Thought Leaders in E-Commerce: Bob Dufour, President of Fusion (Part 4)

Sramana Mitra: Very interesting. The insight that is interesting here is the core versus non-core products and optimizing margins selling non-core products while people are shopping on the core.

Bob Dufour: One of the things that I would say, as far as my overall position goes, would be if you’re getting into digital marketing and if you don’t have an ancillary strategy figured out, I think you’re screwed. You’re just going to watch your margins get eroded and you don’t have anything to move them back up. People who are really good at this are going to make more money. If I’m selling a Sony television and I know that Best Buy and Amazon are out there, I know that I can only get away with offering that product at a certain price. What if I’m really good at selling warranties or financing? Both of those bring in additional profits to me. There are a couple of things I can do with that. One is, I can just take it in as profit. I’ll really look good at Wall Street for a while. The other thing I can do is, I can discount my price even more. Now, I look even better. I’m cutting the price but I’m still going to be as profitable as the other one. It gives me a lot of flexibility when I’m in a digital selling mode by having these profits that come from being really good at selling these ancillary or supplemental products.

Sramana Mitra: When you look around in this whole recommendation system, comparison shopping, optimization space, what are some of the interesting trends in that part of the e-commerce market?

Bob Dufour: I think some of the interesting trends are the application of Big Data. Just the sheer amount of information that we get from the billions of transactions each year and being able to organize that and store it. Also, to sift through it using advance tools to see patterns. I would say, on the one hand, there’s just enormous amount of data getting thrown out by these digital media that needs to be organized. Then, you need to have the tools and the people to enable you to analyze that and get the insight out. The second part is then having a merchandising platform that allows you to turn around and make use of that. If you don’t really have that platform, all that insight won’t do you any much good. It’s very interesting on a PowerPoint, but it doesn’t generate any business result unless you have a merchandising platform that’s capable of taking that information and responding to customers.

I would say it’s the use of Big Data and analytics. Number two is then infusing that into a digital merchandising platform. The third one would be more in terms of testing and optimization. Now, AB testing is more of table steaks. You’re seeing more people doing multivariate testing. More and more, you’re seeing scoring and modeling. Algorithmic kinds of things are becoming more the norm. That trend is moving on there. The other one that I would say that I’ve been mentioning throughout is I see more and more decomposition of this bundled product, all because price is such a big factor. It’s a driver of purchasing.

This segment is part 4 in the series : Thought Leaders in E-Commerce: Bob Dufour, President of Fusion
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