August 28, 2014

Navigating E-Commerce Channels: Is Your Online Business Sinking?

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The benefits of online shopping are limitless: No crowds, a streamlined experience and not being limited by location or time are a few of the many. This digital era has turned e-commerce into a multibillion dollar industry, completely transforming consumers’ path to purchase. Why wouldn’t retailers want to sail on this ship?

Well, we set out to steer that ship in your direction. 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 to $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. It’s important to know what approaches your competitors and peers are taking so you can ensure that you’re following the best (and most profitable!) route through the e-commerce waters.

Over the next few weeks, we’ll unveil the following findings right here on our blog. You’ll find out answers to questions such as:

  • Are you missing the boat on marketplaces?

    • Where are most products currently being sold?

    • What are the most successful online customer-service features?

    • What percent of revenue is derived from online marketplaces?

    • What are retailers’ greatest challenges when selling on marketplaces?

  • Are you exploring international waters?

    • What percentage of sales come from international marketplaces?

    • Which geographic regions are best for selling products internationally?

    • Which global marketplaces provide the best opportunities for selling internationally?

    • What hurdles are keeping retailers from selling in other regions?

  • Are all hands on deck for digital marketing?

    • How are current advertising budgets allocated?

    • How do mobile devices affect web traffic?

    • Which social media platforms create the most conversions?

    • What factors prevent retailers from making a greater investment in digital marketing?

  • Are you prepared for 2014’s holiday hurricane?

    • When does the holiday push begin?

    • What are some strategies for increasing online holiday sales?

    • What do retailers expect this season?

This sounds like a lot, and don’t get us wrong…it is! We’re fortunate to have gathered robust data from a variety of companies, young and old. Don’t worry, though — we’ll be delivering all results in a digestible format over the coming weeks. Before you know it, you’ll be refining your strategies for smooth sailing through the choppy e-commerce sea.


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For a sneak peek of some of the Multichannel E-Commerce Study results, check out the overview Navigating E-Commerce Channels: Is Your Online Business Sinking?

August 22, 2014

What You Need to Know About the Chinese Consumer

China’s e-commerce market has been pumping iron over the past few years. Advanced technology, greater access to the internet and the increased popularity of mobile phones have all contributed to a lucrative online-shopping market.

Just last year, China surpassed the US as the world’s largest e-commerce market, and there are no signs that it will change directions anytime soon. In fact, by 2020 it’s predicted that this online-shopping Sasquatch will have more e-commerce volume than the US, the UK, Japan, France and Germany combined. It’s e-commerce on steroids!

So, what’s a Western retailer to do? Will you experience success in the Chinese market? Before jumping in blindly, take some time to be a bystander. Observation, education and research will lower your barrier of entry into an international marketplace.

As a retailer, it’s important to grasp your buyer’s mindset. You might be surprised to realize just how much culture affects consumer behavior. Over the coming weeks, we’ll use our blog to journey through China’s e-commerce market in an attempt to better understand the Chinese consumer.

  • The channels and devices Chinese consumers are using

  • The reasons for China’s e-commerce evolution

  • The places Chinese consumers are shopping

  • The payment methods Chinese consumers are using

  • The holidays that are making a huge impact

China’s e-commerce market holds much potential for Western retailers, but success won’t come if marketing efforts don’t align with Chinese consumers’ purchasing habits. Knowledge is power. Tune back in next week to begin the journey.


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

 

August 13, 2014

One-Time Only Webinar: How to Accelerate Sales with Amazon Automotive & Powersports

Tuesday, August 19, 2014 at 2 p.m. EDT/11 a.m. PDT

Rev up your automotive sales with this exclusive joint webinar with Amazon. Recordings of the webinar will not be available for viewing after, nor will the slides be available, so this is your one chance — don’t miss out! Amazon Automotive

As an automotive retailer, you know it can be an increasing challenge to move inventory, especially with an abundance of market competition. Not to mention, auto retailers also have the added burdens of narrow margins and special data considerations, like fitment.

