buySAFE blog

What is buySAFE?

In response to many questions from readers to "put it all together for me", here's a quick overview on "The Problem" buySAFE solves, how we solve it and the benefits to online merchants and shoppers.

 

1. The Problem:  
Buyer uncertainty costs online merchants millions of dollars in lost sales and profits each day.  It is a pervasive problem that affects every online retailer — even the biggest sites with the strongest brands.

Source of the Problem:  Consumer uncertainty is caused by two main consumer concerns that, if unanswered, reduce the likelihood of web site visitors becoming buyers.  These are:

v      Is my personal information secure?  SSL & site scanning are website security solutions designed to address this concern.  Shoppers are assured the site is authentic, their information is SSL encrypted and the website is secure from hacker break-in.

v      Is this merchant reliable and will they perform as promised? – buySAFE’s website bonding completely addresses this concern.  buySAFE builds confidence by reducing consumer uncertainty about merchant reliability and performance.

2. The Solution:  buySAFE

buySAFE provides ecommerce merchants a unique trust solution for increasing confidence of website visitors, turning more of them into buyers.

 

buySAFE…

v      Builds confidence with website visitors

o        More visitors become buyers

v      Increases merchant  sales & profits

o        10.6% avg. conversion & sales lift

o        14% avg. increase in repeat buyers

v      FREE solution for online merchants

o        Makes it risk-free to try & use

The Company:

v      Over 4 billion – # of views of the buySAFE Seal online

v      Over 30 million – $ invested in buySAFE, Inc.

v      Over 20 million – # of purchases bonded

v      Over 3000 – # of websites using buySAFE

 

3. How it Works: 
buySAFE is a two-part trust solution, proven to be highly effective at increasing website conversion and sales for ecommerce merchants.

v      The buySAFE Seal provides an explicit 3^rd party endorsement of a merchant’s quality and reliability, thereby eliminating consumer uncertainty.  The buySAFE Seal reassures shoppers that the business behind the website is stable, reliable, trustworthy and able to deliver on the promises made.

v      The buySAFE bond option in checkout, provides shoppers an option – at their choice – to purchase a bond that provides two valued benefits:

        - A full guarantee of the transaction terms of sale up to $25,000 and

        - Thirty days of identity theft protection everywhere, thereby completely addressing the two sources of consumer uncertainty (information security and merchant reliability).

The dual benefits of the bond option provide uncertain shoppers an added level of confidence which in turn, makes them more likely to buy.  Here's an example of the buySAFE Seal and bond option at work in a merchant's shopping cart - they both increase website conversion.

 

 

4.  The Benefits - Increased Website Conversion and Buyer Loyalty

 

A.  buySAFE Increases Website Conversion by over 10%

buySAFE’s value to online buyers and merchants is reflected in increased website conversion and repeat buyer rates seen by buySAFE Merchants. 

v      buySAFE’s average conversion lift over the last three years is over 10% and the impact has been steadily increasing over time.

B. Increases Repeat Buyers by up to 20%

buySAFE increases repeats buyer rates by as much as 20%.  By providing a better buying experience, buyers reward merchants with increased loyalty and repeat purchasing.  

v      As a free service for online merchants, buySAFE is a virtual necessity for every online merchant serious about growing their business.

 

       

        Finally, check back next week as buySAFE will be releasing the results of two in-depth studies on the Conversion & Repeat Buyer Impacts seen by buySAFE Merchants.  This will both be released on this blog within the next two weeks!

Merchant Shows 22.2% Lift in Conversion Rates with buySAFE Seal

buySAFE Case Study Preview

We’re going to publish a new case study soon that shows how a computer hardware and software store CompSource demonstrated a 22.2% lift in conversion rate after extensive test of buySAFE Seal™. We’re previewing a draft of this on the blog right now as a courtesy to our merchant readers who want to generate more sales during this critical shopping period. Our thanks to our friends at CompSource for cooperating with this test and case study.  

[Case Study #9  — DRAFT]

The CompSource Question

CompSource is a well-regarded online merchant specializing in name-brand computer hardware and software products. CompSource’s large sales volume enables it to offer super-competitive pricing. Ranked among the top 500 companies in the current Internet Retailer 500 Rankings and a CNET-certified merchant, CompSource receives over 3500 unique visitors daily to its website, www.compsource.com, and looks for innovative ways to convert these visitors to buyers.

To boost that conversion rate, CompSource undertook to evaluate the buySAFE Seal. The buySAFE Seal allows shoppers to guarantee their purchases with buySAFE bond up to $25,000, and lets shoppers know that they are dealing with a buySAFE merchant.

CompSource recently participated in a extensive test that placed the buySAFE Seal™ on half of its merchandise to answer the question:  Will the presence of the buySAFE Seal turn more shoppers into buyers at the CompSource website?

The Test

In order to test the impact of the buySAFE Seal™, CompSource worked with buySAFE to allow the buySAFE Seal™  to be placed on about 50% of the items on the web site during the summer … a so-called “A/B Test”. The items of merchandise WITH Seals (A’s) and those WITHOUT Seals (B’s) were chosen randomly – so that the presence of the Seal was the only variable between the two sets. The test conformed to statistically rigorous standards and was professionally administered. Over 360,000 shoppers visited the site during the testing period.

And the Results?   

The test results established that those CompSource shoppers who saw the buySAFE Seal were 22.2% more likely to make a purchase than those shoppers who did not. There are several conclusions and implications to these results:

1. The obvious one is that when consumers see the buySAFE Seal they are much more likely to buy than when there is no seal — from the SAME merchant.
2. That out of every 100 shoppers, there are differing priorities as to what factor will close the sale.  For some, it may be purely low price; for others, it may be credible messaging around risk-free shopping.  No merchant can afford to ignore that finding without hurting its conversion rate.
3. Even a very successful IR500 Merchant, which also has benefit of a CNET certification, enjoyed dramatic lift in its conversion rate … suggesting that size and reputation alone are not sufficient to resolve all shopper concerns:  the buySAFE Seal ™ adds value even to this class of merchant.
4. That for those shoppers who are especially looking for a safe shopping experience – no hassles -- low price alone is not sufficient to compel the purchase.
5. That those shoppers who are risk-averse may also have a higher propensity to purchase once their confidence threshold had been met …in fact, they plainly weigh the value of the safety promise more heavily than additional price discounts in making the purchase decision.    

