Email Experience Council Whitepaper

The Email Experience Council (EEC), the Direct Marketing Association’s (DMA) vertical working group focused on the e-mail marketing industry, today announced that the holiday e-mail marketing season for retailers has begun. Along with the announcement, the EEC released "Ring-Cha-Ching, Hear Them Ring: The Guide to Gearing Up for the Holiday Email Season," a 15-page report that discusses retail e-mail marketing trends and practices from the past holiday season.

According to DMA Executive Vice President and Chief Operating Officer Ramesh A. Lakshmi-Ratan, PhD, a DMA survey conducted last December found that 21.9 percent of those marketers surveyed had experienced an increase in their 2006 Cyber Monday sales compared to the same post-Thanksgiving Monday in 2005. "Many of those sales were the result of commercial e-mails," he added.

“Long before retailers hang any wreaths or tinsel in their stores, they send out e-mails promoting their Christmas deals to their subscribers — lots of e-mails!” said Chad White, the EEC's director of retail insights and editor-at-large, founder of RetailEmail.Blogspot, and the guide’s author. "Last year we tracked more than 2,000 e-mails from nearly 100 top online retailers during the fourth quarter and released daily reports on strategies, tactics, and trends via RetailEmail.Blogspot. Based on those reports, the EEC has produced this helpful roadmap to the e-mail holiday season so retailers and other companies can better formulate their campaigns this year."

Here are some of the metrics and advice from the guide, which is available in the EEC’s Whitepaper Room:

- The guide includes discussions and examples of the “12 Phases of Christmas,” the 12 strategies that retailers use at different points in the holiday season. Those strategies include promoting e-gift cards and “buy online, pick up in store” services.

- Last year major online retailers increased their e-mail volume by 47 percent on average during the holiday season.

- Seven of the eight biggest retail e-mail volume days of the year occurred in the weeks before Christmas last year. Those days included Cyber Monday (November 27) and all three “Echo Mondays” (December 4, 11 and 18) — the Mondays that follow Cyber Monday. Interestingly, two of the three Echo Mondays were bigger e-mail days than Cyber Monday, which is billed as the biggest online sales day of the year.

- E-mail volume should peak in the second week of December this year.

- Twenty-nine percent of major retailers promoted e-gift cards in their e-mails during the eight days ending Christmas Day.

- Just as some online and multichannel retailers promote Thanksgiving Day sales to get a leg up on offline competitors whose stores are closed on that day, some will also begin their post-holiday sales on Christmas Day and promote them in their e-mail campaigns.

The guide can be purchased for $99 by visiting the EEC’s Whitepaper Room at http://www.emailexperience.org/Login-Whitepaper-Room.

Leapfrog Using Open Source

At Leapfrog Enterprises, maker of children's learning toys and electronics, the company's best-of-breed infrastructure planning strategies are leading it in the direction of open-source software, while shifting from hosting the bulk of its Web sites in a third-party ASP model to bringing its new Web properties into LeapFrog's own data centers. eWeek has a very interesting article detailing the challenges Leapfrog has faced (particularly with integration).

Stibo Catalog Doing Road Shows

Stibo Catalog invites you to attend one of their Road Shows to find out how the Stibo STEP Product Content Management Solution for multi-channel marketing can help your business drive sales and increase production efficiency. You will learn how successful direct marketing businesses are using STEP for:

- Managing their product information centrally
- Creating catalogs, flyers and other collateral for print and electronic delivery
- Communicating with their customers more efficiently

Road Show locations and dates:

San Francisco, CA - Wednesday, September 18
Los Angeles, CA - Tuesday, September 19
New York, NY - Tuesday, October 9
Boston, MA - Wednesday, October 10
Atlanta, GA - Tuesday, October 16
Detroit, MI - Tuesday, October 23
Pittsburgh, PA - Wednesday, October 24
Chicago, IL - Tuesday, November 6
Minneapolis, MN - Wednesday, November 7
Raleigh, NC - Tuesday, November 13
Toronto, ON - Wednesday, November 14

You can sign up at stibocatalog.com/roadshows
or call Stibo at 678-797-8474.

