digital "elastic" commerce - right here, right now - jump conference 2011

Digital “Elastic” Commerce

Right Here, Right Now New Business Models for the instant access revolution

Oct 12th 2011

Sal Visca Chief Technology Officer

Elastic Path Software

JUMP Conference London, UK Oct 12, 2011

JUMP Conference London, UK Oct 12th 2011

Elastic Path Software provides software and services to help the world’s most innovative digital companies transact and interact online

Software • Consumer • Enterprise • Security

Telecommunications • Handset Manufacturers • Operators / ISP’s • Cable Companies

Media & Publishing • Magazines • Online Content • Entertainment

Online Services • Subscription Content • Digital Marketplace • Digital Retailers

Key Customer Verticals

Elastic Path | Technology and Expertise for the Digital Content Ecosystem

http://www.wolterskluwer.com/WK/

http://en.wikipedia.org/wiki/File:Virgin_Media.png

http://www.sonyericson.com/


Elastic Commerce | Frictionless, Social, Everywhere

Elastic Path’s vision is “Elastic Commerce” – ecommerce that turns new ideas into profitable systems, and is adaptable to diverse, dynamic needs

Everywhere

• Products come from anywhere

• Sellers come from anywhere

• Transactions can occur anywhere

• The primary source of consumer information about products is other consumers

• Consumers drive how, when, and where they buy

Social Frictionless

• Transactions are accomplished in the context of life

• Buyers are presented with more relevant offers


Bold Statement

Traditional approaches to ecommerce are

inadequate,

irrelevant

unsuitable

for companies selling digital content


This isn’t your father’s shopping cart


New rules for selling digital content

Its different than physical product

Its all about the ongoing relationship

Entitlements vs SKUs

People want to buy in the context of life

New business models are needed

APIs are no longer an option


New York Times online? Paywall ?

“It turns out people will pay for things even when payment is not required. Motivations such as convenience, duty or appreciation are more compelling than coercion”

“Digital news is different. It is an intangible good. My access to it does not inhibit your access to it. It has a cost to produce, as a whole, but the cost of extending it to one more person is insignificant. There is no natural scarcity, so we don’t have to impose an upfront price.”

http://www.poynter.org/latest-news/top-stories/142936/why-would-anyone-pay-to-read-the-new-york-times-online/

by Jeff Sonderman Published Aug. 16, 2011


























http://www.poynter.org/author/jsonderman/

http://www.poynter.org/author/jsonderman/


Skus vs entitlements

SKU (stock keeping unit) is completely unsuitable

Product variations could easily produce an unmanageable number of unique SKUs

Manage entitlements - objects with rich and extensible sets of attributes

Need to rethink catalog, merchandising, discovery, selection, etc

Sale not over when first transaction complete


New Business Models

Freemium

Subscriptions

“All you can eat” plans – Netflix, Spotify, 24symbols

Metered Content

Trials

App store – content from anywhere


New Business Models

Resistance to £40 - £50 price point for downloadable games

In-game purchases

Free games boost gaming industry revenue


APIs – No longer an option

Internet of things – explosion of devices

Purchase in context

Functionality and service must be exposed in a way to enable efficient and innovative creation of user experiences

You need an ecosystem – always a mashup

Integration is key


General Online Store

Shoppers

Ecommerce

Store Operator


Marketplace

e-commerce

Marketplace

Multi-Vendor Store Operator

… App Developers, Publishers (books, videos, music, games)

Single-Vendor Store Operator Shoppers


Marketplace : AppStore, SuperStore ….

• Create marketplaces for 3rd party vendors • Sell add-on apps or services for your products • Create new online revenue streams

Vendor Portal

Online Channel

Approvals

Market Place


Marketplace | Capabilities

Vendor Portal

Store Front

Marketplace Manager

Market Place

Vendor Mgmt Vendor approvals Application feedback Review vendor profile

Reporting Financial Revenue

Profile Mgmt Vendor registration Application process Vendor profile Manage users (accounts) Vendor agreement Payment types

Product Mgmt Product creation Product information Pricing Markets Offer opt in Approval workflow (state) Remove / suspend products

Order Mgmt Outstanding orders Completed orders

Community Read product reviews Comment on reviews Knowledge base / forums

Vendor Portal Configuration Vendor registration fields Approvals process Branding & URL Terms & conditions Permitted payment types Commission rates

Catalog Mgmt New product approvals Completed orders

Reporting Vendor performance Commission payments Taxes

Standard Storefront Functionality Search Browse Faceted Navigation Shopping Cart Checkout Payment Self Service Customer Reviews etc


Digital Marketplaces

Application Stores (“AppStores”)

Software Stores

Online Music Stores

Online Video Stores

Online eBook Stores

Online Game Stores

(e) Commerce-as-a-Service


Application Store

Marketplace

e-commerce

Multi-Vendor Store Operator

… App Developers, Publishers (books, videos, music, games)

Single-Vendor Store Operator Shoppers

3. App approved and uploaded

4. Purchase

Developer

1. New App Submitted

5. Revenue (70-80%)

2. App Reviewed

App Store

The Power of App Stores A free application downloaded with not-so-free subsequent transactions…

When frictionless goes too far…


Summary

Digital Goods require a Digital Commerce platform

Selling online now requires Digital Relationship Management

Digital single-vendor e-commerce stores can be expanded into Marketplaces / AppStores

Marketplaces provide a venue for digital publishers (vendors) of all sizes to market and sell their digital wares

Questions

For more on-demand digital commerce resources

www.elasticpath.com/resources

[email protected]

1.800.942.5282 (toll-free in North America)

www.elasticpath.com

http://www.elasticpath.com/resources