The Bottom Line for Online Merchants

Consumer confidence at the point of sale matters. The presence of the buySAFE Seal™ has been proven with high statistical validity to cause a higher percentage of shoppers to buy WITH the Seal present than WITHOUT IT. Any merchant who decides NOT to use the buySAFE Seal is foregoing customers and revenue.  

Resources: CompSource Website

buySAFE Announces Several Key Syndication Partnerships to Reach More Merchants and Buyers

In September, buySAFE announced the launch of several new partnerships, extending its position as the leading ecommerce trust and safety company and the exclusive provider of risk-free, bonded shopping.

Long recognized as one of the premier Yahoo! Store Developers, Solid Cactus, Inc. offers successful retailers a variety of other services including FeedPerfect — a hosted product data syndication solution. Last month FeedPerfect became the latest product syndication partner providing support for the buySAFE Bonded Shopping Network (BSN), our performance-based advertising network launched earlier this year. FeedPerfect provides merchants with a seamless way to send their product inventory to dozens of the top shopping channels and effectively measure their results to better manage their ROI.

Other buySAFE product syndication partners include MerchantAdvantage, Channel Intelligence , Mercent and SingleFeed.

Last month, both UltraCart and Flashecom integrated buySAFE into their ecommerce platforms.  Now, thousands of additional merchants are able to add the buySAFE Seal and bonding option to their retail websites in minutes — free of charge.  Merchants using either shopping cart also have the ability to participate in the buySAFE Bonded Shopping Network (BSN). UltraCart merchants are in the unique position of being able to submit their product data feeds to the BSN directly from their shopping cart application — a first among buySAFE’s integrated shopping cart partners.

We're obviously thrilled to be working with all three of these fantastic new partners and to be in a position to provide our services to their merchants.

— Tim Woda, buySAFE, Inc. VP of Sales and Business Development

Shopper Confidence: The Key to Success in a Tough Retail Environment

Consumer Confidence:  the phrase is everywhere in the news. It seems more like a single word than a phrase…in German, it probably IS one word: Konsumerkonfidence. And while there is a good deal of debate around what drives high or low Consumer Confidence,  everyone agrees that it’s important, even vital, to the economy as a whole and to the retail industry in particular.

Recent news reports and government reports tell us that Consumer Confidence is low and trending downward; that third quarter sales have softened across almost all segments. Even luxury retailers such as Saks and Nordstroms are reporting weak demand from their well-heeled customer base. And that the environment going into make-or-break holiday shopping season is bleak. Recent bankruptcies of a wide range of retailers and restaurant chains reinforce the conclusion that, if this is not officially a recession, it is certainly a tough time for retail.

But Consumer Confidence is not a constant, or something that is imposed on the economy from the outside, like the weather. It’s a highly variable variable – and almost the text book case of mass or herd psychology. It’s pure contagion…consumers can get it (or lose it) only from others!

So here are three ideas around Consumer Confidence, the coming holiday season, and the psychology of purchase decisions, both on-line and off.

1.   Properly understood, Consumer Confidence is not a macro event – like the weather -- for most retailers. It should be understood as a micro event and a point of advantage, especially for smaller retailers. It matters a great deal more to the individual retailer whether a shopper on YOUR site is likely to become a buyer FROM your site than what the national averages are around spending. Unless you are Sears, Macy’s or WalMart, your retail operation is NOT hostage to broad gauges of Consumer Confidence … it is hostage to the degree of confidence YOUR customers have about buying from YOU on YOUR site.

2.  OK, so what does that mean in terms of YOUR shoppers? It means this: the difference between a shopper and a buyer is a decision, a decision to buy. While different shoppers will reach that tipping point to become buyers for different specific reasons, NO ONE decides to become a buyer without answering one core question to themselves:

• Am I OK going ahead with this?
• Am I better off trading my money for this good?
• Am I more likely than not to be happy with this purchase?
• Am I confident enough to hit the “BUY NOW” button?

It’s all the same question…and the retailer’s challenge is to create a purchasing environment and retail offer that invites a shopper’s YES.

3.    SHOPPER CONFIDENCE and MERCHANT REPUTATION are flip sides of the same coin. If I have reason to think that a merchant WILL LIVE UP TO ITS PROMISES, then I am much more likely to have the confidence to purchase. BUT on the internet, where I have this incredible power to scan the entire marketplace for the perfect deal for ME, most likely from a merchant NEW to me, how do I know any seller’s reputation?

Great question!  That’s why credible third-party certification of a merchant has proven to be so valuable: it’s like an injection of INSTANT REPUTATION AT THE POINT OF PURCHASE.     Here’s the good news: buySAFE has solved the problem…by telling your customers, in effect, that WE put our money where your mouth is … that our bonded merchants WILL perform or WE will make them whole…we reassure the shopper and provide the extra level of confidence to convert her to a buyer. And with our Shopping Advisor and Safe Shopping portal, we make it so easy for every shopper to rely on the buySAFE Seal, that more and more merchants are making the decision every day to become buySAFE Merchants.

Put yourself in the shoes of your shoppers, and you’ll see that the retail world is going to be split between two kinds of online merchants: those that have created a trusted environment for buying, and the rest. Don’t believe me? Then become a shopper yourself: Please click here to try Shopping Advisor!

Moral of the story: Consumer Confidence is not something that happens to you, the retailer; it’s something you create in your shoppers that allows them to be buyers. And we can help. Call or email us today—Phone: 888-9-BONDED, Email: info@buysafe.com

--  Travis Brown, buySAFE, Inc.,  September 2, 2008

buySAFE Shopping Advisor Wins Gold from Bloggers, Industry Experts

So we've all heard the phrase caveat emptor, or buyer beware. It's easy to say, but hard to do. And especially hard to do when shopping online, because the Internet creates a gigantic market where both the BEST merchants and the WORST scam-artists and EVERYONE in between is trying to sell you something. That's why we created buySAFE: a merchant certification and bonding service so shoppers KNOW they can TRUST an online merchant to perform exactly as he promised. And if he doesn't perform? Then it's OUR problem, not the customer's. It's online shopping with ZERO risk.

