A. sales / unique visitors
B. sales / total visits
C. actions / unique visitors (e.g. home page test, conversion goal is not a sale but a reduced bounce rate or a click on the main call to action)
D. sales / number of carts initiated
E. sales / relevant visitors (segmented by geography, campaign, etc)
F. (sales – refunds) / unique visitors

Answer: Any or all of the above may be considered a conversion rate. It truly depends on what you think is the best formula for measuring success. The important thing is that you have your calculation of conversion rate defined within your organization, and be careful when looking to external benchmarks (industry data, competitive data etc) to gauge what your target conversion rate should be. You may be comparing apples to hot dogs.

Enjoy!

1. Regularly check the top search terms on your site.

They can be good indicators of new items your clients are looking for, or product lines that are performing well. For example, SLI customer Jelly Belly used to offer only a 10-pound bulk case of its Champagne Bubbles jelly beans. Using information gleaned from site search, the company discovered that Champagne Bubbles candy was the third most-requested search. They decided to offer a one-pound container, and it’s now one of the company’s biggest sellers with wedding planners.

2. Review site search terms for SEO and PPC campaigns.

This is a great source for keyword research because it shows the language your visitors are using.

3. Review the searches with poor or no results.

A poor result is one that has a low clickthrough rate. These terms either relate to content that people are searching for that you don’t have or, more often, are examples of your visitors using different language to describe your content than you do. Both of these pieces of information are extremely valuable. If visitors are searching for content that you don’t offer, then you know that there is demand for that content and may indicate products that you should be stocking on your ecommerce site. If visitors are searching for products that you are not able to or don’t intend to carry, then you can address this by showing keyword-specific banners suggesting similar products.

If your visitors are using a different language to describe your content or products, you can either start using this language on your site (which will help with your search engine optimization as well), or you can add synonyms to your search so your visitors will find the items they’re looking for.

4. Review your site search quality metrics to ensure your site search relevancy is improving over time.

A good site search solution “learns” by tracking visitors’ aggregate search queries and click-throughs to deliver results based on criteria such as popularity. This means that, over time, searchers on your site are presented with the most relevant search results and can find what they’re looking for more quickly and easily. Improved searches result in more satisfied customers and greater sales.

5. Integrate your analytics package with your site search.

It shouldn’t require too much effort to make sure your analytics software is tracking search activity on your site. Your site search provider might be able to help you with this. Being able to measure site search results – like any other marketing activity – demonstrates the value and ROI benefit you’re getting. For example, you can track the conversion rate for site search results pages as compared with other pages on your site, as well as the percentage of revenue generated by site search results pages. You can also determine the average order size for site search users as compared to those who don’t search; if your site search solution is performing well, those numbers should be higher.

6. Watch the keywords that are quickly gaining popularity so you’re able to continually meet increasing product demand.

Again, it’s important to understand the language of your customers – and like any trend, nothing lasts forever, including the search terms used most frequently on your site. Trends around popular terms may shift with the seasons, or with popular songs and movies, or with the latest look sported by the Jonas Brothers. The point is, as terms gain popularity, they signal to you that the products that go along with those terms will likely also gain popularity, so be prepared.

Download the whole collection of site search tips here.

Subject line: You have a credit waiting for you at 1800Headsets.ca

Email body:

We thought you should know, you have a $10 credit with us
You earned it, so why not enjoy it?

$10 may not sound like a lot, but ten bucks could get you 25% off a cellular headset, an extra 17% off a new Bluetooth headset, or even better…

Take $10 off any:

* Wireless Headsets
* Computer Headsets
* Home Office Headsets
* Wireless Telephones

There are many new headsets at 1-800-Headsets.ca

Call a friendly Headset Specialist at:
1-800-HEADSETS (1-800-432-3738)
9:00am to 7:30pm Eastern Time Mon – Fri

Or claim your $10 credit online by clicking the “Use Your $10 Credit Now” button below. Your Priority Number will be entered automatically at checkout.

