ATG acquires Cleverset for automated personalization
This week, Art Technology Group announced it had acquired Cleverset for $10 million. Cleverset is a hosted service provider of automated product recommendations for up-sell and cross-sell. This addition complements ATG’s “rules-based” personalization engine, ATG Scenario Server.
A plethura of new automated personalization products have come to market in recent years. Companies like Baynote, Aggregate Knowledge, Certona and MyBuys all have proprietary algorithms for tracking user behavior and creating an Amazon-like buying experience. They take the pain out of mapping effective cross-sells and up-sells on retail web sites.
These hosted solutions are relatively low cost and simple to implement as javascript — a low-risk for companies who want to try before committing long-term. For ATG, this could be a double-edged sword.
Scenario Server has long been a key differentiator in the sales process. Adding Cleverset enhances the offer, but it may also be seen as a tacit acknowledgement that rules-based personalization, while good on paper, is too impractical for most retail customers.
While ATG could have partnered with any provider, $10M is short money to bring such a service under the ATG brand. Now ATG is committed — and it must compete in this adjacent market, as it does with eStara for live support. This makes better sense if ATG uses the IP to further develop Scenario Server.
Other ecommerce software vendors should take pause before making a similar acquisition. Like ratings/reviews or analytics, these hosted services are so easy to integrate. It may be prudent to partner and keep options open while personalization providers further innovate their point solutions.
SPANX selects GSI Commerce for full service
On January 17, GSI Commerce announced it had signed SPANX to a multi-year agreement. GSI will provide the SPANX® brand with ecommerce technology, fulfillment and customer service for its unique line of form-fitting hosiery.
SPANX was founded by Sara Blakely, a former contestant on the Fox reality show, The Billionaire, where she finished in second place in pursuit of a three month gig as president of the Virgin empire.
SPANX products are carried at almost a dozen national retailers including Nordstrom, Bloomingdales, Lane Bryant, Saks. Partnerships like this, between manufacturers and a crew like GSI, is a great fit. The direct-to-consumer sales channel demands time and attention that many companies just can’t afford to manage in-house.
The new SPANX site is expected to go live this spring.
Borders leaves the Amazon platform next month
Another Amazon client bites the dust. Borders will compete directly with Amazon when it ends a seven year partnership next month. The transition is expected by early February. Borders has been hard at work building its own system for almost a year now, using IBM Websphere for order capture and Sterling Commerce for order management. A beta version of the site went live last quarter.
Until now, Borders had been selling through Amazon on a consignment basis. This meant that Amazon booked the sale and then provided Borders with commissions. Going forward, Borders will recognize the entire transaction, growing topline revenue by an expected $80 million or more.
Because Borders operates stores in all 50 states, U.S. shoppers will now need to pay sales tax online. However, Borders is working on much tighter integration with its Borders Reward program, of which there are 17 million consumers registered already.
HP selects Demandware for paid digital content
On-demand content meets on-demand ecommerce. According to a January 7 press release, Demandware and HP Digital Content Services have partnered up to help studios deliver paid digital content to consumers. Movies, television, games and music can be merchandised and sold using the combined platform.
Demandware will include analytics and site monitoring tools to track online activity. Willem de Zoete, VP/GM of Digital Content Services at HP, is quoted in the release stating, “Demandware’s platform will enable us to quickly deploy storefronts and scale with us as we grow.”
Availability for the combined solution is expected in the first half of 2008.
Last August, HP DCS had formalized a partnership with Ascent Media Group for post-production services to repurpose content for broadband and mobile distribution. Their alliance with AMG began in 2004, and has helped studios including Sony Pictures Entertainment and Paramount Pictures. Adding Demandware to this mix now promises a full end-to-end solution to producers of digital media who wish to monetize their content.
Now only if the writer’s strike would end.
Rest in peace, n2N Commerce shuts down
n2N Commerce is shutting down before it ever got off the ground. Yesterday, Erick Schonfeld at TechCrunch broke the story that n2N has been dumped by its only client, Victoria’s Secret Direct (VSD). I was able to confirm this afternoon that Limited Brands pulled the plug and n2N is closing. Most of the staff was let go just before the holiday break.
One has to wonder how n2N could have burned through $30 million in just ten months, and before their first deployment. They had a jump start with the Demandware eCommerce platform and a top retail client with VSD. n2N management was short-sighted to put all their eggs in one basket and allow the burn rate to spin out of control.
A primary factor contributing to VSD’s pullout stemmed from issues at the new distribution center opened in Ohio last August. The new DC maxed out its throughput well below expectations. These limitations hamstrung direct sales and led to a massive loss in revenue.
Limited Brands posted a 48% drop in third quarter profit. So drastic measures were taken. Catalog circulation was reduced to control holiday demand; and Limited Brands said they planned to reevaluate “development of the new front-end technology systems at Victoria’s Secret Direct.” Just prior to launch, the new system failed to make the cut.
Goodbye n2N. We hardly knew ye.