Here are some of the notes taken from our last eCommerce Toronto meetup on Fraud

Offline Fraud

• On the payment processing side
• Credit Card Fraud
• Counterfeit Bills

Online Fraud

• Higher ticketed items are more susceptible to fraud
• Flipping Product – Buy from Snuggle, sell on Ebay, Kijiji, Craigslist
• Fraud charges – The merchant never wins

Billing address vs Shipping address

• Not all transactions match
• Gift items – Customers have items shipped to a different location
• Supplement subscriptions – goods have to be shipped directly to the customer, no match, no shipment
• Online carts and platforms have built in address verification systems (AVS) which processing companies can then restrict which orders can be processed or rejected.

Technology

• Chip technology
• PIN protection – implemented in Stores. How do you make the transition online?

Customer Credit Card Protection

• The Merchant Never get dings
• Manual Approving transactions

Where do you see the most Fraud?

We asked eCommerce merchants this question, and the answers the majority gave was Toronto and Montreal. This areas may not apply to all retailers and credit card holders because fraud is everywhere and differs from location to location.

Fraud in the U.S

• Fraud is very big in the States.
• Cards across borders get flagged in an attempt to minimize the amount of fraud between Canada and the U.S.
• So frequent, fraud agencies (FBI) don’t bother with certain fraud amounts

Credit Card Specifications

• Address 1 failure
• If the billing and shipping address do not match, many retailers and eCommerce merchants will reject the transaction

Risk Management

• Reverse lookup phone number to match the address
• Make sure the address matches
• Use the telephone – Fraud numbers don’t exist (pay as you go, number keeps ringing)

How many people do you have manage risk?

• Business owners and companies have dedicated teams to manage risk
• Risk Management is a huge sector in the financial and banking industry

Top 5 trends to follow in 2012

I have been paying quite a bit of attention to eCommerce over the past year following latest news, product innovations and trends. 2011 was an exceptional record breaking year, as was 2010, 2009, 2008, 2000…(I think you get the point). Each year eCommerce is growing bigger then the last. Here, in no particular order are, are the top 5 eCommerce trends for 2012.

1. Social Media Integration

As the Social Media phenomenon continues to expand through Facebook, Twitter and now Google+, businesses are expanding into this space recognizing that having a social media strategy is well worth the additional effort (If you are addicted to Facebook, get your resume together). From a marketing standpoint, your fans and followers are all connected and right in front of you. WHY would anyone ignore the opportunity to connect directly?

Social Media Marketing

They like you, follow you, read your articles, and you have done a fantastic job staying in touch and responding to your customers. Online Marketers take note, these are your customers, they choose to come to you. Don’t let your Facebook page rot, or your twitter feeds get boring. ENGAGE!

Start discussions, get product reviews, better yet, offer and sell! More and more business owners are taking advantage of the power of social media. Why shouldn’t you?

Look for more actively engaged social media marketing efforts. It will be interesting to see what kind of things Facebook, Twitter, Linked In etc. will do to adapt to the growing number of online marketers utilizing social media platforms into their marketing strategies.

Contests

In 2011, a lot of social media marketers were using contests to get people to like their pages and follow them. Now that they have built their customer base, this year look to see marketers get more active and engage.

Online incentives are great for your customers. Online promotions and contests reduce costs of direct marketing, and reach your current customers directly.

2. Tablet Shopping

Increase in Tablet Sales

Tablet sales were at an all time high in 2011 and are only going to continue to grow in 2012. Although the Apple iPad 2 remains top of the leader board, Samsungs Galaxy tablet is growing in popularity, and who knows what RIM plans on doing about their Playbook product that was not as much of a success as other tablet products.

Retail Mobilization

In one of our past Toronto eCommerce Meet ups, we had a very deep discussion about the impact online and mobile retailer will affect traditional bricks and mortar retailers. We concluded that there will always be a physical store, regardless the growth of eCommerce, traditional retail will always have a strong presence.

However, we can all agree that the physical store is going to have to change. Retail Mobilization is a growing trend that is making its way into business models and strategies. Amazingly, mobile technology has found its way into employees hands as a tool used for efficient customer service.

Mobile Shopping Tools

It does seem like Apple sets these standards. In Apple stores, customers now have the option to checkout items from their IPhones. Don’t be too shocked once you find out more and more retailers are implementing mobile technology into their checkout process.

We’ve already seen in-store mobilization in retail stores like Sears, Home Depot and Urban Outfitters. Employees are now being equipped with tablets to help with product information and customer service.

