Predictions by ComScore had been that through the last week before Christmas, online holiday shopping would grow by at least 20%. However, despite the solid start for online shopping the last week before Christmas, ecommerce spending ended up at 19% growth over last year. MarketWatch reports that warm November weather was partly to blame for the slowing growth of online holiday shopping:

The Reston, Va., provider of survey and research services in the digital world reported that for the first 57 days of the holiday season - Nov. 1 through Dec. 27 — sales tallied $27.96 billion, up from $23.56 billion in the year-earlier period. Online sales in the 2006 period had grown 26%, the firm reported.

However, for the “core” holiday shopping season, ecommerce spending fared a little better. Between Thanksgiving and Christmas, reports ComScore, the growth in online holiday shopping was 21%.

It is important to note that the holiday shopping season is not quite over yet. Ecommerce businesses should note that after-Christmas shopping can be quite lucrative, since gift cards are redeemed (and shoppers often go beyond the given amount), and bargain-hunters are looking online for post-holiday deals. Indeed, MarketWatch points out that the day after Christmas saw a huge increase (nearly 50%) ecommerce spending:

The day after Christmas saw shoppers take advantage of late-season promotions and lay out $545 million on line, more than twice the year-earlier figure, ComScore Chairman Gian Fulgoni said in a statement.

The post-holiday shopping season has just begun. Ecommerce businesses can lure post-holiday shoppers with incentives and bargains, encouraging them to spend more online.

Tags: online holiday shopping, ecommerce spending, ecommerce spending holiday season, holiday shopping,
ComScore, post-holiday shopping

One of the things Google did to help ecommerce businesses through the holiday season was to offer free transaction processing through Google Checkout. However, Google was always going to go back to the standard fee structure that is common among alternative payment methods. But instead of going back on January 1, as was the original plan, Google Checkout is extending the free transaction processing until February 1, 2008.

This can be good news for ecommerce businesses that use Google Checkout. However, it doesn’t change the fact that eventually Google will start charging for transaction processing again. But there is a way to avoid that.

Google points out that free credit card processing through Google Checkout can be earned when you link your AdWords account to Google Checkout. Google is really pushing for this, since Google gets revenue when you sign up for AdWords. However, Google insists that you sign up for AdWords, and “make sure you link your AdWords account with Checkout by the end of January to earn free transaction processing moving forward.” You are still paying for something, but it can help you cut down on global costs to your ecommerce business. And it’s another way for Google to work at extending its influence in the ecommerce world.

Tags: free transaction processing, Google Checkout, ecommerce, ecommerce businesses,
Google AdWords

One way you can boost your conversion rates on your ecommerce Web site is to offer customer reviews. In an interview with Brett Hurt, CEO of Bazaarvoice, e-Consultancy offers some insight into how effective customer reviews can be.

We’ve seen it can lift conversion 20% or more on an e-commerce site. We’ve seen it increase more highly in some cases, and nearly doubling in a couple of cases.

As for average order value, we have seen rises in the order of between 15% and 30%.

Hurt points out that for most online retailers, the conversion rate is 2.6% This means that the conversion rate can be increased dramatically, just by adding customer reviews of a product.

Customers, especially in the U.S., want to feel as though they are getting a good quality product. They want to know what others think about the product, since manufacturers and online retailers aren’t likely to disclose what it’s really like to use the product or service in real life.

Bazaarvoice offers a service that handles customer reviews for ecommerce Web sites. The idea is to help companies save money overall by handling the reviews. Reviews need to be moderated for profanity and spam, as well as for “seeding.” (Seeding is when a manufacturer or retailer posts an overly-postive review of its own product — this can actually be damaging to an online reputation.) Hurt points out that his service can be cost-efficient, depending on how many customer reviews an ecommerce Web site deals with:

Overstock.com, one of our clients in the US, used to do this in-house and we cost about half of what they used to spend internally. They had around six people reading reviews full time.

No matter how you do it, though, customer reviews can be a great help to ecommerce businesses. Online shoppers like to read them, and they are more likely to buy a product or service from a company that offers them the ability to see what others think.

Tags: ecommerce, ecommerce businesses, online shoppers, ecommerce Web sites,
Bazaarvoice, customer reviews

Magento will be presented in a session titled ”Building an Ecommerce Site with Open Source Tools / An Overview of Open Source Commerce Solutions” at SCALE 6x, Southern California Linux Expo. The event takes place on February 8-10, 2008 at the Westin Los Angeles Airport.

