Today is an exciting today for everyone here at Sigma Micro. We've officially merged with our sister company, Stark Brothers, to form an outsourced business and technology services company called Fifth Gear. With Sigma Micro's expertise in ecommerce platforms and retail software, and Stark Brother's fulfillment and logistics prowess we're confident that Fifth Gear will be extremely valuable to manufacturers and online retailers who want a full service solution that allows them to sell to consumers directly.
So what exactly is an outsourced business and technology services company? Fifth Gear has the unique ability to provide everything a company would need to sell their goods directly to consumers. This would include a warehouse to store inventory, a technology platform to handle order processing, relationships with major logistics providers, a call center to manage customer service, and a front end web store to display your goods online. Previously, retailers would have to choose solution providers in each of these different categories and integrate them for the business to work. This approach can lead to a whole slew of problems if any of the applications don't easily fit together.
With Fifth Gear, the physical warehouse system, the backend online ordering system, and the front end eStore can all be through one provider. You no longer have to spend time integrating different applications or worrying about incompatibility. Fifth Gear has all of the tools needed to operate a direct commerce business.
With the holiday season approaching quickly, many e-retailers are spending sleepless nights trying to better understand how to bring customers to their sites and ultimately, have them spend money. There is no simple answer to this question, only advice on how to better prepare your e-retailer for a holiday boost.
In order to have an effective drive of traffic to your site there must be a constant and time consuming effort to reach out to new customers. A very popular and appropriate solution to this is email campaigning. This is a cost effective tool that can reach hundreds, thousands, even millions of retailers simultaneously. For the e-retailer this means their time will be consumed by creating the email, finding a list, and promoting their sales. There is a perfect solution to this headache.
Sigma Micro offers a full Marketing Relationship Management (MRM) solution that provides an ecommerce platform for the e-retailer to offer their customers a specific marketing email. Sigma Micro has been a ecommerce solution provider for many years offering a full range of services and products, including the MRM. Specific to the campaign management, Sigma Micro provides undivided attention to target specific campaigns to each channel, including web, catalog and call center. By having Sigma-Micro professional design detailed and specifically targeted campaigns, this drives more traffic to your site while the e-retailer spends more time concentrating on their business.
Now I assume that we all understand in order to start a company the first step would be to find a product and or service to offer consumers to purchase. After all, the main point of running a profitable business is providing a much needed product or service. If your company offers the consumer a product but yet the consumer must buy additional services for that product from another business, your company losses out on the service purchase. This will not allow your company to grow as much as it could by offering both product and service.
To this long drawn out introduction, my point is simple. Companies who offer one single product or service are missing revenue streams from other areas of their business. There must be innovation, creativity, and an expansion of what companies offer. Sigma-Micro understands that business cannot be conducted by just one product. They offer a full range of necessary services to make their customers more profitable with less hassle. From the ecommerce platform and warehouse management to providing customer relationship management and multi channel software, Sigma-Micro pioneers the complete product fulfillment industry.
With Sigma-Micro’s entrepreneurial mind set, they continue to provide both product (retail software solutions) and services (product data management, CRM, catalog fulfillment, etc…) to companies that need and benefit from Sigma-Micro to make their company a success. The first step for diversifying a company is to provide consumers with multiple product and service avenues. The second step is calling Sigma-Micro to help grow your company in every aspect of the ecommerce industry.
The idea of selling only a product to a company is a thing of the past. Companies do not just want a product or service but instead the sense of importance and meaning with the company they buy from. Here at Sigma Micro we make collaboration a main priority. We understand that without relationships, growth as partnerships and growth of our multi channel software will not happen.
Sigma Micro provides four themes or processes in the collaboration of our customers. These include: User Conference, Advisory Board, SigmaCommerce Road Map and Research and Development.
The User Conference is an annual event which allows our clients to learn from industry experts, business partners involved with Sigma Micro, and other customers within our organization. At this event we share information on new catalog fulfillment features, our future company goals and directions and what our clients’ needs are.
Our Advisory Board acts like an internal consultant in that we individually meet with clients on a more personal basis to get a better understanding of their business. The Advisory Board of Sigma Micro wants to better understand the functions our clients would use and excel in those areas.
SigmaCommerce Road Map provides a detailed vision and timeline of the evolution of SigmaCommerce. We believe in holding nothing back and in the SigmaCommerce Road Map we reveal every major event in the growth of Sigma Micro and our future plans on features of SigmaCommerce.
We continue to invest heavily in Research and Development of future multi-channel direct marketing, so we can remain a leader in our industry and help prepare our clients for future growth.
