Louis C.K.  was a guest on Late Night with Jimmy Fallon this week, talking about his new special new special, Live at the Beacon Theater, which he self-produced and new special, x through his own website for five bucks.

When the interview turned into a clinic on e-commerce best practices:

Impulse Price

Louis CK told the New York Times, “I buy lots of things online and I had a focus group of one. I thought about it, and five bucks seemed almost free and I figured if I took out the hassle, most of the speed bumps, it would almost be like hitting a link and streaming it.”

He offered the video for $5, to ensure it was a comfortable impulse purchase.

Easy

He told Jimmy Fallon, he wanted to make it ridiculously simply to buy:

• The site has one large call to action, “Buy The Thing” .
• PayPal is the only payment method.
• He asks only for for your e-mail.  There is nothing to join.  He only keeps your e-mail if you really want him to (he openly mocks sites, that default to opting-in the user for e-mail marketing).
• In his own words “No DRM, no regional restrictions, no crap. You can download this file, play it as much as you like, burn it to a DVD, whatever.”

Results

Making it cheap, and eliminating all the friction in the purchase process worked.  In the first two weeks he sold over $1 million (200,000 units).  He joked about watching the sales results on his phone (using the PayPal app no doubt).  It’s an awesome story of about eliminating the middle man, skipping all the digital rights management junk, and succeeding without the networks.

Steal his Best Practice

Louis CK is obviously a talented comedian, but he clearly also understands user experience and consumer psychology.  Al of us can repeat his success.  How can you eliminate friction from your purchase process?  Do you really need to collect your shoppers fax number, and their mothers maiden name?  Fill out an animated 3D Captcha?  Seriously, could you at least skip the account creation prompt, until after I buy?  I’ll bet you’ll like the effect it will have on your conversion rate!

Update – Related Stores:

$1M in 12 days via Engadget

Six things to learn from the Louis CK experiment via Econsultancy

I’m currently on a 8 week road trip full of client and store visits.  My schedule is pretty tight, but the trip does include three big industry events.  Shop.Org, IBM Smarter Commerce, and RIS Cross Channel Summit.  If you’re going to be at any of the shows and want to meet up, feel free to drop me a line. 

Shop.org Annual Summit in Boston, MA, Sept 12 – 14

IBM Smarter Commerce Global Summit 2011 in San Diego, CA, Sept 19-21

RIS Cross-Channel Retail Executive Summit in Scottsdale, AZ, Sept 28 – 30.

Shop.Org is one of my favorite shows, there is usually lots of good content and practical advice for e-commerce leaders.  Be sure to catch the keynote from Glen Senk,(CEO of Urban Outfitter), he’s one of the retail leaders that truly get’s cross-channel.

The IBM show has formerly been focused on the IBM Websphere Commerce platform, but with the many recent IBM acquisitions (Coremetrics, Sterling Commerce, Unica, etc…) the show’s scope is much broader.  I’m looking forward to seeing how much progress IBM has made in integrating their acquisitions, and am particularly eager to see how IBM is responding to the dramatic emergence of Social, Local, and Mobile in our shopping behaviors.

It will be my first time attending the RIS Cross-Channel Summit, but other RIS events have been a lot more “conference” than “trade show” which gives them a much more intimate, less hectic feel.

I’m a fan of industry conferences and am an advocate of getting out of the office and collaborating with your peers.  I know It can be a challenge for busy retail leaders to make the time to attend a few of these events, so it’s critical to choose wisely.  I’d love to hear about your experiences.  What are your favorite events?

Feel free to leave a note in the comments or drop me a line, and if you’re going to be attending it would be great to meet up.

Starbucks is unquestionably one of the most influential retailers on the planet; operating over 17,000 stores in 50 countries.  It’s only natural that the retail world follows any new Starbucks initiative closely, especially if they offer new shopping experiences.  So what can we learn from the new e-commerce site at http://www.starbucksstore.com that Starbucks launched this month?