Customer # HDS1231443
Priority # EH59720

There are several things I want to point out about this email’s brilliance:

1. The subject line gives a strong reason to open the email, piquing curiosity about the credit: “You have a credit waiting for you at 1800Headsets.ca”

2. “We thought you should know, you have a $10 credit with us” as a headline reinforces the promise of the subject line

3. Suggesting “ten bucks could get you 25% off a cellular headset” is smart. I purchased a computer headset. I’m more likely to be intrigued by a cellular headset than another computer one. It’s possible 1-800-Headsets segments customers by product category and customizes the message accordingly.

4. The credit is auto-applied by clicking the big (and I mean big) shiny red button. This makes it easy for the customer, no promo code to remember. It may also create urgency as to have the credit applied in the future would mean digging up the email and clicking through it again.

5. The products on the right hand side all have value propositions: best selling, best range and perfect for noisy offices. If you want to increase your click through for featured products, give the customer a good reason to be interested in them.

An added bonus of the credit idea is you are not reducing the perceived value of your products by reducing the price. Rather, you are selling at full price (and full value) and giving the customer virtual dollars to spend. Sales are boring, and “come back and we’ll give you 10% off something” is overdone and not that exciting.

Linda: We’re seeing a lot of changes with Yahoo and Bing merging. Does that make things easier or more complicated for advertisers?

George: We think it will help search advertising, at least in the short term. The richer data set afforded by combining the Bing and Yahoo.com traffic will be a boon to those who know how to exploit the long tail, and having one less set of copy changes to make won’t hurt either.

Long term, is the industry better served having one larger competitor to Google or two smaller ones? That’s a tough question. To the extent that Google acts as simply a marketplace where advertisers compete against each other for placements, one could argue that a Google monopoly poses no real risk. On the other hand, given an absolute monopoly, who’s to say that Google will stick to the auction model? If negotiated placements yielded more revenue per impression and greater profits, they’d drop the auction in a second. I don’t think that’s likely to happen; I think the reason for Google’s success lies in the fact that the ads are cost effective when managed properly, and moving away from that model makes them just another portal.

Linda: Keeping up with the changes in search engines and advertising program capabilities is a full time job in itself. It’s almost as if when you take a week’s holiday, you’ve surely missed a major announcement or change to the way things are done. The result is do-it-yourselfers may be relying on outdated books or blogs for guidance in managing their PPC campaigns, and even the professionals can be behind the times. In your experience, what’s the most outdated tactic that is still in use by too many advertisers?

George: Things do change all the time but in many senses the fundamentals haven’t changed, and what surprises me is the number of folks who still don’t seem to know the basics.

The fact that so many folks are still bidding by position just amazes me. In fact most of the platforms available for rent and used by many agencies are nothing more than position crawling systems. Even when turned to “efficiency targeting”, they find efficiency by hunting and pecking for the right position, rather than measuring the value of traffic, bidding what makes sense, and letting the position fall where it may. Position crawling guarantees inefficiency and lost opportunity, but even though careful studies have proved that the value of traffic is largely independent of position, people still use position crawlers.

Linda: Surely ignorance is not bliss! That reinforces the importance of having a search manager that really knows what they are doing. Often paid search is outsourced because the retailer does not have the in-house expertise to manage or even understand a campaign, which leaves the program without much oversight. How can you verify your campaign is being managed well? When do you know it’s time to fire your agency?

George: The devil is in the details. I outlined a process for a top-down evaluation of a paid search program. It’s imperative to periodically take the program apart to make sure it is being managed well. Too many folks assume that because they’re using a well-known, expensive agency that their program is therefore well-managed.

Certainly, you shouldn’t have to micro-manage your agency; if you do, what’s the point of outsourcing? But if periodic, detailed evaluations of the program reveal significant problems, the solution isn’t micro-management, it’s finding a competent agency.

Linda: I suppose when clients comes to you after working with another agency, there’s a certain degree of “reworking” you need to do. In your experience, what is the biggest (or most common) mistake that online retailers make in paid search?

George: The biggest mistake is also stunningly common, it’s failing to separate results of brand search and competitive search. Particularly for companies that do a great deal of offline marketing, brand search represents a fundamentally different subset of customers, those who are proverbially ‘walking through your front door.’ Crediting these sales to paid search efforts leads to tremendous overspending in competitive search.

