big open question,” says Chung. “Our overall feeling is that you don’t want too literal a translation—you want to translate the emotional and business functions.” For instance, he says, a 3D experience on a screen is very different from walking around an actual store and, for now anyway, it would be difficult for consumers to use. And in this business, it’s all about whether consumers will use it (most of them aren’t geeks, after all).
Which leads to our third and final Cambridge stop: ChoiceStream in Kendall Square. A big part of making customers come back is the personalized aspect of their shopping experience. ChoiceStream, a member of Xconomy’s greater Boston Internet video cluster, develops software that analyzes users’ online interests and browsing behaviors and comes up with personalized recommendations. That determines whether Borders’ magic shelf will show you the latest mysteries, techno-thrillers, or political biographies, say—and which ones.
ChoiceStream, led by a team that includes CEO Steve Johnson, CTO Michael Strickman, and executive VP of sales and marketing Toffer Winslow, delivered recommendation software that Borders hopes will lead to more purchases per session, more repeat visits, and higher conversion rates. “Over time, we hope to expand our deployment at Borders so that we personalize all aspects of the online shopping experience, and even some of their direct marketing campaigns,” says Winslow. “ChoiceStream’s proven approach to creating a personalized store that automatically presents shoppers with the most relevant merchandise and promotions will enable Borders to build rich customer relationships across all of our touch points,” said Kevin Ertell, vice president of e-business at Borders Group, in a press release.
For Borders, the proof will be in the pudding—but what does all this say about the state of e-commerce? Winslow calls the Borders deal “a great testament to the strength and vibrancy of the local software ecosystem.” Eichner says, “There’s been a rebirth in Cambridge and Boston.” Chung concurs, adding that it never really went away. “While everyone was looking somewhere else—Friendster, MySpace—e-commerce became a real big business, one that actually mattered.” Chung points out that some big stores are now doing 20 percent of their revenue online. “That’s a big number,” he says. “It took four or five years, but e-commerce lived up to what people thought. Now companies are saying, ‘Holy crap, we’re doing a billion dollars online and we haven’t invested anything in our websites.'”
Which, of course, is great news for the local software ecosystem. Just a few weeks ago, Allurent and Endeca announced a formal partnership to develop interactive online shopping software. “We’re trying to create collaborations locally,” says Chung. “We don’t spend enough time in hot tubs together. We need to trust people enough to run off and take some risks. So far it’s worked out really well.”
OK, so during my last week in Boston (I’ve just moved to Seattle), I had to check out the local Borders store one last time. They’d changed the layout a bit—new releases were on shelves to the right instead of on tables in front (perhaps to match the magic shelf?)—but I enjoyed browsing through the store as usual, and had a great cup of coffee. It’s like Chung told me: the website is meant to reinforce the store experience, not replace it. So I plan to keep going in person. At least until they can make me that latte online.