If you’re an automotive retailer, take a brake (we had to sneak that one in there) from the everyday retail challenges, and join us Tuesday, August 19 at 2 p.m. EDT/11 a.m. PDT to hear actionable tips from Amazon’s Automotive and Powersports team. Jono Glanville, Amazon sales manager, David Heaney, Amazon senior category merchant manager, and Rachel Miller, ChannelAdvisor product marketing manager, will unveil strategies for listings that perform.


Webinar

During the webinar, use hashtag #ECOMwebinar to join in on the conversation!

August 12, 2014

What You Need to Know About eBay’s 14.2 Seller Release

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On our sister blog, EBay Strategies, we disect eBay's most recent seller release. Check it out

August 08, 2014

Drive More Traffic with Amazon Sponsored Products

Drive More Traffic to Your Amazon Listings

The Amazon marketplace, while a great selling opportunity, is getting more and more competitive. Driving buyers to your listings can be challenging, especially when you’re competing against Amazon. The good news? You can add another tool to your Amazon belt to gain a competitive edge: Amazon Sponsored Products.

Sponsored Products is a program that allows sellers to advertise their products on the Amazon search results page. These ads are based on keywords that match shoppers’ search queries. If you’re considering online ads to increase your product exposure, Sponsored Products is a great place to start. You can set up campaigns for all or a subset of products, and you incur costs only when shoppers click on an ad. Amazon displays your sponsored product ad only if you’re the Buy Box owner for that product. Customers who click your ad will be taken to your Amazon product listing page to (hopefully) complete the sale.  

Sponsored Amazon Products

Create Sponsored Products campaigns based on what you want to accomplish: highlight new products, promote seasonal listings or drive traffic to products to boost their sales activity. The program is also beneficial for products that have the Amazon Buy Box but low page views.

New Features!

The Sponsored Products program continue to improve! The following are newer additions to the program:

  • Availability on New Devices: Originally for PC browsers only, Amazon Sponsored Products will now be delivered on tablet and mobile devices. Bonus: Given these devices’ minimal real estate, Sponsored Ads could have a better conversion rate since they cover more of the page than on a PC.

Tablet

  • Updated Campaign Manager UI in Seller Central: Amazon has made several improvements to make managing Sponsored Ads easier. Look for simplified navigation, more sorting options, a view of Advertising Cost of Sales (ACoS) and more.
    New Campaign Manager

  • Automated Targeting: Quickly set up and manage your ads with Amazon’s automated targeting system, which serves your ads to all relevant customer searches based on your product information.

Sponsored Ads vs. Product Ads: What’s the Difference?

Amazon’s other advertising program, Amazon Product Ads, also displays ads for products, but retailers don’t set up keyword targets (Amazon does that automatically). When shoppers click on an Amazon Product Ad, they’re taken away from Amazon to the retailer’s webstore, where they can make the purchase. Amazon Sponsored Products, however, are keyword driven and keep shoppers in the Amazon world to complete the sale.

Product Ads

The Fine Print

Sponsored Products is available on Amazon in the US, UK, Germany and France.

At this time, Sponsored Products is available in all marketplace seller categories except Apparel, Jewelry and Camera.

How to Use Amazon Sponsored Products

  • All Amazon sellers are eligible for Amazon Sponsored Products.

  • Agree to terms and set up your budget and campaigns within Seller Central under Promotions > Advertising > Campaign Manager.

  • Select your products and enter keywords (manually or with automated targeting) that will trigger your product ads to be shown.

  • When shoppers’ search queries include keywords you target, ads for your chosen products appear alongside search results — but only when you own the Buy Box.

  • Shoppers who click on your ad are taken to your Amazon product detail page.

  • You incur a fee when your ad is clicked, plus standard Amazon referral fees if the shopper purchases your item.

For more information on the new Campaign Manager, see Amazon’s Frequently Asked Questions (Amazon Seller Central sign-in required).

