Thursday, February 24, 2011

Challenges facing Internet startups

Based on the Taxi Magic presentation and the case for next week, what do you think are the key challenges facing Internet startups as compared to brick-and-mortar companies?

Obviously, brick-and-mortar companies encounter several obstacles that Internet startups do not, but here, we discuss the other way around: the key challenges that Internet startups face compared to brick-and-mortar companies:
1. Harder to build trust
When people open a brick-and-mortar company, customers come and feel more secure doing business with them because their presence is known to several parties: property manager/landlord, county/city tax department, distributors, and so on. From customers' perceptions, brick-and-mortar companies also tend to stay long-term since it takes time to move away with  furniture and goods/products. On the contrary, customers tend to be more suspicious when browsing a website because the website can disappear in an hour without leaving any traces and customers have no way to track down if they lose money, need to return, or simply contact the company. As an example, Tim Csontos said they initially asked customers to give credit card info and no single person was willing to do that. If it had happened at a brick-and-mortar store, the chances that customers accepted that request would have been higher. Similarly, among the feedback from MusicJuice was "I do not trust the website with my money." This trust issue can have domino effect: I don't trust it, then my families and friends don't trust it, either.
2. More competitors
Brick-and-mortar companies do have competitors but usually within a specific region, there are no or just a few competitors. In contrast, Internet startups usually encounter more competitors due to:
- Internet is borderless, so competitors can be all over the world. For MusicJuice based in Toronto: competitors Sellaband from Amsterdam and Slicethepie from Berkshire.
- Internet businesses can be easier to be copied. Brick-and-mortar companies usually involve customer services and harder to imitate. For internet startups, if their business models are good enough, giant companies can copy and with their brand names and huge resources, they can beat those startups.
3. Unable to reach customers
Brick-and-mortar companies usually target on local people, So, they usually pick a great location with high traffic or in a shopping mall, so they get more exposure to local people. They can drop leaflets at residential homes to invite them to visit. For Internet startups, they need to deploy different marketing strategies. Taxi Magic resorted to well-known "tech people" such as the co-founder of Twitter and a person in San Francisco who has more than 1 million followers on her blog. It also managed to get voted among the top choices on Apple apps. They also offered free text messages for taxi companies to reach customers. MusicJuice depends on Google AdSense.
4. Website
Since this is the place that customers visit and decide if they want to do transactions with the company, it must invest significantly in design, making the website attractive and at the same time easy to navigate and take actions. The website performance, reliability, and security are also crucial. With limited cash at the beginning, the website development cost almost all of its cash, with only $5,000 left. Since there are millions of websites, it's very hard to design one website that stands out and attracts many people, both the look and feel and the activities. That's why MusicJuice got the feedback of boring website with few activities.

Monday, February 21, 2011

Azox Customer Showcase Page

View just some of the work Azox has done by visiting the Azox customer showcase page. There you will find sites Azox has worked on. All of these websites are integrated with Microsoft Dynamics GP, allowing for one point of maintenance for inventory, pricing and order processing. Check them out here.

Thursday, February 17, 2011

Business brands for 24/7 workers

24/7 is a dream of efficiency for businesses.
Buying and consuming all day across the world.
Working across each timezone.

You probably work more than 9-5. And you probably check your email at night; at the weekend; again; and again. But that's ok. Because businesses do run all night, and because you might well have your best brainwave at night, or in the shower. And now you can capture it, and act on it, straight away.

We've got the technology to be more connected, and we can make the trade-offs in how we use it.

The acceptance of business as innate to our lives, rather than a prop for them, is changing our habits of consumption. e.g. Business products required in the home - e.g. broadband is often a domestic necessity to keep us online (witness those MP's expenses for it), e.g. Social products required in business - e.g. iPhones and iPads used for corporate email. Both products keep us working and playing all day long. Symbiotically we're connected in technology, but also in thought and focus on priorities of what we must do.

Business brands are having to move further away from the stereo-type "Business Man" to people who live and work in the same life. Accenture focused on marketing through Tiger Woods, to move Consulting to a favourite ground for mixing work and play. Cisco have demonstrated the benefits of their technology to people, more than just technology offices to create the 'Human Network'.

