No Turn On Red

Adobe buys Omniture for 1.8 billion dollars

Tom — Wed, 16 Sep 2009 01:22:21 +0000

Adobe, makers of Photoshop, Flash, and other software that doesn’t get paid for as often as it should, has announced that they are purchasing website analytics and optimization company Omniture in a deal worth 1.8 billion dollars.

This is a huge deal for the e-commerce industry and not just for what it means for Adobe today. This is a huge deal for the type of company Adobe can now position itself as and for where they could potentially be in 18 months.

First, realize that Omniture is not just an analytics company. Sure, that may be what they are known for – but they have many components of their software suite that work seamlessly with each other. Omniture also does merchandising, recommendations, website testing, and site survey – all tasks that are analytic driven. Many of these components are used by e-commerce retailers and I know several retailers that love their packages.

Second, realize that Adobe has already stepped into the e-commerce world when they acquired Scene7 in 2007. Scene7 is a fantastic solution for managing images for retailers. (I’m not rehashing some Adobe marketing, I’m speaking as a developer who’s used Scene7 – I really like this software). Scene7 is now used by many, many retailers around the world to dynamically serve their images.

Short term I’d expect some sort of analytics package being applied to Scene7. I’m not sure what type of analytics you’d see, but I’m sure there are metrics that can be applied. If there are metrics available, there is a marketing person who will want to analyze them.

Longer term, I think it would be killer if there was an e-commerce platform that offered seamless integration with Omniture analytics and Scene7 image hosting. Of course Adobe isn’t an e-commerce platform, but not for long. I don’t think we will see 2010 come and go without a major, major acquisition by Adobe of an e-commerce platform. I think it would make perfect sense for Adobe to grow in this world. The industry has so much growth potential and Adobe could be perfectly situated to take advantage of this. It’s almost a no brainer to me.

I have my own ideas in my head of who I think Adobe could acquire, but I will keep them to myself right now. Let’s just say, that any e-commerce platform offering an ondemand SAAS solution would be the type of company I would think Adobe would gobble up.

The next 18 months are going to be very interesting in the e-commerce world.

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Can Magento book 200 Enterprise licenses in one year?

Tom — Tue, 01 Sep 2009 01:55:37 +0000

Earlier this year, Magento released the Enterprise Edition of their e-commerce platform. While reading up on their integration solutions, I couldn’t help but notice some interesting numbers as part of their partner program.

Integration partners who are at the Enterprise Level must have an $8,000 partner fee and provide Varien (parent company of Magento) with a revenue commitment of $100,000. This may be in enterprise licenses or “other Varien services”. A quick glance at the Magento partners page shows that there are currently 22 Enterprise partners. For a second, let’s consider what these numbers mean if we take them at face value.

This means that Magento is seeing revenues of $176,000 in just Enterprise partners alone (this doesn’t take into considering the $4,500 & $1,500 partner fees for the Professional and Community partnership levels). 22 Enterprise partners means that Varien has $2,200,000 in revenue commitments for the year. At an average deployment cost of $11,125 (according to Magento’s own figures), Enterprise partners must move 197 enterprise licenses this year to meet their commitments.

I know that my math is fuzzy and put together using the information that is publically available. I know that these numbers don’t take into account “other Varien services”. I also know that Varien is a private company with private sales figures. However, I am really interested to hear what others think: can Magento, the quickly growing e-commerce platform, actually see 200 enterprise edition licenses in their first year of offering their Enterprise Edition?

Going one step further and assuming that the average Enterprise Edition customer launches with two production licenses (number completely made up in my head), Magento is still looking at 100 clients. No wonder they are making so much noise in the e-commerce field right now.

So what do you think? Are these numbers, taken for what they are worth, realistically achievable for this e-commerce platform? Or, considering the growth that the platform saw over the past year, are these numbers the low end of what Magento could launch?

(Of course, my numbers could be really off as well. As I said, this is all fuzzy math and estimates. If you feel I’m off base in these assumtpions, please tell me!)

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Retail sales in July remain sluggish; Cash for Clunkers to blame?

Tom — Fri, 07 Aug 2009 12:19:33 +0000

Retail sales in July continued to be a mixture of disappointment and mediocrity.

Retailers catering to teens saw a mixed bag of results as teens decided to spend more money at Aeropostale (same store sales up 6%) and Buckle (same store sales up 2.8%), but both retailers missed analysts projections. American Eagle saw an 11% drop in same store sales, on top of the 7% drop they saw this time last year. Abercrombie & Fitch continued their terminal velocity fall with a 28% drop in same store sales. No good.

Macy’s saw a 10.7% drop in same store sales, JCPenney reported a 12.3% drop in same store sales, while Kohl’s managed to eek out a nearly flat month (0.4% increase in same store sales). I guess shoppers are really going nuts over that new line by Avirl Lavigne.

Besides the general state of the economy and unemployment through the course of the year, some analysts suggest that the, recently enacted and more recently refueled, Cash for Clunkers program is diverting money from the retail industry:

“One of the unintended negative side effects of the cash for clunkers program was that it’s going to remove money that probably would have been spent in retail stores and restaurants and is now going to go toward a car payment,” said Purdue Consumer Sciences Professor Dr. Richard Feinberg.

And not just “spare change.”

Feinberg estimates the nation’s retailers could lose up to $300 million a month as consumers spend their disposable income on loans instead of lunch. By the end of what’s expected to be another tough holiday shopping season, losses could add up to between $1.5 billion and $2.5 billion, Feinberg says.

More information on retail sales from the New York Times and Los Angeles Times.

