moving money magazine — issue 5

movingmoney

Web loyalty schemes 2010 in review Domain names explained Win a digital camera

spring 2011 www.sagepay.com the expert guide to e-payment services

a business in bloomhoW Do you Deliver bouquets of floWers safely anD securely by post? With a little bit of creativity, says bunches’ managing Director, Danielle turner

optional extrasthe multi-channel retailers that are breaking new ground

back to basicsopen source or off-the-shelf? We review the options for web development

best foot forWarDhow it’s become so much easier to shop for footwear online

Welcome to the latest issue of Moving Money, Sage Pay’s magazine for businesses trading on the internet. If you haven’t already, make sure you don’t miss out on future issues by subscribing now at www.sagepay.com/moving_money/subscribe.

This issue, Moving Money is welcoming in 2011 with a look at some of e-commerce’s major success stories to date. Which companies are making the biggest waves in their industries and which have the most ambitious goals for growth? Turn to page 16 to read the stories of some of the leaders in the footwear e-tail sector and to page 30 to find out more about the businesses that have been selected as Sage Pay’s businesses of the month in the past year.

Elsewhere, we continue to peek behind the scenes at some of the web’s most innovative companies with a profile of thriving flowers-by-post web and mail order business Bunches.co.uk. Managing director Danielle Turner sets out the secrets of the company’s success, while IT manager Barry Parkin outlines the virtues of a robust back-office system on page 12.

However, building a successful online business doesn’t happen overnight and e-tailers often struggle to find the right approach and platform for their sites in the early days of trading. Should you hire a development team to create a bespoke site, buy an off-the-shelf platform or opt for an open source solution? The answer will vary according to

your business, which is why we’ve asked some of the UK’s leading web developers to set out the case for their respective approaches on page 26.

Your latest feedback to the magazine has also highlighted your confusion over the legal status of domain names. Buying a URL does not necessarily give you the legal right to trade under that name, so it’s important to understand which rights you own – and which ones you don’t. Turn to page 36 to read our expert’s tips and advice for securing the name of your business, and those of your products and services online.

Finally, we always welcome feedback, so if you’d like to comment on any of the articles or topics in the current issue or suggest a subject for a future issue, we’d love to hear from you. Email us at [email protected] with all your thoughts and suggestions.

I hope you enjoy the latest issue of the magazine.

Emma Joneseditor, Moving Money

[email protected]

EDITORIALEditor: Emma Jones [email protected]: Johnny Acton, Warren Barley, Guy Chiswick, Peter Davy, Emily James, Jenny Homer, Sonja Patel, Jeremy Phillips and Fay Warilow.Production: Dawn McGovernPublisher: Charlotte Speller

SAgE pAyHolborn Hall100 Gray’s Inn roadlondonWC1X 8alTEl 0845 111 4455FaX 0845 111 [email protected]

SAgE IRELAnDTEl 1800 222 [email protected]

© 2011 saGE payall rights reserved. For editorial matters, please contact the editor. The views of contributors do not necessarily reflect the policy of sage pay, nor that of the publisher. The publisher cannot be held responsible for loss or damage to unsolicited manuscripts or photographs.‘moving money’ is a registered Community Trade mark.

Moving Money is printed three times a year on black label silk, a pEFC paper that is accredited as coming fromwell-managed forests. print production by potts printing & packaging.

SUBSCRIPTIONSTo order a complimentary annual subscription to Moving Money (three issues a year), please return the subscription form on page 5 or visit www.sagepay.com/moving_money/subscribe. To amend or correct your address details, email [email protected].

spring 2011 moving money 3

movingmoney

The pace of change

contentsin profile

featuresregulars

12 a busInEss In bloomBunches’ managing director, danielle turner, and it manager, Barry parkin, explain how the internet has enabled them to deliver flowers by post to an entirely new market

30 2010 In rEvIEWWe look back at sage pay’s businesses of the month to uncover what makes these e-businesses so unique

16 bEsT FooT ForWardconsumers have become used to shopping for fashion online, but buying footwear has its own additional challenges. emily James speaks to the e-tailers that are stepping ahead of the competition

22 GaTHErInG momEnTumonline and offline markets are colliding as consumers look to retailers to provide them with a standard service across the web, on the high street and by mobile phone. Fay Warilow examines the potential of multi-channel retailing

26 sTylE and subsTanCEhow do you choose the right web developer and platform for your e-business? We ask some of the uK’s leading providers to set out the benefits of their respective systems and approaches

6 lETTErsyour thoughts and feedback

7 opInIonLife beyond faster payments

8 nEWsa round-up of all the industry’s developments, challenges and trends

42 THE lasT Wordinternet searching is an art form. if you approach it unprepared, you may find that even the most simple question throws up thousands of results, warns Johnny acton

4 moving money spring 2011

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SubScRIbE nOw!network 34 ask THE EXpErTsunderstanding the rules set out by the payment card industry data security standard (pci dss) is no easy task. sage pay’s compliance expert Warren Barley outlines best practice in the industry

36don’T GET CauGHT ouTmany e-businesses believe that by registering a domain name, they are automatically assigned legal rights to that name. if only that was the case says intellectual property specialist Jeremy phillips

38 FuTurE TECHnoloGIEsWhat does microsoft’s virtual human milo mean for customer service on the web? a great deal, says behavioural research consultancy Bunnyfoot

40 HoW To buIld loyal FolloWErsWith so much choice at consumers’ fingertips, how can business ensure shoppers select their site? Webloyalty’s guy chiswick sets out techniques for promoting return visits

34


lettersa barrier to traDe It’s not until you set up an online business that you realise how complicated and convoluted the process can be. Take merchant bank accounts as an example. Even though we have already lunched a number of successful online businesses for our clients, I still find myself surprised each time we launch a new e-commerce site about the amount of time and bureaucracy involved in setting up a bank account to accept payments.

I understand that the acquiring bank needs to run credit checks on the company operating the website, but does it really have to take so long? sam bourke, londonSage Pay’s Christina Cooper replies: Acquiring banks are cautious when it comes to allowing traders to accept card payments. Understandably

so, as it is an area of considerable risk to them. Banks need to work out their potential exposure before issuing new accounts. If a cardholder seeks to ‘chargeback’ a fraudulent transaction and the merchant is unable to repay the funds, then it is the bank that will have to absorb the loss.

Similarly, banks must validate who it is that they are doing business with. This is to protect businesses and consumers from fraudsters setting up merchant accounts under legitimate business trading names. There are also stringent anti-money-laundering requirements that must be adhered to.

Sage Pay has been able to assist merchants by setting up new accounts within 24 hours. However, merchants generally have to wait months for new accounts to be approved, so we would always recommend factoring in plenty of time.

the social netWorkSo successful have become social networking sites, such as Facebook and Twitter, that an entire industry has formed to ‘help’ companies exploit the potential of these marketing avenues. We are told that we should have content on YouTube or Vimeo, that we should actively engage with our customers via Twitter and that we should build and manage our brand via content on Facebook or even Wikipedia. And yet, I am still to be convinced of the return on investment of the time and resources that this entails. adam haldy, by emailSage Pay’s Amy Monro replies: Social media works best when it’s blended with other marketing and sales activities; however, as shown in Sage Pay’s 2010 ‘E-business Benchmark Report’, many companies are successfully using social media to engage

with customers in real-time, gathering feedback, providing support and publicising new products and services. The launch of Adidas Originals trainers at Crooked Tongues provides a fantastic example of the power of social media when used well. The trainers sold out within 15 minutes; simply as a result of the company mentioning them on Twitter and Facebook. In such instances, the effort involved is minimal in comparison to the benefits. However, if you are going to venture into social media, it’s important to do your research first to make sure that the channel you pick suits your messaging, brand and audience.

great WeatherThe great British weather once again wreaked havoc on UK e-businesses in late 2010 as the snow delayed deliveries and left many consumers disappointed.

As you previously set out, ‘customers want their deliveries now’ (‘Getting deliveries right’, MM3), but are they expecting – or being promised – too much? In my view, the infrastructure is not yet in place to support the demand or volume of delivery. Even if it is, it seems to fall apart once pressure is applied. Maybe it’s time to re-evaluate what e-tailers are offering? richard Jenkins, by emailSarah Clelland from Snow Valley replies: Retailers are working hard to provide consumers with delivery services that are both flexible and reliable. They don’t always get things

right the first time – and the weather can often work against them as we saw in late 2010. No industry seemed to be prepared for that bad spell and, of course, retailers and delivery companies were no exception.

As with most business processes, it can take a bit of trial and error before a company settles on the best delivery service for itself and its customers. You might find that you need to try out a number of options before you find the right one for you. The good news is that new delivery models are emerging all the time. As Snow Valley’s annual ‘Online Retail Delivery Report’ tracks, some of these innovations become standard practice, while others fall by the wayside over time.

subscribe meThank you very much for sending me an electronic copy of the last issue of Moving Money; however, I was hoping that I could be added to your subscription list for a hard copy?nicola evans, DundeeEditor Emma Jones replies: We’re happy to send subscribers hard or electronic copies. To change the format of the magazine that you receive, email [email protected].

to write to the editor, email [email protected]. Letters will be answered by relevant experts at sage pay, contributors or the editor, and may be published in future editions. Letters may be shortened or edited for clarity.

Win a panasonic lumix digital camera!the author of the ‘prize letter’ will receive a panasonic lumix Dmc-fx30 digital camera with optical zoom and a resolution of 7.2 megapixels.

prize letter


the uK’s Faster payments service Was haiLed as a maJor BreaKthrough For the BanKing industry When it Was introduced over tWo years ago, But it is yet to reaLise its potentiaL, says vocaLinK’s chris Dunne

Before the Faster Payments Service (FPS) was introduced in May 2008, it took three or four days to transfer money from one bank account to another – a source of great frustration to consumers and businesses seeking to keep on top of their finances. Demands for a faster system led the UK banking industry to develop the Faster Payments Service (FPS). Under this scheme, companies and individuals can make single payments, up to a maximum value of £10,000, over the telephone or via the internet, with the money leaving their account and arriving at the destination account in real-time – or at least on the same day.

Utilised to its full potential, late payment and bounced cheques will soon become a thing of the past. Yet, the launch of the FPS scheme, which was heralded as a major breakthrough, has not had the impact on the market that was expected. VocaLink’s own research into awareness and attitudes towards FPS has revealed that just under a third of people, who are aware of the scheme, have altered the way that they make payments as a result.

This does seem to be changing, however. According to the UK Payments Council, the take-up of FPS increased by 67% in 2010 to £16.9 billion as more banks launched the service. Nonetheless, there is clearly considerable room for growth in the market, as consumers and businesses become more aware of the benefits and ease of the system. Arguably, the banking industry is also missing a trick when it comes to extending the scheme; for example, to allow consumers and businesses to make immediate payments via mobile phone.

not as Futuristic as you thinK Businesses move fast, and banking systems need to evolve quickly to support them. The FPS may not yet have reached market potential when it comes to online or telephone banking, but many UK businesses are now also starting to ask whether the technology can be applied to make inter-bank payments available in real-time via mobile phones.

This is not an unreasonable demand. Mobile phones are already being used by consumers to make contactless payments and to manage their accounts. The natural next step would be to allow them to transfer money

Life beyond faster Payments

The use of Faster payments increased by 67% in 2010 to £16.9 billion as more banks launched the service. nonetheless, there is clearly considerable room for growth

immediately through their mobile devices – a speedy and convenient means of managing their payments. This would also enable consumers to make instant transactions without having to locate a PC, and would provide businesses with another route to receive immediate payment for goods or services.

stiLL some Way to goOf course, it’s still early days for mainstream awareness of FPS as a mobile payment channel. New technologies such as this will invariably raise security concerns, whether they are applied online or by mobile phone. Consumers and businesses want the convenience of a real-time payment service, but they also want to be reassured that the service is secure. This will be a key challenge for the mobile banking sector to overcome. If it is to do so, it will need to invest in a secure central infrastructure that ensures mobile handset security, as well as authentication methods that are both robust and easy for the consumer to employ.

Nonetheless, as smartphone usage continues to proliferate, conducting real-time payments via mobile phones holds enormous potential. These days, we all expect to be able to move money instantly and easily, and the FPS has already started to facilitate this requirement. However, it’s not until this technology is applied to offer a real-time payments service via mobile phones that payments truly will be ready to adapt to the pace of the 21st century. n

Chris dunne is vocalink’s strategy director. For further information on Faster payments service and its potential to facilitate transfers by mobile phone, visit www.vocalink.com.

opinion


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strong quarter For traveL companies

aLL change For maestro

Travel websites emerged as clear leaders in February’s IMRG Experian Hitwise Hot Shops List with the five fastest moving brands all coming from the sector in the first quarter (November 2010-February 2011). Travel agencies Thomas Cook (up 27 places) and First Choice (+21) saw the biggest gains, followed by Thomson (+15), Travel Republic (+15) and British Airways (+12). Consumer electronics also had a good quarter, with Apple (+4), Currys (+6) and Comet (+5) all moving up the Hot Shops List.

Year-on-year the most improved performers were Sainsbury’s (+19), House of Fraser (+19) and Ikea (+10). ‘The economic conditions are tough, but early indications are that the year is getting off to a good start,’ said IMRG’s CEO James Roper.

It’s time to ask your customers to replace their Solo card details with an alternative debit card, as card issuers will stop accepting Solo card transactions as of 31 March 2011. The change comes as a result of MasterCard’s Maestro Alignment Migration programme, which is migrating domestic Maestro users onto the international Maestro platform.

MasterCard has mandated a number of additional changes that businesses taking payment online will need to put into effect this year. Most importantly, e-businesses will need to update their payment pages to reflect the fact that the Solo card will no longer be in use. This could involve removing logos, as well as updating the list of payment options.

The good news is that Sage Pay will be managing the back-end requirements on behalf of its clients; however, e-commerce sites will invariably need to make certain front-end changes to accommodate the change and to help answer consumer queries. Further support will be available closer to the time, but for additional background information or advice, visit www.sagepay.com/help or speak to your acquiring bank.

Tracking by Google and Yahoo! has revealed that chocolate manufacturer Cadbury is generating £2-3 in sales for every £1 it is spending on digital advertising. The findings were revealed by the search engine giants at the close of the first ever comprehensive trial to track the impact of online advertising on physical (offline) sales. It is expected that the results will lead to an increase in investment in online advertising in the coming year. ‘Previous studies like these were all relatively subjective,’ Juliet Du Vivier, digital strategist at media agency PHD Media, told newmediaage. ‘This latest research shows real sales, which should help the market move and increase investment.’

