ABSTRACT
The scenario of established business sellers utilizing online auction markets to reach consumers and sell new products is becoming increasingly common. We propose a class of risk management tools, loosely based on the concept of financial options that can be employed by such sellers. While conceptually similar to options in financial markets, we empirically demonstrate that option instruments within auction markets cannot be developed employing similar methodologies, because the fundamental tenets of extant option pricing models do not hold within online auction markets. We provide a framework to analyze the value proposition of options to potential sellers, option-holder behavior implications on auction processes, and seller strategies to write and price options that maximize potential revenues. We then develop an approach that enables a seller to assess the demand for options under different option price and volume scenarios. We compare option prices derived from our approach with those derived from the Black-Scholes model (Black & Scholes, 1973) and discuss the implications of the price differences. Experiments based on actual auction data suggest that options can provide significant benefits under a variety of option-holder behavioral patterns.
Monday, October 1, 2007
Online shopping receives seasonal boost - Actinic Software - Brief Article
An investigation from provider of PC-based e-commerce technology, Actinic Software Ltd, has revealed that many UK online stores had a seasonal boost in year-on-year growth.
In comparison to the average of 66% increase in year-on-year online sale, traditional high-street stores are reported to have experienced a flat Christmas.
Actinic asked for flash sales figures over the Christmas period from its retailers who had been trading online for more than a year.
Examples of online stores with year-on-year growth are Anything Left-Handed, with a 125% increase and The Gentleman's Shop, with a 121% growth.
In comparison to the average of 66% increase in year-on-year online sale, traditional high-street stores are reported to have experienced a flat Christmas.
Actinic asked for flash sales figures over the Christmas period from its retailers who had been trading online for more than a year.
Examples of online stores with year-on-year growth are Anything Left-Handed, with a 125% increase and The Gentleman's Shop, with a 121% growth.
Wednesday, September 26, 2007
Online shopping receives seasonal boost - Actinic Software - Brief Article
INTERNET BUSINESS NEWS-(C)1995-2003 M2 COMMUNICATIONS LTD
An investigation from provider of PC-based e-commerce technology, Actinic Software Ltd, has revealed that many UK online stores had a seasonal boost in year-on-year growth.
In comparison to the average of 66% increase in year-on-year online sale, traditional high-street stores are reported to have experienced a flat Christmas.
Actinic asked for flash sales figures over the Christmas period from its retailers who had been trading online for more than a year.
Examples of online stores with year-on-year growth are Anything Left-Handed, with a 125% increase and The Gentleman's Shop, with a 121% growth.
An investigation from provider of PC-based e-commerce technology, Actinic Software Ltd, has revealed that many UK online stores had a seasonal boost in year-on-year growth.
In comparison to the average of 66% increase in year-on-year online sale, traditional high-street stores are reported to have experienced a flat Christmas.
Actinic asked for flash sales figures over the Christmas period from its retailers who had been trading online for more than a year.
Examples of online stores with year-on-year growth are Anything Left-Handed, with a 125% increase and The Gentleman's Shop, with a 121% growth.
Seeing The E-Services Big Picture: Online Self-Service Can Pay Huge Dividends, But Requires More Than Simple Automation
"Emerging self-service technologies, such as automated e-mail response, natural language search and knowledge taxonomies, will improve specific aspects of the automation process. Other technologies such as text chat, voice over IP, 'call me back' requests, customer support automation and basic application integration will ease technology integration."
At least that's how the analysts at Gartner, Inc. viewed e-services back in December 2002, having conducted a study on the customer self-service movement. And though automation taking over for contact center agents was still in its business infancy in 2002, there was little reason to think such analyst forecasts wouldn't come to fruition.
At the same time Gartner and other industry forecasters stepped up their focus on self-service trends, multichannel and IP technologies were making waves in business communications circles. Therefore, the verdict more than three years ago that technology integration would eventually enhance e-services automation was a reasonable one.
