Measuring web sales’ impact on financial success

FROM INTERNET RETAILER

Many chain retailers have been secretive about online sales. While some report their numbers deep in government-required filings, those numbers often get little or no mention in earnings releases and many senior executives don’t mention them in analysts’ calls unless asked. That needs to change, says Nikki Baird, managing partner of retail research company RSR Research. “Wall Street should be asking retailers about their online sales numbers,” Baird says. “Those are important to know because you can’t succeed today with just stores.”

Baird researched offline and online sales at some well known chains. What she found in her early research is that reporting online sales as part of a chain’s same-store sales can make a big difference in how financial results are perceived.

Her example focused on Abercrombie & Fitch Co. Abercrombie reported falling or flat same-store sales for each of the past five quarters. In that same period, online sales grew from 42% to 66% each quarter. The web accounts for about 5% of total sales for Abercrombie.

That seems like a small amount, but it’s enough to make a big difference to Abercrombie’s same-store sales figures. When Baird computed same-store sales including the web, they grew every one of the past five quarters. “It behooves retailers to report same-store results while accounting for web sales,” Baird says. “It’s a short-cut way to present year-over-year sales results to Wall Street, which is hooked on same-store sales.”

She notes that the web provided the equivalent of 30 stores’ revenue in the first quarter of 2005 and 100 stores’ revenue in the fourth quarter of 2007. The store base grew by about 250 during the same time, “for a lot more capital and effort involved than what it took to add 70 store equivalents through the online channel,” she adds. In 2007, Abercrombie’s total sales reached $3.75 billion while web sales were $260 million.

Baird cautions, however, that while combined same-store and web sales is a potentially important metric, retailers shouldn’t expect to be able to manage to that number. “It puts too much emphasis on stores and you have to make sure you pay enough attention to online sales to make sure they are growing at the rate you expect and that the web is meeting your metrics,” she says.

kurt@verticalwebmedia.com

BusinessWeek Ranks Northeastern University Undergraduate Business School One of the Top 50 in the US; No 1 for Internships

For the Third Consecutive Year, Students give College of Business Administration
A+ for Job Placement

Boston, MA—March 26, 2008—Northeastern University’s College of Business Administration has announced that, for the third consecutive year, its undergraduate business school is ranked in the top 50 undergraduate business schools by BusinessWeek. The College of Business Administration (CBA) was ranked 34th in the United States overall, and was again named the No. 1 college for internships. More than 98 percent of students at CBA have an internship, and the hands-on, real-world experience is considered “one of the most important aspects of an undergraduate business education,” according to the editors at BusinessWeek.

“At schools like Northeastern, our No. 1 internship champ, every student is required to work a co-op that gives them lengthy work experience as an undergrad,” said Louis Lavelle, B-school editor for BusinessWeek. “I know the students at these schools find the experiences very enriching and valuable preparation for life in the world of work.”

In terms of job placement, Northeastern students gave the school the highest grade possible – an A+ rating – citing the importance and value placed on the cooperative education (co-op) program. CBA also ranked 22nd in academic quality and 28th in the student survey rankings, compared to last year’s rankings of 25th and 30th, respectively.

“Nothing helps to move business education down from the ‘ivory tower’ like real-world experience; our students’ required participation in up to 18 month of cooperative education gives them a truly unique opportunity to put what they’ve learned in the classroom into practice, and then bring those experiences back into the classroom,” said Thomas E. Moore, dean of the College of Business Administration. “Northeastern University pioneered the cooperative educational experience 100 years ago, and students and alumni alike continue to tell us how valuable the co-op experience has been to them.”

According to BusinessWeek, student internships are a top priority because more and more employers hire through those programs. The editors also point out that some school internships stand out from the rest.

“No. 34-ranked Northeastern requires student participation in a co-op program – a sort of souped-up internship – virtually guaranteeing that every business major graduates with extensive work experience. Elsewhere, students aren't so lucky," the editors said.

“Globalization has definitively changed the way we conduct business, as well as how we communicate. The College of Business Administration delivers a real-world business education through the Bachelor of Science in International Business (BSIB) program, and emphasizes international protocol through classes and co-op experiences. Our attention to globalization helps our students communicate with companies overseas, as well as U.S.-based companies with a presence abroad,” explained Peggy Fletcher, associate dean of undergraduate business programs, highlighting another important component of the College’s success. “Companies in Europe, such as Gucci, Versace, and BMW have hired BSIB graduates to work abroad.”

