eCommerce20 ebook

The eCommerce 2.0 Handbook
How to Prosper in the New Era of Online Selling
by Ralf VonSosen
© Copyright 2007 Infopia, Inc. All Rights Reserved.

Foreword
1.0, 2.0, even 3.0—these numbers have been shooting around the technology
industry for the past several years. They are related, in one way or another,
to the Internet as a whole and software solutions. I kept asking myself
what they have to do with the practical day-to-day efforts of eTailers? When
looking towards the future of eCommerce, many discussions seem to be
centered on rich website experiences, social networking, or new analytic
tools, but never on a holistic view of the future of eCommerce.
A few years ago, Tim O’Reilly made sense out of what was next for software
solutions. He did this with his introduction and discussion of the Web 2.0
concept. Web 2.0 explains how the realities of tomorrow will change how
software solutions are designed, created, and used. By examining and
extrapolating Web 2.0 principles, I began to see that they had important
implications for online retailing. This is ultimately where the concept of
eCommerce 2.0 comes from.
Understanding the new possibilities for software—and what principles are
applied in creating it—is the foundation for understanding the future of
eCommerce. It is also the foundation for taking advantage of eCommerce 2.0
principles and the new trends they drive.
This handbook serves as a summary and practical guide to eCommerce
2.0 principles, and how you—as an online retailer—can apply them in your
business today. Each principle is discussed in detail, covering changes in
eCommerce and how to adapt to them. At the end of this handbook, you will
find helpful tips on getting started and questions to ask yourself before
diving into each unique principle that makes up eCommerce 2.0.
— Ralf VonSosen

Table of Contents
The Future of eCommerce 5
Web 2.0 9
eCommerce 2.0 13
Sell Everywhere – Be Seen and Be Shopped 14
The Long Tail – Target Niche Markets 15
Customers Rule – Build a Community of Raving Fans 15
Personalized Shopping – Make It Fun to Shop and Easy to Buy 16
Mash-ups – Integrate and Collaborate 16
Data is King – Collect a Wealth of Opportunities 16
Getting Ready for eCommerce 2.0 17
Sell Everywhere 18
Case Study : Patriot Surplus Charges Into New Online Markets 22
The Long Tail 23
Case Study : HiFi Sound Connection Amps Up for Search Engines 28
Customers Rule 29
Case Study: Shoplift.com is All About the Customer 34
Personalized Shopping 35
Case Study: Visibility Unlimited Sees Crystal-Clear Success 40
Mash-ups 41
Case Study: NextWorth Takes iPods to the Next Level 46
Data is King 47
Case Study: The Product Exchange Boosts Profits Through Data 52
Bringing it All Together 53
Appendix A: 10 Tips for Starting with eCommerce 2.0 57
Appendix B: Are You Ready? 60
About This Handbook 64

Page
The Future of eCommerce
eCommerce is nowhere close to reaching its potential. The selling
capacity of the Internet, along with the technology that drives it, is still
in its infancy. What is interesting at this juncture in eCommerce is that
we are on the verge of a new era in terms of technology, relationships
that drive business, and information that will put more control in the
hands of both eTailers and consumers.
In 2006,
eCommerce was
only 3% of total
retail sales in the
US. By 2011,
eCommerce
sales will
expand from
$110 billion to
$265 billion.
Today, eCommerce is primed for rapid growth that will push the
limits of your technology and potentially net you significantly more
revenue and higher margins than you have seen in the past. In
2006, Bear, Stearns Co. Inc. estimated the total eCommerce
market in the United States was less than 3% of the overall retail
market. That 3% equates to $110 billion. By 2011, with a projected
16% compounded growth rate, Forrester Research estimates the
eCommerce market will expand to $265 billion.
eCommerce strengths are propelling continued online buying.
Shopping convenience and the ability to compare products—in terms
of features and price—is giving consumers a measure of control
over buying decisions that does not exist in the brick-and-mortar
world. It is important to note that as Internet technologies have
improved, consumers have gained greater confidence in and comfort
with online technology. This includes greater confidence in Internet
security, in trying new products, when buying for the first time from
a new merchant, and in buying items related to a main purchase.
As shopping control for buyers has increased, so has control of a
different type for eTailers. Previously, complete eCommerce data
was only available to the industry’s largest brands. Now this data
is available to eTailers of all sizes. This level of empowerment in
the industry is helping drive more aggressive business plans. With
better eCommerce data, eTailers are getting the visibility necessary
to make better decisions and increase online buying through various
channels.

Page
But as buying has increased, so has competition between online
merchants. If you have sold online for any length of time, you have
undoubtedly experienced this. The number of eTailers serving the
growing base of online buyers has risen to extraordinary levels.
Competition in many market segments has become spirited to
say the least. The many options buyers now have has resulted in
challenges for sellers. These challenges have grown exponentially
more difficult to address.
More Buyer Options More Seller Challenges
Online Stores Visibility into Business
Marketplaces Usability Expectations
Shopping Channels Reducing Costs
Search Engines Service Quality
Payment Methods Competitive Offers
Shipping Choices Targeted Promotion
The rate of change in eCommerce is unprecedented and is affecting
fundamental areas. Only four years ago, 65% of purchases were
initiated by customers coming directly to a merchant’s website.
Only 13% of purchases were initiated through a search engine such
as Google, or a comparison shopping engine such as Shopping.com.
A massive shift has occurred. Today, only 24% of purchases are
initiated by customers coming directly to a merchant’s website,
while 50% of consumers come to a website after searching for a
product.
As buyers become more experienced and sophisticated, their
demands become more complex. This is why the dynamic
interaction between applications and data sources has become so
important—it helps you build solid solutions and processes that
create value and help you adapt to market demands. If you offer a
limited number of shipping or payment options, you run the risk of
abandoned carts or buyers who never get past reading about your
As buyers
become more
experienced and
sophisticated,
their demands
become more
complex.

Page
options. Ultimately, if you fail to reinvent yourself in the changing
world of eCommerce, you run the risk of becoming dated and
irrelevant.
Look below at some of the changes in eCommerce over the past
several years and where eCommerce is headed in the near future.
*Some of the observations above were taken from Tim O’Reilly’s
article titled What Is Web 2.0.
Incorporating and adapting to change in eCommerce through
adjusting your own online retail strategy is critical. One place to look
for guidance on eCommerce change is Web 2.0.
Past eCommerce Present and Future eCommerce
personal websites a blogging
domain name speculation a search engine optimization
page views a cost per click
publishing a participation
stickiness a syndication
seller/manufacturer product descriptions a peer product reviews
static catalog a dynamic configuration
mass emails a personalized offers
mass marketing a niche marketing
seller/manufacturer support a user communities
website selling a multi-channel, online selling
system integration a mash-ups
reports a analytics
research and shopping as work a research and shopping as entertainment

2Web 2.0
THE LONG TAIL //
DATA IS THE NEXT INTEL INSIDE //
USERS ADD VALUE //
NETWORK EFFECTS BY DEFAULT //
SOME RIGHTS RESERVED //
THE PERPETUAL BETA //
COOPERATE, DON’T CONTROL //
SOFTWARE ABOVE THE LEVEL OF A SINGLE DEVICE //