As it turns out, the folks at Gartner were absolutely prophetic, particularly in their assessment about self-service technology and integration. Since their respective introductions, technologies such as multichannel communications, e-mail response automation, Web text chat and VoIP have continued to come together rather nicely. The business side of the e-services prophecy also is coming true in that many companies are finally beginning to understand the implications of consumers wanting service on their terms - that is, using their media of choice.
The Myths Of E-Services
Customers and tunnel vision aside, many organizations see e-services as being somewhat experimental. "Let's try this self-service thing in Department A first, and if it works, extend it to Department B, then Department C," etc. This kind of corporate thinking also tends to spawn other myths that presume self-service automation is:
* A quick and easy solution to keep up with competitors;
* A one-size-fits-all process that suits all customers and their needs;
* A means by which to reduce live interactions and eliminate agents; and
* The best way to reduce departmental costs.
The truth is this: Web self-service provides a significant opportunity for any business to both retain current customers and attract new ones - but only if an organization views e-services automation from the outside in, and implements a strategy for self-service continuity throughout the company. In other words, instead of looking at self-service as a competitive quick fix or a way to reduce one department's expenses, companies must be ready and able to deploy the online and associated multichannel options their customers want, and do so enterprisewide.
Covering Every Channel
Along with traditional phone, fax and voice mail avenues, today's consumer wants online self-service options to verify a current balance with accounting, to access a technical fix posted from tech support, and to get an automatic response to their e-mail inquiry and seamlessly place a product order with sales. Of course, Web strategies can be implemented incrementally, taking the "Department A, Department B, Department C" route if necessary, although the ultimate objective must be to ultimately extend every interaction type across the organization. Moreover, any e-services objective must be clearly presented to customers and employees alike. That means senior managers, as the analysts at Gartner said, should be willing to retool internal priorities, business rule processes and management responsibilities to make sure their e-services implementation covers every customer service base and interaction type.
At least that's how the analysts at Gartner, Inc. viewed e-services back in December 2002, having conducted a study on the customer self-service movement. And though automation taking over for contact center agents was still in its business infancy in 2002, there was little reason to think such analyst forecasts wouldn't come to fruition.
At the same time Gartner and other industry forecasters stepped up their focus on self-service trends, multichannel and IP technologies were making waves in business communications circles. Therefore, the verdict more than three years ago that technology integration would eventually enhance e-services automation was a reasonable one.
As it turns out, the folks at Gartner were absolutely prophetic, particularly in their assessment about self-service technology and integration. Since their respective introductions, technologies such as multichannel communications, e-mail response automation, Web text chat and VoIP have continued to come together rather nicely. The business side of the e-services prophecy also is coming true in that many companies are finally beginning to understand the implications of consumers wanting service on their terms - that is, using their media of choice.
The Myths Of E-Services
Customers and tunnel vision aside, many organizations see e-services as being somewhat experimental. "Let's try this self-service thing in Department A first, and if it works, extend it to Department B, then Department C," etc. This kind of corporate thinking also tends to spawn other myths that presume self-service automation is:
* A quick and easy solution to keep up with competitors;
* A one-size-fits-all process that suits all customers and their needs;
* A means by which to reduce live interactions and eliminate agents; and
* The best way to reduce departmental costs.
The truth is this: Web self-service provides a significant opportunity for any business to both retain current customers and attract new ones - but only if an organization views e-services automation from the outside in, and implements a strategy for self-service continuity throughout the company. In other words, instead of looking at self-service as a competitive quick fix or a way to reduce one department's expenses, companies must be ready and able to deploy the online and associated multichannel options their customers want, and do so enterprisewide.
Covering Every Channel
Along with traditional phone, fax and voice mail avenues, today's consumer wants online self-service options to verify a current balance with accounting, to access a technical fix posted from tech support, and to get an automatic response to their e-mail inquiry and seamlessly place a product order with sales. Of course, Web strategies can be implemented incrementally, taking the "Department A, Department B, Department C" route if necessary, although the ultimate objective must be to ultimately extend every interaction type across the organization. Moreover, any e-services objective must be clearly presented to customers and employees alike. That means senior managers, as the analysts at Gartner said, should be willing to retool internal priorities, business rule processes and management responsibilities to make sure their e-services implementation covers every customer service base and interaction type.