Conversation with John Marrah

I spoke with John Marrah this morning about his taking over as President and CEO of ProfitCenter Software. Two major themes came out of the conversation:

1) John sees on-demand solutions as the "dominant strategy" going forward for multi-channel commerce applications, since they eliminate the need to maintain a staff to worry about tuning the database and load balancing and server maintenance and other routine issues of systems maintenance. Users can just concentrate on running their business. He believes that PCS is the dominant player in the on-demand category.

Fair enough. But what about implementation issues?

2) John acknowledged that that was the big challenge facing PCS. They have 35 companies who have signed on, but only five that have gone live so far. Another five or six should go live in the next three months. But it is a priority for him to make implementation more robust at PCS. To that end, they have hired about 20 people in the last few months (some managers, some implementers), and have 12 openings to fill (some in New York, some at their Florida location – John will be working out of both). And a couple of new key executives are heavy-weights with “strong experience” in the enterprise software and direct commerce/multi-channel commerce world, specifically Dominique Laborde and Les Johnson (see previous post).

John was also excited about the potential for leveraging the object-oriented architecture of the PCS platform to make the product “more mature” very quickly, adding functionality into the product set for things like a gift registry, standing orders, or continuity management without having to program everything from scratch by inheriting functionality from other parts of the program. “It is truly amazing what you can do when you don’t have to rebuild functionality multiple times and maintain it multiple times within the application. By taking advantage of the object-oriented architecture and developing functionality and managing it in one place, you get huge speed and maintenance advantages.”

I will be spending a day at PCS in the next couple of weeks and will let you know what I think first-hand. Meanwhile, with "new blood" pumping through its veins, the company has the chance to become a much stronger player.

Comments? Please use the Comments function below this post, or click Discuss PCS & Escalate for our ad hoc discussion board.

New Execs at PCS

In addition to bringing on John Marrah as President and CEO (see previous entry), ProfitCenter Software, Inc. has announced the following new additions to its executive team:

Dominique Laborde
Chief Operating Officer
Dominique Laborde joined PCS as Chief Operating Officer in April 2007. For much of his professional career over the last 29 years, Mr. Laborde has held technology leadership roles within complex software organizations with annual revenues exceeding $1 billion, directing teams of up to 300 people situated globally, to achieve business results in highly competitive markets.

Most recently, Mr. Laborde was Chief Technology Officer with Vertafore, a developer of On Demand enterprise software. Prior to Vertafore, Dominique Laborde has held technology executive positions at large corporations such as Business Objects, Dun & Bradstreet, American International Group (AIG), Computer Associates and Cap Gemini.

Dominique Laborde holds a Bachelors degree in Mathematics and a Masters degree in Computer Sciences from The University of Paris, France.

Les Johnson
Vice President – Professional Services
Before joining PCS, Mr. Johnson was Vice President of Client Operations for Ecometry Corp. While at Ecometry, Mr. Johnson led the Professional Services, Training and Implementations groups. Having spent over 30 years in the technology industry, Mr. Johnson is well versed in the systems and technologies available to multi-channel direct marketers.

John Marrah Taking Over at PCS

We have learned from our sources at ProfitCenter Software that John Marrah has left his position as head of Escalate Retail to take over the head spot at PCS. Here is the text of the press release:

ProfitCenter Software Inc. ("PCS"), a wholly-owned subsidiary of Systemax Inc. (NYSE:SYX), announced today the appointment of John Marrah as its President and Chief Executive Officer, effective immediately. Richard Leeds, Chairman, President and Chief Executive Officer of Systemax Inc. commented, "I am extremely pleased to have someone of John’s stature come aboard to lead PCS. I consider John to be the world’s leading executive in the direct marketing and multi-channel retail software industry, and his joining PCS recognizes the company and its product’s strong position as the right technology platform for the direct marketing industry in the future. John Marrah provides the senior leadership and experience necessary to take the PCS product and business to the next level."