BusinessWeek’s ranking of the best academic programs in the United States began in November. The magazine partnered with Cambria Consulting in Boston to consider 127 programs from 127 colleges. For this year’s rankings, 80,000 graduating seniors were polled via a 50-question survey on things such as quality of teaching and recreational facilities. 22,905 students responded for a response rate of 28 percent. In addition, BusinessWeek polled 618 corporate recruiters, asking them to identify which schools have the most innovative curricula and best career services. This year, 244 corporate recruiters responded for a response rate of 39 percent. Some of the original schools were eliminated from the rankings due to low response rates. In the end, 96 schools out of 127 were ranked by BusinessWeek. For BusinessWeek’s complete rankings of the Top 50 Undergraduate Business Schools, visit http://bwnt.businessweek.com/interactive_reports/undergrad_bschool.

About Northeastern University College of Business Administration
Northeastern University College of Business Administration, established in 1922, provides its students – undergraduate, graduate and executive – with the education, tools, and experience necessary to launch and accelerate successful business careers. The College credits its success to expert faculty, close partnerships with industry, and its emphasis on rigorous academics combined with experiential learning.

The College is highly ranked by several prestigious publications. BusinessWeek ranks the College 34th in its “Best Undergraduate B-schools" and #1 in internships. The College’s Bachelor of Science in International Business program is ranked #16 by U.S. News & World Report. The undergraduate program is also distinguished by Princeton Review and Entrepreneur magazine as one of the U.S. top 25 entrepreneurship programs. Financial Times ranks the College’s Executive MBA program in the U.S. top 50 and U.S. News & World Report ranks the College’s part-time MBA program #21 in the country. For more information about Northeastern University’s College of Business Administration, visit http://www.cba.neu.edu/.

Breaking Out

FROM INTERNET RETAILER

(I am posting this here because there is no way to Digg this story)

Connecting with online shoppers through effective management of web merchandise
By Julian Chu

The Internet channel continues to show healthy growth—an estimated 18-20% for both the recent holiday season and all of 2007, according to multiple studies. That’s encouraging at a time when economic trends bode ill for the overall retail industry. Squeezed by a mounting debt crisis and declining asset prices, the American consumer appears to have lost steam—at least in the offline channel.

Not surprisingly, more and more retailers are focusing on the Internet as a key source of growth, and the fight for consumers’ attention and shopping dollar is certain to be fiercer than ever. Online retailers that are poorly prepared to compete are likely to be disappointed with their performance.

Under the covers of every successful retail operation are the secrets of how to create and present product assortments that engage the consumer and encourage her to purchase time and time again. The basic formula is simple: figure out customers’ needs and aspirations, understand how they prefer to shop, and tailor the offer and experience accordingly to drive sales.

It’s about getting into the minds of consumers to understand what presentations and messages are most relevant as they go through different shopping processes. In some cases, the customer is looking for ideas and inspiration, and may want to see products from different categories presented as an ensemble (think apparel and furniture). In other cases, he has purchased or is about to purchase a core product and wants to understand what complementary products are available (think electronics). Savvy multi-channel retailers are leveraging these insights on their web sites to deliver a more enjoyable and relevant customer shopping experience and to capture market share from competitors.

Merchandising for now
In the early days of e-commerce, retailers hurried to put up a site that offered the basics, which often amounted to a skeleton offering of products and a choppy checkout experience. As e-commerce technologies have matured, online merchants are increasingly able to put into practice the tried-and-true merchandising practices that have served them well in traditional store environments—and even improve upon them by taking advantage of the unique capabilities of the Internet medium. Now online retailers can offer sophisticated product browsing, search and comparison features—which today’s consumers increasingly expect as standard.

