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Online Commerce Overview

According to comScore’s eCommerce Brief, total online spend grew 9% Y/Y to $18.5B, which reflects a moderate acceleration vs. up 7% Y/Y in June and up 8% Y/Y in May.

Reportedly, comScome reveals that July Y/Y growth also shows a modest acceleration vs. 8% Y/Y growth reported in Q2: 10 & Q1: 10. Some key segments that contributed to this are primarily the 20% Y/Y increase in Books and Magazines, 16% Y/Y growth in online sales of Computers and Peripherals with a 16% Y/Y growth in online sales and finally a 12% Y/Y increase in Computer Software and Jewelry purchases.

The U.S. Department of Commerce reported that Total U.S. Online Retail Spend increased 14% Y/Y to $39.7B in Q2, 0.3% below the 14.3% Y/Y in Q1. A 12% Y/Y Growth in 2010 U.S. eCommerce is estimated at this point, which means that approximately $160B in Online Retail spend in 2010 and is driven by 5% overall growth for U.S. Retail Sales and approximately 25 bps of overall Offline-to-Online Retail share shift in 2010.
 

eBay shares are down 10% YTD in a roughly flat market, including down as much as 30% from late March highs. Y/Y Online Retail Traffic was up 14.6% Y/Y, modestly positive, vs. Q2 and Q1 traffic trends at about 13.0% Y/Y growth. comScore tracked 16% Y/Y Amazon’s growth for the U.S. website, a deceleration vs. 21% in Q2 and 24% in Q1, and they’ve tracked a 2% Y/Y decline to eBay’s U.S. Website, a better trend vs. its 5% Y/Y decline in Q2 and 4% Y/Y decline in Q1, despite tougher competition.

Specifically for eBay, PayPal continues to produce impressive Growth/Profits with H1:10 Payment Volume growth off-eBay an impressive 46% Y/Y ex-FX, and Payment Segment Profits up 55% Y/Y. The upshot is a long-term bottom-line PayPal growth outlook of 20%-30%. Also, eBay’s Marketplace may finally be showing improvement.

Some key points that on eBay’s Marketplace are, ChannelAdvisor, which reported stabilization (0% Y/Y change) in eBay Same Store Sale for July, after Y/Y declines in May and June of 4% and 5%. While comScore July eBay traffic data showed 1.5% Y/Y decline vs. an average of 4%-6% Y/Y over the prior four quarters and finally, the 8/10 launch on eBay UK of a Shopping Basket test may finally address arguably the single biggest User Interface gap on eBay.

On their Q2 call, Amazon executives dropped a little number on analysts that was a pretty big surprised.  They noted they are adding 13 fulfillment centers (FCs)  to the ~38 they have now.  That’s a > 30% increase in fulfillment centers and depending on the size could be an even larger expansion from a sq-ft and thus capacity standpoint.  That’s a big investment and it left people scratching their heads – why, where, how big, and does this mean Amazon is seeing another leg of growth (vs. slowing down)?

Digging a little deeper on Amazon’s European Growth

Earlier this week, James Mitchell @ Goldman Sachs did some sleuthing and discovered that one of the large new FCs will be in Germany in the North Rhine-Westphalia area.  Here are some tidbits from a note he published on the topic Monday->

Amazon announced it will open a 600,000 square foot fulfillment center in Werne, North Rhine-Westphalia (Germany’s wealthiest state, with about a quarter of its GDP) in September. The center will employ up to 800 full time and seasonal workers. Amazon will add another 1 million square feet elsewhere in North Rhine-Westphalia sometime in 2011. Amazon already operates about 2 million square feet of capacity in Germany, in Bad Hersfeld and Leipzig.

