Imagine you are the marketing VP of a retailer or a direct marketing company. Your CEO comes to you and congratulates you on the fine work you’ve done running the company’s online commerce operation. Now comes the hard part. The CEO essentially says to you that you’re going to need to double sales over the next 12 months in order to maintain your share of the market because that’s the rate at which it’s growing. What would you do in terms of your online merchandising in order to attract new customers and transact new business with those customers?
You have traditional advertising tools, such as ads, search engine marketing, and of course there’s always email. But the relative effectiveness of those ultimately pales in comparison with actually being able to list your product in front of customers in a way that allows them to make informed buying decisions.
That’s the capability a new Seattle company called Mercent has been offering to its retail clients, companies like Wet Seal, Lucky Brand Jeans, ProFlowers, Shane Co., and Altrec.com.
“There are close to 115 million shoppers visiting 10 of the leading online retail marketplaces,” relates Eric Best, Mercent’s founder and CEO, who is also the principal of Seattle’s Morse Best Innovation. “With our software, it’s very easy to get your product into those marketplaces, and in front of those customers.”
Mercent provides a single point of integration for retailers looking to maximize their return on investment in online shopping portals. The company licenses its software to manage product listings on ten of the leading e-commerce marketplaces, including the kingpin Amazon.com.
Merchants can manage product price points, search keywords and descriptions, and also product categories for each of the online venues. Mercent also provides value-added services such as optimizing merchants’ storefronts and product landing pages tailored to the search engines.
As a former Amazon.com employee, Best knows the technical and business rules that allow marketers to optimize their e-tail relationships. We spoke with Eric about optimizing sales and marketing on the Internet’s ten largest shopping portals.
Seattle24x7: Mercent is emerging on the E-commerce scene at a pivotal time. The online shopping portals appear to be thriving once again.
Best: It’s like the famous quote, “The rumors of my death have been greatly exaggerated.” E-commerce and online advertising are actually coming back in a big way this year. While the off-line retailing market is growing in low single digits, online retailing has doubled in size in the last 24 months to become a $144 billion dollar market. The online advertising dollars which companies allocate in their budget are today the largest that have ever been reported. In Q1 of 2004, $2.3 billion was spent on online advertising. That was a 40% increase over the previous year, and it was the largest amount spent on record. The analysts who reported these results had started tracking the expansion in 1996. I think it’s safe to say that it was the biggest quarter for online advertising in history.
Seattle24x7: Which of the top online markets are you supporting?
Best: The marketplaces that we support today begin first and foremost with Amazon.com. Amazon is unique because they are a transactional platform. They actually complete the order on behalf of their retail merchants, and there are benefits that Amazon provides that some of the other shopping portals do not. Nonetheless, there are customers visiting these other portals that we want our retail clients to get in front of. The other marketplaces are: AOL Shopping, MSN Shopping, Yahoo! Shopping, Froogle, which is the product listing engine provided by Google, MySimon, PriceGrabber, Shopping.com and NextTag. Combined, these represent over 100 million monthly shopping visits.
Seattle24x7: How does the Mercent Commerce System work?
Best: What Mercent Commerce System does is manage product catalogue data for these individual merchandising channels. What that means is you have control over the listings that are being distributed to these shopping sites. You have control over the particular SKU’s that you are going to be selling, the actual product mix if you will.
You also have control over the descriptions, the way the copy associated with these products is spelled out. It may turn out that, over time, you realize the customer shopping at AOL responds to a different message than the customer shopping at MSN. Our product provides you with the flexibility of being able to tailor the marketing messages for the individual marketplaces including Amazon.com.
Essentially, we’re creating marketplace-specific or marketplace-optimized product metadata for each one of these channel partners, and each one of these marketplaces. To create this relational data store, we pull data from a variety of sources on the retailer side, the most obvious of which is the product catalogue but also other product information management systems that help retailers aggregate product data from their suppliers and manufacturers. We take the data and we stage it in a way that offers the retailer a choice. They can use the data that is effectively part of that master dataset. Or, they can modify data sets specific to the merchandising objectives of that particular marketplace. So I can have a separate product description for AOL versus MSN. I can even have a separate price that I’m selling on AOL versus MSN.
Seattle24x7: You’re really optimizing the level of merchandising power
at these portals?
Best: If you take it to the next level, when you start talking about optimization parameters like the categorization of products, the search keywords and other merchandising parameters that you do not find in some of these alternative advertising channels. If I create a search engine listing, like a Google AdWord, the whole concept of a cross sell does not exist. But customers are coming to these marketplaces to buy, so their perception is going to be different. They are going to be viewing these product listings less like an advertisement and more like breadth of selection. The experience is more beneficial to the customer, and feels less like forced advertising.
As you get into the particulars of the platform, that’s when you get into the ability to optimize characteristics of these products that you wouldn’t ordinarily be able to optimize in these other advertising channels.
Seattle24x7: With Amazon, you are able to go even deeper?
Best: It gets back to why Amazon is a different marketplace. We can certainly measure the performance of the product listings on the other nine marketplaces in the same way that we measure the performance of your banner or your key word search term – using JavaScript or tracking pixel in the storefronts. At Amazon, we get a lot more than that. In addition to the product data that we are pushing up to the site, merchants also have control over inventory. So when you talk about optimization at Amazon, you’re actually talking about optimizing the number of available items in your inventory. How many items should I allocate to my Amazon storefront, compared to my other channels? That’s a question we can help answer. Because it provides bidirectional data feeds, Amazon puts merchants in a position to analyze order data and financial settlement data that’s coming back to the retailer. We store that data. It truly is a closed loop.
Seattle24x7: Take us back to your early days. You started down the
e-commerce path with both Microsoft and Amazon. In what capacity were
you working with the two titans?
Best: While I was attending Seattle Pacific University, I had the opportunity to work with a number of professors who were doing independent consulting work for the Microsoft Internal Technology Group, formerly called I. T. G. We rolled out the first online directory of Help Desk Services, back when Internet Explorer was in its
1.0 version and Internet information server was still in its very early form.
I founded a company called MindCorps in 1996. Through relationships with a number of Microsoft managers, we ended up working on Microsoft Commerce Server software. We did early work on what was then known as Site Server Commerce Edition.
Seattle24x7: Seattle was at the forefront of cataloging software at
that time.
Best: Through our Microsoft relationship, we gained introductions to some very large-scale, Fortune 1000 companies and by virtue of our early exposure to e-com technologies were in a position to be their e-commerce service provider and independent software vendor. MindCorps built out the first online stores and auction sites for companies like Universal Studios, PhotoDisc, and Wizards of the Coast.
We actually built some prepackaged software, which we brought to
market through a company called Emercis. Emercis provided catalogue
management software for the likes of Gear.com, 800.com, and
the McAfee online software store.
In 1999, MindCorps was approached by Amazon. They were interested in a deep strategic relationship. Really, what they were looking for was the business expertise and insights that we had working on online e-tailing projects. They acquired the company in 1999.
I left Amazon in late 2000 to start Mercent, building on almost 10 years of Internet software development experience.[24×7]
Find Mercent at http://www.mercent.com
