Read on for what you need to do to survive and thrive.

Google has reduced the traffic and ROI available to SEO-ed sites by:

• - Publishing sites’ content directly in search results as stock quotes, movie times, flight times, sports scores etc.
• - Creating “universal” search results that make sites compete with Youtube, Google News, Product search etc
• - Taking away keyword data for up to 30% of sites’ SEO traffic

And that’s just the more obvious things. But don’t take my word for it, Google proudly say so in this video:

Smart SEOs are already transitioning out of relying on SEO traffic for profit. They’re using it to acquire customers, period.

Everyone knows that repeat customers are easier to sell to and buy more. So make an initial low-profit sale to search visitors, so that you can add them to your email list and make more sales and profit later.

In fact, in my previous email to people who got a free advanced SEO book chapter, I went so far as to advocate selling at cost -i.e. at 0% profit – to maximize your conversion rate on SEO traffic.

Then wouldn’t you price everything – since you want search traffic on all your products – at 0% profit?

How will you ever be profitable then?

There are two parts to making long-term profit off of search visitors.

Part 1 – Dividing products between customer-generation and profit-generation
Part 2 – Segmenting traffic on the fly to personalize the products you show

Part 1 – Divide products between customer-generation and profit-generation

The reason for cutting into margins is that SEO traffic is decreasing, and price-comparisons are a click away.

The thing is … what if there wasn’t search traffic in the first place?

Challenge the assumption that all your products want/depend on search traffic!

Surprisingly, that’s the case for many products. For example, any new product doesn’t have existing search demand. (See sidebar.)

The point is that your site should feature two categories of products:

1) Acquisition products. These low-margin products are meant to draw visitors into the store, to be either immediately converted and/or upsold on products with higher margins.

In offline retail this is known as a “loss-leader” – a product that is sold at little, no- or even negative-margin.

It leads visitors into the sale that is then made profitable with crosssels and upsells.

2) Profit products. These are higher margin products that allow the business to grow and thrive.

Popular examples:

• - Candy-and-magazine display at the checkout counter
• - Accessories for your electronics, such as cases, memory cards, insurance
• - “House” brands – if you manufacture the product, customers can’t get it from competitors, eliminating price-competition

So how do you make sure that your existing customers will see profit-generating products when they return to your site?

Part 2 – Segment the traffic and personalize

Have you visited Youtube while logged in to your Google account? Notice that it recommends videos specifically for you?

Or notice how Amazon welcomes you by name and shows you recently-browsed products? (Retargeting of a sort.)

You can use a free tool like BTBuckets (hattip Daniel Waisberg at SMX Israel) to show these visitors custom content. It’s called behavioral targeting (BT).

Why not just send existing customers to targeted landing pages? Why resort to fancy technology?

It’s not an either-or choice. You can do both.

Most products aren’t sold on the immediate first visit, though. So it’s useful to have this segmentation in place for when users return, potentially on a different URL than your targeted landing page.

They might visit your homepage instead – but fortunately you’ve got them cookied and IP-logged so you know to show them the profitable merchandise, not the acquisition merchandise.

To conclude:

Show SEO traffic your cheapest products – but don’t keep showing them flat-margin products once they’re customers.

Create your own products.

Differentiate them.

Bundle products.

Scrape Amazon’s “customers who bought X also bought Y” recommendations.

Show products that require a higher-degree of trust. Ask for Facebook-connect logins to gain demographic data so you can buy Facebook ads to keep increasing your email list.

Increase that average order value and those profits!

