SEO News

If cheap credit put customers on a pedestal, online retail gave them immortality

Under the Sale of Goods Act 1979 any item you purchase from a retailer should be as described, of a satisfactory quality and fit for purpose.

This means, if a product turns out to be damaged or faulty at the time of sale, or if a fault emerges over a reasonable period of time, you are entitled to a refund, repair or replacement from the retailer. 

Distance Selling Regulations demand that when you buy goods online, over the phone or by post you have seven days grace after placing your order to change your mind and cancel, this can be for any reason.

You will, however, need to notify the retailer in writing within this time frame and return the goods within 21 days if they have already been dispatched. 

The cooling off period given to online consumers seemed sensible, if customers can’t evaluate the item at time of purchase they could be left with a defective or substandard product. It is also a good way to build confidence in a developing sector that initially only added negligible amounts to commerce in the UK.

However, ordering 15 pairs of jeans and sending 14 back seems to be an abuse of a system by the very people that the Sale of Goods Act set out to protect.

Short-term, the company’s revenue is increased but long-term the volume of returns hits the bottom line. Add to this the continuous discounts offered by many sites that can result in the brand premium being massively devalued.  

An article in Drapers (August 2013) highlights the British retail consortium’s latest figures on clothing and footwear, showing a price deflation accelerating over the last six years. This is clearly not a good sign for the industry. 

Here are a few of the tactics that multichannel retailers have actively used to maximise margin and minimise returns.  

Discount duration

Keeping discount periods to a minimum. Companies that are seen regularly discounting their products start to attract deal hunters.

Both Next and Fat Face made brave discounting cuts and saw substantial increase to their profits.  

Postage decisions

Delivery and returns charges should be informed by the finance team and not the marketing division.

There are many instances of companies spending more on delivering an item than the value of the product itself. This might result in the growth of the top line but massively hits profits.  

Ensuring the size is right 

Sizing seems to be a big problem across the industry and an issue specifically related to high returns. Many companies are trying to tackle this by using technology along with more simple tactics.

Metail, a company based in Cambridge has launched a virtual fitting room that provides users with a 3d view of clothes on their body type and is being used by Zalando and Warehouse. The companies declined to comment on the results.  

Donna Ida, a small but premium denim company, has opted for a more simple solution by offering women a visual sizing chart in parallel with a photo uploaded service where someone manually sends feedback. 

Free returns

The returns policy in the Sale of Goods Act is that items can be returned by informing the seller within seven days but does not specify that the seller should pay for these returns (unless faulty). 

Many companies offer up to 28 days full refund along with free returns that really hurt and is not required.

Duchamp, a men’s luxury fashion site, offers a full refund if the items are returned within seven days of receiving the goods. After this period customers are given a credit to buy again in the future. 

According to Lewis Hamilton from Duchamp:

Duchamp offers free delivery for purchases only over £150 but offers free returns only if an item sent was faulty. Further during the sales period we try and limit returns by following a strict seven days policy and offer customers credit notes if the returns are after the seven day period.

We also try different ideas on delivery such as the new free returns policy on hardest to fit clothes like suits that actually help our customers shop online without diluting the premiums that our products command.

This is one way to reduce losses from returns, but brands must also consider the potential harm in terms of customer retention of offering harsher returns policies than competitors. 

Product details

There is always an element of the unknown when buying online. This unknown can be reduced by offering additional information on product pages.

This should include the type of material, high resolution images, zooming options on products and 360 degree views.

Most companies have taken the effort to provide consumers with these additional details but then there are still companies with great clothes that keep the information quite basic.

Here is an example of men’s clothing brand Lambretta where the only useful feature is zooming.

There is a fine line between driving away potential customers and increasing margins when it comes to charges and policies relating to fulfilment.

However, it needs to be constantly monitored by retailers to safeguard their bottomline, and ensure that costs aren’t harmful to the business.

