Hoppit.com

FOX News covers Hoppit.com for a look into the future of restaurant search.

Going Out Is Social, Why Shouldn't Local Discovery Be? | The Hoppit Perspective

Choosing a place is very social. Think about it. You decide where to go with other people. You desire to read reviews from people like you. And, you want to go to places that can be enjoyed by the entire group.

But social place searching is hard to do, and the existing players in the market struggle to be social.

For example, let’s pick on Yelp. Yelp struggles to be social because it is impossible to run a search query that accounts for the preferences of multiple users, even though we rarely eat or drink alone. Yelp also struggles to instill trust in its review system because users don’t know the taste of the reviewers – and how can you trust a user that you don’t know?

The same goes with CitySearch, Ness, and Alfred. All these technologies are set up for individual restaurant searches. But every time I eat, it's with other folks.

At Hoppit, we believe that the future of place searching is social, and we designed Hoppit with that consumer psychology in mind. Hoppit is pioneering the concept of social place searching; our search engine and complex algorithms can take into account the taste of multiple users. We're striving to always have an answer to the question - "What should we do tonight?"

Next time your group is trying to decide where to go, check out Hoppit.

Local Discovery: Designing The Next-Gen Recommendation Engine | Hoppit

This post is dedicated to Hoppit, a new social place recommendation engine that recently launched in NYC and Chicago. Hoppit fosters local discovery - defined as the discovery of new restaurants, bars, shops, and activities around you. Throughout the past few years, I've seen interesting shifts in the local game. However, none have hit the nail on the head. There was still something missing.

Let's talk about Yelp, then Hunch, then Bizzy, then Google + Alfred + Ness. In that order.

Yelp got out there first, of course, providing the aggregated star ratings of local places. This directed people to good places, but Yelp didn't really provide any recommendation engine. It didn't return unique results for unique people. So, those people looked elsewhere.

Then, Hunch attempted place discovery - even though it was part of a much more grandiose mission of personalizing the Internet. The Hunch taste-based method said a lot about local innovation. They were the first to consider, "Should I trust people just like me? Can I base an recommendation algorithm off of human taste and psychographic data?" Definitely intriguing, but it misses a vital component - the actual attributes of the places themselves. We can't do taste-matching alone, because then we miss all this valuable place data.

Then came Bizzy, with an interesting thought. "Hey, if two people like the same place, then they're a good taste match." Again, interesting thought, but misses the boat. Two people can like a place for very different reasons (i.e. ambiance vs. food).

Finally, the market has been met with a slew of new "gene-based," Pandora-like place discovery players. Specifically, Google Places (formerly Hotpot), Alfred and Ness have built algorithms designed to isolate attributes of places. Then, if you "like" a place (or 5-star a place), they can spit back another place with very similar traits. Now then, this is the most compelling algorithmic approach yet; they're getting really close to the Nirvana of local discovery. BUT, it's still missing something.

It's missing what Hunch had. The taste-mapping element.

Gene-based approaches will never optimize place discovery, because everyone who 5-stars a restaurant will get the same results. It's still not tailored for each unique user.

By combining consumer taste-mapping with a gene-based approach, we can now sense which unique human tastes will like which unique place genes. And that is how Hoppit is designed. When a person specifies their tastes and psychographics, Hoppit immediately knows which places to point them to. Even more, the moment that same person likes (or 5-stars) a place - or several places - Hoppit can further customize its database of places for that user, based on the attributes of the places rated.

It's our belief that the best algorithmic approach to local discovery needs to encompass both taste mapping and place genes. Only then can we drive the right person to the right place at the right time.

Meet Hoppit.

Kudos to eBay's Corporate Strategy Team. GSI + Where + Magento = Awesome

eBay's GSI Commerce acquisition, followed by its Where.com acquisition, followed by its Magento acquisition (today) - are the fruits of a very intricate Corporate Strategy. And that strategy will have VERY interesting implications for the future.

Let's take this one step at a time.

