Pod1 Blog

“Is that dress from Asos?” asked a girlfriend one clubbing night during my holiday back in Malta. “Yes,” I replied quite astonished she recognised it from thousands. “I had it saved in my favs. Looks fab on you.” “Thanks!” I replied not quite sure whether to be flattered or not.

Malta is a tiny island, for those who don’t know. It’s about the size of the Isle of Wight but has a population of half a million. Due to space limitation there are only a few ‘largish’ shopping malls and most fashion shopping is done from boutiques and outlets that line promenades and town streets. But this certainly doesn’t limit the fashion savvy Maltese woman. Believe me, the latter knows her stuff.

Online fashion retail is fast becoming a shopping haven worldwide and women in Malta are certainly making the most of it. ASOS alone ships its clothes and accessories to 167 countries. Its reported annual profits of £20.3m are higher than some analysts had expected. Group sales were up 35% to £223m in the year to 31 March while international sales surged 95% to £63m.

I was surprised to see Boohoo billboards splashed all over the tiny island. The early 20s to late 30s shoppers are increasingly becoming obsessed with online fashion shopping. My cousin for starters seems to get an extra kick from shopping at Boohoo, she just loves the fashion and it’s cheap.

The online fashion retail world is certainly globalising fashion trends as well as making it available to anyone who wants to join the club. You see it, you want it and it’s yours! Did you see that the fantastic pink ruffle dress S J Parker wore in STC II the movie? It’s a Halston Heritage and you can have it by visiting Harvey Nichols online shop.  Yes, that’s all it takes (not to mention the essential limitless credit card!)

The fashion industry is catching fire as online retailers take the lead and even more are throwing themselves into it. According to the IMRG Capgemini e-Retail Sales Index, total online sales rose 18% year on year to £5bn last month with clothing being one of the fastest growing online shopping sectors.

From a consumer perspective the quest for fashion is going beyond the physical in-store shopping   experience.  Shoppers are buying online at the expense of not trying before buying and forking out money to return any unwanted items, as happens with most returns policies except in the UK and US.

Having said that, while many women are die hard shopping goers they can’t help being enticed by what they see and is available online. What’s makes us want to shop our clothes online?  Do we think certain items aren’t available in store?  Are there more and better bargains online? Is the high we get from receiving a parcel through the post greater than trying an expansive dress in a store’s fitting room? Is it just because there is more choice online?

Feeding this appetite are agencies such as ours which continuously improve the online shopping experience making it even more attractive with tons of eye-catching web pages, even more fashion smartphone apps, creating virtual fitting rooms and sleek’n’easy checkouts.  All of this backed up by the retailer’s efficiency in stock management and delivery logistics, ultimately boosting the online shopper’s confidence.

Thanks to ecommerce shopping goes beyond the length and breadth of Oxford Street and stretches out to the four corners of the world. The fashion item you want is only a click away and a matter of a day or two before it’s delivered to your doorstep.

References:

http://www.mercurynews.com/fashion-style/ci_15881865?nclick_check=1

http://www.guardian.co.uk/business/2010/jun/09/asos-sales-rise

http://www.netimperative.com/news/2010/july/top-100-online-retailers-in-the-uk-how-do-they

Perhaps not as intriguing as ‘No 1 on Google’ but definitely more relevant to ecommerce, I wanted to address one of the most common issues I come across – namely the difference between Orders and Sales. The definitions are key to the difference between Analytics data and Financial data which is often the cause of much (unnecessary) heated discussion between Marketing and Finance.

Analytics solutions, correctly tagged for ecommerce, measures demand in the form of orders. It measures nearly everything you need to know about visitors to your website and how the orders ended up being placed.

Finance software should, hopefully, actually measure the exact sales that will lead to an equal and opposite receipt of cash (though maybe not immediately.) A sale should equal any shipment out of the warehouse, recognised on the date of shipment, whether for a whole or part of an order.

Between the two there are several reasons that cause them not to match for a particular date range:

• An order that goes to back-order as the item is out of stock and not shipped until later.
• Previously back-ordered items that are now shipped.
• Part-shipped orders.
• Cancelled orders.
• Refunded orders (if not separately reported)
• Warehouse being closed (i.e. not shipping at weekends)
• Date range difference – Marketing often work to calendar months, Finance (in retail) to 4/4/5 week months.

So who is right? Well, cash is king, and finance is therefore right. However, there is little Marketing can do about any of the items listed above and therefore focussing on demand as per Analytics suffices in most respects. i.e. it measures what can actually be influenced. However there is one area where finance data is most definitely needed. ROI.