Friday, September 21, 2007
Online holiday sales retreat from previous years' pace - Brief Article - Statistical Data Included
In contrast to the last three seasons, the once exuberant online holiday selling season will likely serve as the industry's most striking example of "negative growth." Following the events of Sept. 11, several firms, such as Jupiter Media Metrix, have toned down early sales forecasts. Jupiter, for example, now anticipates that online holiday retail sales will ring up $10 billion, a 15% increase over 2000, and the combined online holiday retail and travel sales figure will be $11.9 billion, up 11%. This compares to sales spikes of 54% in 2000 and a staggering 126% in 1999.
Online sales growth has slowed faster than Internet pundits had collectively predicted in the Internet's golden days. In fact, e-commerce sales now stand little to no chance of reaching the trillion-dollar mark by 2003, a time frame put forth merely two years ago by companies such as International Data Corp. and the University of Texas.
In a recent report, Jupiter referred to the slowdown in growth as a "blessing in disguise," reasoning that modest growth expectations allow retailers to scale their businesses to balance consumer expectations and profitability.
Despite the slowdown, e-commerce has not come to a shrieking halt. The Yankee Group analyst Paul Ritter, who predicts a modest single-digit increase of 7% to $9.5 billion, points out that there are still certain growth factors in the sector. Each year, more and more consumers warm up to the idea of shopping online. Jupiter anticipates 10 million more people will buy gifts online this holiday, to total 46 million, up from 36 million in 2000. That said, the traffic boost will likely be offset by shrinking holiday budgets.
And contrary to earlier speculation, the "bunker mentality" is not deterring consumers from frequenting stores. A recent Goldman Sachs, Harris Interactive and Nielsen/NetRatings survey found that 78.3% of this year's holiday shopping will be done in the stores, down slightly from 79.9% in 2000.
Since the mass exodus from the stores to the online channel never took hold, retailers have spent the better part of 2001 trying to quantify the effects of their online business on their stores.
Over the course of 2001, a lot of retailers stopped looking at their online divisions as a separate part of their business, said Jupiter analyst Rob Leathern. The change in corporate philosophy prompted retailers such as Staples, Kmart and Wal-Mart to reel their previously spun-off Internet in-house. Now under the umbrella of a public company, Internet businesses such as Walmart.com and BlueLight.com did away with drains on their budgets, such as free Internet access for customers, a mainstay of the original BlueLight marketing campaign.
Online sales last holiday trumpeted the bricks-andclicks model as the winning formula. Analysts such as Leathern note that throughout the year, consumers have continued to gravitate toward multichannel players.
Ritter went so far as to suggest Amazon is adapting its business model to that of a bricks-and-clicks player through partnerships with Toys "R" Us, Borders, Circuit City and Target. The multichannel approach offers retailers a greater opportunity to capture more market share.
Jupiter research shows that for every dollar spent online, consumers spend another $5 in the stores as a direct result of online research.
Best Buy's own consumer research revealed 80% of consumers surveyed preferred to buy in the store rather than through a catalog or online. Moreover, the research function of Bestbuy.com served to enhance the consumer's experience in the store, said president and ceo Brad Anderson at the International Mass Retail Association's holiday press conference. "'What we discovered over 2001 is that it is truly a clicks-and-mortar strategy."
While retailers have inched closer to a successfully integrated multichannel approach this year, the events of Sept. 11 have thrown them another curveball in terms of fulfillment. Several retailers have set earlier cut-off dates for shipping. Toys "R" Us gave a ballpark date of Dec. 10, a little on the early side compared to past years. Leathern said the earlier dates come after some retailers faced fines from the Federal Trade Commission for failing to deliver on time. "There's an increased sensitivity that external factors-such as shipping- maybe more of an issue because of current events," said Leathern Amazon's in-store pickup deal with Circuit City may help offset sales lost from fewer selling days, said Ritter.
