Since 2001, first-time customers who visited Borders.com expecting an experience unique to the bookseller were in for a bit of a surprise. Thanks to a deal inked between the two in the early part of the 21st century, the retailer’s online venture has simply been Amazon in Borders’ clothing, featuring Amazon’s inventory, site content, fulfillment and customer service capabilities. At the time, it seemed like an ideal solution; Borders’ online store was struggling to make eCommerce work for them in an era when online commerce wasn’t as pervasive as it is now, and Amazon was under pressure to finally turn its first profit. However, in the last few years, the relationship has gone south, as Borders’ profits have dipped and the inability to do exactly what they want with the site has become more pronounced. The site can’t, for example, give Borders Rewards members loyalty points for purchases, aggravating the retailer’s repeat customers who want to shop online.

The new site attempts to change all that. Although the site doesn’t officially launch until early 2008, it can already be viewed in the Beta stage, and though Borders will face a challenge luring customers away from Amazon’s established reliability and low prices, the results of a revamped Borders are already promising.

Along with an entire section of the site devoted to Borders Rewards and its perks, one of the most useful new features for book-lovers is the Magic Bookshelf, a flash-based tool that allows customers to customize it to reflect their favorite genres, interests, favorite authors, etc. Visitors can’t yet register to start the customization process, but if the tool works as promised, it will give book-loving customers a clean, fun way to discover their new favorite title. When coupled with author book lists and attractive, functional product pages, I’d say Borders’ new dot-com has a good chance at success in the crowded marketplace.

After exploring the new Borders site, do you think the bookseller is primed for success, or will they continue to struggle? We’d love to hear your opinion in the comments!

We talk a lot on the eCommerce Cache about the importance of going above and beyond in customer service, but more often then not, these words of wisdom usually follow an example of truly terrible customer service that demonstrates what NOT to do. However, there’s a reason we keep reiterating that point over and over again; according to a recent survey by customer analytics company TeaLeaf, 42% of customers who have a bad customer experience in an eCommerce transaction abandon the sale or make the purchase with a competitor, while 52% who experience terrible service from a call center following a problem online will never shop with the company again. Of the customers who did try again after a bad experience, almost half of them didn’t have their issue resolved. Rebecca Ward, Tealeaf’s CEO, cautions,

“We’re in a ‘perfect storm’ as users’ dependency on eCommerce grows and their patience for bad online experiences wears thin. More than a decade into eCommerce, we’re increasingly savvy online consumers, and we’re no longer willing to put up with experiences that do not live up to our expectations. Companies doing business online must pay attention to their customers’ experiences and help them to succeed, or risk losing them entirely.”

Addressing customer service issues should be the first priority for eCommerce retailers right now, especially for small-to-midsize companies that don’t have the upper hand on low-price giants like Amazon. With the holiday season rapidly approaching, it’s the perfect time to evaluate your own company’s customer service and see where you can make some improvements. Hire more people for your call center, iron out issues that have been a problem in the past, and streamline your shipping, return and order inquiry processes to ensure that you’re gaining customers, not losing them.

Yesterday, Amazon announced the launch of “Customer Video Reviews,” a service that allows customers to share what they think about a product and demonstrate a product in action, which can be instrumental in getting getting others to buy. The videos are grouped with the conventional reviews on a product’s page, making it easy for potential customers to view the videos.

“We are dedicated to offering our customers an information-rich shopping experience so they can know which products are right for them,” notes Colin Bodell, the vice president of Amazon.com. “The chance to see product demonstrations as submitted by fellow customers is just the latest benefit to shopping on Amazon.”

After watching a few video reviews for products as divergent as the Wenzel Queen Airbed and the Darth Vader Voice Changer, I’m instantly addicted. These videos give customers an insight into a product’s value that conventional reviews just can’t, and seeing a product in action can awaken an intense urge to buy, even in a jaded eCommerce blogger like myself.

Some of these are far too long, but I guess that should be expected. I didn’t make it through a review for Playstation 3 that was over 9 minutes long, and the portion I did watch didn’t impart any value. Video reviews should demonstrate why you should or shouldn’t buy a product, not outline mundane details that could and should be found in a product description. A video review shouldn’t simply state if a product has Wi-fi, but whether the Wi-fi works well in a coffee shop/airport/home. That’s the strength of the video review… showing potential customers what a conventional review can’t, and doing it in a way that holds their attention just long enough to impart value.