The market adoption of buySAFE has been tremendous: over 17 million bonded transactions prove that. Now we've expanded to provide shoppers a completely risk-free shopping alternative (the Safe Shopping Portal), via their browser, and also to provide information about the safety and security of EVERY online merchant. Every search can answer the hard questions that really dictate whether or not the shopper will become a buyer:

• Is this a good, reliable merchant to buy from?
• Will I get the item I ordered and in the condition I expect?
• Will my data be safe and secure?
• Will the merchant respect the privacy of my information?

That's exactly what buySAFE Shopping Advisor does: it adds to your search results (from any IE-compatible browser; FireFox will be supported soon) a four-point rating on the safety and security of every ecommerce website.  It answers the key consumer questions BEFORE they have been asked. Shoppers love it, because it's the right information at precisely the right time and place. And good merchants love it, because it lets shoppers know where they can buy with trust and confidence. So if you're someone who shops online, you need to have it NOW: click here, it will take about 30 seconds to download and install.

But enough of what we think

What's really powerful is that the experts on shopping and ecommerce blogs are as excited about Shopping Advisor as we are.  Don't take our word for it, go check out what the industry experts and commentators are saying:

Ed Dickson, one of the best bloggers on internet fraud and security issues, says on Blog Critics: "Shopping Advisor takes this concept to the next level by providing the consumer with a tool to make an educated shopping decision without falling prey to the pitfalls of a 'too-good-be-true come-on." Link: http://blogcritics.org/archives/2008/08/26/073026.php

CNet's Elinor Mills says "Worried about identity theft and fraudulent e-commerce sites? buySAFE may have something for you..." Link: http://news.cnet.com/8301-1009_3-9996513-83.html

The blog fraudwar sums it up this way: "Essentially, Shopping Advisor shows all the shopping opportunities for the search term listed, rates the sites in question and then gives the consumer the ability to make an informed buying decision. If the buyer chooses to buy a product via the Safe Shopping Portal, it is automatically guaranteed and the transaction is protected against identity theft for 30 days." Link: http://fraudwar.blogspot.com/2008/08/how-to-buysafe-on-internet.html

And the Web Host Directory's coverage explains "...Security concerns remain a principal drag on the e-commerce economy. Surveys routinely show that people would do more shopping online if they felt more confident that their information would be secure. buySAFE launched the Shopping Advisor tool aimed at increasing consumer confidence." Link: http://www.webhostdir.com/news/showNews.aspx?ID=27155

I encourage you to give buySAFE Shopping Advisor a try and please let everyone know what you think by leaving your comments here.

The Bigger They are, the Harder They Fall

You've heard them before. Some of the most commonly uttered standard bits of consumer advice for online shopping are:

• Always trust the big names
• Buy only from online retailers whom you’ve heard of
• Big Firms are more likely to perform than small fry

Wrong, wrong and wrong! Any review of recent trends among major online retailers will tell you that the only thing the above three points have in common, is utter nonsense. Not sure? Let’s look at some news items.   

Reuters reported earlier this year that The Sharper Image, home to exotic and futuristic gadgetry, filed for bankruptcy protection after years of slipping sales, stiffening competition and product image problems.

RedEnvelope Inc., a well-known online catalog gift retailer disclosed recently that it was running out of funds, filed for bankruptcy and announced a deal to sell itself to Creative Catalogs Corp.  A little later, well-known home furnishing retailer Linens ‘n Things followed suit.

In fact, of the 500 companies listed in the last 3 years in the Internet Retailer 500 (equivalent to the Fortune 500 of the offline world), 130 sites are no longer live.  Some may have moved their sites, but, like no pulse, this is often a sign of death.   

Obviously, size and reputation of an online seller are no assurance of the future viability of an online merchant.  Even the biggest merchants on and off the web are vulnerable to failure in a time of economic contraction. The advantage that they do have though is that their fall cannot be predicted by the average buyer -- which is not really an “advantage” to the average consumer at all. If it was so before, size is definitely no longer a proxy for stability.
 
Examples like those of The Sharper Image abolish this piece of folk wisdom in the market, and give food for thought to buyers looking to protect themselves against this uncertain and almost unpredictable fate of being left hanging overnight with a worthless plastic gift card, or worse, a freefall in the merchant’s performance.   

In this time of retail turmoil especially, consumers are in a hot spot on how to protect themselves against this sort of risk.  So in these troubled times for the rapidly growing wild west of online shopping, who will take that risk for consumers?   If the consumer can’t trust the big name or the well-known online merchant to be reliable, who can they trust?

Well, you saw this coming, but the answer is: buySAFE. In fact, you can always trust a buySAFE-bonded merchant to not bail on you! The buySAFE Seal on a merchant’s website makes two promises:

1. The Merchant has been vetted, approved, and is constantly monitored by buySAFE – it’s one of the best sellers on the web;
2. If you DO have a problem with a buySAFE Merchant’s performance (even including the bankruptcy of that merchant), then buySAFE ensures that you get your money back – all of it.  Fast.   It’s no longer YOUR problem, it’s buySAFE’s problem.
 
buySAFE has bonded millions and millions of online transactions, and no honest consumer has ever lost a penny. Now that’s a piece of wisdom that actually means business.    

Today's blog was contributed by Madiha Qureshi, Communications Associate

Margins: How Low Can You Go?

How low can you go? This is a defining question for any business, particularly in e-commerce. Sales and top line revenue are always important, but what is clearly understood as highly significant by every successful entrepreneur that I have ever met is a low margin. As the VP of Sales at buySAFE, I have the opportunity to speak with many e-commerce merchants selling in all product categories, and I can see that Internet merchants are constantly under pressure to reduce their margins from every possible direction.

Some of the most attractive characteristics of doing business on the web have been lack of or minimization of “brick and mortar” costs along with low barriers to entry and a nearly unlimited market reach with over 200 million online consumers. All of this should mean great margins regardless of the COGS profile of any business. As e-commerce matures though, these “advantages” are being eroded to the detriment of merchant profitability.

