Exciting Commerce // Unlimited

Groupon IPO: Groupon Can Also Show Profitability

Since the expenses incurred during market expansion had a particularly negative effect on operational results, Groupon is also able to show profitability by adjusting their expenditures – naturally at the cost of their growth figures.

The central question still remains the same: Will the marketing efforts pay out over time and does Groupon thus have a sustainable business model:

In an IPO targeted for November 3-4, Groupon wants to issue 30 million shares at $16 - $18 apiece (or more), and thus hope to raise over $540 million with about 5% of their equity.

Dan Frommer soberly recapitulated the essential aspects of the coming IPO ("Here's what actually matters about Groupon (and what doesn't)").

Related posts:

• Groupon As A Product Mover
• Groupon Bashing and the Internal Response
• Groupon IPO: The Best Analyses of the Public Offering
• Groupon IPO: Groupon Reveals Financial Performance Figures

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Extras: Ordr.in, API Management, Amazon, Taobao, One Kings Lane

Some selected e-commerce news of interest from the past days:

Ordr.in

Google Ventures has invested in Ordr.in.

TechCrunch reported on Ordr.in, which is pursuing a platform strategy for restaurant food delivery:

"Ordr.in’s solution has been to parter with 72 local food ordering sites (and counting) across the United States, which let users order from some 7,000 restaurants. It then normalizes all of that data, and gives other apps and services access to it via an API.

It’s this API that lets any app or service integrate food ordering. Say, for example, Netflix wanted to integrate an option to oder dinner alongside your evening streaming movie. With Ordr.in, they could do it. And they have a financial incentive to do so — they get a cut of each transaction (as does Ordr.in)."

11 API management services

Programmable Web introduces 11 services which help to launch and manage APIs:

“When launching and managing your API, many companies choose to do all the work themselves, unaware that are service providers available to help you plan, deploy, launch and manage your API infrastructure and ecosystem.”

Amazon

A story from the beginning days of Amazon:

“We found that customers could order a negative quantity of books! And we would credit their credit card with the price and, I assume, wait around for them to ship the books,” Bezos tells Richard Brandt, who adapted his book “One Click: Jeff Bezos and the Rise of Amazon.com” for a great Wall Street Journal profile.”

Taobao

Liveshopping in China: Alibaba will be splitting off its group deal platform Taobao Ju Hua Suan into its own company:

“Alibaba has today announced that its group buy site, Taobao Ju Hua Suan – meaning Taobao group bargains – is going to be spun off as a separate company. It has its own daily deals – which come from vendors as diverse as restaurants and travel agencies – and also serves as an open platform for other sites to sell their deals.”

eBay CFO goes to One Kings Lane

Former eBay CFO Dinesh Lathi will be going to the furnishing and home decor flash sales site One Kings Lane where he will lead 'finance, operations and customer service'.

"As the Wall Street Journal reported recently, One Kings Lane is on track for over $100 million in 2011 sales, and is valued at $440 million."

Originally posted in German by Marcel Weiss, adapted for excitingcommerce.com by Jason Soo.

What Is X.Commerce (Beyond Magento)?

There are different opinions on the future of Magento under the stewardship of eBay. And it is difficult to judge whether or not eBay/Paypal will be able to generate the necessary market relevance for X.Commerce without the support of additional shop system providers. Nevertheless, it is worthwhile to examine X.Commerce carefully since the team there is using this initiative to tackle the still all-too common deal breaker for e-commerce: that is, the effort-laden system integrations.

Roman Zenner of ecomPunk summarized some of his conclusions from the Innovate Developer Conference as follows:

"One result from this conference: X.commerce is not Magento. Rather, is is a kind of cloud-hosted service which allows to interconnect all kinds of different, ecommerce-related services, such as payment and logistics providers, different kinds of marketplaces – most notably eBay, of course! – and so on.

As such, the X.commerce platform is free and open to all kinds of shop systems, so in theory someone could use this technology without bringing Magento or even eBay to the table. X.commerce fabric – which is its official name – can even be downloaded and run on one’s own server. In effect, developers using this platform are independent from both Magento and eBay and in theory could go their merry ways with completely different systems."

As expected, the eBay team was not too pleased with the critical review from ecomPunk ("X.commerce & Magento: Way to go for 21st century ecommerce?").

In response, the ecomPunks had a chance to interview VP/GM of X.Commerce Matthew Mengerink. The interview is transcribed and available for viewing.

Congratulations by the way to Alex, Kai and Roman for their successful start of ecomPunk. The e-commerce industry can do well with a few more critical voices.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Shopify Raises Additional $15 Million Growth Capital

Before Magento, Shopify was our biggest hope for a fundamentally new e-commerce system. Those hopes haven’t materialized. Nevertheless, Shopify seems to be doing well and has recently raised $15 million growth capital:

"Shopify, a leading ecommerce platform used to create and power online stores, today announced that it closed a $15 million Series B growth investment from Bessemer Venture Partners, FirstMark Capital, Felicis Ventures, and Georgian Partners.

This new investment adds to the $7 million of Series A funding received last year, providing a sizable balance to fund continued growth."