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How Inhouse Ecommerce SEOs can add value
4 Advanced Ecommerce SEO Tactics
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With x.commerce, Mengerink says, there have been five to six thousand Magento extensions and seven thousand PayPal extensions created by developers in the past year. They’re seeing something like 300 a week for PayPal. There were two thousand Magento extensions installed in the first quarter alone.

eBay/x.commerce announced some new partnerships at Imagine, which should fuel the growth of the ecosystem even more, and add to eBay’s own “fabric” with their own services for merchants o take advantage of. New partnerships are with: Avalara, e-Dialog Express, Fanplayr, Kabbage, Lexity, M2E Pro and TheFind, which have each developed new capabilities based on eBay’s Magento platform. The goal, according to Mengerink, is to keep costs down for merchants, and eliminating the complexities of using multiple solutions. He also emphasizes the ability for merchants to easily switch integrations on and off as they see fit. Because of this ease, he says, merchants can experiment more across different services.

Avalara is offering AvaTax through x.commerce for tax services for merchants, including tax calculation, exemption certificate management and returns processing.

e-Dialog Express is giving Magento merchants email marketing tools, such as an email editor and tools for tracking email opens, clicks, pageviews and social sharing.

Fanplayr offers Coupon & Offer Gamification for Magento merchants to “harness the marketing and sales capabilities of ‘Smart & Targeted’ coupons”.

Kabbage provides funding for online sellers, and uses Magento to streamline the application and payment process for merchants, using PayPal via the X.commerce platform. Kabbage disburses loans to merchants via PayPal Payments, and uses PayPal’s PreApproval API to establish automatic repayment of loans, as x.commerce explains.

Lexity actually offers a search engine marketing platform for Magento merchants, which implements AdWords campaigns. It automatically manages and optimizes keyword bidding.

M2E Pro’s extension integrates Magento and eBay platforms for listings management, synced stock level, imported eBay transactions and orders, and feedback.

Finally, TheFind provides a shopping search engine, indexing over 450 million products from 500,000 online stores for comparison shopping. With the Magento integration, merchants can add it to their own stores.

At the conference, developers are showing off their stuff at bar camps, and getting together at mixers, which Mengerink cites as his favorite part of the event, because it “fosters the ecosystem”.

According to Mengerink, eBay has x.commerce set up so that anytime the company makes a new acquisition, it can quickly be integrated into x.commerce, to add to the fabric. Between acquisitions and partnerships, they’re going to give merchants a lot more reasons to tap into x.commerce.

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For users with the pilot stores that fell under the initial implementation of this feature back in 2011, there will be no publishing changes – a full publish and site generation won’t be required, if a user has already done so in the past.

More information on this can be found at the Yahoo! Stores help center.

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Sociable Labs’ study queried 1088 online shoppers/Facebook users, and investigated the influence social media sharing has in regards to consumer purchases. The survey, which was conducted between January and February, covered the following:

What percentage of consumers take action on social sharing
How consumer-to-consumer sharing influences referral visits and purchases
What drives shoppers to act on social sharing and how you can increase those actions
Why sharers share and what will make them share more
What the value of “Social Proofing” (i.e. seeing friend activity on a site) is to consumers

A key finding in the aforementioned 75% rate of link referral follow-through was that 53% of shoppers who’d clicked retailer links went on to make a purchase. The study suggests that social sharing is about as effective as Google Search when it comes to looking for products – 48% of those surveyed claimed that social sharing was “extremely helpful” or “very helpful” while browsing.

Social Proofing, the use of social sharing “proof” to display friend activity directly on an ecommerce site, was also shown to increase consumer confidence, with 33% claiming that they would shop on a site mentioned by other social network users – this number grew to 62% when users saw that their actual social network friends were making purchases. These results show that social proofing is becoming a mainstream mode of e-marketing. Think of how McDonald’s always advertises how many billions customers tried their hamburgers, to get a better idea of the concept.

Darby Williams, VP of Marketing at Sociable Labs stated, “this study got into the minds of consumers to find out how friend-to-friend sharing influences the way they shop and buy online – We found that consumers discover what products to buy through social sharing, and then act on that information 75 percent of the time. Retailers have the ability to trigger this kind of sharing from their ecommerce sites, driving both significant referral visits and conversion uplift if they fully leverage it. Now with high-velocity ‘Frictionless Sharing’, social sharing can become one of the top drivers of both for almost any online retailer.”

