Gimme Australia Blog

The Rise and Rise of Smart Phones

2012-04-03T00:00:00Z

A recent PWC report into online commerce, quoting Hitwise figures, generated a few surprises.

One eye widener was the explosion of online purchases conducted on mobile devices, and the inescapable need to accommodate smart phones as part of the sales process.

The report covered a wide range of topics from GST implications of online sales, but the growth of purchases, not just visits, being made on smart phones.

A mere two years ago, mobile phone visits to retail stores I’m involved with peaked at around 2% of visits or 1,600 visits from around 80,000. Factor in conversion rates and it hardly seems worth making your site mobile friendly. Not so any more.

According to the report, a whopping 28% of respondents had purchased goods online using their mobile phone. The proportion of shoppers using their smart phones to evaluate stores and compare prices are logically even higher.

Time is limited. Why not make a buy decision on the train home?

Needless to say, when my favourite nerd returns from holidays next week, evaluating the effectiveness of our presentation to smart phones is at the top of the list.

The convergence of mobile phones with web, email, payment systems, mapping and entertainment will continue to drive the use of small portable devices. With almost all mobile phone users sporting smart connected phones, expect the visitor and purchase stats to continue until saturation.

Hang in there Mr Harvey!

2012-03-04T00:00:00Z

The Australian newspaper reported during the week that Harvey Norman were disappointed with the performance of their online entity, launched in November 2011, and had revised their sales targets down by 60%–80%.

But isn’t it a little early to throw in the towel?

The guys who delivered the site are clearly a switched on group of professionals. There is little or nothing to fault from a technical perspective with regard to the content, SEO strategy and operation of the online store.

In fact I think it’s early in round one and the store has just started swinging.

Some quick searches for common lines I see in Harvey Norman reveal that far from hanging heads and revising down targets after just a tick over 3 months, I’d be giving the online store management and staff a pat on the back.

For the phrase “plasma tv” Harvey Norman is already top of page 2 with great prospects for improvement. It is below competitors JB Hifi and Binglee, but above Kogan. No Adwords are running but are for competitors including The Good Guys, Kogan, Dick Smith and Deals Direct.

For the phrase “digital camera”, Harvey Norman features on page 3 below most competitors notably early online adopters JB Hifi. Again, no Adwords and no leveraging the rank of shopping comparison sites.

Other positives are “fridge” page 1, “appliances” page 1 (location result with web address),

On top of this, Harvey Norman is not running any Adwords or participating in price comparison searches. It’s a little unfair comparing the performance of the online venture with the retail stores which enjoy massive blanket marketing, particularly so early on with the site largely un-promoted and still gaining search engine position.

Hang in there guys, hopefully you will see a marked improvement as time goes on.

Let’s put aside that many shoppers can now research products from Harvey Norman before going in-store to purchase. The fact that Harvey Norman online is making 0.5% of sales according to Mr Harvey is a massive positive at this early stage.

It takes time to gain SERP position. It takes time to build a brand (although not in this case). It takes time for customers to decide to purchase.

There is no doubt that noone knows retail better than Mr Harvey, and I would never presume to lecture, but and as far as the online store goes — give it time and perhaps a marketing budget. The site is beginning to rank well natively and if the operations of the business are sound I see no reason why this division cannot achieve the 5% of sales in due course.

Understanding and Aligning Advertising Goals with Business Strategy

2012-02-27T00:00:00Z

I recently reviewed the Adwords strategy for a large online store and found that they could spend less and gain more. Aligning the business strategy with all business units is critical to business success, and advertising is no exception.

Individual online stores have various goals when running advertising. If you don’t have goals when running advertising, hang your head in shame…now.

It’s more common than you think to see many people providing input on the creation of advertising who have vastly different views on what the advertising is actually trying to achieve and indeed what the message actually is.

