TV + Mobile

There is a trend unfolding at the moment in that TV broadcasters are looking for ways to increase engagement by leveraging mobile. Research shows that most of us are using a connected device watching TV. Apps like Zeebox, Fango and Getglue are playing to this trend. TV commerce is a space that we are interested in at BuyReply. Our system is the perfect transactional mechanism for buying directly off the screen as you don’t even need any apps to transact. All you need to do is send an email or a tweet to buy. We can link into apps as well but it’s not 100% necessary. We view our technology as complementary to these apps. While BuyReply is focussed on fulfilling transactions, these apps are there to drive engagement but also have some eCommerce capabilities.

I’m not sure how this game will play out as its looking as if each network is promoting their own app. For example Ten and NBC use Zeebox while Seven uses Fango. Will viewers change apps when they change channels? Will viewers check into multiple shows via multiple apps? As consumers we want to have a single app that works across multiple networks however TV networks are large powerful companies and driving a consensus amongst them is a tough gig however as we know, the consumer always wins and over time I suspect this trend will converge into a single app.

The potential of engaging audiences via mobile in real-time with TV is staggering and we are excited to be a part of this ecosystem as the way we consume television shifts.

#clickfrenzy

The recent click frenzy failure was an embarrassment for Australian online retail which could have easily been avoided if the right hosting solution was used.

The execution of the promotion was unlike anything I’ve ever seen before. Grant Arnott did an incredible job of signing up brands and generating PR.

The aim of Click Frenzy was to replicate the US cyber Monday event and make it an annual occurrence. I’m pretty sure that come next year, everyone will remember Click Frenzy (for good or bad reasons) they will still look to see what’s on offer… So I think this blip might have worked in their favour for next year… If advertisers still trust the brand and decide to participate again.

The technical issues could have been avoided by using a cloud solution like AWS. I’ve written about AWS previously. All they needed to do was set up an auto-scalling group behind a load balancer with 50 beefy servers for 24 hours and their site would have stayed up. This is a similar architecture to BuyReply and it’s highly scalable and available. Once your first server is configured you can set this up in about 1 hour. It’s point and click stuff.

The reality is there are hosting companies out there who claim they can compete with AWS but the reality is that it’s very difficult to do this. It’s like telling people you can build a search engine that competes with Google. Maybe you can replicate the algorithm but you’ll never be able to replicate the speed and scale easily. To put it into perspective AWS is more dominant in their niche than Google is in search.

AWS just announced a Sydney based region so I’m pretty sure I know where they will be hosting Click Frenzy next year.

The future of media

I just read an awesome blog post written by Albert Wenger from Union Square Ventures. Albert has financed some of the largest consumer internet franchises on the web including Twitter, Zynga, Foursquare, Kickstarter and Tumblr. He know’s what is what!

A while back I wrote a post called “The future of eCommerce” which outlined my vision as to where I see online commerce going. His recent post has an uncanny resemblance to what I described back then.

I explained that the future of eCommerce is going to be driven by the following three factors:

  1. Mobile
  2. Frictionless payments
  3. Social platforms

Alberts blog is titled “Attention Scarcity, Transactions and Native (Mobile) Monetization”

  1. Attention Scarcity = Frictionless payments
  2. Native (Mobile) = Mobile (twitter, SMS and email – the lowest common denominator of technologies on smartphones)
  3. His use case is an example of buying via Twitter = Social platforms

What Albert is saying is that we need to capture consumers when their purchase intent is at its highest while they are engaged with their medium of choice, whilst making it easy for them to pay.

Marketing 101 is all about endorsing a celebrity with a brand (think Nike + Roger Federer), putting the celebrity on TV, broadcasting them to a large and engaged audience, and creating an emotional connection with the viewer. This is how brands are built. Almost all established brands have been built this way. It is what they teach you in marketing kindergarden.

