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Summer is finally here, and in most industries, it is a slow time as decision makers everywhere – from consumers to CEOs – decide to hit the beach.

But for retailers, this is no season to relax. This is the final chance to prepare for the crucial 2010 Holiday season – to make sure everything you need to reach those ambitious goals is in place before lockdown.

Because this year, competition will be the toughest ever.

A report by Coremetrics on Cyber Monday shopping patterns clearly documents this. In 2009, compared to 2008:

• bounce rates grew by 18%,
• page views, product views, and session lengths declined by 24%, 18% and 10% respectively, while
• items per order and average order values rose by 30% and 38%

My interpretation is clear: competition is getting worse and consumers are getting harder to catch. For every purchase on the Holiday shopping list, there is an ever-growing list of alternatives, conveniently sorted by advertising budget thanks to Google. Consumers have learnt to shop around, and their patience is falling fast. On the other hand, spend metrics are rising – the successful retailers are generously rewarded.

More and more retailers that I meet are aware of the situation and reluctant to increase their advertising spend without any benefit. Instead, they are turning to merchandising strategies that address the core problem: capturing shoppers’ interest on their first page view, and guiding them to the most relevant, attractive offers.

Recent analyst reports have highlighted this growing interest for personalization and recommendation technology. This quote from the Patricia Seybold Group’s latest market survey is very telling: “According to our survey, there is very strong interest in deploying recommendations … and you don’t want to fall behind—not when recommendations have such impact on conversion and order size.”

Now is the chance to launch a competitive merchandising strategy in time for the Holiday season, to engage with customers and boost your commercial performance. I strongly recommend you take it.

We have prepared a detailed, step-by-step plan for how you can deploy a behavioral merchandising strategy for the Holiday season. In under 10 man-days of total effort for you and your team, you can raise your Holiday sales by 15% or more. Download it here.

In e-commerce, old dogs can still learn new tricks. Our friends at Dobies of Devon have been selling seeds, plants and bulbs since 1880 – an era when mail order was still considered “experimental”. Last month, they launched personalized product recommendations, making them – though recommendation technology has been available for 10 years now – somewhat of an early adopter.

Of course, their sister company Sutton’s beat them to it, but then they had a head start. They were founded in 1806.

Product recommendations have worked very well for both Dobies and Suttons. Here is how Dobies use Avail for their merchandising (click the images to view a larger screenshot):

Product pages

Category pages

Cart pages

In an earlier blog post, I explained why we at Avail consider ourselves a vendor of merchandising success, not software, and how important services are to us. Such claims are of course easy to make, but what concrete steps are we taking to deliver on our promises? Here are two:

1. Strengthening account management

We have created a dedicated account management organization, headed by Sara Svedevi. It will provide customers with personal, informed and fast service, acting as a ’single-point-of-contact’ towards all other parts of the Avail organization, and ensure that they are satisfied with the services and results that Avail delivers.

In her role as Account Management Director, Sara will also be responsible for the Client Services team, which operates all our support services. Sara’s background at Avail means she knows our customers and their Avail solutions very well already, making her an ideal match for the job.

2. Growing our partner base

Our partner strategy strives towards the same goal as everything else we do: more sales and higher return on investment for customers. By co-developing and integrating our solutions, we aim to find synergies for customers: easier integration, resulting in lower cost of ownership, and better results.

We are now hard at work growing our partner base. Just in the last month, we have signed or expanded our partner agreements with global providers Venda, Intershop, eCommera, BazaarVoice and Fact-Finder, as well as several local providers of technology and services.

Next Steps

These are just two steps we have taken. We have many more planned, which I will come back to in another post, but I would also like your feedback. How can we serve you better?

Avail is often classified as a software vendor, and that always makes me cringe a bit. Yes, there is definitely a large industry of software vendors out there – but we are not one of them.

So if Avail is not a software vendor, then what are we?

We sell what our customers – retailers – need: sales, or in more general terms, commercial success in the form of return-on-investment. You could have the best software in the world, but if you do not use it properly, it is nothing but a cost. It happens to everyone including Avail: costly software that is purchased but never used. It is sometimes called the “Flashing 12s” phenomenon, after all those VCRs that people bought but failed to set up, leaving them blinking.

Redefining ourselves as “success vendors” has been very important for Avail, e.g. in that we

1. Measure ourselves on the basis of success delivered (i.e. documented sales generated – in fact, every employee at Avail is evaluated to some degree on their contribution to our customers’ uplift in sales)
2. Prioritize our roadmap in terms of success added, not number of features
3. Put just as much effort into developing our services as our software

Our recommendations engine is just part of how we accomplish it. What we really provide is a package of software, support, advice and partnerships that we call “Success-as-a-Service”, a play on the popular phrase “Software-as-a-Service”, to maximize our customers’ merchandising returns. (By the way – Avail customers, don’t miss to sign up for the April 15 Client Success event!)

