-dock and is more of a B2B function vs. online fulfillment which is Trucks/Pallets in and onesy-twosy out, or B2C.

Walmart doesn't disclose how many B2C centers they have, but what they have said:

  • In 2013, they built 2 'large scale' centers dedicated to online order fulfillment (Penn and TX).
  • There is a 'ship from store' initiative that looks to turn all 4,200 stores effectively into their own FCs. Walmart has said 20% of items are coming from stores now vs. FCs.
  • In June 2014, they announced a 1.4m FC in Indiana.
  • Walmart has also said they have 'online fulfillment' areas inside some of their DCs.

So it's hard to get apples to apples here, but if we assume:

  • 5 dedicated online FCs
  • 10% of DCs acting as FCs = 15

That's a total of 20 FC's equivlent to an Amazon FC in the US.  Using that math, Amazon has 90 vs. 15 or 6X (also Amazon's FCs are generally bigger so it would be a bigger difference).

It's impossible to factor in ship-from-store. One of the challenges that you find with BOPIS (Buy-Online-Pickup-In-St0re) is the SKU footprint.  The average Walmart Super Center has 150,000 SKUs (source: walmart's corp site). Walmart.com has 6m SKUs (source:2014 IR500).  The math on that is 2.5% of the online SKUs are available in a store.  If you adjust for the fact that most stores have the top selling SKUs, then you get to maybe 20-30% of the products that can be shipped from store (or picked up).  Therefore, you can't really compare the store inventory to the FC inventory.

What does Amazon's FC growth mean for the future?

The biggest areas of growth in the Amazon FC count from 2013/2014 are:

  • State based (FL, CA, GA, NY/NJ) expansion - Amazon has been making deals with states for online tax collection.
  • East Europe - Amazon is building out several FCs in Poland and there are rumors of them launching in the Netherlands.
  • Sortation centers - As mentioned there are plans to build 15 in the US for Holiday 14.
  • India - there is one FC operational and we have found reports of 4 more being built which signals a pretty significant buildout.

Amazon is already substantially ahead of any other pure-play retailer and brick and mortar retailer when it comes to a consumer-oriented FC network.  With Amazon's growth into the sortation process in the US, they clearly are trying to further 'own' the fulfillment process.  Amazon Fresh (LA, SFO, Seattle) - includes product deliveries from Amazon branded trucks.  We're receiving more and more reports of Amazon owned and operated delivering products in Prime-dense zip codes.  Therefore reading the tea leaves, some possible next steps:

  • What if Prime offers next day shipping vs. 2-day?
  • What if Amazon increased the number of metros that have same-day shipping?
  • Amazon has expanded the USPS Sunday delivery program, which indicates they are pleased with the results, so expansion of that to more metros is possible.
  • Finally, logistics experts believe its only a matter of time before Amazon has a large selection of trucks, effectively placing them in competition with UPS, FedEx and USPS.

We'll be keeping an eye on all of these trends and keep you updated.

North American interactive map

On these interactive maps:

  • Green markers are operational FCs with their FC designators.
  • Wrenches are FCs that are under construction.
  • Blue stars  are sortation centers.
  • Green clovers - kidding!

You should be able to click on each FC to see it's details such as size and physical address.  If you switch into satellite mode, you can even drill down to the individual buildings where we have included the complete address.

 

European and Asia interactive map

The same legend for the US map applies here.

 

This blog post was written by Scot Wingo, CEO, ChannelAdvisor.

 

 

September 19, 2014

What You Need to Know About the Chinese Consumer: Understanding Alipay

Alipay
The Alibaba Group is generating quite the buzz recently. The company lifted brows around the world as it embarked on its road show journey. Its IPO, now priced at $68 per share and raising just under $21.8 billion, is making headlines as the largest IPO in the history of the US stock market. Alibaba’s unique business model is catching global attention by offering a huge variety of online services, from marketplaces to music streaming to payment systems.

Last week we discussed some of Alibaba’s major marketplaces. Now, let’s investigate its robust payment system accompanying the transactions.

What Is Alipay?

Alipay is Alibaba’s popular mobile payment platform in China — an alternative to a credit card. In response to increased foreign transactions, Alibaba created Alipay in 2004 to build consumer trust with foreign sellers on its e-commerce platform. The secured payment system requires no transaction fees and is highly trusted by the Chinese people.