The minimal barriers to entry have resulted in a general lack of confidence in merchants by consumers since it is very difficult to differentiate through a browser. Some merchants have been all too willing to combat this problem with discounting of the product, while others get into e-commerce with discounting as their sole strategy. The net results are lower margins. The good news here is that 200 million consumers might see your site. The bad news is that it costs quite a bit to get them there. I cannot tell you how many near disasters I have heard about as a result of a runaway Pay-Per-Click (PPC) program. Paying for keywords in the hope of driving traffic can be a risky proposition. The result? Lower margins due to high customer acquisition costs.

But wait, there is more. I wouldn’t want to leave out payment processing fees, fraud detection fees, charge-backs and of course shipping. So how low can you go? But perhaps there is a better way.

buySAFE merchants are able to deflect some of these pressures and stem the tide of declining margins through the use of our bonding service, which provides a level of trust and confidence for consumers not normally found on the web. This helps shoppers discriminate between otherwise similar websites. The net effect is margin protection.

And it gets better. We have recently launched our Bonded Shopping Network focused on attracting the very shoppers that seek the trust and confidence gained from bonded merchants. This network provides consumers with multiple avenues to find these merchants. These consumers do not look at price first. Instead, their first priority is a trusted merchant. The best thing about this new program is it stands at the forefront of e-commerce advertising by utilizing a CPA (cost per acquisition) fee structure. This means that merchants pay advertising fees only after a consumer has made a purchase. The result is not only margin protection but cash flow improvement as well.

The best businesses manage their margins, rather than being told by the market what they must accept. eCommerce sellers are no different; those that can offer real differentiation to the shopper will protect their margins AND grow their revenues. So perhaps the question, after all, should be: How low do you have to go?

Today’s blog was written by Jon Aust, our VP of Sales & Marketing. Jon joined buySAFE in August of 2007 and is responsible for all Merchant sales efforts. Jon is an entrepreneur having launched a number of technology companies and enjoys helping e-merchants to grow their businesses through the guarantee of trust that buySAFE provides.

How the Online Merchant could survive (and profit from) the Recession

The ongoing recession has everyone in a state of uncomfortable uncertainty. The weak economy has consumers and merchants worried alike. But this very uncertainty represents an opportunity for smart merchants who can position themselves as precisely the TRUSTED, value-conscious, and low-hassle sellers that shoppers seek out during a downturn. 

While it is true that qualms about the economy cause some e-consumers to cut back on their online shopping, a recent survey also indicates that  other consumers plan to shop more online because of the convenience and greater chances of finding good deals, of course, to save money on gas (see a recent survey of 200 consumers by investment firm Piper Jaffray).  So the question is NOT what the macro-trend is, but rather how the smart merchant benefits from this share-shift.   

According to this survey, while 33% of online shoppers plan to reduce online spending on discretionary goods, 12% expect to spend more and 55% foresee no change. High-ticket luxury items are most likely to be affected by the decision to delay purchase.

Clearly, tactics for addressing the consumer also change.  For example, 67% of consumers polled by ICOM Information and Communications in another recent survey say that they increase coupon use in a weakened economy. 58% of these consumers favor electronic coupons delivered to loyalty cards online.

The U.S. government’s plan to send tax rebates to many consumers this spring has the ability to provide retailers a boost. But while Tax Rebates will inject a wave of expendable cash into the economy, two factors will influence the opportunity this creates for online sellers in the next two quarters: 1 - More emphasis on value and safety, and 2 - Easier access to discounts and coupons. Here’s how:

Both factors have directly to do with the increased importance of ‘value for money’ for every cent that the consumers spend. Both also increase the likelihood of more consumers turning to the Internet to make way through cuts in their personal expenses. We already know that starting with the price of gas, shopping online is just less expensive than driving to a store. Moreover, depending on how and where you shop, it’s easier to find tax savings, coupons and shipping deals online, because there are more and more narrowed down comparison and specialty stores on the Internet than there were a few years ago. This growth, from brick-and-mortar establishments into a host of niche stores that exist only online, definitely contributes to an exciting scenario for the online retailer. And combined with individual sellers on online marketplaces like Craig’s List, eBay (and now Facebook), these all add up to a plethora of choices for the price-sensitive consumer.
Along with the opportunity this brings though, there are certain challenges to be faced by the online merchant. The smart ones are going to take up these challenges and employ them to make the most of the ‘boom’ that recession can bring them.

1. Firstly, as the competition grows, it is imperative to play on quality not price. There is only a limit to the consumers who buy solely on price. Broken promises are unforgivable in the choice-plenty world of online shopping. Especially with the kind of influence feedback ratings, blogs and chat rooms carry, anyone who finds fault with your product can easily find an eager audience to complain to. Bad word of mouth travels fast.
2. Secondly, show your buyers that they are protected and won’t get ripped off if they deal with you! And there’s no better way to do this than to give the solid assurance of a bond. Protection Seals, bonding, safety from identity theft – show consumers that you care for their safety and that you have taken the extra steps to guarantee their safety. If you don’t take those steps, I assure you that your competitors will!

There are clear signs of a burst of growth in the online economy as shoppers turn to the Internet to better manage their shrinking budgets. It is now up to the smart online retailer to take full advantage of that!

Today’s buySAFE blog was contributed by Madiha Qureshi, who is a part of our Marketing and Communications Team.

This Just in: 2007 Internet Crime Report

The 2007 Internet Crime Report, just released by the FBI and the Internet Fraud Complaint Center, shines a spotlight on the overwhelming share of merchant non-performance as a part of overall internet fraud. The report states that over 60% of all internet fraud complaints are for merchant non-performance — compare that with a paltry 2.9% of all complaints for the much-hyped ID theft.

The total dollar value of consumer losses due to fraud also increased over 20% from the year before, from $198M to $239M – faster than the rate of the underlying growth in online sales. In short, the “bad guys” are doing better than the online market as a whole! Even more interestingly, the report’s research shows that fewer than 1 in 7 losses are ever reported, so the true problem must be significantly larger than the reported numbers.

According to the report, the Top Three internet user complaints by category are:

1. Auction Fraud – 35.7%
2. Non-Delivery – 24.9%
3. Confidence Fraud – 6.7%

While internet auction fraud was by far the most reported offense, non-delivery of merchandise and/or refusal to refund increased 31.1% from 2006.