Web 2.0
The term Web 2.0 was first introduced by computer publishing
mogul Tim O’Reilly in 2002. It is more of a philosophy than a
science and more of a concept than a tightly defined description.
Web 2.0 essentially describes how software and systems should
be developed to address the new age of the Web. It addresses how
applications are created, published, and sold. Web 2.0 also proposes
how this new era of technology development creates value for users.
Web 2.0 can be applied to all facets of software and technology, and
is encapsulated in eight principles for the purposes of this book.
These principles are taken from Tim O’Reilly’s article titled What Is
Web 2.0.
The Long Tail
Small sites make up the bulk of the Internet’s content; narrow
niches make up the bulk of the Internet’s possible applications.
Therefore: Leverage customer self service and algorithmic data
management to reach out to the entire Web, to the edges and not
just the center, to the long tail and not just the head.
Data is the Next Intel Inside
Applications are increasingly data-driven. Therefore: For competitive
advantage, seek to own a unique, hard-to-recreate source of data.
Users Add Value
The key to competitive advantage in Internet applications is the
extent to which users add their own data to that which you provide.
Therefore: Don’t restrict your “architecture of participation” to
Web 2.0
describes how
software and
systems should
be developed to
address the new
age of the Web
and create new
value for users.
For the past several years, “Web 2.0” has been a buzzword that is
seemingly everywhere. But what exactly does Web 2.0 mean, who is
defining it, and how will it affect you in coming years?

software development. Involve your users both implicitly and
explicitly in adding value to your application.
Network Effects by Default
Only a small percentage of users will go to the trouble of adding
value to your application. Therefore: Set inclusive defaults for
aggregating user data as a side-effect of their use of the application.
Some Rights Reserved
Intellectual property protection limits re-use and prevents
experimentation. Therefore: When benefits come from collective
adoption, not private restriction, make sure that barriers to adoption
are low. Follow existing standards, and use licenses with as few
restrictions as possible. Design for “hackability” and “remixability.”
The Perpetual Beta
When devices and programs are connected to the Internet,
applications are no longer software artifacts, they are ongoing
services. Therefore: Don’t package up new features into monolithic
releases, but instead add them on a regular basis as part of the
normal user experience. Engage your users as real-time testers,
and instrument the service so that you know how people use the
new features.
Cooperate, Don’t Control
Web 2.0 applications are built of a network of cooperating data
services. Therefore: Offer Web services interfaces and content
syndication, and re-use the data services of others. Support
lightweight programming models that allow for loosely-coupled
systems.
Software Above the Level of a Single Device
The PC is no longer the only access device for Internet applications,
and applications that are limited to a single device are less valuable
than those that are connected. Therefore: Design your application

from the get-go to integrate services across handheld devices, PCs,
and Internet servers.
The question you may be asking yourself at this point is how all this
applies to eCommerce? While eTailers do not usually count software
development or distribution as core competencies, Web 2.0 has
important implications for eCommerce. Specifically, by applying
these principles a little further downstream in the business cycle—
to the eCommerce cycle—you can take advantage of the changing
landscape of the Web and the expected growth in eCommerce
before your competitors do.

3eCommerce 2.0
SELL EVERYWHERE – BE SEEN AND BE SHOPPED //
THE LONG TAIL – TARGET NICHE MARKETS //
CUSTOMERS RULE – BUILD A COMMUNITY OF RAVING FANS //
PERSONALIZED SHOPPING – MAKE IT FUN TO SHOP AND EASY TO BUY //
MASH-UPS – INTEGRATE AND COLLABORATE //
DATA IS KING – COLLECT A WEALTH OF OPPORTUNITIES //

eCommerce
2.0 represents
a new creative
frontier where
some eTailers
will thrive and
some will be left
behind.
With the evolution of applications and Web capabilities described by
Web 2.0, there are very important changes implied for eCommerce.
These changes represent a new creative frontier where some eTailers
will thrive and some will be left behind. It is a frontier where new
competencies, technology, and partnerships are required—where
great things for both eTailers and buyers will be possible.
eCommerce 2.0
Just as Web 2.0 is altering the software development landscape, the
principles of eCommerce 2.0 will define how eTailers do business
online. These eCommerce 2.0 principles loosely track to those
found in Web 2.0, but take on a whole new life given the unique
eCommerce selling cycle. Below are the principles of both Web 2.0
and eCommerce 2.0, with further information on those found in
eCommerce 2.0.
Web 2.0 eCommerce 2.0
The Long Tail Sell Everywhere
Data is the Next Intel Inside The Long Tail
Users Add Value Customers Rule
Network Effects by Default Personalized Shopping
Some Rights Reserved Mash-ups
The Perpetual Beta Data is King
Cooperate, Don’t Control
Software Above the Level of a
Single Device
Sell Everywhere – Be Seen and Be Shopped
Customer expectations for how and when they buy products have
changed substantially over the past few years. Multi-channel
selling was once limited to managing direct sales, a call center, a

website, and possibly a partner channel. With eCommerce 2.0,
this has been expanded and refined to include various online
channels. These new channels include additional branded
websites, various online marketplaces (such as eBay, Amazon.
com, Overstock.com, and others), and online shopping comparison
engines (such as Shopping.com, PriceGrabber.com, and others).
The Long Tail–Target Niche Markets
eTailers who can connect with niche markets and provide a better
online experience are capitalizing on new-found revenue. In the
past, the obvious strategy was to find the bulk of the market and
then mass market to them. With so much competition,
many online merchants have adapted by discovering new
methods and tools that target specific niche markets. These
niche markets are not flooded by the big brands and respond well
to content and online experiences directed specifically at them. In
many cases, the demands of these niche markets are simply not
being met by big brands. The Long Tail principle of
eCommerce 2.0 is about being able to reach beyond
the traditional prospect base and tap the potential of
niche markets.
Customers Rule – Build a Community of Raving Fans
Buyers were once along for the ride in the eCommerce process.
Now they are in the driver’s seat. The content buyers create through
forums such as product reviews, blogs, and social networks
influences other buyers as much or more than any promotion
eTailers create. Forums like YouTube and MySpace underscore
how content created by consumers has become a viable and
valuable part of the promotional and sales cycle for retailers. The
most frightening aspect of these forums for many eTailers is the
perceived loss of control over content being published.

Personalized Shopping – Make It Fun to Shop
and Easy to Buy
Shopping has long been considered a recreational activity by many.
Shopping online is no exception. In fact, with the sophistication and
speed of online shopping tools, consumers are spending more and
more on eTailer sites. The best of these shopping tools takes into
account that buyers want to be entertained and pleased. Buyers
also—just as in the brick-and-mortar world—do not like long
checkout processes. When building your online brand, regardless of
channel, remember that speedy checkout equates to happier buyers
who are more likely to return and buy again.
Mash-ups – Integrate and Collaborate
Integration is nothing new, but what is new is how dynamically
these integrations need to be initiated, modified, and used. The
eCommerce 2.0 environment is built upon many interrelated
systems and processes that require information to be exchanged
dynamically. This happens between many systems based on
individual user experience and the context of a particular customer
interaction or order. Seamless access and interaction between
systems is what promotes increased conversions and buyer loyalty,
as well as attracts new buyers.
Data is King – Collect a Wealth of Opportunities
Gone are the days of looking at purely operational reports. Seeing
how many listings you have in a marketplace is fine, but it does not
tell you how you compare to other eTailers, what your performance
is like over time, or what other channels may be more profitable.
eCommerce 2.0 is about collecting and managing data from all
online channels to enable better business decisions. Discovering
product opportunities relies on being able to define business
objectives carefully, identify related key performance indicators
(KPIs), and receive continual data to act on it.