As with traditional advertising, when creating online ads I recommend creating a starting point where your team understands the end game. This will avoid comments like “I don’t like that Ad”, with a goal as a comparison point you can become more specific and express your evaluation of advertising in terms of whether it will achieve the goals you have set.

Diversity in opinions of individuals must be unified for any marketing strategy to become consistent, clear and understood. If you hire experts ensure they understand your goals then listen to them or don’t hire them in the first place.

Getting down to the nuts and bolts, goal setting is perhaps more important when creating complex adwords campaigns. If someone on the team strays off course if could be costly.

Advertising is communication. What are you communicating? What are your goals? They can be based on ROI, sales, traffic or be part of a wider branding of a company or product. Make sure your team understands your goals.

Common goals are to achieve a target cost per sale, increase sales for a product or service, or generate traffic to a site and create a long term connection.

Adwords is great at providing instant measurable results. The speed of reaction in Adwords is very fast. Looking at the company above around half of visitors from an Adwords ad who purchased did so immediately and the another half did so over the next 30 days at a diminishing rate.

The Adwords strategy for the business was to produce a sale for every $x spent. They had a daily spend cap with budgets spread across various targeted campaigns. For every additional dollar spent, a diminishing return occurring and the balance between sales gained and cost per sale was found…even this metric will vary with the goal depending on the outcomes you want.

Some campaigns which are brand and product based will naturally have better conversion rates. The customer is more likely to have decided on a brand or model and is searching for more information or to buy it e.g. “Nike Zoom Kaiju Boot”, while more general searches mean the buyer thinks they need something but are not sure what yet e.g. “ski boots”. The first example is more likely to cost a lot less per click than the more general search phrase.

There are many reasons to want to restrict sales even with an efficient campaign: budgets, supply chain issues, warehouse storage limits, process capacity. The business wanted to reign in their spending a little and it was resolved to reduce the daily spend on Adwords.

The change in goal was expected to produce a drop in spend, a drop in advertising and the desired drop in spend.

Their Adwords campaigns were made up of many Ad Groups with various budget limits. Large, more general campaigns were receiving a disproportionate amount of the budget over more targeted groups which hadn’t yet reached their sweet spot.

When looking at the budgets, we decided to make small adjustments to individual groups and what happened was a shift in spend from less effective campaign groups to more effective, cost limited ones producing the overall goal of a lower daily spend.

However the drop in spend and subsequent re-allocation of the budgets led to an increase in sales and an decrease in the cost per sale as more effective Ad Groups were allowed to breath.

Subsequent adjustments to the campaign reduced cost per spend further with nominal change in sales, and allowed further refinement in line with the goals of the business.

Advertising is an art, Adwords are an art within an art which need regular maintenance and refinement.

Woolworths Launch Virtual Supermarket

2012-02-20T00:00:00Z

Woolworths' new virtual supermarket a smart way to advertise.

The marketing team at Woolies deserve big raps. Instead of posting yet another billboard spouting cheaper prices they have chosen to truly differentiate themselves by offering products and ordering via virtual stores and mobile phones.

We’re all busy, and chances are if you’re standing in a train station you go to work early and get home late, often finding you need milk, bread, butter and a tin of chick peas for some strange reason.

Online ordering and delivery of groceries has been available for quite some time, I know a lot of people who use this service, and if you have 2.1 kids or a minder you know that a semi-necessary diversion to the supermarket just isn’t going to happen.

So I find this new take on online commerce really interesting and innovative, far more so than the retail buy/sell offerings online. Roll it out to all stores I say, that will save me pushing my trolly and screaming child around, skimping on my shop due to said screaming child (he’s not that bad by the way) and leaving me with the hassle of navigating the car park.

Woolworths have launched a “billboard” of products which allow shoppers to order popular everyday items quickly and easily which are then delivered to your door.

Using the barcode on the billboard and the Woolworths mobile app you can scan items, order them and have them delivered, along with any other items you may need from the Woolies product range.