Opportunity to succeed comes from being able to demonstrate benefits to users, that reflect life of ambitions that inter-relate work as well as what we do outside it. Brands who can benefit our quality of life, and our success to manage colleagues, managers, friends and family will succeed in the complex web we've woven.

This is a guest blog, written by Phil Edelin, Brand Consultant for Dave.

Wednesday, February 16, 2011

Is Big Brother a good concept to base a marketing campaign on?

The concept of Big Brother rarely gets treated with a positive spin. From the television programme to CCTV cameras, the term is awash with negative subtext. People don’t like the thought that they’re being watched, controlled, or left powerless by others. So with this in mind, why would a company design a direct marketing campaign based on the concept of Big Brother?

There are a number of increasingly popular tactics that companies are using that retarget consumers who have visited their site without buying anything. This is called behavioural retargeting. Or behavioral retargeting if you're on the other side of the pond!

For Christmas 2009, I bought my wife some clothes from Later on in the year, my wife was using my laptop and visited the same website. The next time I checked my e-mails there was one from Oli:

I was confused because I'd not visited that site since the previous Christmas. I assumed it was spam. After establishing that my wife had been on the site that week, I understood that the the company had employed retargeting tactics using information from the cookie in my browser. This is a creative marketing strategy. However, I hadn't given Oli permission to contact me in the first place so to receive an e-mail thanking me for visiting a site I hadn't personally accessed was an invasion of privacy. Oli will argue that this e-mail is permissible because they're contacting me for the same reasons that we had originally done business. This is okay without opt-in.

I understand the strategy behind it, however I wasn't impressed and it left me with a poor impression of the company. I talked to my wife about this and her first reaction was of shock that a. Oli had the capability of doing this and b. they thought it was an acceptable tactic. has since merged with, so it will be interesting to see whether their retargeting tactics change.  

This is an example of behavioural retargeting based on my previous interactions with the company. Companies are also using behavioural retargeting even when they don't know who you are. 

You can visit a website, search for or view certain products and the site's cookie will then intelligently seed adverts through networks with the same or similar products, encouraging you to come back and convert into a customer. Therefore, if you visit a website that's part of the network, you'll be served with adverts that present you with similar products. 

I'm going to Nice later this year, so I'm looking for hotels. After visiting Expedia, I left without booking because I wanted to check out the prices of the same hotels on other sites. Today, I visited a non-travel related website and was presented with the ad to the right with details of three of the hotels I was looking at a few days previously. Clever.

Again, this could be regarded as invasion of privacy, however I'm not as shocked about this as Oli's retargeting. Why?

Sure, Expedia is hitting websites I visit with records of my previous searches, however I don't feel like it's invading my privacy. It's not pushing its way into my letterbox and telling me that it's spying on my every move. These ads are taking a more subtle approach and although it's a reminder that my online activity isn't private, it doesn't feel invasive.

I asked my wife what she thought about this retargeting technique and her instinctive reaction was that it was clever. After some thought, she then started questioning how it worked and exactly what information was being shared with third parties. She ended up having so many questions that her initial enthusiasm was forgotten. 

This is still relatively early days for this type of tactic. While retargeting is one of the more advanced ways of improving conversion, it needs some refining and I think it will improve as consumers' awareness of it grows. 

If you look at the bottom right hand corner of the ad above, there is a small i symbol. When clicked, this gives you more information about how the ad works and also an opportunity for you to opt-out of behavioural retargeting. This is good because transparency is important; however I wonder how many people actually click it? I'm guessing the number is very low! It's pretty inconspicuous. 

So how can this awareness and transparency grow? Should websites carrying these adverts have some responsibility for explaining to its users why they're being served targeted ads, or is it the advertisers responsibility? Should consumers have to opt-in to this advertising instead of having to opt-out? I think in the case of, opt-in should be a given.

Sunday, February 13, 2011

When Passion for Movies, Technology Collide

The article is from WSJ on Feb 10, 2011
Netflix definitely pushed several competitors out of business but in this article, Mr. Skorman, an Internet and retail entrepreneur, "believes rental stores with loyal followings in vibrant neighborhoods will survive.", citing that people still need "community element" that online can't offer.
Notice that there are at least two conditions for the brick-and-mortar model to survive: loyalists and vibrant neighborhoods. So, this model can work but only as highly specialized boutiques located in some crowded areas due to the two dramatic limitations that Chris Anderson pointed put in "The Long Tail".