John Marrah brings over 23 years of software and technology experience to his leadership role at PCS. He most recently served as President of Escalate Inc., a leading provider of software solutions for direct and multi-channel commerce, where he was responsible for Escalate’s engagement in retail vertical industries and delivery of customer value across all business units. During his eight years at Escalate (formerly Ecometry Corporation), John grew the company significantly thorough the replatforming of the Ecometry system to an open systems platform and through the acquisitions of Blue Martini Software, ADS Retail and GERS. Prior to joining Escalate, John was Senior Vice President of Worldwide Sales and Services at Workgroup Technology Corporation. Additionally, he has held executive management positions at Oracle Corporation, XDB Systems, and Information Dimensions Inc.

****
We have a call scheduled with John Marrah tomorrow morning, and will post further details on this very significant development Friday morning.

Meanwhile, we have set up an ad hod discussion board for anyone wishing to comment on this. Just click here Discuss PCS & Escalate to participate. You may also, of course, post comments right here on the blog immediately under this listing.

Data Mining/Modeling Workshop

SPSS and The Modeling Agency are co-sponsoring a Workshop on Data Mining and Predictive Modeling, Burlington, MA, September 10.

The Workshop will show you how your company can acquire new customers, keep existing customers, and increase ROI and profits using the predictive power of data mining. Designed to provide you with ready-to-use resources, the Workshop will address how to get started with data mining, share best practices, and offer first-hand data mining experience. Cost for this day-long event is $299.

Click here for more info, including a full agenda.

OrderMotion - Yahoo Stores Webinar

OrderMotion and Yahoo! Merchant Solutions have teamed up to sponsor a free Webinar on automating your back-office tasks and managing multiple Yahoo! storefronts, Thursday, August 30, at 2:00 PM Eastern time. Click here for further information.

TNT Sets Up Canadian Customs Brokerage

TNT Express has launched a new customs brokerage division for international shipments entering Canada. The division will help to ensure fast and accurate clearance of all import shipments via a direct electronic connection to local customs authorities and other government agencies.

World Marketing Selects Direct EDJE

World Marketing, Inc., a leading fulfillment and marketing services bureau with offices in eight major markets nationwide, has selected Direct Response from Direct EDJE, a Web-based Software-as-a-Service solution, to manage fulfillment operations and give clients control over fulfillment and print programs.

CommercialWare Adds eCommerce

Datavantage/CommercialWare has added eCommerce to its retail solutions portfolio with the acquisition of a 51% interest in the eOne Group, a premier eCommerce solutions provider based in Omaha, NE.

eOne Group and its offerings will be integrated into Datavantage/CommercialWare (which will be renamed MICROS-Retail later this year, as we have already reported). The addition of eOne Group extends CommercialWare's capabilities to offer full support for front-end, customer-facing transactional websites and allows retailers to embrace Web 2.0 and the growth of this channel.

eOneCommerce™ engine and complementary products were developed with open Java architecture, allowing the company to deploy its applications and technology into virtually any enterprise, and perform real-time data access to the customer’s choice of OS/database/hardware platforms. Through the use of a three-tiered application architecture, eOne Group is able to separate the web interface, business logic, and back-end data structures, allowing its solutions to interface with raw data structures, as well as flexibly accommodate existing application processes.

News from VendorNet

VendorNet, which produces solutions for drop-ship management and Web-based Supply Chain Collaboration, has launched a new online newsletter. It's first edition reports that:

VendorNet Converts to the Microsoft .Net Framework

VendorNet Integrates with UPS (while already integrated with FedEx, VendorNet adds UPS to its carrier integration partners)

The Shopping Channel Expands Merchandise by More than Fifty Percent Using VendorNet Dropship Manager

DRTV Becoming MultiChannel Mainstay

According to a recent white paper sponsored by the Electronic Retailing Association (ERA), entitled "The Evolving Role of Direct Response Television in Multichannel Marketing Execution," direct response television (DRTV) continues to grow as a marketing medium. This growth is attributable to both DRTV marketers —who are accelerating their adoption of interactive technologies as a component of multichannel execution strategies —and traditional advertisers, who have begun using the direct response model to enhance customer relationships, drive incremental sales, and ensure marketing accountability.