‘The online relationship empowers our personal and professional lives. You might think: “Who wants to consume all this useless information?”, but with some information it’s like ice cream. It’s not nutritious, but people still eat it.’ Reid Hoffman, founder, LinkedIn

geek speakinternety: to browse online for an unnaturally long period of time.

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Development company and Sage Pay partner ebizmarts has launched an important new extension to Magento’s open source e-commerce platform, supporting Sage Pay’s Form, Server and Direct protocols. The new module includes Server InFrame technology, functionality for Sage Pay’s newly launched Token System (see right) and elements of its new Reporting and Admin API.

ebizmarts is the first Sage Pay partner to offer the full range of Sage Pay’s newest functionality on the Magento platform. In particular, the new module allows merchants to fully customise their payment pages, while avoiding the need to collect or store sensitive cardholder data.

‘A seamless checkout process is absolutely crucial,’ comments Ebizmarts’ Ignacio de Paula. ‘Payment pages that aren’t branded to the e-tailer’s website equate to high drop-out rates.’

Sage Pay’s John Fitchett adds: ‘This is a perfect example of how Sage Pay’s partners are using all of our APIs to drive innovation in payments, as well as revenue and security for their customers.’

Leap ForWard For magento

click-throughs pay oFF For cadBury


1. shop directThe beauty of the Net-a-porter app (see right) is that it allows consumers to shop directly from their iPhone (or iPad) without diverting them at any point to the website for further information or to make payments. This is something that retailers Next and All Saints have also managed effectively. All three have understood the need to simplify the browser to buyer journey. Apps aren’t merely a means to push consumers onto a retailer’s website; instead, they are valuable and distinct shopping channels, which should exist in their own right – and be designed and populated accordingly.

The new eBay app also manages this well. It has rolled all its buying and selling functionality into one mechanism, and added a barcode scanner to speed up searching for and listing goods. Ocado’s grocery shop app also features this barcode scanning technology but, more importantly, its app is entirely synced up with the back end of the website – not only allowing shoppers to order goods online, but also offering them a fantastically seamless experience to boot.

2. make it easy to get on boardWhen it comes to maximising customer engagement and sales via mobile phones, transport companies have been surprisingly slow to act. The National Rail Enquiries app, for example, still costs a hefty £4.99! However, all this has begun to change thanks to Heathrow Express’s new app for Blackberry and Android phones – the first time a train company in the UK has launched a free app for buying and receiving tickets by smartphone.

Meanwhile, other providers are breaking boundaries when it comes to accessibility. The iTunes ShopStyle app is a personal favourite. It allows consumers to browse a virtual city of shops, refining results by designer, style, colour and price to find the perfect outfit, all from the comfort of their commuter train seat.

3. keep it simpleThe brand new mobile site developed for House of Fraser by m-commerce trailblazers, Usablenet, allows consumers to browse the retailer’s full catalogue, which includes products from over 850 suppliers. But, despite this volume, the search and navigation functions have been kept delightfully simple with useful sorting and filtering options, and clear product information.

if you have an app to shout about, we’d love to hear from you. email [email protected] and you could feature in a future edition of moving money.

by Jenny homer

mobile commerce is helping to break down barriers between the physical and virtual worlds, allowing consumers to search and shop at any time, from anywhere. little wonder then that e-commerce mobile phone ‘apps’ are being touted as the next industry growth area.

but app technology is hitting the high street much sooner than many people realise: in the busy Christmas weekend, for example, industry analysts recorded a surge in m-commerce traffic of over 300%, while ebay.co.uk’s app receives on average 340,000 visits a day. uk retailers have been quick to capitalise on the trend, making the app the latest must-have shopping accessory. some have delivered the goods more effectively than others; here’s our pick of who’s succeeded – and why.

sage pay neWs TrendspotterNew payment technology launched by Sage Pay reduces the burden of compliance for online merchants of all sizes. Using its new Token System, e-tailers can offer a fast, single-click payment process, without needing to store or transmit sensitive information, such as credit card details. Instead, payment data is entered directly into Sage Pay’s secure servers where it is converted into a token or card number ‘alias’ and returned to the merchant.

Unlike other forms of payment data, this token can be safely stored by merchants, thereby reducing the level of Payment Card Industry Data Security Standard (PCI DSS) compliance that they need to achieve.

Sage Pay believes that this functionality will help e-tailers dramatically improve the overall customer experience and drive loyalty, without compromising security.

Mat Peck, Sage Pay’s head of research and development, comments: ‘PCI DSS has presented a real challenge for online merchants and retailers, as they attempt to balance the need to provide a positive user experience, with the limitations imposed by strict regulation. Now we can help them do both, and at a relatively low cost to their business.’For more on the Token System, email [email protected].

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newsinternet by numbersamazon says that ebook reader kindle is the best-selling product on its uk site. We check out the stats behind its runaway success.

152 the price in pounds of the 3g Wi-Fi version of the Kindle e-book reader

8 million number of Kindles estimated to have been sold by amazon uK by the end of 2010

2007 release year of the first ever Kindle device. the stock on amazon sold out within 5.5 hours

90,000 number of ebooks available for download on amazon

247 weight in grams of the latest generation of Kindle, less than the weight of the average paperback

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The internet is now more valuable to Britain’s economy than the transport, construction or utilities industries, according to new research by the Boston Consulting Group (BCG). Its report ‘The Connected Kingdom’ has revealed that internet shoppers contributed £100 billion to the economy in 2009, a sum equivalent to 7.2% of gross domestic product (GDP). According to BCG’s findings, this makes the UK the global leader in e-commerce, with the highest online spending per capita in the world.

In addition, ‘The Connected Kingdom’ revealed that if internet shopping were treated as a discrete sector in its own right, the income that it generated would make it the fifth largest industry in the UK, just behind financial services, which accounted for 9% of GDP last year.

an industry in its oWn rightBCG also researched e-commerce by business size and reach. It found that UK internet companies were mainly small- to medium-sized businesses, and yet employed around 250,000 people.

Paul Zwillenberg, a partner at BCG and one of the report’s authors, commented: ‘Everyone thinks the global Silicon-Valley-based companies are driving growth, but this report makes clear that in the UK it is coming from the “mom and pop” businesses. They now have global footprints, they are selling to the “long tail” and they are making their businesses more efficient.’

The report also found that the internet’s importance to the UK economy is set to grow. If current growth rates continue, BCG predicts the internet economy could account for between 10% and 13% of GDP by 2015.

‘One of the key drivers of that growth is going to be broadband penetration’, Zwillenberg said. One in five UK adults still do not currently use the internet; the government has set a goal of ensuring everyone has internet access by 2015.

Britain Leads the WorLd in onLine shopping – With £100 BiLLion spent in 2009

aLL eyes to the east as china reveaLs 457 miLLion noW onLine

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China’s online population rose to 457 million in 2010 as use of mobile phones to surf the internet spread rapidly, an industry group has reported.

According to the state-sanctioned China Internet Network Information Centre, the number of web users – a group already more than 50% larger than the population of the US – grew by 19% in 2010 against the previous year. It also reported that more than 300 million people now use mobile phones in China to surf the web. Officials said that the number of people using online commerce and internet entertainment services also grew rapidly in 2010.

The country’s Communist government actively promotes internet use for business and education; although it operates an extensive censorship system. The country’s impressive rise in web use has also been driven by economic growth, which forecasters say was close to 10% in 2010 following the country’s rapid recovery from the global crisis.


Mobilize: Strategies for success from the frontlines of the app revolutionRana Sobhany (Vanguard press, £10.99)Everyone wants theirs to be the next great killer app. but in the increasingly crowded world of mobile content, it’s becoming harder and harder to achieve success. In Mobilize, author rana sobhany offers a lively step-by-step process to help businesses aggressively position, market and sell their products. Insights from industry leaders help to illustrate vital do’s and don’ts, making this a ‘seller’s development kit’ for the mobile age.

Audience Evolutionphilip napoli (columbia university press, £19)Consumers now have unprecedented choice in terms of the technologies and platforms that access, produce and distribute content. In Audience Evolution, economist philip napoli maps the landscape of our current media environment and describes its challenge to traditional conceptions of the audience, setting out hurdles that must be overcome in order to engage new types of audience and the barriers that still stand in businesses’ way.

The Travelling WebmasterTony brush (ebook, £9.97)you need a holiday, but you have a job to do. ‘Tough call’, says author Tony brush. In The Travelling Webmaster, he sets out techniques for working and travelling at the same time. by sharing the story of how he developed his own business from internet cafes in ‘cash-poor, but culture-rich zones’, brush also provides inspiration to e-business owners and web developers looking to better balance their working lives. From guidance on how to maintain data confidentiality when using public computers to helpful software and services, The Travelling Webmaster provides the stimulus and the tools for those seeking adventure as well as business success.

overseas marKets Key, says asos

a BiLLionaire’s industry, say ForBes

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Nick Robertson, CEO of e-commerce success story ASOS, has urged Britain’s e-tailers to look to overseas markets for growth. In a December 2010 interview with BBC Breakfast News, he argued that expanding into foreign markets was a great way to grow an e-business and a low-risk option in difficult financial times.

‘The internet offers the opportunity to expand internationally very economically,’ he said. ‘The world is getting smaller and we’re taking advantage of that.’ Already, ASOS has French and German versions of its site, as well as a new US site introduced in 2010.

The web has created some of the world’s youngest billionaires, possibly in the shortest possible time scale ever. According to the latest Forbes ranking, released in late 2010, the richest are Google’s founders’ Sergey Brin and Larry Page. They went from PhD students to (paper) billionaires in about five years. The youngest is 25-year-old Mark Zuckerberg, founder of social networking site Facebook.

The top 10 list is as follows: (1) Larry Page, 37, co-founder, Google ($17.5bn); (2) Sergey Brin, 36, co-founder, Google ($17.5bn); (3) Jeff Bezos, 46, founded Amazon in a garage in Seattle ($12.3bn); (4) Eric Schmidt, 54, chief executive, Google ($6.3bn); (5) Masayoshi Son, 52, controls Japanese internet and telecom firm SoftBank ($5.9bn); (6) Pierre Omidyar, 42, French-born immigrant who launched online auction site eBay in the US in 1995 ($5.2bn); (7) Hiroshi Mikitani, 45, runs Ichiba, Japan’s leading online shopping mall ($4.8bn); (8) Charles Schwab, 72, online investor ($4.7bn); (9) Mark Zuckerberg, 25, founded Facebook while at Harvard University ($4bn); and (10) Ma Huateng, 38, runs Tencent, China’s most popular online chat service ($3.6bn).

The highest ranked European business head was Germany’s Andreas von Bechtolsheim (at number 15). His initial $100,000 stake in Google has brought him in $2bn. No British companies featured in Forbes’ top 25 list.

survey Watch

76% the number of Britons who still use cheques to pay for goods or services

source: research by Which? money

latest releases

cover intervieW

ordering FLoWers onLine has Become even more simpLe thanKs to Bunches.co.uK’s innovative approach to deLivery. emma Jones speaKs to

Danielle turner, managing director, and barry parkin, it manager, aBout the technoLogy that sits at the heart oF the Business.

pictures By WiLL amLot

Flower delivery service Bunches.co.ukhas come a long way from its early origins in Mansfield, Nottinghamshire. Set up by managing director Danielle Turner’s parents, Erik and Sandra in 1989, the company

initially operated from a three-by-four metre stall in Mansfield’s Four Seasons shopping centre. It has since grown into a thriving internet and mail-order business, worth £6.5 million a year.

But, despite this impressive growth, Bunches has managed to retain the personal touch that characterised the business when it was first launched. It’s a family business, where customers are treated as returning friends and employees are rewarded for passion and ideas; a nod to the creativity that launched and helped to drive the business in the first place.

‘My dad first had the idea of delivering flowers by post shortly after he trialled the company in Mansfield shopping centre,’ says Turner. ‘In a way, he imagined the business then as it exists today, but of course in the days before the web, he had to find a different route to market.’ He did this by putting the idea to the Post Office and, from early 1990, orders taken over Post Office counters by postmasters working on commission began to flow into the Bunches office for processing.

Turner was involved from the very beginning, helping out first on the stall and then working alongside her parents to take orders, wrapping the flowers in sleeves or tying ribbons: ‘I’d like to

say that I helped, but I was probably more of a hindrance looking back,’ she smiles.

So successful was the venture that, in 1993, Bunches started to expand its mail-order business so that it could take orders from customers directly. ‘We’d already started to build a customer database thanks to our work with the Post Office,’ explains Turner, ‘but dad knew that the company needed to develop this, so he began to invest in a number of successful direct mail and advertising campaigns.’

going soLoThis decision proved prescient when, in 2004, the Post Office decided to launch its own service (Post Office Flowers). ‘We didn’t want to white label our service,’ explains Turner, who by then had come on board as a full-time employee, ‘so we stepped away from the opportunity. It was a big risk for us, as orders made through the Post Office comprised 50% of our business at the time; however, it also gave us the opportunity to stand back and evaluate the potential of the business as a whole.’

Such was that potential, Turner adds, that it took Bunches only one year to build back the level of business that it had lost. Much of that, she explains, came as a result of the new opportunities being offered by the web. ‘We could see the potential of the internet as a new model for reaching out to customers,’ she says, ‘and, by reducing our workload in the short term, we were able to capitalise on that.

‘Bunches had operated a website since 1998,’ Turner adds, ‘but it was difficult to predict in those

A buSInESS In bLOOM



early years, how important the web would become to retailers and businesses like ours.’ In fact, Turner says that 80% of the company’s orders are now generated online.

The current website, as well as its bespoke back-end customer database, was created by IT manager, Barry Parkin, who took up the role in 2001. ‘I was actually working in the customer services department taking phone orders at the time,’ he says. ‘Erik asked me if I knew anything about computers, and when I said that I did, he asked me to oversee the build of Bunches.co.uk.’ In fact, Parkin soon took over the development work himself: ‘The online business was growing rapidly, and our external web developers were proving too slow to respond to our needs. By moving everything in-house, we were able to become much more responsive to the business’s needs,’ he explains.

repeat ordersParkin adds that the back-office system has been designed to enable Bunches’ customer services team to take orders by phone, as well as to monitor orders made online. ‘Our customers are very loyal,’ he explains, ‘many of them have been with us from the beginning, so it’s important that they’re able to phone to make orders as well. We don’t want them to think that we’re a faceless organisation; if they’d prefer to call and talk through the choices then that’s okay too.’