We as a company firmly believe that the relationship between Sigma Micro and our clients be positive and continually grow.
Sigma Micro has been making multi channel software for retailers since 1982. Right now it's nearing the end of 2009. If my math is correct, that means that Sigma Micro has been in the business of serving retailers with technology for about 27 years.
Not bad, if we do say so ourselves.
Enter: Stark Bro's Fulfillment Services. Stark Bro's has been providing multi channel retailers with outsourced warehousing and fulfillment since basically the beginning of time. Or, the early 80's anyway, just like Sigma Micro. Of course, back then, "multi channel" described only two channels; brick and mortar and catalog.
So, rooted in catalog fulfillment and innovating to the latest technology demands of online retail, these two companies represent the very best of technology solutions and services for retailers. Learn more at www.Sigma-Micro.com.
Online retail is on a constant growth spurt in the US. There are many contributing factors to this increase in online activity like continual product update, real time inventory numbers, and ease of researching products. For the retailer themselves, this can be a stressful experience. The online retailer wants an ecommerce platform that will serve every purpose of the company. Many ecommerce companies provide different attributes of an online retail software solution.
Imagine, if you will, that you are an online retailer in need of an ecommerce platform. Your company will need software that handles an order management system, warehouse fulfillment and a product data management system, along with other applications that all perform in sync to facilitate your ecommerce needs. Let’s also pretend that you get your order management system from Company A, warehouse fulfillment from Company B, and all others from Company C. These companies represent different pieces to a puzzle. Remember you are the online retailer and you are trying to make your company run as efficiently as possible. How much of a hassle would it be to understand the different software, much less use the software effectively to accommodate your needs?
Sigmacommerce provides all the necessary tools for a successful ecommerce business. Merchandising, call centers, warehouse fulfillment, marketing, finance, web design, and much more are all offered through one company (Sigma-Micro). We not only provide you with all necessary tools but also help implement it into your company without costly down-time. Sigmacommerce has over 25 years of experience when working with the logistics of a retail company. In order to correctly piece the puzzle together, go with a company that provides all aspects of ecommerce business.
A major component of a successful ecommerce website is the use of website analytics data to make decisions to improve the site. A retail software solution is important to get products on the site and everything up and running, but it's not going to help you make decisions after you start. Here are a few key metrics to watch when using an ecommerce platform. All of these can be computed Per Visit Value You can compute your per visit value by dividing your revenue by your number of visitors. This will tell you how much each eyeball is worth to your site. Now, if you are looking to purchase a banner ad or any other kind of marketing campaign you will have a reliable estimate of how much that ad will be worth to your sales. You'll have to take into account that ad costs are usually based on impressions (which are not the same as visits) but you can easily calculate this based on the average number of pageviews each visitor has on your site. Now you can make a calculated decision on whether or not the ad will be profitable. If you're working with an ecommerce solution provider they should be able to set this up for you.
Breakdown of Traffic Sources Just as a lot of companies choose to diversify their sales channels by using multi channel software for catalog and web sales, it's important to have various sources of traffic to your website. An email list is critical because these will be your most loyal customers. Ones that choose to receive information from you voluntarily, and will keep coming back to the site after they receive emails from you. However, if you only rely on these core customers for sales it's likely that you'll start to see a major drop-off as time goes on. Think about improving your sites organic search rankings by using search engine optimization strategies. Social media and pay per click advertising are other opportunities that should be viable options for any ecommerce website. Use an analytics package to see exactly where your customers are coming from and spend some time diversifying your marketing strategy.
Bounce Rate If your bounce rate is starting to increase there may be a disconnect between your marketing efforts and your content. Investing in a content management tool might be useful, but it may be your marketing message that needs to be refined. You also might have an issue with broken links or missing pages that are causing users to land on a page that's not there and then they leave right away. Bounce rates will tell you how relevant your site is to people who find it. You can check the keywords that users search for to get to your site and make content changes based on the most popular keywords.
Cart Abandonment Rate It's useful to analyze the amount of customers you're potentially losing who find it difficult to get through the checkout process on your site. Most ecommerce sites will have a defined process that a user goes through to purchase a product. They will first put an item in the shopping cart, then be directed to a page to create an account, review their order, and then get to the order confirmation page. You can set up a goal or "funnel" in your analytics platform that referneces each of these pages and then you can see where customers might be falling off the path. Maybe there's a large percentage of people that get to the review order page, but don't continue on to the order confirmation. Maybe you have shipping rates on your review order page and your customers aren't happy with your rates. That type of insight would let you know to make that change.
