"Press 3 for a Diamond Expert."

This is a fork, where my work-related blog for iTradeFair.com and my personal blog start to diverge, allowing me to explore other interests. All previous posts have been replicated in both places, and future posts may be replicated where pertinent.

It was very interesting to read an interview of Mark Stolzman, CFO of Blue Nile, Inc. the online diamond retailer.

Besides the financial aspects of the story (low or no inventory carrying costs, etc.), here are a couple of excerpts that I found interesting, especially finding it in the CFO magazine:

"Right now we have about a 4 percent share of the engagement[-ring] business in the United States, and we think we can double or triple that in the next five years. We want to expand our market share both domestically and internationally. We want to do that by offering education, quality, and selection. And we'll continue to expand our service to the customer both in terms of [technology] tools and in terms of access, whether it's by online chat, E-mail, or telephone."

"Despite the fact that most of the purchase process is done online, our customer-service group gets involved in a vast majority of our purchases, because customers still think, "OK, I'm making a significant purchase, and I want to make sure I've made the right decision." So they get comfort in accessing our diamond experts and knowing the purchase they're about to make is solid."

Mark Stolzman's words capture the power and the challenge of new media in building trust among remote users. Being able to sell a diamond ring without actually meeting the seller in person calls for a high level of trust to be established early on during the shopping experience. The convenience of using the telephone, besides email and chat online, seems to indicate that the trust-building requires some extra support through old technology.

Take a look at this unrelated news item titled "More Consumers Going Online to Shop". According to Nachi Lolla, research director, commerce at Nielsen Online, the majority of consumer concerns about online shopping have been lifted.

Even if retailers may not have mastered all the methods of trust-building over the web, many of the earlier hurdles seem to have been crossed or outweighed by the sheer convenience of getting things or getting things done over the web. The average user now submits shipping and payment information on the web without hesitation. Companies have started building brands on the web where the customer knows that effective means of redresssal are available with a simple email expressing dis-satisfaction about a purchase.

Even if all the tools are available for an online user to independently research and verify the authenticity of an online business, you will be surprised at how often a user says "Is there a phone number I can call?"

As the customer-service function strains to be prompt in its responsiveness, as it strains to overcome the absence of face-to-face or tactile experiences in online shopping through other communication tools, there is a need not only for using whichever instrument of communication works best within the customer's comfort zone, but also a need to have knowledgeable people at level-one customer support.

Just like the diamond experts that Mark Stolzman talks about. That comes at a price - I suppose at a price lower than inventory-carrying costs.

A Successful Virtual Fair

One of the questions that we at iTradeFair.com ask our prospects and customers is "What would you consider to be a successful outcome for your virtual fair?"

This week we heard that one of our customers was waxing lyrical about the virtual trade fair we had done for them. I phoned them yesterday for details. An order worth over half-a-million dollars will be the direct outcome of two companies meeting in that particular virtual fair - obviously a huge success considering the relatively small amount of time, energy and resources that were invested in the virtual fair.

Success stories like these make our day. In work, as in life, we are judged by what we create. To be able to create value in this manner makes our success sweeter. The virtual trade fair would not only result in a purchase order, but would also mean gainful employment for several people, which in turn means more families fed, clothed, schooled and cared for.

The success of a virtual fair has been defined in several ways, some of which are listed below.

1. Giving members better access to vendors: Some not-for-profit organizations use a virtual fair to showcase their vendors to their membership. In such instances the virtual trade fair might become an extension of any in-person conferences. This is not to be confused with a virtual vendor directory. Virtual fairs are fresh and shut down at their peak. Directories tend to lose momentum but stay on regardless.
2. Giving advertisers more avenues for visibility: Publishers consider a virtual fair successful if it can be bundled into other offerings and adds another dimension of visibility to their advertisers who typically become sponsors or exhibitors in the virtual fairs.
3. Bridging distances without travel: Corporate virtual trade shows typically consider their events a success if they are able to bring together more of their employees, distributors, partners, prospects and customers together online in structured forums, without travel.
4. Making new connections: There are some virtual fairs whose success is entirely hinged on the number of new connections made or leads generated. These virtual fairs navigate uncharted waters. It takes a strong brand to be able to consistently bring in new groups of users into such fairs to make them successful. If I have met someone in a virtual booth in Year 2008, then seeing them again virtually in Year 2009 will not be as exciting for either party if the sole expectation of that virtual fair is lead-generation. Now if that exhibitor has a new product on display, that would sustain the interest and traffic of even the repeat-visitors.
5. Placing purchase orders: We did a virtual trade show in which Eastman Kodak Company publicly announced that 25 of their purchase managers will be in attendance with purchase requisitions totaling several millions of dollars. When a virtual fair happens with such depth in commitment, the bar is set very high for what they would consider a successful outcome of the virtual trade show. The expectation is to be able to meet with companies that are worthy of the orders.
6. Doing something novel: The success criteria in this approach to virtual fairs is determined by how pretty the virtual fair looks, and the buzz that they generate. The goal of such virtual fairs is to generate a large number of visitors, media attention and visibility for the organizer or products.
7. Making it convenient: Some virtual fairs are held because that is the only way to get people and companies together when they have conflicting schedules and time-zones.
8. Measuring activity: Many times, virtual fairs are considered successful if the activity in them can be measured. Knowing how many people visited a virtual booth and downloaded a particular piece of information is very valuable information to marketers of the information.

Like any successful commercial initiative, the true measure of success for virtual fairs from the perspective of the producers, organizers, users and providers would be if participants perceive enough value in the fairs to be willing and happy to pay for the service.

Only when virtual fairs become a budget line-item, only when they enter the lexicon of accountants, CPAs, CFOs, marketers and CEOs can we be certain that virtual fairs in general will be a huge success!