What do you think is the best long-term strategy for Netflix, given the recent growth in popularity and competition in the market for online streaming content?

Netflix is a great example of adjusting its strategies based on the user feedback and changing environments, either internal or external. It started with a pricing model similar to the one used by traditional video stores: $4 per movie plus $2 shipping and handling charge and late fees. Customers voiced their frustrations and Netflix switched to no-late-fee subscription model. A great way to differentiate itself from brick-and-mortar competitors and bring more value to customers. Another example is moving from no direct relationships with major studios to direct revenue-sharing agreements with nearly all of them.
To sustain its position as a giant in the media industry, it needs to pursue a long-term strategy with several moves:
1. Continue the close watch of VOD developments and adjust the strategy accordingly. Partner with key IT players in this trend since as Sarandos explained "What we do is probably 70% science, 30% art." To live up with the three strengths: convenience, value, and selection, Netflix definitely needs to invests continuously in IT.
2. One primary limitation of VOD is content availability. Netflix can add more content to serve the "long tail" community by reaching out to more foreign major studios. As Chris Anderson pointed out in "The Long Tail", with this new economics, in which it matters not where customers are or how many of them are seeking a particular title but only that some of them exist, anywhere. With more diverse content, Netflix can both satisfy current subscribers and attract more new customers.
3. Add more "extras" on Netflix. 
When users select a title to watch instantly, Netflix offers services such as Order Foods and Drinks and Share with Friends. If the users select Order Food and Drink, Netflix can give recommendations based on their history, the statistics of others watching the same title, and the ratings. The idea is similar to movie recommendations. The users can choose to enter their inputs. To make this work, Netflix needs to partner with restaurants. Share with Friends is letting the users' friends know that the users are watching this movie now. The purpose is that their friends can pick that movie to watch, too and later on, they can discuss the movie.
When users select a movie for their queues, Netflix displays the list of their friends who have already watched it. This way, the users can have reviews from their friends, making the reviews more likely to be reliable and valuable. Netflix can partner with Facebook, Twitter, or other social media.
After users watch a movie, Netflix displays All About <the movie title>, for example All About Finding Nemo. It is basically a store where users can buy CDs, books, posters, toys, games, clothes, and anything related to that movie. 
The ultimate goal is to deliver more content instantly and conveniently, more relevant services, and greater viewing experience.  

Friday, February 11, 2011

Tuesday, February 8, 2011


What do you think is the best way for Yelp to monetize the reviews and content they’ve generated, going forward? How scared should Yelp be of Google Hotpot and what should they do to maintain/grow their position?

Yelp should be very concerned with not only Google Hotpot but also other websites such as Yahoo! Local and CitySearch. With many competitors around, Yelp risks being just another review website with not much differentiation. Also, popular websites such as Facebook and Twitter can expand their businesses to include services that are similar or even better than Yelp. Furthermore, these potential competitors have the advantage of well-established names and the network of friends, who users trust much more than several strangers on Yelp.

The first option is charging users for accessing the website. Yelp can charge differently to different groups of users and even give free access to some special groups such as Elite Squad, seniors, or military families. They can also use freemium models. However, due to little switching costs, this will drive away several users, who will likely join competitors’ website. Consequently, in the long term, Yelp is losing market share and can lose ground altogether unless it finds some ways to leverage its website to differentiate itself and bring more values to users.  This may mean to turn this website into a high-end place for quality and trusted reviews by hiring “review experts” or giving more incentives to great reviewers. This option is very hard to implement unless it has very creative, innovative and dedicated technical team. This solution may also work only in the short-term since more and more companies offer free access with similar or even better services.

The second option is to invest more money and effort in the sales team, making them greater in number and more aggressive and creative in reaching out businesses for more advertising money. Different from the first option, this one does not guarantee that the time and money invested for the sales team will be made up and the sales team can even bring in more money. Another uncertainty is that no matter how smart and dedicated the sales team is, they cannot persuade businesses to sponsor if Yelp does not create more incentives for those businesses.