4
SELL EVERYWHERE //
THE LONG TAIL //
CUSTOMERS RULE //
PERSONALIZED SHOPPING //
MASH-UPS //
DATA IS KING //
Getting Ready for eCommerce 2.0

Being ready, in a real-world sense, for eCommerce 2.0 means going
beyond understanding the basic theories behind it. Before imple-
menting eCommerce 2.0 in your business, it’s important to look at
what facets of your business each principle touches, evaluate where
you currently are in your ability to adopt eCommerce 2.0, and see how
others are using it in their business.
Getting Ready for eCommerce 2.0
Sell Everywhere
Selling through multiple channels has long been a practice of offline
retailers. Retail locations, call centers, catalogs, direct selling, and
partners have all been leveraged effectively over the past several
decades. But eTailers face issues and challenges not previously
seen in channel selling. Today, there is a whole new set of these
issues and challenges, along with critical success factors, that go
hand-in-hand with selling online in multiple channels.
In order to maximize the benefits of these new online channels
(such as eBay, Amazon.com, and various shopping comparison
sites), it is important to give customers what they want. This means
enabling buyers to do business with you through any channel they
chose—subject to their situation or buying preferences at the time.
Buyers do not want to compromise on product selection or the
level of service they receive because they have chosen a different
channel. Your order fulfillment times should be the same whether
they bought on your website or on eBay. Buyers may also want to
start an order in one online channel and finish in another. What
complicates this further is that you must be able to drive market
penetration, targeted marketing, and customer satisfaction efforts
in each online marketplace.
Multi-
channel selling
has been
expanded and
refined to
include various
online channels.

Collaborating Between Channels
eCommerce 2.0 collaboration is about the dynamic interactions
between eCommerce websites, marketplaces, comparison shopping
sites, natural search, and paid search. Here, natural search refers
to sites such as Google and Yahoo!, while paid search refers to pay-
per-click advertising. This collaboration enables you to establish
relationships with buyers through a variety of different methods,
with the goal of bringing them back to your website for checkout—
where the margin on each sale is higher.
EXAMPLE : Use a technology solution that allows you to redirect
buyers to your website when completing an order on a marketplace
like eBay.
Inventory Management
Effective inventory management requires that you manage items
in only one place and sell in many. If you have a single source of
truth for your inventory across all channels, and real-time inventory
updating, you can always have correct inventory information
distributed across the online marketplaces you sell in. This
requires that you create detailed inventory records. These include
unique descriptions, attributes, and images for each item. All this
information can then be sent to your appropriate online selling
channels.
EXAMPLE : Create an item in your inventory with all appropriate
attributes and then list that item to eBay, Amazon.com, Shopping.
com, PriceGrabber.com, and other channels simultaneously.
Branding
Being recognized is an essential part of continued online selling
success. Because of this, branding must be consistent across all

online selling channels and convey the critical elements of trust,
professionalism, and expertise. Although your company look
and feel may begin with your website, it should never stop there.
Carry your branding over to comparison shopping engine listings,
marketplace listings, search engine advertising, and even the
specialized landing pages you create. Regardless of where buyers
see your branding, it should enable them to easily identify with you
and reinforce positive interaction with your company.
EXAMPLE : Use the same colors, images, and language found on
your website in your eBay listings to reinforce your brand.
Merchandising
Optimize the four Ps (product, price, place, and promotion) and
establish targeted offerings. Your planning should take into account
all online selling channel strengths and weaknesses. This can
be a daunting task, but is well worth the effort. By doing this, you
can reach the right buyer, at the right time, in the right place, with
the right offering. Auction listing templates, as well as a highly
functional and flexible website, enables you to create offerings that
have a consistent look and feel, and lets you take advantage of the
unique characteristics of each selling channel.
EXAMPLE : Sell your products using different promotions and
pricing on your website than you do on eBay or Overstock.com.
Consistent and Reliable Service
This is easy in theory, but hard in practice. eCommerce 2.0, at a
base level, includes the ability to execute on customer orders, as
well as serve customers across online selling channels. No amount
of improvement to your selling process can make up for a deficiency
in this area. Having consistent and reliable service includes having a
consistent, high-level customer shopping experience, good product

selection, and quick checkout and payment. In addition, you should
have processes and tools in place for behind-the-scenes execution
of fast order fulfillment. An important thing to note here is that there
are fraud dangers inherent to online selling that must be screened
for in the order process and addressed proactively.
EXAMPLE : Have a consistent product selection, ability to buy, and
customer service experience regardless of whether it is on your
website or on eBay.
Are You Ready?
Use the following questions to help determine if you are ready to
take advantage of the Selling Everywhere principle of eCommerce
2.0:
q Do you give buyers the ability to do business on their
terms—providing the ability to choose channels depending on
their preferences, without compromising on product selection?
q Do you serve customers in a consistent manner across all
channels without compromising quality?
q Do you allow customers to start a purchase in one channel and
finish in another?
q Do you use a variety of tools to proactively drive market
penetration, targeted marketing, and customer satisfaction in
market segments?

Case Study:
Patriot Surplus
Charges Into New
Online Markets
Patriot Surplus sells military surplus goods online. From their
humble beginnings in a home basement in 2004—selling on eBay—
they have expanded to two brick-and-mortar locations and now sell
online through multiple channels. What motivated this expansion was
the need to raise brand awareness and ensure their products were on
the radar of military enthusiasts everywhere. At the same time, they
wanted to unify and streamline business operations while being able
to centrally manage inventory.
eCommerce 2.0 Adoption Results
Below are some of the results Patriot Surplus experienced by adopting the Selling
Everywhere principle of eCommerce 2.0 into their business.
• Streamlined and unified eCommerce operations
• Automated listings with an integrated scheduler
• Increased traffic on a branded website
• Increased awareness across multiple marketplaces
• Increased sales from shopping comparison sites
Sales took off across all online channels for Patriot Surplus. In January 2007, they
recorded a revenue increase of more than 600% over the same month the year before.
By March 2007, they exceeded 2006 gross revenue, attributing much of the increase to
the new shopping comparison site listings.

The Long Tail
The Long Tail principle of eCommerce 2.0 is all about tapping
underserved markets and selling highly profitable products. “Long
tail” is a term describing products that are in low demand or
have a relatively low sales volume, but can collectively make up a
market share that rivals or exceeds the relatively few bestsellers or
blockbusters at any given time. For example, selling a niche book
rather than a Harry Potter edition may be more profitable if you are
able to target the book to a specific market that values it.
The long-standing rule in real estate is “location, location, location.”
In the same vein, the rule for successful online selling is “know
your customer, know your customer, know your customer.” This
knowledge allows you to target customers better than big-brand
competitors, while simultaneously creating lasting customer
relationships.
Target the Entire Prospect Base
Move beyond the standard prospect list and reach the edges of
the prospect market. In addition to targeting the most common
“persona” in a given marketplace, create specialized campaigns for
specialized personas. Proactively reach out to very specific buyer
eTailers who
can connect
with niche
markets and
provide a
better online
experience are
capitalizing on
new-found
revenue.
NumberofCustomers
Market / Channel / Offering Segment

segments through customized messaging that addresses each
segment’s needs and pain points.
EXAMPLE : When selling cameras, move beyond the classification of
recreational and expert photographer. Find and market to those with
special needs such as photographers who often travel to remote
locations.
Leverage Scalable Tools and Data
Ensure you have the tools and skills necessary to execute
personalized, specialized, and high-volume campaigns targeted at
long tail prospects.
• Use customer relationship management (CRM) tools to build a
single customer and prospect database to manage campaigns
• Take advantage of multiple online channels based on segment
buying preferences
• Use email marketing to target prospects and customers
frequently—always with a valuable message
• Generate scalable personalized offers with marketing tools
• Know what search terms prospects are using and apply those
terms to your search engine optimization (SEO), as well as
pay-per-click (PPC) advertising
Customer Relationship Management
Having a good CRM system in place is essential for management
of customer and prospect data. Gone are the days when CRM
systems required tremendous up-front investments and lengthy
implementation times. Systems such as Salesforce are now sold
in a SaaS (Software-as-a-Service) model and paid for on a monthly
basis. These CRM tools allow companies of all sizes to participate
in marketing, sales, and service activities that would otherwise
be impossible. With integration to eCommerce applications, CRM
technology also gives you a 360° view of customers, including
orders, services items, payments, and buying preferences.