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Some of the features of the Watch with eBay app include:

-Watch With eBay: Couch commerce enthusiasts can tune into their favorite shows with a new, enriched version of Watch With eBay. The new standalone app includes a program guide consumers can use to access content related to their favorite television shows in real time with the ability to curate content by category. Shoppers will be able to browse designers from the red carpet of this year’s award shows or find sports memorabilia for their fan collections, plus much more.

-Shop Like a Star: Fans of television, film, sports and music are invited to shop through the lens of their favorite stars. Through eBay Celebrity – a unique shopping destination that combines celebrity experiences, memorabilia and merchandise with philanthropic causes – Shop Like a Star provides an inside look at featured celebrities’ favorite items, while eBay curates shopping results related to the celebrity picks and provides the option to donate to a benefiting charity at check out. Some celebrities will interact with consumers through original content, video and message boards.

eBay will be on hand at the SXSW Interactive Festival all week.

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• Internationalisation of Ecommerce
• Analysing the Ever-Changing Customer
• Fall in “like” with Tweeting
• From Browsing to Buying
• Cross Channel Marketing

Top 32 Tweets

The event caused quite the stir on Twitter and gave some useful insight into the conference. Here are the 32 Tweets I found most useful from the event in:

1. @drapers_ecomm Interact with customers through the channel they want to be interacted with, Susan Aubrey-Cound, M&S #drapersecomm
2. @keelystocker Rob Moss Mywardrobe – 50% of the traffic to our site is currently coming from global sources #drapersecomm
3. @Ana_C_Santi: Dwell time and order values higher via iPads than any other channel at my-wardrobe says Rob Moss #drapersecomm
4. @drapers_ecomm Barcode scanners have driven traffic onto our website, Robb Moss, My-wardrobe #drapersecomm
5. @keelystocker Dan Lumb, Reiss – use social media to engage with customers but keep it natural and ensure it fits with the brand #drapersecomm
6. @nishmarobb The panel agree …… Search marketing the best for traffic and social media for personality/brand, driven by content. #drapersecomm
7. @Ana_C_Santi: @REISS’s Dan Lumb says Tumblr a good traffic driver for a premium retailer. High dwell time #drapersecomm
8. @wgsn Tumblr a good platform 4 premium retail brand #reiss. A decadent space where it can align its thoughts as a brand #drapersecomm
9. @keelystocker: Good advice from @REISS’s Lumb – remember social is not just Monday-Friday #drapersecomm
10. @Ana_C_Santi Shop Direct’s James Balmain also says important to address different needs of customers – not all use site to purchase #drapersecomm
11. @nishmarobb Gracia of TopShop making a great case for why Facebook adv can influence the cust journey even if not directly delivering ROI #drapersecomm
12. @Ana_C_Santi Topman’s Gracia Amico says editorial content which makes online journey “human” is important. Not always about instant ROI #drapersecomm
13. @Ana_C_Santi But Shop Direct’s Balmain argues if you go too far down content route you become editorial site that doesn’t sell anything #drapersecomm
14. @TweetIntent MT @Ana_C_Santi: Topman’s Gracia says “if you like this, you’ll also like these” strategy is great online conversion driver #drapersecomm
15. @nishmarobb Good to hear that businesses are thinking about the new EU cookie directive as the deadline for compliance is looming 25/05/12
16. @wgsn Good point from Links of London. Apps r very personal, having 1 on ur phone says sth abt u, so ppl just retain those they use
17. @Ana_C_Santi If you want your page to rank high on Google, you need other pages to link to yours, says Shop Direct’s Balmain
18. @Ana_C_Santi Social media is hugely feeding into SEO, says Shop Direct’s Balmain #drapersecomm
19. @nishmarobb: Balmain: making a site social is not just about tracking ‘like’ but ‘want’ too. #drapersecomm
20. @wgsn: Pinterest is third biggest driver of traffic to #my-wardrobe after paid and organic search. #drapersecomm
21. @Realex_UK Ipad was responsible for less than 24% of @schuhstores traffic in 2011 but equated to over 50% of sales -Sean McKee #drapersecomm
22. @nishmarobb Retailers seem more in favour of mobile site rather than apps. Better conv from site vs app and Ipads have the best conv rate. #drapersecomm
23. keelystocker @keelystocker Matt Jeans, Bench – knowing regional markets is key – in Germany order values are often high but then so are return rates #drapersecomm
24. wgsn @wgsn On internationalisation of ecom. Building a local website is not the toughest part but building the demand is, says Bench #drapersecomm
25. nishma robb @nishmarobb Website build least of the challenges of internationalisation but actually developing demand is tough – says Matt at Bench #drapersecomm
26. @LoganTod: 25% of emails now opened on a smartphone – Sean McKee speaking at #drapersecomm pic.twitter.com/6nArFWmG
27. @drapers_ecomm People are influenced most by their friends that’s why social networking is so important – Chris Bale, boohoo.com #drapersecomm
28. @wgsn: Entering a new market? Localisation should be at heart of doing business there. Work backwards from that position. #drapersecomm
29. @wgsn: Boohoo customer research: 1st 30 secs of downloaded app is where you win or lose. Customers will quickly delete. #drapersecomm
30. @nishmarobb: iPad is 50% of sales revenue but only 24% of traffic ….amazing Sean at Schuh #drapersecomm
31. @wgsn: Entering a new market? Localisation should be at heart of doing business there. Work backwards from that position. #drapersecomm
32. @keelystocker: Rob Moss – Pinterest is currently the biggest traffic driver to the site outside of paid and natural search #drapersecomm