The Winterberry Group, a strategic consulting firm which conducted the study on behalf of the ERA, surveyed nearly 100 senior industry executives throughout North America to discover the reasons behind DRTV's increased traction. The panel for this study included representatives from "legacy" DRTV marketers (those that have traditionally used the channel as a primary promotional tool) as well as product distributors, full-service DRTV agencies, integrated marketing service providers (those "MSPs" that offer DRTV in addition to other services, such as direct mail), media buying agencies, production companies, and a variety of specialty service providers.

The report identifies five leading trends that are actively reshaping the DRTV industry"

1. Most notably brand marketers entering the DRTV space, with the growing use of DRTV to develop and nurture customer relationships rather than merely sell individual products, and the increasing use of DRTV to drive Web and retail traffic.

2. DRTV marketers will accelerate their adoption of emerging interactive channels as marketing models and metrics are refined.

3. The focus of call center activity will shift away from inbound order receipt to outbound customer relationship management (CRM).

4. DRTV agencies will develop sophisticated marketing solutions to help marketers optimize strategies around Web 2.0.

5. DRTV marketers will explore forays into branded entertainment and product placement.

Copies of the report, at $500 each, are available at the retailing.org Website (members of the Electronic Retailing Assoc. can get the report for free).

Zappos at eTail

Zappos.com CEO Tony Hsieh spoke at the eTail conference in Washington this week. Multichannel Merchant Weekly recounts his 10 lessons learned in e-commerce during his Aug. 7 session at the eTail conference.

8 Tips from 8x8

Attendees at the Direct Marketing Association "Fast Forward 2007" Executive Summit for Information Business Leaders, held in New York, August 1, had the opportunity to hear high-powered Ecommerce Consultant Amy Africa of Eight By Eight deliver eight tips for Ecommerce optimization:

1. Search inquiries should lead to micro-sites and targeted Web sites for a specific request, with merchandise offered as the result of analytics, not "gut instincts." Moreover, marketers should be using a variety of search strategies, including pay per click, organic, and listings in alternate or industry- or topic-specific search engines.

2. Make better use of integration tools for online and offline contact management, such as circulation-combining tools (although software programs that would facilitate them aren't commercially available yet). They also include tracking metrics like the number of clicks within a site before a prospect makes a purchase. Combine the data, and use it to inform marketing decisions back and forth across the virtual and real worlds. But remember that the mechanics of marketing online and offline are very different, from the breadth of products offered to the sales cycle times.

3. Use trigger-based e-mail efforts in reaction to customer or prospect behavior, such as EBOPPS, EBOSI and EBOTAS -- e-mails based on past purchases, selected interests and target audiences. Be aware of the factors that influence your response rates such as time of day and e-mail format.

4. Get help obtaining e-mail addresses. As Africa put it, "the company with the most viable names wins." Use e-mail appends, and remember to include source lookups.

5. Forge third-party agreements, including banners, swaps, e-mail introductions for complementary offerings and mentions in offline media.

6. Develop user profiling programs. There's a lot more information available online than offline. The more information a user has about its customer, the more streamlined the site it can show.

7. All markets are not alike, and should not use Web sites that work as if they were. The needs of the education, government, business-to-business and consumer audiences are radically different. So too should be the sites that present to them.

8. Take better advantage of metrics. Know the average audience user session (AAUS) length. Track page views, user paths within a site, which pages surfers come in through, which pages are the last ones viewed before they leave, what the main referring URLs and Web sites are, and which key words are used, both to access your site, and within internal site searches. Know where and when prospects abandon shopping carts, and where within the sales funnel they drop out.

And above all, remember that even with a good, well-designed site, 60 percent of visitors will leave without making a purchase.

Harry & David Expanding Ohio DC

According to MultiChannel Merchant magazine, Harry & David will be adding 45,000 sq.-ft. to its Hebron, OH-based distribution center facility. The $16 million expansion will be completed in fall 2008.

To receive a $351,000, seven-year, 45% tax credit from the state, Harry & David must maintain a presence in Hebron for at least 14 years and keep its current workforce of 225. The company said it expects to add about 160 new full-time jobs to the DC, with an annual payroll of approximately $4 million.

The Hebron facility shipped more than 3.6 million gifts last year, about 1 million more than Harry & David's Medford, OR-based headquarters.