EXAMPLE : Use Salesforce to manage all your customer, order, and
service information. The marketing tools within Salesforce enable
you to proactively market to all your customers, regardless of
whether or not you acquired them online.
Many Online Channels
Creating an online advertising and promotion strategy is challenging
given the many channels available. Each channel is unique and
requires you to look carefully at specific advantages, target markets
present, and critical success measurements available in them.
Find your own balance among search engine marketing, email
marketing, comparison shopping feeds, and marketplace listings.
This balance requires you research channels thoroughly to come up
with the right promotion mix. Always be sure this mix is in line with
your company goals.
EXAMPLE : If you sell bicycles, send an email campaign to all
customers regardless of channel, making sure your website has
information and keywords specific to season-beginning tune-ups
and repairs.
Email Marketing
Email marketing is a great tool for reaching both mass and niche
markets. Your email marketing should be tied to and driven by your
database of customers and prospects. This enables you to segment
your target market and refine messages exclusively for them. This
is a perfect way to differentiate yourself from your competitors and
address niche buyers in a way that your competitors do not. Email
marketing is generally inexpensive and not resource intensive.
EXAMPLE : If you sell golf equipment, target all customers and
prospects in your database with a special fall offer. Make the offer
that goes to golfers in Wisconsin different from the one that goes to
golfers in Arizona.

Personalized Offers
Customers are regularly bombarded with general offers that leave
them unenthusiastic. Your CRM and eCommerce technology must
be able to integrate the information you collect to help you interpret
your target market. This gives you the ability to create offers that
are uniquely positioned and communicated to your target markets.
While this requires a certain amount of flexibility when creating
offers, the right communication tools make the task a very real
possibility.
EXAMPLE : If you are a toy retailer trying to encourage a repeat
purchase by a customer who bought a toy truck as a birthday
present for a toddler last year, the offer you send could serve as a
personalized reminder of the birthday as well as promote new age-
appropriate toys.
Search Selling
Selling through natural and paid search has increased tremendously
in the past several years and shows no sign of slowing. This type of
selling helps you reach customers with specific needs and wants
who are searching for products using specialized words, terms,
and concepts. It is important that you optimize all your listings and
website content so search engines are able to recognize and find
your segment-specific information. The same is true for your paid
search advertising efforts. Be specific in your ads and continually
refine your strategy.
EXAMPLE : If you are an electronics eTailer selling TVs, also have
segment-specific information on your website about home theater
systems, DVD players, and sound systems.

Are You Ready?
take advantage of the Long Tail principle of eCommerce 2.0:
q Do you move beyond the standard prospect list and reach the
edges of the prospect target market?
q Do you create specialized campaigns and offers for segmented
markets?
q Do you use segment-specific content in appropriate channels to
reach prospects and address their needs?
q Do you have the tools and skills necessary to execute high-
volume campaigns that are created specifically for target
prospects and/or markets?
q Do you create email campaigns, search marketing campaigns,
and specialized offers for a variety of selling channels?
q Do you capture customer information in a CRM system, and do
you use this information to drive both offers and the campaigns
that include them?

Case Study:
HiFi Sound Connection Amps
Up for Search Engines
Founded in 2001, HiFi Sound Connection started by selling home
theater equipment, car audio equipment, and accessories exclusively
through eBay. By 2003, HiFi Sound Connection was doing so well
that it launched a new, branded eCommerce website. That’s when
the company realized that they would not only need help ramping up
their operations, but they would also need help getting buyers to their
eCommerce site. This is a top concern for many eTailers who launch
new websites.
Below are some of the results HiFi Sound Connection experienced by adopting the
Long Tail principle of eCommerce 2.0 into their business.
• 243% increase in traffic from Google
• 220% increase in traffic from Yahoo!
• 822% increase in traffic from MSN
Two years later, the company’s rapid success was evident as it became one of the
largest online car audio dealers and a successful eBay PowerSeller. Today, if you
search for electronics terms on popular search engines, HiFi Sound Connection will be
one of the top results.

Customers Rule
The Customers Rule principle of eCommerce 2.0 is about building
a community of raving fans. The communication and feedback
from your buyers about both your products and service have a
tremendous impact on long-term success. Building the kind of
community you want is not a hands-off affair. You can build a solid,
loyal customer base if you effectively manage the buying experience.
It is also important to give buyers access to tools that enable them
to exchange information and experiences. This helps you build a
community around your services.
Include Customer Experiences and Input
Make customer input and experiences part of your product offerings.
This drives conversion within your website and marketplace
listings. Customer input can come in many forms, such as reviews,
comments, and blogs.
EXAMPLE : Use a customer product endorsement on an offer
landing page that includes the product.
Buyers were
once along for
the ride in the
eCommerce
process. Now
they are in the
driver’s seat.

Build a Community
Give customers the ability to communicate and interact with each
other. This can be directly on your website or through promoting an
offsite resource. Whatever the case, you should be involved from
both a thought leadership perspective and a helpful/consultative
one. These communities are not a place to refute arguments, but
where you provide value to customers and prospects.
EXAMPLE : If you sell dietary supplements, create a presence on
MySpace and build a community for health and fitness enthusiasts.
Customer Relationship Management (CRM)
A CRM system is essential for getting a 360° view of customers,
including their orders, service items, payments, and more. As a
primary link to revenue, customers are your most valuable asset.
It is imperative you maintain a complete, single view of your
customers to maximize your return on each and every “asset.”
Complete customer information allows you to execute targeted
marketing that includes well-thought-out offers based on data and
branding that is present in all your selling channels.
EXAMPLE : If you sell gardening products, use a CRM system
such as Salesforce to see which type of plants and tools a market
segment is buying. Then use that information to create offers and
informational messages that target customer needs.
Transform Transactions Into Relationships
Successful eTailers understand the importance of customer lifetime
value. This value is realized by focusing not only on creating more
online transactions, but also by having visibility into and measuring
the success of repeat purchases. Improving customer lifetime value
comes from leveraging CRM and eCommerce data to enhance
relationships.
EXAMPLE : If you are a photography eTailer, send information
on how to improve photography skills to customers who bought

intermediate-level cameras. This improves your relationship with
these customers and encourages future purchases.
Understand Content Purpose and Usefulness
It is critical to understand both the purpose and usefulness
of content being contributed by customers. Things such as
recommendations, helpful hints, and stories are all created for
different reasons. Find out where your products and company are
being discussed, who is reading and leaving information, and why
they are doing so. Being aware and involved helps you influence
these things in a positive way.
EXAMPLE : Set up a Google Alert for your company’s name. Click
through to community site links to find places you are being
discussed. Think carefully about your responses—always keeping in
mind the goal to provide value or assistance to customers.
Customer Reviews
In the past, buyers relied on product reviews by manufacturers,
vendors, and independent outlets such as Consumer Reports.
Now, buyers tend to trust peer reviews more than these traditional
sources of information. Customer reviews have tremendous impact
on whether a buyer will complete a purchase. Because of this, you
should provide the ability to post and read reviews on products. Be
sure you keep up on which customers are leaving reviews and why
they are leaving them. Also be aware of who is reading these reviews
and why they are reading them.
EXAMPLE : Use a solution like PowerReviews so customers can
post reviews on products and provide prospects with first-hand
experiences.