Just from an interactive advertising perspective it’s a winner. It’s not just “Got Milk?”, it’s “Got Milk, Bread, Butter etc and want it delivered really soon?”.

Advertising mechanisms like this are convenient, cool and provide a point of difference which will accomodate an increasingly busy workforce. They remind, educate, interact with and enable consumers. I love it.

We are so conditioned to how we shop for groceries that this departure really floats my boat. I made a decision to use brand A supermarket yesterday for a pretty fickle reason — they had a trolley with a kiddy seat. It’s the little things. Virtual shopping could be one of those little things.

Why the concept is so brilliant is that the users are already out and about. For that reason the billboard placement in a train station is great. It’s high density, you’re out already, probably busy and probably have a little downtime between stops and walking home or to your car.

It’s no wonder that mobile devices are the real target market and the convergence of payment solutions and smart devices will continue as retail experiences are remodelled with services like this one.

Once you have the app you’ll use it more and more, the virtual train station supermarket is really just a cool way to deliver the app and a shopping experience while reminding you to buy some stuff, educating you about the benefits of electronic ordering on the way.

Coles does not currently offer a mobile phone app or online purchasing. Honestly, I’m not sure why the second tier supermarkets are not being the innovative ones, as is normally the case.

Changing the fundamentals of how Australians shop is a real challenge. Personally, I take no delight in my grocery shopping, but like all the other sheeple) I continue to go to spend most grocery money over the counter at Coles and Woolies.

This is a system I think I would actually use, even in-store to save transporting groceries and risking damage to perishable items if the shops aren’t my last destination.

Delaying your Christmas profit taking can lead to bigger rewards.

2011-12-29T00:00:00Z

Delaying your Christmas profit taking can lead to bigger rewards.

One thing I’ve found when running an online store is to give a little and not be greedy. Customers love a free gift, an unexpected product, sampler, or a simple ‘thank you’.

Another thing I notice is that many stores look at the Christmas sales period as the goal, neglecting New Year and the post Christmas holiday period.

Most suppliers are closed until around mid January. They arrive back to work to a storm of orders and demanding customers. Suppliers will also be low staffed, low stocked and awaiting arrival of new season and restock orders, so don’t expect your stock orders to arrive until February.

We sometimes even clean a supplier out of key products (depending on timing of future deliveries, exchange rate movements and availability) so they simply can’t resupply competitors. They’ll have to wait for the next boat to arrive.

There is a real opportunity for your store to clean up in the post-Christmas and New Year period while competitors are counting their cash, fly by nighters have disappeared and supply chains are still winding up.

Our strategy to moderate dividends in December and increase our stock holding has always produced fantastic results year after year.

Depending on what you sell, don’t be tempted to rip the guts out of your product and rush it out the doors for Christmas. Maintain your pricing and you might just find you’re the only one with stock until supply lag catches up.

It’s incredible some times seeing the market at work. Proactive competitors monitor stock levels at rival stores and often adjust their prices accordingly, there’s no need to be cheap when you’re the only one with stock. Consumers quickly establish that everyone has been cleaned out and will purchase even at prices which are not heavily discounted.

We often see ‘fly by night’ sellers in for the quick buck at Christmas, obtain product and undercut the market. They’re mad. Don’t fall into their trap, you need to make profit to invest and grow. They will always be small-time making bugger all, ignore them, stick to your strategy.

So my tip for gaining a larger slice of the slightly smaller post Christmas pie…resist the large pay day after Christmas, invest in stock for the New Year and cash in while your competitors are low stocked.

Online Stores Need To Concentrate On The Basics

2011-12-20T00:00:00Z

Come on people. It’s simple stuff.

There is plenty of hype surrounding online shopping, but increasingly I see online stores forgetting their roots, neglecting their strengths they built there businesses on.

It’s an almost arrogant attitute and abuse of the less than personal nature of buying online that an order placed does not arrive in the promised time in the promised condition.