In fact, Turner says that another side-effect of building such a large web presence has been the need to expand and alter Bunches product range. ‘Customers definitely expect more choice when ordering online,’ she says, ‘we used to sell just six bouquets; now we offer 43.’ Online shoppers also favour different types of flower, she adds: ‘so, whereas mail-order clients tend to order Carnations; Orchids are the most popular item ordered online.’ Bunches.co.uk also offers a number of ‘added extras’, such as balloons, chocolates and cuddly toys.

In order to meet the growing demand for orders and choice, the company has expanded its operations too, building an extension to its warehouse space in Newstead, near Nottingham in 2007. It’s also invested in a number of new production systems to automate

the sorting and trimming of its flowers. The bouquets, however, are always assembled and quality checked by hand.

‘We’ve seen a 150% growth in orders in the last four years,’ explains Turner. ‘By expanding our warehouse space, we can keep up with demand and continue to grow.

‘Our goal is to become the number one household brand for flower delivery in the UK’, she adds.

Flower delivery is a fiercely competitive market, but unlike many of

its competitors, Bunches doesn’t have the expense of high-street stores or

van delivery services to factor in, allowing it to sell high quality goods at

a great price. ‘Because our service is so streamlined,

we’re able to keep our costs down,’ says Turner. ‘We still

sell our bouquet of 10 classic Carnations for £9.99 – the same price

as it was sold in 1990.’ Delivery charges are included in the price too: ‘We want

‘we want to deliver smiles as well as flowers, which is why its so important that customers have a good experience when they order with us’

to deliver smiles as well as flowers, which is why its so important that customers have a good experience when they order with us,’ continues Turner. ‘That’s also why we decided to include postage in the cost of the bouquets, rather than charging extra for it at the end. It’s about creating a continuously excellent service at a cost-effective price, and about working hard to ensure that we’re constantly learning and improving,’ she adds.

constant improvementThis thirst for improvement applies to all areas of the business, including the website. ‘What gets measured, gets done,’ says Turner, ‘so we’re always assessing our systems and processes to see what is working well and what could be improved.’

The vast majority of technical improvements are delivered by Parkin’s team, which has grown steadily to reflect the importance of web orders to the business.

‘We didn’t originally set out for all development work to be managed in-house,’ comments Turner. ‘We just have really high

cover intervieW

standards as to what we think is good, and we’ve found that one of the keys to our success lies in being able to react quickly.

‘By bringing it all in-house, we’re also able to monitor and assess better what works and what doesn’t; whether that applies to our website, our customer database or the products we sell,’ she adds.

‘Anything we can do in-house we do,’ agrees Parkin. ‘Everything else we try to find a way to do it in-house. It’s about planning ahead to ensure that we stay one step ahead of market needs.’

Where functions can’t be managed or built in-house, as with e-payment gateways for instance, Bunches has equally high standards: ‘We used a competitor to Sage Pay in this area originally,’ comments Parkin, ‘but as technology moved on, we found that their systems didn’t.’

Parkin adds that Bunches.co.uk was also experiencing a lot of basket abandonment with its previous supplier. ‘Many of the customers had already chosen their flowers and personalised their messages, but seemed to be put off by the need to enter a third-party site in order to make their payment,’ he explains. ‘Using Sage Pay has enabled us to integrate the payment process into Bunches.co.uk, making a huge difference to customer confidence when making an order.’

But, this is not to say that Parkin is entirely happy with progress in the e-payment area as whole. ‘Banks have done a terrible job at promoting the use of 3D Secure, for example,’ he comments. ‘When they see it for the first time, many people have no idea what the system is – and why they’re being asked to enter a password.’

However, Parkin says that Bunches is lucky in that it avoids many of the fraud concerns that plague other e-businesses. ‘Orders go though so many eyes before they go out the door that it’s easy to spot and check abnormalities.’ Here, he says, the most common challenge lies in verifying delivery addresses: ‘Many of our customers are ordering a gift for someone else, so it’s common to find that the address is slightly wrong. We make sure we check and validate all deliveries before we post them. It’s very important to us that they get to their intended recipients on time.’

It is this added effort that, for the Bunches team, characterises customer


service: ‘Our job is to make ordering online as easy and stress-free as possible,’ adds Turner. ‘I know from my own experiences how frustrating it can be if the company you’re ordering from doesn’t answer the phone or get back to you promptly. That’s why we always make sure that our team is on hand to talk to customers when they need us.’ Bunches also offers all customers a no-quibble guarantee if they’re not happy with the service: ‘It’s resend or refund, no questions asked,’ says Turner.

‘Trust is key to our business’s success,’ agrees Parkin, ‘so the emphasis is always placed on communicating to our customers, for example, that they shouldn’t be afraid to call if they’d rather not pay online.’

handLe With careFor many potential customers, the idea of flower delivery by post is a bit of a surprising concept; after all, how can they be sure that the flowers will be delivered in one piece? But, Turner stresses that it’s really very simple and secure. ‘We use Royal Mail’s first class postal service, so if customers order before 4pm, 95% of the time the flowers will arrive the next day,’ she says. ‘We’ve been working with Royal Mail

since the business first started and problems are few and far between.’

Part of that is also due to Bunches’ robust packaging. ‘We know which flowers will travel well and how best to support them within the parcels,’ explains Turner. So, for example, the company has designed a range of inserts that help to hold flowers in place and a leak-free water box that keeps flowers watered in transit.

But, Bunches isn’t finished yet. ‘There is still a large number of shoppers that haven’t even thought about ordering flowers online,’ says Turner. ‘Our goal is not only to reach those people, but also to provide them with fantastic customer service so that they come back time and time again.

‘If a business delivers what it says it’s going to, then customers will return – and tell their friends too,’ she adds. ‘That’s something that my dad instilled in the culture of the business from the very beginning. For him, it has always been about making sure that Bunches’ flowers are high quality and good value, and that customer service is always kind and considerate. Those are the reasons for our growth – and the same principles that we’re operating under today.’ n

‘If a business delivers what it says it’s going to, then customers will return – and tell their friends too’

FootWear is BuLKy to deLiver and trouBLesome to return, so hoW is it that so many retaiLers have BuiLt thriving internet-onLy Businesses suppLying shoes and trainers?emily James examines a marKet Where one size never Fits aLL

If you’ve spent a lot of time watching Sex and the City then you may be of the opinion that half the pleasure of buying a pair of new shoes comes through the ritual of trying on the footwear in the shop. But, unless you can afford to buy your Manolo Blahnik’s direct from the store on Fifth Avenue, then this is rarely the case. In my experience, the stark reality is often a Saturday morning spent traipsing around

the high street, feet swelling as you wait around for shop assistants to retrieve your size from the stock room and then fighting for space so that you can even sit down to try the shoes on. We’ve become so used to the ease with which other internet purchases are delivered to our door; wouldn’t it be so much better if we could just order our footwear online too?

Of course, most fashion retailers have been selling footwear online for as long as they’ve been selling their clothes. Sales of footwear have just taken a little longer to take off because there seems to be a bit more hassle involved: What if they don’t fit? What if they don’t look as good in real life as they do on screen? Won’t it be expensive for me to post them back? If you’re not sure what size dress or shirt will fit you, it’s relatively simple to order two sizes and then post one back. The same does not apply so readily to boots or trainers with their bulky boxes. Is there a way for e-tailers to get around this?

try this on For sizeAs with much of the web, it’s all about perception. The easier you can make it for consumers to buy and return goods, the more likely you are to be successful, no matter the goods in question. For high-street stores, with the infrastructure in place, it can be relatively easy to promote returns, for example, by allowing customers to exchange or return footwear bought online in their stores. This is something that high-street retailer Next does well, allowing customers not only to return shoes in store, but also to order them online for free pick-up in their nearest shop. However, internet-only businesses need to find a different way.

In the past, online shoe sales were mostly driven by consumers looking to the web for deals. Often those consumers would try on shoes in the shop and then head home to source the same pair at a discounted price. To a certain extent that is still the case; however, by making the purchase experience smooth and hassle free, e-tailers have been able to build a loyal customer base that returns time and time again.

This is something that Luke Barlow of Fitnessfootwear.com says has been key to his business’s growth. Now the largest independent sports footwear retailer in the UK and the main supplier of leading sports and outdoors shoes, including Fit Flops, Barlow says that being an internet-only business has been a help, rather than a hindrance when it comes to driving the sales

bEST FOOT FORwARD

spring 2011 t moving money 17

industry Focus


on cost, but it’s not just about offering customers a good deal. The web has also allowed many experimental internet-only businesses to emerge and shake up markets, potentially nibbling away at the share of more established sellers. Other e-tailers have built themselves a market by concentrating on niche or high-fashion imports that just aren’t available on the high street. This works particularly well in the footwear sector where many consumers buy shoes in order to be on trend. Before Ugg opened its high-street stores in the UK, for example, the only way that you could get hold of its fashionable brand of slouch boots was to fly to Australia or order a pair online.

According to James McLintock of market research agency The Sound Research: ‘Trends in clothing and footwear behave much like trends in financial markets. They start from a low base and gather velocity over time, before slowing or crashing as people lose faith in them. Some endure;

The web has also allowed many experimental internet-only businesses to emerge and shake up markets, potentially nibbling away at the share of more established sellers

of shoes: ‘We’ve grown tremendously in just a few years,’ he explains, ‘because we always put our customers first by offering great service, free delivery, easy returns and friendly advice.’

Barlow believes that consumers are now more willing than ever to purchase footwear online, particularly in the trainer market. ‘Shoppers have become a lot more used to buying online, and if a site looks trustworthy, they’ll take the plunge even if they haven’t heard of that company before. That was something that wouldn’t have happened previously,’ he says. It helps too where brands are instantly recognisable: ‘Customers will have seen Fit Flops before,’ he adds, ‘with an item like that, they’re not going to worry that the flip flops won’t fit.’

a good deaLHowever, Barlow adds that it’s important for the business to keep emphasising the ‘value’ of buying online. ‘Consumers have come to expect discounts online, so if you don’t highlight them on your website it can appear as if you’re not offering any, which means that potential customers may navigate away to a competitor’s site.’

The lower overheads of online retail make it easier for companies operating in this space to differentiate themselves

many disappear. But, if you’re truly passionate about what you do, your store can become a kind of trendsetter.’

McLintock says that this is most likely to happen in the trainer or sneaker market where purchasers, mostly young men, will remain loyal to a brand and buy it wherever it is sold. ‘They don’t even think about such things as trying the footwear on,’ he says.

This rings true with e-tailer Crooked Tongues (Crookedtongues.com), which specialises in re-issues of trainers originally sold in the 70s, 80s or 90s. ‘Ours is a well-informed, product-focused customer base,’ says marketing manager Tom Scott. ‘They visit the site because they’re looking to buy a particular brand release.’

Scott says that most of Crooked Tongues’ customer base are males, 18-35, many of whom are loyal return visitors to the site. ‘Generally, they’re after footwear that they liked when they were younger, but couldn’t necessarily afford at the time,’ he says. ‘Now they have the disposable income to buy the types of trainers that were popular in their youth, like the Air Jordan, for example.’

KnoWLedge and saLesBefore the web provided a channel to buy and sell niche ranges like this, Scott says that fans of retro footwear would travel the world to find old stock. ‘That’s actually how Crooked Tongues started,’ he explains. ‘It was an online forum for like-minded individuals to share experiences and knowledge about the best places to find footwear from the 80s and 90s. Over time, brands got wise to the demand for their older models, so decided to start re-issuing designs.

‘Now reissues of old classics make up a big part of their income and marketing spend,’ he adds.

The Nike Dunk (pictured above) was one of the first styles to be re-released. And, as the re-issues became available, the Crooked Tongues forum became one of the most popular destinations for consumers to

industry Focus

The Wellington boot – the preferred footwear of festival-goers, hill-walkers and dog-walkers – had a fashion makeover in 2008 when Hull-based start-up footwear retailer WedgeWelly launched a surprising new innovation into the market: a Wellington boot with a wedge heel.

It all started because high-heel addict sarah longthorn – who founded the company along with her husband John, and friend and business partner laura booth – refused to attend v music Festival in a pair of flat shoes. ‘I said: “If you can find me a pair of Wellington boots with a heel, then I’ll go”,’ she explains. John and laura couldn’t and, recognising a gap in the market, decided to design and market a pair themselves.

The company now retails over 15 styles of boot in their unique, Flex and Curve ranges. Even before their successful appearance on bbC’s Dragon’s Den, in may 2010, the fun footwear was being sold through boutique, high-street and online retailers, such as new look and asos. The injection of cash and experience from the Den – £65,000 from dragon and retail expert Theo paphitis – has allowed the company to expand production and retail of the boots even further.

know your marketbut for founder and director, longthorn, the success of the company is firmly based in its roots. ‘We’re a family business, firmly embedded in the music scene,’ she explains. ‘It’s our love of music [she’s a huge kings of leon fan] and our teenage audience that inspires us and our designs.’

longthorn says that WedgeWelly’s target market is female festival-goers aged 16 to 25, but adds that the company’s website has played a key role in attracting customers outside that

demographic too. ‘Whereas our key client base [the female festival-goers] will tend to purchase from us because they’ve heard about the WedgeWelly and seen it at festivals or in shops, we’re increasingly seeing a lot of purchases from customers outside this group who have seen our offering online and decided that they want to replace their boring old pair of wellies with a more glamorous equivalent.’

The festival season is still the company’s key sales period, but longthorn says that, thanks to their success both in and outside Dragon’s Den, the company is busy year round.

‘actually, we’re ridiculously busy, processing orders and responding to enquiries,’ she says. ‘We turned over £300,000 in the six months following our appearance on the Den, and that rapid growth doesn’t seem to be letting up yet.’

However, for longthorn and the rest of the team it’s not just about attracting new customers, but also about providing them with ‘added value’ during the purchase process. ‘We really want people to be involved

and connected to WedgeWelly,’ she says. ‘We want it to become a vibrant community.’

The company facilitates this on its website by clearly showcasing customer feedback in its ‘small talk’ blog. ‘Fortunately, our customers only have good things to say,’ adds longthorn. ‘but, even if they didn’t, online businesses need to have a forum through which to feed back to a business what they thinks works and what maybe doesn’t work quite as well.’

The team also focuses on constant innovation and improvement in the look and feel of the WedgeWelly designs. ‘businesses have to keep moving,’

says longthorn. and, here

too, the team places a great

deal of emphasis on customer feedback.

although the overall design is the responsibility

of booth – ‘the creative one’, says longthorn – the team encourages ideas from customers for new prints or future products. ‘We want the boots to meet their needs,’ explains longthorn, ‘so we encourage them to

tell us what they want.’The team also does a lot of

what longthorn terms ‘on-the-ground research’: ‘one of the highlights of our jobs is going to the festivals to market our

boots to new clients,’ says longthorn. ‘It’s also where we get a lot of ideas for our next instalment of WedgeWelly designs.

