Category Archives: eCommerce

“Who is She?” Gender in Specialty Retail

In the world of specialty retail, gender-specific data can really throw marketers and merchandisers for a loop. Marketing campaigns, stores, product lines, entire brands may be constructed around a single gender ideal. But when you discover the truth is something different you may find yourself in a bit of a bind.

As an example, let’s take a set of brands that cater primarily to women: yoga products. Major brands include Lululemon, Lucy, Gaiam, and Athelta.

Many of these brands offer products for men, but generally speaking they are focused on women. What do you think would happen if they found out that say 40% of their buyers are actually men? Yeah, I think they’d flip out too.

I could turn this argument around and take a look at weightlifting equipment. More often than not, these brands are geared towards men but I know for a fact that women buy from these companies. My wife is one of them.

How to Tell

On the one hand, you can spend a fair amount of money to have an outside service bounce your customer file against large consumer databases. They can match household data and credit histories. They can mingle your data with others (these are called co-ops) and give you generalized (or specific) buying history profiles.

You can also save a little dough and do some high level stuff on your own…

The US Census Bureau is our first stop in digging out the gender of our customers. Back in 1990, they produced a statistical analysis of first names and surnames and published the raw data. You can download the files here: Census Genealogy Name Files.

When bouncing this data against your own customer file, I recommend putting customers into one of four buckets: male, female, both, neither. The male/female buckets are those customers who have a first name match against the names in ONE file but not the other. “Both” is a designation for a name that is found in both files. “Neither” is self-evident.

What About “Both” and “Neither”?

Dealing with the names that fall under both genders can be a little troubling. The simple answer is to trend the purchases by month and compare the curve against the gender-specific data. If you find a match, you can include the “both” with either the male or female datasets. Depending on the number, this may influence macro gender trends pretty significantly.

For example, let’s say you find that 25% of buyers are male, 55% are female, 15% are “both”, and 5% are “neither”. If it turns out that the “both” curves look a lot like the male buyers, 40% of your customers may be men. A big difference, right? Sure it is, but be careful about drawing conclusions here.

As for the “Neither” customers, I suspect that this will be a fairly small percentage of your file. I’d set this group aside. There are a lot of reasons why a name may not match (bad data, international names, odd spellings), but the purpose of this exercise is to look for larger trends where you can make an immediate impact in marketing and a long term impact in merchandising. That said, I would do a little aggregation to find out why they didn’t match. Bad data might suggest system problems, and you’ll want to alert someone to that possibility.

Digging In

Once you have this basic gender assignment, you can do additional queries to match trends across time and categories.

Understanding the purchase behavior within a particular season will help you tailor your message and your product offerings. Understanding the macro trend across several years, may help you identify new opportunities. Taking a look at product category usage by gender will often show you some gaping holes in your offerings.

I’d start with the following:

1. Gender Purchase by Year – Assuming you’ve been in business for awhile, try looking at the number of purchases, total revenue, and average order size by gender over a period of years. Are there any macro trends?

2. Gender Purchase by Month/Season – This is one of my favorites. More often than not you have a peak buying season. If you’re lucky, you have several. So, who is buying during these times? Men or Women? Who is buying during the “off-season”? Who spends more?

3. Product Categories by Gender – Are there certain products purchased (or not purchased) by certain genders? Is it because you do not have an offering or is it because the offering you do have is not appealing or hidden? This might be a great opportunity to try an email test. Try offering the right products to the right people and see how they convert.

4. Product Categories by Gender by Month/Season – Some of the things you learn here will be pretty obvious (e.g. people buy cold weather gear during cold weather). But you may discover that your preconceived notions about purchasing habits are not panning out the way you thought. Maybe guys aren’t buying candy at Valentines Day. Maybe women aren’t buying gifts for Mother’s Day. If you built your whole business plan for those months around these assumptions, you might want to rethink the plan.