(1) We believe the fact that this center is in Europe supports our view that much of Amazon’s capacity expansion in 2010 is in less-mature international markets, rather than the US. See our prior note, Fulfillment centers spearhead Europe and China expansion, July 27, 2010. (2) The size and location of the center may allow Amazon to provide same-day shipping in Ruhr-Rhine cities such as Koln, Essen, Dortmund, and Dusseldorf, just as it already does in Greater London and Greater Tokyo. (3) The new center may also facilitate Amazon’s expansion into the Netherlands and Belgium, where Amazon began offering free shipping in 2009.

Excerpt from ChannelAdvisor Blog…Get the full text here…

ChannelAdvisor Expands Amazon solution to Germany and France

In fact, our UK customers have been asking for us to support Amazon DE/FR for the last two years as they see that as the next logical step.  We’re pleased today to announce that not only have we added support for these regions, we are also bringing our industry-first FBA support to the region.

Sell More through Amazon UK, and now France and Germany!

Tuesday, August 17, 2010 at 9am – 10am EST

Presented by:
James Scott, UK Managing Director, ChannelAdvisor
Scott Galvao, E-Commerce Integration Specialist, ChannelAdvisor

ChannelAdvisor’s Premium Marketplaces solution has expanded its support beyond Amazon US and UK to include Amazon France and Germany. Just in time for the holiday rush, online retailers can sell across Amazon UK, FR and DE from ONE platform, expanding their reach, saving time and automating the tedious tasks necessary to meet Amazon’s strict selling requirements.

Join our Amazon experts to learn:

• How you expand your business to Amazon FR and DE now to maximize holiday earning potential
• Why you should consider Fulfillment by Amazon (FBA), which ChannelAdvisor is the only 3rd-party solution to fully support
• How to make the expansion to these marketplaces seamless, and much more

Register for this webinar HERE.

Oh but I will TONIGHT on Late Night BETA go get on VIP Follow List right now!

What’s up? I promise that you guys will get all the goodies, cause that is why I blog man. So here is some valuable stuff that I got from attending this year’s Channel Advisor conference. Presentations were given by eBay, Google and of course the Jedi Mind of Scot Wingo. Here are my personal notes I wanted to share with you guys, hope you like it.

NOTE: You can download all the slides from Catalyst HERE

Scott Wingo’s Presentation: eCommerce Landscape

Trends

Amazon vs. EBay

• New Amazon Product Ads are becoming interesting as a new way to get into Amazon traffic, which is now the fastest growing. It’s a CPC relationship that you can acquire from the Amazon customer without revealing any data to Amazon.
• EBay is worth $60 billion and Amazon $10 billion; Amazon growth is surpassing e-Commerce and retail growth.
• EBay is catching up with Amazon internationally but not so domestically; however, the US is lagging in innovation in contrast to the UK.
• Amazon is expected to be bigger than eBay by 2012, if things continue the way they are; eBay is set to lag as the number two player within two years.

More Trends

• By the end of the year, Smartphones are expected to outsell laptops, and that will begin to be reflected in site visits for ecommerce.
• Android OS is moving on iPhone quickly, they are within 10% of each other.
• Shopsavvy, Red Laser and Edocrab are some of the coolest next generation e-Commerce applications for shoppers.

Facebook

• Facebook is the runaway leader in social networking for unique views; however, Twitter is the one where we should keep an eye on.
• New ecommerce social models: GILT (private sales) Groupon, Ruelala, Gilt and social gaming like Farmville, Zynga, etc.
• Farmville has over 100 million users and is gaining around $600 millions anually.
• Facebook credits are going to have a large volume just in gaming credits on day one.
• In 5 years, social will be a big portion of ecommerce, keeping it as an early adopter is a good thing; so, make sure that your social links are on your pages, every email and any customer communications you do. Also, it’s important to recognize that SEO actually pays off.
• Case study is Shoe Metro using SortPrice.Com for a store in Facebook.
• If you have a Fan Page for your products, be sure your customer service people are watching it constantly in order to handle issues quickly.