Navigate into Seller Central to Amazon Sponsored Products to try out the program.

 

Blog post by Gina DeFrank, ChannelAdvisor Product Manager


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Looking to bring life back into your Amazon sells? Check out our eBook, How to Revive Your Amazon Sales

 

 

July 30, 2014

Expanding on Marketplaces Beyond Amazon and eBay – Newegg

Heard of Newegg? It can be easily be mistaken as Amazon and eBay’s geeky younger brother, but it is a marketplace that is going through a successful growth spurt and lapping up traffic with over 487 million visits per year – not too shabby for a four-year-old marketplace.

Newegg.com is an online trading ground primarily known for its computer hardware and software sales, however it is quickly gaining traction. Office Supplies, Health & Beauty, and Automotive as well. The chart below highlights Newegg’s top-performing product categories that yielded the highest year-over-year sales.

Newegg YOY

Newegg’s primary audience is mostly made up of affluent, tech-savvy males (a rarity for online marketplaces) between the ages of 18 and 35. However, its female demographic is on the rise – as you can tell by the Health & Beauty product category sales growth. Newegg’s consumer demographic is continuing to evolve and develop at a promising pace.

When it comes to fulfilling orders, Newegg gives sellers some leeway — allowing them to fulfill orders themselves or let Newegg fulfill for them, also known as Shipped By Newegg. But be aware that if sellers don’t send shipment notifications within 72 hours of order time, Newegg will cancel the order.

Newegg just recently created a new channel — a B2B marketplace known as NeweggBusiness.com. This avenue is a great opportunity for suppliers that are set up to sell in bulk. Though the channel is still green, traffic and sales are up, providing a refreshing outlook for its forthcoming success.

If Newegg is not on your horizon, it should be. If you are already selling there, be sure to optimize your data and engage with account managers so you can take advantage of the marketplace’s growth and drive product sales. This youthful marketplace holds a lot of potential for retailer’s expansion options.

 

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


Broadening Your Horizons

 

Want more thoughts on online selling expansion? Take a look at our eBook Broadening Your Horizons: Expanding on Marketplaces Beyond Amazon and eBay.

July 25, 2014

Amazon's Q2 2014 results from a seller's perspective

Deep dive into Amazon's Q2 results from a seller's perspective.

Yesterday, Thursday, July 24, 2014 Amazon announced their Q2 2014 results.  The results were mixed and Wall St. spent a lot of time digging into Amazon's big investment areas where they are incurring loses such as video licensing (Amazon Prime Video content) and AWS (Amazon lowered prices and is investing in a lot of hardware).

Q2 Highlights

There was a lot to process in the Q2 results, here are the key points that we think sellers should focus on:

  • Acceleration - EGM (Electronics and General Merchandise) accelerated in NA (second Q in a row) from 27% to 29% which was good news because that's where most of the 3P action is with our sellers.
  • Paid item growth -Paid item growth came in at 23%, flat with Q1.  
  • Active users - Q2 active users grew 16% y/y to 250m (a small slow-down from Q1's 17% growth rate).
  • Units per user - One interesting metric is the units/user - this metric shows us buyer frequency.  In other words, are buyers increasingly active or decreasing activity. Of course, increasing is good and programs like Prime, and recommendations and upsells are working.  Units per users were up 6% on a y/y basis which is an impressive metric.
  • Media share - Media hit a low-water mark of 25% with EGM at a high-water mark of 69% (the missing 6% is other -ads and AWS).
  • 3P unit share - One positive, is that 3P unit share ticked up to 41% from 40%.  While this doesn't seem like a big move, when we look at the interior math, we see 3P GMV grew 28% y/y (an acceleration from Q1) compared to 1P GMV which grew at 23%.