The Southern California Linux Expo is an annual Linux, Open-Source, and Free Software conference held in Los Angeles, CA. This is one of three community run open-source events in the United States.

The Southern California Linux also known as SCALE has been held annually since 2002. The event features an expo floor with both commercial and .org / non-profit exhibitors, as well as 2 days of seminars on the topic of Linux and Open Source software. Some past exhibitors have included: IBM, Sharp, MySQL, Debian, KDE, OpenDocument Fellowship, Google, MythTV, and others.

Hope to see you there!

Last week, I posted on how the battle between alternative payment methods Google Checkout and PayPal are about to find a new competitor from Amazon.com with its new “Pay Now” widget. But this isn’t the only story for Google Checkout and PayPal. After PayPal soundly beat Google Checkout during the end of October and the beginning of November, Google Checkout is back in the running.

The main reason, according to Hitwise’s Robin Goad, is to do with the fact that most of PayPal’s users come from its parent, auction site eBay:

Although the two sites are competitors, they have quite different sources of traffic. As you would expect, the majority (59.1%) of Paypal’s traffic comes from its parent, eBay (combined UK and US sites), with another 12.4% from Google (UK and US sites again). A further 11.7% comes from a combination of email providers, social networks and banks; but just 2.2% comes from non-auction Shopping and Classified sites. This compares with 45.3% for Google Checkout…

Apparently, despite its efforts to integrate with Web sites not connected with the PayPal or eBay brands, PayPal is still struggling to get beyond the fact that it is inextricably connected to an auction site.

Now, the graph above, and the Hitwise information, is for the U.K., but the traffic sources comprise U.K. and U.S. Web sites. And the data is still telling, as it shows a general trend. Google Checkout can leverage its search capability into an alternative payment coup. After all, ecommerce businesses that want to make things easier for customers can encourage purchases right from the search results. And, as I pointed out before, alternative payment is becoming popular with customers who do a lot of online shopping, but don’t want to spread their personal payment information around.

Interestingly, though, Hitwise points out that perhaps customers aren’t completing their purchases. Goad mentions that online data shows that after visiting Google Checkout or PayPal, some shoppers go to another online retailer:

[M]ore people currently visit another Shopping and Classifieds site after Google Checkout than after Paypal, and that the gap is widening.

So, while more customers visiting online retailers may have a look at Google Checkout, they may not actually be buying the item. They may be abandoning the purchase. But since PayPal is often associated with auctions and the famous “buy it now” feature, not many online customers appear to move on to another online retailer.

For now, it appears that the two will remain neck-and-neck, since traffic sources to their sites come from very different places. But who knows what will happen once Amazon really enters the fray.

Tags: alternative payment, online shoppers, Amazon pay now widget, ecommerce,
ecommerce businesses, online retailers

Online holiday shopping is a good time to try out new retailers, according to a survey conducted by Deloitte and reported by Internet Retailer. Indeed, with all the ecommerce businesses available, more people are searching for Web sites that offer unique products and bargains. The Internet offers consumers the opportunity to find what they are looking for more easily. Internet Retailer reports on the interest in finding new online retailers while doing their holiday shopping online:

45% of respondents to the survey said they had shopped this holiday season at an Internet retail site they had not previously visited…Most of the visits to new online retailers resulted from an online search…

One thing that ecommerce businesses should take special note of is the fact that most customers who try out new online retailers find the stores through Internet search. This means that it is important for ecommerce businesses to carefully consider their audience, and what types of keywords and items are of interest.

Online retailers should pay attention to the importance of Internet search. While it isn’t everything, designing an ecommerce Web site with search in mind can draw more new customers to your business. This is especially important during the holiday shopping season, reports Internet Retailer:

“The holiday season is a great time to attract and win over new customers, but this audition comes at a very hectic time,” says Stacy Janiak, Deloitte’s U.S. Retail Leader. “Retailers must be prepared in order to succeed.”

Other interesting information that the Deloitte survey found regarding online holiday shopping includes:

• 70% of respondents made at least one purchase at the new ecommerce Web site visited.
• 89% reported that at least one of the new online retailers found this holiday shopping season would be added as a “favorite.”

Additionally, Internet search can be important for offline businesses as well. Deloitte reports that ecommerce Web sites can result in customers going into the store to buy items, further underlining the importance of Internet search:

• One in seven customers said Internet search resulted in a visit to a new offline store.
• 31% of respondents went and bought a gift in the store after researching it on the Internet.

