Major online retailers are leading the way in adopting alternative payment methods. A recent study by Brulant points out that out of 100 major online retailers, 30 percent offer alternative payment methods to credit cards. Brulant reports on some of its alternative payment findings:

“One of the most surprising findings is the increase in retailers offering all three alternative payment methods,” says Brulant principal Adam Cohen, noting that none of the same retailers offered all three methods in February 2007. “Today we find 5% adoption of all three at a variety of retailers from Toys ‘R Us to PetSmart to Rite Aid. This reinforces the ‘customer is king’ mentality, as retailers begin to offer a multitude of choices for checkout.”

This is further indication that ecommerce shoppers want the ability to limit how many ecommerce Web sites get their personal information. It also emphasizes the increasing customer focus in online shopping on increased options.

The study did not address the Amazon “Pay Now” widget, instead focusing on the more popular options: PayPal, Google Checkout and Bill Me Later. These three services are making inroads, it appears, and it may be difficult for Amazon, a late-comer to the alternative payment game, to catch up. Adding the “Pay Now” widget to your ecommerce site, in addition to the three other major alternative payment methods won’t hurt, though. Ecommerce Trends points out that alternative payment is becoming a consideration, along with product choices:

“As online shopping continues to grow, it is critical to not only expand your product assortment,” but to also offer “alternative means of payment,” says Marty Keane, senior vice president of e-commerce at Bluefly an online retailer.

One thing we’re learning about ecommerce customers is that they are increasingly interested in personalization. They like product recommendations, and many of them like creating profiles that can help ecommerce businesses better cater to them. One thing many ecommerce customers don’t like is email newsletters jamming the inbox.

Oh, they sign up. But after a while, the email newsletters become annoying. And hard to find when you realize that maybe you do want something after all. (Where did I put that? Did I delete it? Maybe it got sent to the junk mail folder…) A new ecommerce Web site aims to change all that.

iStorez offers an email newsletter aggregator. iStorez has signed up for all the email newsletters and  you can choose which you want attached to your profile — in a searchable format that makes information easy to find. YOu don’t even have to sign up for the email newsletters yourself, and you don’t have to register at the individual stores.

iStorez is the child of Kriyari, and CEO Anand Jagannathan insists that iStorez will be a big hit because email newsletters work. Erick Schonfeld at TechCrunch, on the other hand, reporting on iStorez, points out that this ecommerce concept might work for the opposite reason:

Actually, what he is saying is that email marketing doesn’t work. You need to bring those messages to the Web and allow consumers to explore them in their own way when they are in a shopping frame of mind.

iStorez does this. Some of the capabilities offered by this new ecommerce Web site include:

• Shop by brand.
• Shop by retailer.
• Shop by tag.
• Customize a virtual mall.
• Share links to your mall.
• Plans to add the ability to add an RSS feed for your mall are in the works.

iStorez just may take personalized online shopping to a new level. The site takes social shopping to a new level, and that ecommerce model is just really gathering steam.  If iStorez is successful, it will also mean a new way to increase the personalization of email marketing — without necessarily having to increase the number of emails that go out.

In an effort to combat fraud, PaypPal has purchased the Israeli software firm Fraud Sciences. At a time when the sheer volume of ecommerce customers is growing, fraud is growing as well. More automated fraud detection and management systems will be needed to combat this growth. Ecommerce Times reports on the acquisition of Fraud Sciences by PayPal, a company owned by eBay:

Integrating Fraud Sciences’ risk tools with PayPal’s sophisticated fraud management system should allow us to be even more effective in protecting eBay and PayPal’s hundreds of millions of customers around the world,” said Scott Thompson, president of PayPal.

The idea is to fix some of eBay’s problems with fraudulent users, while at the same time boosting PayPal’s appeal as a third-party payment service. Most PayPal users still use it mainly for eBay purchases, and PayPal has been trying to expand beyond that designation to service non-eBay, non-auction ecommerce Web sites.

This is especially important in terms of international ecommerce. An increasing number of ecommerce purchases are made overseas, and international fraud is more than two times as likely as domestic fraud when it comes to online shopping.

There are many changes taking place in the world of ecommerce. And one of the most important, for ecommerce businesses, is fraud management. Cybersource recently released its 2008 Fraud Report, and its results are interesting. Some of the findings of the ecommerce fraud reports include the following:

• Percent of online revenues lost to fraud is down to 1.4 percent from 1.8 percent in 2004.
• Internet revenue lost to fraud in dollars, though, is up to $3.6 billion from $2.6 billion. The growth of ecommerce results in more dollars lost, even as percentages decrease.
• International orders are more than twice as likely to be fraudulent as domestic orders.
• Manual review rates for fraud are on the rise again in 2007 to 27 percent, from 23 percent in 2006.

