Yahoo! + Microsoft: what it could mean for small business e-commerce

What could the Microsoft + Yahoo! merger mean for small business e-commerce?

Let's take a look.

Microsoft's Office Live offerings include hosting and Web site building services for small businesses. Office Live (as of today) does not include any hosted e-commerce services.

In addition, Microsoft has never offered a licensed small business e-commerce system. In other words, Microsoft is not currently a player in the small business electronic commerce solutions market. Different story with Yahoo!

Yahoo! Stores has been around for years. It's definitely not the best small business e-commerce solution out there, but it's good enough for many, and thanks to its big brand has accumulated over 40,000 subscribers.

So, will Microsoft simply roll Yahoo! Stores into Office Live, assuming the merger goes through? It's not that simple.

Yahoo! Stores uses a difficult (according to many), proprietary programming language called RTML (Real Time Markup Language), which is unknown to most Web developers. That's because it was developed by the company that originally created what later became Yahoo! Stores. The company was Viaweb, bought by Yahoo! in 1998.

I doubt Microsoft will want to keep using RTML. It simply would not be consistent with the overall .NET strategy, which is an integral part of Microsoft's strategy for the Internet.

With tons of developers on hand, developing an equivalent to Yahoo! Stores in ASP.NET will not take years. In fact, given the somewhat limited feature set, it will probably take less than 6 months (I'm thinking of a team of 40-50 senior developers). Or they might decide to do it by acquisition, picking up some existing small business e-commerce software (*), and developing internal tools to migrate existing Yahoo! Stores account to the new platform.

So here is my small business e-commerce prediction out of the Yahoo! + Microsoft merger:

- Yahoo! Stores is rolled into Office Live
- RTML is gradually phased out
- Office Live Stores is rewritten in .NET

Now the big question: if the merger does not happen, am I supposed to delete this? Sorry, just kidding... the question is: will Microsoft want to become a player in this space? If the Yahoo! merger goes through, yes, I believe they will. And an aggressive one too.

(*) Hey, Microsoft, if you decide to buy some e-commerce software for this project, let's talk. ProductCart costs less than $31 a share, I promise. And we can yodel too!


Comment
A few weeks after I wronte this, Microsoft actually did release a hosted e-commerce service, called Store Manager. It's a pretty basic service (very small feature set), and follows a revenue model that's almost identical to Yahoo! Stores (monthly fee + 1% of sales). Yet another "me too" product by Microsoft, and a lost opportunity. One more service that competes directly with Yahoo! The two probably would end up getting merged into one small biz e-commerce offering did the companies decide to get married (no wedding date yet, as I write this).

Targeted stores work

An article I recently read about NetShops caught my eye. In case you don't know them, NetShops is a company that runs over 200 very targeted Internet stores.

Each store is totally focused on a specific niche. Are you looking for a coffee table? There's a store just for that. Don't know where to put your bottles of wine? There's a store that is dedicated to wine racks. Tired and need a break? Head to the hammocks store.

Their strategy has proven very successful, and they keep adding new, niche-oriented stores to their portfolio.

When I first started blogging, the reason for it was mostly that I wanted to point out something that I see over and over on my job: Internet retailers that focus on a niche - if they know their stuff - will be successful. If they are not focused, or forget to stay on track, they have a much harder time.

There are many reasons why this is the case. If you have a few minutes, go back to The niche is the trick (first part) and The niche is the trick (second part) for more on the subject.

The story is not going to change in 2008. If anything, social networking (the idea of people coming together on the Net based on something they have in common) will make this even more true. Stay focused on what you know best. Become more and more the "go to" Web site in your niche (or at least one of them). It will pay off.

Some ideas:

- First and foremost: write good copy for your Web site, keep it current and make sure it is effectively indexed. Your home page should contain some of it, and change regularly to link to the new articles you have written. Those articles should link to products and categories in your store. Basic, extremely effective search engine optimization, without doing anything special.

