AIAIO: Our Blog

The New York Times reports ecommerce is shrinking this month, the first time since the industry began.

This is distressing news as we head into the holiday season. What can the industry do for 2009?

1. Improve incrementally. Test pages and categories at length. Small victories can lead to substantial gains in an economy looking for good news.

2. Improve correspondence. Talk to customers more often. Survey them, get their feedback, respond to their requests and suggestions. Because….

3. UX is king. Any degree of user experience improvement will be welcome at this time, and the easiest place to try harder is in customer service. Flexible, friendly assistance will create good impessions and loyalty, minimizing acquisition costs. And “minimizing costs” is the magic phrase right now.

I’ve spent much of the week battling a nasty cold. One of the last things I expected when sent to the pharmacy was to think about user experience. Doc said, “Get some Mucinex D,” so off I went.

But what is Mucinex D? I asked for it at my usual pharmacy but they only had plain Mucinex and Mucinex DM. This sent me to the nearby chain pharmacy, where my head began to spin.

Mucinex–a basic guaifenesin expectorant–comes in seven varieties. There’s plain; D, with a decongestant (requiring the pharmacist keep it behind the counter); DM, with cough suppressants; a dedicated cough version; a maximum strength version; a severe-cold formula; and a nasal spray. Each has its own color scheme.

This theme plays out similarly throughout the entire cough-and-cold aisle. Every product has multiple versions that exist in part to satisfy finicky customer demand but mostly to consume shelf space at competitors’ expense. Thus the pharmacy becomes an experiment in patience at the exact point in time when pharmacy customers want speed and efficiency.

I ultimately got my Mucinex D (and a righteous bout of post-nasal drip, thank you very much). But I also got overwhelmed. Is this the best way we’ve found to treat the sick?

Techcrunch posted a great item on online video penetration earlier this week. The numbers are both inspiring and sobering.

Among them:

• YouTube is streaming 5 billion videos per month
• Only 4% of those videos support paid advertising
• Online video is generating ad revenue at one-tenth the CPM of television ads
• So far, only 1.4% of video watched by Americans is online
• The online component is expected to double by 2010

As it always has been, video streaming is a great potential resource, but it remains largely potential in nature. Financial aspects will have to catch up to other mediums (or expand greatly in volume) for the industry to become fully viable.

According to research firm NPD, Apple’s iPhone was the best-selling cell phone in the U.S. in Q3 2008.

Which, frankly, is remarkable: a company that didn’t make mobile phones until 2007, and which introduced its phone at a staggering $599 price point, has in less than 18 months come to dominate the market.

Perhaps Apple isn’t the biggest cell-phone maker overall; that’s left to mobile-phone companies that produce multiple models. But in having the best-selling, and arguably best, product in the industry has completely altered the landscape.

The one-two punch of the iPhone and iPod underscores Apple’s incredible product strategy. The company creates a product, optimizes the user experience, markets it like mad, and basically comes to own the product segment.

A decade on, iPods still represent more than 75% of the portable music device market. The millions of iPhones suggest that Apple is succeeding in its goal of becoming the default option for consumer-grade smartphones. No other product–from video game systems to household electronics to automobiles–has such dominance from a single player with narrowly focused product segments.

This is now a company that plays to win. It’s a far cry from the Macintosh era, when Apple was content to make products that were simply better than the competition. Now they are the best, and the marketplace is responding in kind. No wonder so many companies look to Apple as their aspirational benchmark.

A great follow-up to my whitepaper on holiday shipping promotions: this new weekly index of free shipping across 100 ecommerce sites. Great research.

Ai technical director Martin Anderson and senior developer Ed Samour are speaking at Apachecon in New Orleans this week.

Developers attending the conference should visit the OFbiz symposium Thursday to see their presentation, How I Learned to Stop Worrying and Love OFbiz. The rehearsal was fascinating and fun–don’t miss it.