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This blog has moved to www.derekhat.com.
Thursday, December 22, 2005
Wednesday, December 21, 2005
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Last week itbusiness.ca did a piece on the holiday rush for Canadian online retailers (http://www.itbusiness.ca/it/client/en/home/News.asp?id=37853&cid=9). Some interesting tidbits:
Sears's online sales last year accounted for between $150 to 200 million out of the company's $6.2 billion total revenue.
Sears.ca was ranked as the No. 1 online retailer by Canadians who shop online, with 41 per cent of respondents indicating they plan on purchasing from the department store’s Web site. Futureshop.ca followed closely behind with 40 per cent. Indigo.ca, Amazon.ca and Canadiantire.ca rounded out the top five.
I imagine that a lot of Sears' online shoppers use the web site to simply order things from the catalogue rather than calling in their orders. The web site is not great for browsing and discovery (certainly not nearly as compelling as flipping through the Wish Book).
As an Internet guy living in Canada, it is perhaps a tad depressing to see how small a sliver of Sears Canada's revenue came from online sales and then to realize that Sears.ca is the number 1 online retailer in Canada (in at least one survey). And the web farm handling all that Canadian ecommerce traffic? Just four boxes:
Sears Canada, for example, adds an additional two servers onto its existing two to handle the extra load placed on them during the fourth quarter. The fourth acts as an emergency server.
I'm guessing they're running something better than PowerEdge 850s over there...
By contrast, sportcheck.ca (also mentioned in the article) seems to have been caught with its Columbia/Burton snowboarding pants down this year. They have had a "holiday season traffic, slow webpage loading, sorry" message up for at least a week! And they don't even sell products online - it's just a catalogue. Too bad. There's probably some IT guy over there being dragged over the coals even though he warned his boss that this would happen...

Although the message and slow load time is bad enough, the site was not loading at all when I tried it earlier today. It would serve a blank HTML page 50% of the time. Not good for stickiness.
(Addendum: A Sears package was delivered while I was writing this. They are watching. Beware.) 
Posted by derek hatchard 12/21/2005 5:25:42 PM (GMT Standard Time, UTC+00:00)
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Thursday, December 15, 2005
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It snows a lot where I live so I own a really great snowblower. My neighbour was babysitting it while I had a storage shed built for it at my new house (thanks, Nathan). Today we had our first significant snowfall so I brought my baby home. I needed a new padlock for the shed so after I cleared the driveway I went down to the local home hardware store for a padlock, some wood glue (not for the shed), and some windshield washer fluid (also not for the shed - maybe that was obvious). I arrived 5 minutes before closing but having worked at a supermarket in the past I know there is a small buffer of grace at closing time at most stores.
I walked in intent on being very fast out of respect for the staff itching to go home. I literally grabbed the glue as I walked by the aisle and headed for padlocks. I had one in my hand and was about to proceed to the cash when a clerk asked if I needed help. "So far so good," I thought. "Not only is he not visibly annoyed that I am shopping just moments before closing time, but he made a friendly offer to help." As "Ted" casually explained the differences between the store brand and the brand I had in hand, another clerk - let's call him "Bill" - walked up and barked at Ted about needing keys. He then said to me "It's pretty much 9, dude" in a tone that was, well, not friendly. Especially compared to Ted. Even though I really needed washer fluid, I momentarily felt intimidated enough to consider leaving without it.
Clearly Bill's approach is a problem for the store. It is likely suffering reduced sales at closing time because a staff member is pressuring customers to stop shopping early. At another store recently a worker turned off the lights in the seasonal department 5 minutes before closing time! But perhaps the underlying problem is not Bill or the guy who turned off the lights in seasonal. Bill is not getting commission on sales so he has no monetary incentive to encourage last minute shoppers. But he has plenty of incentive to discourage them (he gets to go home a few minutes earlier after a long shift). Depending on the employer, he may not even get paid for being at the store beyond closing time.