Posted by David-Mihm

Well, it’s been nearly a year since I published the last version(s) of this graphic. That’s a long time in a space that evolves as quickly as Local Search, but frankly, 2013 hasn’t seen quite the turmoil of 2012, in which Google+ Local, Apple Maps, and Facebook Nearby were all released within seven months of each other.

We’ll be adding all of these graphics to the GetListed.org Learning Center in the next few weeks, with full references and screenshots showing attribution. But while I had a bit of time before the fall conference season—I’ll be speaking more about these at Local University Advanced in just a few weeks—I thought I’d consolidate my thoughts and get them into a blog post.

My thoughts on the U.S. ecosystem

The Big Three are now the Big Four

Since I first started researching the local search space back in 2006-2007, Infogroup, Localeze, and Acxiom have been the undisputed primary data suppliers in the U.S.

Although multiple independent sources heard from Yelp this summer that they no longer actively ingest data from Acxiom, Acxiom is one of only two suppliers mentioned on Google Maps’ legal notices page, and they’ve fed data to Apple Maps since it launched.

It’s always been difficult for me to recommend an answer to the question, “Which data aggregator would you pay to manage data with?” My standard answer has always been “all three.” But if you are looking to prioritize your local marketing spend, I hope the graphics below showing each provider’s publicly verifiable network assist with that.

Factual is a relatively new player on the scene—they were barely on my radar less than two years ago. And yet today, if you visit their homepage, you see a who’s who of local search portals, including Yelp, Bing, and TripAdvisor. It’s clear they’re a force to be reckoned with, especially globally (more on that below).

Aside: the GetListed upgrade

As a result of Acxiom’s resurgence and Factual’s emergence, for the last several months we’ve been working to add both to the roster of data platforms we display on GetListed. I’m excited to announce their release today. Big thanks to Adrian, Frank, and Josh for making those additions happen this summer.

Foursquare as a data provider?

The fragmentation of the location-based app market is only going to increase, and like Factual, Foursquare has turned its sights on becoming “the location layer for the Internet.” Its API has been quite reliable for GetListed, at least, and it surely counts a healthy percentage of web developers among its 40-odd-million users, whom it’s now enlisting in a quest to provide extremely fine-grained venue data.

If Foursquare can expand its typical venue categories beyond food, drink, and entertainment, it could become even more of a key player despite a declining rate of user growth. I still wouldn’t be surprised to see Foursquare purchased by the end of the year, but the list of companies who both need and could afford it is slimming considerably as its dataset continues to get better.

The traditional IYPs have it tough

From a citation-strength standpoint, few traditional directories are competing favorably with Yelp across a broad array of categories. Citysearch, Superpages, Yahoo, and YP.com are still very strong players, but with Citysearch laying off a substantial percentage of its staff recently and Superpages’ merge with Dex, it’s pretty clear that a lot of consolidation and reconfiguration is happening among the major players.

It also seems that vertical and geo-focused directories, and even unstructured local citations, are playing a larger role than ever in competitive search categories. With so many traditional local search sites offering free listings to business owners, citations from traditional providers now appear to be “table stakes” in Local SEO…but the sites that offer those listings are continuing to have a hard time monetizing them.

What’s Apple up to?

It’s been almost exactly a year since Apple’s less-than-impressive release of Maps. The good folks in Cupertino went silent for a good long while before making a couple of key summer acquisitions: Locationary and HopStop. For our little world, Locationary is the more relevant purchase. Grant Ritchie and his team essentially built their own version of Map Maker (see below)—an efficient system of ingesting data from multiple sources and making sense of it.

I don’t see the Locationary acquisition affecting any of Apple’s existing data relationships imminently, but expect we’ll start to see a lot faster pace of innovation with their mapping platform in the coming year. And the quality of data will get considerably better as Apple beefs up its Ground Truth and engineering forces.

The continued importance of Google Map Maker

One of the least-heralded but most important stories in the last year has been Google’s unification of its backend location database. There are now effectively four (and possibly more) public front-ends to this database: “Report a Problem” reports, Places and Google+ Page Management, and the Map Maker interface itself.