Unfortunately, many sites today are still running on antiquated technology, offering simplistic presentation of their product assortment and forcing all shoppers to shop in the same one or two ways. They need a more advanced merchandising system that enables the retailer to present products in multiple contexts that are relevant to specific shoppers and shopping occasions. Underlying technology platforms must have the flexibility to address the needs of different customer segments, product categories and selling models within a retail enterprise.
Leading online retailers are showing the way, employing more sophisticated online merchandising practices such as the following:

1. The matrix approach. Different consumers will have their own preferences in how to browse through online product catalogs. Some might be focused on a particular brand, others on a particular style, and still others on meeting needs for a particular life event. The dimensions can be as numerous as there are different product and market segments. Thus, online retailers must be able to merchandise any given product in multiple ways to maximize the likelihood that customers will find it regardless of how they are shopping.

On The Timberland Co.’s U.K. site, Timberlandonline.co.uk, which is a client of my company, a shopper can access a given pair of shoes by browsing a collection (e.g., Outdoor Performance) as well as through the traditional product category hierarchy (e.g., Men’s Footwear). The site intelligently displays the right “breadcrumb” trail to indicate how the customer got to that product to ensure a consistent shopping experience.

The ability to make real-time changes to the product classification matrix helps support marketing programs that drive traffic and sales. For example, a merchant may want to create a special collection of products related to a special event, such as the Red Sox winning the World Series. Products bearing the Red Sox logo thus need to be assigned to both their original categories and the new special collection. The retailer should be able to make this happen within the catalog management system without having to duplicate product content or create multiple SKUs.

2. Shopping by product set. Retailers with strong “merchandise authority” can actively tell the consumer what products go well together, as is often the case in fashion-oriented categories such as apparel or home furnishings. For example, Gap Online’s Gap.com makes extensive use of an engaging “shop-by-outfit” approach. Gap.com artfully presents complete outfits (e.g., top, bottom, shoes and accessories) to inspire shoppers and make it easier for them to obtain a certain look. While each of the products can be browsed and bought individually, there are special ensemble pages that enable the shopper to choose size and quantity for each item in the set and send them all to the shopping cart with a single click.

Through this strong “suggestive selling” approach, retailers can boost average order size and conversion rates. The key is to enable your merchants to decide how to mix-and-match products in the catalog to create these ensembles and get them onto the site quickly and easily.
3. Context-relevant product recommendations. Cross-selling and up-selling as a combined merchandising strategy is one of the retailer’s best tools for increasing basket size and margins. But too many sites treat this as a generic activity, presenting other suggested products without specific messaging that make them more understandable and appealing to the consumer.
In contrast, at U.K.-based House of Fraser, on the web at HouseofFraser.co.uk, another client, context-relevant cross-selling is central to the product presentation. From the product detail page for a dress, the shopper is given multiple ways to explore related products: other dresses that are similar, other products from the same brand (across different categories), and the option to see just a few or an entire page of related products.

Similarly, Circuit City Stores Inc. delivers at CircuitCity.com a variety of product and service recommendations depending on the type of product. When viewing a large-screen television, for instance, the shopper can also choose among compatible accessories, specially priced package deals, and value-added services such as warranties and installation. The question to ask is whether your merchandise managers have the ability to define and present product recommendations in multiple, distinct ways, not only at a product level but also in other areas of the site (e.g., category/department pages, campaign landing pages).

4. Interactive shopping tools. Certainly one of the most notable advantages of the Internet channel is the ability to provide shoppers with a wide range of interactive, information-rich tools that help them find or create the perfect product to meet their particular needs. Whether it’s the “Cushion Solution” for outdoor furniture at Gardener’s Supply Company’s Gardeners.com, which is also a client; Timberland’s custom boot builder at Timberland.com, Blue Nile’s “Build Your Own Ring” at BlueNile.com, or any number of product comparison tools on other e-commerce sites, leading online retailers have come up with many innovative ways of helping customers shop more effectively, thus earning greater loyalty and repeat business.

What’s key is the ability to define the right product attributes—which may be unique to particular products and thus require an easy way to make changes to the catalog’s data model—and the ability to feed up-to-date product and inventory data to these web tools, so that the online experience reflects the most current products, options and availability.