Blogs
Blogs are a strong foundation on which to build perceived expertise.
Over time, they can help you become a trusted advisor in the
market. By providing valuable information and advice, as well as
answering questions and soliciting comments, you become a part of
the community as opposed to a vendor selling to the community.
EXAMPLE : If you sell pet supplies, use a blog to discuss
topics like training, health issues, and traveling with pets. You
can provide tremendous value to customers and prospects while
establishing yourself as a trusted source for information.
Forums
Forums are an excellent way to build a community—giving
customers and prospects value far beyond what you could create
by yourself. Active forums help you get valuable information that
may go beyond your areas of expertise, provide a high level of
implied credibility, and be very timely about discussing current
market issues. Forums also give you a place to proactively insert
your recommendations and clarifications. They are an active
communication mechanism not only among your customers, but
between you and your customers as well.
EXAMPLE : If you are a sports equipment eTailer specializing
in triathlons, create forums that help athletes ask and answer
questions, share training plans, and coordinate for upcoming races.

Are You Ready?
take advantage of the Customers Rule principle of eCommerce 2.0:
q Have you ceded control of content to your customers and
prospects?
q Do you make customer input and experiences (from reviews,
comments, blogs, and elsewhere) part of your product offerings
to drive conversions for your website and marketplace listings?
q Do you give customers and prospects the ability to communicate
and interact with each other in a helpful, consultative
community?
q Do you maintain a 360° view of your customers by tracking all
your customer interactions, activities, and information?
q Do you understand the purpose and usefulness of content being
created and consumed by customers?
q Are you involved in online discussions about your company and
products so you can respond to issues and influence
conversations?
q Do you know who is leaving and reading both feedback and
reviews, and why they are doing so?

Case Study:
Shoplift.com is All
About the Customer
Shoplift.com sells brand-name merchandise at clearance prices.
As a retail distributor that was losing storefront sales to eTailers,
they decided to expand their business to the Internet, taking their
retail partnerships along with them. Shoplift.com wanted to expand
on current relationships by building a network of loyal online
customers—with the goal of providing something of value, while at
the same time increasing their bottom line.
Below are some of the results Shoplift.com experienced by adopting the Customers
Rule principle of eCommerce 2.0 into their business.
• Increased brand awareness
• Increased website traffic
• 20% increase in conversion rates
• Higher number of repeat customers
• Greater interaction between customers and the company
• Better search engine rankings
In May 2007, Shoplift.com launched the community website ShopliftCommunity.com.
This is a place where customers and prospects can post information on just about
anything from product reviews to service requests. Within two weeks of launching the
community site, Shoplift.com received roughly 1,700 hits a day. This number continues
to grow.

Shopping
has long been
considered a
recreational
activity by many.
Shopping online
is no exception.
Personalized Shopping
Make it fun to shop and easy to buy. When shopping on your website
is an informative, easy, and fun experience, customers are more
eager to not only buy once, but to return and purchase again. One
way to ensure shopping with you is a pleasurable experience is to
visit competitor sites and make sure your layout, site navigation, and
customer options are more enticing. Empowering your buyers to
configure or bundle their own products is an additional enticement.
Use Flexible Tools
By using flexible tools for merchandising, listing, and offer
packaging, you can make shopping fun and easy for buyers. This
flexibility also empowers buyers. All these things are critical
elements in addressing buyer needs and will drive higher conversion
rates, as well as repeat purchases.
DYNAMIC OFFERS
Empower buyers to build their own “solution” (a set of products or
configuration) with website and online marketplace tools that can
dynamically match similar or related products and bundle them
into a single offer. Ideally, use technology that allows you to draw

dynamically on available product inventory information in real time.
Dynamic offers are custom offers that enable buyers to tell you
exactly what they want. This can increase conversions and give you
valuable offer research data at the same time. Be sure you have a
flexible dynamic offer tool that lets you integrate with your inventory
system, as well as define rules and product combinations.
EXAMPLE : If you sell computers online, give buyers the ability
to configure a computer with options, related products, and
accessories. Be sure to give suggestions and expert advice on
upgrades.
UNIQUE OFFERS
Using offers that are hard to re-create can give you a sustainable
competitive advantage. This is often a combination of products and
services or information that only you can provide to buyers. Unique
offers often draw buyers to you because they provide value that
cannot be found somewhere else.
EXAMPLE : If you are an eTailer for golf equipment, establish
relationships with regional golfing associations to offer unique
packages that include equipment and golfing vacations.
AGILE SELLING
Respond to the behavior of online shoppers in real time by adjusting
product selections, promotional offers, website appearance, and
processes. Take into account buyer click paths, point of entry,
and decisions while shopping. While this provides the greatest
personalized shopping experience possible because it adjusts to
buyer interest—as well as comfort with technology—it requires a
sophisticated Web shopping tool and the ability to collect and utilize
a great amount of business intelligence data.

MODULAR PACKAGING
Avoid static, monolithic offerings that are difficult to adapt to market
changes. Instead, give your buyers several choices related to the
product itself and accessories that could go along with it. This helps
you target and sell to buyers more effectively because you are giving
them a certain measure of control and choice.
EXAMPLE : If you are a computer eTailer, make several pre-
configured computers available across your website and
marketplaces, but allow buyers to define the features and
accessories they want.
FEEDBACK OFFERS
Customer feedback can be a valuable information source when
creating offers. Using customer feedback in this way enables you to
adapt quickly to new information and trends. This requires the right
customer information system—one that collects data on customer
and prospect activities, what they are buying, and what they want
that you do not have.
EXAMPLE : If you are a cellular phone eTailer, collect feedback
information from customers and prospects to create new cell phone
packages that have special calling plans and devices that go along
with them.
Build A Better Shopping Experience
There are more than a few websites and marketplaces vying for
buyer attention. Capture buyer attention by giving them a complete
shopping experience that takes advantage of the latest technology—
one that facilitates item location and the selection process. Make
sure you use inventory attributes for search on your site. This gives
buyers quick and complete access to products on your website. Rich
Internet applications can help you optimize this cornerstone of your
business by enabling you to give buyers a simple, yet more complete
shopping experience.

EXAMPLE : Provide buyers with interactive advice,
recommendations, and product selections based on lifestyle and
product needs.
Use Multiple Selling Channels
Buyers in your target markets will always have unique expectations,
while marketplaces have unique selling tools. Taking advantage
of both requires skillful merchandising. Your offers should be
synchronized to manage things like cannibalization across channels
and branding that sends signals to the market.
EXAMPLE : Give special, branded item packages and valuable
information as a reward for shopping through your website and
its entire inventory vs. shopping through a comparison shopping
engine.
Collaborate With Merchants
Creating the right partnerships can help you develop more complete
solutions that meet a broader set of buyer needs. It can also help
you create more loyal customers, as well as define new prospect
sources. Find other merchants with complimentary products—and/
or the same target market—and set up partnership activities. These
activities should enable you to expand your offers. They should
also not make you operate outside your core competencies, but
instead help you leverage the competencies of other merchants.
Partnerships can also provide economies of scale with suppliers.
EXAMPLE : If you are a sewing eTailer, establish a partnership with
a fabric company to give your buyers a more complete solution for
their clothes-making needs.

Are You Ready?
Use the following questions to help determine if you are ready
to take advantage of the Personalized Shopping principle of
eCommerce 2.0:
q Is it fun to buy something from you?
q Do you continuously adapt and refine your shopping experience,
brand, and product offerings as buyer needs and market
conditions change?
q Do you empower buyers to create their own solutions by giving
them shopping tools and choices related to modular products
and accessories?
q Do you target customers with personalized solutions?
q Do you incorporate customer feedback to dynamically change
and adapt your offers?
q Do you create partnerships with other merchants to help you
meet a broader set of buyer needs, create more loyal customers,
and define new prospect sources?
q Do you create offers that are hard for competitors to re-create,
and do you set yourself up with sustainable competitive
advantages?