Sharing the Insights

This can be tricky. Some brands are built on the concept of an ideal buyer. Any deviation from this ideal may be ignored or even violently discouraged. Hopefully, you’re not living in a world like that but even if you aren’t you should introduce this information carefully so that it sinks in.

Also, if you’ve discovered something completely out of line with the expectations of others, I would refrain from announcing it in a massive news flash or treating it as the gospel. This is good advice in general when dealing with the sharing of data, but particularly important when discussing matters of gender and brand.

Here are some recommendations:

1. Make sure you know the expectations – If the brand is constructed around an ideal (and it probably is), try to get a measurement from others before sharing your insights.

2. See if there’s a match for the expectations – You may find that the gender expectation matches the way a brand used to function. This is where your macro view of gender by year (or even month and year) will be a big help.

3. Pinpoint the change – Assuming you can locate the switch mentioned above, see if you can nail it down to a specific event. Was there a product launch that changed the business? A major marketing campaign that tapped a whole new segment? Or maybe it’s just a general trend in the overall market. Try to get specific because the information will help open minds.

4. Share the data in broad strokes – Start simple with male and female trends over time. Dig into product lines later. I recommend starting with contrasting pie charts (Year X vs Year Y) instead of a trend line. From there, you can add more specific data.

5. Step back – Don’t try to pound your assertions in. Give people some room to absorb the data and the implications. Let them draw their own conclusions. You may feel like you need some tests here to back up your assertions. If you culture supports that, I say go for it. Again, this is something to be careful with because some people may feel like you’re trying to hard to be right.

Ideally, the insights you pull from this sort of analysis will be welcomed by your peers. It’s an opportunity to understand the way your brand is evolving in the marketplace and an opportunity for growth. It’s also a chance to serve your customers (all of your customers) the way they want to be served, which is what retail is all about.

Squarespace – Great Content Management with a Good Start in eCommerce

I heard about Squarespace (over and over) while listening to a marathon session of This American Life podcasts. I have to admit, it’s a little strange to hear Ira Glass pitching web services so I thought I’d check them out.

What is Squarespace

Squarespace is an all-in-one platform for hosting web content and eCommerce. The tool provides a simple, yet comprehensive back-end for content management and a fairly sophisticated “LayoutEngine” for building pages and making them look swell.

Pricing

  • $10/mo ($8/mo if you pony up for a year in advance) – 20 Pages. 500GB of bandwidth, 2GB of storage, 2 contributors, mobile skin, and a custom domain.
  • $20/mo ($16/mo for a year in advance) – Everything above, except unlimited. You also get form building tools and Google Apps/MailChimp sync along with publishing to Facebook.
  • $30/mo ($24/mo for year in advance) – You get eCommerce added in, along with all the lovely features needed to support such a venture (product catalog, inventory, tax, coupons, etc).

Overall, these prices aren’t too bad. You can self-host a website for about the same price, though you won’t have unlimited storage and you’ll have to do all the heavy lifting yourself. The real question here is whether the tools Squarespace provides are worth the price.

* It’s also worth noting here that Squarespace uses Stripe for payments. I address this in the eCommerce section below, but you should be aware that eCommerce will incur additional costs outside of Squarespace (usually 2-3% of the purchase price).

So, let’s get on with a trial run…

A Trial Run with Squarespace

In the spirit of all things testy, I decided to set up an account with Squarespace and give it a go. They give you 14-days to play around with the product and then you need to shell out.

Selecting a Template

Selecting the initial template for your site is the first thing that happens. The gallery of stock templates is chock full of nice designs that give you the sense that you’re creating something chic, like a high-end magazine:

Select Template - Squarespace

Selecting a template in Squarespace

When you select a design, Squarespace shows you other sites using the same layout templates. This is pretty smart since it gives the user a sense of the customization potential.

Template Usage Example - Squarespace

Squarespace displays other sites using the same template.

Sign up

Once you have your template, Squarespace asks you to sign up. It’s a typical form (name, email, password); no credit card required. Your site is live as soon as you fill out the form.