The customer experience
The merchandising tactics described above not only require flexible, easy-to-manage product catalogs, but also have implications for other core e-commerce capabilities. For example, how should merchants handle product sets in search results? Do you show both the product set as well as the individual items? When refinement filters (e.g., price, brand, color) are selected, do the set-level or the item-level attributes apply? The answer may vary for different types of products, so the retailer needs the ability to control the customer experience appropriately.
When online retailers merchandise products in different categories and contexts, the shopping cart must handle these differences intelligently. For instance, in some cases where the product image may vary depending on the category in which it was viewed—the shopping cart needs to select the right image. If shopping cart cross-sells are based on category assignments, the system must understand the category context to determine which products to display. And when the shopper wants to navigate back from the shopping cart to the product detail page, she should be able to return to the same context in which the product was originally viewed.
Bundled product pricing presents challenges for both front and back-end systems. If “package deals” or other pricing promotions are based on a set of multiple products being purchased, the shopping cart must recalculate the right price dynamically if one of the items is removed. Later on, if the customer returns one of those purchased products to the retailer, the retailer must have defined business policies regarding the appropriate refund amount and have the ability to accurately execute the transaction.

Delivering on the brand promise
Unless you’re simply competing on price, the quality of your online shopping experience, in terms of ease-of-use, richness, and relevance, is paramount. To meet the expectations of today’s well-informed and discriminating consumer, online retailers must have the capability to execute the online merchandising practices described above. With this foundation in place, they can then look forward to taking the next step in areas such as dynamic merchandising (where site content, offers, products and presentation change based on multiple rules and analytics) and personalized merchandising and marketing (where these aspects of the site change based on the profiles and behavior of the individual customer).

Today, leading-edge adopters are learning what works and doesn’t work in these more advanced forms of online merchandising. The marketplace will continue to evolve, and meanwhile the enabling technologies will change even faster. In general, however, a fundamental need will remain constant: To provide merchants with the ability to easily and quickly change how products are merchandised on their sites, so they can respond to shifting customer tastes and competitor strategies.

Julian Chu is director of client success at Demandware Inc., a provider of on-demand e-commerce technology. He previously led strategy and business development at IBM Corp.’s multi-channel retailing practice. He can be reached at jchu@demandware.com.

Travel Affiliate Web Sites

FROM GROWING WEALTH

Experts weigh in on potential

Sunil Bhatt, vice president of affiliate marketing at the Hotels.com/Interactive Affiliate Network (IAN) division of Expedia, agrees that the industry holds a wealth of opportunity. “Travel is a very good business, in general,” he says. “It’s a very large market. Everybody travels, so there are lots of opportunities to capture travelers with specific needs or interests by creating a travel affiliate Web site.”

Bhatt, whose company partners with hundreds of successful sites operated by individual entrepreneurs, offers one important caveat. “To be successful today, you need to find a creative niche for helping consumers. But there are plenty of opportunities still out there.”

“What has worked well for us is mixing relevant content that the affluent reader wants to see with high-end services like yacht charters and fractional jet ownership or a VIP concierge service for visitors to Las Vegas,” says Gilbert Gautereaux, founder and president of LuxeMont.com, a successful travel affiliate site in San Diego.

Plus, it’s an easy market to get into. “You can create a Web site and do your search engine optimization work, or buy keywords, and attract people searching for travel to your site” with no real barriers, says Gautereaux, a former information technology executive at GE.

To read this entire story, please visit: http://www.paradigmshiftpr.com/travelaffiliate.htm

Rare Commodity

FROM ENTREPRENEUR MAGAZINE

How some women are working hard for the money.

By Aliza Pilar Sherman Entrepreneur Magazine - February 2008

Could a little more estrogen in the VC mix bode well for women? According to the Center for Women's Business Research, women owned the majority share of 7.7 million firms in U.S. businesses in 2007, employing more than 7.1 million workers and generating $1.1 trillion in sales.
Yet female entrepreneurs received an average of only 4.6 percent of available VC funding between 1997 and 2004, according to the Center.

So how are female entrepreneurs doing today? "Although the percentage of women seeking venture capital money has not greatly increased, the quality and experience of women who lead venture-backed companies is extraordinary," says Jeanne M. Sullivan, general partner of StarVest Partners LP, a VC firm. "They know that competition is keen, and they have to 'run with the bulls'--run fast, run hard."