Thoughts & Take-Away

Although not actually being there in real life, the tweets did give me some useful insights and I reinforced thoughts in areas that should be highlighted for businesses, regardless of whether they are in online fashion or not.

Top Social Media Takeaway Thoughts & Take-aways

It seems that that everyone is still discussing the importance of social media and its relevance to online businesses, and why not, with social media still in its growth stage and new platforms coming about, such as Pinterest. There is still a lot more that businesses can do with this and should note:

• Use a platform social media platform that all your customers can interact well with and fits well with your brand image, for example it would be useless for ASOS to focus all their social media efforts via Linkedin, if their target market is engrossed using Facebook and Twitter.
• Social Media, quite rightly pointed out by Dan Lumb @Reiss, is not a Monday to Friday activity, and should be managed even on weekends, so as sad as it maybe for you or your employees, do try to engage with your target market during the weekends.
• Using Facebook is a great way to improve brand visibility even if the site does not give ROI. We have all heard of the term “lost leader”, whereas a supermarket for example entices people to buy products from its shops at a loss. If you are able to work out a different ROI system that is not solely based on money, but can say social media had an affect on the increase in profits, this would still be another option.
• Don’t just jump on the band wagon with Pinterest. For some sites it works, for some it doesn’t – don’t feel pressurised if your client or boss says we should be doing it as it’s the latest craze.
• Tracking your ROI based on likes and followers is useless. If you would like more Twitter followers for free you can read more about it here. Track ROI using a variety of other ways, SEOMoz wrote an interesting article regarding this in September 2011, and software services from DC Storm is a great way to help track keep on top of this.