Online sales growth has slowed faster than Internet pundits had collectively predicted in the Internet's golden days. In fact, e-commerce sales now stand little to no chance of reaching the trillion-dollar mark by 2003, a time frame put forth merely two years ago by companies such as International Data Corp. and the University of Texas.
In a recent report, Jupiter referred to the slowdown in growth as a "blessing in disguise," reasoning that modest growth expectations allow retailers to scale their businesses to balance consumer expectations and profitability.
Despite the slowdown, e-commerce has not come to a shrieking halt. The Yankee Group analyst Paul Ritter, who predicts a modest single-digit increase of 7% to $9.5 billion, points out that there are still certain growth factors in the sector. Each year, more and more consumers warm up to the idea of shopping online. Jupiter anticipates 10 million more people will buy gifts online this holiday, to total 46 million, up from 36 million in 2000. That said, the traffic boost will likely be offset by shrinking holiday budgets.
And contrary to earlier speculation, the "bunker mentality" is not deterring consumers from frequenting stores. A recent Goldman Sachs, Harris Interactive and Nielsen/NetRatings survey found that 78.3% of this year's holiday shopping will be done in the stores, down slightly from 79.9% in 2000.
Since the mass exodus from the stores to the online channel never took hold, retailers have spent the better part of 2001 trying to quantify the effects of their online business on their stores.
Over the course of 2001, a lot of retailers stopped looking at their online divisions as a separate part of their business, said Jupiter analyst Rob Leathern. The change in corporate philosophy prompted retailers such as Staples, Kmart and Wal-Mart to reel their previously spun-off Internet in-house. Now under the umbrella of a public company, Internet businesses such as Walmart.com and BlueLight.com did away with drains on their budgets, such as free Internet access for customers, a mainstay of the original BlueLight marketing campaign.
Online sales last holiday trumpeted the bricks-andclicks model as the winning formula. Analysts such as Leathern note that throughout the year, consumers have continued to gravitate toward multichannel players.
Ritter went so far as to suggest Amazon is adapting its business model to that of a bricks-and-clicks player through partnerships with Toys "R" Us, Borders, Circuit City and Target. The multichannel approach offers retailers a greater opportunity to capture more market share.
Jupiter research shows that for every dollar spent online, consumers spend another $5 in the stores as a direct result of online research.
Best Buy's own consumer research revealed 80% of consumers surveyed preferred to buy in the store rather than through a catalog or online. Moreover, the research function of Bestbuy.com served to enhance the consumer's experience in the store, said president and ceo Brad Anderson at the International Mass Retail Association's holiday press conference. "'What we discovered over 2001 is that it is truly a clicks-and-mortar strategy."
While retailers have inched closer to a successfully integrated multichannel approach this year, the events of Sept. 11 have thrown them another curveball in terms of fulfillment. Several retailers have set earlier cut-off dates for shipping. Toys "R" Us gave a ballpark date of Dec. 10, a little on the early side compared to past years. Leathern said the earlier dates come after some retailers faced fines from the Federal Trade Commission for failing to deliver on time. "There's an increased sensitivity that external factors-such as shipping- maybe more of an issue because of current events," said Leathern Amazon's in-store pickup deal with Circuit City may help offset sales lost from fewer selling days, said Ritter.