Channel Advisor News

• Amazon repricer is a new feature which is in beta mode. Sync quantity, cross channel dash, premium stores version two.
• New features: iPhone/Android shopping application for Channel Advisor customers and CRM solution with Salesforce.com
• 85% of the people with smartphones are never more than 3 feet away from it, 24-hours a day.

Customer Panel (a panel of ecommerce shoppers randomly selected for the public)

• Of all the customers, none of them has used a comparison shopping engine.
• Shipping is very important to the customer, cost shouldn’t be hidden until the end and shipping cost is considered a deal breaker; particularly if there are too many fees involved.
• 4 out of 8 confirmed that they shopped on eBay in the last year; however, 8 out of 8 had purchased from Amazon.
• One panelist said: “eBay is more like Craigslist, but Amazon has a more retail-like experience”
• 7 of the 8 panelists knew that Amazon does not fulfill all the items on its site (third party sellers)
• One of the gentlemen who buys on eBay said that he never opens the junk mail from eBay or the eBay Bucks. He doesn’t “bother with that stuff”
• All of the panelists have Facebook account; however, not one of them pays attention to the ads on Facebook, since they claim “it’s never about shopping”
• None of the buyers would be willing to post a link on Facebook about a product to recommend it to a friend, even if they get a freebie.
• The panelists are not interested at all in “spamming” for brands or retailers in their Facebook streams.

Stephanie Telenius. VP of Commerce for Google.com: Presentation

Overview:

• Talked about why she joined Google after being at eBay for 7 years.
• HTML5 will bring more change and interaction within customers and buyers.
• Mobile adoption – 4.6 billion users; two thirds of the globe now have some form of mobile access.
• Half of the internet interactions are not from mobile and growth of mobile is eight times that of PC adaptation when it was starting.
• There’s a thirty times growth in mobile shopping queries right now; mobile is the number one platform for Google, nowadays.
• In one year www.polyvore.com grew to 6 million users a month as people are personalizing their shopping experience.
• 97% of people use online media to research locally, 1 in 5 Google searches are now local.
• Tips on how to get found on Google: Product pages with a new partnership with Bazaarvoice and Mobile shopping is in PVT beta right now.
• 25% of commercial search queries are ones that Google hasn’t seen before, so stay up on your keyword buys.
• New tools from Google:  Ad Planner is now in Beta for retailers.
• Google just launched remarketing, which is retargeting ad tool.
• The web integrated with mobile is now the new commerce, not just “e-commerce” anymore.
• There is a CPA ads in pilot right now, so they are testing it.
• They are looking to bring the price point down for Google Commerce Search for smaller sellers in the future. Right now it’s $50K.

Dineshi Lathi from eBay: eBay’s Evolution, What’s different? Delivering, listening, innovating.

Overview:

• Last year, they have delivered when it comes to trust value selection and velocity, efficiency, reliable business partners.
• Top rated seller grew 13%, while ecommerce built at 11%.
• Daily Deals are driving large inventory for sellers
• Tracking information is easy to post for sellers, no matter what carrier you are using.
• Member to member communication is in pilot, you will be able to see threaded conversations.
• EBay has lowered insertion fees over 99% for selling in fixed price. For example, it used to be $4.80 to sell an iPad and today it’s just a few pennies.
• Top-rated eBay sellers are 32% of eBay GMV today.
• EBay Bucks is being funded by eBay itself and applies to the entire selection of inventory of eBay
• Feature fees have been removed. It has cost nearly half a billion in eBay revenue to accomplish.
• Fixed-price listings have improved selection for buyers and they are actively recruiting big brand names on eBay, which keeps buyers coming.
• EBay-On-Location is not for the crowd that was present at this conference, but for smaller sellers who are also top buyers on the platform.
• 2010 is already showing some brand names in the search. For example, if you search for Disney, you would see a logo taking you to the Disney Outlet.
• Pilot coming soon to eBay: Split screen of auctions and buy-it-now for search results.
• Coming soon to eBay: Excel spreadsheet uploads of product listings to eBay.
• They are working to eliminate completely the problem of UPI from eBay.
• “We are committed to delivering a great ‘search experience’ for eBay sellers and buyers’.
• “We will compete fiercely in 2010 for your business” – Dinesh Lathi of eBay.
• They are working with ChannelAdvisor for a shopping cart solution; and that’s something that they know buyers want on eBay
• Variation listings should be rolling out more and more as they will continue to do so in a more controlled way.