Here is a vide tour of the new site, with my initial impressions:

Overall, it’s a competent but not revolutionary e-commerce effort, with some strong features, some usability challenges, and a few very painful mistakes.

StarbucksStore.com Best Features:

• Subscriptions – Create a recurring order for your favorite coffees and specify your preferred shipping schedule.  You can also edit the shipping schedule for your existing subscriptions.  The subscription feature is constantly implemented throughout the site, and feels like a core part of the experience (unlike other sites that offer recurring orders as an add-on).
• Graphic Design – A very credible design, with strong images, clear calls to action, and a visually uncluttered look.
• Navigation – It has all the traditional navigation elements right where you’d expect to find them (which is a good thing).  Simple, straight forward guided navigation via a drop-down “super-menu”,  ubiquitous on-site search, promotional spots, and a footer.
• Faceted Search – The guided navigation results can be further refined with helpful category specific filters.
• On-Site Search – A predictive type ahead feature shows you the # of results for popular searches similar to what you are typing.
• Rich Search Result Pages – Grid and List Views with Badges, Ratings, Prices, and Quantities are all scanable at a glance.    A compare feature let’s you see the descriptive attributes for several SKU’s in a side by side view.  Instant actions let the user take popular actions without ever drilling down to the product detail page.

StarbucksStore.com Potential Usability Problems:

• Heavy use of Hover-overs –  Too many elements on the page automatically do something when the mouse hovers over them.  The Mini-Cart, Subscription Widget, Product Images, and Search Results all leverage hover-over.   I know these seem like cool features for advanced web-users, but I’ve seen these features test really poorly in usability studies.  No mater how advanced the user is, it’s NEVER a good idea to have pop-ups appear over the top of the pages most important call to action (Add to Bag). 
•  Guest Checkout – The current flow is optimized for registered users and the guest checkout is de-emphasized.  If a majority of visitors are going to check-out as guests (and I strongly suspect that is the case), then the flow should be optimized for Guest Checkout.     Words like “Sign-In” and “Create an Account” are like nails on a chalkboard to users who just want to buy coffee without being aggressively marketed to.  Guest users will still share almost all the info Starbucks wants, they will just do it in the context of placing the order. When the order is complete and the shopper is happy, Starbucks can still offer to create the account.
• Mini-cart dependence – A mini-cart (or “My Bag” as Starbucks calls it) in the header can be a useful feature. It’s good to always tell the user how many products they have put in in the bag, and what the running sub-total is.   However, Mini-Carts are usually a supplemental navigational aid, not a feature that the shopper is required to learn.  On product detail pages, the only clue you get that you’ve added a product to your bag is an animation in the mini-cart.   A typical user at a comfortable reading distance from the screen has an area of focus about the diameter of a quarter… if their attention is focused on the “Add To Bag” button, they might not notice the mini-cart animation at the edge of their peripheral vision.  The result is often that the user clicks on the button multiple times before they figure out what’s going on, and ending up with too many of an item in their bag.
• Calls to Action on Product Detail Pages – “Add to Bag / Add to Subscription” buttons only live on top right corner of the Product Detail Pages. We call these buttons the Calls to Action (CTA’s) and they are by far the most important thing on the page… I like to call them the “Give Starbucks Money” buttons. Once the shopper scrolls down to read reviews, brewing tips, or other content they will no longer see any way to buy the product. At the very least, I’d like to see an extra set of the CTA’s on the bottom of the page, but it would also be interesting to test a floating set of buttons that stay persistently on-page.
• URL’s – The product detail URL’s are very long and have a number of dynamic variables at the end that are not user friendly (for sharing, bookmarking, etc…).  The URL’s certainly aren’t SEO friendly.   It would be better if static URL’s were used.   The Shopping Cart URL is static but has “demand-ware” in the URL string (which is great SEO for Demand-Ware, but not so good for Starbucks).  It’s common for shoppers to bookmark a shopping cart to come back to later… in this case the bookmark will be named “Cart – Shopping Cart” thanks to the generic Title Tag.
• Bugs – There are still a few rough edges (on-site search says there will be 7 results for “Tea Tours” but it actually gives no results).  If I stumbled across one piece of flawed data in the search index, then it’s not a big deal, but I have to wonder if there is systemic flaw in how content is indexed for the on-site search.