3. Real Time Connectivity

Customer service (Live chat support)

Customer service is quickly evolving online. When I first starting exploring Microsoft adCenter and was a little confused with the reports and settings (my background is with Google Adwords), I logged on and had a quick chat with a customer service rep who was extremely helpful getting me set up on their platform. Believe me when I say software and development companies will better their customer service efforts by implementing instant live chat in 2012.

Live video chat/sales

If you ever had any doubts about the non tangible aspects of online shopping, maybe this will help. Web stores such as Joyus have implemented video sales to further engage the customer and show off the features of the products they sell online.

Video search is one of the most popular activities on the web. Bloggers, Social Media users, pretty much everyone embeds and uploads their own videos. Over the past few years, product pages have evolved quite a bit including customer reviews, color and size attributes.

While How-To’s have been flooding the web for years now, in 2012 look for merchants to take advantage of online viral marketing. Keep an eye out on your favourite eCommerce sites and watch the number of video sales increase.

Video Ads

Remarketing tools for Pay Per Click advertisements have exploded all over the web over the past few years. This has been a great way for online marketers to get visitors that are interested in their product or service to their site.

Pay per click has evolved across search engines and display networks and continues to be a high source of traffic to small business and corporate website owners. As more and more merchants realize the value of remarketing and video advertisement placements don’t get to upset that your favourite videos are getting bombarded with Pay Per Click Ads.

4. Dynamic Site Experience

On site Marketing - Coupon Codes

Okay nothing new about this topic, but as spending online is increasing, grass roots marketing is evolving online as well. My Christmas shopping has certainly become a lot more easy over the years. Gift Certificates to the mall, movies, restaurants and the LCBO, done!

E-tailers, do not hesitate on the idea of a virtual gift card. Coupon and promotional codes are secure and an effective way for customers to gift online, and get new customers. Think real, act viral.

Ren’s Pets has always been active in direct marketing campaigns with their wholesale catalogs and in store coupons. This is a screenshot of their online gift card.

Visual and Graphic Design

The following is an excerpt from a previous blog post I posted after one of our bi-weekly eCommerce Toronto meet ups

“A balance of both design and user experience needs to be present in order to run an effective eCommerce store. There are eCommerce storefronts that are very design heavy and engage their target markets by providing eye candy websites while others such as Sears focus on product and category pages and easy navigation through the checkout process.”

The quality of product images and visual merchandising online is a trend that marketers will continue to evolve throughout 2012. A product image zoom tool is a cool feature etailers are implementing into their product pages to interact with the customer. Fashion sites implement product zooms because their products are modeled and gives the customer a visual of what a jean jacket or purse looks like on a person.

Product image zooms are very popular in fashion sites.

Multiple Store Views

Websites like Bentley Leathers operates two storefronts, one in English, the other in French. Multiple Store Fronts are very common in search (Google) and social (Facebook) engines, but also websites like Monster who are segmented based on location (Monster Canada, Monster Europe etc.)

Many retail and restaurant chains are owned under a parent company. Merchants are beginning to operate Multiple Store Fronts to maximize efforts on the web and open up more channels of distribution for their products and services.

5. Job Opportunities

The demand for IT and eCommerce positions in 2012 will increase. As a young industry in Canada, certain skills and requirements are not easy to find. Keep an eye out for Help Wanted ads in Workopolis and Monster for online marketing, engineering, analysts and other eCommerce related positions to open up in the near future.

What does this mean for Post Secondary Institutions?

A question I decided to ask myself, and answer as well. Technology and schools of Business Management cannot ignore these trends. It is possible that over the years we will see post secondary institutions implement eCommerce related courses into programs related to technology and marketing. There are certain skills and trades that are still young in the industry such as project/product management and online marketing (changing what seems like every month).

I would like to start off our return of This week in eCommerce with a very delayed Happy New Years from the team at Demac Media. This is the first post I have done for this week in eCommerce so I thought I would simply sum up the month so far with a few industry news articles. Starting next week I will keep up weekly posts so I am not to far behind on industry news. This post will include articles about upcoming trends and some tips for 2012.

6 Tech Trends to Watch in 2012

Link: http://www.getelastic.com/6-tech-trends-to-watch-in-2012/

It was pretty evident that in 2011, tech trends saw rapid growth from the years before. Advancements and innovation in mobile technology, services, traditional retail were all significant changes that will dictate the tech trends of 2012. From online shopping and eCommerce growth to voice messaging and recognition (Siri), what tech trends will have the most significant impact in 2012?

