Retail Performance Marketing - The Mercent Blog

"Maximize Your 2011 Retail Sales on Google" Free Webinar Now Available On-Demand

In case you missed our joint Webinar with Retail Online Integration (ROI) and Google, the complete session with slides and audio is now hosted online and available free on-demand.

No one knows more about Google retail advertising programs than Mercent (other than Google... maybe).

Here's the summary of the presentation:

Featuring: Eric Best, Chief Executive Officer, Mercent and Frank Kochenash, VP of Client Services, Mercent
Introduction by: Kristine Szarkowitz, Director of Marketing & Communications, Mercent
Duration: One hour
Cost: Free to attend/register!

Savvy retailers understand in order to win in eCommerce a highly proactive and informed strategy is a must! Google is taking the eCommerce landscape by storm as one of the fastest growing online shopping channels available to today. Too few retailers however, have the necessary insight and knowledge leverage everything Google has to offer.

In the first of its 2011 Mercent Retail™ Webinar Series, Mercent will deliver a high-value, informative session to demystify Google’s top retail programs and divulge ‘must know’ expert insight on how retailers can leverage Google’s programs to maximize their 2011 retail sales through the channel. This is an ideal program if you want to learn more about:

• Google Product Search (GPS)
• Google Adwords paid search 
• Google Product Listing Ads (PLA)
• Google Product Extensions to AdWords (PE)
• Google Affiliate Network (GAN)

RSVP (Registration) is required to attend this free webinar.

Mercent FY2010 Financial Results are In (and Up!)

This morning, Mercent released highlights of our 2010 fiscal year.  It was another formative year for the company -- and sets a good foundation for an even better 2011 (where we're all focused now that last year is ancient history).

Here are the key metrics from this morning's press release:

Focused on ensuring retailers are visible, competitive and profitable wherever consumers shop online, Mercent delivered another year of positive business performance representing record gross merchandise value (GMV) sourced and tracked for its portfolio of tier-one, brand name retailers. Operational highlights are as follows:

• Achieved record consolidated GAAP revenues in FY2010

  • 70% (1.7X) year-over-year GAAP revenue growth for FY2010

  • 5th consecutive year of annualized GAAP revenue growth exceeding 70%

  • 5th consecutive year of accelerating annualized GAAP revenue growth

• Achieved record aggregate client gross merchandise value (GMV) in Q42010 and FY2010

  • 172% (2.72X) year-over-year GMV growth in FY2010

  • 5th consecutive year of annualized GMV growth exceeding 75%

  • 5th consecutive year of accelerating annualized GMV growth

• Expanded enterprise retailer client base with the addition of new tier-one retail brands including Signature Styles, The Land of Nod, DSW Inc., Welspun USA, and many others.

• Expanded online marketing reach and revenue-generating capabilities.

  • Introduced new profit-generating Mercent Retail™ programs for Google, Amazon, eBay, Microsoft Bing and others.

  • Introduced new online retail sales channels, including the availability of social shopping merchandising via Twitter, Facebook, MySpace, Ning, Bebo, and other social sites.

  • Delivered new, innovative and revenue-generating Mercent Retail™ platform capabilities, including the widely adopted Mercent Retail™ Price Optimization Engine, and expanded support for the Google Affiliate Network, Google Product Extensions to AdWords, and Google Product Listing Ads.

• To accelerate software engineering investment, expand services, and accommodate client portfolio growth, increased company full-time head count in FY2010 by 76%.

 

http://www.marketwire.com/press-release/Mercent-Reports-70-Revenue-Growth-Record-FY2010-Results-SAAS-Digital-Marketing-Software-1388308.htm

 

Google Emerges as eCommerce Powerhouse

More evidence today that our thesis here at Mercent regarding Google as a key player in online commerce is correct.

The back story:

 Sept, 2009

 http://www.auctionbytes.com/cab/abn/y09/m09/i01/s02  

 Google is a dark horse in the race with its product search platform and Checkout technology. Best said the growth of Google's shopping traffic relative to the other players over the past 18 months has been massive, particularly Google Product Search.

 June 18, 2010

 http://www.techflash.com/seattle/2010/06/qa_mercents_eric_best_on_e-commerce_trends.html

 Is Google a big player in e-commerce? We view them as the dark horse, with Stephanie Tilenius, the former eBay executive, joining them as the VP for Commerce. It’s clear to us that Google is making a significant investment in the e-commerce space and the big strategic question that they will have to answer in the next few years is how they go from a strictly catalog and ad-focused business to actually being a participant in the transaction, either through a shopping cart program or a payment program.