- Create a community around your store by allowing visitors to write product reviews, post on a forum, and maybe even collaborate on a wiki. These are all things that have become quite easy and inexpensive to implement.

- If you haven't already done so, start a blog on the subject, then link to it from your main Web site.

- Consider attending industry trade-shows. Start small, see if the ROI is there. Given the cost of Internet marketing these days, spending a few thousand dollars on target offline marketing might turn out being money well spent.

And if your Web store ends up being one of the leaders in your niche, NetShops might even write you a check :-)

Tips & Tricks: Using a custom Google search engine on your Web store

Google recently started marketing a pretty interesting tool called "Custom Search Business Edition". Let's take a look at what it is and how it could help your e-commerce store.

What is it?

It'a a Google-powered search engine for your Web site. What does this mean? In a nutshell:

• You can add a search form anywhere on your Web site (e.g. on every page, at the top)
• The results come from Google's index (fast, good results)
• You can define the "portion" of the Google index that the results come from
• The search results can be an integral part of your Web site, with no ads

For example, here is a search for "Google Checkout" on our Early Impact Web site. Notice that the results include both static content (e.g. Web pages, PDF files) and dynamic content (Knowledge Base articles). The results are framed within our Web site interface.

Pricing

This service has been part of Google for a while. What's new is that now you can get an ad-free, cheap version of Google, seamlessly blended into your Web site design. Pricing right now is as follows, based on the number of pages that are being searched:

• Up to 5,000 web pages: $100 per year
• Up to 50,000 web pages: $500 per year
• Up to 100,000 web pages: $850 per year
• Up to 300,000 web pages: $2250 per year

About the search index

A custom Google search engine is a subset of the whole system. Results in the custom search engine exist in Google. You cannot "add" content to the index. You can only filter it so that results that exist in the Google search engine do not come up in your custom version of it. In other words: your custom version of Google is a filtered version of the Google index. Filtered so that it only returns results that you want to show (e.g. only pages that contain your Web site URL).

Getting your store pages to come up in the results

Your store catalog pages (e.g. categories and products) will come up in the results only if they have been indexed by Google. So make sure that Google is building a good index of your store pages.

This article is not the right place to talk about good search engine optimization for your Web site. That said, the approach to getting your store properly indexed is probably known to you by now: use a store map, a Google sitemap, and lots of Well-designed, text-rich static pages to link to your catalog.

In fancier terms: build a lot of link popularity for your category and product pages within your Web site. If you do, you can be almost positive that all of those pages will be found and indexed by a search engine spider.

Why it can help your e-commerce store

Your shopping cart software already has a search feature. I'm sure that's the case. It could be more or less sophisticated, but it's there. The issue is that the search feature included in your e-commerce system typically only searches your store catalog, not the rest of your Web site. What about your forum, knowledge base, regular HTML pages, blogs, etc. etc.?

Could a search that includes those documents help? Could you convert more sales if customers were able to search all of that content? Search is king, they say. That's true on your Web site too. Many studies show that a majority of visitors to a Web site are likely to use the search feature, if it's there.

Since the cost of adding this Google service to your online business is rather low, I would give it a try.

But how can you easily combined the custom Google search engine with your other search feature? Here is a simple suggestion for quick implementation. I'm sure that a much fancier integration of the two could be done, but let's keep things simple and "non-technical" for now.

Combining a Custom Google Search Engine with your e-commerce search form

Again, this is just a suggestion for quick implementation. If you have access to a good developer, they can probably use the API that Google has made available for the custom search service to get a much fancier integration implemented on your Web store.

What I am suggesting is that you alter the advanced search page provided by your e-commerce software to include both the Google Custom Search form and the rest of the search filters. That way you can offer your store visitors a way to either perform a generic Web site search or a more specific store search. The latter will typically have more search filters available (more or less advanced based on how sophisticated your shopping cart software is).

Here is a visual example of this approach. The search form for the Custom Google Search engine is at the top. Technically speaking, the page contains 2 HTML forms.

I hope this helps you convert more store visitors into customers!

