Internet Retailer editorial

Internet Retailer is now uncloaked and is gradually taking on its own life. It’s remarkably exciting seeing the subscriber numbers notch up and the press releases and leads start arriving at the ever-open editor’s inbox.

Selectivity is an issue since many of the releases I’m getting are just “something to do with the internet or technology” and don’t really address the specific concerns of ‘internet retailers’ or etailers. There are already some excellent forums and publications which focus on individual specialisms (eg retail technology, or fashion, or catalogue retail, or online security…). Internet Retailer though is focusing on the intersection of these skills and interests.

I’ve also published the first editorial – I’ve reproduced it in full after the jump – but it’s interesting to see from a catchup of my RSS subscriptions that there are very different interpretations of Google’s new Checkout and its impact on etail. My view is that it’ll be welcomed by consumers (who don’t trust retailers for the most part) and it’ll pose a challenge to the survival of weak retail brands as Google become the shop front for the digital consumer. It’s worth having a look at the comment on Techcrunch to see a totally different view.

In the meantime let me know what you think of Internet Retailer, good or bad. Oh, and don’t forget to mail me with any tips, leads and suggestions.

Reproduced from InternetRetailer.info

Google’s “Checkout” and the retail challenge

Google’s “Checkout” is the new payment system, previously reported as “GPay” and touted as a Paypal competitor.

It is however fundamentally different from Paypal, which allows person-to-person payments (ie no need for a merchant credit account) and micro-payments (either to other individuals or companies).

Google Checkout is rather a ‘meta checkout’, providing the customer with a single, consistent and quick checkout interface with which to buy from any participating etailer.

The benefits for the customer are clear: a single interface, a trusted intermediary, protection from future sales spam, protection of confidential credit card information, fraud guarantee… There’s even a single ‘basket history’ so you can view all purchases across any vendor. That alone is worth signing up for!

The commendably zippy video tour will ring alarm bells with retailers! This shows clearly how a retailer’s brand and lovingly-crafted website is reduced to no more than a paid-for, text product link with the ‘checkout basket’ logo to indicate the mother of all “Buy it now” opportunities. There are no upsell opportunities, brand messages or other retailing opportunities. It’s a world in a few lines of text.

While afilliate sites already aggregate products from many retailers in the past the retailer has still “owned” the customer by dint of taking the payment and capturing delivery details. With Google Checkout the payment information and even the customer’s email are obscured and so this could affect the ability of retailers to get repeat business. This could, for example, dent the viability of deep discounts on ‘first purchases’ in the expectation of recouping the discount on subsequent sales.

In the round this provides a major challenge to retail brands. Taken in the context of Amazon’s “@market” initiative (which gives other retailers the opportunity to sell goods via Amazon and to get priority in the ‘buy box’) we can see two parallel challenges to retailers. In the first instance Amazon is vying to become the destination etail brand of choice, co-opting weaker etailers into becoming little more than fulfilment wholesalers (ie delivering goods for Amazon, taking the stock and returns risk, all the while never owning the customer). Taking the opposite approach we have Google which is rejecting the notion of a retail destination site at all: the search engine IS the retailer! There’s a reduction of the retailer to little more than the text or product description in the sponsored link.

This brings to mind two other current debates around brand and etail. The first is Saatchi’s comments in the media this last week promoting his One Word Equity notion. His contention is that advertising is dead (what, again? – ed) and that in a world of Consumer Attention Deficit Disorder (CADD) the proper response is to spend even more money than before in a conceptual land-grab to own single word concepts. This is a limp and lazy misunderstanding both of the purpose of advertising and the new digital consumers: they’re not deaf or indifferent, they’re simple more savvy, more selective and justly cynical. Furthermore this appears to be a retreat from measurement: digital marketing is unique in that its impact, effectiveness and ROI can be surprisingly well assessed. There’s little truck now with the old maxim that “80% of marketing spend is wasted, we just don’t know which 80%”. Currently we do know – it’s the above the line, unfocussed and self-indulgent tosh that Big Advertising dished up in the Saatchi heyday. The OWE project seem like a retreat to the days of unaccountable, “conceptual” spending and should be rejected. Ashley Freidlin has written a good comment on this position which you can read in this blog entry. The debate though does echo a valid concern of retailers who worry as they see their brands becoming increasingly irrelevant online.

This irrelevance is demonstrated by whether the brand name alone is sufficient to close a sale or be selected from other near equivalents. Take a search for a television for example. In a search result listing for a Sony plasma TV, for example, the phrase “Sony Plasma 40″ HD TV [reference number]” will be repeated in all results. Why then would “… from Acme Retailers” be decisive in making you click on one result over another identical result “… from Universal Retailers”? In most cases the retailer is less important than the price. The decision steps would be price, then looking for hidden charges, then weighing the likelihood that a given retailer is fraudulent. It’s clear therefore that in the ‘lowest common denominator’ world of search returns it’s difficult for the retailer to weave ther retail magic (and benefit from all of the good usability and customer messaging on their own websites).

Indeed, there’s been an interesting debate on how one can’t “build brand” via a search engine conducted at the Publishing 2.0 weblog, and this blog article illustrates graphically the user experience on a luxury, branded purchase journey how the search+buy experience does not really allow space for the retailer.

These concerns notwithstanding, Google are going to be rightly thanked by customers for helping them solve the usability and experience nightmare that is the checkout process. The exemplary Online Retail User Experience Benchmarks 2006 report by Dr Mike Baxter has shown once more that one of the key gripes across all sectors, customers and brands is the poor experience of checking out. If Google can improve on this they’ll be loved by all.

I wanted to try the Checkout myself (all in the name of research!) but the service is US-only at present. When, however it’s available in the UK I expect to see further pressures on retailers. Search engines, price comparison engines, affiliates, branded megasites and now Google all seem to be colluding to separate the retailer from the end customer (and their cash!).

This pressure will demonstrate graphically those businesses whose brands are founded on value, customer satisfaction and which answer a genuine customer need, and those which have simply survived in the hitherto less competitive market to be the front of mind, retailer of choice to today’s digital consumer.