To truly measure ROI you need to know the contribution (that is the contribution towards your fixed costs) that a sale makes. Try not to be distracted by the paint drying on that nearby wall. That means understanding the product margin and all the variable costs associated with a sale (delivery, picking, packaging, card commissions, variable warehouse and CS staff costs etc.)

Only by knowing that can you understand your true ROI and make marketing investment decisions such as modifying spend on paid digital channels to increase CPAs for higher contributing products or vice versa.

We’re happy to announce the latest incarnation of the Barcelo Hotels website.

Rebuilt from the ground up, using our in-house Epifony CMS, the site is focused on delivering a much more simplified and intuitive user journey.

Once of the key features is the ability to filter criteria to meet the customer’s specific needs.

The new site also comes with a brand new, redeveloped, user-friendly booking engine.

As well as the hotels and bookings sections, the site comes with new areas to explore and book all the other hotel facilities available.

Barcelo Hotels has been a Pod1 client for over 6 years (previously called Paramount Hotels), with the very first website delivered in 2004, (and winning an NMA site of the week).

Website number 2 came in late 2006, and this won Travolution’s Best Hotel Website category.

We have high hopes with this latest release, but as with all new websites, the proof is in the pudding.

Check out the site here, and let us know what you think.

I finally got round to watching the Varien webinar on Magento Mobile, and specifically the iPhone application they’re launching as part of their Magento Mobile strategy.

Different people will have different views on what mobile strategy retailers should follow: eConsultancy recommend building a mobile site that works cross-platform first, then building apps if the analytics suggests they will be supported, whereas Varien recommend building a combined mobile site and app strategy. Clearly the cost of building apps is a factor in the eConsultancy recommendation, and it looks as if Varien have developed a really cost-effective strategy for Magento Professional and Enterprise clients, which will increase the range and quality of mobile eCommerce applications considerably.

How does it work? As far as I can see:

• The retailer (or their agency) installs the Magento Mobile extension on their Enterprise (1.6+) or Professional (1.8+) website
• They configure their mobile app preferences and submit the configuration and initial data XML to Varien (through an admin function)
• Varien bundle their iPhone app, configuration and data into a new app, which they upload to iTunes on the retailer’s behalf
• The consumer downloads the iPhone app and starts interacting with the retailer using it, with the same account details as their normal web interaction (so CRM can link the iPhone and web interactions together)
• The retailer can change product data, configuration and design in the admin interface, and these will be updated on all iPhones using their app automatically

The app looks very capable and well-designed, and there is a lot that can be configured in terms of visuals and functionality. All the integration with back-end systems, payment gateways etc is taken care of, as the app interacts with your Magento app directly, almost as if you were using it through a web page. There are likely to be restrictions on which payment methods can be used, but other integrations should work out of the box if they’ve been implemented well.

Costs are very low: retailers who already have Magento Enterprise or Professional edition can get a Magento iPhone app up and running for a lot less than they would have paid via any other route.

We’re signed up for the early adopters program, and I’m hoping we can launch a Magento iPhone app very soon for one of our clients.

Featured in .net (Summer 2010): Download PDF of article

- Main feature looks at the latest in Social Commerce

- How to…Decide when to upgrade your store (thanks to Essie from Brilliant)

Download PDF of article

Very good round up of all the stats you need to know about…

More than 30 people came together over beer and pizza to talk Magento yesterday evening, at Brilliant’s office in Shoreditch. I spoke about Magento and PCI compliance, and what we’ve worked out about the Magento Payment Bridge so far. There is a range of opinion (understandably) on this topic, and I’ll write another post that covers the field soon.

Jon spoke about our experiences building a multi-lingual (English and Arabic) Magento site, and all the support Magento gives the developer and the retailer in that area: again this is something we will write about at greater length soon.

Hannah spoke about Magento’s theme building capabilities, and the ability of Magento to fall back on default themes, which means developers don’t need to build an entire theme every time they create a website.

In the “any other business” part of the agenda, there was some good discussion about scaling Magento to large websites, and the use of cloud versus physical hosting.

There was a lot of discussion throughout, in fact, and we’re definitely going to host another event, probably in October. If you’d like to be added to the mailing list for an invitation, please email magento-meetup@pod1.com

The discussion ended with a brief chat about what we love and hate about developing with Magento. There are lots of loves, of course, but the things picked out as concerns or niggles were:

• Updates to community edition often breaking the website you’re updating
• Varien can be quite hard to get information or feedback from
• Performance, though it has improved a lot with recent releases
• The CMS not being as good as Drupal or Wordpress – it has one box for formatted content not flexible, structured content pages
• The need for a really good technical user guide
• The performance of the software running the forums

It’s important to be balanced about lists like this, and it’s widely agreed Magento is a great improvement on any of the alternatives, but it wouldn’t have been a proper developer meeting without the gripes!