Ecommerce fraud management needs an efficiency increase

With manual review rates on the rise since 2006, it is clear that ecommerce fraud management is becoming increasingly important. The Cybersource reports points this out about ecommerce fraud management:

As online eCommerce sales continue to grow 15% to 20% per year, merchants face the growing problem of screening more online orders. . . Only 20% of online merchants report having budget to increase manual review staff in 2008 to cope with higher order volumes. Therefore, each year, merchants must increase fraud management efficiency approximately 20% just to keep pace.”

So, even though the percentage of ecommerce revenue lost to fraud is decreasing, the growth of ecommerce means that in numbers, there is more fraud to deal with. However, it is difficult to find the budget to provide the personnel to keep up with the need for manual review. Indeed, in 2007, Cybersource reports, ecommerce businesses increased spending on staff for manual review by around $100 million.

It is obvious that in order to keep up with the needs of fraud management efficiency many ecommerce businesses will need to turn to automation. Some sort of integration between manual review and a certain level of automated fraud risk detection will be needed. Otherwise, fraud detection and management will not be able to keep pace with ecommerce growth.

One of the growing trends in ecommerce is social shopping. Social shopping is a way for consumers to “shop together” by sharing products, tips, bookmarks and reviews. Social shopping goes beyond Web sites that offer comparison shopping and actually moves into a dynamic shopping experience that consumers can share with others, all from the comfort of their homes. eBay Neighborhoods is an example of social shopping, as is kaboodle. (Get Elastic has a very good list of social shopping Web sites to get you started.)

But until now, most social shopping has been done through bookmarks and bookmarklets and other similar tools. Not any more. Sosign Interactive, a Canada-based company, aims to help etailers make social shopping a truly social experience with Clavardon. Ecommerce-guide.com offers this explanation of the new social shopping application:

The main features include: co-browsing, co-scrolling, co-highlighting and chat. Clavardon also provides a way for visitors to meet friends by e-mail and invite other visitors to co-browse. (The name of the tool comes from the French Clavarder, to chat.)

This means that online shoppers interested in social shopping can do so together. It’s the online equivalent of a trip to the mall with your friends. Consumers can browse products together and talk about them, even consulting with each other before making a purchase decision.

Integration onto ecommerce Web sites is supposed to be simple, and Sosign has packages that range from free to monthly subscriptions. It’s an interesting idea. Consumers are always interested in what others think about products (that’s why online customer product reviews are so popular), and this interactive social shopping experience may provide a user-friendly way for consumers to make connections with others online.

Tags: social shopping, ecommerce, ecommerce businesses, ecommerce trends,
ecommerce ecommerce, Get Elastic, social shopping bookmarks

When ecommerce first started, business Web sites simply set up their business models to work like brick-an-mortar stores. Basically, ecommerce just followed the old models set forth by traditional retailing. All that is changing now as technology improves and the consumer demands more innovation. From product recommendations to text message alerts on your cell phone, ecommerce is changing the way business is conducted online. The New York Times describes Ideeli, a clearinghouse for high-end goods:

The site sells just three or four products over the course of a week, which members can preview. They then stand by for e-mail or text messages saying when a specific product has gone on sale. …

Shoppers who want to increase their odds of scoring a bargain can pay $8 monthly to shop an hour earlier than general members.

Ideeli is only available to members who are invited by other members, or by the ecommerce retailer (open memberships available until tomorrow). The idea is to galvanize the consumer by offering only a limited number of products. Members get the text message, and then they race others to buy the scarce product for a great price. The bargains are great, and the scarcity factor means that all the available product usually sells out — and many consumers end up empty-handed. But they still keep coming back, hoping to score a great deal on high-end products.

Ideeli’s success supports the findings that high-end shoppers look for deals. Indeed, Ideeli has built its entire ecommerce model on the fact that big spenders look for big discounts. And its exclusivity and the scarcity of its products is creating demand by excluding some people (which is not a common mass-marketing practice among traditional retailers). And paying a subscription fee for first dibs? That’s not exactly standard retail practice.

But most of all, the Ideeli ecommerce model illustrates the importance of technology. Ecommerce is evolving to make online shopping a more personalized experience. If you are still operating like a brick-and-mortar store, your ecommerce business may find itself in trouble.