Tablets and e-readers see Hot and Heavy Sales

Link: http://www.ecommercetimes.com/story/Tablets-and-E-Readers-See-Hot-and-Heavy-Holiday-Sales-74249.html

One of the hottest trends in the tech industry that will have a huge impact on eCommerce is the growth of tablets and e-readers. With more than a quarter of U.S adults owning a tablet or e-reader, sales are surely to continue rising. While the future of tablets is certainly very bright, it is still uncertain of what kind of impact they will have on eCommerce, retail and enterprise markets.

Five Optimizations to Keep Customers Coming Back in 2012

Link: http://www.plumbersurplus.com/Blog/post/2012/01/20/Five-Optimizations-to-Keep-Customers-Coming-Back-in-2012.aspx

This list is handy to look over for eCommerce site owners who are at a stand still and wanting to know what to do next. If your site conversions are improving you are on the right track, but still need to optimize your marketing strategy to retain customers and acquire new ones. This post gives a little advice as to what improvements and additions you can make to your site in order to keep customers coming back.

eCommerce 2012: Expand, Integrate, Refine

Link: http://www.zippycart.com/ecommerce-news/18019-ecommerce-2012-expand-integrate-refine.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zippycart%2FGWfN+%28Ecommerce+News%29

2012 is set up to be a very productive year in eCommerce. I go on about the growth of eCommerce and the different trends to look out for, but this article breaks down things to consider when business planning and developing marketing strategies. Combining trends and technology into your planning will help expand, integrate and refine your eCommerce solutions. Looking at the big picture, how will consumer behavior impact eCommerce in 2012?

We recently upgraded one of our sites from Magento EE 1.9.1.1 to Magento EE 1.10.1.1. For the most part the upgrade was painless and much needed as it fixed several outstanding bugs. Any developer that has upgraded Magento knows that more often than not you can expect small issues either with the data or with the custom code running on the store.

In this particular case we started getting complaints from the catalog merchandising team about the speed on the backend, specifically the saving time once a product was created or updated.  On average it was taking 2 to 3 min to save each product.  We all know the backend of Magento can sometimes be a bit sluggish (lots of ways around this though), but 2-3 minutes is a little crazy to save a single product.

Our team decided to dig in and see if we could fix this before escalating to Magento.  Our first approach was to check the usual bottlenecks on a Magento site:

- Memory Usage
- Database bottlenecks
- Cpu usage

After a quick look at all of the usual suspects, everything looked normal.  We suspected it was something non-server / configuration related since the site was actually performing very well in both frontend and backend with the exception of saving products.

One thing was called to our attention was the fact that the price indexes where running each time a product was saved; a quick test confirmed it and incredible enough each index refresh was taking between 2 and 3 minutes; so each time a product is saved, the price indexes for 10,000 products get refreshed.  It’s also important to note that for performance reasons we only refresh the indexes on set intervals when the traffic is slow, so all indexes are set to manual update (no automated index refreshes here).

So our next step was to check if maybe one of the third party modules or our own extensions might be the cause of triggering the reindex event.  A quick look at the code and configuration looking for observers attached to the product save event or maybe an override to a controller or a model returned nothing suspicious.  Could this be a core Magento problem?

After poking around the core code I found a suspicious line of code inside the saveAction fucntion in the file:

app/code/core/Mage/Adminhtml/Catalog/ProductController.php around line 707:

Mage::getModel(‘catalogrule/rule’)->applyAllRulesToProduct($productId);

And one google search later, my suspicions were confirmed.  There are a couple of bug reports regarding this issue, notably http://www.magentocommerce.com/bug-tracking/issue/?issue=11036.  Interestingly this bug appeared on Magento CE 1.5.0.1 and it’s still open; so I decided to try one of the suggest solutions and comment out this line of code. To properly to do it:

1) Copy the ProductController.php from app/code/core/Mage/Adminhtml/Catalog/ProductController.php to app/code/local/Mage/Adminhtml/Catalog/ProductController.php

2) Look for
Mage::getModel(‘catalogrule/rule’)->applyAllRulesToProduct($productId);

and replace it with

//Mage::getModel(‘catalogrule/rule’)->applyAllRulesToProduct($productId);

That solved the issue and product updates went from taking 2-3 mins to only a few seconds. The only possible downside is that catalog rules are not being applied when the product save and full price reindex its still needed, in our case this works because we are already reindexing on a schedule and we don’t any reindexing to occur during the top traffic hours.