First Data Buyout Hits Snag?

Aug. 10 Bloomberg reports that the global stock-market decline has hurt shares of buyout target First Data Corp., prompting speculation the deal may go back to the negotiating table.

First Data, which agreed to be taken private by New York-based Kohlberg Kravis Roberts (KKR) in April, dropped as much as 6.1 percent to $29.13 and has decreased 7.4 percent since July 10. KKR agreed to pay $34 a share.

From another source, on Wednesday a story from Dow Jones Newswires reported that the financing for the $26 billion buyout of First Data still contains $14 billion of loans that are light on protection for creditors, and no such high-yield loans are moving right now. That means that unless things change dramatically between now and September, the banks arranging the debt sale are going to be forced to eat the paper.

Those banks are Citigroup, Credit Suisse Group, Deutsche Bank, HSBC, Lehman Brothers Holding, Goldman Sachs Group and Merrill Lynch. According to the Newswires piece, comparable debt now is trading in the market at about 95 cents on the dollar, which could mean 5% in losses to be shared by the banks, or roughly $700 million.

State of Competition in European Postal Services

According to Bloomberg.com -- Deutsche Post AG may be defenseless against invaders into its lucrative home turf as the rest of Europe backtracks on promises to throw open national mail markets.

A two-year delay in opening most of the region is thwarting plans by Europe's biggest postal service to expand. That leaves Deutsche Post little room to improve margins when its letter-delivery monopoly in Germany, its most profitable business, ends Jan. 1. The shares have dropped 20 percent since April, after more than doubling in four years as Deutsche Post shed workers and boosted profit.

Deutsche Post has forecast domestic competition will trim earnings at its mail division -- which makes up over half the company's income before interest and taxes -- by as much as 20 percent by 2009.

The delay in ending monopolies in countries including France, Spain and Italy will "put a halt to Deutsche Post's foreign expansion," said analyst Michael Benedikt at Commerzbank AG in Frankfurt. "They won't be able to compensate for market-share losses at home."

The European Parliament dealt a blow to Deutsche Post's expansion strategy on July 11 by voting to allow mail monopolies throughout the European Union to continue until at least January 2011. Deutsche Post had urged the parliament to stick with an original plan to open markets no later than 2009.

Preparing for Competition

Deutsche Post has been preparing to compete at home and abroad since the German state began selling stakes in the company in 2000. The state still holds 30.6 percent of Deutsche Post through development bank KfW Group.

To cut costs, Deutsche Post closed about 4,000 post offices in the past 10 years and shed 140,000 jobs, mostly in the domestic mail and parcel businesses. The mail division employed almost 130,000 at the end of 2006.

Deutsche Post also made about $20 billion in acquisitions in businesses such as logistics, express delivery and freight as e- mail began supplanting letters and competition to ship heavier items in Germany increased.

Takeovers of Plantation, Florida-based DHL Worldwide Express in 2002 and Seattle-based Airborne Express Inc. in 2003 positioned Deutsche Post as a global express delivery company pitted against United Parcel Service Inc. and FedEx Corp. The 2005 purchase of Bracknell, England-based Exel Plc made Deutsche Post the world's largest manager of warehouses and inventories.

Debt Increase

The expansion also more than doubled Deutsche Post's net debt, or debt minus cash and cash equivalents, to 3.08 billion euros in 2006 from 1.36 billion euros in 1999.

Even as Deutsche Post has branched out, its monopoly in Germany on delivering letters weighing less than 50 grams (1.8 ounces) remains its most profitable business. The mail division had a profit margin of 15.5 percent last year, compared with 1.9 percent at its express unit and 3.4 percent for logistics.

Deutsche Post had about 91 percent of Germany's 9.8 billion euro mail-delivery market last year, according to the German regulator, the Federal Network Agency. That will probably drop to 70 percent within five years after liberalization, Commerzbank's Benedikt said.

Two Main Challengers

TNT NV, one of Deutsche Post's biggest competitors in Germany, has a local market share of about 2 percent to 3 percent, Klein said. The Hoofddorp, Netherlands-based company aims to increase that figure to 10 percent by 2013.

