Author Archives: abach

After almost 10 years within online sales and ecommerce in Telia, Ticket, AO Johansen and as a consultant I have decided to change focus in my professional career. Ecommerce is one of the most vibrant and fast evolving areas and I have learned so much from both a technical, commercial and leadership perspective and my learning curve has constantly been on speed.

Nevertheless as of 1st September I am proud to finally announce that I have joined SEED Capital as Investment Manager. SEED Capital is the largest venture fund in Denmark within the pre-seed and seed segment managing DKK 2.1 Billion.

SEED Capital’s aim is to transfer knowledge into growth. We finance and advise ambitious tech entrepreneurs engaged in creating successful and internationally oriented companies.

Please reach out if you have something you would like to discuss or if you hear about an interesting startup I should check out!

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Scott Galloway predicted Amazons take-over of Whole Food

Scott Galloway suggest that Amazons might take over a company such as Whole Food a week before Amazon did exactly that!

Think twice, is it all right?

Nordstrom+Anniversary+Sale+-+My+Picks+on+Bubbles+in+Bucktown+(bubblesinbucktown

Should apparel brands start online outlets?

Pricing online is a transparent affair. Google and a wide range of comparison sites makes it increasingly easier for the customer to find the product of choice matched with the best total offer in terms of product price, various discounts, shipping and return policies etc.

Pricing is a central component when creating that decision but also very important to your overall business. The right pricing and mark-up policy can make or break it for your company as it is directly associated with your overall profits.

Since the big recession we have seen a lot of ecommerce tactics focused on discounts – product discounts, newsletter vouchers, flash sales sites and online outlets. Theses tactics will quite certainly drive more revenue to your shop and allow you to reduce sales acquisitions costs thus making your online marketing efforts much more successful.

But should you do it? It’s a very tough question and you really need to think twice and consider which problems discounts and reduced sales prices introduces along with the potential increase in revenue on both short- and long-tem.

Short-term problems are somewhat well known. For example one of the most commonly used tactics is a discount on shipping. It might be the last push to convert a user to a customer. But before the return period is up you won’t know, since free shipping and return also tend to increase the total return percentage from you sale. And it is not cheap to handle returns! You can actually end up in a situation where you loose money on the total order because of all the costs associated i.e. the initial order fulfilment and product shipment, the return shipping, new hangtags and re-packing etc. before the products is ready to sell again.

But discounts and dedicated outlets are also dangerous paths in a long-term perspective. Customers tend to get used to discounts and quickly learns your sales-cycles, so if you are not smart and cautious, you might end up in a situation where customers starts to substitute your full-prized items with discounted items. You might experience an increasing revenue, but if the customers has substituted full-prized items with discounted items you could experience your overall profit is shrinking at the same time because the product margin is gone caused by a lower total profit margin. Dangerous stuff and hard to roll back!

The catch is that the best growth possibilities are within the segment of discounted goods and outlets. This is where we have seen most of the growth in online shopping coming the recent years. So if you are still want to investigate the outlet and discount possibilities further you might want to look at how Nordstrom is executing. Nordstrom has for a long time had their normal ecommerce site Nordstrom.com with a discounted area and furthermore they had a flash sale site at HauteLook.com. But last year they decided to take their Outlet concept Nordstrom Rack online. They have separated the full-price and the outlet concepts and launched the outlet as a dedicated shop at Nordstromrack.com (just like offline). This allows them to make tailor-made communications towards the two different segments – one segment interested in news and trends and one segment interested in bargain hunting.

Some clear competitive advantages are created by this separation and it will be exciting to follow and see if Nordstrom’s “scale and separation strategy” is a winner. So far they just released a quarterly report showing strong growth in revenue – again. So for now it looks like the scale mission with increasing the revenue is well on its way.

But it seems like the margins are under pressure, which might be caused by customers swopping high margin products for lower margin products.

“Gross profit of $1.3 billion, or 35.3% of net sales, decreased 6 basis points compared with the same period in fiscal 2014.”