Advertisers mistakenly believe that since the overall cost to sales ratio is reasonable, they’re spending money wisely. If we think instead about the law of diminishing returns and the question: what happened to the last $1,000 we spent and what would happen to the next $1,000? We’ll end up seeing that those answers are all found in the competitive non-brand search program, because that’s where all the incremental spending happens.

Linda: Speaking of keywords, it’s rare to talk about paid search strategy and escape the topic of the “long tail.” As you mentioned earlier, those who know how to work the long tail have an advantage. [Reader note: “Long tail” queries refer to searches that happen only a handful of times per year (maybe only once) can make up the lion’s share of clicks and sales.] What is the best way to capture the long tail? Is the broad match type with a thorough negative keyword list the answer, or should you try to predict the tail with keyword research and exact match terms?

George: I’ve written about this a good bit recently. The importance of the tail does vary a great deal from advertiser to advertiser so it’s not quite true that it matters tremendously for everyone. However, when it does matter, there’s no question about it: broad match by itself is not the best solution.

The right way to approach the tail is to build out the keyword list thoroughly and carefully, with attention to landing pages and copy to maximize both click through and conversion rates. Then, with sophisticated bid management and flexible attributes applied smartly, the real power of targeting bids to the differentiated value of the traffic takes over.

We like using broad match as a catch-all with lower bids on the broad matched versions than the exact matched versions. The keyword list can never be perfectly comprehensive, and broad match is tremendously valuable for catching word orderings and typos that you’d never catch with exact or phrase match.

Linda: Yes, sometimes the queries that trigger your ads can be very irrelevant (even humorous!) We would get searches like “granny cart” triggering our ecommerce software ads at Elastic Path, for example. When you add them up, there truly is a long tail of negative matches that can really dilute your click through rate.

Linda: If you’ve added sufficient negative matches and a keyword still suffers from low click through or abysmal conversion, Is it ever a good idea to delete the keyword? What are some strategies to turn a “dog” keyword into a “star”?

George: I once went so far as to say “there are no bad keywords, only bad bids.” That might have been a bit overstated, but my point was simply this: there are very few keywords – assuming they’re reasonably targeted — that draw in traffic of zero value. The value might be small, but it’s rarely zero. So, first and foremost is the notion that it isn’t a matter of finding keywords that “work” on the first page, and turning the others that “don’t work” off. Bid the appropriate amount and take whatever traffic you get.

Now, it is possible to improve the value of the traffic on a given keyword by identifying negative associations to knock out the wrong traffic, and by making sure the copy qualifies traffic as much as it can. If you sell “desk chairs”, but yours start at $350, where Staples has “desk chairs” for $35, you may find “$350 + for quality office chairs” helps steer the bargain hunters elsewhere.

To a large degree, paid search is dominated by mass marketers. Keywords that speak more to mass market intent can be tough for niche marketers who don’t have selections that appeal to the mass market.

Linda: Ad copy, like any copy, can benefit from split testing. What have been some of your most effective PPC tests? Are there any “rules” to live by?

George: There are very few rules that apply to every advertiser, so maybe one universal rule is to test assumptions! In truth, what may be a universal rule is this: never assume that the traffic on Google.com will perform the same as traffic on Google’s syndication network – even more true for Yahoo and its syndicates. Separate campaigns and measured bid differentials for the engine and its partners almost always delivers positive results.

We have some very exciting results from Yahoo’s new syndication bidding settings that should yield more revenue for our clients, and for Yahoo.

Linda: Sounds juicy! For my final question (you cannot interview a guru without asking something to this effect): where do you see the future of paid search going?

George: The two biggest changes on the horizon are likely to involve the ad formats and how paid search integrates with other marketing efforts.

Google is testing and testing to find formats that generate more revenue per impression, and they may find something. I don’t think product images are going to be it, though. Someone searching for “Pet Supplies” isn’t likely to respond to any particular product image. That said, giving marketers and agencies flexibility to design appropriate display ads for different levels of search depth might work. Providing a plus-box like expansion to the next level of depth, rather than all the way to the bottom with products, might be the best solution.