My god, it's full of forms...

My god, it’s full of forms…

Squarespace sends a confirmation email and then sends a second email that provides a video walk-thru:

Editing and Adding Content

Editing content in Squarespace is very simple. The editor is WYSIWYG, meaning that you’ll basically see the page as it looks in real life. Just clicking on the elements of the page invokes the editor for each type of content (text, images, etc).

Editing Content in Squarespace

Editing Content in Squarespace

Squarespace also provides a quick edit pop-up when you’re looking at your site. Unlike most mini-editors (WordPress, I’m looking at you), Squarespace has provided a powerful tool that allows you full editing capabilities. This is particular useful when you need to make quick changes to a site for typos and such.

Quick Edit - Squarespace

Squarespace’s quick editor

* One thing I didn’t like was the lack of revision history. That said, versioning is a complicated bit to pull off in a user-friendly way.

When you add new content to Sqaurespace (via the Add Block button), you are faced with a ton of choices:

Adding Content - Squarespace

Adding Content - Squarespace

Adding Content - Squarespace

The choices are all pretty self-evident. Form allows you to create a form. Text allows you to add text. The test account will also allow you to add products for eCommerce. I’ll talk a little about that later.

Any block you add is popped onto the end of the page. From here you can edit or move the block as you see fit.

Site Navigation

Adding new pages to the site is just as intuitive as editing content. Squarespace provides a high level tree view of all of your content. You can drag and drop items to change the order. You can click on them to change their relative URLs. To add a new page or section, just click Add Page.

I thought it was pretty helpful to have the Not Linked section in the nav as well. This area lets you know when orphaned content is on the site.

Site Navigation - Squarespace

Tracking

Out of the box, Squarespace provides simple tracking of visits, popular content, referrers, and search terms. Nice for a quick view, but you can also add your Google Analytics account ID for seamless integration (Settings->General).

eCommerce on Squarespace

Since I have a trial account, I can’t go end-to-end on eCommerce, but I can get pretty close.

Setting up Shop

First, I have to give kudos to Squarespace for the easy setup of the product catalog. Adding a new product is just like adding content to the site. In fact, you even do it in the same place within the tool. You can also merchandise your products on any content page. This is a nice feature.

To add a product, you need to select an existing collection of products or create one. To create a collection, you select Add Page and select the option for Products.

Create a Page - Squarespace

Click on Products to create a Product Collection

From here, you click the Add Product button and walk through the steps to create a physical or digital product. The set up for both products is fairly similar, the difference is that with a digital product you provide a file and for a physical product you provide variant or SKU details.

Selecting a product type - Squarepace

Selecting a product type during setup

Digital Product Setup - Squarespace

Setting up a digital product in Squarespace

Physical Product Setup - Squarespace

Variant/SKU setup options for physical products

Payments

Like many new eCommerce platform startups, Squarespace is using an outside vendor for payment processing. In this case, it’s Stripe. Stripe has a good reputation in the developer community and I’ll do a review on their services at a later date.

Promotions

Squarespace allows you to create coupons in four basic categories:

  • Any Order – Global discount without any qualifier.
  • Order Threshold – Discounts applied when order totals reach a certain dollar value.
  • Category Discount – Broad discounts based on a products within specific categories.
  • Single Product – Which should be fairly obvious…
Promotion Setup - Squarespace

Setting up a promotion in Squarespace

The discounts include basic flat discounts and percentage discounts. Free shipping is also available as a discount type with Any Order or the Order Threshold promotions.

Once you create the promotion, you can add coupon codes. You can also set the duration of each code.

Overall, it’s a pretty basic setup in terms of promotions. I’d say 90% of what most very small vendors might need, which is pretty good.

Order and Customer Management

Super basic here. You can see pending, completed, and cancelled orders. You can also export orders as a CSV. This won’t be enough for complicated eCommerce businesses.