Varien have launched version 1.9 of Magento Enterprise Edition: the details are on the Magento website at this link.

I watched the webcast that announced the release. There are some interesting new features, which I’ll summarise in this article.

Gift registry

There is a gift registry in the latest release that allows shoppers to create gift lists (a bit like wishlists) and then distribute them to their contacts. As items are bought from the list, they are removed from it, and they are all allocated the same shipping address, so they can be shipped to the owner of the list. This looks like great functionality for weddings and such like. We’ll be evaluating it properly soon, as some of our clients will definitely be interested in it.

Recurring purchases

Using Paypal, customers can now set up recurring purchases of items they want delivering every month, for example. We have a client who wants to offer a monthly delivery of one of their products to customers throughout the year, and this is perfect for them. The fact that it’s tied to Paypal may be an issue for some, but once again it’s something that will help many retailers.

Enhanced search

Varien made Solr an option for search in version 1.8 of Enterprise Edition. They’ve enhanced the search in the latest version with the option to have suggestions appear as searches are being typed in, and with auto-correction of mis-spellings in search terms.

Pod1 tends to implement Enterprise Edition with Fact-finder, a merchandisable eCommerce search solution that is comparable to Omniture Merchandising, Fred Hopper or Endeca, so it’s unlikely we’ll be implementing Solr for any of our clients soon, but it’s great that Varien are working with one of the leading open source search solutions, rather than trying to create a solution themselves: search is an often over-looked area of complexity in eCommerce, and it’s a good thing to get specialist help with.

Magento Connect

Magento Connect is now available in Enterprise Edition. Until now, if you wanted to install a Magento extension in Magento Enterprise you had to do it manually, which is a fairly complex task, best left to developers. Site owners can now browse and install extensions that have been developed to work with Magento Enterprise, in the same way they could with the Community Edition. We expect to see lots of development in this space: one example is that we’ll soon launch a version of our Sagepay extension that will be installable in Magento Enterprise using Magento Connect.

Full Page Caching

Varien have enhanced Magento Enterprise Edition’s full page caching so it will work with pages that contain dynamic content: the dynamic content will be generated on demand, while the static content is cached. They expect this enhancement to significantly improve site performance once again.

Payment Bridge and PCI Compliance

The last (and largest) enhancement I’m highlighting is the implementation of the Magento Payment Bridge, which is a step towards achieving PCI compliance for retailers. This is a very complex area. I’ve spoken to Varien about their intentions with the payment bridge, and I’m consulting with other industry experts as well, to formulate a clear position for our clients, but the key points I’ve identified so far are:

• Using Magento Enterprise Edition 1.9 isn’t going to ensure you’re PCI compliant: Magento itself no longer handles payments if you’re using the Payment Bridge, but you still have infrastructure and process work to do to achieve compliance.
• The Payment Bridge encapsulates all the payment functionality for payment systems that Varien have integrated it with, and at present that list is very short: none of the payment systems Pod1’s UK clients use has been integrated yet. Third parties can’t integrate other payment systems with the Payment Bridge.
• Retailers can still use other payment extensions, such as our Sagepay extension, and can still achieve PCI compliance through that route.

I’m preparing a presentation on this subject for our Magento Developers’ Meet-up tomorrow, and I’ll share that through the blog later this week.

Conclusion

Varien have come out with another very interesting and useful upgrade to Enterprise Edition. Some of its features are very useful to our clients, and we’ll be implementing them over the coming months. The PCI situation remains complex, and we’re continuing to provide advice to our clients on an individual basis.

The numbers are so high for next Wednesday’s meet-up we’ve decided to move it to Brilliant, our sister agency in the Pod1 group. If you’d like to attend, please email magento-meetup@pod1.com for all the details.

Beer, pizza, Magento, geeks… who could ask for more?

The Magento developer get-together on July 28th is filling up fast, so please email us at magento-meetup@pod1.com if you’re planning to come.

It looks like there will be talks about best practice theme building, internationalisation, PCI compliance, and the different versions of Magento you can now use (Community, Professional and Enterprise). If you want to talk about anything else, or lead a discussion, let us know in an email or a comment to that post.

The event starts at 6:30pm, there’s beer and pizza, and it’s in Westbourne Park, 2 stops from Paddington Station.