The third option is to partner with other applications such as Facebook, Twitter, and Microsoft Bing. This way, Yelp will get more exposure and build its brand name, thus getting more recognition and users. Business will be more likely to spend advertising money on Yelp. Yelp is already listed as a partner site on Facebook. However, it is hard to get the buy-in from other applications since they themselves can expand their services to include reviews like Yelp. Even though they agree to partner, there can be conflicts of interests or different business strategies that Yelp must depend, compromise or sacrifice. 

The fourth option is to sell the business to whoever is interested. This is probably the easiest way, no longer worries about ways to get more revenues and be competitive. Then, Yelp just gets one-time money and the price offered may be far below what Yelp perceives. This may be a recommendation given Yelp services and the popular business model of free access from several websites. Also, social websites such as Facebook have more advantages since reviews or requests are among circles of friends, who we trust more than strangers on Yelp.

The fifth option is to reach out further, to countries with fewer competitions such as in developing countries, where there are no or few websites exclusive for reviews with the extensive interface and services in compared with Yelp. Yelp can have its website to be translated into local languages and hire local people to do the job. Since Yelp already has the website, it just needs to translate into different languages, so the cost of this translation is insignificant compared with what it had invested in the website. Yelp may use some models similar to “franchise” so it can reduce risks. This option definitely poses some risks. Doing business in a foreign country, especially with different language and culture, requires the management to be very adaptive and Yelp likely to be dependent on the local people to manage and operate.

Among these options, the third and fifth look much better given the harsh competition and this globalization trend. For the best solution, Yelp should implement both of them.

Sunday, February 6, 2011

Some interesting contrasts between Webvan and Yelp

Of course, Webvan and Yelp cases share some similarities, but there are many interesting contrasts partly due to their different industries, both grocery and last-mile delivery industries for Webvan and information goods industry for Yelp. First, during the first few years, Webvan tried to launch its services in several big cities while Yelp just focused on establishing its presence in San Francisco. Second, Webvan spent over $100 million upfront on distribution centers whereas Yelp needed very small infrastructure investments. Third, Webvan needed a complicated supply chain management since it’s in both grocery and last-mile delivery industries. Meanwhile, Yelp was in information goods industry and dedicated to its web content. Finally, Webvan’s direct source of revenues was users and could have made profits if the number of users was big enough. In contrast, Yelp already had a great community of users but could not find ways to monetize this.

Thursday, February 3, 2011

Amazon’s personalization feature should be more personal

Amazon is an ecommerce trailblazer. From the long tail strategy that Jeff Bezos adopted for the company to its groundbreaking affiliate scheme. Where this online giant leads, others follow, including Packt.

Amazon was one of the first websites to introduce personalization and the ability to push targeted products to customers based on their browsing and purchase history. This transformed the customer experience and gave us products and options that we weren’t aware of and ultimately persuaded us to buy more.

I like French films but my French isn’t great, so I rely on reviews and recommendations from English speakers. With Amazon’s personalization, I get a regular stream of suggestions and ideas of films to watch. However I think Amazon’s personalization algorithm is flawed and needs updating.

My main gripe is that it doesn’t take into account fast-moving, regular purchases against one-off or once-in-a-while items. Before expanding into the world's biggest department store, Amazon's core business was books, CDs and DVDs. Personalised recommendations of these reasonably low-priced items work well and I have bought many a French film thanks to them. However if I bought a new LCD TV, I don’t expect to be presented with a list of other LCD TVs every time I visit the site over the next few weeks.

Amazon also heavily weights its personalization results with your most recent activity. So if I was to visit any page on its website, even if someone sent me a link to a product with funny reviews, my next session would be dominated by similar products. One of the reasons I included this here was because I had been sent a link to the reviews of an album by a questionable celebrity duo and for my next visit, I was presented with the male half of the duo's back-catalogue. This has happened with other products.

However on researching this blog, I found a link to an article about funny Amazon reviews. I checked out this relaxation tank on their .com site, with some very funny customer comments. I then visited the homepage to see what I was presented with, expecting other relaxation-based products and instead, there was a list of the other items with funny reviews. Maybe Amazon has cottoned on, with its .com site leading the way.