The pressure on the margins is obvious and establishes a constant demand for more aggressive top-line revenue growth just in order to stay on parity. So far it looks like they are strugling to get to that level of growth momentum.

Left to our own devices

cross device shopping

On March 18th, ecommerce technology giant Demandware broke the news of their Shopping Index measuring digital commerce growth. They found a 6% increase in shopper spent as well as a 25% increase in shopper attraction totalling a 32% digital commerce growth. These are fascinating figures. It seems digital commerce keeps growing, and naturally so does my interest in finding out what led to this and what lies ahead.

According to the Demandware Shopping Index we’ve seen a digital commerce growth of overall 32% because of higher shopping spent but especially because of increased attraction of shoppers. This is great news for Retailers.

One fact missing though is whether this is gross or net revenue. A very central component when dealing with ecommerce is the return rate. Since a lot of companies struggle with extremely high return rates north of 30%, this has to be taken into account when evaluating growth rates in digital commerce.

However Demandware reveals that the biggest value driver is a major increase in shopping attraction, pointing towards new orders and not just more items (and possible returns) per shopper. How this attraction is happening is not crystal clear but it would be nice to know if this has something to do with increased spending driving traffic to the site, which is a major and crucial cost factor.

Speaking of devices. One very interesting fact is the numbers Demandware published about M-commerce. The companies have been trying for years to give the shoppers the opportunities to access online stores from basically everywhere and from all devices known to man, but now that they’ve succeeded in doing so, is it at all showing at their bottom line?

With the increased traffic numbers from mobile and tablets, it is interesting to see that in the UK they actually manage to convert this traffic to sales. Globally, the overall visit share from desktops was down 16%, and now accounts for 52% of the traffic and 67% of the orders while mobile phones and tablet account for 16% and 17% of the orders. In the UK desktops only accounts for 46% of the traffic and 53% of the orders while mobile phones and tablets accounts for 23% and 24% of the orders. In other words the share of orders on mobile and tablets are more than 40% higher compared to the rest of the world.

I predict that the rest of Europe, as with anything else, will look to the British Isles for inspiration. Therefore we’ll probably see a lot of companies on this side of the canal investing heavily in creating even better and more frictionless purchase solutions making it more likely for shoppers to make the final call on their phones or tablets.

That’s it for now. I’m writing this post on an old fashioned computer and you’re probably reading it on a phone bought on a tablet while trying on a t-shirt you might send back.

About Google Analytics Enhanced Ecommerce

Google Analytics Enhanced Ecommerce

So what’s the deal with Google Analytics Enhanced Ecommerce (GAEE )? Google Analytics did a big update on their ecommerce reporting last year. Here’s a run through some of the most important arrivals making GA even more compelling as your Analytics tool.

What makes GAEE so interesting is that it a very huge update with the single purpose to help you getting closer to answering why people visit your website and chose not to finish a purchase?

GAEE is an addition to the Universal Analytics library and it provides you with data on a whole new level. For GAEE to work you need to implement new code and also feed Google Analytics with information from external sources in order to figure out return rates. This is a little tricky and naturally the quality of the reports you receive in the end will depend on the quality of the data you deliver. But it might be worth the effort since returns can make or break an ecommerce company especially within fashion where we see return rates north of 50% in some categories.

Once everything is in its place you can start seeing things like how many times a certain product has been viewed and bought making reports on conversion rates per product possible. This will help you getting a much better grip on your merchandising performance.

You can start tracking affiliate codes, product codes etc. revealing the secrets of coupons and their efficiency.

In my opinion some of the biggest wins happens with the much significantly improved insights into funnel action e.g. which products are added or removed from the shopping cart, add-to-cart rate, login dropoff, shipping dropoff, payment dropoff et.

Investing time in GAEE means investing in a deeper understanding of what makes customers tick and click. But be aware; It only works with Universal Analytics and not older versions and it will make your analytics installation even more complex.

Feel free to drop me a line if you want to know more about GAEE and how your business can benefit from it.