I think the retail industry, and many industries with them, would be well served to stop buying software. For every piece of software that you currently use, ask yourself “What do I really need?”, and pick a vendor who delivers that. Force the software industry to change for the better.

Being a serial-entrepreneur myself, I love seeing companies who dare to be the first to go after a new market. Companies who will take the shot and risk failure – or make it big.

And mobile is a new market, by all means. Outside of Japan, commercial transaction volumes using a mobile for anything but ringtones and wallpapers are more or less negligible. In fact, I think one of the key reasons why m-commerce is still considered a new market – despite having been technically viable for at least 10 years – while e-commerce has prospered, is that people have insisted on treating mobile as “just another web browser”.

But mobile is different. There is the obvious case of the significantly smaller screen, which makes it important to prioritize harder which content to display. There is also the lack of quick text input methods which makes any kind of forms a sure conversion rate killer. And don’t forget the camera, or the ability to call or text anyone you want.

Finally, there is the difference in context. Web usage is often planned – you are sitting down to perform a task – while mobile usage is driven by the moment – you are bored, or you have an impulse urge. Computers are sometimes shared, mobiles are very much personal. By releasing mobile stores that are just mobile browser-enabled versions of their standard web stores, many retailers may be missing out on the opportunities that mobile offers.

However, that does not mean everything is new. Some old tricks still work just fine. In fact, as the case of Bokus’ mobile store project shows, they are even more valuable in a mobile context.

Such as strong merchandising: delivering a shopping experience with excellent support for product discovery, up-selling and cross-selling. Because the screen is so small, because adding another product and checking out takes effort, mobile is where displaying the right product at the right time – and nothing else – is the most essential.

After all, the mobile phone is a personal tool, so why shouldn’t you expect a personal shop in it?

There’s recently been a lot of negative publicity around the economies of southern Europe. Most of it is centered on Portugal, Ireland, Italy, Greece and Spain (rudely abbreviated the “PIIGS” in a WSJ article). For sure, these countries face challenges, and consumer spending will likely suffer. How should online retailers tackle the gloom?

Here’s my take: continue to invest, but wisely. “Invest” meaning continue to build your platform where it matters – the underlying e-commerce operations, traffic acquisition and merchandising. Much like turning off the electricity to a factory, cutting down on these components just to cut cost seldom translates into better bottom-line results anyway. And “wisely” meaning culling underperforming and unnecessary elements. Pay for performance only and prioritize what has been proven to work for others.

By doing so, you can beat the gloom – perform better during any downturn, and be better positioned for the upturn that will eventually follow.

The strong interest in online merchandising from Southern Europe that we still see at Avail seems to prove my point. For example, IBS, a book store, and Bow, a consumer electronics site, both from Italy – went live with Avail in January. Benvenuti!

I just got back from an amazing conference in Reykjavik, where everybody at Avail gathered for our annual winter Boot Camp. Iceland is an amazing place; Situated straight atop the rift between the North American and Eurasian tectonic plates – drifting apart by around 2 centimeters per year – it’s a wild, ravishingly beautiful landscape raptured by volcanoes and geothermic activity. Yet it is the home to one of the world’s oldest democraties; Already in the 9th century, the Viking settlers gathered once a year at Tingvallir to issue laws and make decisions in a democratic parliament.

At the conference, the Collective Intelligence of all the smart people at Avail was put to work for our customers. You can expect some very exciting developments coming out of it in the coming months.

I already got myself my own christmas gift; booked a short trip to the alps with a friend after the holidays. To me there’s few things better than looking out from the peak of an alpine mountain, skis on, sun glittering.

But for all the near and dear ones I still need to get my christmas gifts and this year I promised myself I would shop all my gifts online, not having to buy everything in a hurry on christmas morning.

For those of you who also decided to buy your gifts online this year; On http://www.pasttimes.com/ visitors from the past will guide you to the perfect presents. With a little help from their new Avail Behavioral Merchandising solution of course.

This may sound as something from 1993. But I truly love the Internet! It simply never ceases to amaze me.

The Avail solution is just one example of the little online applications that constantly evolves to benefit the world in more and better ways when users – I don’t even know who all of them are – finds new and cooler ways of using it.

Tonight, I realized I could use Youtube to integrate a video-recorded demo of our solution into the (Google Docs based, online) standard sales presentation our account managers use when they explain why merchandising is so crucial to the success of eCommerce and the benefits we can contribute.

Feel like taking a look? It’s right here:

Goodnight wonderful world!