The payment escrow service accounts for roughly half of all online payment transactions in China. Late last year, the company reported nearly 300 million users and 2.8 million transactions. Every day through November and December 2013, an average of 12 million payments were made via the Alipay mobile app.

Why Alipay?

Culture greatly influences shopping patterns. In China, consumers don’t like to spend money they don’t have. Even though credit card use is on the rise, using credit for foreign transactions isn’t ideal.

Alipay offers a trusted alternative to credit card payments. It’s an escrow service, meaning that the system will hold a buyer’s payment while the order is being processed. Payment is only released to the seller if the buyer confirms that the order was received in satisfactory condition.

AliPay Also Does What?!

Think PayPal on steroids. Providing effortless e-commerce payments is just a portion of Alipay’s service offerings. The payment platform is essentially an all-in-one banking tool. In addition to purchasing items online, users can also use Alipay to purchase items in brick-and-mortar stores, pay bills, send money to friends, invest in stocks and more. This can all be done either on a desktop browser or through Alipay’s Wallet app.

Forbes has accurately described Alipay as a financial Swiss Army knife for your phone.


Understanding-cn-consumer-LP
Eager to learn more about the e-commerce opportunities in China? Download the free eBook Understanding the Chinese Consumer.

 

 

September 18, 2014

Navigating E-Commerce Channels: Are All Hands On Deck for Digital Marketing?

Retail Blog Header

With the assistance of Redshift Research, we conducted the Multichannel E-Commerce Study with more than 200 respondents — US and UK retailers that already sell products online. Respondents were e-commerce decision makers at companies that averaged $3-5 million in revenue in 2013. The survey was intended to pinpoint e-commerce trends, as well as help identify opportunities and challenges in the online market.

 

Digital marketing is a common topic on our blog. We can talk all day about what it is, the importance of it and best practices to consider. But let’s take a different perspective this time. Understanding how your peers, your competition and other industry players are marketing their products online could allow you to better understand how digital marketing affects your online business.

Digital Marketing

As technology has advanced, so has the world of advertising. Digital marketing is here, it’s happening and it’s proving very successful for retailers.  

Of the retailers surveyed in our Multichannel E-Commerce Study, 64% are using digital marketing in their overall advertising plan. The top digital marketing channel among the surveyed retailers is product listing ads (PLAs). The visual nature of PLAs make them a great way to get products in front of consumers in an engaging format.  

The top three factors holding retailers back from increasing their digital marketing spend are budget (67%), confusion about the digital marketing landscape and the options it holds (36%) and uncertainty about the ROI at hand (32%). Digital marketing is an investment that requires constant learning. But if managed correctly, it can be a powerful tool to increase brand awareness and revenue.

Mobile

Mobile adoption is on the rise for retailers' consumers. It’s a trend that’s becoming increasingly more important to the ebb and flow of business. In fact, 67% of retailers reported more that 21% of their current web traffic comes from mobile devices. Even 86% of the retailers surveyed believe that web traffic from mobile devices will increase over the next two years.

Learning to adapt to trends — especially the trends in consumer behavior — is key to success. Retailers are preparing for the mobile shift as 75% of those surveyed expect to increase mobile advertising over the next two years. Currently, 30% of retailers are allocating 11-15% of their advertising budget to mobile marketing. However, many plan on eventually increasing their mobile budget “significantly.” It’s refreshing to know that retailers understand the positive impact mobile can have on their businesses.

Social Media

Social media provides an opportunity to better connect with consumers and boost brand loyalty. Retailers are finding social media to be a vital part in relationship marketing. In fact, surveyed retailers' top three goals for social media are increasing brand awareness (70%), reaching a new generation of customers (41%) and driving conversions (40%). It’s a channel that allows retailers to talk with customers, not at them.

Out of the multitude of social networks, surveyed retailers named Facebook as one of the more popular social platforms used to create sales conversions. Drive traffic back to your webstore by posting about upcoming sales or coupon codes. If you have the capacity for a social budget, use Facebook’s robust advertising service to get specific posts in front of a targeted audience.  Nearly a third (31%) of surveyed US retailers are already using social media to advertise promotions and/or deals.