 Nov 4, 2010

 http://online.wsj.com/article/SB10001424052748704506404575592420335177184.html?mod=WSJ_hps_sections_tech

Retailers pay Google to advertise products next to product-search results. Some advertisers pay every time someone clicks on an ad, while others pay a commission for each product purchased by customers who found them through the ads.

The commission model, introduced last year, gives Google direct insight into which products are selling. That accomplishes a "key strategic objective" for the search company, which can use the information to better target the ads on its site, among other things, said Eric Best, chief executive of Mercent Corp., which helps retailers sell and market products through Google. Some retailers pay commissions of 9% to 12%, he said.

Today:

Today’s Wall Street Journal news unveiling Google’s latest moves to become a noteworthy eCommerce player is generating big waves among retailers.  Specifically, Google has confirmed it is making strategic investments in its product search business and Google Shopper mobile application, all with the goal of providing retail shoppers with the ability to discover real-time local product inventory.  This program should emerge as an important channel for driving in-store sales through Google’s Web and mobile presence for multichannel Mercent clients like Office Depot, Brookstone, REI, and Lands End. Whereas ~7% of total retail sales occur online today, up to half of all considered in-store purchases are researched in advance on the Web and mobile devices.

 Google is also planning to launch a high-end fashion website, Boutiques.com, to feature well-known designers, and, like its upgraded product search and mobile capabilities, will also drive shoppers to local stores where they can purchase products.  At Mercent, we view this as a highly strategic move by Google to align itself competitively with other large eCommerce players like Amazon and eBay, with its new Fashion Vault program.  A site like Boutiques.com moves Google forward in terms of providing shoppers with better product search, discovery, and comparison online.

 Despite a generally lackluster holiday sales forecast for offline retail (flat to 2%), Forrester Research reports online retail is expected to increase 16% year over year, and as has been the case for much of 2010, affluent consumers are expected to drive more growth.  Luxury retail has been slow to move into the eCommerce market until recently.  With year-over-year eCommerce growth in the double-digits, these retailers are realizing they can no longer ignore the channel, as evidenced by brands like Burberry, which has credited investment in digital strategy for an 18% year-on-year jump in profits.

 At industry and Wall Street events, Mercent has anticipated Google would make a marked shift in its overall strategy to become increasingly entrenched as an eCommerce player.  Today’s news delivers on this expectation, in time to create a major buzz prior to the holiday shopping season.

 Looking forward to the holiday shopping season!

 Eric

Mercent Announces Support for Google Commerce Search

We are pleased to be the first online channel management solutions provider to offer data feed support for Google Commerce Search -- a powerful search solution that enables online retailers to provide online shoppers with fast, accurate and highly relevant product search results Google is known for, directly through their own eCommerce websites. Mercent supports GCS by providing complete data feed integration with the GCS platform through Mercent Retail® -- Mercent's online channel management platform. Integration is seamless with GCS features and functionality.

Mercent handles all aspects of the product feed integration with GCS on behalf of the merchant; including feed formatting for Google's XML APIs, data mapping and content augmentation to support parametric search and product promotions, and search optimization for effective search performance. Once integrated with Mercent Retail, retailers are able to deliver rich and search-optimized catalog product information to the GCS platform for indexing by Google. When a shopper searches using a specific term or phrase on the retailer's eCommerce site, Google delivers immediate and highly relevant product results specific to the search query -- results critical to delivering an exceptional online shopping experience that helps promote buyer conversion.

The full text of our press release covering the announcement is available on our corporate Web site.

Mercent Looking to Hire VP Client Services to Head Up Retail Performance Marketing Agency

Mercent has experienced incredible growth in recent quarters, doubling the size of our portfolio by signing and launching more than 60 new enterprise retail clients in 2009. We are looking for a seasoned digital agency veteran to help us expand and grow Mercent Performance, our own agency services team providing performance marketing optimization services to retail advertisers.  Please send executive referrals and inquiries to jobs@mercent.com.

The full description of the opportunity is available at Mercent.com.

Thanks for your interest and referrals!

Mercent CEO, Eric Best

Mercent and Performics Partner on Retail Ecommerce Advertising

Mercent announced today that Performics will be standardizing on our Mercent Retail on-demand advertising software for management of shopping feeds, e-commerce search marketing, and shopping cart-based marketplaces like Amazon and eBay.

The majority of Performics’ data feed clients will be launching on Mercent Retail simultaneously, benefiting from Mercent’s advanced channel analytics, campaign merchandising and advertising optimization tools, and deep channel integration approach which handles end-to-end commerce workflow including automated order delivery to the retailer’s warehouse.