These data explain powerfully why many online shoppers are anxious about buying online, despite the enormous benefits and rapid adoption of ecommerce. Shoppers’ uncertainty impacts their willingness to make online purchases – the reason why the National Consumers League’s Internet Fraud Watch now advises consumers to seek out bonded merchants when they buy online.

And that is, of course, where buySAFE comes in — we are experts at identifying good merchants, and so we can guarantee that they will perform, or we’ll take the loss for the consumer. We’ve bonded over 15 million transactions, and no honest consumer has ever lost a nickel. It’s very satisfying for me and my team to work in an area of the net that protects both consumers and rewards honest, reputable merchants.

For more information, check out the National Consumers League’s Internet Fraud Watch to read tips and info on protecting oneself when buying online.

Today’s buySAFE blog was contributed by Hans Dreyer, our VP of Operations. Hans has been with buySAFE since 2003, is in charge of our operations and customer support group, and, when he is not making the net safe for ecommerce, runs in ultra-marathons/adventure races and enjoys traveling the world.

Vizu & buySAFE Release Holiday Shopping Survey Findings

Over the last couple of months, we conducted an online survey in partnership with Vizu Corporation to better understand what online shoppers are thinking this holiday season.  The results are useful for any eCommerce merchant to review.  Key highlights include:

• 1/3 of online shoppers plan to spend MORE online vs. last year - good news!

• Merchant performance is most important for online shoppers when making an online purchase - even more important than price: 48% cite merchant performance as the most important factor followed by price (38%), amount of selection (9%), and ease of transaction (6%).

• 66% said they would be more willing to buy online if every purchase was guaranteed
• 73% or respondents said lower shipping costs would cause them to spend more online this holiday season.
• 46% of respondents said they’d rather shop online this holiday season than face the hassle of malls or pay the high cost of gas.
• 34% said procrastination (e.g., buying items at the last minute) is the reason they would shop offline this holiday season
• One half of respondents have experienced at least one serious problem when buying online (e.g., item never arrived or wrong item arrive): nearly one-third of those have had at least three or more problems with online purchases.

You can also see more of the findings at www.MarketingCharts.com or by clicking here.

buySAFE Founder Interview on Practical eCommerce

Nice interview of Steve Woda in Practical eCommerce this week on "The Future of Shopping Carts."  If you haven't seen it yet, check it out by clicking here

Ingredients for the Secret Sauce – buySAFE Luncheon in Boston

As readers of this blog are aware, last Friday, buySAFE held an invitation-only luncheon in Boston titled “Discovering the Secret Sauce of Multi-Channel Selling Success.” With a capacity crowd at Anthony’s Pier 4 restaurant on the picturesque Boston Harbor waterfront, this panel drew e-commerce merchants, Wall Street analysts, and journalists as attendees, all of whom left the session with greater insight into the challenges of and key factors for succeeding online as a multi-channel merchant.

The topic and composition of the panel could not have been more timely, as the issue of multi-channel retailing came to the fore frequently during the week of eBay Live, with our panelists and attendees playing key roles:

· Moderator Ina Steiner of AuctionBytes.com was quoted in numerous publications during the week, and also scored key interviews with eBay North America president Bill Cobb and CEO Meg Whitman, addressing multi-channel issues specifically.

· Panelist Bjorn Espenes, CEO of Infopia, announced the availability of Infopia’s new book “The eCommerce 2.0 Handbook – How to Prosper in the New Era of Online Selling” by Ralf VonSosen.

· Panelist Brian Smith of ComparisonEngines.com and SingleFeed was one of the first to break the story of eBay’s decision to pull their advertising from Google.

· Panelist Jonathan Garriss of PeSA, ECMTA and Gotham City Online penned a much talked-about position paper about the eBay marketplace titled “Unhealthy Marketplace Dynamics - Seller Perspective.”

· Panelist Steve Woda of buySAFE announced new partnerships with TRUSTe and comparison shopping site PriceRunner.

· Attendee Derek Brown of Cantor Fitzgerald was quoted extensively in the San Francisco Chronicle and other media outlets regarding the impact of eBay’s boycott of Google.

Other analysts from Bear Stearns, Canaccord Adams and other Wall Street firms were also in attendance.  Additionally, highly influential eBay community members were attendees including Mike Enos of Platinum Power Seller, Skip McGrath of Auction Sellers Resource, Kerry Murdock of Practical eCommerce, Phil Davies, CEO of Tias.com and David Hardin, PeSA Board Member & CEO of Shoetime.  The event really brought together some key influencers in the e-commerce world at a very important time.

As for the actual panel discussion, the session lasted approximately 60 minutes, including 15 minutes of questions and answers. Topics ranged from how to optimize keyword campaigns, to the best ways to drive traffic, to choosing a shopping cart platform. Key takeaways included the following:

1. Diversify or Die – Successful online merchants must leverage multiple online channels. “eBay is a great starting point, but if you’re serious, you need to have your own Website,” said Garriss. “On Amazon, they give you buyers, but they are not really your customers. At a certain level, you want to take control of your business.”

2. Analytics are Key: All panelists agreed that you must closely track key metrics to understand success or failure in real time. “What you really need to know from analytics is, ‘What does it cost to acquire a customer?’ – at the platform, keyword and SKU level,” said Espenes.

3. Test, Test, Test – There are many advertising platforms besides Google that merit experimentation for driving traffic to a merchant’s site. “You have to test,” said Smith. “Test SEO. Test AdWords, MSN AdCenter, and Yahoo Search Marketing. Test Amazon. You have to see what channels work for you.”

4. The Customer is King – Panelists agreed that the lowest hanging fruit for driving sales is leveraging a merchant’s existing customer base. “You can always buy traffic, but drive traffic that converts. The number one way to convert is to motivate your existing customer base,” said Garriss.

5. Trust is a Must – In order to convert shoppers to buyers, merchants must convey their trustworthiness, else be forced to lower their prices to compensate for a lack of awareness and trust. “Merchants want to compete on a non-price basis. You can build a brand, but it’s extremely expensive. A third-party endorsement of your business from a trusted source helps merchant bridge this trust gap” said Woda.