It has been just over a month since our last eCommerce Toronto meet up , but with the holiday season in the books, retailers and etailers are now handling customer returns. The topics of discussions included:

Customer Returns

• Biggest time of the year for returns
• Apparel is big for returns – Women’s fashion – 10-20%
• Buying, wearing, returning – Canadian mentality
• Online vs In-Store Returns
• Packaging up returns and sending it back to merchant for a refund

Returns

• Customer is always right
• Put up a big enough stink, they’ll take it
• Difference between physical and online returns, face to face
• How many accepted returns go back to the store? Distribution centre

Different stores and businesses have different return policies. In most cases, the physical retailer gives returns to customers who put up a big enough stink. In order to retain customers, many retailers will accept returns out of “good faith” , even if the product being returned is completely dismantled.

Exchanges

• Buy online, return in store
• Some stores sell an item in one location and are useless in others. Therefore when a return is made from a store in one location to the next, it is pretty much a write off.

Inventory

• Allocating inventory for online purchases
• Buying an item from one store and returning it to the other, they add it to their inventory
• Buy and distribute product to all stores (in most cases for physical retail, especially mall outlets)
• Big Box stores keep their own inventory in a back warehouse. Dealers may not accept

Size of Physical Stores

• Mall stores, pay for retail space
• Flagship stores typically have a warehouse that they can distribute to other stores (Ren’s Pets)

Web returns

• Zappos set the bar with customer service model
• Sub set of items that are easy to ship therefore offering free shipping

Canadian Merchant

• Deal driven
• American customers shop at normal price point
• Canadians shop in the States because of lower prices to get the better “deals”
• High shipping costs – 50+ Shipping Zones in Canada compared to 4 in the U.S
• Regional shipping costs differ nearly 20 km’s

Shipping

• High rates
• Can Par (low), Canada Post (High), Purolator, UPS
• Can Par Return Slips – Built in technology

The Canadian eCommerce ‘Channel’ has always fallen a bit short. This is mainly because most online shopping options for customers are from USA based merchants, leaving customers with those not-so-friendly cross border shipping/duty bills when they purchase.  SHOP.CA is filling a serious hole by giving the consumer a one stop shop for all their favourite brands distributed by respected Canadian retail merchants.

At Demac, we’re committed to being at the core of eCommerce in Canada.  Working with SHOP.CA and our great Canadian based merchants is bringing us one significant step closer to giving the Canadian consumer the great shopping experience they deserve.

For the Shop.ca launch we are supporting integrations to SHOP.CA from Magento using our proprietary Demac Media Integration Framework (aptly named the Data Donkey).  Moving forward we’ll build integrations to Shop.ca from other major eCommerce platforms based on demand.

In short, we’re pretty excited about our new Certified Integration Partnership with SHOP.CA.  We’ve been working closely with them for a few months and it’s been a barrel of fun!

View the full press release.

View our SHOP.CA Certified Partner program page.

We talk a lot about lifetime value of a customer in eCommerce. It’s actually quite significant when making decisions around marketing / advertising spend and more specifically the return you get on a channel (i.e. – PPC).

Running this report in Magento is a bit of a pain, but luckily a simple mysql query can solve your problems.   The following mysql query gives you a list of customer emails, names, and total purchase amount over the life of the customer (since the dawn of time!).

The Query:

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SELECT DISTINCT customer_email, customer_firstname, customer_lastname,
SUM(subtotal_invoiced) AS Total
FROM `sales_flat_order` AS a
GROUP BY customer_email
ORDER BY SUM(subtotal_invoiced) DESC

And the resulting output…

This is the fourth post in our Canadian eCommerce Statistics Series. Following up from last months data from November 2011, the data below was collected from December 1 -  December 31, 2011. This data is compiled using 5-10 Canadian-Only online retail businesses eCommerce platform and Google Analytics data.  We’re giving a range as we want to keep the sites being used to aggregate this data somewhat confidential. (All data is rounded to two decimal places)

General Numbers

Monthly Sales Growth Over Same Period Last Year: 160.89%

Average Conversion Rate: 1.56%

Converstion Rate Lowest & Highest Range (so you know where above average comes from): 0.96% – 2.22%

Average Order Value: $131.65

Average Time On Site: 4:32

New vs. Returning Visitors: 55.15% (New) vs. 44.85% (Old)