‘you have to know your market,’ she adds, ‘but it also helps if you get to

live it too.’ n

the Brand Was innovative and appeaLing enough to attract investment From theo paphitis in dragons’ den. WedgeWeLLy’s sarah longthorn expLains hoW the desire to LooK gLam at a music FestivaL Led to a thriving onLine and oFFLine Business

gIVIng IT SOME wELLy



Customer service is equally important to Crooked Tongues. Here, its partnership with leading fashion e-tailer ASOS has substantial benefits in terms of sharing resources and knowledge. ‘ASOS provides the logistics,’ says Scott, ‘so we can benefit from its massive scale.’ However, he emphasises that Crooked Tongues itself has no plans to expand to ASOS’s level: ‘Crooked Tongues is nowhere near the size of ASOS and never intends to be as we are so niche,’ he says, ‘however, that isn’t to say that we can’t provide our customers with the same level of service.’

Nonetheless, there have been some additional hurdles to overcome. ‘Many of our customers will buy trainers, but not wear them for six to 12 months,’ he says, ‘so if they do discover a problem, it falls outside the Distance Selling Regulations for returns – or we may not have any stock left to replace them. That said, we always make an effort if it’s a genuine fault. Everything that we sell, we sell because we believe in it, so we want

discuss the new models. ‘These were shoes that were idolised by most of our customers in their youth,’ explains Scott, ‘so they’d come to Crooked Tongues to discuss the revisions made to the original style: did the re-issue do the original justice? Were they as good? Many had some very strong views.’

That community forum still thrives on the Crooked Tongues site, but with such a strong following among trainer fans, it was only natural that the company move into e-commerce and to start selling trainers as well. ‘The forum has allowed us to become an authority in marketplace,’ agrees Scott.

That’s been to the benefit of both customers and the brands. ‘Some of our customers have collections of vintage trainers that go back decades,’ he explains. ‘They are so passionate about the originals that it’s only natural that the brands will want to discuss with them their intentions for the re-issue. They are the targeted customer base, so it’s important to get it right.’

‘Many of our customers will buy trainers, but not wear them for six to 12 months, so if they do discover a problem, it falls outside the Distance Selling Regulations for returns’

to make sure our customers are getting what they’re paying for.’

Scott adds that the Crooked Tongues core customer can buy a new model as frequently as every two to four weeks. ‘We get a lot of return customers,’ he explains. ‘They know the market and have a clear schedule for the month when it comes to the trainers that they want to buy.’

a LoyaL customer Base‘Some of our customers have 3,000 plus trainers,’ Scott continues. ‘Often they’ve been collecting them since they were teenagers. They want to be one of the first to have the new releases and they know that Crooked Tongues is one of the few retailers in this marketplace who will have the stock. It’s a great foundation for our business.’

When you operate in a niche market like this, it’s imperative that you know what you’re talking about. Here, Scott says, that it helps that the e-commerce store grew out of the forum, rather than vice versa.

Of course, many other footwear e-tailers have become successful in the market by offering a broad, rather than a niche, product range. Such is the case with fitness footwear e-tailer Purekit.com, which has grown into a thriving online business even though founder Andrew Baldwin states that the company knew little about fashion, but a lot about e-commerce, when it was first launched.

‘As with many other internet successes, we saw a gap in the market and went for it,’ says Baldwin. ‘We couldn’t find the shoes we wanted in the high street or on the internet in one place, so we decided to create a website to rectify that.

‘We also wanted to give customers the sort of service that we ourselves expect,’ he adds. ‘We set out to be pure by name and simple by nature, to provide customers with an informative, attractive and functional online shopping environment, which is easy and efficient to use and provides advice that they just wouldn’t receive anywhere else.

‘We’re not a fashion retailer by background, but we do have flair. People come to us for functional, stylish and comfortable footwear and expect the same quality and style they’d find at the best retailers,’ he concludes. ‘That’s what makes e-businesses such as ours, so successful.’ n

industry Focus

onLine and oFFLine marKets are coLLiding as consumers LooK to retaiLers to provide them With a standard service

across the WeB, on the high street and By moBiLe phone. fay WariloW sets out the drivers oF that groWth

gAThERIng MOMEnTuM



marKet trends

The rapid development of the smartphone market means that by 2015, more consumers will be accessing the internet from their phones than from their desks or home pcs

It would be an understatement to say that the web has changed the way in which businesses trade and consumers shop, but there are still many businesses that are yet to make

the most of the opportunities offered to them by the internet.

These days, not having a website is a bit like not having a telephone. Every business – it doesn’t matter if it’s a window cleaner or a local firm of accountants – has to have a website. Consumers will give up browsing for their preferred brands if they can’t find or buy from them online, and will switch to a company that does have an online store instead. This much internet-only businesses have proved time and time again.

However, the web does not necessarily replace ‘bricks and mortar’ stores (although it can); more often it simply complements and enhances core bricks and mortar businesses.

moving With the timesRetailers who are not yet fully operational on the web have some serious catching up to do. Consumers are racing ahead not only in terms of what they expect online, but also now on their mobile phones. In fact, such has been the rapid development of the smartphone market that by 2015, more consumers will be accessing the internet from their phones than from their desks or home PCs. Many of us already are and this is transforming the way in which we shop and interact with businesses.

In the ‘old economy’ bringing a consumer into a shop was considered enough to drive sales. But, thanks to smartphones, consumers can find an item that they like within a shop and then look online to see where it would be cheapest to buy it from. With such power now at consumers’ fingertips, retailers need to rethink the way they interact with their potential market – and the mediums that they use to interact with it.

At the very least, it’s now becoming clear that bricks-and-mortar stores, mail-order catalogues, websites and now the smartphone can no longer function as separate channels for sale. Instead,

retailers need to develop a more unified approach to consumer interaction, so that store, catalogue, website and mobile unite together to provide consumers with the same offers and stock information. That is the essence of ‘multi-channel’ retailing.

But, even though multi-channelling has essentially been driven by consumer demand – and the availability of more sophisticated technologies – the benefits to retailers are not simply limited to the ability to give customers what they want. Managing each separate channel in a holistic way also helps companies to cut costs and inefficiencies; for a start, they no longer need separate order-management and customer-service operations, or multiple warehouses and fulfilment systems. It does mean, however, that many companies need to radically rethink the way that they run their businesses in order to maximise the benefits of a multi-channel solution.

As David Soskin, CEO of price comparison website mysupermarket.co.uk explains: ‘Retailers will need to overcome a number of technological and organisational hurdles; particularly, those older retailers with legacy systems, structures, skills, staff incentivisation programmes and so on.

‘Channels have existed as separate entities for one simple reason: they have grown independently of each other, implemented at different times and evolving at wildly different speeds,’ he adds. ‘For this reason, there is often no consistency or message or approach across these media. Not only do the channels not talk to each other, they’re also left fighting each other for the same customer. This is not a viable long-term solution.’

Instead, retailers must consider a single-minded view where a customer is a customer however they transact. Only then will they be able to understand their

customers and personalise the ways in which they interact with them.

The question, however, is: where do you start? It’s not as simple as just upgrading technology; retailers also need to work out how they organise their back offices too; for example, how they account for profit and loss across the channels, how marketing and sales are organised and how all incumbent business units work together.

putting the customer FirstCustomers don’t want to buy a product in a shop only to get home and find that they can get the item for a cheaper price online; particularly not where that cheaper price is on the retailer’s own website. For that reason, multi-channel retailing is as much, if not more, about a retailer’s internal operations and suppliers as it is about its customer-facing services.

According to Sage Pay partner Sanderson Multi-Channel Solutions, the core technological capability needed is a back-office system with a single customer information view, ideally via a single software platform that allows the business to manager customer relationships enterprise-wide. This requires full integration of database and management systems across channels and supply chains.

‘Retailers must put in place a system that allows for multi-channel conversations to be had,’ echoes e-commerce specialist Pod1. This must encompass till systems, website sales, warehouses and catalogue stock systems. If the customer is to be able to ride seamlessly between touch-points, the brand must already be doing it.

However, there are a number of stumbling blocks when it comes to merging and standardising customer data in this way; for example, in unifying different systems which may have very distinct data models. Similarly,


naturally that if one business provides a flexible delivery or returns service, then customers will start to expect it from other businesses too, even if they’re not in the same industry.

‘For example, customers want to be able to check and reserve stock online for in-store pick-up. Argos, Currys and others allow them to do this, so they want other retailers to provide the service too.’

Clelland adds that customers don’t just want their goods to be delivered promptly, they also want to be able to track those goods – and when they are likely to arrive – online. ‘ASOS has shown that this is possible and now consumers expect it of other retailers too,’ she says.

Consumers also want to be able to use loyalty cards, store cards and gift vouchers through channels irrespective of how and when the buy. Tesco Clubcard, Nectar, Debenhams Beauty Club Reward Card and many others have

‘If one business provides a flexible delivery or returns service, then customers will start to expect it from other businesses too, even if they’re not in the same industry’

Sanderson says that retailers should expect some difficulties in reducing or abolishing organisational boundaries to cope with new channels. Here, newer or smaller retailers will have the advantage of being fleet of foot.

The next step should be to ensure channel synchronisation; for example, ensuring consistency of brand, information and customer experience. As part of this, companies need to consider the issue of pricing across the different channels that exist to date. Ideally, all prices across a business should be standard with no differing charges (for example, for delivery) depending on how customers choose to collect their goods.

That sounds simple, but in reality prices can often vary considerably between shop and site. Shops have higher cost structures than web channels; similarly, price competition is higher on the internet leading to greater use of discounts. There are ways around this; for example, by offering ‘web-only offers’ and marketing them as such. The alternative is to set one price for all mediums by balancing profit in one channel with potential loss elsewhere. Clearly customers should be pushed in the direction of the profit-making channel.

In addition, while retailers need to be consistent in their messaging across channels, that is not to say that each channel should be identical in presentation or content. Instead, retailers must tailor both to fit each channel because they vary in effectiveness and efficiency. This is best done by listening to and watching the habits of their customers.

one size does not Fit aLLConsumers are not sitting idly by twiddling their thumbs while retailers develop their strategies; instead, they themselves have become more sophisticated and demanding. They expect a retailer to interact with them in the way that they choose; for example, many potential customers will choose to go elsewhere if retailers do not provide a free returns service or allow them to return products that were bought online to store.

E-commerce specialist Snow Valley’s Sarah Clelland comments: ‘It follows

shown that this is possible to do, so why, consumers are asking, don’t my other cards update themselves automatically each time I make an online purchase?

Of course, many models can exist successfully in just one channel; for example, e-commerce only operations such as Amazon or ASOS thrive because they don’t have shops or catalogues to manage. Instead, the web provides the global reach these companies need to gain scale. They’ve also invested heavily in brand marketing, technology and efficient sourcing and fulfilment processes, which means that customers return time and time again.

However, many internet-only businesses are now venturing onto the high street too; for example, by running pop-up shops or concessions in existing department stores or chains. This is something that clothing retailer and Sage Pay customer Pretty Green has done successfully to date. ‘By featuring our

collection in Selfridges, we’re able to showcase our brand to a whole new audience,’ says sales manager Dean West. Owner musician Liam Gallagher plays an important role here too; for example by making public appearances to launch the new collections.

Shop-based retailers, however, face a more difficult challenge. If they are to thrive, they need to promote interaction between their shops, websites and, if relevant, catalogues; for example, by using the internet both to draw customers into their physical stores and to offer shoppers a wider selection of goods and greater convenience.

Retailers need to consider how customers interact on each channel and how best to leverage this, agrees Pod1. In its report ‘Multi-Channel Nirvana’, it highlights that this is something that both John Lewis and Marks & Spencer do well, as they allow customers to buy, collect and return goods through all their channels. ‘Such policies not only offer greater convenience to customers, but also help them to experience the brand seamlessly in their preferred way,’ comments the report’s authors. ‘However, it’s also about pushing consumers into channels; so, for example, retailers should be encouraging catalogue users to order online.’

channeL managementIn general, catalogues attract new customers and drive repeat business, whereas the web offers convenience, product information, and quick updates for pricing or promotions. Shops, by contrast, allow shoppers to handle and test goods before they buy them, thereby supporting or prompting the sale. For this reason, many expect shops to drive a rise of channels within channels; for example, by offering kiosks and multimedia services within their doors, much as Argos already does.

The challenge for retailers at present is to understand how customers use each channel, to match products to that channel’s economics, and to create a consistent customer experience across all of them. n

research released in January 2011 by consultancy deloitte has supported arguments that retail brands must invest in multichannel operations or risk missing out on sales opportunities. Its retail survey found that shoppers that use more than one channel before making a purchase spend 82% more per transaction than those that only shop in store. The average expenditure for multi-channel customers across the clothing, home and electrical categories is £116 per transaction compared with £64 for store-only customers.

The research also found that by value, 38% of all retail transactions across the clothing, electrical and home sectors are now influenced by the internet, with 21% coming from direct online purchases while 17% are multi-channel transactions. other findings include:l Consumers from higher socio-economic groups are most likely to be multi-channel shoppers;l men are more likely to be web-influenced shoppers than women and also tend to spend more per transaction;l Catalogues remain an important element of shopping in the uk: 11% of web-influenced homeware consumers and 12% of web-influenced clothing shoppers used catalogues for research purposes.To download the full report, visit www.deloitte.com.

multi-channel retail is the future

it can Be hard For e-Businesses to choose the right WeB deveLoper and pLatForm, particuLarLy iF they are Launching onLine For the First time.

We asK some oF the uK’s Leading providers to set out the BeneFits oF their respective systems and approaches

STyLE AnD SubSTAncE


it’s all about speed to marketrachel Wilkinson, portaltech

Today’s e-tailers don’t have time to build a site from scratch; they

want to be able to leverage best-in-class technologies that are pre-integrated into reliable web platforms in order to get to market quickly and as cheaply as possible. Portaltech developed the QuickLive platform as a response to this. It can be deployed securely and cost-effectively in timescales as short as eight weeks from the initial business brief.

Developed on the hybris platform, QuickLive is already powering hundreds of websites globally, including high-profile brands such as Long Tall Sally and DIY retailer Focus.

Shoe retailer LK Bennett came to Portaltech, for example, because it wanted to re-platform its site in a 12-week turnaround time in order to tap into the lucrative January sales market. It also wanted a flexible content management system (CMS) that the team could update and manage internally; a platform that would support multi-channel retailing (including, for example, m-commerce); a platform that was robust, flexible and scalable; and a future-proof solution that could be easily expanded to include multi-language and currency.