Many Bing.com advertisers woke to some unexpected news in their in-box. Beginning the end of July the Cashback program will be ending. There are many ways to interpret this and a lot of questions seem to come up initially. Since our interview with the Director of Marketing at Bing.com did cover the success of the program, I too was interested in this development.  The ChannelAdvisor CSE blog weights in with some early thoughts on this news from Microsoft Bing saying.

Bing tells us they will be taking the Shopping experience to a non-CPC model, ala Google Product Search, which could make retailers even happier as it could mean free traffic.  

You could also see that a free shoppin experience maybe better integrated at the search level and possibly as part of the Yahoo! integration.

As the date moves closer we should all keep an eye on how this will begin to play out on the platform and with the advertisers.

Microsoft Advertising
Dear Merchant,

We are writing to let you know that Microsoft has decided to discontinue the Bing cashback program. After 9:00 P.M. PST on July 30, 2010, we will no longer offer this program on the Bing search results or Bing Shopping pages. This will also be the last day consumers will be able to buy through the Bing cashback program.

What this means for you

As we continue to evolve both the consumer and advertiser experiences for Bing, we will pursue different avenues in order to offer great shopping experiences to consumers and great advertising experiences for our advertisers. We’ve prepared some frequently asked questions about the program closure. Please keep these key points in mind in the coming months:

* This is a great time to spend your cashback budget to drive mid-summer sales. You can increase sales payout rates to the maximum outlined in your merchant agreement to help use up the funds in your piggybank before July 30, 2010. Microsoft will continue to contribute to your piggybank until that date.

* After July 30, Bing Shopping will continue to operate as it does today, but without the presence of cashback. We’re continually improving the Bing Shopping experience to help shoppers discover products, compare offers, and buy seamlessly online. In addition to current features like consumer reviews and ratings and Visual Search, we’ll also offer a more streamlined Bing Shopping experience and better shopping integration with Bing.com.

* We are developing a new shopping program that will offer greater flexibility than you experienced with cashback. You’ll be able to provide a broader set of products in Bing Shopping searches, with little or no extra work. The program is scheduled to begin later in 2010, and we’ll provide more details soon.

What this means for your customers

Bing cashback consumers can continue to shop and earn cashback through 9:00 P.M. PST on July 30. They can redeem all of their acquired cashback earnings consistent with the cashback terms and conditions, as well as access the Bing cashback customer support system through July 30, 2011-a full 12 months after the program ends. Consumers can learn more about the discontinuation of cashback on the Bing web page.

Thank you

We would like to thank the more than 1200 cashback advertisers who joined us for this two-year journey. With over 82 million Bing searchers,* we are still strongly committed to being the destination for all commerce-related searches. Please stay tuned for more online shopping innovations from Microsoft, and again, check out the frequently asked questions to learn more about these changes.

Sincerely,

Microsoft Advertising Bing cashback Team

Been around the world and back again! You got it man, tonight we kick off Season Too of Late Night Beta w/ ColderICE and it’s LIVE. Yep, tonight at 10:30 pm est, you need to be there or be a total square. I can’t wait to get my drink on and talk with you guys LIVE in the chat rooms. I got so much information and few cool ass tool to demo for you. So get your self a cocktail and make sure you are in the house at 10:30 pm est TONIGHT!