The ability to parse credit between multiple ads within a search program and across multiple marketing programs will become imperative. We’re launching an attribution management solution for our clients by the middle of March, and I’m sure other agencies will do the same. The better we understand what advertising dollars truly drive sales, the more efficiently we can allocate resources.

It keeps getting more complicated, but that keeps it interesting for us geeks.

Linda: It sure does! George, thanks again for sharing your brain. And now, we open up the floor to questions…

Here’s an example regarding canonical URLs and duplicate content:

Directory form, www.google.com/product(/)
www.google.com/product (canonical), try version:
www.google.com/product/

with: suboptimal behavior when trailing slash added
* includes product main pages in directory form without a trailing slash

200 status code given when slash added to Google Products’ canonical URL, Sept. 2009:

Avoid multiple URLs that serve the same content. From the example above, the good news is that visitors will reach the content no matter which version of the URL they choose. This is because a “200 OK” status code is given for both URLs. The bad news is that each of these URLs will get crawled and indexed by search engines, creating duplicate content. Search engines will have a tougher time deciding which URL is the canonical. Also, each URL will have its own reputation. Using a 301 on www.google.com/products/ will consolidate this valuable reputation so that the canonical can rank to its fullest.

404 status code given when slash added to Google Finance’s canonical URL, Sept. 2009:

Prevent 404s. A lot of visitors will try to reach Google Finance with the URL finance.google.com/. Many others will try www.google.com/finance, but a large number will also try www.google.com/ finance/, which leads them to an unhelpful 404 page. Some visitors will assume that the service is down (“Why wouldn’t www.google.com/finance/ work?”). Others might try another form of the URL, but say, “I never know which URL to choose for Google’s products!” Think of the most common URLs that visitors might try in order to reach your product, then 301 redirect these to the canonical URL. This will prevent a lot of frustration for users who access your product by typing the URL in their browser’s address bar.

404 page shown when slash added to Google Finance’s canonical URL, Sept. 2009:

To see the whole shebang, download the SEO Report Card < here.

This week’s video is on mobile websites vs. mobile applications and features Elastic Path’s Peter Sheldon.

RSS and email subscribers, can’t see video? View this post on the web.

Video Transcript:

Mobile commerce is growing.

In fact in the US next year, it’s expected that 1% of all transactions will occur from a mobile phone. So many retailers are looking at growing their mobile commerce strategies and are not sure whether they should build a mobile optimized website or whether in fact they should build dedicated apps for the different devices like iPhone and Blackberry and Android.

There are pros and cons to both.

On the mobile website side, it is guaranteed that they can be used across all different phones. Any phone with a browser can view a mobile optimized website. But even then, some retailers are finding they need to build two versions of their mobile optimized website: one for the high end devices, and one lower fidelity version for the lower end devices. This creates a lot of constraints on your development capabilities, and the experience differs depending on what device one’s using.

On the other side, mobile apps like iPhone apps, Blackberry apps and Android apps have to be created for each of the different devices, but they’re dedicated for each device. They’re guaranteed to work and they can leverage some of the rich hardware features of the phone like the GPS, the camera and the maps.

So think carefully whether a mobile app or a mobile optimized website is right for you. Know what your customers are using or what devices they own. If all your customers are business users and are all using Blackberries, then think seriously about building a dedicated Blackberry rather than just a mobile optimized website.

On Monday we will follow up this topic with a more detailed post from Dennis Newel, Business Analyst at Elastic Path, Mobile Commerce: App, Mobile Site or Both?

And on Tuesday, March 30 we will be presenting a live webinar with Elastic Path’s CTO Michael Vax discussing the ins and outs of application stores: App store – a new way to sell software, media, and anything digital.

• Not one, but two of our Elastic Path software developers sent me a link to this fascinating case study by Luke Wroblewski: “Mad Libs” Style Form Increases Conversion 25-40%. Dare to give it a try on your own site?

• Another great post from Luke W, Web Form Innovations on Mobile Devices covers design best practices for mobile usability.

• Gmail is really stepping up its bells-and-whistles. One innovation is Enhanced Email which allows the recipient to browse products within the message. Sears is already taking it for a test drive. Another new feature allows YouTube video to be played within Gmail. Mark Brownlow reports how it works and explains the hope and the hype of it for retail email marketers.