Performics is recognized by Internet Retailer as the number one search engine marketing firm managing more IR Top 500 search engine marketing programs than any other vendor. Internet Retailer publishes its Top 500 Guide annually and includes profiles and statistics of America's 500 largest retail Web sites ranked by annual sales.

"Performics has powered comparison shopping engine and marketplace advertising programs for clients for six years, and we expect this partnership with Mercent will provide our clients with even more value and performance-based opportunities," said Doug Kofoid, senior vice president of business services at Performics. "The Mercent Retail platform aligns with Performics' methodical approach to delivering increased ROI to our clients' campaigns with the right a blend of analysis, insight and management tools."

Mercent’s official press release is online at http://www.mercent.com/pressreleases/pr_20090303_Performics.aspx

Tagged: CSE Management, Datafeeds, Internet Marketing, Market Research

Mercent Announces Holiday 2008 Retail Results: Same Seller Sales Increase 29.6% YOY

Comparison Shopping Engines, Amazon.com, and eBay Shine

As a follow up to our Cyber Monday post, today Mercent released aggregate year-over-year customer online sales growth numbers for December 2008. Interesting to note how closely performance on Black Friday and Cyber-Monday predicted future results for the season. In December, our clients’ aggregate online sales generated by Mercent were up 29.6% YOY.

Conclusions

The most obvious conclusion to draw from our data is that consumers aggressively leveraged comparison shopping sites like Google Product Search, NexTag, Shopzilla, and PriceGrabber.com and the third-party seller programs at Amazon.com and eBay (particularly fixed-price listings) to their advantage this holiday. While bargains are always found immediately following Thanksgiving and Christmas, it seems the abundance of discount pricing, coupon offers, free shipping and other promotions throughout the entire month of December encouraged shoppers to utilize these sites like never before.

While overall online sales were down anywhere from 1% to 7% in December 2008 (depending on cited source), hurt by the economy and a short post-Thanksgiving shopping season, aggressive retail advertisers have access to a high-growth, high-intent channel for acquiring new customers and revenues.

Methodology

The methodology for this comparison matches our Cyber-Monday study. This performance data reflects retail transactions driven through The Mercent Shopping Network. For the purposes of this report, to ensure “same seller” continuity and to eliminate artifact associated with new customer sales ramp, we excluded all retailers that launched on the Mercent Retail platform after Q3 2007. We did allow for expanded distribution/participation in the Mercent Shopping Network, as this is effectively an increase in advertising reach and budget – available to any online retailer and expected of high-growth companies.

Unlike the Cyber-Monday study, we ran the December year-over-year comparison two ways to help eliminate artifact associated with weekday sales cycles. On the graph below, the red line shows daily sales growth relative to the same date (day of the month) in 2007. Weekly spikes are inherent in the daily sales growth line (Red) before adjustment for weekday cyclicality – Mondays, for instance, are typically the biggest sales day of the week. These spikes disappear when the data is shifted so weekdays are aligned year-over-year (Blue). Of course this adjustment skews sales growth immediately prior to and following Christmas as the holiday is no longer aligned – creating a bigger spike and drop around the 25th. We’ve elected to report on the date-aligned (rather than weekday-aligned) figures as they present a more moderate result overall for the month. For complete press coverage of these results, see our In the News page at Mercent.com.

Here’s to recovery and growth in 2009!

Eric Best
CEO, Mercent

Tagged: Black Friday, Cyber Monday, Comparison Shopping Engine, Mercent Shopping Network, Online Holiday, Holiday Online

Mercent Announces Cyber Monday Results: Aggregate Customer Revenues up 29% Year over Year

Today Mercent released aggregate year-over-year customer online sales growth numbers for Cyber Monday and the 7 days preceding Cyber Monday (including Black Friday).

For Mercent’s retail brand customers (those customer live since Q3 2007 with comparable year over year data), aggregate online sales through Mercent are up 29.3% YOY for Cyber Monday, and 25.6% YOY for the preceding 7 days.

Mercent generates orders for our retail clients (REI, 1-800-Flowers, GUESS, RedCats, etc.) through the Mercent Shopping Network, a retail advertising network representing more than 70 online shopping destinations including comparison shopping engines like Shopping.com and Shopzilla, cart-based marketplaces like Amazon and eBay, affiliate programs like Google Affiliate Network and LinkShare, and paid inclusion programs like Yahoo! Search Submit Pro. The Mercent Network likely outperforms the broader e-commerce market because it offers consumers the opportunity to comparison shop across multiple merchants – key in the current economic environment -- and it offers retailers a high-growth, pay-for-performance advertising platform which receives a significant share of overall advertising budget.