Top SEO Thoughts & Take-aways

I felt from looking at the tweets that discussion on SEO was fairly weak, but this did give me some other ideas and areas that businesses should look to develop and take note of:

• We all understand that Google enjoys content-rich websites. However, a good point from Shop Direct’s Balmain was that you can have too much of it. It may lead to being a site for providing content in giving customers knowledge of a product rather than actually selling the product the person already searched for.
• Another point from Shop Direct Balmain, simply put: if you want to rank higher on Google you need links. However, bear in mind that it’s about quality links and not quantity. The best links are from authoritative sites giving a reason for the user clicking through to your site in the first place.
• If you are looking to enter a new market, understand the local search engines and how you can be better optimised. For example, if you are entering China, understand that the majority of the Chinese market is going to use a search engine such as Baidu, which has a different algorithm to Google.
• Finally, SEO is not dying, even with SSL Encryption, the EU Cookie Directive and Google Privacy Laws. These are just factors that SEOs will have to learn to handle and overcome, because simply put, search marketing is such a powerful marketing tool that it is evolving and even affecting how we learn and think!

Other Areas of Thoughts & Interest

Even though most of my time is spent in SEO and Social Media, there were a few valuable points that I feel were very interesting to note:

• Importance of multi-channel marketing, integrating QR codes and barcodes will become popular in helping drive traffic to a site.
• It was interesting to note the level of focus on ROI and Sales reported for Tablets and Smartphones; businesses will be looking to develop their websites better to help cater for this platform.
• E-mail marketing will place a heavier focus for a better marketing campaign, with the rise of smart phone and tablet users; people are more engrossed in opening their emails on the move and in times of boredom.

If you did attend the Drapers Ecommerce 2012, it would be great to hear your personal thoughts and top takeaway tips!

Thanks and Mentions Special thanks to all those who tweeted – without your help this post would not have been possible! Thanks also to Sushanta and De_Louvre, for their immense Flickr pictures.

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Develop a Plan

Writing a business plan does not have to be as challenging as it sounds. There are great templates and guides available online that can assist you in working out a detailed business plan. You can also talk to friends or associates that have an established store to find out how they developed their business plan. A business plan will help keep your business focused and is necessary if you require start up capital.

Select a Good Supply Source

Have your source for your product lined up and have contingency plans in place in case your main source becomes unavailable. It may seem like common sense, but many e-commerce site owners find themselves in a situation where their source goes out of business or runs out of merchandise. If you make the product yourself, have a plan in mind to handle situations such as if you get sick or injured or if you get a sudden influx of large orders.

Find a Dependable Web Host

After you have selected a good domain name, you will want to secure a reliable web host for your online store. Web hosting companies usually charge a monthly fee but this is one area where you do not want to skimp on costs. Your web host will play a large role in the success of your online store. One key factor to consider is the amount of downtime a potential host has experienced. If your website is down, then you’re not making any sales.

Find a Good Ecommerce Software Program

You will need a reliable and secure software program to effectively run your e-commerce site. It will handle everything from keeping track of your inventory to calculating shipping charges to handling the shopping cart and processing orders. This is another element that you may need to spend more on; however, the price of software has gone down significantly in recent times.

Obtain a Merchant Account

In order to process credit or debit cards, e-checks and mobile payments you will need a merchant account. There are many merchant account providers that have expanded their services to include this rapidly growing payment trend. If you want to allow for mobile payments, make sure you check out different merchant account providers in order to find the best price and will allow for the different payment methods you will accept.

Opening an online store for your small business can be a great way to expand your customer base and capitalize on the goods or services you offer. With careful planning, you can easily set yourself up for success.

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International business was  a little less successful, but still saw an increase of 3.5% in revenue. The shaky worldwide economy lead to decreased operating profits, however, UPS still set a record in amount of items shipped per day.

UPS also introduced new e-commerce tools, allowing members to sign up for “UPS My Choice”. This provided users the ability to pick a four-hour delivery window in which to receive packages.

Kurt Kuehn, the UPS chief financial officer, said this of the latest in B2C, “B2C is growing robustly, especially through the e-commerce avenue. In December, B2C was almost 50% of our volume.”

UPS’s forecast for 2012 looks a bit murky at the moment. They’re forecasting an increase in earnings/share, but is showing signs of a flat earning curve in the European market. This would be supplemented by continued increases in the America market.