As a cyclist I watch the Tour de France every year. I see these guys pumping up Alpe d’Huez with sweat beading from their foreheads. They are my hero for that moment and I watch in awe taking into consideration how gruelling the ride must be. If you are a soccer fan, you sit there glued to the TV watching your heros play the game. Every pass of the ball stikes an emotional cord. Fans want to be the players. Fans want to wear what they are wearing. This is why people pay $149 for a pair of Nike shoes that cost $15 to manufacture. This is why we shop at Nike Town not Joe’s Shoe Store.

The problem though, is that until now it has been impossible to turn purchase intent into a transaction at the moment where purchase intent is at its highest. In order to make a transaction, consumers have to move away from the medium they are engaged with, whether it be Twitter, TV, newspapers or magazines, and go to a store or web browser to buy. There is too much friction in this process.

Albert describes this here:

Because at the moment most routing is still of the disrupting and annoying kind that tries to take your attention and move it somewhere else altogether, such as a different web site altogether. The primary reason behind the need to disrupt and really move you elsewhere is that most web services have not yet found or deployed their native way of making money, which is largely due to the inability to transact within the services themselves.

According to Alberts example, he is saying that the consumer needs to be taken away from the Twitter stream and moved elsewhere on the web to a place with a low conversion funnel before they can buy. In reality, it is much worse than this. While watching the soccer, if I want to buy a Barcelona jersey, I have to leave the medium I’m engaged with (TV) leave my house, go find a store that stocks this product then buy it.

While my purchase intent is at its highest while watching TV, it diminishes over time, so the sooner I can capture a transaction, the higher the chance of a sale. 

As time goes on my circumstances change, I get distracted, my financial position might not afford a jersey, my wife might talk me out of it or Barcelona might lose the game – i.e. before half time I might have wanted to by the jersey badly enough to transact on the stop but at the end of the game I no longer want to. Had I been able to make that purchase instantly, before half time, I’d have done so.

In reality, the transaction point is not a website away (perhaps it is from Twitter) but if you take into consideration traditional marketing methods, the transaction point is miles away. If you see somethinig you like on TV, hear something on radio or see something in a magazine or catalogue, you still need to visit to a store. Even if you don’t need to visit a store, there is significant friction in buying online. You need to leave the couch, find a computer, search for the product, find a size, add it to cart, enter your payment details and so forth.

The opportunity therefore lies in bringing the transaction point to the medium – Twitter being one of those mediums.

  • What if you could bring the store to the TV?
  • What if you could transact within the Twitter stream?
  • What if you could buy off of the page of a magazine?
  • What if you could buy instantly while listening to radio?
Albert describes this here:
 The primary reason behind the need to disrupt and really move you elsewhere is that most web services have not yet found or deployed their native way of making money, which is largely due to the inability to transact within the services themselves.
It is not only web services that have not found a native way of transacting in stream. It is ALL offline mediums that don’t yet have a native way of transacting. This includes television, radio, magazines, catalogues etc. In order to transact we see something we like, then we go to a place where a transaction point can occur which is either in store or on the web, but what if the transaction could occur off the medium itself? What if I could buy Roger Federer’s shirt off his back while I’m watching the game in real-time using NATIVE technologies on my mobile phone (by native I am referring to technologies that dont require an App download). What if i could purchase when my purchase intent was at its highest via a single click payment mechanism? This is what Albert aludes to in his last paragraph when he talks about Facebook, Apple and Amazon storing credit cards.
FG says:

The platform we have created (BuyReply) solves this problem, and I look forward to sharing more with you shortly. We enable instant transactions from any online or offline medium including Twitter via a secure virtual wallet!

AIMIA Social Commerce Event

This Friday I’m going to be presenting on the topic of Social Commerce at the AIMIA Social Commerce event. I’ll be talking on these topics:

Recent history would indicate that social and commerce do not mix. Until now monetizing the social graph has been somewhat of a guess. However;
  • What if you could monetize the social graph? 
  • What if the dynamics of the social graph could be extended to commerce? 
  • What if transactions could spread through the graph with the same viral speed of a tweet or re-tweet? 
  • What if commerce could be facilitated via twitter and Facebook?
  • What if you you could ’tweet to buy’ and your followers could re-tweet to buy? 
  • What if it took 3 seconds to pay and check out?
  • What if consumers could buy off of any medium including TV, Radio and Print, using Twitter?
  • What does this mean for brands, businesses & consumers?