OH and BTW you do not want to miss the first 5 minutes of tonight’s "season too" opener! I got something special for the ones who get in the room ON-TIME and the late folks will just have to miss out, sorry here is that link for the show one more time…Late Night BETA w/ ColderICE

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OK, so I am sure you have heard the news right? Buy.com got bought for $250 million The acquisition, valued at approximately $250 million (USD), will be carried out by Rakuten’s U.S. subsidiary, Rakuten USA."

The press release illustrates the strategy as follows:

“As a company, Buy.com shares our vision for the future of ecommerce  as a platform to give consumers the best value no matter their location, and to merge shopping with entertainment, and to help retailers build deep and lasting consumer relationships.”

Now things are getting juicy, there is a possible new player in the eCommerce domination game. No more do you just speak about eBay vs Amazon, you have to know that a 3rd rail is coming. Will it be Wal-mart? Sears? or now BUY.com?

We know one thing, Buy.com has a sweat heart deal with eBay and now eBay got a new "mac daddy" from the far east running the show…LMAO. Will this turn out to be a case of "chickens coming home to roost?" Could Rakuten USA be the stone that brings down a giant? I dunno, but you got to love the drama right.

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Today eCommerce has certainly become a way of business! According to the Pew Internet & American Life Project, 66% Americans have purchased a product online and 93% have used ecommerce activities such as researching and bidding. The internet has forever changed the world, by becoming a trendy time-saver and a resourceful way to find and compare virtually any kind of item and service.

eCommerce, has changed the way we buy. You can shop in your pajamas, don’t have to drive to the mall or physically move from shop to shop and wait in line at the register… Remember those times? I think it has been nearly 7 years since I went to a mall to shop, literally!

eCommerce history dates back to the invention of the old notion of “sell and buy”, electricity, cables, computers, modems and the Internet; although most people don’t realize that eCommerce was originally conceived to facilitate business transactions – not personal transactions. By using a technology called Electronic Data Interchange (EDI), developed in the 1970’s, it allowed business to electronically exchange things like purchase orders and invoices.

The 1970’s also brought the ‘Electronic Fund Transfers’ (EFT) that allowed payments to be processed online. The EFT and EDI were the enabling technologies that laid the ground work for ecommerce, and have been around for over 40 years. Actual online purchasing didn’t come into place until 1979. It was invented in Great Britain by Michael Aldrich. Jane Snowball, from Gateshead, England has the honor of being the first person to make an online purchase. It was May 1984 when 72-year-old Mrs Jane Snowball first used a groundbreaking new Gateshead Council Shopping and Information Service (SiS), to purchase her weekly groceries from Tesco. Gateshead Council’s SiS service – which allowed residents to order shopping by using their television and remote control – is widely believed to have paved the way for the $500 billion business we know today as internet shopping.

Electronic commerce became possible in 1991 when the Internet was opened to commercial use. But it wasn’t until 1994 that it really began to accelerate, with the introduction of security protocols and high speed internet connections. The definition of e-commerce began to change in 2000, the year of the infamous dot-com collapse, when thousands of internet businesses folded. These “first mover” failures served their yet-offline competitors very well, providing evidence of what not to do in building a viable online business.

Sales figures for 2008 were somewhere in the area of $204 billion and now account for nearly 4% of total sales worldwide. Even with a slumping global economy, online retail sales continue to rise. eCommerce has grown so much that consumers can easily search through a large database of products and services, see actual prices, sizes and styles, build an order over several days and even email it as a “wishlist” hoping that someone will pay for it.

Online vendors also have a wide variety of advantages – which have increased even more since the evolution of social networks, bookmarks and video sites. The web and its search engines provide a way to be found without expensive advertising campaign. Web technology also allows you to track customer preferences and to deliver individually-tailored marketing.

Currently, Amazon, Dell, Staples, Office Depot and HP are the 5 largest and most famous worldwide Internet retailers. There’s so much credit to be given to companies such as eBay and Amazon, which really began to lead the way in e-commerce

eBay Inc.