Traffic Sources

% of Traffic – Search (Organic): 54.39%

% of Traffic – Search (PPC): 6.9%

% of Traffic – Search (Google): 50.84%

% of Traffic  – Search (Bing): 2.13%

% of Traffic – Search (Yahoo): 1.05%

% of Traffic – Direct: 11.89%

% of Traffic – Facebook: 1.9%

% of Traffic – Twitter: 0.026%

% of Traffic – Wishabi / Canada Post: 0.51%

Sales Data

% of Sales – Search (Organic): 48.76%

% of Sales – Search (PPC): 6.26%

% of Sales – Search (Google): 44.04%

% of Sales – Search (Bing): 3.04%

% of Sales – Search (Yahoo): 1.65%

% of Sales – Direct: 13.8%

% of Sales – Wishabi / Canada Post: 1.01%

I would like to begin this post with a Merry Christmas to all and happy holidays! With the new year just around the corner, eCommerce has one final week remaining to close off what has been a spectacular year in eCommerce. Boxing day traditionally has been a day for retailers to unload leftover inventory and have a massive sale (In most cases for the whole week). There has been no difference in the past couple of years other then eCommerce trends. Maybe not to the extent of a Cyber Monday (don’t take my word for it), but Boxing Day deals will give online shoppers more of a reach to look for great deals.

Why Engagement Matters Most in Digital Commerce

Link: http://www.getelastic.com/why-engagement-matters-most-in-digital-commerce/

I cannot, and will not stop fascinating over the innovation digital commerce continues to display. In yet another great post from Get Elastic, these are some good reasons why engagement with your customers, subscribers and users is so valuable in the eMobile wave.

Tech Trends in 2012: What’s Hot, What’s Not

Link: http://www.ecommercetimes.com/story/Tech-Trends-in-2012-Whats-Hot-Whats-Not-73977.html

It seems we are outnumbered by the advancements in the tech world and we don’t even realize it. Simple, we have adapted quick, and don’t quite understand the significance of the changes. Compared to other parts of the world, North America (especially Canada) is still playing catch up. This article goes over the biggest trends from emerging technology, companies on the rise and fall, social sites and tech innovation.

E-Commerce – Preparing for and Maintaining Success

Link: http://business.transworld.net/80247/features/sal-orofino/

This article is very interesting and is outside of what you may think the title represents it as. When I was reading through some articles, I was expecting a blog that has a list:

Preparing for Success, 10 easy ways to succeed in eCommerce

1. Great Content (nothing new)
2. Social Media (Ok I get it)
3. Design (Sure, looks nice, what else do you got)
4. I think you get the point.

This article focuses on an emerging space e-tailers have to consider; a Compliance Program. Tax Liabilities, Data Security and Data Compromise programs are rapidly growing in the online world as more players are emerging every year.

Maximize post-holiday sales with search and social media

Link: http://blog.shop.org/2011/12/22/maximize-post-holiday-sales-with-search-and-social-media/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ShopBlog+%28Shop.org+Blog%29

It has been a relatively slow week as shoppers have completed (or waiting until Christmas Eve) their shopping for Christmas. Statistically over the years however, search and social media have played a key role for drive sales post Christmas day.

Online Commerce Pro Offers Tips for Home Business Success

Link: http://www.digitaljournal.com/pr/520770

Entrepreneurs are taking a chance at eCommerce start ups as the industry continues to grow in North America. In this article, the Digital Journal offers a few simple, but key tips to home business success on the web. Burt Durden (Durden Small Business) consulting practice provides these easy tips for capitalizing online trends and succeeding with a small eCommerce business.

Mobile e-commerce rise puts strain on retailers

Link: http://www.itp.net/587329-mobile-e-commerce-rise-puts-strain-on-retailers

Research shows that mobile customers are increasing demand for retailers to provide exceptional service in delivering content and product on tablets and smartphones. These statistics are from studies conducted in the Middle East, where 70% of eMobile customers wait 20 seconds for a page to load before bouncing to the next (survey conducted using a sample of 400 participants). What kind of pressure will be put on retailers who are Marketing their product/service using mobile tablets and smartphones to reach their customers and increase online conversion?

Online Cash Registers in Holiday Overdrive

Link: http://www.ecommercetimes.com/story/Online-Cash-Registers-in-Holiday-Overdrive-73982.html

Online merchants are kicking and screaming in joy over the current results of this record setting year for online holiday shopping. The largest factor for consumer behaviour online is price and convenience. This article also dives into the mobile factor of increased user experience and higher conversion rates online.

Understanding Holiday Retail Sales

Link: http://www.esa.doc.gov/Blog/2011/12/12/economic-indicator-understanding-holiday-retail-sales

This article by the Economic & Statistics Administration breaks down stats for this years holiday retail sales. I’ve spent the majority of this month posting articles on the 2011 holiday online retailer trends and statistics, and this weeks edition of This Week in eCommerce has been no exception. This article is filled with charts and incredibly detailed explanations on the importance of the stats collected from this years holiday season thus far for 2011. With less then 10 days to go until Christmas, it will be interested to see how this holiday season ends with a so far record breaking year for holiday eCommerce.