The QuickLive platform was adapted to meet these needs. As it is built on a hybris core, it could deliver the flexibility and functionality that LK Bennett requested, and allow the company to manage its existing online, catalogue and retail channels. It also provided the ongoing scalability and multi-currency capabilities that the company required for its long-term growth.

Not only did the website launch on time, but the company also saw its net retail sales increase by 103% in the first five weeks of operation and by 70% on the previous year.

Key to the success of this website and many others that operate on the QuickLive platform has been the rich media capability provided by the back-end CMS. It allows companies to tie in marketing communication to on-site content, reducing the reliance on external development

agencies. LK Bennett, for example, uses lifestyle shots, with hot spot overlays, to provide product information faster, reducing the number of clicks customers have to make to find the products they like and add them to their basket.

an agiLe soLutionMaking the process as simple as possible for the consumer is at the core of hybris technology. One area where it does this particularly effectively is in the area of personalisation. The ‘customers who bought this book also bought these books’ form of product recommendation has become accepted, and was entirely pioneered by Amazon.com, but hybris takes this to a new level by automatically detecting and comparing customer behaviour patterns.

Customers can be analysed by their context – using Google referrals, search trails or engagement patterns – and compared to users with a similar customer profiles to create highly valid and reliable product recommendations. These context-based recommendations can then be combined with a user’s known profile information and purchase history to give the ultimate shopping experience.

In the same way that ‘cross selling’ is employed on the High Street, e-retailers can also create rules-based ‘cross selling’ recommendations that feature a set of defined products. For example, the ‘get the complete look’ personalisation employed by Long Tall Sally ensures that multiple components are shown to customers selecting one item from the range to prompt add-on purchases.

By calling upon established and forward-looking technologies like hybris, companies do not need to dedicate time or resource to development in-house. They can also benefit from improvements to the system made by hybris itself. Unlike many open source codes, for example, hybris is developed by one business owner (hybris the company), with a key strategy for growth. Rather than relying on a community of developers to grow the code, the company and its partners work to develop the code in line with business needs. n

Rachel Wilkinson is head of brand and retail at e-commerce consultancy Portaltech.


WeB trends

the ease of buying off-the-shelfsteven hickey, ekmpowershop.com

Setting up an online shop can be an exciting,

money-making prospect for any business; ideally, it should also be a painless and rewarding process.

Keeping costs under control while delivering an effective, profitable website are common challenges faced by businesses when they set up online. Much of this boils down to how you decide to build, run and maintain your company’s online presence.

Choosing the right web platform for your online shop has a big impact on both the cost and the performance of your project. Get it right and you could make hefty returns. Get it wrong and you could be left with a dent in your bank balance and a negative return on investment.

understanding the optionsBespoke systems were once the only option for companies wanting to sell online effectively. The only alternatives were low-quality open source and software-based platforms. This resulted in a huge gap between ‘high end’ bespoke online shops and those done on a budget. The difference was clear in both appearance and functionality, as cheaper methods were difficult to customise, offered limited features, and required advanced web design or development knowledge to build.

Fortunately, much of that has now changed as technology has developed to a point where systems can be delivered ‘on the cloud’. Delivering software via the web is what we now consider to be the norm (even if we don’t know it) – from our content management systems to our diaries.

Hosted solutions such as those provided by ekmPowershop.com are now able to offer advanced systems and applications over the internet. This not only cuts down cost, but also makes it possible for all businesses to sell online, so long as they have an internet connection. There’s no need for a web designer, in-house techie or a degree in IT. No messing around with FTP

access or database installation. Anybody can set up an online shop, regardless of budget or technical expertise. Most importantly it is also secure for customers due to its integrated checkout and payment processing functions.

We’ve always stood by our platform as being the quickest and easiest way to sell products over the internet. Eight years after its launch, ekmPowershop.com now powers one in every five online shops in the UK, having helped over 20,000 businesses sell their products over the internet. And, while ekmPowershop.com was primarily built for SMEs, independent retailers and bedroom traders – those businesses that could not afford the price tag that typically came with a ‘decent’ e-commerce website – along the way we’ve also attracted some big names such as Lotus Cars, PGA Golf, O2, Michelin Tyres, Future Publishing and many more. Testament that ‘off the shelf ’ e-commerce software no longer carries the ‘cheap and cheerful’ tag it used to.

What comes next?The past five years have seen a convergence between bespoke and the open source models. These days most ‘bespoke’ agencies simply offer open source systems, just customised. Some (very few) will use their own core – which is still arguably not truly bespoke, as the core is recycled, client after client.

Of course there will always be the requirement for bespoke systems due to the exacting nature of some projects, but nine out of 10 e-commerce projects can easily and effectively be fulfilled using an off-the-shelf product, at a fraction of the cost. n

Steven Hickey is the sales and marketing manager at ekmPowershop.com.

open source is the most innovative and flexible of the platformsrobert castelo, code positive

There are many open source platforms to choose from, but Drupal, the one that we use, is widely recognised as being one of the best. The platform is a little bit like Lego: you download the core Drupal base and then you build on it by adding the functionality modules that suit your needs. At present there are over 6,500 modules to choose from, including Ubercart, an e-commerce module.

Some companies may have been reluctant in the past to use open source software, but that’s no longer the case. If anything, it’s now become standard practice. The White House website is built using Drupal, for example, which is a good indication of how secure the platform is regarded to be.

At Code Positive, we’ve built websites for everyone from BT to Sage Pay, and consulted on projects for organisations such as Comic Relief. On Red Nose Day, the Comic Relief site saw a 250% increase in traffic. If there had been any downtime on the system, the charity could have lost vast amounts of money in donations, but Drupal is more than robust enough to cope with increases in traffic like this.

Free to LicensePerhaps the biggest attraction for companies when they first switch to open source is the cost saving. There is no licence fee to use the code or the modules. Businesses only pay for internal or external development work.

In the early days of the web, a lot of companies chose to develop bespoke systems in-house, but that’s very rare these days. Websites require ongoing maintenance, and a business can leave itself exposed if the original developers leave.

A common alternative these days is to buy a proprietary product; in effect, you lease the platform by paying a yearly licence fee. The main disadvantage of this approach is that it may not be possible to get the platform owner to add new features as your business grows and your requirements change. With the content of your site locked

into a proprietary platform you are also vulnerable to licensing price increases.

With Drupal, not only do you not need to pay a licence fee, but you can also bolt-on or build new modules as and when your business needs them. The development framework is already in place to help you do this, so you don’t need to start from scratch – you’ve already got a mature code base at your disposal.

One other major benefit of Drupal is that developers work to strict coding standards, and developers are able to quickly pick up and understand what another Drupal developer has written. This means that developers become interchangeable, so a company isn’t reliant on a specific individual or an agency – and can bring in support on short notice if they need a quick turnaround.

The size of the community also helps with the strength of the code and, therefore, any potential security issues. The licence doesn’t oblige you to release the code that you write back into the public domain for other people to use (you are free to keep any developments to yourself in-house), but if you do, then it will get peer-reviewed by the community of international developers and heavily tested – for free. This is not something that many companies can afford to replicate in-house. You can also benefit from any developments made by others; for example, any bugs that they spot in your code and go on to fix, or whole new features that they’ve developed that you might not have even thought about. Effectively, you’re paying just one developer, but calling on the expertise of thousands. There are over 3,000 active Drupal users in the UK alone.

From a personal point of view, this community is also very important to the developers themselves. If you work in-house developing code then no one will ever see it outside the business, and it will rarely be peer-reviewed even by colleagues. Many top developers work in open source projects exactly because they want feedback from other developers, and also the satisfaction of seeing their code become widely used. I believe this attitude leads to higher-quality software than the motivation of just sitting in a cubicle and picking up a pay cheque at the end of the month.

Another major competitive advantage for e-commerce websites is the adaptability of Drupal to other web platforms. Many traditional e-commerce platforms work

‘These days most “bespoke” agencies

simply offer open source systems, just

customised’


WeB trends


emma neWman, founDerwww.emmasboutique.co.ukI set up the website when I was still working part-time using investment from business link. The website development was a struggle; it can be difficult to translate your vision for your product range onto a website; particularly if it’s your first time doing so.

It’s such a shame that the business link funding that helped me to launch the site is no longer available. There are lots of cottage industries that just aren’t going to be able to get off the ground now that business link investment has gone.

budgets are still tight, so networking, blogging, Twitter and Facebook are all really useful free tools. If I post a new handbag on my Twitter feed, I generally get 60+ views in the next couple of hours.

small businesses like mine are so personal. Customers want to get a feel as much about me as the products, but it’s the personal touch that I think makes all the difference. so when I’m dispatching a bag or a piece of jewellery, for example, I always make sure that the goods are giftwrapped. I want customers to feel as if they’re receiving a present.

try this: Chunky flower pendant on a snake chain (£7) – one of our original pieces, and we keep it in stock because everyone loves it!

michael Jobling, founDerwww.michaeljoblingwines.comWe started the business 22 years ago with a modest collection of 45 wines. I was an accountant at the time and had always had an interest in wine, but when I was initially proposed the idea, I just thought ‘it’s not possible’. luckily a friend of mine persuaded me to do it. We’ve grown a lot, but the philosophy of the business hasn’t changed: all our wines are ones that we like to drink ourselves and we don’t stock anything that you’d find on a supermarket shelf. We try to source independent growers with story to tell. For me, it’s all about the people.

our biggest hurdle has been the website, but we had a major revamp last year, so it’s much more effective. The thing about a website is that you can’t think: ‘oh, it’s done now.’ It’s a continuous project, so you need to keep working on it. Technology moves so fast, and it’s hard to keep it fresh. but, we’ve been able to get around this by focusing on content. buyers like to know the background to their wine.’

try this: The 2009 Tinto roble (aga, spain, £6.66). This wine is ideal for this time of year and well priced. It has a vivid red colour with a large presence of fresh

fruits and flower notes, has a toasted background and a long and very pleasant finish. It goes well with chunky casseroles and pork dishes.

melanie ieronymiDes, founDerwww.loveleaftea.comI used to have a teashop in newcastle city centre, but with a young family to raise, I found that working all hours just wasn’t sustainable, so I decided to sell the shop and set up online. I had a lot of help from business link: it provided the initial funding for the website and then again later to help with our search engine optimisation and marketing.

When I was initially looking for someone to design the website I wasn’t sure where to start. I could have just gone for the cheapest quote, but in the end I went with a recommendation. That would be my main advice for other businesses: ask your peers who they are using or choose an agency that has clients that are doing well online – and ask them to give a reference. It may cost a bit more, but it will definitely be worth it.

try this: our best sellers are English breakfast and oolong, because we are one of the few to sell this online. but Chocolate mint rooibos

is always popular, as are the accessories we sell like teapots and tea cosies. n

We speaK to sage pay customers in the north oF engLand aBout their experiences Launching onLine – and asK them to provide some inspiration and advice For neW e-taiLers

FROM ThE ShOp FLOORperfectly for the website itself, but if you want to launch an intranet or a social networking site, then you’ll need to use a different application. That often results in companies managing three or four different technologies at the same time. With Drupal, you can build almost any project, so you only need to use and understand the one code base whether you’re looking to launch a website, an intranet site or a social network.

One of the stated goals of Drupal when it was first released was to get rid of developers entirely. We’re not quite there yet, but the system has been simplified to the extent that a company can set a website up relatively easily. All you need for most projects is someone on hand who knows how to configure it and you’re ready to launch.

The latest release, Drupal 7, has focused on improving the user interface for setting up and maintaining a website, making it even simpler for businesses to get online. Moving forward, we are also looking at packaging Drupal into pre-configured solutions, which will mean that companies will be able to set up online with just one click.

maKing sense oF contentChanges to the way the latest version of Drupal displays content can give companies a significant boost with their search engine optimisation (SEO). By adding semantic tags around information, Drupal 7 enables search engines such as Google to contextualise the data. Without these semantic tags, if you entered ‘Paris Hilton’, for instance, Google would be unable to distinguish the person from the venue.

For e-commerce websites this is tremendously important as Google will be able to identify and use product information such as price, colour, and location to not only provide a more accurate search for specific products, but also to filter and sort the results found. n

Robert Castelo is CTO of Code Positive and one of the organisers of DrupalCon, an international event that brings together the people who use, develop, design and support the Drupal platform. This year, DrupalCon Europe will be held in London, 21-26 August. To find out more, visit london2011.drupal.org.

decemBer: Be Kindwww.arkhq.comAh, Christmas, the season of goodwill to all – doesn’t it seem so long ago already? Not for do-gooders Ark°, a not-for-profit movement encouraging ‘acts of random kindness’ (or Arks°) through its ethical clothing range. They keep up the good work all year round. What’s so special about it? You don’t just get to wear this fashionable range of clothing, you’re also encouraged to perform an Ark° every time you do, whether that’s volunteering for charity or simply giving up your seat on the bus. Designs on the clothing act as a reminder to be kind, allowing wearers to look good while doing good (hurrah!) and inspiring others to do likewise. It’s all about doing a little something to make someone else’s day that little bit better. Nice, isn’t it?Who set it up? Ark° was founded in November 2008 by then 18-year-old Cameron Stewart. It was one of the first brands to pioneer social action through fashion and already has a presence in 29 countries worldwide.they say: ‘Ark° is our mission to reconnect society. It’s a reminder to be kind, and a symbol for a new way of life through a new kind of clothing.’ We say: We love Ark°’s use of viral. Check out its website to see a fantastic video of one of Ark°’s co-founders selling “Deluxe hugs” on the streets to raise enough money to take a homeless man out for dinner. Ark° puts purpose before profit and that makes it really stand out. Keep up the good work, guys!

novemBer: experiencewww.ebizmarts.comSelf-proclaimed Magento ninjas and e-commerce specialists, ebizmarts is also a Sage Pay partner helping to bring Sage Pay’s services to hundreds of businesses.

30 moving money u spring 2011

If it’s a party with a difference that you’re after, then look no further than web-based events company, vintage patisserie.

What’s so special about it? more than just food or drink, vintage patisserie is all about the experience. Clients don’t just get homemade cakes delivered, the team also brings a dressing-up box, so that hosts and their guests can fully revel in the decadence of vintage glamour by adorning themselves in feathers, pearls and fascinators. 1920s style hostesses serve tea and cakes on fine vintage china, while 1940s jazz plays in the background. Every party is completely bespoke so you can even include dance lessons to complete the bygone era experience.

