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Holiday E-Commerce Activity Off To A Fast Start

The three days following Thanksgiving delivered a strong beginning to the online Christmas shopping season, several reports suggest.

While sales figures will have to wait for Cyber Monday (Nov 26), Monday (Dec 3) and Green Monday (Dec 10) - the 3 heaviest online shopping days for 2011, according to Jefferies analyst Brian Pitz – all signs point to record-breaking activity for e-commerce this year. Two big trends appear to be driving it: first, increasing consumer confidence, and second, the continued mainstreaming of online shopping.

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Subscription E-Commerce Player Cravebox Counts Impressions For Retail ROI

"Discovery" and "curation" have become big buzzwords for e-commerce start-ups, as flash sales and daily deals-based social shopping reach the saturation point for many consumers. Brands like Birchbox, PopSugar and the year-old Cravebox are trying to entice consumers with a subscription-based model that sends consumers sample products in the hopes of connecting brands and shoppers in a more targeted way.

Last March, Cravebox was spun out of blog network SheSpeaks. Its CEO, Kitty Kolding, was previously head of another social marketing company called House Party.

The holiday season may be make-or-break for a number of companies in this increasingly crowded e-commerce category. In a bid to set itself apart and back up its curatorial selectiveness, in order to be featured in “Cravebox,” a brand receives a five-part promotional sequence that accompanies the shipments to ensure that the brands are reaching at least a million people and delivering a minimum of 25 to 40 million impressions, even if the shipment is less than 10,000 boxes. We spoke with Kolding about the idea of using impressions as a measurement of e-commerce ROI.

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Birchbox: ‘Discovery,’ Not Deals, Is The Way To Scale E-Commerce

When niche retail e-commerce gained steam about three years ago, deals, the focus was on flash sales and discounts on upscale items for fashion and restaurants. But the ground has slowly shifted as local deals site Groupon filed its IPO and a slew of like-minded sites started to crowd the space.

Two years ago, two recent Harvard Business School grads, Katia Beauchamp and Hayley Barna, started Birchbox as an online subscription service offering women a chance to sample – or “discover,” in the current lexicon of e-commerce – makeup and beauty products.

As the New York-based startup attracted nearly $12 million in venture capital funding from major investors like Accel, and has hit over 100,000 subscribers the company has looked to create a wider e-commerce platform with the introduction of Birchbox Men, which costs $20 a month to join ($10 more than the original women’s site). Co-CEO Beauchamp tells AdExchanger Birchbox plans to explore refining its marketing strategy with retargeting. But that’s still to come. For the moment, the company, which saw its offices closed due to the effects of Hurricane Sandy, says it has hardly been slowed down on deliveries. As of Nov. 1, the warehouse was open and shipping “full-size orders without delay.”

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Home E-Commerce Player One Kings Lane Uses TV To Complement Retargeting

This past week, home furnishings shopping site One Kings Lane kicked off its first national brand advertising under the tag, "Design is Never Done." The ads, which were created by Wieden+Kennedy, are intended to complement the San Francisco company’s extensive use of internet advertising, which includes a heavy dose of display, search, retargeting and social media marketing, with traditional TV and print spots. We talked with Greg Fant, One Kings Lane’s chief marketing officer, about the company’s plans to raise its profile in the increasingly crowded e-commerce space.

AdExchanger: Is this the first brand campaign One King’s Lane has done? Why now? What are the goals?

GREG FANT: Yes, this is our first big campaign we’ve done. I’ve been here two years and the model is three years old. Historically, we’ve relied on data-driven, direct response-based marketing, classic SEO stuff along with a fair amount of retargeting. Typically, we’ve balanced that out by focusing on developing a lot of earned media in PR and social. As for right now, we feel we’re in a good place in terms of growth, but outside of core home decor enthusiasts, we’re still largely unknown. So we felt it was time to tell our story in a much bigger way. And the best way to do that in this day and age is still television.

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Google Goes Shopping: 'Product Search' Could Generate $1.4 Billion In Revenue

Google is poised to shake up e-commerce to an even greater degree as the company merges its paid Product Listing Ads and its "free" shopping-related results into a single paid format. The process started in the U.S. two months ago and is expected to be completed by the beginning of October, with Asia and Europe planned for 2013.

In an analyst note, Nomura's Brian Nowak and Michael Costantini believe the change to a fully paid model for product searches could produce $1.4 billion in incremental revenue for the search giant, once the international rollout goes through. But it's not just revenues that Google is aiming at -- the move reflects a more aggressive approach to e-commerce that involves taking on Amazon more directly.