Licensed vs. Hosted Shopping Carts

Should you buy a licensed shopping cart or rent a hosted e-commerce solution? It's a big decision. There are clear advantages and disadvantages with both approaches. Practical eCommerce just ran two interviews on the topic.

• They interviewed me as the "licensed carts" guy. See what I had to say >>
• Michael Valiant of 1ShoppingCart is the "hosted carts" counterpart. Read his opinion >>

It's an interesting debate, with no winner. There's no winner simply because both solutions have reasons to exist and businesses for which they represent the right fit.

The important part is that - if you are in the process of deciding how to build your estore - you understand the good and not-so-good aspects of both solutions.

Tips & Tricks: Optimizing your "Search Box"

Search is a key feature for any e-commerce store. According to recent studies, half of visitors to an online store begin their visit by typing a keyword in the search box. And consumers that use the search feature appear more likely to buy than others. If that is the case, then...

1. Search Box
   Make sure that you estore layout does contain a "quick search" form in a place that makes sense. If it's not there, some customers may be turned off and walk away. Below we're going to spend a bit of time looking at where that search box should go.


2. Search Results
   Make sure that your search feature returns relevant search results, offers ways to narrow the search, and provides a friendly way to browse the results. I still see a lot of small business e-commerce tools pay little or no attention to their search feature. Technologies like AJAX can be very helpful in enhancing the search experience (at Early Impact we did a lot of work in this area: try a search on this demo store).

Even if your shopping cart does not have a strong-enough search feature, there are a lot of third-party tools that you can employ to improve the search capabilities of your online store. This will be the topic of another post.

For now, let's focus on the search box. It's such an important piece of your store layout (again, likely 50% of your visitors will use it!), that it deserves a lot of attention. Specifically, where should it go? On the left? On the right? How should it look?

I'm a big, big advocate of learning from people that are very good at what they do. So let's look at how the Top 5 online retailers (according to US online sales) position the search box on their store layouts. You'll see that the result of this bit of research is not what you might have expected.











Just by looking at these 5, leading retailers, there are a few things that we can learn and apply to all of our stores:

• Search is definitely key. Each store puts the search box in an extremely visible location. Office Depot even highlights the "Search" button in red.
• The Search Box is at the TOP. Not in a left or right-side column. It's always at the top.
• The Search Box can be right at the CENTER. The search box is so key that the top 3 online retailers put it right at the top center. You can't miss it.
• It's a good idea to write what type of search customers can run (e.g. "Keyword Search" vs. "Keyword and SKU search") right in the input field. That way there are no surprises. You can use simple JavaScript to remove that default text "onFocus" (useful links for this task)

Time to update many of our store layouts :-)

Should you use Google Analytics?

Is Google's free Web statistics service worth your time? We've been using it on our Web site and Web store for quite some time now, and have integrated it in our shopping carts. Here's my opinion based on the experience.

Summary

If your shopping cart can provide order information to Google Analytics, then the e-commerce reports generated by GA can help you understand where your sales are coming from and make it a good choice for your business.

The report that you can view by selecting "Traffic Sources > Keywords > E-commerce (tab)" will trigger a "wow" for many Internet merchants that have not seen something like this before (it details exactly how many orders each keyword phrase used in a search engine triggered in a given date range - see example below from our own Early Impact account). Since it's free, I'd give it a try if I were you.

Pros
What we like in Google Analytics (here I'm focusing on the most unique aspects of the system as there are many other services that offer good Web stats).

• E-commerce Reporting
  For an e-commerce store, this is without a doubt where the biggest value is. If your shopping cart program passes order information to Google Analytics, you will be able to see reports that merge sales and traffic data. What this means is that you can look up which keywords customers used to find your Web site, and whether they ended up generating any orders. This information is powerful as it can help you fine-tune your landing pages (and your Web store overall) to focus on revenue-generating keywords.
  
  For a list of e-commerce applications that have been integrated with Google Analytics, see the "e-commerce integrations" area of the GA forums.