Who set it up? Founder angela newman (also known as angel adoree) is passionate about everything vintage. she started off as a collector, before setting up her first business ‘The vintage Experience’, throwing open the doors of her home to fashionistas looking for the perfect vintage look. angel soon decided to move her business online and set up T-shirt patisserie, selling customised clothes which were beautifully wrapped and delivered with a home-baked treat. The treats went down, well… a treat, and from this came the idea for vintage patisserie. It was so popular it was even a hit on Dragon’s Den.they say: ‘Investment from the Den has enabled us to expand our product range and improve the site; in particular, we plan to add lots of inspired items such a dresses, jackets, underwear, swimwear and headwear to the bespoke gift design side of the business.’We say: We’re racking our brains trying to think of as many reasons as possible to have a tea party.

octoBer: going vintagewww.vintagepatisserie.co.uk

What’s so special about them? When it comes to web development, ebizmarts is always one step ahead of the game. The agency has just launched a new extension for Magento’s open source e-commerce platform, which includes all of Sage Pay’s latest payment technology, from InFrame to the new Token System. With flexible configuration, merchants can select a variety of functionalities and create ‘tailor-made’ integrations suited to their individual needs. This extension differs from the previous modules as it supports all the latest Sage Pay integration in a single ‘Sage Pay suite’ rather than in separate packages.

Who set it up? ebizmarts is a group of experienced and like-minded programmers, designers, artists and consultants that have joined together to leverage the power of open source technologies to help e-businesses accomplish their goals.they say: ‘Over 800 Magento online stores are using ebizmarts’ Magento Extensions to take Sage Pay payments in to live mode. That means a lot; it’s a huge responsibility and, at the same time, an awesome opportunity to keep improving.’We say: One of the things we love about ebizmarts is that being as on top of all the latest Sage Pay functionalities as they are, you’d expect them to be based down the

We LooK BacK over some oF your success stories With a round-up oF sage pay’s Businesses oF the month

2010 In REVIEw


road from us in London and to pop in for monthly meetings with our channel manager John. But, actually, they’re based just about as far away as they could be: in Uruguay, in fact. So it just goes to show, out of sight is not always out of mind!

august: race, ducK?www.greatbritishduckrace.co.uk Imagine taking a stroll by the River Thames and suddenly seeing 250,000 plastic ducks floating past you. That’s the entertaining view that greets local residents and supporters of The Great British Duck Race (nearly) every year.What’s so special about it? It raises lots of money for charity. Each duck that takes part in the race is sponsored – at only £2 each and a chance of winning £1,000,000, the Great British Duck Race is also one of the most entertaining ways of raising money for charity. The event has been running for just three years, but so far over 700 charities have benefited from the scheme, with more signing up for the next event in 2012. Who set it up? The Duck Race is run by Practical Action, a development charity that believes that the simplest ideas can have the most profound, life-changing effects on poor people across the world.they say: ‘The Duck Race is a fantastic opportunity to have some fun and raise some serious money for a range of good causes.’We say: The Great British Duck Race has made donating to charity a great family day out. It’s all quacking good fun.

JuLy: Fancy FootWear www.crookedtongues.comIf you want to succeed as a web-only business then customer experience is key. That’s something that Crooked Tongues, a partner of leading fashion retailer ASOS, has known from the start. It’s already

using Sage Pay’s Token System solution to provide its customers with a quick and easy checkout experience. What’s so special about it? Crooked Tongues has taken online foot retail to the next level with its funky website and efficient customer service. Not only does it provide trainer lovers with all the latest styles, but it does so in its own unique and engaging way. One look at its fashion blog or its ‘Today I’m wearing...’ daily sneaker showcase and you can’t help to realise that you’re in the company of people who are truly passionate about trainers. Who set it up? Originally established by a community of sneaker enthusiasts, Crooked Tongues launched its online store in 2000.they say: ‘It’s all about the trainers.’

We say: Crooked Tongues is taking the protection of customer card data seriously by tokenising payments and fighting the good fight against fraud!

June: a Bit oF Fantasywww.bombayduck.co.ukIf it’s gifts with a difference that you’re after, you’ll always find something extra with a Bombay Duck product, whether you’re buying for yourself or a friend.What’s so special about it? Bombay Duck likes to stand out from the crowd. Its collection of gifts and home accessories have been designed to help customers express their personality with style. The company’s attention to detail takes customer service to new levels.

Why lug your weekly food shop home when you can get food delivered to you? and, why buy it from a supermarket when you can get it delivered straight from the farm? In the absence of the time and skill needed to grow the fruit and veg yourself, The nearly naked veg Company offers the next best thing.What’s so special about it? lovingly prepared boxes of fresh fruit and veg, picked from the farm the day before and delivered directly to your door. It not only looks good, it will also make you eat well too – and, if that wasn’t already enough, the company will also deliver freshly baked bread, jams and joints of meat sourced from local butchers. and that means no unnecessary packaging and (almost) no nasty chemicals. Who set it up? ben brunning (pictured, right, with his dog Cooper) set up the

company, outside plymouth in devon, in order to share his love of fresh produce with the world.they say: ‘We are truly and genuinely obsessed with our fruit and veg! We love to plant it, grow it, pick it and most of all deliver it. We passionately believe that local produce is best, and that there is no need to spray crops with unnecessary preventative chemicals or preservatives.’ We say: When it comes to fresh produce, these guys really know their onions.

septemBer: time to get naKed (With Food)www.nearlynakedveg.co.uk

2010 in revieW


Who set it up? Sisters and self-proclaimed shopaholics Laura and Steph.they say: ‘Fantasy is our secret ingredient. It’s the little girl in all of us that dreams of the vintage car, the trip to Paris, the castle in the country... It’s a hint of the unknown, the unexpected and the magical, from the champagne bubbles of our door knobs to our vintage tea sets.’We say: We love Bombay Duck’s fun and quirky style – and so do its customers. The business has gone from strength to strength, exploding off the web and into high-street stores around the world.

may: Love teawww.teapigs.co.ukSocial media can be a successful way of building brand loyalty, by giving companies a chance to interact with their customers, get their feedback on future products, enhance their reputation and up-sell their products. But it can be really hard to get the approach right. One e-tailer that seems to do it supernaturally well is ethical teashop teapigs.What’s so special about it? What sets teapigs apart from many other food and drink retailers is the sense of personality that you get from visiting its website. This enables the team to connect with and relate to their customers, and to build rapport, so that those customers choose to come back time and time again. Of course, the gorgeous range of teas, from Chocolate Flake tea to Liquorice and Mint, helps too.Who set it up? Tea evangelists Nick and Louise started teapigs in November 2006. They’d met while working at a leading tea company. They realised that a whole world of teas existed out there that just weren’t getting the attention they deserved, so they set up teapigs to rectify that. they say: ‘Social media helps us to reach our fans and customers worldwide. We use it to keep everyone up to date with news from within the company, events, competitions, promotions and also general chit-chat. The communication network of Twitter, Facebook and the teapigs blog has allowed us to spread the word and share the passion for what we do, all from the comfort of our little office in Brentford!’We say: Does anyone else fancy a brew?

march: neW ideaswww.omlet.co.ukCreativity thrives on the internet with new and increasingly innovative companies popping up every day. In fact, you can order pretty much anything online these days, including bees and chicken hutches, thanks to modern pet housing company omlet.What’s so special about it? Whether you want to keep chickens, bees or rabbits, you can do it in style thanks to omlet’s fantastic range of ‘eglus’ and the new ‘beehaus’. modern, easy to clean and safe, these animal houses make caring for pets straightforward and enjoyable – plus they look great in the garden. Just as importantly, the website contains all the information you need to know to help care for the animals properly; there are courses to sign up to and there’s a fantastic community forum where you can ask questions and share tips and advice.

Who set it up? royal College of art graduates Johannes, William, James and simon. They initially designed the eglu as a way for people to get closer to their food and to improve their quality of animals’ lives through sustainable intelligent design.they say: ‘nothing compares to the fantastic taste of home grown eggs and the good feeling you get from knowing exactly where your food is coming from.’We say: omlet’s innovative products are perfect for city dwellers who want to indulge in a bit of the good life without compromising on style.

apriL: royaL designwww.councilroyalty.comUrban clothing label Council Royalty has a clear purpose behind its fashion brand. It wants to save the world and educate young minds, as well as sell clothes as part of the process. It’s not what you’d normally expect from an online start-up, but then this isn’t your run-of-the-mill clothing brand.What’s so special about it? Council Royalty believes that businesses have a responsibility to mimimise their impact on the environment, and so offsets its greenhouse gas emissions to become carbon neutral and only uses suppliers that have signed up to the Fair Wear Foundation ethical manufacturing agreement. But it’s not just the environment that Council Royalty wants to help; founder Keman Allen also believes in the importance of supporting young people. Having come from a council estate himself, he wants to help youngsters from disadvantaged backgrounds pursue their own dreams through business.Who set it up? Keman Allen in November 2009 with some help from The Princes Trust.they say: ‘Having a successful profitable

business shouldn’t be the only goal; caring about the customers and the world has to be up there too. It’s easy to find a manufacturer that will produce garments by the truckload but, as always with mass production, quality and ethics are lost. We hope others will follow our lead to help preserve our fragile ecosystem for future generations.’We say: The clothes are innovative and funky, and the message is powerful too.

FeBruary: First upwww.henleys.co.ukOur first ever business of the month came as a result of a Sage Pay secret shopper exercise. We wanted to find a website that emphasised payment security while remaining user friendly, and we found that in abundance on clothing retailer Henley’s site. What’s so special about it? You’d be surprised how often security is overlooked. Henleys came out the clear winner in our secret shopper exercise. It also managed the tricky task of displaying its product range online by allowing customers to narrow down their search by price and to filter products by colour.

2010 in revieW


Who set it up? The iconic Henleys brand was set up in 1996 by trader Ben Luscombe as a shirt brand. It has since expanded into men’s and women’s fashion.they say: ‘We’re always looking to improve usability to ensure that our customers have the best possible experience on our site.’We say: Henley’s checkout process was seamless and the best bit was the free next day delivery!

January 2011www.purekit.comWe’re already making headway in 2011 and, with the excesses of December behind us, but not forgotten, most of us have gym on our minds. That’s where footwear and clothing specialist, Purekit, comes in; it has a product for every sporting occasion from hiking boots to hydration kits.What’s so special about it? Purekit makes exercising fun; or, at least, shopping for exercise fun. The main business focuses on sports footwear, but the company has recently expanded its range, selling everything from wellies to waterproofs. It’s a real success story too: the company began in just a small warehouse in Chelmsford, Essex, as a response to the lack of quality outdoor footwear that could be found at the time on high streets and online. Within just six months, the small start-up had achieved a turnover in excess of £1 million a year.Who set it up? Andrew and Richard – two experienced e-tailers who specialise in offering comfortable, well-made and fashionable footwear to complement an active and healthy lifestyle .they say: ‘We strive to provide an informative and attractive online shopping environment that answers customers’ questions, is easy and efficient to use and provides advice above and beyond the level they would normally expect anywhere else.’We say: Purekit has the entrepreneurial acumen to develop a strong and valuable e-business that delivers real benefits to online shoppers, whether they’re looking to get fit or simply enjoy the great outdoors. n

To keep track of all our businesses of the month, visit the Sage Pay blog at www.sagepay.com/blog.

matthew gardner, 46, civil servantshopping habits: once or twice a week. most likely to buy music and book accommodation or transport.

visits: amazon, easyJet and booking.com.Likes: reliable past service, good layout, good functionality and search facilities that get you what you want very quickly.dislikes: messy or unattractive websites, convoluted processes, having to give too many personal details, sales emails.confidence: ‘as well-established companies should have a vested interest in protecting their customers, I tend to feel comfortable shopping online; however, I have backed away from buying goods when there’s been something suspicious about the website.’

philip lee, 24, studentshopping habits: Two to three times a month. most likely to buy groceries, clothes and airline tickets. visits: shopittome.com,

momondo.com and uncrate.com.Likes: Websites that allow you to compare discounted goods or view by price. delivery options – even if it takes longer to arrive.dislikes: browsing online.confidence: ‘If you are sensible about the information you provide online it is quite safe. I use websites I can trust.’

olivia marsden, 33, team leadershopping habits: once or twice a week. most likely to book travel or events. visits: amazon, lastminute.

com and travelsupermarket.com Likes: Flexibility to search by date, quick links and customer reviews. dislikes: Finding additional charges for credit cards on the final payment page of a transaction. Websites that don’t have a phone number, so you can’t speak to anyone if there’s a problem.confidence: ‘I happily shop online and for some websites my card gets validated

through the 3d secure procedure which is reassuring. I do still feel apprehensive about banking online, however.’

Dip sengupta, 35, tax accountant shopping habits: Three or four times a month. most likely to buy Cds and books, or to book travel.

visits: Travelsupermarket.com, moneysupermarket.com and amazon.Likes: Well-laid out websites and easy-to-pay facilities like 1-Click in amazon.dislikes: Having to sign-in or register in order to access information.confidence: ‘I think it’s reasonably safe to shop online; it’s not something that I worry about.’

pei-chin tay, 30, enterprise officer shopping habits: once a month. most likely to buy groceries, tickets or domestic appliances.

visits: Waitrose, sadler’s Wells and amazon. Likes: Good selection of delivery times, clean layout, price comparison information, customer reviews and online promotions. dislikes: Extra delivery charges which only become apparent at the point of purchase. confidence: ‘I only shop at reputable websites to avoid the risk of fraud. using payment providers that I recognise make me feel more confident. ‘

lesley Wilkins, 51, operations co-ordinatorshopping habits: Every couple of weeks. most likely to buy clothes, household goods or wine.

visits: sweaty betty, majestic, amazon.Likes: sites that are easy to navigate, free returns and good customer service.dislikes: spelling mistakes, no contact number, forms that don’t work properly. confidence: ‘I don’t have any major concerns, as I make sure that I shop with major retailers that use 3d secure.’

We asKed a seLection oF the British puBLic to share their Favourite sites and their pet peeves When shopping onLine

whERE DO yOu ShOp?


understanding and navigating the ruLes set out By the payment card industry data security

standard is no easy tasK. sage pay’s compLiance expert Warren barley oFFers some timeLy advice

help is at hand

The Payment Card Industry Data Security Standard (PCI DSS) is fundamental to any business that handles or stores any sensitive card data, but this is even more the case when you work for an e-payment gateway, such as Sage Pay. Even before the PCI DSS regulations came into effect [the first standard was released in 2006], Sage Pay had stringent security controls in place. Our business is card data, so data security is key to everything that we do.