1) eBay acquires GSI Commerce. This, in my opinion, is genius. It gives eBay the ability to rival its chief competitor - Amazon.com - by giving them an immediate global logistics network. It also gives eBay the experience to serve mid-size to large retailers in a MUCH more a effective way, as GSI has many notable large retailers. Up to this point, they had been getting beat silly by Amazon in the mid to large size game. GSI's shipping infrastructure levels the playing field.

2) eBay acquires Where.com. Again, great acquisition. Where.com has reach into 120,000 retailers - both large and small, and therefore is a significant participant in the Local Commerce space (which everyone is trying to win right now). What can eBay do with Where.com? Oh, I don't know - only give its ENORMOUS retail base access to intelligence on local markets in real-time. This is huge - especially for retailers with both a brick-and-mortar presence and an eCommerce and mCommerce preserence.

3) eBay acquires Magento - Magento, being the open source eCommerce platform with 90,000 SMB retailers and 1,000 large Enterprise retailers. Magento, also being the first open source mCommerce platform - not to mention the company which recently launched Magento Go, hosted eCommerce for SMBs and emerging businesses. Magento, the company that has Apple's verison of the app store, but for eCommerce retailers - an eCommerce app store, basically. This acquisition gives eBay an incredible retail reach and great additions to its technology portfolio.

So now we have eBay + PayPal + GSI + Where + Magento. Wow. Imagine the possibilities! eBay is well positioned to do many significant things -

• Amazon, beware! The eBay marketplace can overtake Amazon as the market leader. eBay can now offer sellers so many tools and technologies and sophistication (a la GSI and Magento), as well as more channels (Magento and Where.com).
• So. Many. Synergies. GSI and Magento retailers can take advantage of lots of PayPal innovation in the payments space. Where.com can also provide a lot of intelligence layers to GSI and Magento retailers.
• Local, Local, Local. eBay is eCommerce + mCommerce + global + social - and now local. Here's a little forward-looking note: watch out for eBay to rise up as a leading hyper-local services provider for retailers. In the future, eBay can help you reach local consumers in real-time.

So, all in all, I'm quite impressed with eBay's corporate strategy group. Kudos.

Now the only thing is - execution. Which is quite the tricky beast.

Best of luck, eBay.

-Steve

2020 Ecommerce Customer Base and the Strategic Technologies to Support Them

Currently, the world has 1.8 billion internet users. By 2020, Zdnet forecasts that there will be 5 billion worldwide internet users. The first thing we should take from this is that there will be 3 billion more internet users who are not from the United States. The international opportunity is seemingly tremendous.

This is by no means supposed to discount the U.S. market. In fact, the U.S. market is the steady core that provide retailers with unyielding growth through 2020 (and most likely beyond). It is a necessity for retailers. But as an e-commerce strategist, one must always think "beyond the core" (to quote Chris Zook). Indeed, it would be unwise to miss out on the significant international opportunity - especially the 2020 international opportunity.

Briefly, let's review some more data. In 2009, 6% of the $135 billion in U.S. e-commerce came from international buyers. With such explosive growth in overseas internet usage and e-commerce growth, this "international sales ratio" will double to 12-14% of U.S. e-commerce sales. This means that 1 in 7 buyers at your e-commerce site isn't from the U.S. And this is just an average! Some retailers already have 30-50% of total web sales from international buyers. These cases will only multiply over time.

A lot has been written about U.S. domestic customers (and who knows U.S. consumers better than the retailers that sell to them?). Therefore, I won't re-invent the wheel with domestic consumers. I'll focus on the international audience.

In order to win the international market in 2015 and 2020, retailers have to begin thinking strategically about technology spending about now. Research has shown that the ramp up time for international customers to crowd into your web retail store is a 2-3 years. So if you begin in 2014, you won't be ready to capitalize by 2015.

In-house IT groups always have dozens of "high-priority" projects to attend to - but this needs to be at the top of their list. So now the question becomes: what aspects of the international experience should in-house IT groups focus on?

Should retailers or their e-commerce platforms be preparing for technologies that support multi-currency transactions? Back-end financial reconciliation? Language translation? International shipping? International marketing?

What technology aspects should be outsourced to 3rd parties? And what should be in-house?

Read next week's post for the answer.