Shopify founder Tobias Lütke wrote in his blog:

"Within the coming weeks and months we have some really exciting announcements to make that will shed some light on how we will use the capital. New product features, new apps, themes, partnerships, and even a few surprises.

I’m especially excited about the $1M Shopify Fund that we are announcing alongside this funding event."

Shopify resisted for a long time against external funding, but nevertheless are now proceeding in a way quite ably as compared to Magento's approach (vis-à-vis X.commerce). As such, Shopify can use the capital injection to expand independently.

Shopify is based on Ruby on Rails, similar to the open source solution from Spree Commerce, who registered a seed round of $1.5 million last week.

In the summer, BigCommerce, a direct competitor to Shopify and Magento Go, also received $15 million in growth capital. All use a subscription/commissions based income model.

Shopping systems are currently attracting a lot of attention from VCs. Amongst the open source solutions, Prestashop recently completed their first financing round. Oxid also raised fresh capital.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Must Read: “Commerce in the Time of Social”

What is the future of e-commerce? As usual, the team from Lightspeed Ventures (LivingSocial, Shoedazzle, Bonobos) have the most exciting perspective on the online retailing of tomorrow ("Commerce in the Time of Social"):

“The reduction in information asymmetry in the marketplace and the ability to mobilize people, through the social graph messaging and data, have the potential to unleash peer to peer commerce in a way we have never seen before.”

The Rediscovery of Direct Selling Businesses

Everyone has heard stories of Tupperware parties where a group of people gathered in someone’s home for product demonstration, buying and socializing.

The social media is giving a new boost to this old business model by enabling the entrepreneurial hosts to invite friends and friends of friends, and gather offline to socialize and transact, using online tools such as Facebook and Twitter.

The online and offline recommendation, feedback and validation reduce the social approval anxiety and the friction in the buying decision.”

Shopping parties and the renaissance of direct sales channels. Exciting Commerce is also expecting a load of new business models driven by the social web (German post).

Here is the link to the complete post from Lightspeed and to their predictions for 2011 which they posted at the end of last year.

The photo is from the Shopping Party Session (German link) at Exciting Commerce’s Live Shopping Days Conference in 2011.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Commerce Identity: Magento Gets Central Shopping Profile

It could be assumed that Magento will primarily serve eBay as a means to an end. But what that end is, has been up till now not so apparent.

Therefore the e-commerce world is eagerly looking towards San Francisco now during eBay’s Innovate Developer Conference 2011. eBay is revealing details about the future role of Magento within the eBay universe.

Amongst other things, the PayPal based “Commerce Identity” login will be introduced. Customers should be able to login to all Magento shops with a single login as well as all other eBay sites (eBay, GSI Commerce/Intershop, etc.).

"X.Commerce has been piloting Commerce Identity and helps shoppers easily log in to retail websites, just as they can log in to many sites using their Facebook accounts, for example.

Neal Sample, X.Commerce's CTO, told EcommerceBytes it's a little different from a typical log-in or social identity in that it includes a shopper profile, or "commerce identity." It will include such data as the user's purchase history, preferences, and shoe size, for example. It's tied to PayPal but is an opt-in program.

"We think there's room for a Commerce Identity for an individual to provide them both with safety and security and convenience of shopping that they don't get out of other identities that are currently available on the web," Sample said."

With that statement the strategy is a bit clearer: Magento will be helping to expand the PayPal reach and convert it from a pure transaction processing function to a platform independent shopping profile.

Related post:

• X.Commerce: What Is eBay Doing With Magento?

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Book Tips for 2011 // From January to September

Amongst the English language books on the Exciting Commerce rankings, Rework is in first place (“Change the Way You Work Forever”).

Business Model Generation (“A Handbook for Visionaries, Game Changers, and Challengers”) is following strongly behind and may even take the lead by year end.

Amongst the new releases this year, Umair Haque’s The New Capitalist (“Building a Disruptively Better Business”) is doing well.

And Delivering Happiness from Zappos CEO Tony Hsieh still holds a firm place in our shortlist.

Here are the top English language books on the Exciting Commerce charts for the first nine months of 2011:

1. Rework (“Change the Way You Work Forever”)
2. Business Model Generation (“A Handbook for Visionaries, Game Changers, and Challengers”)
3. The New Capitalist (“Building a Disruptively Better Business”)
4. The Anatomy of Buzz Revisited (“Real-life lessons in Word-of-Mouth Marketing”)
5. Delivering Happiness (“A Path to Profits, Passion, and Purpose”)

These and other book tips can be found in our books category.

Related posts:

• Books Tips for 2011 – From January to March
• Advanced Business Models: The Library for Pioneering Entrepreneurs
• The Top 25 Business Books of the Year 2010

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

K5 Conference Countdown: The “Who’s Who” of German E-commerce

In the last few days there was a grab for the last few K5 Conference tickets, especially from interested retailers. The event is now sold out!

Therefore a big thank you now to all participating retailers and e-commerce representatives for the vote of confidence. Everybody who’s anybody from the current (and future) German e-commerce scene has come on board. From Alternate to Zalando and from Amazon to Weltbild, the broadest spectrum of market areas are here.