• Shopping Cart Abandonment "goal"
  GA allows you to monitor specific behaviors on your Web site. The call this feature "goals", which is a somewhat confusing name. The idea is that your "goal" might be to get people to register, and you can track the "visit to registration" conversion by telling Google Analytics which pages (URLs) are used in the process. For an e-commerce store, this becomes quite interesting if you apply it to your checkout process. Rather than a goal, you'll be keeping an eye on your shopping cart abandonment rate. By telling GA which steps customers take during checkout, you can monitor the drop-off at each step (GA has some pretty neat visual reports for this). For instance: view cart -> login -> billing -> shipping -> payment. If you saw at high drop-off at the "shipping" step, it might indicate that your shipping rates are too high.


• Interface
  GA just released an updated interface. Tons of flash-based reports that look quite nice and that make changing the date range on reports quick and easy. The customizable "Dashboard" (your start page) is useful too.


• Email Reporting
  There are many options for receiving regular reports from your GA account, without having to log in. I like the fact that you can have the system send you a PDF copy of your customized "dashboard": it's a quick way to get a summary of your Web stats, and you're saving a hard copy of some of your statistics for your records (in case Google goes belly up and your Web site stats with it... but that's not going to happen anytime soon anyway :-)


• Cost
  GA is free, and that's hard to complain about. But, your Web hosting company probably offers you free stats too. Again, the real value for a Web store is in the e-commerce reports.
  

Cons
Things that could be improved.

• Refunds and Cancellations
  There is no way to "remove" a transaction (e.g. an order was cancelled). What you can do is post a negative transaction that offsets the original one. This is tricky to do unless your shopping cart software has a built-in feature to help you with it. Ask you e-commerce software provider about it (the screen shot below shows you what we did in ProductCart). Bug GA could make things easier in this area by providing some functionality right into their console.
  
  
  
  Missing Transactions: A by-product of this issue is that when you post a negative transaction that completely offsets another one, the two transactions "disappear" when you view a report for a date rage that includes both, but they are shown when the date range does not include both. This creates confusion as some orders are shown in some reports and not others. I have already notified the Google Analytics team on this, and hopefully they'll post a fix.


• E-commerce Reports
  I'd like to see more options to organize and save custom e-commerce reports. For example, even simple features like the ability to sort by order number or order date is missing (you can sort by order amount and you can specify different date ranges, but you can't easily sort within a date range).
  
• Reliability
  I should also note that some people recently complained of reliability problems. Google was quick to point out that no data was lost: the issue was just that the Google Analytics console could not be accessed. I don't see that as a big issue, and I'm sure that with Google's deep pockets, more powerful data centers will reduce the chances of that happening again.

I'm always interested in hearing your thoughts. By the way: if you end up using Google Analytics, keep an eye on the Analytics blog as the GA team postd there pretty frequently.

Google Analytics and Spry

I haven't posted much lately because I've been spending time reading and learning about a couple of interesting technologies and solutions that will definitely affect small business e-commerce in the upcoming months.

1. Google Analytics
   A good, free Web statistics solution (from Google's purchase of Urchin). It's easy to track statistics on your Web site (and Web store) using Google Analytics. And the price is hard to beat. Look into it if you haven't yet. But... where things get really interesting is when you can tie your e-commerce store to your GA account so that sales data is fed to the system. Then Google Analytics can output some really neat reports about where your sales are coming from. There are a couple of issues with handling refunds and cancellations, which is one of the things we are working on at Early Impact. Check with your shopping cart provider to see where they are with Google Analytics integration. You might be able to turn it on already.
2. Spry
   Adobe (ex Macromedia) is working on a framework for AJAX that will make it easier for an ecommerce development company to add more, cool interface elements to our applications. For example, you could have your ecommerce store tell you which customers exist in the database as you type the customer name, facilitating and speeding up searches. You can read about Spry and play with some of their demos at: http://labs.adobe.com/technologies/spry/ - Spry can also help you add some cutting-edge looking navigation to your storefront.

I'll blog more about both things in the upcoming weeks.