Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Arianna Huffington's call to accelerate innovation captures the spirit of a record-shattering IRCE 2011.
Newspapers were dying in the Internet age, but people still wanted the news. So Arianna Huffington built a web site, the Huffington Post, which supplied timely news and insightful commentary, in the process building a business she sold this year for $315 million to AOL Inc.
That kind of disruption of traditional business patterns is playing out in other industries, including retailing, Huffington told attendees at the Internet Retailer Conference & Exhibition 2011 in June in San Diego.
"Life is moving online at a growing speed," she said in a featured presentation. "And those of us born online have a great opportunity to accelerate all we are doing."
The four-day IRCE event made her point, as speaker after speaker described new ways to engage and sell to consumers via the web, says Kurt Peters, editor in chief of Internet Retailer and conference chair. "Social commerce emerged this year as an important focus, and mobile commerce is expanding rapidly," Peters says. "But it wasn't just those emerging areas. Retailers are finding new ways to market via search engines, and to source goods, fulfill orders and raise money. Change and innovation were very much in the air."
The conference theme—"E-commerce shifts into overdrive: The race is on"—was underscored by the record attendance. The event attracted an unprecedented 7,318 participants, 14% more than the 6,432 at last year's show in Chicago, the previous record for an e-retailing event. The Exhibit Hall at this year's IRCE also set a record, with 502 companies demonstrating their products and services, a 20% increase from 417 exhibitors at IRCE 2010 in Chicago.
The Facebook factor
E-retailers particularly appear to be racing to get ahead of the explosive growth of Facebook, which now claims 750 million regular users worldwide, and other social networks, such as Twitter and LinkedIn.
Attendees heard from Facebook Inc.'s director of business development David Fisch, who said the fast-growing social network is taking online shopping beyond efficiency and convenience to the kind of interaction with friends that characterizes a trip to a bricks-and-mortar shopping mall.
Fisch cited his own experience as a new parent who asked his Facebook friends what kind of baby stroller he should buy, prompting 25 responses in an hour. "That behavior happens offline all the time and, increasingly, it's happening online," he said during a session at the Social Marketing workshop on IRCE's final day. "There's a huge opportunity here to really participate in this and, for the first time ever, drive word of mouth at scale."
That opportunity is evident to such major e-commerce players as eBay Inc., whose president for North America, Christopher Payne, delivered the conference's keynote address. Payne enumerated many innovations at eBay, including one due to be introduced in the second half of 2011 that will enable consumers to show their Facebook friends items they're considering on eBay and solicit feedback. "Social will have a transformational impact on shopping," Payne said. "The key is to begin to experiment."
Payne also emphasized the fast pace of change in e-commerce as a whole, and used the point to underscore the marketing, technology and fulfillment services eBay can offer online retailers, particularly after its recent acquisitions of e-commerce technology and services provider GSI Commerce Inc., and the open source e-retailing software company Magento Inc.
EBay is investing $1 billion a year in research and development, and can offer e-retailers services they could not develop on their own, Payne said. "Because of the pace of change, it's very difficult to do this alone," he said. "We're in a great position to bring this partnership to merchants of all sizes."
Several other speakers described how they leverage the social web to boost online sales. Cam Balzer, vice president of marketing at web-only T-shirt retailer Threadless, reported that putting the Facebook Like button on its product pages led to 5.7 million impressions on Facebook in May and 25,000 referrals from the social network to Threadless.com.
The shopping cart at Supershoes.com, in another example, lets shoppers love, hate, tag and share footwear styles, explained Frank Malsbenden, vice president and general manager of Vision Retailer Inc., operator of Supershoes.com and other e-retail sites. Vision also uses its Facebook page to gauge interest in new products, he said.
Digital natives—those who grew up with the Internet—are best suited to spearhead social initiatives, said Mike Jansma, CEO of online jewelry retailer GemAffair.com in a session at the Social Marketing workshop. He spoke alongside his own social marketing manager, 22-year-old Nicole Pepe, who sent her first e-mail at age seven and has been blogging since she was 14.
Digital natives, Jansma said, "are multitaskers from the word go. We hired a native because we figured she would have the instinct for all this."
If social marketing is the hot new arrival, mobile commerce is the rapidly maturing adolescent of online retailing, as several IRCE speakers documented.
Such mainstream retailers as Walgreen Co., the nation's largest drugstore chain, have well-established mobile capabilities that they're rapidly enhancing. More than 2 million consumers already receive text alerts from Walgreens pharmacies when their prescriptions are ready, and the retailer is testing a service that would let consumers refill a prescription by replying to a text message, explained Sona Chawla, Walgreen's president of e-commerce, in a keynote address on June 16.
HauteLook, the private-sale site acquired by Nordstrom Inc., generates 15% of weekday sales and 20% on weekends from mobile devices, reported David Sobie, vice president of business development, in another IRCE session. Mobile customers tell HauteLook they want larger product images, faster page loads and the ability to track shipments from their smartphones, Sobie said.