I will be presenting on the future of commerce in a connected, social, and offline world, so please come along.

I’ll also provide examples of how BuyReply can facilitate these interactions which will be the first time that the general public will see our new platform.

I have 1 spare ticket (worth $105) that I’ve yet to give away and have reserved it for a reader of my blog, so if you’d like to take me up on this offer e-mail brad[at]lindventures.com with your name, company and position and I’ll have you added to the guest list. First come first serve!

The event is this Friday, 25th May at KPMG (10 Shelley Street Sydney) from 10:00am-12:00pm and you can register here:

http://www.aimia.com.au/home/events/aimia-events/the-virtual-storefront–evolving-social-commerce-platforms

Jeff Bezos’ annual letter to Amazon shareholders

Amazon founder Jeff Bezos starts his High Orde...Jeff Bezos is one of my favourite entrepreneurs. He is well known for his long term thinking and willingness to reinvest profits to innovate and build over the long term. Amazon started as an online retailer however today Amazon is as much a tech powerhouse as it is a retailer.

Two incredible bets he has placed that are paying off in spades are the Kindle and Amazon Web Services.

His most recent letter to shareholders came out on Friday. I read it every year. You can read it here.

Two of my favourite quotes:

“The most radical and transformative of inventions are often those that empower others to unleash theircreativity – to pursue their dreams,” writes Bezos. “These innovative, large-scale platforms are not zero-sum – they create win-win situations and create significant value for developers, entrepreneurs, customers, authors, and readers.”

I am emphasizing the self-service nature of these platforms because it’s important for a reason I think is somewhat non-obvious: even well-meaning gatekeepers slow innovation. When a platform is self-service, even the improbable ideas can get tried, because there’s no expert gatekeeper ready to say “that will never work!” And guess what – many of those improbable ideas do work, and society is the beneficiary of that diversity.

 

Swim with your arms and kick with your legs

One of the key differences between BuyReply and Lind Golf is that BuyReply’s business model gives us control over our inbound and outbound sale efforts. Unlike Lind Golf, BuyReply does not rely only on inbound activity. We can also generate outbound activity at a pace of our choosing.

When selling products online via an eCommerce model, much of your effort is focussed on generating inbound traffic. That means setting up Google Ads, building an email database so that you can market to existing customers (who were acquired via inbound strategies) and running ads on Facebook and social media platforms. Generating inbound traffic is expensive and risky. You need to invest a lot to get results.

The problem with this, is that once things are humming, it is difficult to do anything that has a material impact on your business. You can’t close a massive deal which takes things to a whole new level in terms of sales or revenue. You can’t do this because doing deals is an outbound activity. You need to wait for somebody to visit your site, and hope that they are the 1% that convert.

Traditional and online retail is mostly an inbound game. The way to grow these kinds of business is to try and best convert the traffic that you get by merchandising and pricing your offering well, delivering excellent customer service and offering a great user experience. You can grow your business by growing your product range across categories, therefore increasing your total addressable market, however that is often an expensive and timely exercise. Bricks and mortar retailers generate their inbound traffic by paying high rent in high-street locations.

What we are doing different this time around, is building a product and business model where we can drive outbound sales as well as inbound traffic. We still have the same inbound marketing strategies in place, such as Google Adwords, PR, social and so forth, however because we are selling a service we are able to identify who would want to use our product, and contact them directly.

Running a business that solely depends on inbound sales is like swimming with your arms only. You are only utilising half of your potential. What you really want to do is swim with your arms and kick with your legs at the same time.

That is how it felt at Lind Golf as we relied 100% on inbound sales. We considered opening a wholesale division however our low Internet/direct pricing was working against us because stores had their own home brands and our range was not priced at a premium price point so there was no room for a wholesale margin. We were swimming with our arms and frustrated that we couldn’t kick with our legs.