Tags: ecommerce, ecommerce Web site, online retailers, online shopping,
new business models, ideeli, ecommerce business models

One of the hazards of product recommendations is that you may suggest the wrong thing. But online shoppers love product recommendations, so it is helpful to use them. And they can be great marketing tools. The key is personalized product recommendations.

E-Consultancy offers some interesting numbers regarding product recommendations:

• High spenders (69 percent of those who spent more than $1,000 in the last six months) are more likely to make purchases at ecommerce sites that offer personalized suggestions. You can draw more big spenders to your Web site with the help of personalized suggestions.
• Poor recommendations mean that some (39 percent) are unlikely to return to an ecommerce site. So if you provide poor recommendations, says E-Consultancy, you may find yourself worse off than offering no recommendations at all. Poor recommendations include items that a customer has already bought or items that the customer isn’t actually interested in.

Customer service, as you know, is all about catering to the customer. It’s clear that customers enjoy personalized product suggestions. And this means you can boost your sales by steering visitors to buy additional merchandise with product recommendations. But you have to make sure the products are appropriate (men don’t want recommendations for handbags), and you want to ensure that the products match the interests of your customers.

Toffer Winslow, of ChoiceStream, pointed this out on E-Consultancy:

“Personalized recommendations are table stakes in today’s competitive e-commerce environment. But retailers that provide customers with poor quality recommendations are putting their brand and revenue at risk.”

Tags: ecommerce site, personalized suggestions, ecommerce blog, online shoppers,
marketing tools

The big news today is that PayPal will begin offering new software tomorrow which will allow PayPal members to generate a one-time credit card number for online purchases, according to Reuters. Customers will download the software, called the PayPal Secure Card, and when they land on the billing page of ANY eCommerce site which accepts MasterCard, it will allow them to generate a credit card number to make the purchase.

A few points on this:

• The software was made in conjunction with MasterCard, so if your site accepts MasterCard it will accept this new one-time card number. I assume that the billing address will need to be the address tied to the PayPal account, but I am curious how this and the CVV number will work.
• Reuters claims “It answers an innovation by Google Inc, which a year ago introduced Google Checkout…”, but I disagree. Google Checkout was an answer to PayPal integrations on-site, but this is a definite step ahead of Google, as it allows ANY eCommerce site which accepts MasterCard (and who doesn’t?) to let PayPal customers make a transaction.
• The article also states that “Secure Cards is the latest measure from eBay to curtail “phishing’”, and I just don’t see the connection. Can anyone help me out in the comments, because Reuters just starts listing out statistics on phishing and doesn’t explain this bit of PR at all.
• The whole software package is a plug-in, only available to PC users on Firefox and IE at the outset. The Reuters article claims that “Users of Apple’s Safari browser have only partial access to the service for now.” I don’t understand what partial access would mean, you get the first 8 digits of the card maybe, but I am curious to find out tomorrow.
• Commenters on TechCrunch point out that this is not an entirely new idea, Discover and Citi have long offered one-time virtual cards, but I think the fact that this ties to a PayPal account, and the added ease of the plug-in, will make the pick-up of Secure Card fairly high.

What do you think of this new software?

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.

eCommerce is making its way onto cellphones across the country, thanks to mobile shop and compare sites like Frucall and the newly released mShopper. Amazon and Yahoo are also getting into the “mCommerce game,” but at this point, no application has a clear market majority. Obviously, any attempt at increasing customer convenience should be greeted with open arms, especially as web-enabled mobile devices are increasingly becoming the norm. However, this principle only applies if the mobile shopping site fulfills its primary purpose for consumers - that is, making it as easy as possible to compare and shop on a cellphone. This means taking customer expectations for how to shop online and translating them as smoothly as possible to the mobile experience. In this regard, not all mobile shopping sites are created equal.

Frucall, for example, requires a customer to enter a UPC code to shop and compare on its site. This forces customers to shop in a way they’re not used to, which may cause frustration if the UPC code is not readily available. mShopper, in contrast, requires very little text to find an item, making it much easier to navigate and shop within the site. However, Frucall searches the full web for products and prices, while mShopper restricts itself to a select network of online stores, giving Frucall a much broader base of products for comparison shoppers.

I have no doubt that these on-the-go eCommerce tools will continue to refine their design and functionality, and it’s going to be interesting to see the effect they have on offline retailers, as customers browse in-store items and find a better price on the web, leaving with no purchase in hand.

What do you think will be the effect of mobile shopping sites on both offline and online commerce? Leave your thoughts in the comments.