Pin Group AG, a Luxembourg-based deliverer, aims to boost mail revenue in Germany to between 1.5 billion euros and 2 billion euros by 2015 from 168 million euros in 2006.

... [but] competition will be limited, with TNT and Pin likely the only major challengers, said Andre Mulder, an analyst at Kepler Equities in Amsterdam.

The government may also impose a minimum-wage requirement on postal companies, preventing rivals from paying much lower wages than Deutsche Post.

A potential legal dispute between Germany and the European Commission is also brewing as the two argue about German plans to continue exempting Deutsche Post mail services from the value-added tax, Benedikt said.

HP Data Warehouse at Wal-Mart

Intelligent Enterprise reports that "Wal-Mart, a data warehousing pioneer, is showing that it's not afraid to take a gamble if there's more business insight to be gleaned from the 800 million transactions generated by its 30 million customers each day.

"The $345 billion-a-year retailer revealed last week that it's one of the earliest customers of Hewlett-Packard's new Neoview data warehousing system. That Wal-Mart would choose Neoview was unexpected, though not entirely surprising. Unexpected because Neoview is new and unproven, formally introduced just three months ago, and because Wal-Mart is heavily invested in Teradata's data warehousing platform. But it's not surprising because HP CEO Mark Hurd, who once headed Teradata, and HP CIO Randy Mott, who once ran Wal-Mart's IT organization, have firsthand knowledge of the retailer's data warehousing environment and almost certainly drew on that experience to close the deal.

"Neoview will be used in conjunction with Wal-Mart's strategically important Retail Link system, which gives Wal-Mart's 20,000 suppliers access to data about the movement and sales of their products in its stores. In other words, the HP platform isn't being relegated to some secondary business process. HP couldn't have hoped for a better proof-of-concept customer as it tries to sell its new business intelligence platform in a highly competitive market that includes IBM, Oracle, SAS Institute, and Teradata.

"For more than a decade, Wal-Mart has operated one of the largest commercial data warehouses in the world. Over the last two years, that Teradata-based warehouse has doubled in size to more than 1,000 Tbytes, or a petabyte, packed with sales information on every item sold in its stores. 'Business intelligence is huge' at Wal-Mart, says CTO Nancy Stewart. Wal-Mart is making 'significant investments' in BI tools, Stewart adds, though she declined to reveal how much it's spending on the HP system.

"Earlier this year, Wal-Mart created a loose-knit internal BI team under senior VP Marc Rosen that's assessing new graphics-rich desktop tools that render 'what-if' scenarios, as well as new options for cleansing and managing data with an eye on governance. The company also is considering building data marts--smaller, subject-specific data warehouses--that focus on snapshots of operational data, Stewart says.

"...At Neoview's core is the Tandem NonStop operating system kernel and database acquired with Compaq in 2002. Before jumping into the market, HP engineers tuned that software, originally designed for transaction processing, for data analysis workloads.

"... Until now, Wal-Mart's Teradata-based data warehouse has been used to support Retail Link, which tracks everything from percentage of items in stock (Wal-Mart aims for a 98.5% in-stock rate) to profit analysis on markdowns and so-called 'market-basket analysis.' Neoview will now be shouldering some of that workload; Stewart says Wal-Mart is looking at 'a whole new set of queries and algorithms.'

"... In the early going, HP has identified retail as one of its target markets for Neoview. One customer is Bon-Ton Stores, which has 278 stores under such brands as Bergner's and Boston Store. Bon-Ton went live in October with its first Neoview application, which measures suppliers' merchandise performance. The company has since added marketing and merchandising applications, the largest of which contains a database table with more than 4 billion rows, says CIO James Lance in an e-mail interview. The system has exceeded the expectations of users, Lance says."

Red Prairie Enhances WMS, Workforce Management

RedPrairie Corp. has enhanced its Warehouse Management and Workforce Management software applications to include new billing options and support for third-party logistics (3PL) providers. The new features incorporate all of the functions required to optimize a multi-client distribution center, RedPrairie said. User-defined billing options cover multiple operations, including receipt check-in, putaway, picking, loading, storage and value-added services.