PCI DSS has given the e-commerce marketplace a comprehensive data security standard to work to – providing a framework to help in the prevention, detection and appropriate reaction to security incidents. Not all businesses taking card payments are PCI DSS compliant, but in being so, our customers can have confidence when doing business with us. It’s also essential to our reputation and relationships with acquiring banks and card schemes.

PCI DSS is not yet a legal requirement, but it is becoming more commonplace. The standard is being promoted by the card schemes (such as Visa and MasterCard) and through acquiring banks in order to make merchants not only more security aware, but also to ensure that

asK the experts

they make every effort to protect the data they hold if they wish to trade online.

Sage Pay is PCI DSS Level 1 compliant and must maintain that status. This means proving we are adhering to the standard and we are audited accordingly by a Qualified Security Assessor (QSA).

Not all levels require a QSA audit. The lower levels allow merchants to complete a self-assessment questionnaire, making compliance a lot less expensive. The downside of this is that it can make it easy for e-businesses to ignore the requirements. However, they do so at their peril. It doesn’t matter which level of PCI DSS compliance that you have to meet. If you don’t know what data

you’re collecting, how you’re storing it, where its located or who has access to it, then you are exposing yourself and your customers to a potential breach.

KnoW your BusinessTo trade successfully and responsibly online, it’s very important to understand the potential risks of handling card data.

If you’re in any doubt about the requirements, seeking professional advice is always a sensible first step. The risks of non-compliance are simply too great to ignore. If you are non-compliant and you suffer a breach due to lack of security or controls, then you can expect to be heavily penalised. Card schemes

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are able to award potentially unlimited fines and you also need to consider the impact on your reputation as a business.

PCI DSS compliance is not always easy to achieve and will depend on how your business handles card data. Knowing your business and how it works is a good start. I’ve been working at Sage Pay for nine years and security has been a primary focus not only for me, but also for every staff member within the business. It’s part of my job to know our business and its systems inside out, and to adapt our work and processes to meet PCI DSS requirements.

Compliance is a constant, non-stop process, not a one-time event – everyone has to be involved from the front door to the back door and everything in between.

a question oF LogicNonetheless, a lot of the requirements are common sense. If you take card payments, then you have to think about the data you’re collecting – how are you going to make sure it’s secure? How are you going to manage the requirements? You can’t afford to be naive in this respect.

As a business grows, new systems are introduced and regulatory requirements become more stringent. In general, the bigger a business gets, the harder data is to track, so you need to work harder as a result. PCI DSS has to be part of everything that you do. For example, Sage Pay develops its hardware and software with security in mind.

Security should be the first consideration not the last. You can’t simply fix a system or process to meet PCI DSS requirements after the effect. By the time you consider it, it’s too late. Hackers are becoming more and more intelligent, so you need to work hard to make sure you stay one step ahead.

Simply being compliant with PCI DSS doesn’t guarantee security, much as an MOT on your car doesn’t guarantee its safety or roadworthiness.

Similarly, the only time you’ll know you’re not compliant is when your security is breached; until then you’re just doing your best to mitigate risk. At Sage Pay that includes ensuring physical as well as virtual security for the office, robust password protocols for logging in to computers and systems, and so on. However, it’s also key to ensure that all our staff are educated in Sage Pay’s security protocols, from the people developing the software to our customer support teams, who are also called upon to

simply being compliant with pCI dss doesn’t guarantee security, much as an moT on your car

doesn’t guarantee its safety or roadworthiness

answer vendor queries about PCI DSS. They need to know what they’re talking about.

If you’re a Level 1 or Level 2 e-business, QSAs should play an important role in your security protocol; it’s not simply that they need to audit a business in order to assess whether or not it’s compliant, their assessment should also help you to identify areas where you need to improve. Some people dislike the scrutiny, but I think QSAs are there to protect companies. If they find a fault, you have a chance to fix it. It’s those faults that you don’t know about that should be cause for concern.

I want our QSA to pull our systems apart. It’s better that they find as much as possible, so that we can address it. If we were ever given a clean bill of health on the initial audit, I’d be worried; there’s no such thing as a 100% secure environment; you need someone on it 24/7, 365 days a year.

Many businesses focus on security compliance during the lead-up to the annual audit, but that’s not much good if you’re not compliant the rest of the year. That’s when you’re at your most vulnerable. We don’t want there to be any dip in our efforts, so we’re constantly working on security and compliance.

Be careful not to leave it to the last-minute either. You need to work continuously to meet and maintain compliance. The audit itself is a few days of investigation and interviews, but the remediation work and fine-tuning can take months. The QSA inspects a business, collects all the data and evidence required, and passes the report

to its Quality Assessment (QA) teams before they pass it to the card schemes’ QA teams for compliance to be finally approved. An assessment can fail during any part of that approval chain and passed back to a company to remediate. If you don’t set aside enough time, you could miss the compliance deadline.

an issue For everyoneOf course if you’re a small business, you might not know where to start when it comes to the right security measures to implement. For example, which is the best firewall in the business? Which encryption service should you use? However, you can overcome this by getting advice from the appropriate technical resources.

If a company doesn’t need a QSA audit as part of its compliance efforts – for example, if a third party is hosting its payment pages – it should still dedicate as much effort to security as it can. Is there a network infrastructure diagram; does the company know where its data is and who has access to it, does it know about the encryption it uses; has it checked that any third-party services that it uses are compliant?

Ultimately it’s about protecting the data that you hold, only keeping the data you actually need and securely removing the data that you don’t. Unfortunately, that’s far from being as simple as it sounds. n

For more information on PCI DSS and the level of compliance that applies to your business, visit www.pcisecuritystandards.org or speak to a Sage Pay adviser.

If your business is struggling to understand, let alone achieve, pCI dss compliance, you are not alone. sage pay’s ‘E-business benchmark report’ revealed that around one third of online businesses fully adhere to pCI dss regulations. although that is better than the industry norm – figures issued by visa in 2010 revealed that just 9% of the uk’s level 1 retailers (stores handling more than six million transactions a year) have achieved pCI dss compliance – many retailers have a lot of catching up to do.

The good news for many e-commerce merchants is that they can reduce their pCI dss requirements by avoiding the need to handle sensitive payment card data in the first place. merchants are able to do this only if they use a service provider with certified pCI dss level 1 compliance, such as sage pay, to collect, store and transmit card data on their behalf. For further information, email [email protected].

easing the burDen of pci Dss compliance


many e-Businesses BeLieve that By registering a domain name, they automaticaLLy oWn the name. iF onLy that Was the case, says Jeremy phillips. he sets out advice to heLp Businesses avoid getting into a LegaL rumpus

Domain names: don’t get caught out

The message is drummed into businesses these days: ‘If you want to get ahead, get online.’ It’s one of those basic rules, like ‘don’t forget to lock up when you leave the office’ or, ‘If you want to stay out of trouble with the taxman, remember to file your VAT return’.

But, as many e-businesses know, getting online is not that simple. Businesses need a website; even sole traders use them and few businesses providing goods and services can be found if they haven’t got one. But selecting the right domain name for that website is much more complicated than it first appears. After all, locking up when you leave the office doesn’t require strategic forethought. Similarly, if you don’t know how to file your VAT return, the advice you need is the same no matter your business. In contrast, getting and using a domain name requires a great deal of thought. It’s a bit like choosing a car: it’s got to be the right one for you and, if it doesn’t do what you need it

to do, you may have wasted a lot of time and money buying the wrong one.

thinK LateraLLyWhere then should you begin? The first move is, of course, to choose a name. Ideally it should be short, memorable and easy for people to type without making mistakes. Thus www.apple.com works well, at least if your business name is Apple or you sell apples, but if you are a law firm like Skadden, Arps, Slate, Meagher & Flom, you’d be wise to chop the domain to a more manageable www.skadden.com. ‘Rumpus’ is a neat name (good!), but consider how many ways an eager prospective client might misspell ‘Thoroughgood’ (not-so-good!).

Having chosen your name, you may face obstacles in getting it. Many millions of domain names have already been registered and, unlike people, businesses and even brands (think, for example, about ‘Polo’), no two domain names can be exactly the same.

If you key the words ‘domain name’ into your favourite search engine, you’ll be bombarded with links to lots of websites offering you the domain name of your choice for as little as £2.99 – but unless your choice is unusual or off-the-wall – you may find that both your favourite and close variations on it have already been gobbled up. If this happens, don’t despair: sometimes you can buy the domain name from its owner, if they are not actually

LegaL BrieFs

Having chosen your name, you may face obstacles in getting it. many millions of domain names have already been registered

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using it, but have merely ‘parked’ it. Or you may be able to think up something else that describes and identifies your business equally well.

Such has been the growth of the internet, that there are lots of different endings to choose from too: top level domains such as .com and national country codes like .co.uk are popular, but it’s becoming more difficult to find domain names that are still available within this

band. Recent additions such as .biz, .name and message-bearing country codes such as .co (Colombia), and .tv (Tuvalu) are now in vogue. There’s even .us, if you fancy www.rump.us.

issues oF oWnershipNow for the legal issues. Contrary to popular myth, registration of a domain name is not a cheap equivalent to registering a trademark or obtaining protection for a company name.

Trademark registration confers a powerful legal monopoly that gives its owner the power to stop businesses using the same or a similar name for the same or similar goods and services if it is likely to result in confusion in the marketplace. Company name registration gives a business the right to object to the registration of another company name that is the same, or almost the same, although it doesn’t stop another company trading under the same name. It is therefore not much use for protection purposes.

Similarly, a registered trademark is a valuable piece of property that can be sold, mortgaged or licensed – and, if you look after it, it will also last forever. But because trademarks can be expensive and fiddly to get in the first place, many businesses think they’re opting for a bargain-basement version when they register a domain name. The reality is, of course, that they have the name, but not the protection.

Here are three key rules for domain names. Ignore them at your peril: 1. Your domain name is an address, not a property right. If your business name is Rumpus and you register www.rumpus.co.uk, internet users can use it to find your website, but you can’t wield it as a weapon against anyone else who decides to trade as Rumpus. It’s not a trademark or business name either. It’s just the name of your little patch of cyberspace.

2. Your use of a domain name can infringe someone else’s trademark. If you are supplying financial services through the www.rumpus.co.uk website and someone else has already registered the word ‘Rumpus’ as a trademark, the inclusion of the word ‘rumpus’ in your domain name may infringe that right. This may be so even when the owner of the Rumpus trademark isn’t a direct competitor (for example, if they are an insurance adviser and you offer mortgages), or if their trademark isn’t just Rumpus but something similar; for example, WH Rumpus & Sons.3. You can lose your domain name if you forget to renew it. Tenants in rented accommodation are protected by the law. If they forget to pay the rent or renew a lease, they don’t just get thrown into the street. However, the same doesn’t

apply to domain names, which means that businesses need to take care. Forget to renew your domain name and you’ll lose it. You may be able to purchase it again, but not if it’s already been snapped up by another company.

Not all lapsed domain names will be instantly picked up by other companies, but highly publicised oversights can be embarrassing. Microsoft’s failure to renew www.hotmail.co.uk, for example, and toy shop Hamleys’ similar slip-up over www.hamleys.com were great for headline writers, but did little to contribute to corporate morale or brand enhancement. The mere fact that you used to use a domain name doesn’t give you any automatic right to stop its next owner using it – although if it’s famous enough and/or registered as a trademark you’ve still some clout. In these instances, Microsoft and Hamleys were able to draw on their trademark rights to retrieve their domain names – a costly procedure.

Tugs-of-war involving domain names can be arbitrated by bodies that supervise the management of the domain name-granting process, such as Nominet for .uk and EurID for .eu domains. Disputes involving trademarks can end up in court. But they only end up there if they’re allowed to start in the first place. So the moral of our tale is this: with a little forethought you can avoid many a costly and unseemly rumpus. n

Jeremy Philips is an intellectual property consultant, author, and founder of the www.ipkat.com IP blog.

the registration of a domain name is not a cheap equivalent to registering a trademark or obtaining protection for a company name

the right Domain name for your businessa great domain name should be easy to remember. make sure yours is as short as possible and easy to spell. most of all a domain name should reflect your business. make sure you:l register your main company or business name in popular domain

spaces; for example, rumpus.com and rumpus.co.l register your product and service names; for example, rumpuslaw.com.l register generic terms relevant to your business; for example,

rumpuscars.com or rumpusfurniture.com.l secure names in global markets; eg, rumpus.eu, rumpuscars.asia or

rumpusfurniture.co.uk.if your preferred name is taken then search for an abbreviation, change the order of words around, add hyphens, or add your city, county or country to come up with something unique.


customer experience doesn’t have to Be sacriFiced in order For a Business to Keep its payment process secure, says alexa mattheWs oF WeB usaBiLity speciaLists BunnyFoot

The age of the avatar

No longer are avatars the ideas and projects saved for geeks or the games industry. Since the massive success of James Cameron’s film Avatar, the wider public has been exposed to not only the concept and possibility of 3D virtual worlds, but the technology behind creating and controlling an avatar – the name for the graphical representation of a user in a virtual world.

To date, the most successful consumer-focused incarnation of this type of technology has been the Second Life web programme. But, whereas avatars here were created and controlled by gamers or companies seeking to replicate their brand or business on the Second Life platform, technology will soon enable avatars to take on (almost) a life of their own. In fact, the development of personalised intelligent media is progressing so fast that it will soon provide us with engaging social and sensory interaction experiences that far exceed Second Life’s capabilities.

That may sound like science fiction, but it’s closer than you may think. 3D-immersive virtual environments that are filled with socially intelligent and believable avatars are fast becoming a reality. And, thanks to improvements in web programming, these avatars are set to be far more believable in terms of appearance, expressions and responses.

Biometric technology is already being employed to allow these avatars to recognise the human user that they are interacting with accurately. Developers are seeking to utilise this knowledge to enable the avatar (or rather the coding that controls them) to engage with the user by reacting intelligently to the user’s environment, mood and physical form, creating a realistic and believable social interaction in turn.

This concept is not as farfetched as you may first think. It has been well documented for many years that humans respond to computers in a similar manner as they do other human beings. The social rules that govern human-to-human interaction, stereotypes and personality attribution also apply to human-computer interaction. For instance, it has been shown in many studies that we

prefer to interact with computers that exhibit similar characteristics to ourselves, just as we do with humans.

Microsoft recently unveiled its own virtual human, the avatar ‘Milo’. It demonstrates just how far this technology has come and what results it can elicit from its human users.

hitting the mainstreamUnsurprisingly, perhaps, the launch of Milo led to questions as to whether this technology could, in fact, perform as well and intelligently as Microsoft claims it does. Does this disbelief come from a lack of belief in the capability of the technology or from fear about its implications? Great debates – and a whole library of science fiction writing – hinge on the implications of this type of technology and what it could mean to real-life interaction. But, there are

technoLogy

the social rules that govern human-to-human interaction, stereotypes and personality attribution

also apply to human-computer interaction

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also clear benefits for internet users, both businesses and consumers, if this technology can be used to improve websites and the browser’s experience.