 

Retailers realize the importance of digital marketing, and it’s becoming an increasingly essential element in their overall marketing strategies. Tune back next week for an overview of retailers’ expectations for the 2014 holiday season.


  Navigating E-Com-Channels-Infographic-LP-img
For a visual recap of our Multichannel E-Commerce Study results, check out our infographic.

September 16, 2014

Ask a Retailer - Premium Australia Foods | Part 2: China’s E-Commerce Landscape – Insider Tips for Success

With more consumers, competition and channels, e-commerce is only growing more complicated and overwhelming. Sometimes, all you want is a frank conversation with someone in a similar position to ask them for advice.

Welcome to that conversation.

Our Ask a Retailer blog series shares insights from e-commerce retailers across various verticals.

This post is the second instalment featuring Christopher Morley from Premium Australia Foods, a successful export e-commerce company that helps Australian food retailers and manufacturers sell internationally. Armed with more than 10 years in the industry, Christopher brings a unique perspective to the intricacies of cross-border trade and the Chinese online market.    

Missed part one of our chat with Christopher? Catch up here

Chris Morley

What do Australian retailers need to know about Chinese consumers (shopping behaviours, psychology, etc.)?

The Chinese consumer shops differently to Australians when it comes to food. Typically they frequent brick-and-mortar supermarkets less and have lower cart value. This is because of smaller family sizes and more reliance on physical market stalls. Online food sales are taking off at a rate far greater than what we see in Australia. Typically, wealthier consumers don’t trust Chinese-made food and prefer food made overseas. Often this food can only be bought online, so more and more consumers are visiting the likes of Tmall to purchase their groceries.

The Chinese consumer is, in our experience, keen to try new things. However, because of the many food scares that have taken place over the past few years, they are also wary of counterfeit goods. Items that are seen to be similar to what we enjoy here in Australia and are packaged as they would be here, are seen as trustworthy and a status symbol.

Many Chinese see foreign-made goods as luxury items, particularly food. When presenting items in China, it’s important to focus on what makes the product special.

Something I’ve seen in Australian e-commerce, when looking at the distance between us and US e-commerce, is that the online communities deemed to be behind in terms of maturity often learn from the mistakes of the leader. Therefore, I think many Australian online sellers have looked at the US market and learned from mistakes made there and avoided them. I see this in China as well. While the Chinese market is behind in terms of maturity, they have learned quickly and have the world’s online sellers to learn from. For instance, email isn’t as popular in China – live chat and SMS are far more popular for buyer-seller communication. These are far more rapid and personal forms of engagement.

According to Forrester Research, more than 400 million Chinese consumers now have smartphones.1 Does the rise of m-commerce affect your strategy?

Mobile image
Mobile commerce is booming. The mobile phone is a permanent accessory of every Chinese citizen, and they’re very adept at buying from their phone, more so than Australians. While their e-commerce maturity may be behind Australians in terms of acceptance and infiltration, their m-commerce is leading the way globally. It’s almost as if the Chinese consumer skipped a stage of online buying, progressing quickly to the comfort and acceptance of m-commerce.

Checking the responsive design of all online aspects is vital. To not have a mobile-friendly site in China would be ridiculous, but the phone can also be used for scanning QR codes and taking photos/movies for social media. Both of these link back to our overall strategy.

 

What about social media?

Social media china 2With Facebook, Twitter and YouTube all banned in mainland China, we have a presence on WeChat, Weibo and Yukbo – the Chinese equivalents of the aforementioned social sites. These sites have significantly high user engagement and are growing at rapid rates.

One aspect of social media that’s been shocking to us is the influence of KOLs – key opinion leaders – essentially celebrities in China who mention products on their Weibo/WeChat accounts. These mentions heavily influence consumer purchasing. In Western media, celebrities don’t have anywhere near the level of influence they do in China.

Many of the same Western concepts about social media engagement ring true, such as trying to make the individual feel special and involved in something. A KOL is an absolute must for any business wanting to grow market share in China.

Does Premium Australia Foods have any strategies for Chinese holidays, such as Singles Day, Double 12 or Autumn Moon Festival?