I do not use the word arrogant lightly. Online stores are riding a wave and some clearly seem to believe the popular press that online shopping is superior and traditional retail is in decline. Guess again.

I’m shocked at the attitude of popular online stores and their ambivilence to delivery promises and prompt responses to customer enquiries. Really basic stuff for online stores.

I don’t need the less than motivated sales person or the overpriced and outdated floor stock…but I demand a fulfillment of the basic tennants of online stores such as prompt delivery and a timely response to enquiries.

As an online commerce advocate I naturally purchase online products more frequently that most consumers and I’m pretty appauled by an increasing gap in what I expect, am promised, and what I receive.

The frequency of missed delivery dates and response lag is genuinely troubling me. Not because I received my Christmas purchases in 3 weeks, not the promised 2-5 days, from one of Australia’s leading online stores. But because if this becomes the norm the wave of support for online retail will subside in disappointment.

My message to my staff, as I expect it is for all business owners, is to never rest on your laurels and ride someone elses wave. Every slow response, missed order delivery or failure to follow up a lack of fulfillment not only burns a customer for your store, but builds a mistrust of online commerce that destroys potential for other online stores.

That pisses me off.

I believe in the great work of many great online retailers in Australia and as an online retailer, consultant and customer implore all online stores to stick to the basics.

Ship orders on time and respond to customer service enquiries quickly.

Harvey Norman launch online store, but will it work?

2011-11-23T00:00:00Z

With very little fanfare Harvey Norman launched their online store today.

So how has Harvey Norman delivered a competitive proposition to the market and reconciled it’s traditional sales model, traditional costs and it’s need to drive customers in-store.

Quite well it seems, here are some examples. An iPad 2 16GB with Wi-Fi is a sharp $553 compared to $579 at Apple Store. A Sony DCR-SX65S Camcorder is $298 at Top Buy, but only $246 at Harvey Norman Online…and the examples kept coming.

Whoever Mr Harvey begrudgingly gave the nod to has done a really impressive job from an SEO perspective with well thought out page headers easy navigation and what looks like a full product range.

Now don’t forget Harvey Norman’s previous foray into the online marketplace with the thoroughly disappointing Harvey Norman Big Buys. It now seems to have emerged as something of an online small goods site with good pricing and a range that I buy regularly and might actually be tempted to try.

The new Harvey Norman site ticks a lot of boxes for me. Technically, it’s a great job, so hats off to the IT guys who are involved.

I feared that the relationship between online customers and geographical franchises would be lost, but the delivery from stores solves that and we’ll see the online strategy be supported by stores instead of seeing the website as a competitor.

The in store pick-up option will work for many people who know what they want a fast check out. I just hope that some kind of stock control exists and that orders are set aside in an easy to find location in store, otherwise there’s really no point.

Delivery is excellent, but are we to believe that at any point in time any given product listed on the site will be available from a local store for delivery or pick-up. The reality is that many online orders will require a stock transfer and fast delivery or pickup may not be possible.

This is of course unless the aforementioned IT guys have done a large scale real time product integration and fulfilment system. But I don’t think so considering that the delivery policy states that “ the store will contact you directly to confirm when your order will be ready to pick up”…I would have assumed that it was already available if it was available for sale.

All in all, well done to Harvey Norman.

And here comes the ‘but’.

How resiliant really is this online business when you consider that in the fundamentals of Harvey Norman’s are to drive customers in store and sell them on instant gratification, range, service, and lucrative finance.

The move online could just be an exercise in educating existing customers about the merits of online buying, then the natural tendancy to price comparison, and this is where the Harvey Norman online model may fall over.

The major cost savings of a scaled online venture are the savings in rental costs as expensive retail locations are not needed and that staff are only required when orders need to be packed and shipped. Customer service online can respond a few minutes later as they efficiently deal with many enquiries and down time can be used to ship orders, not so on the retail floor.