Marian Sabety spoke with 177 VC firms before accepting $2.5 million in angel funding. She believes being female affected her experiences with the VCs. "I have 25 years' experience successfully doing business in the technology industry, so I'm used to the dynamics of a man's world. I remain mystified, however, that in 177 VC meetings, I only met one woman at the table--and even then, she was mum," says Sabety, president and CEO of Wyndstorm Corp., an online marketing and promotions firm based in Washington, DC. To counter these barriers, Sabety is looking into getting a loan against receivables and using other venture instruments.

To read this entire article, please visit: http://www.paradigmshiftpr.com/rarecommodity.htm

GREYLOCK PARTNERS ISRAEL LEADS A $10 MILLION INVESTMENT ROUND IN WEBCOLLAGE

Proceeds To Accelerate Expansion Of Product Platform And Global Growth


New York, NY – March 24, 2008 – WebCollage, a leading content exchange for manufacturers and their business partners, today announced that the company has secured $10 million in new financing. This round was lead by new investor Greylock Partners Israel with participation from existing investors Sierra Ventures, Cedar Fund and Gilde IT Fund and brings the total investment in the company to more than $45 million. WebCollage will use the capital to accelerate the development of its on-demand service and to expand globally.

“During the past year we have seen a rapid increase in the number of manufacturers eager to extend the breadth and depth of their online marketing reach and interaction with customers. WebCollage’s patented solution enables manufacturers to increase sales by 6% -15% by automating the exchange of Web marketing with business partners while uniquely addressing manufacturers’ requirements for ensuring brand consistency and providing richer, more interactive online merchandising experiences for their end customers,” said Yuda Doron, CEO of WebCollage. “As we looked at whether to self-fund or accelerate our growth with new investment, we chose to go with Greylock -- a partner with an impressive track record of building successful companies and whose investment will enable WebCollage to immediately take full advantage of all available product line extensions and market growth opportunities.”

“At a time when online marketing and advertising programs are rapidly proliferating, WebCollage offers a unique, transformative solution that allows manufacturers to engage with their customers directly at the point of product research and purchase,” said Yoram Snir, Partner at Greylock Partners Israel and new WebCollage Board Member. “Moreover, we believe that with its proven ROI, its rapidly growing network of 750 top ecommerce sites and its more than 75 leading global brand clients, WebCollage is poised to become the premier online content exchange for online marketing and sales programs.”

With this new investment, Yoram Snir will join WebCollage’s Board of Directors and Laurel Bowden, a London-based Partner with Greylock Partners Israel, will help guide WebCollage’s European expansion.

As a SaaS marketing solution, there is no software for WebCollage clients to install or maintain in order to exchange marketing content with business partners. WebCollage’s solution opens an automated pipeline, between manufacturers’ websites and their business partners’ websites, through which Web marketing and advertising are seamlessly delivered. As manufacturers update and change their marketing messages, WebCollage keeps partners’ websites synchronized -- driving measurable increases in online and offline sales and ensuring that customers have access to the most up-to-date and accurate marketing information no matter where they research and buy goods.

Forrester Research’s recent February 2008 report: B2B CMO Investment Priorities for 2008 included four recommended investment priorities for marketing executives, one of which was to “give partners new ways to hook into your online systems.” Forrester states that B2B CMOs should “automate data exchange between partner ecosystems to keep distributors, resellers, and suppliers on message and to reduce wasted sales time and sales costs. Technology that offers lightweight integration, like WebCollage’s content syndication software service, is faster and cheaper to implement than full-blown content management systems.”

About Greylock Partners

Founded in 1965, Greylock Partners is one of the world's leading venture capital firms. Over the past 43 years, Greylock has funded and helped build several hundred successful companies. The Greylock approach uniquely puts the entrepreneur first, with Greylock working as an "invited guest" in a highly supportive yet consultative way to help entrepreneurs build market-leading companies. Companies Greylock has funded include Ascend Communications, Continental Cable, Data Domain, Decru, DoubleClick, Internet Security Systems, Legato, Millennium Pharmaceuticals, Openwave, Red Hat, RightNow, Tellabs, Trilogy and Wily Technology.. Companies Greylock has funded in Israel include Imperva, PortAuthority, Red Bend, Siliquent Technologies, Aeroscout, Camero, MySuprmarket.com, Celeno and Zend Technologies. Greylock's offices are located in Silicon Valley, the Boston area, Israel and India. For more information, please visit http://www.greylock.com/.