• Sephora sent out a brilliant email asking recipients to personalize the email (on an interactive landing page) to get featured product recommendations that match their skin type, tone, eye color and fragrance preferences. A novel way to personalize email when you haven’t collected such information in profile data.

• Avinash Kaushik blesses us with 7 sources of free intelligence data on your direct competitors, your industry segment and search engine / website behavior.

• What does the Apple iPad mean for retail? Forrester Research’s Brian Walker weighs in on the multichannel opportunity represented by the iPad as an in-store device.

• HTML5 is (slowly) coming! Will it be a Flash / Silverlight killer for showing video and other rich media or is it just hype? The iStobe blog discusses HTML5’s potential applications for ecommerce and mcommerce.

• Speaking of mobile commerce – Graham Charlton of Econsultancy addresses the question: should you have a mobile site or app?

• Forrester believes that retailers are leaving too much cache on the table – focusing too much on server cache, and missing the opportunity to optimize browser and edge cache:

“Caching nearest to your users goes without saying, but most companies must allocate their caching dollars carefully, and your biggest investment should be close to your most profitable customers. Your most profitable customers may not be located in your highest concentrations of customers. Work with your marketing department to analyze customer profitability and location, and then review this data at least annually.”

• Bryan Eisenberg has compiled a master list of everything you’ve ever wanted to know about Google Analytics (and a few hundred things you never thought of) with the Missing Google Analytics Manual. Bookmark!

• Keep your bookmark finger ready… Which Multivariate? is an unbiased review of all the conversion optimization testing tools out there and it’s very comprehensive. Hat tip to Bryan Eisenberg for sharing and Conversion Rate Experts for putting it together.

• Can A/B testing have search engine implications? Traian Neacsu shares how you can minimize the impact of website testing on SEO.

The webinar is the first in a series of software and technology related topics based on the top issues we have found working with and speaking to enterprise firms in this industry. In the webinar we took a deep-dive into the issue of “owning the conversation” and bringing all relevant content and information to bear on each transaction.

5 Considerations

• Manufacturer strengths / weaknesses
• Governance
• General design / site architecture
• Source and nature of traffic (segments, personas)
• Leveraging user-generated content

Manufacturer strengths

The software and technology marketplace involves a mix of retail resellers and their online counterparts, manufacturers selling direct to consumer/business and affiliate websites like comparison shopping engines and technology reviews (think Cnet and PC World Magazine).

These channels are all important to the technology brand, as they will all attract different types of customers and cast a wider net for more sales. Of course, maximizing revenue driven through a manufacturer’s own ecommerce project is the goal – not only for higher margin but the opportunity to remarket to these customers through renewal and upgrade emails, cross-sells/upsells etc.

Brand strength

But the beautiful thing for technology manufacturers is when a customer knows what product he or she wants, there is a high likelihood that the customer will go directly to the manufacturer’s web site. According to Forrester Research, 58% of consumers researching an online purchase will begin their research at the manufacturer’s website. An additional 16% will use a search engine, and when searching for a product or brand name, will likely land the customer on the manufacturer’s site also. So potentially you have 75% of customers beginning research at the brand website. For software that offers a direct download, we expect this figure even higher, as research has shown customers prefer to receive an instant delivery than a packaged product.

Content

Manufacturers also have more content to leverage than resellers, including rich product information (videos, tutorials, screenshots, demos, .pdfs), comparison tools, product finders and even community forums and knowledge bases. All this content supports the researcher and can help “sell” your product.

Manufacturer weaknesses

Unfortunately, all this great content creates complicated information architecture. Most commonly among software and technology sites, we find the .com site has rich product information along with a separate “store” (subdomain or subfolder) that has its own product pages – often with different design, copy and calls to action. Furthermore, stores often don’t have the rich content like product finders and comparison charts that can be found outside of the store.

The more fragmented the content is, the more difficult it is for the customer to reach all the necessary information to make a purchase decision, and the more effort it takes to navigate from product page to store to checkout.

Above, top: The .com product page is text-heavy, but calls to action for the store are very subtle, perhaps too subtle to be noticed by the reader. Above, bottom: The transactional page has a simpler design, more like a retail store page, but may not provide the depth of information necessary to make a confident purchase decision.