If you were not fortunate enough to join us, Ina Steiner conducted interviews with some of the panelists and participants during the week of eBay Live. You can check them out here:

Brian Smith -- http://auctionbytes.tv/cgi-bin/video-manager/frame.pl?features&06172007f

Jonathan Garriss -- http://auctionbytes.tv/cgi-bin/video-manager/frame.pl?features&06172007e

Ralf VonSosen (author of the Infopia book “The eCommerce 2.0 Handbook” -- http://auctionbytes.tv/cgi-bin/video-manager/frame.pl?features&06172007d

 
Pictures from buySAFE’s lunch panel:

http://auctionbytes.com/cgi-bin/ebaylive2007/index.pl?0&2&1

http://auctionbytes.com/cgi-bin/ebaylive2007/index.pl?24&2&2

Lastly, a big THANK YOU to all the panelists and to the over 100 attendees at this terrific event.

Internet Retailer & Bear Stearns Internet Conference Takeaways

Most of the buySAFE team is now back from last week’s Internet Retailer Conference.  Some of us, like me, just spent the last two days in NYC for the 18th Annual Bear Stearns Technology/Communications/Internet Conference. I was a speaker yesterday on the Safety Panel.

I wanted to share a few important insights from the two conferences.  I’ll share a bit more following the eBay Live conference this week. 

Internet Retailer put on a terrific conference. The number, variety and quality of both the exhibitors and the merchant attendees were exceptional.  This was the best eCommerce conference I’ve attended all year.  It’s a great conference for large, professional, multi-channel online retailers.  So that’s you -- you should try to attend next year. The depth and quality of the content is much higher than one typically finds at an eBay conference and the caliber of the attendees there makes it a much more productive conference for everyone involved. 

The Bear Stearns conference provided a great overview on the key trends across the internet.  Internet advertising continues to grow at an astounding rate and it sounded to me like the trend toward CPA (Cost-per-action) vs. CPC is really picking up steam.  CPA-based advertising is a new form of advertising which merchants are clamoring for because it takes all the risk out of marketing (they pay  % of sales vs. a flat fee for impressions or clicks).  Given that advertising is the riskiest, yet most important, spend a merchant makes, turning this into a truly pay-for-performance model where advertisers are paid as a % of revenue generated will be a great thing for merchants. On the trust and safety front, our panel discussed the trust issues all online merchants face.  That online shoppers are nervous and that to avoid missing major sales opportunities, online merchants need to aggressively address the two primary concerns online buyers have when buying online – 1) will my information/data/privacy be kept safe and 2) will this merchant be reliable and trustworthy and deliver as promised (will I have a smooth transaction and get what I paid for?). Tom Cuthbert from ClickForensics also provided some great insights into the click-fraud issues the search engines are facing.  All of the engines are taking it seriously and trying to minimize it as much as possible, but that overall, the search engines are not making much headway in reducing it.  In fact, in many cases click fraud is actually growing.

Scot Wingo of Channel Advisor, Rodrigo Sales of Vendio and Jonathan Garriss and Joe Cortese of PeSA all participated in a panel yesterday afternoon. The focus of the discussion was eBay and the universal message was that eBay isn’t innovating fast enough and the changes they are making (like raising listing fees) are net harmful to the marketplace. According to Jonathan/PeSA, the primary issue eBay continues to face is buyer confidence. Everyone seemed to agree with this.

So who is bigger, ChannelAdvisor or Marketworks?

I was looking at Marketworks’ press release today as covered in Ina Steiner’s AuctionBytes and I was struck by one statistics they mentioned. They processed $15 million in GMS on the first Monday after Thanksgiving (link to press release). That’s huge! A big congrats to the team at Marketworks!

Given that ChannelAdvisor had previously issued a press release in December stating they had just processed a record $10 million in GMS on a single day, I was surprised Marketworks had seen just a great day. It looks like Marketworks may hold the single day record, but I believe CA holds the title for total customer GMS (CA says they now do $100 million a month and Marketworks says they did $200 million in Q4 which equates to about $67 million a month in Q4).

Regardless, both companies appear to have had a great Q4 and they both have great solutions for online merchants. Congrats to them both!

Breaking News - MIVA partners with buySAFE!

I love it when my Marketing and PR team is a couple days ahead of me! Yesterday, buySAFE and MIVA announced an exciting new partnership! MIVA Small Business Solutions – with its more than 60,000 customers – will soon be making buySAFE bonding available to its tens of thousands of Merchant 5 customers. We couldn’t be happier about our new partnership with the team at MIVA, they are really great to work with! If you use MIVA 5 today and are interested in participating in the beta roll-out starting very, very soon, email us at miva@buysafe.com

You can see the full announcement here and almost instant coverage by Ina Steiner at AuctionBytes here.

Wharton, buySAFE and the Future of Advertising

Yesterday, Steve Woda (buySAFE’s Founder) and I spent the day in Philadelphia attending Wharton Professor Dr. Eric Clemons’ Jones Center on Global Strategy and Knowledge Intensive Organizations. The Jones Center is essentially a research organization headed by Dr. Clemons that is designed to highlight potentially disruptive industry changes and overwhelmingly attractive opportunities long before they are visible through traditional environmental scanning or trend analysis. In short, it’s an opportunity for companies and members to learn about cutting edge research being performed by Dr. Clemons at The Wharton School and to share ideas and insights. The center has been operating for over 20 years. Steve and I have been invited guests for the last few years.

Yesterday’s session primarily focused on two key topics.

1) buySAFE and valuing the elimination of uncertainty. A case study  Download buysafe_wharton_case_study_clemons_0906.pdf on buySAFE was reviewed and the large body of statistical data that has now been collected which measures the very pos itive impact buySAFE is having on buySAFE Merchant conversion rates and pricing was reviewed. In Dr. Clemons’ own words, “not surprisingly, this represents a significant improvement over eBay’s rating systems, and not surprisingly this translates into measurable price premiums for sellers”. We discussed buySAFE’s positive impact in the context of the cost of Uncertainty in online transactions (this cost is borne heavily by online merchants) and the value of Signaling in reducing uncertainty which then leads in changes in online shopping behavior.