Several complete industries are represented. From the book industry with Buch.de/Bol up to Buecher.de. All four of the big teleshopping networks (1-2-3.tv, Channel21, HSE24, QVC). Furthermore Groupon, Vente-Privée and several of the young innovation drivers are coming out. 

We are happy to welcome many wine retailers - from Ebrosia to Meevio. Also several consumer electronics dealers such as Cyberport, Notebooksbilliger and Synaxon/PC Spezialist as well as practically all beauty product retailers. Home furnishing companies are represented by such names as Avandeo, Design3000, Westwing, Wilmowsky and XXXLutz. Just as well represented is the fashion segment where not only market portals are participating but also many brand manufacturers (Strenesse, Seidensticker, Street One, etc.).

Prescription glasses and contact lens retailers like Brille24, Lensspirit and MisterSpex are as well covered as the baby product market with Baby-Markt, Baby Walz and Windeln.de. In the sport and lifestyle segment, Bergfreunde, Planet Sports, Keller Sports and Frontline are amongst the names represented in this sector. Adding to this are construction material companies, online supermarkets and a load of retailers related to motor vehicles. Very present is the mass customization theme with such companies as Personalnovel, PosterXXL, Renesim, Woonio, Selve, Shirtinator and Spreadshirt.

How should a modern e-commerce conference for online retailing look like? That was the question raised by Exciting Commerce during the conception of the K5 Conference. And it was clear from the beginning that the program alone wouldn’t be the key driver. The K5 lives from the participants and the exchange of ideas between them. Whether it be during the program breaks or during the evening event, finally retailers from across the German e-commerce landscape will be able to trade information about their various development consultants and IT agency experiences instead of the other way around.

The response received has shown that a Pure Player conference also draws the attention of retailers who use multiple sales channels. We are therefore pleased to welcome the participation from Douglas, Obi, Baldur Garten, Jochen Schweizer, Louis Sayn, Neckermann, Otto and its daughter companies – from Baur to Bon Prix, from Heine to Mirapodo and from Limango to Smatch.

Very surprising was how many former CEOs, e-commerce and project leaders are now working as independent consultants. Anyone looking for qualified services on freelance or permanent basis will surely find what they need at the K5.

And on this topic: Expect a New Kind of E-commerce Conference! On the 6^th and 7^th of October in Munich, Germany.

A special thanks to our top sponsors who have made the impossible possible. The first K5 Conference for E-commerce

will be presented by

and supported by

Related posts:

• K5 Update: Expect a New Kind of E-Commerce Conference
• K5 - Expect a New Kind of eCommerce Conference

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

K5 Update: Expect a New Kind of E-Commerce Conference

At the end of this week we will host our first annual K5 Conference in Munich. eComBytes' Ina Steiner has all the details in English.

We expect 650+ retailers and industry experts for this two-day-gathering of Germany's top online retailers. Our friends from ecomPunk will cover the conference in English.

The conference will focus on growth strategies and untapped potentials for online retailing - like female shoppers and repeat customers.

You can already find lots of pre-coverage in our German edition

Groupon Rewards To Convert Bargain Hunters to Repeat Customers

One of the issues for Groupon is that the new customers Groupon generates for their merchant partners often remain just one-time bargain hunters. Although this isn’t a knockout factor given the other benefits of Groupon (example: merchants can also fill their unprofitable low volume periods) it doesn’t mean that Groupon shouldn’t try to minimize this disadvantage.

Groupon’s answer to the customer retention problem is Groupon Rewards:

"With a Groupon Reward, a business that offers a regular Groupon deal will be able to follow up with another reward that gets unlocked after the customer spends a certain amount of money. For instance, after a customer spends $50 or $100 at a store over time, she might get a Groupon Reward of $20 worth of goods for $4.

All that a customer will need to do is pay with the same credit card which is already on file with Groupon (after opting into the program). She can reach the spending goal, which is set by the merchant, over multiple visits.

Each time, she will get a notification by email or on her phone alerting her that she just spent money at a merchant offering a Groupon Reward and how much more she needs to spend to unlock it: “You just spent $7 at Salem Coffee Beanery! You’re only $15 away from unlocking an exclusive reward!”"

Groupon Rewards identifies customers via the credit card they use. This makes the implementation in the USA rather simple, however leaves countries like Germany out where credit card usage is too low.

In connection with Groupon Rewards, an analysis tool will be available for merchants:

“With most of Groupon’s daily deals today, they still don’t know how many people redeem them or when or how much total they spend at each merchant. Groupon Rewards can actually track spending at each merchant, which gives Groupon much better visibility into the success of its main business (how many people who buy regular Groupons come back, how much do they spend, etc?). Merchants who participate will also get a dashboard to track these metrics for themselves”

Related posts:

• Groupon As A Product Mover
• Groupon Bashing and the Internal Response
• Groupon Now! and the Mobile Future
• Is Groupon Developing in the Right Direction for the Long Term?

Originally posted in German by Marcel Weiss, adapted for excitingcommerce.com by Jason Soo.