Surveying 82 of the top technology and software sites, I found that 70% have separate stores. The 30% of sites that did have a consolidated store (one product page with a “buy” button linking directly to the shopping cart) were “smaller” in the sense that they serve only one market, with one line of product or were gamer sites like Atari.

Why do enterprise sites have separate .com content and store content? The main reason for large companies is governance – the .com (informational site) is owned by Marketing while the store (transactional site) is owned by Sales.

Governance

Organizational structure can often get in the way of what drives a really effective ebusiness. When you have segregated groups with each group chartered for different purposes (this could be IT, Marketing, Sales and Web Analytics or Product A vs Product B vs Product C), strong advocates for certain web changes will be motivated by their own interest. For example, Product A pushes for a certain change that may lift his division’s product revenue by 10% – but would the resources required to support that change be better applied to something that could lift revenue across the board?

The best scenario is when there is a holistic approach, when a tightly integrated team is working toward the same targets with plans completely aligned, and there are little organizational differences.

In addition, an ecommerce business should be data driven as opposed to opinion driven. This requires a core team that makes decisions independent of how the rest of the company is organized.

Site architecture

Menus and navigation

Remember that a home page’s goal is not to convert a customer to a sale but to get a click deeper into the site. Content must be well organized, menus usable and intuitive, and labels clear.

Home pages that make it easy for a customer to “self identify” will enjoy reduced bounce rates. Symantec does a good job at minimizing merchandising and copy in favor of showing clear links for different visitor segments – home users, small and medium business and enterprise customers.

There is danger showing products and offers when you don’t know who your customer is or what they are looking for yet.

The word “Download” is often ambiguous. A download may refer to a full product, trail version, upgrade or .pdf file. The site below displays all available products under the Download menu, but also under the Products and Store links. This makes it confusing for customers looking for something specific. If you want to download a full version immediately, do you use the Products, Download or Store menu?

Search

Enterprise technology sites have so much content, including product pages, store pages, .pdf files, press releases, blog and forum posts. Any and all of this content may be matched in site search to a query. Often large software search results look like this:

These results look a lot like Google search results, but do not help a customer looking to buy a product. Technology companies can improve search pages by including product thumbnails for “transactional” product pages (pages with a call to action to add to cart), prices, brief product descriptions and filter/sort refinements, like a traditional retail store like Best Buy would:

Source and nature of traffic (segments, personas)

Targeted selling refers to showing different content and offers based on what you know about a site visitor (we have a whole webinar on targeted selling if this is new to you). Some of the ways you can gather this information is thorugh:

Browser/OS Detection – As I blogged about a couple weeks ago, software vendors can leverage operating system detection to deliver the right products based on the platform the customer is using.

User Authentication – If a customer is logged in, you may draw upon purchase history, download history, profile information (hardware he or she owns, interests, industry he or she works in) and even forum participation (is the customer a power-contributor or a newbie?)

Campaign/Referral Source – Leverage referral information like email campaign, search engine and keywords and serve up relevant messaging, banners, landing pages and so on.

Site Behavior – Keep track of events like clicks on offers, clicks on product categories, time on site and number of visits in cookies to build a profile of customer intent. You may, for example, reserve your live chat agents for customers who have spent X number of minutes on a site, viewed X number of pages or made X number of visits vs. a visitor who has spent 5 seconds on your site.

Leveraging user-generated content

A final consideration is an emerging concept rather than a trend. I did find Apple leveraging user generated content on its software product pages, including customer reviews and support forum posts:

Many manufacturers hold back on adding reviews because they are not always positive. It’s easy for a Best Buy or Walmart to be “transparent” – they sell a wide range of brands. Negative reviews on a software product site can be damaging to conversion, as can forum posts. While this content can enrich a product page, care must be taken that all content be supporting to the product decision and not superfluous or damaging to the brand.

Another question is if using content off other sites like general tech forums, if it relates to your brands, is a good idea for product pages. That depends on the legal issues of using another site’s content, and whether the content will help or hurt your conversion rates.

Certainly there should be a dedicated resource working on moderation of all user generated content that appears on a product page, and this idea should be tested against having no user generated content on the site at all.