To test the service (and to try and take my own advice) I did a video review this morning for the headset I use to record the Magento screencasts, the Sennheiser Gaming Headset. We’ll post a follow-up link to it in tomorrow or Monday’s post (since video reviews typically take 48 hours to appear on the site… a tactic to prevent inappropriate video, I’m guessing). Overall, the upload process was incredibly easy. Amazon allows you to upload your video file in .WMV, .MPEG, QuickTime or .AVI formats, and the browse/upload tool works in a way that’s basically identical to YouTube’s. Amazon has even struck an agreement with the Flip Video camcorder that can automatically upload a review from the camera to Amazon.

I can imagine that this feature will be incredibly popular on Amazon. As more and more retailers see the value in video reviews, I have a feeling that we’ll start to see that this is the direction that reviews in general are heading. According to research conducted by the E-Tailing Group, embedded video reviews are among the top content features that influence a customer’s decision to convert. Maybe we should all start investing in the Amazon-sponsored Flip Video, because I bet we’ll be seeing and making a lot more of these video reviews.

You know the holidays are coming when shopping engines across the web unveil a seasonal increase in their cost per click (CPC) rates, and sites like ComparisonEngines.com argue on the behalf of merchants that not every category should be hit with the same seasonal increase. Countering increased rates on Google Adwords and Yahoo! Search Marketing, the shopping engines argue that they’re just trying to cover their costs, and that conversion rates increase during the holidays. Merchants shouldn’t mind, right?

Not everyone, however, experiences this windfall… making the flat, 25% increases on NexTag, Shopzilla, and PriceGrabber seem like nothing more than a way to exploit eCommerce retailers desperate for holiday conversions. It seems to me that instead of coming off as a seasonal inconvenience, it appears to merchants that shopping engines are trying to take advantage of them. As Brian argues,

I’m not so sure that this Forklift seller is going to see a huge spike in conversion. Or that people will be adding projection mounts to their holiday wish lists. NexTag, Shopzilla, and PriceGrabber are saying that CPC rates increase for them during the holiday shopping season. Again, I don’t think that argument holds for across all product categories. Do bids for textbooks on Adwords or YSM really increase 25%?

Shopping.com, on the other hand, has decided this holiday season to use a variable rate increase from 10%-25% depending on the product. Office equipment and cars, for example, are not usually categories where merchants are wrestling for prominence during the holiday - thus, they’re only seeing a 10% increase. Flowers and items for children, on the other hand, are seeing the conventional 25% as more merchants compete for the clicks.

Shopping.com has admitted that not all categories see cost increases during the holiday season… so why do the other prominent shopping engines insist on these flat increases in CPC rates? It’s an unfair practice, and it shouldn’t continue for this, or any holiday season. Check out all of Shopping.com’s holiday rates and a more in-depth analysis here, and let us know what you think about this flat rate vs. variable rate debate in the comments.

We’ve discussed the importance of regularly testing your eCommerce site for bugs and poor performance which could affect your customers’ satisfaction in the past . But what about testing it to prevent theft? Recently, the Consumerist reported that a woman in North Carolina exploited a glitch in QVC’s online store that enabled her to steal $412,000 worth of merchandise from the retailer. The problem? If a customer canceled an order immediately after placing it, they would receive the items anyway, free of charge. This was likely a disconnect in the system they had set up, where orders would immediately go to fulfillment, but cancellations would not.

This is obviously a pretty significant glitch… but it was never caught by QVC. It was only after two women grew suspicious of the thief’s eBay auctions that the glitch was found and fixed. This is a cautionary tale for eCommerce retailers - regularly go though the motions in your own store to make sure that it’s operating at peak efficiency and that all of the divisions in your eCommerce operation are communicating with one another. The time you spend doing this is always worthwhile… remember, you could be saving yourself a lot of time and grief in the long run.

This advertisement for soon-to-launch online retailer Hema is one of the most innovative, entertaining and fun marketing efforts I’ve seen in quite awhile. The whole page, recreating an eCommerce site (with a chaotic twist), is the perfect combination of humor, defying visitor expectations, and most of all, getting potential customers excited about the new store. Viewers can even send the page to a friend using a tool that at the end of the advertisement, helping to spread the word about the site’s impending launch, and surrounding it with buzz.

