An interesting article from Scientific American discussing the psychology of pricing. If you are running a shop, it should give you some thoughts on your pricing strategy.

Great quote from the book Hidden in plain sight:

“People as a rule do not seek products or services, or want to satisfy needs or wants. Products or services are merely a means to get things done or to spend time their way, to enjoy and experience life.”

How true. This is so applicable to so many parts of a business, foremost (in my mind at least) the copy writing mantra of “benefits, not features”.

Something I talk about a lot in my newsletter is customer focus. Everyone talks about it but not many people really do it. However, I was very interested to read an article about VistaPrint putting execs on the frontline. Senior staff would spend a few hours a week manning the customer phone line. What a way to get great feedback!

Great article talking about why they did it, and specific customer problems they identified and have addressed through this program.

http://www.magentocommerce.com/

They released it today as promised.

My take on it: I’ve played with a few betas. It looks like an excellent product. However, there were still some pretty major bugs in beta version just a few weeks ago. This is a major piece of software, and it’s almost certain there will be significant bugs in there. For those keen to try it I’d recommend waiting at least three months to let the dust settle and to let the worst of the bugs be knocked out.

Also check support for your preferred payment gateway(s). There are still some major omissions, and documentation is still thin on the ground.

In short, great product, but wait.

I’m not sure how well it will convert, but this is certainly an innovative way of displaying your products:

http://producten.hema.nl/

(thanks to Rodge for the link)

There are lots of bad ecommerce home pages, right?
But one of them has to be the worst, right?

Well, I found it.

Domino’s Pizza. Having a lazy weekend, I wanted to order a pizza. While with pizza ordering by phone is probably easier, I thought I’d try the online experience, given I am an ecommerce consultant and all…

When I got to the homepage, a great big flash animation came up. “Click here for transformation”. This flash animation was full screen transparent, so I could see the big “Order online” button I wanted. I had three choices - click on the close link which was obscured by being positioned over some other text, click on “Click here for transformation”. Transform? Into what? I’m interested in transforming from hungry to full, that’s all. You literally could do nothing else without first dealing with this piece of flashturbation. Once you click on it, all it does is show you some animation. There’s no campaign, no offer, no competition, not even an especially good animation. And once it’s finished, you still need to find the obscure close button.

Dominos, I will put $5,000 of my personal money on the line. Run an A/B split test on that homepage - one with the animation, one without. My bet says that removing that animation as the sole variable of the test will boost sales at least 5%.

Why is this the worst? Because it’s not some backyard outfit. It’s not some dodgy “my cousin knows web stuff and installed OSCommerce for me” setup. This is a multinational company who cleary invested some serious money into their site, which in general isn’t a terrible site. Why oh why do they actually go out of their way to actively prevent their users from spending money with them?

PS. I tried to send them feedback. They want my full name, address and phone number as compulsory fields just to give feedback.

I’ve been hearing an increasing amount of hype about the Magento Shopping Cart product. It’s a free & open source product.

Given the hype, I thought I’d check it out and see if it had substance or was just hot air.

Before I give my comments, let me say I’m generally not a fan of open source shopping carts. I have no problems with open source in general (this blog is Wordpress, an open source blogging tool which I love), but all the open source carts I’ve looked at leave a lot to be desired (and I’m not talking about a simplistic functionality check list, I’m talking about tools to help create a profitable business). I’ve also looked at quite a few of the commercial products out there, more than most people.

So is Magento worthy of the hype? In short, yes. This is one awesome looking product.  If I were a commercial shopping cart vendor I’d be afraid. Very afraid. This has the freedom and flexibility - not to mention the $0 price tag - of an open source solution, but it also has the polish and sophistication of a commercial solution.

Casting my mind back over what I think some of the better commercial solutions are, I could only think of a few features they have which they either do better than Magento, or Magento doesn’t have yet. However, Magento is still in beta and it’s free! Give it another 12 months, and I think that list of missing features will be very short indeed.

Magento does have a lot of features and flexibility that put most commercial products to shame. The marketing promotions manager - I was drooling on my keyboard at the flexibility! It seems that no matter what tool I use, the marketing managers always dream up some promotion that can’t be done. Well, I challenge them: come up with a promotion that magento can’t do! I’m not saying it’s unlimited, but it’s the best I’ve seen.

Above that, their approach seems very mature. For example, their data interchange features are a very enterprise feeling approach, and the general architecture and structure of the software makes it clear that these guys aren’t amateurs, but making software that is designed to scale up and play with the big boys.