There were a couple of other interesting new datapoints from the conference call and press release:

  • Amazon forecasted Q3 total revenue growth in the 15-26% range (21.5% at the midpoint)
  • Parts and accessories - Amazon mentioned that in Q2 over 1m vehicles were added to their 'shop by vehicle' feature in the P+A category.  They also said there are now 14m accounts with vehicles.
  • Amazon's geographical mix for the Q was 62% North America, 28% non-domestic
  • Amazon is going to open 6 more FCs and started talking about a new concept - a "sortation facility".  They have 15 sortation facilities now that get them closer to customers for delivery.
  • Amazon also mentioned they have added 18 more cities for their USPS powered Sunday delivery program.
  • Gross margins came in at the highest they have ever been - Amazon was tight lipped when asked about it, but the general concensus is that it is due to the 3P program.  You could make an agument that the 3P program is essentially helping Amazon invest in all of these fronts they are fighting on (China, AWS, devices, Prime Video, etc.)
  • Finally, on the conference call, Amazon's CFO was asked if the Prime price increased caused a material slow down and he said they had that actually net Prime signups in Q2 2014 were larger than Q2 2013, so the price increase doesn't seem to have slowed down the freight train that is Prime.

Those are the seller-oriented highlights from the Q and here is an updated dashboard with all the key metrics.

Amazon Q2 2014 Key Performance Indicators (for sellers) Dashboard

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Q2 2014 Amazon growth rate cube

Here is our regular matrix of the different Amazon growth rates.  The category most 3P sellers focus on is EGM (Electronics and General Merchandise) and you can see that it grew at a rate of ~2X e-commerce  domestically. 

Amzn_q2_growth_cube

On the conference call, Amazon specifically called out some challenges in Japan due to a new tax that went into effect in that country on April 1.

 How big was 3P in Q2 2014?

For Q2 2014  Amazon's quarterly GMV (1P+3P) came in at $37.4b.  Here is a stack chart with the 1P and 3P GMV trends since 2011.  

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eBay vs. Amazon GMV Q2 2014

Now that we have both Amazon and eBay reporting, we're able to compare apples to apples (eBay's GMV vs. Amazon's 3P GMV):

Ebay_v_amzn_gmv

Here you can see that eBay was slightly above Amazon this Q - a difference of only ~$400m by our calculations.  With eBay's GMV growing at 8% and Amazon's 3P GMV growing 28%, the lines will cross as they naturally do in Q4, but most likely from that point forward, Amazon's 3P GMV won't dip below's eBay's in 2015.

 

Conclusion

 From a seller's perspective, this was a strong Q with EGM in NA accelerating and solid international EGM results (especially if we were able to strip out the impact from Japan), both of which about twice the size of the 13% e-commerce growth rate as reported by ComScore.   The color around prime and buyer activity plus Amazon's continual FC build out signal that we could see a Q4 from Amazon that considerably outpaces the average e-commerce growth rate.  We'll report back in ~90 days when Amazon reports Q3 results which will give us a good idea of how things look going into the critical holiday period.

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

 

July 23, 2014

Amazon Q2 2014 Results Preview (from a seller's perspective)

After the market tomorrow, Thursday July 24th, 2014, Amazon will report their Q2 2014 results.  ComScore recently reported that US e-commerce grew at 11.8% y/y for the desktop which translates to 13.1% y/y with mobile included so that is the baseline for 2014 growth.  eBay reported first this quarter and came in at 8% y/y GMV growth which was ~5% below the ComScore baseline.

From our SSS data, Amazon averaged 29.8% y/y growth over the second quarter.  

It will be interesting to see if eBay's challenges around the data breach and Google SEO changes benefited Amazon, or if Amazon also saw some headwinds in Q2.