StarbucksStore.com Big Misses:

• No obvious checkout – Once the shopper has put their desired products in the bag, it’s too difficult to figure out how to check out.    I’d highly recommend a “Proceed to Checkout” button every time something is added to the bag.  At the very least, if the shopper expands the Mini Cart (aka “My Bag”), the call to action should be  “Checkout” not “Manage My Bag”.   Starbucks has deviated from typical conventions here, and I suspect they are going to pay for it with abandoned shopping carts.
• Shipping address – The “Same as Shipping” checkbox is implemented really poorly.  It’s actually a “Copy Billing info to Shipping Info” button, if you change any of your billing info after checking the box, your changes will NOT be used for shipping (even though the box is checked).  That behavior is going to create a lot of user confusion and cost Starbucks sales.  In many cases, the shopper will never be able to figure out how to pass the required fields validation, due to this unorthodox behavior. 
• Lack of cross-channel – How can a retailer with 17,000 stores, completely ignore them on their e-commerce site? Shoppers will use the product detail pages to learn about products, read reviews, etc… and then want to buy them in their local store. Yet, there are no features on starbucksstore.com to help with this common use-case. It is disappointing that Starbucks doesn’t offer a way to check store inventory, offer a “buy online pickup in-store” experience, or even tell the shopper which products are typically available in stores. A store-locator is one of the most frequently used tools on a cross-channel retailers e-commerce site (and it’s on the top navigation bar at Starbucks.com), but the store locator is hidden in the footer on starbucksstore.com.
• Alternative images – Products that have multiple images on the product detail page are simply broken.  If a shopper clicks on one of the alternative images, they might expect it to replace the primary image, but instead they are going to be thrown to a new page with a full screen version of the image and no navigation whatsoever.  If the user does know to use the back button on their browser, they will be permanently lost.
• Lack of a domain strategy – Starbucks has made great progress in merging all their various Starbuck Cards and Reward features into a single account and putting them all on the starbucks.com domain.  So why are starbucksstore.com and mystarbucksidea.force.com on separate domains?  Will users figure out that they need separate accounts on all three sites?  By launching the e-commerce site on a separate domain, Starbucks is giving up one of it’s greatest competitive advantages.  From an SEO perspective Starbucksstore.com has less domain authority than Peets.com, even though Starbucks get’s 30 times the traffic Peets does.  It’s crazy that Starbucks doesn’t want to aggregate all their traffic and offer a seamless experience across all their properties.

Conclusion

The world-wide-web is full of far worse e-commerce experiences than what Starbucks is offering, but I expected more from them.  Retailers looking to add replenishment subscriptions will certainly want to look closely at Starbucks offering, but outside of that, retailers will have to look elsewhere for best practices.   It’s pretty clear that the site was built as a stand alone project, and is not part of a comprehensive cross-channel strategy.

About the Author:  Jason “Retailgeek” Goldberg” is the foursquare major of his local Starbucks, and can give you directions and store hours for the Starbucks location at any airport in North America and most of Europe.  When he’s not drinking iced latte’s he leads the Strategy and Customer Experience practice for CrossView, Inc, where he helps clients generate over $1B in e-commerce revenue.

reposted from blog.crossview.com

Most e-commerce executives are focused on on-line sales, even though their actual contribution to the organization is far broader. In order to maximize the effectiveness of digital marketing, executives need to think about their roles differently.