Tags: ecommerce, ecommerce businesses, ecommerce Web site, online holiday shopping,
Internet search, ecommerce customers, online retailers

The final week of pre-Christmas online holiday shopping started strong. According to comScore, Monday the 17th saw a 33% increase and Tuesday the 18th saw a 25% increase over last year. This means that even though growth for the entire online holiday shopping season has been lower than forecast to this point, this week’s strong performance could still nudge the numbers up.

comScore points out that its chairman, Gian Fulgoni, believes that shoppers are more willing to wait until later in the holiday season to do their shopping:

“While it is now safe to say that the heaviest online spending days of the season are behind us, we believe we may continue to see strong growth rates during the remainder of the season due to the late-season shipping deals being offered by some retailers, and consumers’ ability to buy online and pick-up their purchase the same day at the retail store.

Customers are demanding more from ecommerce this season, and waiting for online businesses to offer the same sorts of incentives seen at brick-and-mortar stores by the end of the season. Indeed, this holiday shopping season may show the importance of free shipping, and discounted shipping for fast delivery.

While final numbers for online holiday shopping this season aren’t out yet, we will be watching to see if the 20% growth number is met this year.

Tags: ecommerce revenue, ecommerce growth, holiday ecommerce, online holiday shopping,
online shopping, ecommerce businesses, online spending

From the Varien family to yours, Happy Holidays.

In ecommerce, the goal is always to make things more convenient for the customer. This is why so many ecommerce Web sites have begun accepting PayPal. And why PayPal began allowing purchases on ecommerce Web sites that are not integrated with the program. And then, of course, Google wanted a piece of the “easy pay” action and Google Checkout was born.

But what about Amazon.com? Until now, the ecommerce giant has been keeping its payment system on its own site. No longer. The Amazon Web Services blog recently announced that it is joining the ecommerce payments fray:

The new “Pay Now” widget builds on top of the base-level payment functionality offered by the Amazon Flexible Payments Service (FPS) to make things very easy for web developers who would like to accept Amazon Payments on their site. Customers can pay by clicking on a Pay Now button or by selecting Amazon Payments as their payment method.

The idea is to make it easier for the customer to choose more options. Consumers are increasingly worried about the security of making credit card payments online. Services like PayPal, Google Checkout and now Amazon Payments allow customers to limit where their financial information is stored, as well as limiting how many people “see” it. No more giving out credit cards online. Just sign up with a payment service or two, and you are covered.

Amazon.com is showing that it is ready to continue to diversify its offerings. And the company obviously wants to join the ranks of the ecommerce elite in terms of accepting payments. Amazon is clearly attempting to enter the market and compete with PayPal and Google for users of their payment plans. And because Amazon Payments uses widgets, they are easy to set up on ecommerce Web sites, offering solid design and usability.

Google Checkout has been slammed for customer usability issues and PayPal has issues with the buyer claims when items are bought on eBay. If Amazon.com’s “Pay Now” widget can address these problems, and truly make things easier for both the customer and the ecommerce businesses that use Amazon Payments, the online giant is poised to give both Google Checkout and PayPal a real run for their money.

Tags: ecommerce, ecommerce businesses, Google Checkout, Amazon.com pay now widget,
ecommerce Web sites, PayPal, Amazon payments

Holiday ecommerce continues to grow, but economic factors indicate that online holiday shopping is not growing as much as expected this holiday shopping season. comScore reports that holiday shopping online advanced 19% over ecommerce last year in the same period (Nov. 1 - Dec. 16). However, the L.A. Times points out that this is still lower than the projected 20% growth.

Many reasons are being given for the lower-than-expected growth of ecommerce holiday shopping. One of them is that worries over a coming recession may be prompting consumers to be conservative in their spending, increasing their desire for discounts and bargains. The L.A. Times reports on consumers’ reluctance regarding ecommerce:

“Consumers are waiting for that next big discount,” Larry Freed, chief executive of research firm ForeSee Results Inc., said Friday.

However, the comScore information also shows that last week (the week ending on Dec. 16) boasted a 22% growth over the same week last year. This means that a holiday shopping push this week, as ecommerce businesses use free shipping and discounts to lure customers, could actually bring ecommerce growth in line with forecasts for this year’s online holiday shopping season. comScore emphasizes the importance of this week in ecommerce:

“The current — and final — week of online shopping before Christmas will be especially critical to the overall success of the holiday shopping season.

Tags: ecommerce, online holiday shopping, ecommerce shopping, ecommerce growth,
holiday shopping season, ecommerce businesses