I am currently involved in some product development (www.churchradius.com and Project Elm) that will soon give rise to a need for a sales force. I have started paying a lot more attention to issues around sales and customer service for software products and subscriptions, especially the ways in which they are similar and different from the issues around sales and customer service for software consulting / training / mentoring and other types of business. Certainly commissioned sales people are much more motivated than a hardware store clerk. But how do you motivate sales and customer service professionals at "boundary conditions" like five minutes before quitting time or Friday afternoon or the day before starting a vacation - times when cumulative monetary incentives are weak? How do you instill an empathy for customers' problems that creates a strong desire to help relieve that pain point?
I strongly believe that small things can make a big difference with customers. A few extra seconds on the phone can differentiate great customer service from merely adequate service. A little bit of casual conversation can turn a lead into a sale. And a friendly tone can sell an extra jug of washer fluid.
Posted by derek hatchard 12/15/2005 3:16:59 AM (GMT Standard Time, UTC+00:00)
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Wednesday, December 14, 2005
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You might know that Google is being sued over click fraud. The plaintiffs are seeking class-action status, claiming that Google is too tolerant of click fraud in the AdSense and AdWords pay-per-click advertising systems. The truth is that despite Google's current efforts, they are certainly making money off of click fraud. Of course no one is really sure how much, and that is a big part of the problem. Google regularly credits advertisers but does not provide details on when and how the fraud was detected.
The issue that should concern advertisers is that it is not in Google's best interest to detect as much click fraud as possible. Google only needs to detect and credit for enough fraud to pacify advertisers that are paying attention and address the fears of prospective advertisers. Of course if fraud gets bad enough a critical mass of advertisers will bail out and the pay-per-click model will go the way of banner ads.
I did some exploratory work this year on click fraud detection using both client-side and server-side techniques. I can assure you that it is a not simple problem to solve with technology if the bad guys are smart (or populous and distributed). And when fraud goes undetected it is the advertiser pouring money down the drain while Google and/or the content publisher cash in.
For now we just have to accept that click fraud is a cost and risk for online advertisers. In the future I expect to see a lot more cost-per-action (CPA) advertising options (pay-per-conversion, pay-per-sale, pay-per-lead, etc.). The online advertising industry has a few technical and trust issues to work through to really make CPA work but we will get there. Strong messages from advertisers like the AIT / Click Defense lawsuit are likely to drive reforms in the system that will take us in the CPA direction.
Posted by derek hatchard 12/14/2005 4:29:14 AM (GMT Standard Time, UTC+00:00)
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Thursday, December 08, 2005
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With the recent announcement of the Coolthreads technology (formerly Niagara), I think we are finally starting to see the strategy behind the years of madness at Sun. While seemingly watching the commodity hardware market go by and constantly harping that "Software is going to free", there didn't seem to be anything left except services for Sun (Sun grid and Java Enterprise subscriptions???) But with it's processors (and presumably systems) a step ahead of the competition, having all your software a commodity is probably a smart thing. If they can get enough people convinced of deploying their java apps on Solaris (for dtrace and other cool features) then the natural complement to Solaris is these new breed of servers (and presumable more to come).
Posted by jordan lutes 12/8/2005 4:27:06 AM (GMT Standard Time, UTC+00:00)
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Thursday, December 01, 2005
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While reading Jonathan Schwartz's blog the other day, I followed a link to an article titled "The Fortune at the Bottom of the Pyramid". In the article, the authors make a case for creating products and services aimed at the 4 billion people on the 4th tier of the world economic pyramid. It is an interesting read, but the thing the struck me is the economic pyramid itself (Exhibit 1 of the article). I have heard my whole life that 5% of the population controls 95% of the wealth. I assume the saying applies to North America, where a large percentage of people are in Tier 1. I find it mind boggling that 5% of the 1.7% (0.00085%) of the world has all the money. Pretty crazy.
Posted by jordan lutes 12/1/2005 7:56:55 PM (GMT Standard Time, UTC+00:00)
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