Over Christmas, I used Amazon to buy many of my presents, as many of us did, however even though I was happy to buy my sister a copy of the Style Book: Fashionable Inspirations, I didn’t want to see similar products the next time I visited. I want to see suggestions of similar products that I'm interested in, not those that I've bought for others. My sister may disagree.

With Amazon, you can delete items from your browsing history, however for an intelligent system, I shouldn't have go out of my way to visit my browsing history and then scroll down to delete the things I wasn't interested in seeing. They could make this easier for customers by offering checkboxes on product pages and in the checkout procedure. Even if there was an option for me to state whether the purchase is a present and if I wanted to remove it from my browsing history, would be a good start.

Amazon, with all its customer data and purchase history, should also understand what products are bought regularly and those that we buy less frequently. These products should be removed from the personalization adverts, or at the very least, show me one or two products, not a never ending list. For what has been designed as an intelligent system, it hasn't scaled its intelligence as the site has scaled.

Wednesday, February 2, 2011

The single most popular shopping cart conversion clincher

The conversion and abandonment rates of our shopping cart are two of our most important ecommerce KPIs. The shopping cart has been optimised to within an inch of its life, following best practice and tips from industry leaders.

This has resulted in:
  • A standout checkout button with available card symbols and a trust seal placed above the fold
  • Checkbox for easily copying over shipping to billing address
  • Product availability 
  • Breakdown of price
  • Upsell to related products
  • Shipping costs
In early 2011 we're adding premium shipping options and a save cart for later button.

Am I missing anything here to help optimize our checkout further? Let me know what you think.

These improvements improved conversion and subsequently our abandonment from the cart dropped. However, there was still room for improvement. So where was this extra juice to be squeezed from? The only concrete way to find out was to turn to our customers. I've mentioned in another post how talking to our customers is probably the most important and successful tactic we employ for improving our services and this is another example of that.

We began e-mailing and surveying customers that dropped out of the cart to ask them why and also wrote to those that converted to ask them what swayed them. 

The number one reason? Shipping.

Due to the location of our printers and distributors, Packt offers free shipping to certain countries and charges for others. For those with free shipping it was a deal breaker, for those that we charged shipping for, it was the number one reason for abandoning. For many customers, the shipping costs put doubts in their minds about the overall cost and was a push to find the same product cheaper elsewhere.

This was difficult to counteract as it would result in changing our business model or heavily reducing our profits. So what was left for us to do? How could we turn these customers around? 

The answer was with our eBooks. For all print book orders, we added the upsell message for our eBooks and outlined how these offered quicker access. This didn't reduce the price of shipping but offered a relatively cheap way to start reading the book as soon as it had been purchased. Of all the optimisations we introduced on the site, this was the most effective in terms of reducing abandonment. 

So sometimes, you can follow as many best practice guides as you like, however in order to find out how to take your site's performance to the next level, the answer is with your customers. 

Tuesday, February 1, 2011

Enhancing Microsoft Dynamics GP with E-Commerce

Our most recent post on ERP Software Blog discusses the benefits of integrating e-commerce with an ERP system like Microsoft Dynamics GP. From allowing customers the ability to browse products, shop, and place orders on‐line at anytime around the world to streamlining shipping orders, this post explains real world benefits of connecting an e-commerce storefront with Microsoft Dynamics GP

Check out the full post on ERP Software Blog and find out how The Salvation Army was able to solve global logistical challenges and tap into new markets with Azox E-Commerce solutions for Microsoft Dynamics GP.

Spring is Around the Corner-Get Ready!

March through May can be the biggest quarter of the year for baby and maternity sites. Are you ready to go? Start preparing by:

1) Making sure your loadin up spring inventory
2) Work on SEO -be focusing on terms that relate to this time of the year
3) Spring is huge for baby showers-make sure your ready to go with your gift regestry
4) Put in any design requests early-you will want a fresh spring look or grahic for your front page!

We Want to Hear From You

We would love to feature your story or experience about on our website. has a page rank of 4 so it's an excellent one way link for your site. If you would like to be featured on the Client's Page please email us at