Choosing the right e-commerce integrator: Successfully selecting your partner

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In the first of this 2-part article, we shared key considerations for building an effective multichannel commerce RFP that will facilitate your integration partner search. We will now provide some insights on important factors that will help you identify and select the right e-commerce integrator as part of your RFP.

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Choosing the right e-commerce integrator: Building an effective RFP

Adding a new e-commerce channel to a brick & mortar business is an intricate process and choosing the right e-commerce integrator is crucial.

Adding a new e-commerce channel to a brick & mortar business is an intricate process and choosing the right e-commerce integrator is crucial.

In the first of a 2-part article, we will share key considerations that will facilitate your supplier search and enable you to identify the integration partner that best meets the needs of your project.

As the backbone of the project’s implementation, your integrator’s experience and support will not only help secure the delivery of your project, but will also greatly affect the development and deployment of your multichannel roadmap in the future.

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Can luxury brands play catch-up in an aggressive multichannel world?

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Luxury brands have been reluctant to adopt digital commerce

For years, prestige goods companies have looked down on online sales channels, which they have perceived as inappropriate for an industry which is all about high-quality and exclusivity.

“We think for luxury it’s not right. It’s good in countries that don’t have the shop nearby.”

– Miuccia Prada, chairperson and Creative Director of Prada Group, 2013.

Many preferred keeping luxury in the rarefied world of high-end boutiques and department store glossy storefronts. They have mostly been using the online channel to showcase the brand, through institutional websites with limited product content and information.

Whilst many retailers have hesitated to adopt e-commerce for fear of store sales cannibalization, the reluctance of premium brands seems to have been mainly driven by a somewhat conservative view of the luxury shopping experience. This view has been largely supported by the stereotype of e-commerce as a discount channel on which it is difficult to perceive and experience the product quality.

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Amazon: the beast luxury beauty brands should tame rather than fight

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Late 2013, Amazon decided to step out of the mass market and launched The Luxury Beauty Store, a beauty products sales site to attract prestige brands. This site competes directly with luxury cosmetics brands and leverages the marketplace’s muscle power (e.g. free shipping for orders above 35$ and free 48h-delivery for Prime customers).

Many premium brands initially refused to join Amazon’s new site, which they perceived as a grey market and low-price channel. They hoped to continue controlling their distribution and pricing, but had to rapidly review their strategy upon realizing their products were actually widely sold on the marketplace by third-party sellers. By officially listing on the Luxury Beauty Store, many of these brands managed to better control the distribution of their products on the platform.

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How User Experience matters in multichannel commerce – Part II

General estimates of the value of investment in User Experience design vary from a return of $2 to $100 for every $1 invested.

Last month we wrote about how User Experience design matters in helping satisfying customers growing multichannel expectations, through understanding the users, their context and the interfaces they are interacting with.

We mainly focused on the customer demands and we will now see how User Experience design participates in meeting business objectives.

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How User Experience matters in multichannel commerce – Part I

As customers are interacting with more and more channels and touchpoints, it becomes essential for brands to adapt to their context and deliver meaningful interactions in order to satisfy their growing expectations.

Following the relaunch of its ecommerce site at the end of 2013, Halfords online sales have risen 13.7% from the same time last year.

Whenever adding a new channel, improving an existing touchpoint or redesigning the entire omnichannel setup of a brand, User Experience expertise actively participates to increasing conversion rates, repeat purchase and ultimately market share.

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The Online Product Catalog, an invaluable asset to the store

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Whilst retailers have an increasing choice of new technology (augmented reality, beacon, NFC…) and touchpoints (responsive website, wishlist, Tweeter “Buy Now” button…) to boost their multichannel value proposition, they should not forget the foundation of their success lies in the strength and presentation of their product catalog.

Yes, in the new omnichannel retail climate, all merchants should be marketing and technology driven, with most strategic decisions being fuelled by (big) data, consumer behavior and market trends. However, without a strong Online Product Catalog, reaching out to the (connected) consumers and convincing them of the value of your offering will become more and more difficult.

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Alibaba: how marketplaces are changing the face of retail

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On September 19th, the Chinese e-commerce giant Alibaba went public after months of hype. The IPO frenzy hit the New York Stock Exchange with a share price increasing by 38% on the first day of trading, making Alibaba the largest IPO ever with a historical $25b.

Why the hysteria? Simply put, Alibaba is the biggest, most successful e-commerce company ever, with bigger transaction volumes than both eBay and Amazon combined.

The Chinese success story, which covers different online formulas, accounts for 80% of all online commerce in China, bringing the term “dominance” to a whole new level. Just to compare: Amazon takes 16% of all online commerce in the US. Alibaba counts 279 million active customers (Amazon about 244 million), enjoys profit margins of 43% (Amazon struggles to break even) and, with China’s online population expected to grow to 800 million by next year, their number of customers will see tremendous growth.
Alibaba is a giant and everyone seems eager to take a bite of it.

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The quality of e-commerce in the UAE has yet to come

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More an Offer than a Demand issue

The lack of credible digital commerce offering in the UAE remains an ever true fact with only 15% of its population shopping online. Given the country has an Internet penetration of 80% and one of the world’s highest smartphone penetration (78%), the paradox is striking.

Any analyst of mature online markets would regard this as nothing but pure heresy, since the more connected consumers a brand has, the more additional revenue it can draw from them. The reality is somewhat more complex and the relatively weak development of e-commerce in the UAE has reasons beyond lack of trust and payment security concerns, as often raised by vendors in their pitches.

UAE connected consumers are increasingly relying on web and mobile services to communicate and facilitate aspects of their day-to-day life. The development of e-services and mobile apps in the region, heavily pushed by the government, is increasingly generalizing electronic payments. Online payment has actually been a common practice in the Emirates for traveling purposes for some time. UAE consumers are now ready for more relevant and actionable online content and services, which local retailers are yet to provide them.

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Loyalty programs: recognizing customers before they even purchase

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Loyalty programs are structured social marketing efforts that reward, and therefore encourage, loyal visiting and buying behaviour. This targeted and incentivized behaviour should be beneficial to both customers and companies.

In terms of loyalty, understanding pre-purchase moments is more important than the purchase itself: customers want to be recognized and perceive their interactions with a brand are valued more than just for the purchase they make.

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