New Trends in eCommerce and the Web (some hot, some just not)
Published May 23, 2012 Share
In a session at the recent Shopatron onTarget 2012 client conference, Shopatron CEO Ed Stevens, Forrester Research VP Sucharita Mulpuru and Josh Reddin, VP at digital agency BKWLD, got together on stage at the Cliffs Resort in Shell Beach, Calif. for a friendly chat about some of the hottest topics in eCommerce. The opinions shared by a few of the brightest minds in eCommerce and the web were just too valuable to limit to conference attendees, so I wanted to share their insights here, with you…(Aren’t you lucky.)
Below is a quick review of the discussions. Feel free to use this as a cheat sheet for what’s really worth looking at in eCommerce in 2012.
Pinterest: Hot or Not?
According to Josh, Pinterest is definitely hot. “Tastemakers are jumping on top of it and it’s exciting to be a part of that,” he said of the social media site that allows you to share, or pin pictures to its wall. “It’s a powerful branding piece, especially if you have the assets to back it up.”
But for the rest of the panel, Pinterest doesn’t look like the next Facebook.
“Pinterest makes me yawn,” Sucharita said to sea of laughter from the onTarget attendees. In her opinion, Pinterest is not yet hot. As she says, this is a product that has been done before without any real form of great financial success. In fact, Sucharita even had a couple of nice alternatives she recommended: “Try ‘Fancy’ and ‘Houzz,’ the Pinterest app is not the greatest,” she said.
So it was up to Ed to break this Hot or Not tie. And he did… “It’s hot for my daughter, but not for me.”
In the end, the ruling was mixed. While Pinterest’s exact place in the market is yet to be determined, it is still a site that draws a ton of traffic (gaining over 13 million users in just 10 months). This large number of possible customers can potentially be tapped similarly to Facebook, where you can communicate and share information with Pinterest users based on their profiles, but just don’t expect to be converting them into sales just yet.
Facebook Commerce: Hot or Not?
Facebook commerce, or fCommerce, is a big topic these days, big in so much as it has not lived up to lofty expectations. And for the most part the panelists agreed with this sentiment.
Josh was the first to go on the offensive, saying that it will be hot one day and that it has the potential to be really hot, but as Sucharita said in her keynote, fCommerce is certainly not hot at the moment.
“Facebook stores just haven’t sold much,” added Ed.
The verdict here: Not hot.
Daily Deals/Flash Sales: Hot or Not?
Sites like the Gilt Groupe and Groupon have made daily deals famous, while flash sales have been all the rage for many commerce sites. But the success of these tactics to drive long-term sales remains unproven.
“I am just not sure if Groupon’s model is viable long-term,” Ed said, planting himself on the not hot side of the argument, which the other two panelists eventually joined. “The economics of the offers just don’t work on a long-term basis for most of their target audience.”
“Groupon deals are vouchers and Gilt is flash sales,” said Sucharita, “and both of them have the difficult task of procuring great merchandise every day.” She continued by describing how all retailers and brands have the ability to offer similar deals.
While activities like these can often boost traffic to your website, it can also lower the inferred value of your product and make consumers “wait it out” to buy again until you offer a similar bargain. As a general consensus from our panel, this makes discounts like these not hot for your business.
QR Codes: Hot or Not?
You see them all over the place these days. You know, the black and white squares that can get you to a site or an app with the snap of a picture on your smartphone. But their effectiveness, not their pervasiveness, was the topic of debate.
“It’s a hard debate,” says Sucharita, who points to Asian markets like Japan where 80% of consumers use QR and bar codes regularly. “I’m going to say hot, but keep watching.”
Josh on the other hand took the converse opinion on QR (quick response) codes, claiming that it’s just content saved to a URL.
Ed gave this debate some gravity by saying that kids like his 13-year-old son think QR codes are cool. “The younger generation sees clearer what it’s all about,” Ed said. “Expectations on mobile devices are so fast, the experience has to be blistering fast.” And for that reason, QR codes are warming up in the hot or not discussion.
Sales Tax on Online Sales: Hot or Not?
To wrap up this hour-long discussion, the panel wanted to talk briefly about the impact of sales tax, particularly with what Amazon is facing with upcoming legislation on this issue.
For a company like Amazon, which makes slim profits on each sale, any increase in price – say, for example, if a sales tax is enforced – could have a huge impact on sales.
“With the sales tax impact on prices, there will be a linear effect depending on the size of the ticket,” said Ed. “If it’s a $10 ticket it will be a small issue, at $100 it’s a factor and then at $1,000 it's a huge factor.” This means that if “total” prices are rising because of tax, as Ed says, at least some purchases will shift back to the local stores.
Sucharita took a more mild approach to this topic, saying that Amazon doesn’t really care if they lose a few more bucks on an item when they’re already operating at a loss on some purchases. “Their model is to win at all costs and then to figure out how to pay the bills – and they’re doing it,” she said. “I don’t see the Amazon juggernaut going away.”