We absolutely do have strategies for the Chinese holidays – especially the upcoming Singles Day, 11/11 – the biggest e-commerce sales day in the world. We’re also looking to bring many of our Australian holidays to China to help grow promotion opportunities, such as Australia Day, Christmas and even the Queen’s birthday feature in our marketing strategy.

By combining the Chinese and Australian calendars, we actually create new reasons for customers to come. I hope this will be an advantage for us in the next year or so.

Do you have any e-commerce best practices that you think might benefit other Australian retailers looking to sell internationally?

The use of m-commerce in China is, in my opinion, far superior than in Australia, in terms of consumer acceptance and business resource allocation. I think we can learn a fair bit from that, as it will be the future of buying. In Australia, there was significant debate about online versus offline and the use of phones in stores as a downside for Australian businesses. In China, it’s the complete opposite. Because of the emergence of online and the use of mobile phones, the trend of online to offline (020) commerce (attracting consumers online and then directing them to a physical store,  has emerged) – a more efficient and convenient retail model. This, too, is something we can learn from.

Christopher, we appreciate your sharing this insider glimpse of Premium Australia Foods and your insights into the Chinese market. We wish you and your company continued e-commerce success.

Blog post by Shani Flynn, Marketing Copywriter, APAC, ChannelAdvisor


[1] http://www.forrester.com/China+Online+Retail+Forecast+2013+To+2018/fulltext/-/E-RES109441


Chinese consumer ebook cover

 

Want to learn more about China's shopping patterns? Check out our free eBook Understanding the Chinese Consumer.

September 15, 2014

2014 User Conference Follow-Up: Optimizing for Amazon

This afternoon, at our 2014 User Conference East, product manager Gina DeFrank and launch manager Lisa Learst offered expert tips for optimizing your listings on Amazon.

DeFrank started off the session by sharing a quote by advertising legend Morris Hite, “Advertising moves people towards goods; Merchandising moves goods toward people.”

Why spend time optimizing your online listings? It allows buyers to discover, evaluate and purchase your products. Amazon’s Listing Optimization Framework looks at the data you’re providing in three areas: core, categorization and product-specific.

Core Data

Core data involves product title, image, brand and description. It’s critical to have core data listed because it helps search results become higher in relevancy. Search is the primary way customers are going to find products on Amazon. Quality core data also allows customers to evaluate your products against similar products.

Images provide the closest opportunity for online shoppers to touch your product. Amazon prefers high-resolution images on a white background, multiple angles and zoom enabled. Images 1,000 pixels or larger in either height or width will activate the zoom ability. According to an Amazon study, listings with zoom-enabled photos enhance sales.

When your product doesn’t have the right title or image, Amazon will suppress your product. In Q2, ChannelAdvisor released an Insights Page allowing you to see your products that are suppressed within the Amazon system. In Q3, we decided to alert you to this again by also including these suppressed products in your Error List. Make it a priority to fix these items because those products are negatively impacting discoverability and product sales!

Categorization

Make sure you are properly placing your products in the Amazon catalog so buyers can easily find them. Products are classified correctly in the Amazon catalog with the use of the Item Type Keyword. The products show up when the buyer browses for a specific item..

Browse Structure best practices include:

  • Review updates each quarter
  • Properly classify products with an Item Type Keyword (ITK) or Browse Node ID (outside the US)
  • Use the most specific and lowest level node
  • Notify Amazon if products aren’t classified correctly

Product-Specific

Size, color, style, occasion, height, screen size and country of origin are all examples of product-specific information associated with your product. By including this information in your listings, it will help your items appear higher in search results due to increased relevancy.

 

Don’t think this session would end without a mention of Amazon’s fulfillment option. DeFrank and Learst concluded the session by highlighting the benefits of using Fulfillment by Amazon (FBA):

  • Extends reach to Prime and Super Saver members

  • FBA products are eligible to win the “Buy Box” at a higher price with free shipping

  • Easier access to international customers

  • Potential access to holiday deals

  • Multi-channel FBA

FBA can be easily managed with ChannelAdvisor’s platform. Once you initially ship your products to Amazon, ChannelAdvisor detects your quantity and looks for updates each hour. We list your product as “FBA” until quantity runs out. If FBA goes to zero, we flip you back to Merchant fulfilled status, if quantity exists.