The promotion makes me look forward to seeing the final site… what about you? Do you think this is an effective way to market a site? Tell us your thoughts in the comments.

Recently, InsideCRM posted a massive list of customer service resources entitled “The Web Entrepreneur’s Customer Service Toolbox: 100 Hacks and Resources,” offering almost anything the average web entrepreneur might need to successfully run their business. The extremely helpful and comprehensive list offers solutions for everything from ways to keep in touch with customers, improve your team’s organization, and develop vendor connections. Anyone in eCommerce should take a look and see what solutions they can utilize to improve sites, stores and business relationships.

Here are a few from the list that eCommerce retailers might find useful:

MOO: This service allows you to design and print high-quality, inexpensive postcards and mini-cards. Include a mini-card with your site’s name and web address in every order you ship to help keep your store fresh in your customers’ minds.

Wufoo: Wufoo is an easy-to-use program that helps you create a customized feedback form for your store. It also allows you to create reports and build graphs based on your data, helping you organize your site’s customer feedback.

Ning: With this service, set up a custom social network based around your store and its products. Ning makes it easy to do, and it’s a great way to add more social shopping elements to your site.

HyperOffice: The HyperOffice project collaboration tool allows small businesses to keep track of to-do lists and assignment progress, keeping your team organized so that your site can keep improving.

Sky Blue Support Helpdesk: This service allows you to set up a customer-support center within your office, providing tools such as e-mail support, call logging and compiling customer data. Since customer support continues to be a top priority among customers choosing an eCommerce site, trying this service could get you on the fast track.

Have you tried any of the many applications in the article? Let us know your experiences in the comments!

Ushering in the weekend is a barrage of great news for online retailers - TechCrunch and Reuters reported yesterday that the Senate has passed an extension on the internet access tax moratorium, while eCommerce sales have jumped up 23% in the third quarter of 2007. At this point, total eCommerce sales are on track to hit $200 billion dollars by the end of the year. The tax extension can only help future growth in 2008 and beyond, though the Senate and House have yet to agree on just how long this exemption will last (the Senate is arguing for seven years, while the House wants four). In any case, it’s been a banner week for eCommerce… time to take your staff out to lunch to celebrate with all that money you’re making on rising sales that WON’T be going to access tax.

Shoeline.com has developed an innovative feature that’s helping their customers make better purchasing choices. It’s called the Return-O-Meter, and it illustrates to browsing customers how often a shoe style is returned after being purchased. Over the last year, the addition has resulted in higher click-through rates from product page to checkout and lower overall returns for the store. If the return rate for a product is high, it lists reasons given for returning the shoes, like, “Narrow” or “Sizes Run Small,” keeping the customer informed about potential concerns before they take the plunge. Frank Malsbenden, vice president and general manager, notes,

“I really believe that today’s customer appreciates when a retailer tells them the truth, and I felt that we could increase our credibility with the consumer by adding this feature.”

It’s this credibility that’s the feature’s strongest suit, helping assure customers that the retailer is being completely transparent and up-front with them in every part of the shopping experience. Since it’s primarily customer-oriented, the Return-O-Meter gives the impression that people, not profit, are number one with the company. As customers face a growing pool of online shopping options, keeping customer trust a top priority is an excellent way to set your store apart.

Examine your own site, and look for where a greater sense of transparency could improve your customer experience. Have any suggestions? Share them in the comments.

If you’re an eCommerce retailer that uses PayPal as a payment method in your store, this PayPal Fee Calculator might just become your new best friend. The free calculator lets you easily see what PayPal fees you’ll owe when paid a certain amount of money online, and also allows you to perform “reverse” calculations. For example, if you want to actually receive $45, how much would you have to charge to get exactly $45 after your PayPal fee? A reverse calculation can tell you.

The calculator supports all of the major countries and currencies PayPal supports, so calculating international prices is a breeze, and all of this functionality is wrapped up in a clean, easy-to-use interface. Check it out, and if you find it useful, donate a couple of dollars to keep this great eCommerce asset online.