Imagine that you are the VP of e-commerce for national cross-channel retailer. If you are like most of your peers, you probably rose through the ranks of a retail IT organization, or perhaps an IT vendor. You likely report to a CIO, and your primary success criteria is the profitability of your e-commerce business. Your business is growing year over year, and you spend the bulk of your busy days figuring out how to get more traffic, improve your conversion rate, and increase your average order value. Your job is challenging but rewarding, and thanks to your year-over-year growth (which, by the way, you achieved in spite of being understaffed,) you feel like a success.

Unfortunately, your role and your perceived success are likely based on a false premise. That false premise is that your job to is to sell merchandise on your website.

While online sales and profitability are certainly important, they likely contribute far less to your organization’s overall success, than your effect on brick-and-mortar sales via digital marketing. If your business mirrors that of Best Buy and Home Depot’s recent disclosures, a majority of all your brick- and-mortar sales originates with a visit to your website.

“45% of in-store visitors pay a visit to homedepot.com first”

– Hal Lawton, President Home Depot Online.

“We know that 60% of our U.S. store sales are influenced by our customers’ experience on bestbuy.com”

- Brian Dunn, CEO Best Buy

Your online sales last year may have been $250M, but you influenced $2.5B in your retail stores. Saying that your primary success criteria is online sales, is like saying that the primary success criteria for Victoria Secrets catalogs is to increase mail-order sales.

Your Real Job

Your e-commerce website, and the digital marketing initiatives that drive traffic to them are the very top of a marketing funnel that ultimately results in sales at your retail POS. Think of your e-commerce site as the first 2,000 sq. ft of a 20,000 sq. ft store. It’s great if a shopper walks in your front door and quickly buys the product displayed in the window, but it’s even better if that windows display entices them deeper into the store to make an even bigger purchase!

So how much of your day is dedicated to meeting the needs of those brick-and-mortar shoppers who start their trip on your website? Consider these questions that you ought to be asking:

My team at CrossView is growing and we have openings for some great retail strategists.

The world of shopping experiences is changing rapidly… not only are on-line and off-line experiences merging, but rapid evolutions in mobile, social, and local trends are forever changing shopper expectations.  Great retailers are responding to address these new expectations, but they need your help!

The Retail Strategy practice at CrossView works with some of the worlds top brands.  We help our clients with a variety of projects, but typical engagements might be to:

• help retailers integrate all their customer touch points by developing a Cross-Channel Customer Experience Roadmap
• answer all those questions about apps vs. mobile sites, mobile commerce vs. mobile-merchandising, platforms, integration and much more by developing a Mobile Playbook
• teach clients how to apply the latest analytics to a wide range of traffic generation activities including organic search, pay for click, and electronic direct marketing as part of a comprehensive Traffic Optimization service
• leverage User-Centered Design, Usability Testing, and Split Testing as parts of an an ongoing Webstore Conversion Optimization process.

If you’re a rock-star that has experience with one or more of the above types of work then we may have a terrific opportunity for you.  Check out the job description for Senior Retail Strategist, and if you think you have what it takes, send your resume to jobs@crossview.com.

Digital Signage Expo, Las Vegas

I’ll be in Las Vegas for the Digital Signage Expo, February 22-25.  On Thursday at 3pm PST, I’ll be presenting the Exploring the Adoption of Digital Innovations session in the Advertising and Marketing track.  Please come by and say hello if you’re going to be at the show.

I’m also looking forward to the Las Vegas visit, so that I can shop the “Connected World” Best Buy stores that have been deployed there.  It’s an ambitious re-designed experience for Best Buy that breaks a lot of their traditional customer experience conventions, so I’m eager to see how shoppers are responding.

RetailConnections, Miami

Assuming I don’t lose my plane tickets in a wager at the blackjack tables, I’ll be heading straight from Las Vegas to Miami for the RetailConnections Business Executive Summit, February 27-March 1st, at the Turnberry Isle Resort.  I fear it will be the debut of my 2011 golf game after being in hibernation for the Portland winter, so if you happen to be in my foursome at Turnberry, I’d like to apologize in advance.