Preparing for the 2020 Ecommerce Channel

Since 2000, e-commerce has more than tripled (a compound annual growth rate of 19%). And over the next ten years, Goldman Sachs projects e-commerce growth to be five times the rate of traditional retailing (CAGR 15% e-commerce vs. CAGR 3% traditional retail). E-commerce sales will reach $624.17 billion in 2020, as offline sales reach $3.64 trillion. This makes e-commerce equal to 17% of total U.S. retail sales in 2020, up from a current 5-6 percent of retail sales.

Bottom line: retailers need to be ready to support booming e-commerce sales.

We also see retail mindsets shifting. 90%+ of senior retail executives in a recent KPMG survey cited "product innovations" and "innovative merchandising strategies" (which includes online and mobile internet shopping) as their biggest revenue drivers over the next three years.

Analysts and retailers alike are recognizing the strategic importance of e-commerce.

Such significant shifts in channel sales require long-term foresight and technology evaluation. It requires looking at how to support future customer needs. It requires budget changes - cutting technology spend in slower channels and ramping up funding in fast-growth areas. Retailers need to ask themselves:

- What does our customer base look like in 2015? 2020? (customer intelligence)?
- What are the most effective ways to drive these future users to our site (marketing)?
- What are our biggest e-commerce platform needs (user experience)?
- What are our biggest sales needs (conversion)?
- What are our biggest payment needs (transactions)?

Likewise, e-commerce technology vendors need to be looking to the future. Product development needs to hone in on 2015 and 2020 retailer needs.

Of course, this is easier said than done. Retailers spend millions on customer intelligence activities, and its really quite impossible to predict the future - especially within the confines roller coaster economy. But there are still some sure-fire bets that retailers and platforms can make.

In my subsequent posts, I'll speak to these trends. Next up: "What does your customer base look like in 2020?"

Relationship Commerce Model #2: Solution Providers

Relationship commerce, the combination of social media and e-commerce, is the latest and greatest burgeoning e-commerce trend. And if you don't think social media is taking over selling efforts, look at this recent study:

-82% of the Fortune 100 tweet
-68% of the Fortune 100 youtube
-59% of the Fortune 100 facebook
-36% of the Fortune 100 blog

In this second article, we'll discuss the solution providers who are bringing retailers into the relationship commerce realm - and why they will grow very quickly.

We'll start with case studies. One company at the front of the trend is Shopigniter. This company is trying to bring human interaction into the e-commerce process via social media tools and tying the online process with the off-line, real world retail experience. ShopIgniter landed $3 million in its first institutional venture capital financing round just last March.

Shopigniter's platform is slick. Check out their video tour. They offer a full e-commerce platform (e.g. storefront, checkout) and a seamless integration into Facebook. I've never seen a more seamless Facebook integration. The consumer can purchase a product in Facebook, and it looks exactly the same as the store website.

It will be interesting to watch Shopigniter compete against the likes of ATG and Demandware, but my guess is that they'll find their niche with the right retailers.

More and more platforms (and maybe even ATG and Demandware) will begin to offer social media plug-ins like Shopigniter's. You heard it first here on the Stroop. In three years, this will become an essential feature for e-commerce platforms to offer to retailers. What is more, start-up firms who can offer this as a platform-agnostic plug-in will have dramatic success. Look for VC funding going to these types of firms. They're obvious future acquisitions candidates for bigger platforms, after they've proven their model.

Lastly, I find it necessary to mention OpenSky and Flattr. We'll start with OpenSky. OpenSky is another prime example of monetizing social media - in the case, it's all about blogs. The OpenSky platform enables bloggers, media personalities and trusted experts to sell unique products they love without worrying about the backend. OpenSky just raised $6M in VC funding in April. Novel idea.

Flattr is similar to OpenSky in principle, but is different in its functionality. In Flattr's case, the name of the game is social micropayments (which could be an entire blog post in itself). Check it out. Flattr is another way for social-media-content-creators to realize revenue. I've signed up for a flattr account and will provide a report on it later this Fall.

In sum, the signs are there. Relationship commerce is growing and will become mainstream in the near-term. Solution providers that enable retailers to capitalize on this trend will grow very quickly.