Behind the magic: how do stellar sellers work their magic? From the first cold call to closing the deal, discover the top sales secrets of some seriou
The secret to a successful sales letter is making it took just like a typical business letter. You want to position yourself as a peer who has a great idea and a helpful offer. In working with sales Consultants at IBM, we coach them to start where the last conversation left off--something like, "After your comment to me on the phone last month, I've been thinking about a way to X." Your opening shot can't be a misfire.--Dianna Booher, author of E-Writing: 21st Century Tools for Effective Communication and CEO of Booher Consultants Inc., a Dallas/Fort Worth-area communication training firm
How to generate repeat business
Our customers aren't customers; our customers are owners. That sets a certain bar. If one of our owners is going to take a flight, a sales vice president may be helping with the luggage and the catering. We feel like if we get in front of our customers and we hustle, at the end of the day, it will be translated into repeat business.--Kenny Dichter, founder of New York City-based Marquis Jet, an 80-employee global leader in private jet cards whose Marquis let Card Program has a 90 percent customer renewal rate
How to upsell your current clients
I asked a client if they were thinking about redoing their website. They said, "No." I didn't tell them, but I was going to work on something because I had a vision for it. I presented it to them, and they loved it. I had a $10,000 sale for that website. The biggest secret is just taking the time to think, "What does my client need that he's not asking for?"--Paula Yakubik, founder of MassMedia, a 7-year-old Las Vegas PR and advertising firm with 18 employees and $3.5 million in annual sales
How to hire a good sales manager
Successfully hiring a strong sales manager is a balance between science and art. All strong sales-manager candidates exhibit three behavioral traits: a high energy level, tenacity and competitiveness. The biggest mistake companies make is that they try to find someone who will change the process because sales are not at the desired level. The majority of the time, the process isn't broken; what they didn't find was someone who has sold in that process before. Finding a manager compatible with the process is crucial.--Jim Kasper, author of Creating the #1 Sales Force: What It Takes to Transform Your Sales Culture
How to offer great customer service
The big secret is to passionately believe in your people. It's easy to say and difficult to execute unless you're in a culture that supports and encourages great customer service. Everyone's going that extra mile. Behind every transaction is a personal relationship.--Jack Mitchell, author of Hug Your Customers: The Proven Way to Personalize Sales and Achieve Astounding Results and CEO of Mitchells/Richards, a high-end Connecticut clothing retailer with $70 million in annual sales
How to generate repeat business
Our customers aren't customers; our customers are owners. That sets a certain bar. If one of our owners is going to take a flight, a sales vice president may be helping with the luggage and the catering. We feel like if we get in front of our customers and we hustle, at the end of the day, it will be translated into repeat business.--Kenny Dichter, founder of New York City-based Marquis Jet, an 80-employee global leader in private jet cards whose Marquis let Card Program has a 90 percent customer renewal rate
How to upsell your current clients
I asked a client if they were thinking about redoing their website. They said, "No." I didn't tell them, but I was going to work on something because I had a vision for it. I presented it to them, and they loved it. I had a $10,000 sale for that website. The biggest secret is just taking the time to think, "What does my client need that he's not asking for?"--Paula Yakubik, founder of MassMedia, a 7-year-old Las Vegas PR and advertising firm with 18 employees and $3.5 million in annual sales
How to hire a good sales manager
Successfully hiring a strong sales manager is a balance between science and art. All strong sales-manager candidates exhibit three behavioral traits: a high energy level, tenacity and competitiveness. The biggest mistake companies make is that they try to find someone who will change the process because sales are not at the desired level. The majority of the time, the process isn't broken; what they didn't find was someone who has sold in that process before. Finding a manager compatible with the process is crucial.--Jim Kasper, author of Creating the #1 Sales Force: What It Takes to Transform Your Sales Culture
How to offer great customer service
The big secret is to passionately believe in your people. It's easy to say and difficult to execute unless you're in a culture that supports and encourages great customer service. Everyone's going that extra mile. Behind every transaction is a personal relationship.--Jack Mitchell, author of Hug Your Customers: The Proven Way to Personalize Sales and Achieve Astounding Results and CEO of Mitchells/Richards, a high-end Connecticut clothing retailer with $70 million in annual sales
Thursday, September 20, 2007
Take heart: to really make an impression on your customers, don't just memorize a sales pitch—let them see your heart and soul
YEARS AGO, I worked with a sales rep who had a great personality and a real knack for building relationships--outside of sales calls. As soon as he got in front of a prospect, his whole demeanor changed. He became a robot, spitting out the sales pitch he had memorized and virtually shutting out the customer. The guy with the great personality disappeared, and the salesperson showed up in his place.
Sure, customers want you to know your business. They expect you to have the facts at your fingertips. They need you to be thinking all the time. But what they really want is to make a connection. It can't be said too many times that people buy from people they like, trust and respect. If you use just your brain on a sales call, and not your heart, you'll be like every other Tom, Dick and Sally, working as hard as you can and making very few sales.