Case Study:
Visibility Unlimited Sees
Crystal-Clear Success
Visibility Unlimited is a scuba and snorkel retail store that began
as a service for a thriving travel agency. The specialty store quickly
became known for providing a superior level of service, education,
and dive travel experience. After more than 10 years of impressive
growth opening brick-and-mortar franchises, the company decided
to move online. With so many combinations and accessories available
in diving gear, Visibility Unlimited was not sure how feasible
online channels would be. There was a wide inventory to manage,
specialized products that needed explanation, and a reputation of
personalized service to uphold.
Below are some of the results Visibility Unlimited experienced by adopting the
Personalized Shopping principle of eCommerce 2.0 into their business.
• $80 increase in average selling price for online transactions
• A database of customers who value personalized shopping
• Consistent branding that has led to industry recognition
Online sales spiked for Visibility Unlimited as buyers were easily directed to additional
equipment they needed. The company collected information about their online
customers and established relationships with them during transactions. This helped
them to create many loyal, long-term buyers. Thanks to ongoing branding efforts
across channels, Visibility Unlimited has also enjoyed recognition from companies
such eBay, Amazon.com, and others.

Mash-ups
The whole idea of mash-ups has grown out of the need to integrate
disparate data sources. But mash-ups are more than just
integration in the traditional sense. Mash-ups take two sets of data
and combine them in ways that produce previously unseen value.
Mash-ups are also collaboration, on a technology level, that produce
amazing results.
The early buzz about mash-ups has been primarily focused on
consumers and using various data sources made available via
the Internet. As the idea of mash-ups has begun to take hold,
businesses are looking at ways to benefit.
For you to take advantage of mash-ups, it is essential to build or
acquire an eCommerce platform that meets your needs today,
and takes into account tomorrow’s possibilities. This is because
the velocity at which technology changes continues to increase
and customer expectations continue to escalate. Any technology
platform you choose must focus on integrating disparate systems
and processes, enhancing user experiences, and using many
different types of information.
The
eCommerce 2.0
environment is
built upon many
interrelated
systems and
processes that
require
information to
be exchanged
dynamically.

Build Modular Solutions
Avoid hard-coded solutions and processes. You need flexibility.
The speed of buyer- and market-related change has accelerated
tremendously. This is fueled in part by accelerating change in
technology. New shopping tools, communication tools, shopping
habits, and business models require you to realign yourself quickly
to new paradigms.
EXAMPLE : Incorporate a peer review solution into your online
selling platform to not only enable customers to post reviews, but to
track who is posting the reviews within your CRM system—all with
the goal of refining offers for increased conversions.
Create a Network of Cooperating Data Services
All your mission-critical systems should integrate. Get these
specialized systems to interact via data services. These services
may be specialized for a particular process and data management
function, and they often collaborate dynamically with other services
to provide a complete and seamless business processes.
EXAMPLE : Use a specialized eCommerce platform to drive online
sales in various channels and then integrate that with a CRM
system to manage customer service and customer information in
those channels.
Use Web Services Interfaces
Web services provide the ideal data flow mechanism for the new
interactive processes between applications. Using standardized
Web services, you can quickly adjust to new applications and
easily interact with both partners and other systems outside your
company to enhance business.
EXAMPLE : Use standard Web services to interact with Amazon.com
and eBay so you can use a single inventory system to list items on
both marketplaces.

Empower Employees and Buyers
Control of content, promotions, design, layout, interactivity, and
analytics should be firmly in the hands of your “business users”
and creative personnel. Mash-ups allow this to happen without the
intervention of IT personnel. This frees IT personnel to worry about
scalability, reliability, and security. Rich mash-up interactivity is
powered by newer technologies such as Flash and AJAX. By using
these technologies, you can provide a battery of tools for people
across your organization—such as brand managers, merchandisers,
and analysts—while simultaneously giving customers and prospects
better ways to buy from you.
EXAMPLE : Use a specialized solution to manage online selling
offers and promotions that integrates with your eCommerce
platform. It should be a solution that your sales and marketing
personnel feel comfortable using without the involvement of IT.
Data Combinations
Mash-ups give engineers the ability to combine two or more data
sources that were not originally designed to be combined. This
often promotes unforeseen benefits to those using the mash-up.
Ultimately, creating successful mash-ups requires looking at
several data sources, finding a combination that has value, and then
using tools to create a composite front end. This front end provides
a seamless user experience despite the fact that the mash-up is
drawing on different data sources. The syndication of information is
multi-directional. You can effectively pull information from certain
data sources and then publish that information in business tools
across the Internet. Mash-ups are the framework that allows this to
happen.
EXAMPLE : Provide personalized offers by using order histories,
resolved service requests, and qualitative feedback from your
customers.

Reliability And Scalability
You should have confidence that your eCommerce platform will
be there for your business and your customers when it is needed.
Beyond reliability, be sure your eCommerce platform can meet
marketing campaign and listing needs, both in terms of scaling to
reach larger audiences and future integration with other solutions.
To accommodate growth, it must be able to integrate with financial,
inventory, CRM, order management, and other systems.
EXAMPLE : Establish close relationships with all service providers
to be sure that you are well aware of any planned outages and can
proactively address all those that are unplanned.
Extensibility
Today’s eCommerce applications need the ability to easily extend
their functionality, without being reliant on any one company’s
ability to build out that new functionality. Having access to data and
functionality from other systems enables you to build a complete
solution that is specific to your business needs. Mash-ups have
inherent integration strength that makes this a simple and efficient
process. They also allow you to quickly take advantage of new
tools as they become available. Mash-ups help you build upon
the technology foundation you already have. You should not have
to replace existing systems, but instead extend them using Web
services and online APIs.
EXAMPLE : Ensure that all your technology is implemented using
standardized architectures and Web services so you can exchange
order, customer, service, and other data.
Business Collaboration
Online channels can create challenges that go beyond IT concerns
to branding. If you do not have a cohesive strategy across offline
channels—such as retail locations, call centers, catalogs, and
partners—it can create even more challenges. You should have

a clear business vision and strategy in place to execute across
all channels. Having this kind of internal business collaboration
results in consistent merchandising, messaging, and service.
Thinking externally, business collaboration also includes the
new relationships you form with other merchants to provide
complimentary goods and services. These partnerships can provide
additional reach into your target markets and enhanced value to
your existing customers.
EXAMPLE : If you sell shoes online, use standardized technology
architecture to integrate systems with a clothing partner to create
joint offers for buyers.
Are You Ready?
take advantage of the Mash-ups principle of eCommerce 2.0:
q Do you have modular solutions with adaptable processes and
information management capabilities?
q Do you have information systems that are able to adapt to
changes in buyer and market needs?
q Do you have a network of specialized systems that cooperate
to provide complete and seamless business processes through
standardized Web services?
q Do you use standardized Web services to quickly adopt new
systems that enable you to interact with partners and other
systems outside your company?

Case Study:
NextWorth Takes iPods
to the Next Level
NextWorth, a small company outside of Boston, saw an opportunity to
sell used, high-value products on eBay. They quickly switched from
selling multiple categories of electronic items to strictly selling used
iPods. As sales increased drastically, so did their customer base. With
no customer management tool, they felt some customers were falling
through the cracks.
Below are some of the results NextWorth experienced by adopting the Mash-ups
principle of eCommerce 2.0 into their business.
• Increased ability to search and organize customers
• 50% decrease in customer response times
• 30% decrease in customers “falling through the cracks”
• 75% reduction in reporting time
• Improved tracking of customer trends
NextWorth integrates eCommerce, trade-in, inventory, and CRM systems for a
complete business solution. As a result, they have significantly improved customer
satisfaction, streamlined operations, and reduced transaction costs. By having
shipping information automatically migrate to their CRM system, NextWorth can
extract key data such as shipping preferences and payment methods. This enables
them to target market segments using newsletters and special offer emails that are
sent from their CRM system.