All of these metrics can be found with a free software application like Google Analytics, but there are many other solutions like Fireclick and Omniture that are even more powerful. Your ecommerce platform should integrate easily with any of these programs
Multi Channel Software is designed to unite information across two or more business operations; specifically, retail sales operations.
When most people hear the phrase "retail sales" they think brick and mortar retail. In fact, any transaction in which a product is purchased by a consumer from a business is a retail sale. Therefore, retail sales operations occur not only in brick and mortar locations, but also over the phone and online, often driven by paper catalog mailings.
Sigma Micro has been designing and building multi channel software solutions since 1982, first with a product called Controller, and most recently with a program called SigmaCommerce.
These two order management systems represent over 27 years of expertise in unifying the information that comes from selling through two or more retail sales channels. This kind of software allows a retailer to track, manage, and measure its entire business with a single, comprehensive tool.
Not all catalog fulfillment solutions are created equal. Stark Bro's Fulfillment Solutions (SBFS) offers such services for retail companies who sell direct to consumers through a catalog. These services include warehousing and shipping, outsourced call center services and unbeatable freight rates that individual retail businesses could never negotiate alone. Stark's shipping volumes allow them to negotiate rates with major carriers like Fed Ex, UPS, and the US Postal service.
Stark takes these responsibilities and their related costs off the plate of a retailer and manages all of them independently with sophisticated order management systems build exclusively for direct retailers. Learn more about Stark Bro's Fulfillment Solutions at www.starkbrosfulfillment.com.
Every consumer product business begins in one channel or another. By channel I mean sales channel or retail channel.
Essentially, a person or company might open a brick-and-mortar location as the first channel through which their products are sold to customers. Another person or company might start by selling their products online, rather than a physical storefront. Still another person may choose to compile and distribute a paper catalog through which products can be sold over the phone.
Because products are being sold to consumers through each of these conduits, they are all retail channels.
Now, eventually, the growth of that business will begin to plateau as they saturate their reachable market in their original channel. Essentially, the marginal cost of acquiring each new consumer through that same channel begins to increase as they become more difficult to find.
It is at this stage in the growth of a retail business that opening a new retail sales channel holds the most profit potential. A new channel means reaching new customers who want your products and simply have different shopping preferences. It means reaching more people the way they want to be reached.
Opening that new channel will require a few new tools for the business to utilize; the central tool being multi channel software. Multi channel software will integrate and help manage the operations among both -- or all three -- retail sales channels of the business, including inventory levels, financials, performance reporting and much more.
If those sales channels include the internet, an ecommerce solution provider may be the magic bullet for your multi channel software integration. Investigate Sigma Micro's ecommerce solutions, multi channel software, and catalog fulfillment resources for your multi channel retail business.
Are your freight costs skyrocketing? How successfully are you managing your seasonal warehouse and call center labor? What percentage of your orders are you shipping same day or next day? Perhaps it's time for you to consider a catalog fulfillment and technology partner capable of providing you a full mail order solution.
As the weather cools and the leaves fall, this only means one thing to retailers. Things are about to get crazy with the holiday shopping season. As we move into the busiest and most stressful time for your online ordering system have you taken a good look at your current ecommerce solutuion provider? Does your retail software solutuion provider assist you with the following items:
- Do you have an ecommerce platform that is easy to use and encourages growth in your business? - Do you have an end-to-end order management system build exclusively for direct retailers? - Does your provider also have catalog managment software and do catalog fulfillment? - Does your provider have a robust customer relationship management application? - Does your retail solutions provider have a multi channel software system or is it all located in one system with one shared database?
Can your system do all that? If not maybe its time to look for a new Ecommerce Solution Provider so you are all ready to kick butt next holiday season.
Check out Stark Bros Fulfillment (www.starkbrosfulfillment.com) for all your catalog fulfillment needs. For over 14 years, we have provided Stark Bros with the order managment systems and ecommerce platform they need to be your full service, catalog fulfillment partner. Stark Bros leverages our multi channel software combined with their infrastructure to deliver to market a complete mail order solution.
In times like this, direct retailers must consider new business models to gain a competitive advantage. To better focus your time and energy on your expertise in merchandising and direct marketing strategies, have you considered outsourcing your catalog and ecommerce fulfillment? With our industry leading Order Management Systems, SigmaCommerce and Controller+, we have the technology, infrastructure and expertise you require. We utilize our own proprietary multi channel software with a robust ecommerce platform. We manage 400,000 square feet of warehouse space and two fully staffed call centers. The combination of our technology, infrastructure, and operational expertise forms a full service order management system. Let us prove that outsourced catalog and ecommerce fulfillment can work for you.