This performance data reflects retail transactions driven through The Mercent Shopping Network. For continuity, we defined weeks as starting on Monday and ending Sunday. Day of the week significantly impacts sales volume. Monday is always the largest day, so it’s important to compare whole weeks year-over-year for this type of analysis. Here are the exact date ranges we used for 2007 and 2008:

2007
November 19–25, 2007
CyberMonday 2007 was November 26

2008
November 24–30, 2008
CyberMonday 2008 was December 1

For the purposes of this report, to ensure “same seller” continuity and to eliminate artifact associated with new customer sales ramp, we excluded all retailers that launched on the Mercent Retail platform after Q3 2007. We did allow for expanded distribution/participation in the Mercent Shopping Network, as this is effectively an increase in advertising reach and budget – available to any online retailer and expected of high-growth companies.

Mercent’s top performing online customer is up 588% over 2007.

Happy Holidays!

Eric Best
CEO, Mercent

Mercent Announces Full Support for eBay and PayPal: Enterprise Tools Designed for “Diamond PowerSellers”

Today Mercent is excited to announce the launch of merchandising and order integration tools for eBay. Mercent’s official press release hit the wire this morning, November 25, 2008 at 8AM ET.

We’ve integrated the Mercent Retail platform directly into eBay’s brand new Large Merchant Services (http://developer.ebay.com/products/large-merchant-services/), making Mercent the first company to go to market with seller tools based on these APIs. SmartBargains is Mercent’s first client to launch on eBay using Mercent Retail integrated with eBay’s Large Merchant Services APIs.

Since 2003, Mercent has been helping retailers take full advantage of online cart-based consumer marketplaces like Amazon.com, SHOP.COM, and Buy.com along with comparison shopping engines (CSEs), affiliate networks, and paid inclusion programs. eBay represents the next logical step in our bid to provide comprehensive distribution and channel-optimizing technology and services to large and high-growth online merchants.

Mercent Retail for eBay will help us launch and manage the hundreds of major retail brands we already count within our merchant portfolio, and will accelerate eBay selling for new Mercent clients.

With the advent of full Mercent support for eBay and PayPal, large eBay PowerSellers including eBay Diamond Sellers (aka Diamond Powersellers) now have a compelling alternative to traditional eBay auction management tools like ChannelAdvisor and Infopia. And since Mercent Retail is fully integrated with eBay Large Merchant Services, sellers benefit from the key features of these APIs including (courtesy eBay) when they adopt Mercent Retail:

• Substantially reduce network bandwidth, and connection requests. Consolidate tens of thousands of Requests, or Responses into a single, compressed file.
• Simplify integration. Familiar file-based integration method between Merchant IS systems and eBay.
• Reduce compute capacity. Leverage eBay infrastructure for highly optimized, parallel execution of individual Requests.
• Simplify error management. LMS will manage transport and general system errors, and retry appropriately.
• Rich features. Access Trading Platform features that may not be available via the Trading API.

Here are a few of the key benefits the Mercent delivers for eBay sellers:

• Complete product and order feed integration –ensure your product listings are always synchronized with your back-end systems without having to manually download order reports or upload inventory figures
• Streamlined product catalog management – quickly map your products and categories to the best performing eBay categories. Use automated content rules to apply content changes, such as inserting promotional text, across definable segments of your product catalog
• Comprehensive analytics – track and report on the revenue, profits, cost-per-order (CPO), and other key retail advertising metrics associated with orders on eBay and other online shopping channels
• Powerful optimization features – Automatically optimize advertising campaigns based on listing-specific and product-specific performance parameters including stock levels, gross margin, cost-per-click (CPC), ROAS, and CPO

With Mercent Retail for eBay, it’s easier than ever to launch a high-volume, fixed-price, multiple-quantity seller presence on eBay, and manage your eBay presence (including your eBay Store) with the full benefit of enterprise automation and world-class optimization that Mercent customers have come to expect.

If you’ve outgrown your ChannelAdvisor or Infopia solution, or you’re just interested in learning more about Mercent, give us a call at 206 832 3900 or email info (at) Mercent (dot) com.

Tagged: Mercent Retail, Mercent Performance, Diamond PowerSeller, eBay PowerSeller, eBay Seller

Google’s Answer to Consumer Weakness? Give Amazon, eBay (and Microsoft) Away for Free

In the last few quarters, the Mercent performance marketing team has observed the growing advertising impact of Google Product Search and influence of Google Checkout as Google has established preferred placement for retail product listings within its natural search results pages.  With the quantitative results we’re observing across our portfolio of merchants, Google’s e-commerce plans are the topic of the day in Mercent’s offices, conference calls, and emails.  Our marketing managers are keenly interested in the strategy, market potential, and competitive impact of Google’s moves on current e-commerce marketplace leaders Amazon and eBay.