Digging Deeper – Development Options

When you pop into settings, you’ll notice that Squarespace provides extensive configuration options. There are tweaks for SEO, comment engines (Disqus is supported), Amazon associates, social account hookups, and more. In commerce, you can configure order and shipping confirmation emails too. However, as great as the tools may be, there’s always going to be an itch you need to scratch. To get at that itch, you’ll need to get inside Squarespace and they give you two basic options: code injection and straight up developer access.

Code Injection

This is pretty simple stuff. Squarespace provides a field where you can add content to the HEAD of your page or down at the footer of the page. Both are generally places where you’ll pop in Javascript add-ons to your site. For example, interested in doing multivariate testing with Optimizely? This is where you’d insert their code.

Code Injection - Squarespace

Adding HEAD and Footer code to templates

Developer Access

Selecting “Developer” in Settings told me that I needed to set up a developer account and directed me to Squarespace’s developer center.

Developer access is extensive. You get deep control of the templates on your site. Squarespace also has a fairly vibrant community forum for Q&A.

I won’t cover all the options as Squarespace does a good job of this in their own blog post: Diving into V6: The Template Development Kit.

Conclusion – Powerful Content Editor with Rising Potential

Creating a tool with this breadth is not an easy task. You have to make a lot of decisions about which tools to include and which to hide. Overall, I think Squarespace has made a lot of good choices. It’s a balanced tool and the pricing is very fair.

I’d give Squarespace a grade of A on the content management side of things. As for commerce, the grade is B-. It’s super basic but enough for small sellers without complex inventory management issues. Again, the order and customer management features look really weak which is something everyone should be aware of. Still, it’s obvious that Squarespace is dedicated to improving the platform. If they put the same thought and energy into eCommerce that they’ve shown in content, I would expect this grade to improve.

Using Ghostery for Competitive Research and Protecting Privacy

Ghostery - Click to Download

Ghostery is a special browser plugin that will allow you to block cookies from adware, spyware, and tracking services. It’s 100% and focused on helping the average Internet citizen protect themselves from prying eyes.

However, if we turn the tables, Ghostery can be used by marketers to help discover the tools other marketers are using. In this brief post, I’ll show you how to do that and also show you how using Ghostery can protect your own customers.

Download Ghostery

Downloading Ghostery is pretty simple, just pop on over to their site and hit the download link. Right now, Ghostery supports all major desktop browsers as well as iOS (iPhone and iPad) using a special browser app available in the App Store.

Using Ghostery

Once installed, Ghostery will ask you to set up blocking options. If you’re interested in sniffing about other websites, don’t turn on any of these features. This will let Ghostery notify you of tracking cookies dropped when you visit various sites.

Here’s an example of Ghostery in action when visiting Amazon.com:

Ghostery on Amazon

When entering a page, Ghostery will check the scripts and cookies set against its repository and alert you to the “bugs” dropped on your browser. In this case, Amazon is dropping beacons from Amazon Associates, DoubleClick, and Microsoft Atlas.

If I click the little ghost icon in the menu bar, I can drill into each of the found beacons for more information:

Screen Shot 2012-12-14 at 2.59.53 PM.jpg

For example, if I drill into Microsoft Atlas, I’ll go to the Microsoft Atlas entry on Ghostery. Here I’ll learn that this script is found on over 60,000 websites and is used for targeted advertising on Microsoft’s online properties.

Protecting the Privacy of Your Customers

Obviously, Ghostery is a powerful tool that makes it easy to find out exactly what your competition is trying, but don’t stop there. You can also use it on your own site to see how your knowledge of the beacons you drop on visitors stacks up against the reality of what’s really going on. You might be surprised by what you find.

For example, you might be trying a new advertising network. Everything looks simple enough. You just drop a little bit of Javascript and you’re serving ads somewhere, right? Well, it may just be that that Javascript loads some additional script and or beacons and suddenly your site is getting flagged for serving malware or spyware. Even worse, you might be exposing your customer’s information in ways you did not expect (nor which you’ve covered in your site’s Privacy Policy).