Key metrics we are watching:

  • Active users  - Every other metric is 'backwards facing', so we like active users because it is forward looking and because  it tells us how many shoppers are actively buying on Amazon going forward.  Last year (Q2 2013) there were 215m active users and last quarter (Q1 14) there were 244m.  This metric has been growing around 17% which would yield a Q2 14 target of 251m.
  • EGM y/y growth rate - This blog is for Amazon sellers and the bulk of Amazon sellers are in the EGM category (Electronics and General Merchandise).  Last Q (Q1 14) , EGM grew at 27% with the US at 28% and non-domestic at 26%. A year ago (Q1 13) EGM grew 29%.
  • % units from 3P - For the last year this metric has been ‘stuck’ at 40% after previously moving a point or so every Q.  For one Q, (Q2 2013) Amazon did mention that the metric was under pressure because they changed the way many digital books are sold (moving them from 3P to 1P) and that if they excluded that it would be 43%.  Unfortunately, they haven’t provided details on that again that I’ve seen, so we have been patiently waiting for this headwind to either dissipate or ‘we lap it’.  We'll be watching this one closely.
  • Paid Unit Growth/Sold Item Growth - eBay reported sold item growth of 9.5% for Q2 2014.  Last Q (Q1 2014) Amazon reported 23% which was down from the year ago period (Q2 2013) of 29%.  It will be interesting to see if this metric accelerated or stayed flat from the first Q.

This dashboard shows all of the metrics we'll be watching closely to see how Amazon performed a year ago and last Q.


Amzn_q2_preview_dashboard

 

 We will have the highlights from the report out Friday - stay tuned!

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

Webinar: Retailers’ Top Holiday Strategies Revealed

You’re occupied with vacations, wrapping up summer and getting ready for back-to-school time, right? The holiday season probably hasn’t even crossed your mind. Let us help you get ahead of the curve. The whirlwind of a season will be here before you know it, and it’s best to start preparing now.

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We recently asked a group of retailers what they’d be most interested in learning from a holiday webinar. We then asked e-commerce expert and ChannelAdvisor CEO Scot Wingo to speak on those areas of interest. These tailored responses will be debuted in our holiday webinar on Tuesday, July 29 at 11 a.m. EDT.

Sign up today to get expert insight and tips for success in the areas retailers are most interested in. Scot will also deep-dive into expected trends for this holiday season.

Finally, we’ll unveil the results of a survey ChannelAdvisor conducted with hundreds of retailers in the US and the UK. You’ll find out:  

  • Retailers’ expectations for this holiday season

  • When they’re beginning their promotions

  • Their strategies for increasing sales this year

  • And much more

Holidays are crazy for everyone. Prepare now. Stress less later. This is a webinar you don’t want to pass up. Register today!


Webinar

 

This is one webinar you don't want to miss this holiday season — Retailers' Top Holiday Strategies Revealed.

Tuesday, July 29, 2014 at 11:00 a.m. ET/8:00 a.m. PT

July 22, 2014

Is Price Parity Still on Your Radar? Because It’s on Amazon’s!

Life is a lot about cycles. Ebbs and flows. Action and reaction. It looks like Amazon’s price parity is in one of these cycles that’s approaching a “high visibility” era again. So let’s talk about it and make sure you’re ready for the increased attention it seems to be getting.

First, what is price parity? According to Amazon’s General Pricing rule, the company requires that the total price offered on Amazon  (which includes item price, shipping and discounts) must be at or below the lowest total price offered on any other online sales channel. At ChannelAdvisor, we refer to this rule as the price parity clause.

Additionally, some sellers who are on a Professional selling plan with Amazon (or other similar programs) will sign special revised agreements with Amazon. Such agreements could give the seller benefits like reduced selling fees, more frequent payments from Amazon and more. It’s common for these individual agreements to have a parity clause as well, which varies in scope and requirements from the General Pricing rule.

The implications of price parity are huge.

Amazon is guaranteeing that its sellers are going to present their best offer to Amazon shoppers, which in turn gives buyers a very compelling reason to make Amazon their purchasing destination. Cause and effect. (Could this be one reason for the decline in comparison shopping site traffic, as Amazon has become the comparison shopping destination?)