With BuyReply we are able to segment our market, target specific use cases of the platform, contact customers directly and set up meetings. Phone calls are a lot cheaper than Google Ads and you have so much more control. We can see our customers, speak to them, learn from them, address their concerns and make our business (and their businesses) better because of it. Furthermore, BuyReply is much more scalable. We can close a really large customer that could double our business, in a matter of days or weeks, where as closing a single customer at Lind Golf may have ended up in a $300 order. Having direct control over our sales is really exciting coming from an environment where we had fairly little control over sales and scale.

Interview with Power Retail

Last week I was interviewed by Power Retail about eCommerce, my journey so far and what’s coming next. I was lucky enough to have the interview promoted as a feature article on their site today.

You can read the interview here.

The Coming Era of Flat Earth Pricing

It is not often I post other people’s are articles on this blog. I prefer to write original content.

However this article hit me on two fronts.

  1. Because of its awesome title – it refers to the the book “The world is flat” which is probably one of the best books I’ve ever read. It inspired me to start my first business.
  2. Because it is so true.

It was written by Jon Bird, the CEO of IdeaWorks. I don’t know Jon.
But I know that his thinking is spot on.

http://www.newretailblog.com/the-coming-era-of-flat-earth-pricing/

Enjoy.

Woolies Barcode Scan Virtual Store

I took this pic last week in Circular Quay. This is the kind of thing that we are going to be seeing everywhere soon.

I spoke about in my recent Future of eCommerce post. It’s pretty damn cool – and scary. Retailers must adapt and embrace. You can’t fight this kind of change. Just figure out how to make it work for you.

 

Two topical articles

Last month I wrote  a blog post titled “Create your own luck“. My point in this article was that Rocks are finite, but knowledge is not meaning that we must continue skilling ourselves as an economy and country as the resources we have will eventually run out.

This morning I woke up and read a Thomas Friedman article in the New York Times titled “Pass the Books. Hold the Oil.” It drives home a very similar message. I really suggest you read it.

This was my favourite quote:

In sum, says Schleicher, “knowledge and skills have become the global currency of 21st-century economies, but there is no central bank that prints this currency. Everyone has to decide on their own how much they will print.” Sure, it’s great to have oil, gas and diamonds; they can buy jobs. But they’ll weaken your society in the long run unless they’re used to build schools and a culture of lifelong learning. “The thing that will keep you moving forward,” says Schleicher, is always “what you bring to the table yourself.”

On a different topic, I read an article written by Reid Hoffman (founder of LinkedIn) and his team from Greylock Partners in Silicon Valley which was titled “The Credit Card Is The New App Platform“. They describe the Online to Offline trend in uncanny similarity to a recent Lind Ventures post titled “Online2Offline – The Megatrend” which I wrote in Feb. I really believe this is one of the largest opportunities in the marketplace today:

We’re big believers at Greylock in the future of “online to offline” commerce, and we’re seeing a ton of innovation in this space. One of our portfolio companies, CardSpring, announced a major partnership with First Data earlier this week. We’ve invested in several other “online to offline” commerce companies including Coupons.com, Groupon, Shopkick, Swipely, TrialPay and Wrapp. And there are many other companies innovating in the space, including startups like Square, and established companies like Google, American Express and Visa.

For all of the attention focused on online commerce, the market opportunity for “online to offline” commerce is way bigger. Online commerce is now a $200 billion industry, but it’s still small compared to offline transactions. Up to 70% of consumer spending is influenced by Web and mobile research, but over 90% of actual transactions are still conducted in the physical world. Several major industries are motivated to see this new app developer ecosystem take flight. Retail marketers know they can advertise more efficiently if they can actually track and close the redemption loop from online browsing to offline buying.

Greylock has invested in a few companies that operate at the fringe of this trend however as Ron Conway puts it, the largest returns to be had from the online to offline space will be for the companies that are as close to the actual transaction as possible. That means payment processing or facilitating payment processing in the real world by electronic means.