The biggest thing I saw missing (although I have a list as long as my arm of smaller things, and yes Magento team if you are reading, I did read the road map and there’s still a heap of stuff, but you know that I’m sure)  is a mature newsletter management tool. The two big features I’d like to see are:

• Target newsletters based on customer data - eg “send this newsletter to people who haven’t purchased from us in 6 months or more” or “send this only to people who have purchased products from this category”
• A powerful newsletter creation tool. I find the hardest/most time consuming part of newsletter creation is the thing that you almost invariably want to do: product insertion, it’s always so time consuming and fiddly. There’s a great opportunity to have product “micro templates” and insert products that way.

I could go on for pages dreaming… for example… how about “insert the best selling product in the last month from the category this customer has most commonly purchased from previously” - totally personalized newsletters.

In summary, this is one product to look out for. They are promising an early 2008 1.0 release. It’ll also be interesting to see the community that springs up  around it. There will be lots of the normal small webshops, but also think there is an opportunity to attract some of the bigger commercial VARs and sell this into larger organisations. I, for one, will be watching with great interest. Well done Varien!

“comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released U.S. e-commerce spending figures for the third quarter of 2007, showing that retail e-commerce increased 23 percent versus year ago to $28.4 billion.”

It’s a good time to be in ecommerce, if you are to believe the latest comscore stats (and I have no reason to doubt them).

“Online retail spending continues to grow at rates in excess of 20 percent year-over-year, which suggests that the market is still far from maturity”

“During the first nine months of 2007, total e-commerce spending surpassed $143 billion, putting it on pace to reach $200 billion by the end of the year. Retail e-commerce accounted for nearly $84 billion, or 58 percent of the total, while online travel spending came in just shy of $60 billion.”

Full release at http://www.comscore.com/press/release.asp?press=1842 .

SEO is the life blood of many e-commerce sites. It’d be rare to find one that hasn’t done at least a little SEO, even if it is creating some meta tags and optimising page titles. Most of us have gone and done at least a little link building.

The world of SEO is changing though. The real value is getting into the top 10 of Google. There’s plenty of studies that show most people never go past the top 10, and the most value is in the top 3 or 4, what shows above the fold (without scrolling). But, the game is changing.

I did a Google search today for Guatemala (the South American country).

http://www.google.com/search?hl=en&q=guatemala&btnG=Google+Search.

Try the search now. I’ll wait.

In the top results, I get:
A preview of Google images results
A wikipedia article
A lonely planet article
CIA world fact book entry.

Let’s say I’m selling tours to Guatemala. The image results, there’s nothing I can do about as an SEO. The wikipedia, lonely planet and CIA world fact book entries - well, it’d be a brave SEO who would claim to be able to beat those three. It’s probably possible with a huge budget, but who has that sort of money for one word?

This is becoming increasingly common. I’m seeing in the top of the Google search results:
YouTube videos, with preview images
Google Book results
Google Images previews (like above)
“Refine results” (here’s an example)
The ubiquitous Wikipedia results.

I’m sure I’m missing some, and the list will only grow. www.Ask.com are really pioneering this trend, the classic example being their search results for Spiderman 3. Have a look. There’s a good chance that what you are after is on that homepage above the fold.

The result is there’s increasingly little room for “organic” results in the top 5. Remember, Google’s job (and Yahoo, MSN, Ask, etc) isn’t to keep you in business. It’s to keep them in business. They stay in business by providing the most relevant search results. If the most relevant search results means making organic results the also-rans, then that’s what they’ll do - and are doing.

What’s the solution? Well there’s no easy answer. Here’s some suggestions:
- Paid ads, of course. Unlike some sceptics, I don’t believe Google is doing this to drive us to paid ads. It is a nice side effect though!
- Long tail search results. Don’t SEO for Guatemala. SEO for “Guatemala boat tours”, “Guatemala cheap holiday”, and about 10,000 other results you can think of. This is where a content rich site is invaluable.
- Keep building links, but make them real links that drive traffic. Think of the SEO benefits of those link as secondary, not primary.

Take this site for example. I get a good chunk of my traffic from Google. However, a relatively small percentage is from the big terms. I got 2 people last month search for “free shopping carts review”. Add up all those 1’s and 2’s, and you have about 40% of my traffic. There’s a bunch of sites linking here, and they drive a lot of my traffic as well. I’m sure they help with my Google results, but there’s about half a dozen links which get me almost as much traffic as Google.

I hope this isn’t doom and gloom, just a good chance to re-think your SEO strategy.

We’re all tempted to say “oh this is easy to use, it’s very straight forward”. I’ve sure done it. But the human brain is a strange and complex thing and more often than not when I test my “very straight forward” theories, there are usually big holes in it.

Jakob Neilsen posted about 86% of people who couldn’t find the single most obvious piece of information on a page. The human brain is a mysterious thing indeed, and unless you understand every aspect of the brain, then test, test, test.