According to Internet Retailer (and Hershey's ecommerce homepage, www.hersheygifts.com) Hershey's Gifts will be closing its catalog and web businesses on July 31st, 2009. My initial question is... why?
Why, after all the examples we've seen of ecommerce success even in the midst of economic recession, would a major brand shutter its direct retail operations? Why, knowing the ease and efficiency afforded to direct retail customers by online shopping, would Hershey's cut this entire business unit from its growth strategy in one fell swoop?
Let's look at Hershey's foundational business model. Traditionally, Hershey's is not a direct retailer at all. Hershey's is a brand manufacturer; a producer of chocolate happiness and a vendor to the direct retailers who sell it. I can't name a single gas station or convenience store that doesn't sell Hershey's candy. The price point is low, the purchase is driven by impulse, and it may very well be the only product that's more convenient to get in the real world than in the virtual one.
But Hershey's knew that all along.
So instead of selling almond bars and $5 bags of kisses through a channel with shipping expenses equivalent to the value of the product, they designed HersheyGifts.com to be a resource for much more luxurious and valuable candy products. The online selection is comprised of fancy gift tins and baskets, categorized by gift "occasions" complete with pretty packaging and all the other cost justifiers required to drive up average order value.
Internet Retailer reports that the ecommerce and catalog operations combined drove $22 million in 2007 and experienced no growth in 2008.
Now, I can't imagine the flat growth curve of 2008 was the deciding factor for closing the doors. As I mentioned in a previous post, "Flat is the new Up". A website that maintained its sales in 2008 didn't do half bad, all things considered.
Internet Retailer also reports that the closure will eliminate only 12 employee positions. Even after considering the cost of catalog distribution, mail order solutions and other materials, these would have to be some pretty well-paid employees if the $22 million operation was losing money.
In the end, I guess it's not for me to know what's responsible for the demise of HersheyGifts.com, but I won't be surprised to see some iteration of direct retail efforts emerge from that company again in the near future.
As it stands, most retailers who sell products through catalogs or the internet are not required to collect sales tax for transactions performed with customers outside their own state, or any other state in which they maintain a physical presence.
That is likely to soon change.
A handful of states including Hawaii, Minnesota, California, Connecticut, Tennessee, and Massachusetts have introduced legislation that would require internet and catalog retailers to collect sales tax for all sales to customers in those states, regardless of the merchant's physical location. This mirrors a New York state law that requires retailers to collect tax on all sales driven by affiliate sites based in the state.
Essentially this means that the internet is likely to become just a tad more similar to brick-and-mortar retail; where every transaction is accompanied by state and/or local sales tax.
As our very own Jeff Long discussed in his post "Beware the Taxman" several months ago, online retailers are soon to lose the advantage of tax-free sales they've enjoyed for so long. Many would call this more leveling of the playing field with b&m retail, but let's not forget the ever-present shipping expense associated with direct-to-consumer sales.
While states continue to be pressured by budget deficits and scramble desparately to save public programs, anticipate the milking of ecommerce dollars... because there are only two guarantees in life.
It's true that an ebbing tide lowers all ships, but there are certain industries that are more vulnerable to the type of economic situation we're all living right now. Conversely, there are certain industries that are more insulated, and some that actually benefit.
This might be an obvious point to make. After all, we see the news about increased sales at movie theaters driven by people who want an inexpensive escape from a harsher reality, and busier auto repair shops because of people postponing the more expensive alternative of purchasing new cars. Cost conscious consumers are shying away from major cash outlays in all kinds of areas, and I'm seeing some pretty specific ecommerce examples for illustration.
NFL.com cashed in on 2008 consumer attitudes with an 18.9% increase in sales over 2007 according to Internet Retailer. In case you missed the news reports, it turns out that sports are another favorite passtime for reality escapists. What better way to live the dream than to buy the gear? Combine that with the obvious array of holiday gifts at the peak of football season and you've got a recipe for success.
At the same time, Select Comfort Corp., manufacturer and retailer of beds and mattresses, saw a 32% decline in 2008 vs. 2007. If I'm not mistaken, a new mattress is about a once-every-10-years investment. Anyone who didn't absolutely need a new mattress in 2008, probably didn't buy one. If they did, they probably didn't invest in a high-tech robot mattress. A tried and true Sealy helps deliver me to la-la-land just as well.
People are likely to maintain their reality abandonment through 2009, so we would be wise to apply these lessons wherever we can; including mail order solutions, catalog management software, and customer relationship management applications.