Not only is this bad business, but it could also spell trouble.

It’s all about the numbers…

This post on TechCrunch by a fellow who runs a daily deal aggregator really got under my skin. It wasn’t so much that he was trumpting the daily deal model as much as he was providing completely unrealistic numbers.

If you take a peek in the Facebook comments, you’ll see a nice, long response by yours truly. Yes, I’ve finally decided to weigh in publicly on the rage that is Daily Deals (Groupon, Living Social, etc).

I’ve reposted my response below for posterity, but let me be clear: there’s a place for daily deals but they are not a panacea. They can be one of the most expensive ways to acquire new customers and retailers need to be careful.

Here are my three (3) rules for evaluating deals:

  1. Always make a decision on the numbers – There are some things you might do just for the fun of it. We usually refer to this as “doing it the brand”. However, deals where you are putting real money on the table need to be evaluated using metrics and realistic expecations.
  2. Always cut your expectations in half – If it turns out you’re right, then you can be pleasantly surprised.
  3. Always be blunt when someone tries to make you violate #1 or #2 – You can’t blame the partner if you didn’t stick to your guns.

If it looks too good to be true it probably is, but that doesn’t mean there’s not something to it.

Now that I’ve said all the tough guy stuff, let me also say that I’m not exactly shy about business. I’m always up for trying new ideas and testing new channels. I mean, ThinkGeek grew by 55% last year. Don’t think I’m being cocky here either. A lot of people worked very hard to make this possible. What I’m saying is that we certainly didn’t accomplish results like that by running away from new business.

So, here are my three (3) rules for testing new sources:

  1. Limit Your Exposure – A test is only a test if you can control the size of the deal.
  2. Avoid One Way Streets – Can you back out of the deal if something goes wrong or shut down the test early? if not, you’re probably going to regret it.
  3. Measure Everything – If you can’t track the test, you can’t say it worked. If you don’t measure the results, you’ll be n the dark about true impact of the rollout. Measure everything you can.

Maybe this isn’t a perfect formula but it’s working pretty well.

Got an opinion? Drop way down to the comments and tell me what you think.


Appendix: The Daily Deal Reply

Here’s what I had to say:

Sorry but your numbers are unrealistic for most if not all retail businesses.

The deal hunters of the world are interested in only one thing: deals. They won’t pay more, and they’re more likely to take advantage of low margin products (to maximize the value of the deal). There’s nothing wrong with that of course, but retailers really need to think this through using realistic data.

Here’s a analysis of your post and model:

Overage: The example in your post assumes a 50-100% overage rate. In the retail world, that simply does not happen. Ever. Your Excel model is a little more realistic, but 14% is too generous for forecasting. In selling to a discount-minded audience, the best you can realistically expect is 5%.

COGS: In your Excel model, you assume 40%. This may be true of service business but not true in retail. Even most apparel businesses don’t get close to that number. In addition, discount-minded customers rarely buy items where you’ve got great margin. They look to maximize the deal by buying items on sale or items with razor thin margins where they can’t get a deal anywhere except by using that coupon.

Commission: Your Excel model assumes a 40% commission. That’s not happening with any deal network. 50% is the floor and it goes up from there.

Using your model, if I change overage, COGS, and commission to realistic numbers the merchant loses $3 per customer.

But I can’t really stop there…

In your model you assume three (3) repeat visits for new customers. You also assume that the “conversion-to-repeat” will be static. In other words, there’s no entropy over time of the original 20% who return. This is unrealistic. First, for forecasting purposes you shouldn’t assume more than one (1) repeat visit. If you can’t make money from an acquisition after the second sale, you’ve got a bad channel. Second, over time, the number of customers who return from the initial acquisition is going to degrade. Not only that, but it’s going to degrade very sharply. You’re going to go from 20% on second purchase to 5% to 4% and then probably level off after that at 2% of the original batch of customers… if you’re lucky.

I’ll meet you half way though and only change repeat visits to 1.5 and ignore the entropy factor. Now, I’ve lost $5.90 per customer.