There’s still no substitute for querying Map Maker directly if you’re having persistent issues with incorrect business categorization, PIN placement, or duplicate listings, and Map Maker’s release in many, many more countries—including longtime holdout Italy—making it a relevant and useful tool for SEOs almost no matter where your clients are.

Internationally speaking

One of the least-obvious facts for newcomers to local search is that other than Google’s central position, every country’s ecosystem is different. Factual is one of the very few companies with a reliable global dataset, and the search giant relies on a completely different set of providers in each country that Maps operates. Typically these are established yellow pages players, such as YPG in Canada, Telelistas in Brasil, and Sensis in Australia.

Secondary and tertiary relationships can be considerably harder to tease out, but the graphics below represent my best effort to reconstruct these markets. I received a considerable amount of help on both Germany and Australia from Nyagoslav Zhekov of NGS Marketing, who may have more experience building citations in international markets than anyone in the world.

Thoughts on Canada:

In my introduction to the international section, I already mentioned the primacy of YPG in supplying data to Google, and in few markets around the world is there a single provider as dominant in its country than YPG. The number of prominent local search sites under the YPG umbrella is impressive, and may be a reason its digital revenues are responsible for a comparatively large share of its overall earnings.

Canada’s also relatively unique in that an arm of the Canadian Government, Industry Canada, offers such an easily-crawlable database of business information to the public. Whether Google has a formal relationship with Industry Canada or not, it’s clear that this data makes it into Google’s index. Thanks to Jen Salamandick of Kickpoint for her empirical confirmation of this relationship.

Thoughts on the UK:

The UK features the most complex ecosystem of any country country in the world. At first glance, Google should have a dominant provider in BT, but my experience during a two-month sabbatical in the UK in May 2011 indicated that The Local Data Company, Market Location, and 118 Information were all more influential sources for data that would eventually wind up at Google. TouchLocal’s acquisition of Scoot in 2009 makes that duo a significant citation source as well. Qype and Yelp are both extremely well-crawled, and there are a number of geographically-focused directories, especially in Greater London, that Google is surely looking at.

Similar to Canada, there are two governmental entities—Companies House and the Royal Mail—whose datasets provide the backbone to a number of location indexes, I’m sure.

All this means a lot of work for UK SEO’s trying to clean up or establish citation profiles for their clients.

Thoughts on Germany:

In preparing for my SMX Munich presentation earlier this year, the primary providers in Germany clearly seemed to be the Deutsche Telekom-GelbeSeiten-Das Ortliche trifecta. German SEOs should not overlook infobel, however, the owner of Kapitol S.A., which is mentioned on the Google Maps’ legal notices page.

There are a myriad of secondary local search engines in Germany and in my research, their strength depended on the industry I was investigating. Qype was essentially the only dominant consumer portal horizontally, but Varta Guides and Restaurant-Kritik were exceptionally strong in travel and cuisine. If I’m a German SEO, I’m paying special attention to my client’s phone contract records and their listings on the associated GelbeSeiten, Das Telefonbuch, and Das Ortliche, updating Qype, and then I’m going straight for industry-specific directories, before circling back to the secondary search engines. That’s quite a different workflow from what I’d recommend here in the States.

Thoughts on Brazil:

The Brazilian market strikes me as one of the biggest global opportunities in local search. It’s a huge country with a lot of urban population centers, a relatively well-educated population, and high percentage of smartphone ownership. And from an SEO standpoint, it appears to be about four to five years behind the United States.

Certainly the complexity of the Local ecosystem is nowhere near that of more established markets. Telelistas and Apontador are the clear market leaders, and Yelp’s purchase of Qype looks like a smart investment in this market.

Conclusion

As I said in the introduction, we’ll be establishing a permanent archive for these ecosystems in the GetListed Learning Center in the next several weeks, but in the meantime, I look forward to hearing your questions and feedback in the comments below!

A final thanks to Gregory T’Kint of James Hargreaves Plumbing, Tom Lynch of Location3, Russ Offord of Orion Group for their correspondence regarding these ecosystems in the past year.

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