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Boscov’s to get 43.7 million in government loans

Tom — Thu, 06 Aug 2009 20:02:46 +0000

Good news for the sometimes troubled retailer:

The Boscov’s department store chain will receive a $43.7 million federal loan through a Department of Housing and Urban Development program for economic development, U.S. Sens. Arlen Specter and Bob Casey announced today.

The 20-year loan is intended to assure the Exeter, Berks County-based department store chain continues to operate. The chain employs about 5,000 workers in Pennsylvania.

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Red Bank (NJ) to get micro Staples

Tom — Wed, 15 Jul 2009 19:45:51 +0000

Red Bank Green has the news that the town will be getting a new retail tenant: Staples will open a micro copy center location sometime this Fall. The location will have a full feature copy & design center as well as carrying an assortment of the “top 1,000 products” in the store.

This is great news for the Red Bank retail community. Staples is second national retailer to embrace Red Bank in recent months, joining Urban Outfitters who will also be opening a Red Bank location sometime this Fall/Winter. Though in-town retail vacancies rose rapidly through the end of 2008 and early 2009, this is another glimmer of hope that the town may be making the turn towards better times.

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Express Lane for May 14, 2009

Tom — Thu, 14 May 2009 16:35:37 +0000

Few things on my radar this morning that I want to share:

Great post by Get Elastic that analyzes the checkout login process of several of the top converting sites. New users resist registering and want to check out without creating an account. Very good data and thoughts there for anyone working in e-commerce.

Not all the news about the retail industry should be bad. Seeking Alpha has a list of 10 retailers with stronger than expected first quarter sales. A slight glimmer of positive news in the midst of all the doom and gloom about the economy that is still lingering.

For the designers in the house, I really love going through the sites at Design Meltdown. Always an inspirational gallery site. Last week they posted a new collection of “super clean” websites. Just because the design is clean doesn’t mean it has to be bland. Good inspiration there.

Jeremiah Owyang is live blogging from the Corporate Social Networking Conference in Amsterdam and has a recap of the panel on digital natives. Kids born after 1980, who grew up with the level of technology, should be looked at differently by businesses and brands. This is an important segment of consumers that retailers have to be aware of and cater to. Teen retailers have been forced to get it, but how will retailers react as this generation continues to grow older?

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16 E-Commerce Sites Ready for Valentine’s Day

Tom — Mon, 09 Feb 2009 21:46:38 +0000

Valentine’s Day is just a few days away. I wanted to see how various retailers are promoting the holiday in order to see how they are working to increase last minute sales. Below you’ll see screenshots of various e-commerce sites that are ready for the Holiday: from department stores, to jewelry, candy, and lingerie.

I find it interesting to see a holiday like Valentine’s Day play out over the web. On one hand, there is the traditional retail focus on jewelry, flowers, and accessories but they are interspersed with free shipping promotions, shipping guidelines, and gift finders. Throw in a lot of red, red, and more red and you have the state of e-commerce as we run full force into the Valentine’s Day holiday.

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Macy’s cutting 7,000 jobs

Tom — Mon, 02 Feb 2009 19:58:57 +0000

Another reduction in the retail workforce: this time it is Macy’s announcing a 4% reduction in their workforce, slashing 7,000 jobs. 5,100 of those are at the store level.

“Reducing our workforce is an unfortunate outcome of the current economic environment, and I am frustrated that so many of our people will be unable to move forward with us as we proceed into a very exciting future for Macy’s and Bloomingdale’s,” Macy’s CEO Terry Lundgren said in a statement.

The retailer estimates the restructuring efforts will reduce previously planned expenses by about $400 million a year beginning in 2010.

This is the latest in a line of retail layoffs – last week Home Depot, Starbucks, Williams-Sonoma, and Target all announced layoffs. Best Buy has also announced that they will be cutting workforce in their corporate headquarters later this month.

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Starbucks announces layoffs, more store closings

Tom — Thu, 29 Jan 2009 04:21:39 +0000

As speculated last week, Starbucks has announced layoffs and another round of store closings. For the quarter ending December 28, the coffee retailer announced a 69% drop in net income and a 10% drop in same store sales.

These store closings are on top of the 600 company-owned stores the chain closed in 2008. 200 of the closings will be in the United States with 100 closing oversees.

CEO Howard Schultz also announced that he is reducing his base pay to $10,000 from $1.2 milllion.

Follow reaction to the announcement in the comments posted over at Starbucks Gossip.

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More Retail Layoffs

Tom — Mon, 26 Jan 2009 16:36:37 +0000

With the disappointing Holiday season behind us, the layoffs and retail store closings are continuing to mount:

Today, Home Depot has announced that they are closing their line of Expo home design centers and trimming support staff, resulting in 7,000 reduction in staff. With both home sales and the economy down, shoppers aren’t looking for high end home design solutions right now. The retailer is quick to note that the layoffs will not impact any customer service positions at the Home Depot proper chain.

It appears that their Expo stores weren’t performing well during the housing boom, so it’s no surprise that they would be doing even worse during the current economic conditions.

Another victim of the housing slump is Williams-Sonoma. On Friday, the retailer announced an 18% reduction in their workforce. In addition to stores being effected by the layoffs, the retailer will also close a call center in Pennsylvania and a distribution center in Memphis. I think the high end housewares stores have been hurt badly by both the economic downturn and mid-market retailers like JCPenney and Kohl’s.

Starbucks, who closed 600 stores in 2008, is expected to eliminate 1,000 jobs at their corporate headquarters and reducing district managers and field employees. The published report, prepared by investment firm McAdams Wright Ragen, speculates that these layoffs will happen in early February and won’t effect store-level barista positions.

And don’t forget that last week Circuit City announced that they are closing all US operations with job losses effecting up to 35,000 people.