Groupon’s Simplified Merchant Center

Groupon’s new Merchant Center simplifies many features from its previous version. It now provides an overview of a merchant’s featured deals, Groupon Now! deals, and Groupon Rewards program. The new dashboard also shows customer demographic information such as age, sex, and zip code. The new dashboard is basically designed to encourage retention of desertion of customers depending on their feedback. In turn, it will help merchants understand their market’s behavior.

The Merchant Center Customer Feedback

Other than the condensed Merchant Center, the new dashboard also had a significant addition to its features—the Customer Feedback section. This feature will help merchants see who among their customers recommend their brand, while checking consumer feedbacks. That way, merchants can further understand how their business is performing and how to re-engage their market.

The Customer Feedback section is basically divided into two parts: Responses and Comments. As Koren explained on Groupon’s blog, Responses represent the number of people who answered yes or no to a merchant’s recommendation query. The Comments section, on the other hand, shows the customer feedbacks after filling out their Groupon experience survey. These sections are updated in real time.

Groupon’s 2011 Gross Billing

In addition to the launching of Groupon’s new Merchant Center, Yipit (a daily deals aggregator) also reported last Wednesday that the company’s gross billing in November of last year outranked its rivals. Gross billing refers to the amount collected by the company from its coupon sales before paying their merchants’ share.

As for Groupon, they have earned $154 million in North American billings, beating its closest competitor, LivingSocial. Yipit also added that the company was able to take the industry’s lead, wherein the gross billing just increased to 2 percent from October to November.

The new Merchant Center is accessible through Groupon’s previous dashboard to help merchants switch from the old look to the new one comfortably. The revamped dashboard is part of the company’s efforts to provide a more comprehensive e-commerce platform for merchants, and to encourage them to promote more deals.

With the new dashboard, merchants will have data satisfaction, as they can now see real-time percentage of their customers’ recommendation and feedback. That way, they will no longer wonder whether they need to continue running daily deals or not.

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So, how might they do that? Let me count the ways:

• Near Field Communication (NFC) was in the Google phone and Google wants Android support for NFC chips to give it a leg up on using your phone to pay for things in physical stores. Who wouldn’t want to wave their phone at the cash register and be on their way?
• Google Wallet is stalking eBay’s PayPal to take a piece out of the online payment market. eBay sued Google within hours of the Google Wallet announcement, so don’t think this will be a quiet fight.

Well, that wasn’t hard to count, right? Doesn’t sound too threatening–I mean MasterCard is even a partner on Google Wallet.

Well, look a bit closer. What is really going on here is that these are just a couple more data points in the Google orchestra of data. Google has Google Analytics and Google Checkout and Google Search and a dozen other properties that all work together to find out more and more about what people are buying and where.

What would stop Google from analyzing all these shopping patterns and launching Goo-pon? By looking at all this behavioral data, Google could provide shopping savings that we could all like:  saving money without the hassle. In fact, Google’s recent purchase of ITA must have sent shudders through the ranks of Travelocity and Expedia. Google is doing the same thing they do. Why couldn’t Google use all of the data they have collected to offer any discounts they want, because they know the price point to pitch each one? Information wins this game.

But information isn’t all that is needed. One area where NFC still lags is security. Reports of physical security being hacked (if you walk by someone, they might be able to charge your phone) and the different legal status of NFC–a fraudulent charge on your credit card won’t cost more than $50 in the U.S. by law–might both be impediments to wary consumers adopting NFC. Remember how long it took for consumers to be willing to enter credit card numbers online? There were far fewer real dangers there than for NFC.

So let’s return to the original question. Google wants to be your new credit card because it is its new source of growth. They’ll start with the easy stuff, but don’t be surprised if they are working to remove the middle-man at some point. Because Google doesn’t suffer its partners for very long.

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