What would it take for Google to beat Amazon and eBay at the third-party seller game? Simply cheaper ad inventory built on Google’s search monopoly, combined with 35% profit growth on 39% revenue growth year-over-year (Q2 2008 results) self-funding a loss leader strategy that gives online merchants free e-commerce services in exchange for more core advertising dollars.  In spite of Google’s incredible year over year growth, Wall Street expects more and expressed disappointment in the form of a 12% drop in valuation following the Q2 earnings report. But Google has the leverage to disrupt major established markets to continue its advertising business expansion, with software services a rich and vulnerable target.

Every retailer knows the classic story of King Camp Gillette and his pioneering razor and blades business model, first introduced in 1903, along with Gillette’s namesake products. Whether labeled freebie or loss leader marketing, the key to success is market control gained by giving away for free that which your competitor cannot or will not. Google knows this. Amazon and eBay know it too. The strategy has proven highly effective in Google’s own short history with Gmail and Google Analytics cannibalizing inferior free (Hotmail) or incrementally better fee-based (Webtrends) products and services. In a perfect case of turnabout, Google’s Chrome aims to beat Microsoft’s Internet Explorer at desktop monopoly.  In fact, Microsoft has adopted a wholly new business strategy focused on advertising revenues in response to Google tactics.  Now Google has set its sights on e-commerce services as the next lever for ad revenue growth.

Retail Advertisers Win (for Now) at Amazon and eBay’s Expense

An online seller generating leads through Google Product Search pays no listing fees, cost-per-click (CPC) marketing fees, or cost-per-acquisition (CPA) commissions on converted orders.  Compare this zero cost basis to eBay’s 8.75% per transaction on top of their recently announced 35 cent per-SKU 30-day listing fees.  Note that 43% of eBay’s listings are fixed-price as of August 2008, and eBay has publicly disclosed its strategic shift toward supporting and growing large, branded fixed-price seller participation.  Amazon charges no listing fees for participation in the Merchants@Amazon.com marketplace program (a more programmatic and enterprise-ready version of the company’s Marketplace branded seller program), but applies a variable 6 – 20% cost per order depending on vertical category.  Amazon’s and eBay’s fees include credit card processing and seller protections related to fraudulent orders, but Amazon retains marketing control over the end-customer buyer.  By some estimates Amazon’s third-party seller program generates 40% of Amazon’s total order volume, representing $5 billion potential gross merchandise sales worth $450 million in commission revenue at an estimated average 9% transaction fee. Of note: while Microsoft owns a much smaller percentage of the online commerce market, they are executing on (experimenting with?) a similar loss leader strategy with the launch of Microsoft Live Search Cashback (formerly Jellyfish.com), wherein consumers receive cash rebates from Microsoft on purchases executed through the shopping portal. Of course, in the case of Microsoft Live Search Cashback unlike Google Product Search, advertisers foot the bill for the consumer rebates.

Google does charge its sellers transaction fees, but applies an aggressive loss-leader pricing strategy funded by AdWords revenue (and a $12.7 billion cash warchest). A seller adopting Google Checkout receives preferential ranking among other merchants in Google Product Search results, benefits from a new trusted method of payment, and sees the entirety of their Google Checkout processing fees credited to their AdWords account balance.  Effectively, with Google, all e-commerce services that generate and capture demand are free to the merchant, so long as the merchant is an active buyer of AdWords.

Advertiser Opportunities and Platform Defense

How do Amazon and eBay compete as Google owns and brokers a larger and larger share of all online shopping demand, and is willing to offer its merchant advertisers competitive e-commerce services for free? More importantly, how do retail advertisers take full advantage of the changing landscape?  I’ll address these topics in my next posting.

About the Author

E-commerce veteran Eric Best is CEO of Mercent Corporation. Founded by veterans of Amazon.com and based in Seattle, WA, Mercent handles online product promotion for 1-800-Flowers, GUESS, REI and other top-tier retailers.  In 2008, the company completed the certification process to provide product data feeds to Google Product Search and achieved certification as an integrator of Google Checkout.  Mercent is also an Amazon.com Certified System Integrator, Buy.com Gold Certified Partner, SHOP.COM Certified Data Feed Provider, and Yahoo! Search Submit Pro certified feed provider.