Major retailers are sharing some remarkable data about the cross-channel behavior of their shoppers:

“45% of in-store visitors pay a visit to homedepot.com first”

– Hal Lawton, President Home Depot Online.

“We know that 60% of our U.S. store sales are influenced by our customers’ experience on bestbuy.com”

- Brian Dunn, CEO Best Buy

Applying those ratio’s to publically available data, you get some startling facts:

For every dollar in orders on HomeDepot.com the site also influences $60 in brick and mortar sales.  For every dollar spent at BestBuy.com the site also generates $10 in brick and mortar sales.

Traditional e-commerce metrics report that HomeDepot.com converts 1% of it’s traffic to customers, while BestBuy.com converts 2.2%.  But those metrics only tell part of the story… When you factor in the sales that start online and finish in the store, the true conversion rates are 61% for Home Depot and 25% for Best Buy. Yet, the overwhelming majority of eCommerce leaders manage their business’s for on-line sales, even though they are vastly more successful at creating brick and mortar sales.

What if retailers to started thinking about cross-channel success criteria?  Would features like “Store Availability”, “Store Locator”, and “Store Hours” become more important than “Buy Now”?

Think how you might approach webstore feature sets, information architectures, user personas, usability testing, content development strategies, and ROI calculations if you knew your “happy path” was a shopper that started on-line and finished in the store.

It’s time to stop talking about “Buy Now Conversions” and “Online Sales,” and start thinking about “Cross-Channel Conversions” and “Total Influenced Sales.”

What are your favorite cross-channel metrics?

Todays shopper marketer needs to be a master of a wide variety of disciplines, and apply them across multiple touch points.  The secret to success is to build a great foundation in four key areas:

• Consumer Behavior
• Story Telling
• Retail
• Internet Marketing

Here are my 14 all time favorite shopper marketing books (link to permanent page with mini-reviews of each book)

Consumer Behavior

1. Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions
2. Influence: The Psychology of Persuasion (Collins Business Essentials)
3. How We Decide
4. The Paradox of Choice: Why More Is Less

Story Telling / Copywriting

1. Letting Go of the Words: Writing Web Content that Works (Interactive Technologies)
2. Breakthrough Advertising
3. Ogilvy on Advertising

Bricks and Mortar Retail

1. Why We Buy: The Science of Shopping–Updated and Revised for the Internet, the Global Consumer, and Beyond
2. The Aesthetics of Merchandise Presentation

E-Commerce / Internet Marketing

1. Landing Page Optimization: The Definitive Guide to Testing and Tuning for Conversions
2. Always Be Testing: The Complete Guide to Google Website Optimizer
3. Web Analytics 2.0: The Art of Online Accountability and Science of Customer Centricity
4. Neuro Web Design: What Makes Them Click?
5. Don’t Make Me Think: A Common Sense Approach to Web Usability, 2nd Edition

I’ve made this list a permanent page that you can link to here: Recommended Shopper Marketing Books (link to permanent page with mini-reviews of each book).

I’d love to hear about some of your favorite books!

(Note:  All links include an Amazon affiliate code.  It’s not my goal to  make income from the blog, so I won’t be offended if you buy via other means.  Cheers!)

We  are seeing the first signs of reverse commoditization:

• In early January I predicted that mobile shopping tools would make pricing and availability completely transparent  to shoppers, which would drive retailers to compete on customer experience rather than price.
• On February 1st, Google announced their mobile shopping app for the iphone.
• On February 4th, Best Buy’s CTO and Geeksquard founder Robert Stephens replied to one of my tweets:

@Retailgeek:  As #mobile gives shoppers perfect pricing/availability info #retailers will need to compete on customer experience!

@rstephens:  We Agree.  RT: As #mobile gives shoppers perfect pricing/availability info #retailers will need to compete on customer experience!

• On February 9th, Bloomberg broke the news that Best Buy was considering a switch to every day low prices.

