Friday, August 29, 2008

eCommerce Technology Spending to Rise

Internet Retailer conducted a study via email participation of 92 "web only" merchants and other's participated and here are the findings:

Though 72 percent of internet retailers plan to purchase e-commerce applications or services this year, they'll be spending less than they expected to spend last year, according to Internet Retailer's latest survey on e-commerce technology spending intentions (via Retailer Daily).

A whopping 73.6 percent of respondents say they plan to increase those budgets 15 percent or less, compared with 49.4 percent of respondents last year who said so; moreover, about half (47.2 percent) say plan to increase those budgets 10 percent or less, the survey found. Below, additional findings from Internet Retailer's survey.

The top spending priorities of online merchants:

Replacing outdated e-commerce platform: 28 percent
Miscellaneous apps: 20.5 percent
Content management system: 11.9 percent
Web analytics: 11.8 percent
Order management system: 8.2 percent
Site search software: 6.8 percent.
Among the top new website features or applications to be implemented:
Customer reviews and ratings: 35.5 percent
Inventory availability tools: 34.2 percent
Blogs, forums or videos: 32.9 percent
Streamlined navigation using Web 2.0: 26.3 percent
Mouse-over tools: 25 percent

Most online merchants, however, intend to keep their current platforms and applications:

67.1 percent intend to keep their rich media applications.
61.7 percent don't intend to replace their web analytics software.
55.2 percent will continue to used their present content management system.
55.2 percent don't plan to buy site search software or service.
52.6 percent will stick with their current order-management system.
46 percent plan to keep their in-house or third-party platform.

Other highlights from the survey:

At two-thirds (67.1 percent) of e-retail companies, the official with the final word on tech purchases is the CEO; next are the CIO (9.2 percent) and CMO (6.6 percent).

The annual e-commerce tech budget is $50,000 or less at 51.4 percent of online retailers; that budget at 27 percent of retailers ranges from $50,001 to $200,000; 9.5 percent have budgets of $200,001 to $999,999; 5.4 percent have $1 million to $2.5 million; and 6.7 percent have budgets of more than $2.5 million.

51.3 percent of the surveyed retailers don't plan to hire a consultant or other third-party help for a major technology upgrade in 2008.

73.7 percent run their own internal fulfillment program. Among the remainder that do outsource fulfillment, 65 percent plan to keep their third-party provider.

About the study: The survey was emailed in early June to subscribers of IRNewsLink, Internet Retailer's e-newsletter; responses were collected and analyzed by Vovici Corp.; 92 web-only merchants, chain retailers, catalog companies and consumer brand manufacturers took part in the survey.

Related: Investment in the web by big retailers will increase even more as top executives at the largest retail chains become more aware of the power of the web in driving multi-channel sales, says Kasey Lobaugh, direct-to-consumer practice leader at consultants Deloitte LLP.

Many retailers today, he says, don’t realize that store sales preceded by visits to retail web sites account for about 20% of sales and online-only sales for another 7%, accounting for 27% of total sales in one way or another driven by the web.

“Today, most retailers only see it as a 93%-7% split, where the 93% of sales are in stores and 7% online; they don’t realize that 20% of store sales are influenced by the web,” Lobaugh says.

But that mindset is changing fast among senior retail executives, he adds, especially as the percentage of total sales driven directly or indirectly by the web grows to about 50% over the next few years. “CEOs will soon recognize that what they thought was 7% of sales driven by the web is actually about 50%, so there is going to be a big shift in investing in a web-focused multi-channel retailing environment,” Lobaugh says.

Get a Phone Message After Every Transaction?

Times...they are'a changing. In the past, telemarketers would call and try to get us to "buy" something. Now there's a group who wants to call you AFTER you "buy" something. Actually they plan to send an SMS to cellular phones or PDA's everytime a credit/debit/ATM card is registered with them and subsequently used for a transaction. They are essentially pitching what they have to offer as a Value Added Service Provider, (VASP) Rather than selling "ring tones", they are, instead, trying to "cell" notifications of credit/debit/ATM card use. Initially it sounds like it has a ring to it, but I don't know what to think of this idea quite yet.

What I do know is that the iPhone's OS has a security hole which can expose private information. (The flaw being a simple two-step trick which can be accessed directly from the iPhone's password protected interface, gives full access to a user's contact list, e-mail and text messages, including access to all SMS's.) see: Huge Security Flaw Puts All Private Information At Risk - Gizmodo

The other question I would pose, in order to determine the viability of the idea would be how much each SMS would cost the end-user. If it costs, for example 50 cents for each transaction notification, a $25 transaction would have effectively, a 2% discount rate. Here's a tip...for that money, banks could offer a "Transaction Insurance Protection Plan" (see, I told you I'd give them a TIPP...) Here's there press release:

MIAMI, Aug. 28 FL-CNSC-Debit Security Aug. 28 /PRNewswire

Ivan Ochoa and Daniel Davila, executive members of the newly-created company C.N.S.C. (Charge Notification Services Corp.) are launching their proprietary and patented credit, debit card and ATM transaction security service in the United States.

The premise of the C.N.S.C. service is to put the cardholders in control of their own identity security by instantly advising them via SMS (Short Message Service) to their cellular telephones or PDAs each time a charge or withdrawal from a C.N.S.C. covered card is made.

With the proliferation of cellular phones, this service is expected to reduce credit and debit card fraud significantly for individuals or companies who choose the coverage. Credit card fraud in the United States has increased in terms of total losses and is expected to continue growing, according to studies conducted byThe Nilson Report.

A Cybersource report indicates the same escalating trend ine-commerce transactions, surpassing the two billion dollar mark for 2007. Those affected by fraudulent activity include the card user, who may spend months trying to clear up an unauthorized transaction; the financial institution issuing the credit or debit card, as each time a fraudulent transaction is detected several time-consuming steps must be taken by staff, making it an expensive proposition for banks and issuers; and ultimately by the merchant accepting the fraudulent charge, as in most cases, the charge-backs are a direct loss to them. "The result of this is that society at large loses, even those who do not use credit or debit cards, since it makes every product and service more expensive. It is a zero sum game in which those who operate within the law lose out," stated C.N.S.C., E.V.P. and Chief Operations Officer Daniel Davila.

Referring to the most recent large-scale credit card fraud cases, C.N.S.C.Chief Executive Officer Ivan Ochoa comments: "We know that merchants have been slow to advise cardholders of fraudulent activity and that despite the existing firewalls and algorithms developed to detect abnormal usage patterns,the technology exists that allows criminals to access card numbers, as well as social security and drivers license information. Fraud has become everyone's problem, and consequently, everyone's responsibility. We are confident that with a minimal investment on the part of card issuers and the cooperation of cardholders, we can overcome this pernicious social and economic predicament affecting us all."

Messrs. Ochoa and Davila have a combined five decades of experience in the financial services industry. Mr. Davila's background includes 16 years at American Express where he was a Senior Director within the Global Network Services (GNS/Franchise) division and more recently, two years as Vice President and Chief Risk Officer of the credit card division at Russian Standard Bank (RSB) in Moscow. While at RSB, Mr. Davila launched a similar SMS credit card fraud protection service with great success, resulting in an overall significant reduction of fraudulent transactions. Mr. Ochoa's 25 years in the financial services industry include executive positions within American Express and MasterCard International, where he was Chief of Staff for Latin American countries. His areas of expertise include managing operationsfor multi-markets, re-engineering, quality control and technology. Mr. Ochoahas lead major innovative developments in products and systems.

SOURCE Charge Notification Services Corp.

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