Which products in your mix could take advantage of this trend?
I've just come across the most impressive ecommerce sales figures I've seen yet for 2008 online retail. Internet Retailer is reporting that Staples Inc. saw 37.5% growth in web sales over 2007, as the online channel accounts for 33%... that's right... 33% of total sales for the year.
Am I naive to be so impressed? I think not.
This means that one third of all revenue for Staples Inc. was driven by the internet directly, plus who-knows-how-many more sales prompted by online research before in-store purchases. This gives Staples Inc. the second largest revenue generating ecommerce operation in the world, at $7.7 Billion online alone.
My first question is, why?
First of all, let it be known that Staples bought some of that market share with its acquisition of Corporate Express Inc., another international office supplies retailer. But of course, there's much more to it than that. While online retail is proving itself as the best bet for revenue and year-over-year growth in nearly every industry, office supply products are particularly well suited for this channel.
Millions of businesses worldwide are constantly cycling through inventories of office supplies. When they run out, they know exactly what to purchase, exactly what it will look like when it arrives, and they know pretty well what they'll pay based on the last time they ordered. This is a beautiful sweet-spot for a sales channel that offers the ultimate in convenience and efficiency. In fact, Staples is probably selling online to many of the retailers who are competing for it's high rank in ecommerce sales.
Staples is cashing in on a great combination of sales channel and product set. If you're a retailer with an online operation, take a lesson out of their book when choosing which products to promote most on your site. This could be a simple key to higher growth; a pretty affordable investment compared to mail order solutions and catalog management software.
I usually keep a close eye on updates from Internet Retailer, and it seems that late-February / early-March is the right time for reflecting on retail performance from the previous year. I've been taking notes to share with you, just in case you're not such an avid IR reader.
First on the list: the Home Shopping Network.
As I understand it, HSN is the hallmark direct-response television retailer. Of course, most of my familiarity with the company comes from sleepless nights in front of the tube, when the only viewing options are get-rich-quick infomercials and HSN. There's plenty to be said for this business model; I can't tell you how many items I've been tempted to purchase with judgment impaired by sleep deprivation. But that's a marketing lesson for another time.
According to IR's reports, HSN's direct-response TV business unit held it's own by maintaining sales levels from 2007, which, considering the economic events of 2008, might as well be considered a landmark achievement. However, HSN experienced real growth through HSN.com, it's ecommerce operation, which grew 16% over 2007. This performance is par for the course, as online growth metrics have consistently outperformed traditional channels year-over-year. If you think about it, the online channel is the greatest innovation in "home shopping" since direct response TV anyway. HSN seemed pretty well positioned to take advantage in the first place.
Despite these great numbers, HSN Inc.'s total sales fell 3% in 2008. This is because HSN owns a very separate business unit called Cornerstone Brands, which operates an ecommerce channel, catalog, and retail stores. HSN would have posted considerable growth overall if not for this unit which shrank in every channel. Store and catalog sales hemorrhaged losses of 22% while the web, still the best performer, lost 6.7% of sales over 2007.
This illustrates two important lessons for retailers:
Ecommerce is the indisputable champion for consistent year-over-year growth, or at least, protection from cataclismic losses in retail sales.
Ecommerce is not the magical door to Narnia. Even well managed online divisions cannot push a company with unpopular brands and products into the black.
Mail order solutions and product data management will only get you so far. A good online ordering system with appealing products and (price points) to match will go a long way in hedging your bets for 2009.
Let's look at Hershey's foundational business model. Traditionally, Hershey's is not a direct retailer at all. Hershey's is a brand manufacturer; a producer of chocolate happiness and a vendor to the direct retailers who sell it. I can't name a single gas station or convenience store that doesn't sell Hershey's candy. The price point is low, the purchase is driven by impulse, and it may very well be the only product that's more convenient to get in the real world than in the virtual one.
A handful of states including Hawaii, Minnesota, California, Connecticut, Tennessee, and Massachusetts have introduced legislation that would require internet and catalog retailers to collect sales tax for all sales to customers in those states, regardless of the merchant's physical location. This mirrors a New York state law that requires retailers to collect tax on all sales driven by affiliate sites based in the state.
This might be an obvious point to make. After all, we see the news about increased sales at movie theaters driven by people who want an inexpensive escape from a harsher reality, and busier auto repair shops because of people postponing the more expensive alternative of purchasing new cars. Cost conscious consumers are shying away from major cash outlays in all kinds of areas, and I'm seeing some pretty specific ecommerce examples for illustration.
My first question is, why?
First on the list: the Home Shopping Network.
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