(Nasdaq: EBAY) today reported financial results for its first quarter ended March 31, 2010. The e-commerce company posted first-quarter revenue of $2.2 billion, up 9% year over year, or up 18% excluding Skype. The increase was due to growth in the Payments and Marketplaces businesses, as well as a positive impact from foreign currency movements against the U.S. dollar. The company recorded net income on a GAAP basis of $397.7 million or $0.30 per diluted share, and non-GAAP net income of $554.2 million or $0.42 per diluted share, for the first quarter of 2010.

GAAP operating margin increased to 22.2% for the quarter, compared to 20.9% for the same period last year. Non-GAAP operating margin decreased slightly to 30.6% for the quarter, compared to 30.7% for the same period last year, as productivity gains were offset by faster growth in the company’s lower-margin PayPal business and lower take rates.

eBay Inc. generated $418.3 million of operating cash flow and $266.0 million of free cash flow during the first quarter. Operating cash flow and free cash flow were reduced by a one-time tax payment of $207.4 million related to a legal entity restructuring, as a result of which the company moved approximately $1.1 billion in cash to the U.S. in the fourth quarter of 2009.

“Our first quarter results reflect another strong step toward achieving our three-year growth and profitability goals,” said eBay Inc. President and CEO John Donahoe. “We are becoming a more customer-focused and technology-driven company, delivering more innovative products and experiences and driving operating efficiencies to reinvest in growth. We are improving the fundamentals of our business, strengthening eBay Marketplaces and aggressively growing PayPal to become the leader in global online payments.”

Amazon.com

Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its first quarter ended March 31, 2010.

Operating cash flow was $2.78 billion for the trailing twelve months, compared with $1.76billion for the trailing twelve months ended March 31, 2009. Free cash flow increased 62% to $2.32 billion for the trailing twelve months, compared with $1.43 billion for the trailing twelve months ended March 31, 2009.

Common shares outstanding plus shares underlying stock-based awards totaled 463 million on March 31, 2010, compared with 447 million a year ago.

Net sales increased 46% to $7.13 billion in the first quarter, compared with $4.89 billion in first quarter 2009. Excluding the $185 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 42% compared with first quarter 2009.

Operating income increased 62% to $394 million in the first quarter, compared with $244 million in first quarter 2009. Excluding the $15 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, operating income would have grown 56% compared with first quarter 2009.

Net income increased 68% to $299 million in the first quarter, or $0.66 per diluted share, compared with net income of $177 million, or $0.41 per diluted share, in first quarter 2009.

"We remain heads-down focused on customers," said Jeff Bezos, founder and CEO of Amazon.com. "Amazon Prime has just celebrated its fifth anniversary, adoption of Amazon Web Services continues to accelerate, Kindle remains our #1 bestselling product, and earlier this week, Kindle selection reached 500,000 titles."

I know many you guys were unable to make arrangements to fly to Vegas for this years eCommerce Summit 2010. But you do NOT have to miss out on all of the events. They will be broadcasting sessions LIVE on Ustream.tv by going to http://www.ecommercesummit2010.com/Video.html

Just make sure you do not miss it! I will be there too presenting on April 15th (Thursday) at 11:15 Vegas time which is 2:15 pm on the east coast time, so tune in to hear "Social Media for Business STINKS: Unless You Know These 7 Secrets"

And do NOT forget to register for our Atlanta Meetup at our BRAND NEW Buckhead location. We are ITP (inside the perimeter) now so now excuses, you got to be there! This re-launch is going to be jam pack with business networking, education and information all FREE.

Once again, the Vegas broadcast starts on Wednesday and Thursday so do not miss it simply go to  going to http://www.ecommercesummit2010.com/Video.html for schedule of events and all the details!

REMEBER you can come right back here on April 15th (Thursday) at 11:15 (Vegas time) which is 2:15 pm east coast time, so tune in to hear me present…

"Social Media for Business STINKS: Unless You Know These 7 Secrets"

Free video streaming by Ustream