Here are four ways to use both your mind and heart to make your sales sing:
1. PREPARE. This is the "just the facts" part of the sale. Do your research. Gather as much knowledge as you can about the person you're selling to, the company he or she works for and that company's customers. Make sure you're armed with information about your own product or service as well.
2. BUILD A STRUCTURE. Set goals, and outline how you would like the sale to go. This is not a script that you follow, but rather a general idea of the direction you want to pursue. Any event, whether it's a one-on-one sales call or a presentation to a large group, is only as strong as its structure. If there is no foundation, a single question or comment can throw you completely off track. Having a structure allows you (or the customer) to go off on a tangent but then find your way back quickly and efficiently.
3. LET GO. Once you have the structure established, let it go. I've talked before about mushin, the martial arts concept that means "no mind." When you have really practiced a martial art, you don't have to think about every move you make. Your strength and agility are based on your previous training. In a sales call, you've got to rely on your training as well. It becomes easy to go with the flow, instead of following a rigid script, when you have experience and have done all the research. When you learn to trust your instincts, you can allow yourself to react naturally and believe in your abilities.
4. SELL FROM YOUR TRUE, PASSIONATE HEART.
Customers want to deal with the real you. They want to believe in both you and your product or service; they want to know that buying from you is the right choice. When you're passionate and enthusiastic, you spread those emotions directly to the customer. I deal with high-level customers every day--from sports legends and famous comedians to CEOs of billion-dollar corporations. People in those positions don't buy because a salesperson has the most polished presentation. They want to cut through all the layers and make a connection. They want to see inside you, not right through you. When they can see your true spirit and tell you're on the same level, they can be confident you have their best interests at heart.
As Shakespeare wrote, "This above all: to thine own self be true, And it must follow, as the night the day, Thou canst not then be false to any man." Follow the four steps outlined above, and you have the perfect formula for a successful sales call.
Sure, customers want you to know your business. They expect you to have the facts at your fingertips. They need you to be thinking all the time. But what they really want is to make a connection. It can't be said too many times that people buy from people they like, trust and respect. If you use just your brain on a sales call, and not your heart, you'll be like every other Tom, Dick and Sally, working as hard as you can and making very few sales.
Here are four ways to use both your mind and heart to make your sales sing:
1. PREPARE. This is the "just the facts" part of the sale. Do your research. Gather as much knowledge as you can about the person you're selling to, the company he or she works for and that company's customers. Make sure you're armed with information about your own product or service as well.
2. BUILD A STRUCTURE. Set goals, and outline how you would like the sale to go. This is not a script that you follow, but rather a general idea of the direction you want to pursue. Any event, whether it's a one-on-one sales call or a presentation to a large group, is only as strong as its structure. If there is no foundation, a single question or comment can throw you completely off track. Having a structure allows you (or the customer) to go off on a tangent but then find your way back quickly and efficiently.
3. LET GO. Once you have the structure established, let it go. I've talked before about mushin, the martial arts concept that means "no mind." When you have really practiced a martial art, you don't have to think about every move you make. Your strength and agility are based on your previous training. In a sales call, you've got to rely on your training as well. It becomes easy to go with the flow, instead of following a rigid script, when you have experience and have done all the research. When you learn to trust your instincts, you can allow yourself to react naturally and believe in your abilities.
4. SELL FROM YOUR TRUE, PASSIONATE HEART.
Customers want to deal with the real you. They want to believe in both you and your product or service; they want to know that buying from you is the right choice. When you're passionate and enthusiastic, you spread those emotions directly to the customer. I deal with high-level customers every day--from sports legends and famous comedians to CEOs of billion-dollar corporations. People in those positions don't buy because a salesperson has the most polished presentation. They want to cut through all the layers and make a connection. They want to see inside you, not right through you. When they can see your true spirit and tell you're on the same level, they can be confident you have their best interests at heart.
As Shakespeare wrote, "This above all: to thine own self be true, And it must follow, as the night the day, Thou canst not then be false to any man." Follow the four steps outlined above, and you have the perfect formula for a successful sales call.
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