These are the glaring differences between traditional retail and online stores. They are inescapable and I fear that after such an inspiring response to the criticism Mr Harvey has copped, the commendable implementation may not be enough to make it a massive success.

Quick Tips for eMarketing this Christmas

2011-11-07T00:00:00Z

If you haven’t started already, get a wriggle on.

The first week of the Christmas online sales surge has begun. This should be the most productive 6 weeks on your store’s sales calendar, if it’s not, here’s some quick tips to help take advantage of the increase in online retail spend from early November to mid December.

Your streamlined Adwords campaigns, CPC shopping position and marketing affiliates are about to be drowned out as competition for sales heats up and savvy marketers stay ahead of the game leaving you behind.

Competition for sales during busy periods is intense. Your well positioned eBrand will need some extra love and care as new seasonal players enter and existing competition tweak existing campaigns to maintain their position.

The difference between a great holiday retail period and otherwise could only be a few cents per sale and a little bit of time.

As a rule we monitor our eMarketing strategy weekly and review it monthly to ensure it is aligned with our business strategy. During the crazy period this task is performed daily to see who is outbidding us on our most valuable key words. Hopefully they are not as diligent as you are.

This of course takes time and skill, and all of the time and effort spent improving your Google Ad Rank will now start paying dividends. Those with poorly formed or irrelevant Ads will be paying through the teeth and often spend their profits on traffic. Profit is sanity, sales are vanity.

It’s worth a call to the friendly folk at the shopping search engines, they are happy to tell you how much you need to bid to appear high in their rankings. Although we have found we obtain a better ROI from Adwords, we often place a bet each way with a small budget for CPC shopping searches even if we don’t entirely agree with their cash for traffic business model.

Communicate with your affiliates, and remember that you are not their only customers. Consider increasing your affiliate marketing payout to help sway them to promote your store, not your competitor’s during the rush.

Good luck and best wishes for the holidays.

Evaluating the Value of Affiliate Marketing Partners

2011-07-04T00:00:00Z

Too often we see affiliates who are adding very little value to online stores, and in some cases actually cause harm to a store’s image.

How much value do your affiliates actually add? Are they creating traffic which you are not already reaching?

We evaluated a program being operated by a store recently and found some very interesting things. Evaluating individual affiliate partners, the store was able to weed out ineffective marketers with no loss in traffic and strengthen relationships with some who adding great value by providing traffic which was never destined for the store.

Affiliates who add value by allowing you to leverage good search position, verticals with related products or customers, those with a large following such as popular blog sites or social networking sites, and sites who rank well for generic brands, categories and products are good performers and generally earn their commission.

Avoid affiliates who run CPC marketing in competition to your own, rely solely on gaining prominent ranking for your brand name, use deceptive practices to lure click-throughs via sensational page titles such as “MUST READ”, “your brand SCAM” or “Click for huge discounts” type stuff.

Affiliates must add value to merchants, not deceive shoppers or hijack your brand name.

At the very least, affiliates must create unique copy when describing your store. Smart partners will use keywords and phrases which you may not be well placed for.

Quality affiliates will provide a shopper with information to assist in a buy decision from your store, not simply act as a stepping stone to a sale that would have occurred anyway, clipping the ticket as the customer passes through.

I recommend communicating with affiliate marketers and establishing how they plan to generate traffic. Evaluate their blogs, social media pages, or product comparison sites and find examples of multipliers which will capture traffic which would otherwise go to a competitor, this is worth paying for.

Sometimes I question the value of pure coupon sites, even those who have gone to the trouble of creating unique copy even if it adds no additional value to what is on your site. When I say ‘pure’ I mean directory type sites which simply focus on your brand, a brand you have spent time and money building.

Consider a customer who has purchased from you before, searches for your name and sees a site positioned close to yours which promises a discount for your store. Of course they will check it out, and more often than not there is either no discount or you end up providing a discount on an order plus the affiliate commission on a sale you would have got anyway. Add this this scenario an element of deception by the affiliate making claims, promises and sensational statements designed to scare them into clicking them first.