2) Reaching the Customer: The Future of Advertising and Social Network Websites. This was a fascinating discussion of the continued erosion in the effectiveness of traditional advertising – primarily as a result of reduced trust in what the ads themselves are saying and from the sheer overload of messages. It also covered the importance of marketers to embrace the new channels and methods of marketing their product. In a world increasingly dominated by social networks and user generated content, the implications of the resultant loss of control over one’s message – create real challenges and opportunities for marketers.

This concept of the “death of push marketing” has obviously been around for a few years now. I personally believe Seth Godin is one of the best at truly understanding this topic and most importantly, for providing advice on how marketers should change their paradigms of thought in order to leverage new and much better ways to drive adoption of their products. If you haven’t read his work, you really should. Start with Permission Marketing and Unleashing the Ideavirus and work forward from there. Anyway, the implications of this for a company in the Trust business (i.e. buySAFE) are quite interesting… my train of thought goes like this…

a) falling trust in what the ads themselves are telling you is a major contributor to their reduced effectiveness,

b) with reduced trust, consumers don’t trust marketing pitches unless it’s from a trusted source (thus the power of word of mouth marketing),

c) the internet is a powerful tool that enables individuals to share ideas, thoughts and reviews but there’s a huge need on the internet for the “source” to be validated and trusted (LonelyGirl15 on YouTube is a prime example of this), so...

d) how do you solve this?

1. Build your own brand (e.g. become popular and well known enough that everyone knows who you are and trusts you)

2. Rely on the “wisdom of crowds”

3. Rely on an unbiased Trusted Third Party

Each has their own pros and cons, I believe the most reliable and effective is reliance on an unbiased trusted third party, but what you do think?

Over 50% of eBay sellers plan to stop selling on eBay?

Ina Steiner from AuctionBytes just released results on a survey of eBay Sellers.  Kudos to Ina as the survey is packed with lots of great information. 

The most shocking of which is what eBay sellers say they plan to be doing in 6 months… almost 60% said not selling on eBay.   Wow.  While its tough to tell exactly what people will do from surveys, they do reflect very much the current thinking of the respondents and it sounds like most eBay sellers are thinking about throwing in the towel.  What we typically see is a fair bit of eBay seller transition/attrition just after the Christmas selling season, so I’d expect the worst of it will hit eBay in the January/February timeframe. 

At buySAFE, we’ve see a marked softening in activity since the new eBay store fees went into effect.  The number of items sellers are listing for sale dropped deep double digits in just a couple weeks.  We’ve also seen an overall drop in sales/GMV as well, although not as significant as the reduction in listings.

The new fees are doing at last half of what eBay wanted – reducing the number of store listings.  So far, from what we can tell, it has had no (or negative) impact on overall eBay sales activity, so the second half of what eBay was hoping for – a rebound in core, hasn’t yet materialized.   Somewhat related, I’ve already seen a few eBayexpress.com ads on TV, but we haven’t seen dramatic changes on merchant sales.  That said, I suppose it is still early days.  My initial reaction from the ads I saw was that most people won’t realize that eBay Express is actually a different website called ebayexpress.com.   While it helps with overall eBay awareness, the ads I saw didn’t clearly make the distinction that eBay has a new/second website for you to look for new items.  Educating online shoppers of the new offering is clearly going to take some time.

Sheldon Liber from Bloggingstocks- I'd love your take on this.

Everyone's a critic? Not so fast

I think a lot about trust. E-commerce trust in particular. Lack of trust is the biggest reason why 50% of Americans still don't shop online. Trust is a powerful emotion. It can motivate us to participate in something outside our comfort zone, or lack of trust can cause the little voice in our head to say, “don’t do it.” So this week, when two conflicting articles about online trust came out, I had to put it all in context.

Guy Kawasaki writes about an article in the San Francisco Chronicle on the power of online reviews for small businesses. The article basically summarizes that online, consumer-generated reviews on everything from restaurants to websites are changing commerce and throwing off many small businesses.

In e-commerce, we've known the power of such reviews for years- otherwise known as feedback. In eBay-world, user-generated seller reviews are the gold standard for building trust online. Except that they don't work all the time, but that's another topic.

This is why I found this study so interesting:

"Only 21 percent of consumers trust product information within social media, such as blogs and public forums, when evaluating a product for purchase. In contrast, consumers are twice as likely to trust product information they encounter on a company Web site or a professional review site (such as Edmunds.com)." Hat tip to Jupiter Research and Clickz's Kate Kaye.   

eh? So, does all of Web2.0 for commerce go out the door? Not quite. They key here is context. I bet users trust product information on a corporate web site they trust. If they don't trust the brand, they don't trust its product info. Edmunds.com, eBay feedback: forums they trust. Word of mouth is no good if it's not in a trusted context. I trust my best friend's movie recommendations, but not some guy posting on a forum.

By definition, trust is the trait of believing in the honesty and reliability of others, but when it comes to e-commerce, it appears that trust is more about reliance- certainty based on past experience. As long as it’s from someone you know.

Sellers, eBay and what the Media Left Out

"If their new fee increases leads to increased revenues and stock price for EBAY, then the leadership is to be commended.  If they notice that the new fees have a detrimental effect on certain segments of their business, then I truly hope they reconsider their recent move.  No matter what they say to the press or how they try to frame it, it’s all about bringing increased revenues to their bottom line.  And a less-than-expected increase will likely be the only thing that would get them to change their recent fee increases."

This quote comes from a large eBay seller I spoke with last week, and it echoes the sentiments of many large volume sellers I’ve talked to recently. Most professional sellers understand that eBay has a business to run, but sellers have businesses to run too. If squashed margins driven by new policies hurt sellers’ businesses, what choice to they have but to shift their businesses elsewhere?