Data is King
If you measure it, you can improve it. Data is the key factor in
helping you make the right business decisions because it can give
you visibility and insights into how you are doing business now, and
how you could be doing it in the future. While the massive amount
of data that eCommerce 2.0 produces can be overwhelming, there
are ways to approach data that can drastically improve business
performance. Data truly becomes king when you can firmly establish
key performance indicators and goals for your business, then
collect and distribute the right information to the people who make
business decisions.
Make Informed Decisions
To make well-informed decisions, you have to have a solid
foundation to work from. Detailed analysis down to the click and
dollar level is essential. This means knowing the effectiveness of
your product listings, what your product turnover is, what orders you
have in the pipeline, and what your presence looks like in various
marketplaces. You can also use the knowledge you gain about your
selling process and your customers’ buying experiences. All this
information helps you create a sound base from which to make
business decisions.
EXAMPLE : Focus your marketing dollars on the most successful
product offers and eliminate all non-performing offers to optimize
marketing spending.
Establish Your Goals
Before you can establish goals, you need to identify appropriate
key performance indicators (KPIs) for your business. These are
quantifiable metrics that measure performance. KPIs then tie to
strategic objectives such as growth, profitability, market expansion,
eCommerce
2.0 is about
collecting and
managing
data from all
online channels
to enable
better business
decisions.

and cost reduction. The combination of KPIs and objectives tell you
where to focus your energy and help you refine your business activities.
Create a Complete and Sustainable Strategy
Creating a strategy that is complete and sustainable requires that
you consistently execute the performance improvement cycle. The
four stages in this cycle include the following:
1) Visibility into your business performance, including information
about current and historic KPI levels
2) Insight into eCommerce cause and effect, which leads to
understanding what is influencing the current KPI results
3) Improving your performance, which results from decisions and
actions taken to adjust KPIs to better levels
4) Measuring your performance improvement, which happens
by linking your KPIs to your activities when attempting to
improve performance
Send the Right Information to the Right Users
Because business users and creative personnel have different skill
levels and different responsibilities, they need different sets of
information. It is critical to present each with the appropriate level
of detail to aid in decision making. For some, this means high-level
dashboards with aggregated numbers. For others, it means detailed
information in several reports that are specific to products, listings,
customers, and other aspects of your business. Finally, some people
require granular-level detail such as individual transaction records
and the ability to move data into other analytics systems.
EXAMPLE : A quick graph that shows the profitability of
marketplaces may be the right level of information for an executive
with little time to look at details.

Gather Complete Information
Your business strategies, plans, and decisions should all be based
on complete information. To get this kind of information, you need to
gather and compile it from across the eCommerce business process
(from inventory to orders to payment) and track it across time to
recognize trends. Data from all online selling channels must be
included. Another critical element is the ability to see the lifetime
value of customers. This helps you make strategic decisions about
customer acquisition and service.
EXAMPLE : Although sales revenue for a product may not measure
up to the level of other products, the profit on that product may be
superior based on marketing costs and cost of goods sold.
OPERATIONAL AND PERFORMANCE REPORTS
These reports deal with metrics for profitability, listings, products,
orders, and so on. They should help you do the following:
• Gather summary and detail information
• Gain visibility into product/category profitability
• Improve product mix
• Increase decision-making support
• Increase operational efficiency
• Improve resource utilization
CUSTOMER INFORMATION
This is information on customers, preferences, promotion
responses, and so on. It should help you do the following:
• Maximize customer lifetime value
• Identify repeat purchase patterns
• Gather insight into service requests
• Analyze order patterns and history
• Focus resources on the most valuable customers

WEBSITE ANALYTICS
These reports give you visibility into website traffic, click patterns,
stickiness, and so on. They are available in solutions such as Google
Analytics and Omniture’s SiteCatalyst. They should help you with the
following:
• Gaining insight into website activity
• Understanding customer behavior
• Integrating with AdWords
MARKET DATA
This data enables you to see pricing, keyword, category, selling
activity, and other information from specific online marketplaces. It
should help you do the following:
• Enhance pricing and listing decisions
• Use the right listing features
• Optimize your listing categories
• Use successful keywords

Are You Ready?
take advantage of the Data is King principle of eCommerce 2.0:
q Do you use analytics in all your business decisions?
q Do you use a cycle of performance improvement that draws on
knowledge gleaned from key performance indicators (KPIs) and
in turn drives them?
q Do you collect and use both operational reports and performance
analytics when assessing profitability, listings, products, orders,
and other aspects of your business?
q Do you collect and use customer information such as
preferences, promotion responses, service cases, and lifetime
value to make business decisions?
q Do you collect and use website analytics for visibility into
traffic, click patterns, stickiness, visitors, and other aspects of
your website?
q Do you collect and use market data to optimize pricing,
keywords, category assignment, descriptions, and other selling
activities?

Case Study:
The Product Exchange Boosts
Profits Through Data
The Product Exchange sells discounted, brand-name consumer goods
such as golf equipment, apparel, collectibles, and more. In 2005,
they started with golf equipment and quickly branched out into other
products. With so many product lines, listing strategies often felt like
a shot in the dark. They wanted to reduce the typical times listing
an item from seven days a week to just two or three a week with the
same selling results.
Below are some of the results The Product Exchange experienced by adopting the Data
is King principle of eCommerce 2.0 into their business.
• Reduced listings fees with the same selling results
• More efficient business practices
• A better eye on the competition
• Better anticipation of market demand and changes
• Proactive vs. reactive decisions
With market and product data they are using, The Product Exchange is now proactive
in finding in-demand products rather than relying on suppliers. They have competitor
data to benchmark against and make decisions. In addition, The Product Exchange
reduced their number of weekly listings by 30% or more while making the same profit.

5Bringing it All Together

Bringing it All Together
eCommerce is growing and changing at a rapid pace. It is being
driven by ever-evolving technology and consumer needs. Keeping
pace with this change can be difficult. What eCommerce 2.0 does is
give you a guidepost for where you are with your business today and
where you can go with it in the future.
eCommerce 2.0, with all of its principles, represents a new creative
frontier that will test your competencies, technology, and ability to
form partnerships. It will also give you better information and more
effective branding capabilities, and help you form more profitable
online relationships. What eCommerce 2.0 ultimately gives you—by
adopting its principles—is more control over your own data,
processes, and profitability.
The following is a review of the eCommerce 2.0 principles to
consider implementing in your business:
By adopting these eCommerce 2.0 principles, you are laying
the groundwork for continued growth and optimization in your
business. You are also separating yourself from your competition as
eCommerce continues to evolve and advance.
eCommerce 2.0 Principles
• Sell Everywhere
• The Long Tail
• Customers Rule
• Personalized Shopping
• Mash-ups
• Data is King

aAppendix A // B
A:10 TIPS FOR STARTING WITH eCOMMERCE 2.0 //
B: ARE YOU READY? //

This appendix has basic tips for adopting eCommerce 2.0. Use it to
asses how well you are tapping into current resources and how you
can make general preparations for using eCommerce 2.0 principles
in your business.
10 Tips for Starting with
eCommerce 2.0
The tips below will kick-start your ability to take advantage of
eCommerce 2.0. They are adapted from Serious Business: Web 2.0
Goes Corporate by The Economist Intelligence Unit.
1. eCommerce 2.0 Applies to You
According to the Pew Internet American Life Project, 50 million
Americans receive news online, 73% of American adults go online,
and over 50% of all Americans ages 12-17 are part of online social
networks. Internet technology is something you and your business
need to embrace because your customers and your prospects are
embracing it.
2. Bridge the Generation Gap
Look for young people who live with and are intimately familiar with
the new paradigm that Web 2.0 and eCommerce 2.0 represent. They
can bring competencies to your business that would take years to
learn on your own. Tim O’Reilly suggests that you “listen to people
coming up in the ranks and be prepared to learn from them.”
3. Do Your Homework
Look to leaders in Internet retailing and your specific product
categories for ideas and lessons learned. Find out what is working
for them. Also initiate and collect research from current and future
category customers. Focus on young segments as they are more
likely to be wired into eCommerce 2.0.