The best affiliate partners are those who create channels which don’t rely on the use of your brand, brand searches are sales which are likely to become yours anyway because customers have probably been referred or responded to your branding exercises. Affiliates who are highly ranked for a broad range of generic search terms (or those who operate CPC advertising for them with your consent) will provide far better performance.

TIP – Google your brand. Fair use, in my opinion, would be those with genuine user reviews, product blogs, product comparison capability, evaluations of your terms of service, those who create an improved user experience and importantly those who already have some native traffic that you could gain a slice of. Communicate any concerns you have and give affiliates an opportunity to change how they operate. Update your Affiliate Terms and Conditions too so future partners understand your position.

You might be well placed for ‘laptops’, but having a partner who also provides traffic for ‘netbooks’, ‘notebooks’, ‘macbook’ and ‘portable computers’ is worth something.

Good affiliates are hard to find, as are good merchants. It is a relationship which should benefit both parties, so make sure you get the balance right when controlling your brand. Get tough, if you must, on those who simply squat on your brand with some token copy and perhaps misleading claims.

Can Harvey Norman reconcile its enormous investment in bricks and its need to add more value to its online presence?

2011-04-04T00:00:00Z

Harvey Norman’s legacy retail model is simply not a good fit for its proposed online venture, but is it dead in the water before it floats?

Harvey Norman stores are franchises which are part owned by Harvey Norman Holdings and the franchisee. Gerry Harvey suggested that his online foray will “cannibalise” his franchises. This statement suggests that he will be selling online at store prices which will be easily comparable and uncompetitive.

It’s no wonder Mr Harvey doesn’t think the venture will turn a profit. It probably won’t and is perhaps, at least partially, motivated by shareholder pressure.

So can Harvey Norman reconcile it’s enormous investment in bricks and it’s need to add more value to its online presence? Probably, but it doesn’t look like the current strategy will achieve this goal.

The move has been widely slammed by online competitors who, for some reason, see Mr Harvey as the face of old school retail. The word “dinosaur” has been thrown around a bit.

The fact is that Gerry Harvey is a shrewd operator, he has changed his business before, adjusted to the times, and succeeded when faced with larger threats than this. Plus, he probably doesn’t give a shit what his competitors think of him or his business.

But is it all doom and gloom for the idea of Harvey Norman moving online? I don’t think so.

Already the next phase of online commerce is visible on the horizon. Harvey Norman may have lost round one and some successful startups (and some vocal upstarts) have gained a foothold in the market, but keep an eye on Gerry Harvey.

Harvey Norman is faced with the dilemma of either being competitive online and risk bastardising their traditional retail market, or sell online uncompetitively to preserve the retail franchise model. The first option is pointless and the second is dumb.

I hope the folks at Harvey Norman simply stop thinking of the dilemma they have in terms of “If we launch online it will devalue our retail operation”.

There are a raft of smart strategies in the new online commerce landscape for Harvey Norman outside the product based “list, sell, and ship” of his competitors.

I say dispense with the idea of creating a product based online store. Gerry Harvey has been resisting it because he knows the “pointless and dumb” equation. Use a model which incorporates the stores to either ship or as a pick up point. Take advantage of the geographical spread of the stores and offer localised deals. Move away from single sale and ship offerings. Move straight to the next generation of collaborative procurement models and use your brand to leverage social networking to spread deals.

There is too much focus on the challenge for Harvey Norman to mitigate online competitors by becoming one too. That just won’t work. I’m getting sick of the personalisation of the argument with Gerry Harvey becoming the pin up for “old retail”. In a lot of ways I hope he kicks some ass with this opportunity.

Mr Harvey, there’s another way. There are online models which will fit the Harvey Norman structure without killing traditional retail.