For online businesses, for example, a virtual sales agent that is capable of engaging the site’s visitors in conversation or motivating them into a further enquiry or sale is a powerful tool. This type of interaction has the potential to make a connection with the visitor and to provide them with information regarding products and services, in turn creating the opportunity to convert investigating visitors into customers.

Again, it’s important to stress that this isn’t an unrealistic proposition. At Bunnyfoot, we have undertaken numerous testing projects involving the use of agents (virtual or otherwise) to support the sales journey. The most successful agents support a wide variety of user enquiries and provide the company with valuable information about customer likes, dislikes and behaviour.

Of course, there could be an argument around whether there is room within commercial business for this type of technology to flourish and develop. We recently had discussion as part of an ongoing project with a financial client regarding the use of an avatar within the ‘help’ section of its website; we advised them that the technology available to them at this point would not improve their online customer experience. However, in general, I feel that avatars and intelligent agents placed within the right application, using the right (available) technology and with the correct user research behind them can assist and enhance the user journey. There is obviously a large cost implication to this type of development, but it is an area that Bunnyfoot is excited about.

Wider BeneFitsThere are benefits outside the e-commerce sector too; for example, in the areas of health and education. Throughout the health sector, for example, virtual worlds and avatars are already being used to treat phobias, assist in behavioural therapy and train professionals. Similarly, education establishments are creating and implementing virtual environments and programmes to educate children on healthy eating and exercise with great success. The increasing cost of courses along with the decreasing cost

of technology has resulted in a surge in distance education across the UK. As part of this, the need to provide students with a classroom feel has grown. Creating a personalised and socially engaging environment in which to collaborate has been shown to increase feelings of community and engagement, and decrease that of social isolation and in some cases increase efficiency.

Some argue that this type of technology could be destroying our sense of self and could even be the beginning of the end of society. But, are they fearful of it because it is something new to them or because it could in fact be harmful?

In my view, we are social beings who inherently seek to make connections, build communities, and search for companionship. I don’t think interactions through these technologies are ever going to replace those of real-life, even though they may be able to mimic them.

As with all new innovation, there are pros and cons to this new type of technology, but in this case, I believe that the benefits to certain groups of users far outweigh the negatives. n

Alexa Matthews is a usability consultant at specialist consultancy Bunnyfoot and an expert on avatar technology.

technology that is changing the Webavatars aren’t the only neW forms of technology that are revolutionising the Ways in Which We interact on the Web. sonJa patel sets out the benefits of eye-tracking, another key aDvance being pioneereD by Web usability experts, such as bunnyfoot.

eye-tracking studies can reveal valuable information about how people read and interact with websites. By measuring either the point of gaze (where we are looking) or the motion of an eye, businesses can tailor the design and functionality of their websites to better reflect the ways that consumers use and view it. common considerations include:

1. headlines draw eyes before pictures this may surprise some companies given that it is commonly believed that photos and graphics should take prominence in order to draw the attention of users. however, most internet browsers will look at headlines, especially in the upper left of the page, before they look at photos when they land on a page.

2. We only scan the first couple words text can draw users’ attention, but most people only scan the first few words of a site or article before deciding whether or not to continue reading. content-heavy sites should therefore front-load articles with the most interesting and provocative words in order to attract

their attention. this will ensure that their seo rankings remain high.

3. visitors have short attention spansan e-business must grab visitors’ attention and retain it. online consumers are grazers. they flick between websites quickly. if you want to keep them on site, you have to give them what they want very quickly. that means clear signposting of content. you have to get to the point instantly.

4. keep your navigation on topnavigation at the top of the page appears to work best. in general, anything that is located at the top of a page will be seen immediately.

5. short paragraphs encourage reading no surprise here. even in print this is true; big blocks of type look imposing and difficult to digest, and this is even more the case on the web. help visitors by breaking up text into readily digestible paragraphs.

6. place ads in the top or to the left the eye tends to start in the upper left of a page, so an advert (or anything else) in that area will be noticed. people also notice adverts and promotions when they are placed close to popular content; however, today’s consumers are perfectly capable of ignoring the existence of ads altogether on a website.

Want to find out more? For more on eye-tracking, visit www.bunnyfoot.com.


With so much choice at consumers’ Fingertips, hoW can a Business ensure shoppers seLect their site? WeBLoyaLty’s guy chisWick sets out techniques For maximising revenue Without minimising user experience

building loyal followers

The digital age has provided consumers with greater choice, but that also means that online shoppers have become more promiscuous than ever before. Today’s customers are expert buyers – able to cherry-pick their purchases from a worldwide shopping mall that is handily located on their computers. Alongside this explosion in choice and accessibility, has come a wealth of opportunities for retailers to build loyalty and drive revenues.

tempting customersOpportunities for building loyalty, whether online or offline, take a range of forms. Most are geared towards satisfying the almost universal motivation among consumers to find the best deal possible online. For example, voucher sites are a relatively new phenomenon, with the likes of Quidco, Groupon and VoucherCodes.co.uk claiming some impressive membership numbers. The success of these sites is proof of the consumer’s desire for value, driving sales for retailers by delivering a large audience of deal-savvy customers to their sites.

Similarly, ad network houses such as Ad2One and Unanimis offer websites the opportunity to drive incremental

revenue via web banners on their sites. Client exclusions can be made to ensure that customers aren’t lost to competitor ads while browsing the host site; however, there is a school of thought that suggests the additional revenue achieved through such a network deal doesn’t offset the lost sales caused by customer distraction. If you’ve worked hard to attract customers to your site, why risk losing their attention to adverts? Fortunately, more viable models are at e-tailers’ disposal.

incentives to shopLoyalty schemes are not a new idea, but they’ve become hugely popular as a means of offering both online and offline customers rewards and incentives for shopping repeatedly with the same retailer. In addition, the retailer can benefit substantially because the customer is encouraged to keep coming back and shopping at their site.

The end goal? To encourage loyal customers. If implemented well, such schemes can help companies to create precious data that helps them to engage with customers more effectively; for example, by targeting promotions at those who want them – thus maximising profits for the retailer while delivering customers the services that they want.

The best schemes rely on:i) Scale – from members and services;ii) Relevance – of offers/services;iii) Innovation – keeping members engaged; andiv) Interaction – between the programme and its members.

Tesco developed the blueprint for effective loyalty programmes over 10 years ago. Its loyalty scheme saw the supermarket chain double its market share and cement its position as the number one grocery retailer in the UK. However, a loyalty programme in the model of the Tesco Clubcard is an

onLine trends

Loyalty schemes are not a new idea, but they’ve become hugely popular as a means of offering both

online and offline customers rewards and incentives

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expensive route for many businesses to take as it requires a significant and ongoing investment. As an illustration of this, Tesco slashed its marketing budgets in order to divert funds into the programme on its launch.

Of course, Tesco isn’t the only company to have developed an effective loyalty programme. In recent years Nectar has picked up where Airmiles started many years ago, with a successful multi-retailer approach that includes a range of partners from Sainsbury’s through to British Gas. This approach means that Nectar doesn’t require the funds that it takes to power a sole retailer scheme like the Tesco Clubcard; however, there is the potential with such a strongly-branded multi-retailer scheme of losing brand identity and for customers to become confused as to who they are being rewarded by.

is there a Better Way?How can retailers maximise revenue from their sites and drive traffic back to them – while offering valuable benefits to their customers? This is the key challenge facing companies online. However, our experiences at Webloyalty have shown us that effective membership programmes don’t have to be expensive. For example, in the UK we partner with online retail and travel companies and utilise their post-transaction confirmation pages to sign-up members to our online savings, discounts and protection programme: Shopper Discounts & Rewards.

Membership programmes like ours provide a simple and cost-effective method for online retailers to tap into the rewarding loyalty market. Best of all, they don’t require the e-tailer to make any major adjustments to their selection or payment pages, as the service is provided by an independent third party.

This leaves the retailer free to focus on growing its business, while the service provider works to ensure that the experience is seamless and rewarding for both the customer and retailer.

The retailer benefits from repeat business back to its site via the cash back vouchers that third-party loyalty programmes offer to customers, as well as the sense of added value that comes from providing customers with discounts and rewards.

Loyalty isn’t an area that should be overlooked. Over the course of their lifetime online consumers are extremely valuable. Our research (see below) has shown that the average 20-year-old internet shopper will spend over £100,000 online by the time they reach the age of 65. The challenge for online

retailers is to extract as large a possible share of this spend. Loyalty schemes help them to do that by offering discounts and rewards that seek to repeatedly drive consumers back to their sites. n

Guy Chiswick is business development director at Webloyalty.

pulling consumers onlineWebloyalty’s 2010 research into internet retail habits reveals the following trends among today’s consumers:

a significant marketl By any standards, the rise of internet

retailing is phenomenal. this year alone shoppers will spend £19.4bn on retail goods over the internet, accounting for some 8.6% of all retail spend.

l this rapid growth is set to continue and by 2012 Webloyalty forecasts that 13.6% of all retail spend will be made via the internet, equating to a sales value of just over £44bn.

but shoppers are not loyall across the board, loyalty among

online shoppers is lower than it is offline. the least loyal sector, according to Webloyalty’s research, is in the electricals sector.

l there are three main factors behind this: First, competition online is much greater and consumers have an extensive choice of retailers when making a purchase. this makes it easy for shoppers to transfer their custom and loyalty to another retailer should their first choice not meet their expectations.

l second, many aspects of the online operation are not fully optimised. delivery and fulfilment, for example, still consistently falls below consumers’ expectations.

l third, the internet makes comparison shopping – especially in terms of price – very easy. this visibility across many retailers means loyalty is much harder to attain in the online channel.

builDing loyalty paysl the average 20-year-old shopper will

spend over £100,000 online by the

time they reach the age of 65 in the sectors of: food, clothing, health and beauty, electricals, diy, homeware, and music and video.

l When other forms of online expenditure such as furniture, books and toy purchases are added in, the total lifetime value is well over £150,000.

l Building a lifelong relationship is vital. retailers that get it wrong lose not only one sale but potentially a whole lifetime’s worth of sales.

reasons to returnl When asked why they returned to

websites, the consumers surveyed by Webloyalty said: low prices (26%), good service (24%), easy navigation (19%), wide choice (18%), fast delivery (17%), product information (10%), delivery ‘when i want it’ (9%), good communication (8%), branded goods (8%), easy returns (8%) and help and advice (5%).

l many consumers actively use the internet to seek out low prices, but price alone is rarely enough; consumers also want good service. these two factors combined produce a perception of value for money which is one of the most potent drivers of loyalty.

Webloyalty provides loyalty services to over 40 clients in a range of industries from fashion to fast food to florists. For a small monthly fee, the customer gets, among other things, cash-back offers and discounts of up to 20% at hundreds of well-known online retailers, as well as valuable protection benefits, such as best price guarantees, extended warranties, damage, theft and loss protection, and delivery guarantees. to download its full report, ‘internet retailing – how to “pull” consumers online’, visit www.webloyalty.co.uk.


iF you’re unpractised in the art oF internet searching, you may Find that even the most simpLe question throWs up thousands oF resuLts. But there are Ways to get ansWers quicKLy and easiLy, says Johnny acton

At the time of writing (January 2011), there are estimated to be around 18 billion indexed pages on the World Wide Web. With almost three web pages out there for every man, woman and child on the planet, searching for exactly what you

want can be a major headache. Even the simple task of trying to buy your Uncle Jim a pair of socks online for his birthday can take an unbelievably long amount of time if you don’t get the search words right. True, Google and chums have become much better at tailoring search results to your location of late – there was a time when a person looking for a decent Chinese restaurant in England’s second city would have to sift through reams of information about Oriental eateries in Birmingham, Alabama – but online searching is still liable to overwhelm you with irrelevant junk. Unless, that is, you master a few simple techniques.

What do you Want to KnoW?I used to work part-time as a researcher for a firm which promised to answer any question texted to it via SMS. It was inexhaustibly interesting to know what information deficit was eating up the people of Britain. Queries ranged from the number of baked beans that would fit into an Olympic swimming pool, to which horse was likely to win the 4.20 at Haydock and to, in the case of one punter, daily requests for speculation about what various women in his workplace would do with or to him if he were only an inch high (‘put you in their pocket?’). The problem was finding the answers

quickly enough to stand a reasonable chance of exceeding the earnings of a medieval lavatory attendant. We were paid a miserly fee per reply, so there was no time to dawdle.

For that reason, the job description might as well have read ‘needs to be good with Google’. (It would be pointless of me to pretend that people use other search engines. They may do in China – in fact they have to – but let’s face it, if you’re about to do an internet search you’re overwhelmingly likely to head for the biggest search engine in the world.) I wouldn’t describe myself as an expert, but I must have been better than the people who texted in questions or they’d just have gone online themselves and found the answers.

In my experience, perhaps the most useful tool for whittling down an almost infinite list of suggested web pages is the minus sign. Say, for example, you want to trace an old friend who shares a name with the world’s most prominent bride-to-be (I happen to know someone in this invidious position). If you just type ‘Kate Middleton’ into the search bar, you will be deluged by web pages pertaining to Prince William’s fiancée. If, on the other hand, you add ‘-wedding -william’, you may stand half a chance. You’ll still get well over a million results and plenty of royal bumpf will slip through your carefully constructed filter, but this way I found my mate on page 2.

Another goody is placing quotation marks around the precise phrase you are looking for. If you type the words ‘popular’ ‘dogs’ and ‘names’ into the search bar, Google presents you with 15.4 million options. If, on the other hand, you enter the phrase ‘popular dog names’, you get a much more manageable 34,000.

A more refined use of the quotation marks technique is to put yourself in the shoes of the person who has created the fact or item you are trying to search for, then to take a stab at a phrase he or she might have used. Taking as a test case the quandary with which we began – finding a suitable pair of socks for Uncle Jim – I typed the phrase ‘socks for uncles’ into the search bar and practically got a googlewhack (that rare phenomenon where an internet search yields just one result). My mother’s brother will therefore have warm tootsies on his coming birthday. With a little bit of thought, your searches can become similarly fruitful. n

the Last Word

hOw TO SEARchOnLInE

Google and chums have become much better at tailoring search results to your

location of late, but online searching is still liable to overwhelm you with irrelevant junk

moving money magazine — issue 5

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