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AdMeld's Jason Kelly Joins Berlin DSP Sociomantic Labs

Sociomantic Labs, a two-year-old DSP geared to e-commerce advertisers, has hired Google's Jason Kelly as CEO. Kelly was the chief revenue officer at AdMeld, prior to that company's acquisition by Google – and since then he has focused on integrating AdMeld with the Google stack.

Berlin-based Sociomantic Labs has grown organically, having accepted no investments according to a rep. Its headcount has spiked this year, from 20 to nearly 100. It now runs campaigns in "more than 45 markets across six continents." No word yet on the timeline for its RTB push into Antarctica.

Offices include Amsterdam, Warsaw, Moscow, Paris, and Sao Paulo, Brazil. A New York City office is expected to officially open soon.

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Group Commerce Marries Premium Publishers With 'E-Tailing'

On one end of the online revenue spectrum, there's advertising, which runs the gamut from direct response (primarily) to traditional, branding-style "premium campaigns" (to a lesser extent). At the other end is e-commerce. Content companies have been playing catch up on both fronts, even as the two revenue streams require very different strategies. Former Google DoubleClick executives David Rosenblatt and Jonty Kelt think that they can bridge the gap. Sure, just about every ad tech company promises to do that, but the track record suggests some possibilities for their e-commerce services provider, Group Commerce, where Rosenblatt is chairman and Kelt is CEO.

The surprising thing about their pitch is that they believe they can approach e-commerce through ad sales teams of premium publishers like The New York Times, where Group Commerce powers the paper’s deals program, TimesLimited. In just two years of operation, Group Commerce has also attracted the likes of CBS’ Local Offers, EveryDay Health and Thrillist’s Rewards program. We spoke with Kelt about why publishers can compete against e-commerce players like Groupon and how the tension between ad sales and retail marketing is a benefit that can be leveraged by both.

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GroupM Next’s Copeland: Data Is At The Center Of E-Commerce

E-commerce has become much more mainstream in the last two years. And yet, no one company, except for Amazon or perhaps Apple, appears to be notably dominant. Earlier this week, WPP’s GroupM Next released a survey of 1,000 users that showed 45 percent of customers shopping in-store at brick and mortar locations will walk out and complete their purchase online for a discount as low as 2.5 percent. We spoke with GroupM Next CEO Chris Copeland about the trends in the space and why a pioneer like Groupon appears to be so weak, even in the face of producing its first profit.

AdExchanger: What did you hope to discover with this survey of showrooming?

Chris Copeland: Not surprisingly, one of the top concerns our clients have is about the economy and its affect on sales. We’ve seen, with the rise of mobile phone usage, a change in consumer behavior – there’s been a shift in how people find and choose what products they buy. We wanted to try to see if we could quantify and identify a price point for a given item that would make someone walk out of store. And would we be able to create media strategies down the road to change that behavior. After all, you can change prices, you can offer incentives – there are many things that brands can do. But understanding when and how to do those things is a challenge. We think this kind of research can help with that.

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Unified Shopping Experiences Like 'Showrooming' Will Drive E-Commerce Growth

As retailers, both online and offline, prepare for this year's holiday season, the evolution of the e-commerce space is expected to have an even bigger impact on the way people choose to buy things and how marketers attempt to influence what they buy.

Citigroup analyst Mark Mahaney attended the eTail East conference in Boston last week and was struck by a provocative keynote by Phil Thompson, VP for marketing and e-commerce for Fossil, called “Why eCommerce will be dead in 10 years?”

Thompson outlined the advent of mobile apps, mobile point-of-sale tools, geo-targeted services & promotions, as well as social media and even shipping improvements as playing clear roles in shaping the landscape. It would seem that the Amazon's and the Groupon's would have a clear advantage. But Thompson's view,  that the future of e-commerce is still up for grabs -- a point that appears to be backed up by a study released this week by WPP's GroupM Next.

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Even A Profit Cannot Erase Questions About Groupon's Business Model

Daily deals site Groupon can't even produce its first quarterly profit without disappointing shareholders. Though the company's revenue gained 45 percent year-over-year to come in at $568.3 million in Q2, that was short of analysts' expectations of $578 million. And while profits were $46.5 million versus a $101 million loss in Q2 2011, investors quickly perceived that Groupon's main business of selling coupons to merchants' products and services were in a downward spiral. And that was enough to send Groupon's share price down nearly 20 percent in after-hours trading.

For a long time, high end establishments, primarily restaurants, have tended to avoid Groupon for fear of being perceived as needing to reel customers in with "discounts." Apart from the perception, businesses worry that Groupon ultimately undercuts the value of the promotion with deep discounts.

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