About Sierra Ventures

Sierra Ventures, founded in 1982, is a privately held venture capital firm focused on investments across all areas of the Information Technology sector from semiconductors to enterprise software. Sierra Ventures has managed nine venture capital partnerships and currently has more than $1.5 billion of capital under management. Some of the firm’s investments include 360Commerce (acquired by Oracle), Active Software (acquired by WebMethods), AmeriGroup (AGP), Authentec (AUTH),Centex (acquired by WorldCom), ConvergeNet (acquired by Dell), FatBrain (acquired by Barnes & Noble), Frontbridge (acquired by Microsoft), Healtheon (merged with WebMD), Interact Commerce (acquired by Sage), Intuit (INTU), Micromuse (acquired by IBM), OnAssignment (ASGN), OnLink (acquired by Siebel), Quinta (acquired by Seagate), StrataCom (acquired by Cisco), Sourcefire (FIRE), Sychip (acquired by Murata Manufacturing) and Teradata (acquired by NCR). More information is available at http://www.sierraventures.com/.

About Cedar Fund

Cedar Fund is a venture capital firm, investing in high technology companies. Cedar Fund seeks to invest in outstanding entrepreneurs pursuing high growth markets with distinguished technologies in the telecommunications, networking, Internet-infrastructure and enterprise software areas. While the fund invests in all stages, it specializes in early stage, Israel-related situations, including Pre-Seed®, seed and first round, where it believes its strategy and capabilities offer the greatest potential. With its quality investment track record and over $225 million under management, Cedar Fund is among the largest and most notable venture capital firms focusing on Israel-related, early stage investments.

About Gilde IT Fund

Gilde IT Fund is an international venture capital fund, focused on providing world-wide funding and support to software, communications and internet companies in various stages of development. With more than 100 investments in the IT industry in Europe, the U.S. and Israel, Gilde IT Fund has distinguished itself among other venture capital firms with its entrepreneurial and long-standing track-record in building leading international IT enterprises. Past investments include No Wires Needed, Cambridge Silicon Radio, Docent, MatrixOne, Seagull, and Skybernet. More information is available at http://www.gilde.nl/.

About WebCollage, Inc.

WebCollage is the leading Web content exchange for manufacturers and their business partners. Using WebCollage's patented, turnkey solution, manufacturers can extend their Web product marketing content to all of their business partners and address the challenge of how to optimize the selling and marketing of products via the Web. WebCollage benefits manufacturers and business partners alike with measurable bottom-line results including higher conversion rates and larger overall order sizes.

Founded in 2000, WebCollage is a privately-held company headquartered in New York, NY, and backed by Sierra Ventures, Cedar Fund, GSI Commerce, Inc., and Gilde IT Fund. For more information, please visit: http://www.webcollage.com/ or call 1.212.563.2112.

Media Contact: Dennis O’Connor (for WebCollage) Paradigm Communications (781) 530-3700; cell: (781) 883-5109Dennis.oconnor@paradigmshiftpr.com

All Eyes Today Turn to Wall Street

FROM THE NEW YORK SUN

The Federal Reserve is also trying to do its part to improve the economy, but that too is being met with skepticism from investors. The Federal Open Market Committee is widely expected to cut its key interest rate by half of a percentage point when it meets next week. It already lowered its key rate three times last year, with the last on Dec. 11, when it sliced the rate to 4.25%, the lowest level in two years.

"Mr. Bernanke's rate cut will be a yawn, because it's what the markets expect," Mr. Flynn said of Federal Reserve Chairman Ben Bernanke. While investors say Mr. Bernanke should be more aggressive in cutting rates, economists are increasingly voicing concern that the cuts are inflationary.

It may be that despite the rate cuts and the fiscal stimulus package, little can be done to stem the market's slide.

"When an economy has overspent itself and over levered itself, a pull back is inevitable and there is nothing that Bernanke or Bush or anybody on Capitol Hill can do about it," a professor of finance at the College of Business Administration at Northeastern University, Harlan Platt, said.

To read the entire article, please visit: http://www.paradigmshiftpr.com/alleyes.htm