4. Borrow What You Cannot Build
Build vs. buy/hire vs. contract decisions obviously need to be made
about your eCommerce technology and services. These decisions
have a significant impact on how quickly you adapt to eCommerce
2.0. Know, however, that you do not have to build all the components
yourself or make permanent hires for all skill sets. Just be sure you
have the knowledge and skills necessary for continuous work on
your eCommerce 2.0 initiatives.
5. Do Not Mistake eCommerce 2.0 for Advertising
For eCommerce, a significant amount of effort has shifted from
traditional advertising to discussions and conversations. This
means you need to carefully balance the amount of branding and
advertising you are doing with new efforts focused on community
building.
6. Give Up Control
This is probably the most challenging tip in this list. Rather than
fear what buyers might say about you, realize that they will probably
express their feelings in a forum no matter what. It is much
better to create an environment where you have visibility to buyer
conversations. This way, you have the opportunity to be involved
instead of isolated.
7. Make a Straightforward Business Case
Just like all your other business decisions, do not forget to examine
return on investment (ROI) for eCommerce 2.0. Look at your long-
term business goals and strategies and how eCommerce 2.0 can
be incorporated. After doing so, it will be much easier to convince
yourself or a reluctant CEO about ongoing investment of time and
money in eCommerce 2.0 initiatives.
8. Look in Your Own Backyard
You may have more eCommerce 2.0 expertise at your company
than you realize. Those people who are very active online social

networkers, Internet shoppers, bloggers, and product reviewers can
provide invaluable input into your business strategies and give you
insight into how your efforts will be perceived by buyers.
9. Avoid the Hype
eCommerce 2.0 takes a disciplined approach to truly benefit
your business. Applying eCommerce 2.0 principles just because
your competitor is doing so, or because you heard about it in a
presentation, will not do you any good. Evaluate which principles to
apply based on sound business practices and what your customers,
as well as your prospects, are looking for. Many aspects of
eCommerce 2.0 need to be genuine or buyers will see through them.
10. Get Your Toe in the Water
Start today. It’s as simple as that. Start by evaluating one aspect of
eCommerce 2.0 and learning how it is affecting your business. Most
importantly, learn about how it is affecting the lives and shopping
habits of your customers. eCommerce 2.0 is not an “all-or-nothing”
proposition. It is a new way of thinking about your business, followed
by continuous improvement and refinement.

Appendix B: Are You Ready?
This appendix has the Are You Ready? questions from each
eCommerce 2.0 principle section. Use it to find out where you stand
in implementing each principle of eCommerce 2.0.
Selling Everywhere
take advantage of the Selling Everywhere principle of eCommerce
2.0:
q Do you give buyers the ability to do business on their terms—
providing the ability to choose channels depending on their
preferences, without compromising on product selection?
q Do you serve customers in a consistent manner across all
channels without compromising quality?
q Do you allow customers to start a purchase in one channel and
finish in another?
q Do you use a variety of tools to proactively drive market
penetration, targeted marketing, and customer satisfaction in
market segments?
The Long Tail
take advantage of the Long Tail principle of eCommerce 2.0:
q Do you move beyond the standard prospect list and reach the
edges of the prospect target market?
q Do you create specialized campaigns and offers for segmented
markets?
q Do you use segment-specific content in appropriate channels to
reach prospects and address their needs?
q Do you have the tools and skills necessary to execute high-
volume campaigns that are created specifically for target
prospects and/or markets?

q Do you create email campaigns, search marketing campaigns,
and specialized offers for a variety of selling channels?
q Do you capture customer information in a CRM system, and do
you use this information to drive both offers and the campaigns
that include them?
Customers Rule
take advantage of the Customers Rule principle of eCommerce 2.0:
q Have you ceded control of content to your customers and
prospects?
q Do you make customer input and experiences (from reviews,
comments, blogs, and elsewhere) part of your product offerings
to drive conversions for your website and marketplace listings?
q Do you give customers and prospects the ability to communicate
and interact with each other in a helpful, consultative
community?
q Do you maintain a 360° view of your customers by tracking all
your customer interactions, activities, and information?
q Do you understand the purpose and usefulness of content being
created and consumed by customers?
q Are you involved in online discussions about your company and
products so you can respond to issues and influence
conversations?
q Do you know who is leaving and reading both feedback and
reviews, and why they are doing so?
Personalized Shopping
Use the following questions to help determine if you are ready
to take advantage of the Personalized Shopping principle of
eCommerce 2.0:
q Is it fun to buy something from you?
q Do you continuously adapt and refine your shopping experience,

brand, and product offerings as buyer needs and market
conditions change?
q Do you empower buyers to create their own solutions by giving
them shopping tools and choices related to modular products
and accessories?
q Do you target customers with personalized solutions?
q Do you incorporate customer feedback to dynamically change
and adapt your offers?
q Do you create partnerships with other merchants to help you
meet a broader set of buyer needs, create more loyal customers,
and define new prospect sources?
q Do you create offers that are hard for competitors to re-create,
and do you set yourself up with sustainable competitive
advantages?
Mash-ups
take advantage of the Mash-ups principle of eCommerce 2.0:
q Do you have modular solutions with adaptable processes and
information management capabilities?
q Do you have information systems that are able to adapt to
changes in buyer and market needs?
q Do you have a network of specialized systems that cooperate
to provide complete and seamless business processes through
standardized Web services?
q Do you use standardized Web services to quickly adopt new
systems that enable you to interact with partners and other
systems outside your company?

Data is King
take advantage of the Data is King principle of eCommerce 2.0:
q Do you use analytics in all your business decisions?
q Do you use a cycle of performance improvement that draws on
knowledge gleaned from key performance indicators (KPIs) and
in turn drives them?
q Do you collect and use both operational reports and performance
analytics when assessing profitability, listings, products, orders,
and other aspects of your business?
q Do you collect and use customer information such as
preferences, promotion responses, service cases, and lifetime
value to make business decisions?
q Do you collect and use website analytics for visibility into
traffic, click patterns, stickiness, visitors, and other aspects of
your website?
q Do you collect and use market data to optimize pricing,
keywords, category assignment, descriptions, and other selling
activities?

About This Handbook
The eCommerce 2.0 Handbook is published and distributed by
Infopia, Inc. Please send any questions or comments to
ec20@infopia.com.
The Author
Mr. VonSosen is a technology executive who has worked for
companies such as Siebel, SAP, Nextance, and Infopia. He is
currently a Vice President at Infopia—an eCommerce technology
company—where he leads product and communications teams.
Mr. VonSosen has also served as a Vice President at SAP, with
responsibility for the company’s CRM product marketing strategy.
Mr. VonSosen holds a Bachelor’s Degree from Brigham Young
University and an MBA from the University of Utah. He is a proud
father of four and an active triathlete.
The Company
Since 1999, Infopia has provided eCommerce technology to eBay
PowerSellers and online retailers. The Marketplace Manager
eCommerce platform from Infopia enables businesses to fully
execute the online inventory-to-cash cycle. It integrates a full range
of critical success factors and is based on eCommerce 2.0 principles,
helping companies optimize product merchandising, manage the
shopping experience, and maximize their presence through premier
online marketplaces and search engines such as eBay, Amazon,
Overstock.com, Shopping.com, Shopzilla, Yahoo!, and Google.
Together with online selling best practices, Infopia provides unique
and proven value to a wide range of clients. Infopia is headquartered
in Salt Lake City, Utah. For more information, visit www.infopia.com.
All products mentioned in this handbook are trademarked and
property of their respective owners.

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