Best Buy’s shift in pricing strategy from targeted promotions to everyday low prices would be intriguing.  Many Cross-Channel retailers (including Best Buy) feature different pricing on-line than they do in their stores.  When a shopper notices the discrepancy, most retailers will match their own lowest price, but usually at the expense of irritating their customer.

It may be a slow migration, but given the traction that mobile shopping tools are getting I now consider it inevitable that most retailers will move to universal pricing.

Is there an advantage to being a first mover?

If you know that the entire market is eventually going to move to an everyday low pricing strategy, do you want to be the first retailer in your category to own that strategy ,or do you want to be perceived as responding to your competition?

Banks found themselves in a similar circumstance in the 1990’s.  In the early 90’s banks used to charge their customers when they used other banks ATM’s (so called “interchange fees”).  In the mid 90’s Banks began charging an “ATM surcharge” to non-customers who used their ATMs.  Essentially visiting customers were charged by both banks.  But bankers realized that consumer would revolt and that the double fees would not last.  Rather than waiting for the competitive pressure to force them to drop the fee, several savvy banks proactively eliminated the “interchange fee” and launched aggressive marketing campaigns promoting themselves as no-fee banks.  A few years later, ATM surcharges from the out-of-network bank became the norm, but the first mover banks had several years to capture new customers.

Do retailers have a similar opportunity to earn the “everyday low price” positioning before mobile price checking becomes ubiquitous?  Does Walmart already own that position?  These are not easy decisions as pricing changes can we quite expensive to a major retailer. Is it better to make a number of small pricing steps (1.  eliminate restocking fees, 2.  move away from promotion based pricing, 3. unified cross-channel pricing), or one big one?

As for me, I’m advising clients to put universal pricing on their roadmaps.

UPDATE: Twice reports that Best Buy pricing article may be inaccurate.

A new feature I am going to try to maintain on the blog, is a weekly summary of the news you would have heard this week if you followed my twitter stream @retailgeek:

Consumer

• Retail sales climb a health 4.2% for January – LA Times
• More confident consumers start using credit cards again. Bloomberg News
• Online Retail Spending Reaches A Record $43.4B In Q4 2010; Up 11% Techcrunch
• The Return of the Aspirational Shopper; more shoppers are ready to splurge.  via WSJ

Mobile

• 26% of mobile Apps downloaded in 2010 were used just once Localytics
• 8.8% of retailers have a mobile commerce site, 75.9% expect to launch one soon. Milo
• eBay generated more than $2B in worldwide mobile sales in 2010.
• Global SMS traffic will grow from 5 trillon to 8.7 trillion messages by 2015.
• JCP issues iPads as a sales assist tool for jewelry sales clerks.
• Apple Initial Sales via Mary Meeker Slides on Techcrunch:

• In 10 Quarters there have been 10 billion apps downloaded from iTunes versus only about 624 million songs.  Mary Meeker Slides via Techcrunch
• Smartphone market now bigger than PC. According to IDC, 101 million smartphones were sold in Q4, versus 92 million PCs.  via Businessinsider
• Worldwide smartphone sales grew 72% in 2010 to 1.6 billion units. via Gartner
• USA Today’ Adds Microsoft Tag 2D Barcodes to print edition.  via Mediapost

Retail

Best Buy has launched a new Buy Back program.  For an extra fee at the time of purchase, Best Buy will promise to buy the product back in the future, at a pre-arranged price.  Buy a $400 phone with the Buy-Back option, and sell it back for $160 in 12 months.   Many consumers will think of this as a $240 purchase rather than a $400 one.  Like a lease for a new car, consumers can start thinking about paying for the utility they get for an purchase instead of having to pay for the full life of the product.  These programs have been around for a while via companies like Tech Forward, but this is the first a major retailer has really promoted it, via a SuperBowl ad no less!  Read Barry Judge, Best Buy’s CMO’s thoughts on the Buy Back Program here. Will Best Buy start selling previously owned products as well?