Articles, blog posts, and analyst coverage have taken note of seller grumblings about eBay’s new fee increases for stores and eBay's rationale that it was needed to “rebalance” the inventory levels between stores and auctions. eBay built its business off of core auctions, and developed a strong business model with the addition of stores.  The addition of eBay stores was the very reason hundreds of thousands of businesses could run off of the eBay platform each year.  By hitting these businesses where it hurts, eBay is forcing them to re-think their long-term business strategy, and the company is underestimating the ability of these businesses to sell off of the eBay marketplace.  As someone who speaks to hundreds of eBay sellers each year, what’s surprised me in the coverage of this recent issue is what is not mentioned:

1) They don’t discuss the inevitability of where this big eBay debate is heading: that some sellers will strongly focus on building their businesses outside of eBay. This is healthy and shows a maturing of the e-commerce market.

Multi-channel selling is the future- and it’s often misunderstood by the mainstream media. The media is harping on Google becoming the next marketplace, but I actually think the future has less and less to do with massive portal-like marketplaces. Free- standing stores, powered by software service providers like Channel Advisor - probably the best known of these in the eBay space, but also companies like MIVA or Yahoo Stores - are big players beyond eBay. This trend brings along with it a whole new suite of problems, but we see the growth in this sector, we’re excited about it, and we’re addressing ways to allow merchants to extend powerful trust signals backed by financial guarantees to make them mean something to their free-standing stores. Our other more eBay-centric colleagues like Channel Advisor also rapidly following their customers off eBay.

eBay still is and always will be an incredibly powerful and rich marketplace, but change is afoot and diversification, as I mentioned last week, is inevitable. We’ve certainly turned our business in that direction.

2) They don’t understand seller motivations- or at least they don’t seem to accurately report on them. As the quote above echoes, eBay sellers are businesspeople (many are quite sophisticated and are former investment bankers, lawyers, accountants, etc. with MBAs and other advanced degrees). Some articles have been quite patronizing in their discussion of eBay sellers and their reactions to fee increases and other new rulings such as the removal of many sellers’ stores listings. Hi-volume eBay sellers are smart entrepreneurs. They know eBay is motivated by the bottom line, and so are they. I think some analysts and journalists still think of eBay sellers as empty nesters wanting to clean out their attics and garages or stay at-home mom’s who have built a business out of the garage.  I assure you, there is nothing is further from the truth. These sellers want and need to run healthy businesses. High fees, lower visibility, and a lack of buyer trust conspire to create an atmosphere for some sellers that just do
esn’t allow them to run profitable businesses. Profitable businesses lift the e-commerce sector as a whole- and lift eBay’s value in the long run.

Professional sellers view eBay as a landlord, and when your landlord starts charging too much rent and letting the riff raff in, you move, or open another location. As Mylene Mangalindan mentioned this week in the Wall Street Journal, “there is a growing gap between registered users—people who have registered information about themselves on the site—and its “active” users, who have bought, bid on, or sold something in the past year.” The numbers I’ve seen point to active user attrition rate on eBay is now approaching 50% (annually).  This points to a massively high churn rate for eBay buyers, something more in keeping with the behavior of a search or comparison shopping engines and not a trusted marketplace. However, Wall Street (and journalists) often see eBay as an e-commerce play unto itself—or as an auctioneer, maintaining prices, courting buyers, and controlling inventory.

The truth is somewhere in between, but for the majority of serious merchants we work with, eBay is now just part of a multi channel retailing strategy. This is healthy, and to be expected.

Trust and the Little Guy

We now live in an era of declining trust in major corporations and those who lead them.  After management misdeeds ranging from Enron to WorldCom and accounting fiascos ala Fannie Mae, it’s hardly a surprise. And yet, huge companies who have lost trust in the past can regain that from consumers. I think of Microsoft, which was five years ago was vilified for its anti-trust and monopolistic tendencies.  After several years of consciously re-building their image couple with an effort to be more transparent—better press relations, more open product releases, blogging, employees feeling free to take on senior executives when they disagreed with company policy (see Scoble calling Steve Ballmer to task for MSFT's lack of support on a gay rights bill), and a generally more open spirit—Microsoft was this year named the “world’s most trusted company” in the Edelman 2006 trust barometer, an influential survey of business leaders, media etc.

Microsoft had been vilified because its most interested, invested users lost trust and respect in a company they simultaneously needed and resented. Although trust was re-built, MSFT alternatives grew apace, so that now the most believe they are less dependent on the giant company than they were in the past - one could argue Web 2.0 and its open source spirit was made possible by a sense that users just didn’t need Microsoft and its ilk to do what they needed to do online.

In many ways, we see the same thing happening today on eBay.  Citizen groups of alienated power sellers are revolting against eBay draconian policies and rising fees and organizing to fight back, or to create alternative marketplaces. See the growing “Powersellers unite movement,” which states as its mission:

"PSU was “born” when eBay implemented rate increases that significantly impacted sellers large & small. The fee hikes affect buyers also, as most sellers have no choice but to pass on the eBay fees to buyers. Our focus has now shifted away from the eBay boycott in early 2005 to helping sellers, and buyers, find the best alternative auction site(s) for their needs.

PSU is a fast- growing group of online members – seasoned and new – with common goals."

From an eBay competitor perspective, Overstock.com Auctions is gaining traction- this small competitor to eBay charges much less to merchants and gives them good visibility through search results and a “Trusted Merchants” gallery. As a result, we’re seeing movement to Overstock, and sellers are plugging Overstock on eBay message boards (link).  With their recent move to incorporate “Trusted Merchants” inventory in their core shopping site search results and their announcement today that they’ll automatically syndicate seller fixed price items to Google Base and Froogle, they are aggressively addressing the biggest knock sellers have had with them to date – limited buyer traffic.  These moves will no doubt have a significant impact in driving increased buyer demand for their Auctions site.

That said, thus far, these citizen actions have not gained significant traction, as Sheldon Liber mentioned in his follow up piece on Blogging Stocks. eBay is still the biggest game in town and sellers still need eBay. But citizen action and unrest is important, and eBay must listen. If eBay is seen as an unfair, monopolistic monolith then it will not win in the long run. Microsoft learned the hard way.

Plus, let’s not forget the recent lesson of the Connecticut Democratic Senatorial Primary. Who would have thought a little known guy with no government experience could beat a former vice presidential candidate and veteran Senator like Joe Lieberman? Ned Lamont won because grassroots supporters cared enough to force change. It all started with simple websites, like we’re seeing now with these grassroots anti-eBay sites.