Essentially, Amazon has guaranteed that it will have (or match) the lowest price for a huge percentage of its catalog. Well played, Amazon.

Before we go any further, let’s be clear that a) not all sellers have parity requirements, and b) these requirements might vary by seller. For example, the Amazon parity policy varies around the globe, with UK and European sellers being completely exempt after Amazon withdrew the requirement in 2013. (Note to readers: This post applies only to Amazon sellers in the US.)

Price Parity and You

In recent months, we’ve seen an uptick in the number of sellers reporting listing violations caused by price disparity. In a good number of those cases, sellers’ accounts were suspended. If you fall in that bucket, check out our recent post on how to recover from an Amazon account suspension. If you haven’t run into violations for price disparity, then take that as a sobering reminder to audit your pricing strategy for anything that might get you in trouble with your Amazon terms agreement.

Surprising Parity Conditions for Revised Seller Agreements

If you have a revised Amazon agreement (and you’re not in the UK or Europe), take some time to pull out the document and locate the section related to parity. Be aware of what your specific agreement requires so you can ensure your compliance. If you’re like most, you may have overlooked (or forgotten about) some surprising conditions that many parity clauses require. Here are some powerful requirements we’ve heard of from customers:

  • Price parity extends to products purchased offline

  • Price parity extends to variations (like color, size, etc.) — meaning that if you offer a blue version on Amazon, your red version can’t have a lower price elsewhere.

  • Price parity refers to the “all in” price, so any rebates, product-specific discounts and shipping charges/discounts must have “all in” comparable price parity on Amazon as well.

  • Parity extends to customer service, returns and refund policies.

  • Parity extends to data completeness and quality — meaning you should be sending Amazon your best and most comprehensive product data.

  • Price parity requires sellers to make refunds to customers when disparity is discovered.

As we said, pull out your agreements and see what terms you’re being held to. All of the conditions above could have far-reaching effects on your cross-channel strategies, so you’ll want to give them serious thought.

Where Do Sellers Go Wrong?

We wish we could say that we don’t see price parity resulting in account suspension, but that’s unfortunately not the case. To keep your business protected, here are the ways we’ve seen retailers end up with price disparity that got them kicked off Amazon:

  1. The “Black/Gray Hats”: Check out our recent blog post on this topic here, but these are the sellers that are deliberately skirting the rules. Amazon uses automation and algorithms to detect price gaps, so don’t be surprised when it catches disparities.

  1. Employees Uneducated about the Policy: Anyone on your team involved with pricing needs to be briefed about the parity clause. Everyone should be clear on how to stay compliant and what your cross-channel pricing strategy is.

  2. Managing Marketplaces in Silos: Sometimes retailers manage Amazon separately from their other marketplaces, which opens the door to gaps and inconsistencies in data and pricing. This could lead to your Amazon price being inadvertently higher than your eBay, webstore or other price. Systems like ChannelAdvisor can help you consolidate your multichannel efforts and avoid these situations.

  1. Isolated Repricing Automation: Some sellers use repricing systems that hum along happily, optimizing Amazon prices — without a care in the world about other e-commerce channels. This is a dangerous scenario, and any price determined by a repricing solution should have checks built in so that prices aren’t raised above other sites and channels. ChannelAdvisor can keep this in check for you with our Repricer with Pricewatch, so reach out to our Sales or Support teams if you’d like more information.

Next Steps

Lately, we’ve given you a lot to think about in terms of your compliance with your Amazon agreements. I know there are many more things you need to fit in your day than making sure you’re following rules. But just as I’m sure you want to avoid an IRS audit after tax season, I hope that a suspension notice from Amazon is something you also want to avoid — especially as Amazon goes through a season of house cleaning, which it appears to be doing now.

 

Blog post by Rachel Miller, product marketing manager, ChannelAdvisor


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Read up on other tips to avoid being suspended on Amazon in our white paper, “13 Ways to Get Kicked Off Amazon: Are You Guilty?” with 14 ways to stay in good standing.