Next webinar

App Store – a new way to sell software, media and anything digital

Join Michael Vax, Chief Technology Officer and Matt Dion, VP Marketing of Elastic Path Software on March 30th to discuss the current state of
Application Stores, future trends, and how technology companies and network operators can leverage this new business model to drive adaptation of their platform and generate additional revenue.

Date: Tuesday, March 30th, 2010
Time: 9am Pacific / 12pm Eastern
Date: Tuesday, March 30th, 2010

Register at www.elasticpath.com/apps

First, since this is really the first blog to explore the value of cloud computing within the world of ecommerce, let’s put forth a general definition of cloud computing. For the most part I like to go with the National Institute of Science and Technology, or NIST, who defines cloud computing as having the following characteristics:

• On-demand self-service.
• Broad network access.
• Resource pooling.
• Rapid elasticity.
• Measured service.

Cloud computing’s value is the ability to expand access and provision resources as you need them, and then have those resources expand as the application (in this case, ecommerce) needs to expand to support an increasing or “bursty” processing load. In the world of ecommerce where the margins are typically razor thin, the use of cloud computing provides on-demand access to application servers, databases, even middleware as needed. If deployed correctly, the use of infrastructure hosted in cloud providers such as Amazon, Microsoft, and Google, should function as if it’s in your own data center.

While the value proposition of cloud computing is generally clear, the use case for eCommerce can be…well…cloudy. The value as I see it would be in the “rapid elasticity” that cloud computing brings, allowing those who need the extra capacity to get the extra capacity without driving waves and waves of software and hardware purchases, or worse, having to acquire more data center space. When using cloud computing, the extra capacity is on-line and ready for use minutes after you need it, which is perhaps the most compelling reason to leverage a cloud computing model.

Those who move portions of their ecommerce systems to cloud computing have to evaluate their own requirements. I see the need for cloud computing arising when the answer is “Yes” to at least two of the following questions:

1. Do you have excess capacity standing by (e.g., idle servers and databases) for the time when your ecommerce systems need the additional processing power, such as the holidays?

2. Are security requirements around the information you retain and/or process low to medium?

3. Will your business benefit by the preservation of capital?

4. Will cost reductions have a direct benefit when considering the profitability of the company?

It’s interesting to note that the questions above are more about the business benefit of cloud computing than the technological advantages, and that’s the way those who maintain and deploy ecommerce systems should look at them. Clearly the goal is to be more effective and efficient with the same architecture, technology, and deployment models you support today. Perhaps therein lies the intersection of cloud computing and ecommerce.

This post was contributed by guest columnist David Linthicum. David is a cloud computing and SOA expert and author of several books on Information Technology.

Brands like Vans, K Swiss, Etnies, Shoes of Prey, Puma, Converse, Reebok and Timberland are a few examples.

I while back I had a chat with Heather Frost, Ecommerce Merchandise Manager from Timberland to discuss Timberland’s product configurator.

Timberland launched their custom boot builder with one boot style in 2004. In 2005, 6 more patterns were added. The tool was more successful than Timberland had anticipated. In the last year, the configurator was redesigned to accommodate the addition of 4 handsewn boat shoe styles.

Customers can start from scratch or select from an “inspiration” (designed by Heather herself), including scarlet, screaming green and pastel pink.

The configurator has a stepped process:

Product Configurator as Market Research

Offering this tool helps Timberland collect customer feedback in a unique way. Web analytics helps Timberland track which are the most popular leather uppers, midsoles, outsoles and collar. Top sellers are reviewed twice per year.

For example, Timberland found for classic men’s boots, most customers were taking the classic design and colors and simply adding initials or tweaking very little. Women go out on a limb a bit more with their boots but still choose conservative color tones. Handsewn boat shoes attract a younger, dare-to-be-different customer and funkier designs reflect that demographic. Asian orders are the wildest by far.

Keeping tabs on what customers build for themselves helps Timberland merchandise across channels and determine which new styles might work for the mainstream.

Perhaps we at Elastic Path should gear up with custom EP boots for our next staff outing Vancouver’s famous hiking trail, the Grouse Grind?