You also recommend that businesses provide a second incentive to a discount-minded customer. You’ve brought in a deal hunter to your shop and converted them to a customer and then you reinforce the discount mindset by offering a second deal? I’m sorry, but this is really bad advice. There’s nothing wrong with bringing in deal hunters, but retailers need to understand what that does to their margins. They also need to understand that it is very, very difficult to convert a deal hunter to a full margin customer, and by very difficult I mean impossible.

So, my advice to retailers is to be very careful about the offering and very conservative on the forecasting. If you can, limit (i.e. eliminate) your exposure on low margin items or stacking discounts. Deals are great, just be smart about it.

To help, I’ve uploaded this version of the model using the more realistic assumptions to Google Docs and made it public to the web. Interested parties can download it here.

What’s Next, Jamie?

When I first told my wife that I planned to submit a proposal to reorganize my business, she looked concerned. When I told her I didn’t include a box for myself on the org chart, she wanted to know if I’d lost my mind. This seems reasonable. I mean, isn’t this the worst economy in, well, ever?

Maybe the outside world isn’t going to view this as the most brilliant stroke of the pen, but I had my reasons…

The Plot So Far…

To begin with, I ran an entrepreneurial business within a business. We grew like most eCommerce businesses: huge leaps, year after year. There are a number of factors, but to make it simple let’s just say that we reached the point in scope and scale where it made sense to fold our operation in with the core business.

Writing the plan was exciting and fulfilling. This was the day we’d worked toward for years. It was bittersweet as well since I loved working with my team and we were very successful.

When most people are ready to submit a proposal like this, they take a deep breath. Exhale slowly… And then they hit the delete button.

Part of me (a rather frightened part) really wanted to hit that delete button, but instead I hit send. Of course, I was afraid. I spent years working for the company, building a record of achievement. I have a family to support. I have a child who has cancer. Anyone who tells you that they proposed changes like this and weren’t afraid to do so is either lying or insane.

Now, I’ve written this post several times. The last version went into all sorts of detail about the process of shaping the plan, and while I’m sure that kind of insight is valuable to prospective clients or employers, I’m not going into that sort of minutiae.

Besides, what would we have to talk about later?

No, instead of focusing on what happened, it’s enough to say that I did what was best for the company and it’s time for everyone to focus on the future.

So Really, What’s Next?

At the moment, I’m helping the company make the big transition. But now that I’m on the other side of this change, I find myself with a once-in-a-lifetime opportunity to pursue my life’s passion… And that’s exactly what I’m going to do.

My “What’s Next” is simple: I’m embracing writing with open arms.

Some people know that I write. Some people know I’ve written two novels, piles of stories, millions of words all told. Some people know that I run a little website called How Not to Write.

If you don’t know, now you do.

In addition to fiction, I have two non-fiction works tied to eCommerce and web in process. Sign up for the site emails and you’ll get an announcement as soon as they are available. Who knows, you might even get a copy for free. :)

Oh, and I’m Still an eCommerce Guru

By the way, I’m not abandoning my knowledge. How could I? I love the web and eCommerce. I love technology. I’m just shifting what I do and how I do it.

If you’re an eCommerce colleague dropping in, this is your chance to get a seasoned eCommerce executive on your team, a pro who can help you fix what’s wrong or help you develop a plan to take your business to the next level. Take a look at What Jamie Can Do For You to find out more.

If you don’t know me, let’s get introduced

Thank You

I realize this isn’t a typical “I just got laid off” message, but then I’m not your typical person.

Those of you who realize this will probably be the first to drop me a line. Those of you who don’t will probably wonder why you kept reading all the way to the end (if you did). That’s OK. I don’t expect everyone to understand, but I do want to thank you for taking the time to read this post.

This is a time of dramatic change for all of us. I’m thankful to have such great people in my life. I’m looking forward to what’s next and I hope your life is filled with good times.

Have fun! I know I will! :)


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