 

Additional questions or didn’t get a chance to talk with one of our experts today? Email info@channeladvisor.com. We hope everyone enjoyed today’s event! Be sure to tag your social posts and/or Instagram pics with our event hashtag #ECOMuser.


Your Essential Guide to Success on Amazon
Can't get enough Amazon tips? Download this free read for additonal Amazon success strategies: Your Essential Guide to Success on Amazon.

September 12, 2014

What You Need to Know About the Chinese Consumer: Understanding Taobao

Think purchasing via marketplaces like Amazon and eBay is common in the US? It is. But marketplaces are even more popular in China. There, 90% of e-commerce transactions are completed via marketplaces — a significant difference from most countries.1 To put that into perspective, marketplace sales in the US make up roughly one-third of the total e-commerce pie.2

US e-commerce

                                    US E-Commerce Breakdown

China e-commerce


 

 

 

 

                                   

                                                                                                China E-Commerce Breakdown

So what does China have that makes online marketplaces so appealing? Alibaba.

The Alibaba Group is an e-commerce behemoth. The company is composed of dozens of business entities that, together, dominate China’s e-commerce space. Its primary marketplaces include Taobao, Tmall and Tmall Global. Estimates put Tmall's market share at approximately 50% of business-to-consumer (B2C) e-commerce in China, while estimates of Taobao's share of the consumer-to-consumer (C2C) e-commerce market are often upward of 90%.  

Chinese Marketplaces

Below, we break down a few of Alibaba’s marketplaces.

Taobao

With its B2B portal Alibaba.com up and running, Alibaba decided to branch out to a more consumer-focused realm, launching Taobao in 2003. This was Alibaba’s first attempt at a large marketplace — and, boy, did it succeed. As of June 2014, Taobao is home to 8.5 million active sellers.

Taobao is often thought of as China’s version of eBay — without the bidding concept. It’s primarily a C2C site, an online hub that Chinese merchants and consumers flock to to buy and sell goods. The marketplace is made up of many independent stores that list their products at fixed prices, much like eBay’s “Buy It Now” feature.

Products in China are often more expensive in brick-and-mortar stores, and the retail selection is slim — another reason Taobao’s popularity has soared with consumers. With millions of sellers, Taobao offers a wider array of products, compared to physical stores in China. Plus, Taobao displays the products via a robust search feature that lists price options for the same product side by side.

And like eBay, Taobao has its fair selection of quirky goods from independent sellers. We’ll let you browse the luffa water and live scorpions on your own time.

Taobao Mall (Tmall)

Taobao's success led to a surge of counterfeit products, so Alibaba launched a B2C-focused spinoff marketplace for authorized sellers with legitimate products. Taobao Mall, mainly referred to as Tmall, is a B2C marketplace founded in 2010. It currently houses 50,000 storefronts and 70,000 brands.

In an effort to build consumer trust, Tmall permits only verified stores to sell via the marketplace. Alibaba also charges a commission for third-party retailers to sell products on Tmall.

Tmall Global

Tmall Global, the international division of Tmall, allows foreign brands to take part in the massively growing Chinese e-commerce landscape without having an actual presence in China.

Access to the world’s fastest growing e-commerce market offers distinct advantages for international sellers trying to reach Chinese consumers. Likewise, Chinese consumers are able to purchase high-quality products from outside China. Logistics are handled by international Tmall cross-border drop-shipping specialists, allowing delivery to Chinese consumers within five to eight business days.

Global brands such as the National Football League, Apple, Nike and Gap have launched on Tmall. A storefront on Tmall allows foreign brands to easily tap into China’s quickly growing population of online shoppers.

As the e-commerce hype continues to spread from China to the rest of the world, it’s important that Western retailers are able to take advantage of the growing market. Tmall Global helps dissolve yet another international barrier and opens up opportunities for both e-commerce consumers and merchants.

Tune back next week as we dive into Alibaba-run payment methods: AliPay and AliExpress.

 

McKinsey & Co.

Based on public reports from eBay, Amazon, Google, Shopping.com and ChannelAdvisor estimates based on our transactional data.


Understanding-cn-consumer-LP

 

Want to learn about additional online marketplaces in China? Check out our free eBook Understanding the Chinese Consumer.