In its second-largest acquisition, Amazon buys the company for $970 million.
The demand for high-quality images meets retailers’ restricted tech budgets in creating a market for outsourced image management.
For all the great things the Internet allows retailers and shoppers to do, one of them is not providing a taste of a food product. And so food retailers have to compensate with imagery.
It’s not as if they don’t have experience with that already-many of the leading sellers of gift foods on the web are leaders in catalogs as well. But the web adds dimensions to the problem: images must be rendered in a number of formats from thumbnails up to expanded views and they must show crisp and clean no matter which of the thousands of computer configurations a consumer is using. “When you deliver these images, you want to be as agile as you can be,” says Kevin Beresford, president of Berries.com, which sells hand-dipped chocolate strawberries and other berries and sweets. “We must make this product so incredibly beautiful that viewers will want to reach through the screen and try to eat it.”
Berries.com and online food retailers are not alone in their need for high-resolution pictures that can be delivered on a nanosecond’s notice to web browsers. It’s a problem that most online retailers must deal with. And it’s a problem that compounds as the amount of content and the popularity of online shopping go up. Not only does a retailer need greater computer capacity to handle demand, it also needs greater storage capacity for images and more bandwidth to ensure its web site remains responsive.
The problem of scaling
But everyone is familiar with today’s restraints on retailing’s technology investments, which means the money may not be there to invest in imaging technology. Retail IT spending growth barely moved the needle last year and is not expected to set any records this year either. Thus to fill the demand for higher quality images with no degradation of web site performance, a handful of providers of image and content management systems is providing services on an outsourced basis to retailers who need the capacity but don’t want to spend the money. “The problem is in scaling the infrastructure to handle the worst case scenario,” says Gordon Smith, vice president of marketing of Speedera Networks Inc., a content delivery network.
Speedera two months ago partnered with TrueSpectra Inc., a provider of image management services, to offer TrueSpectra’s services on an outsourced basis through an application services provider arrangement via Speedera’s network. Retailers upload a high-resolution image to TrueSpectra’s server, which then re-purposes the image and delivers it on demand to consumers’ browsers. First customers for the ASP service include Berries.com, Lowe’s Cos. Inc. and Office Depot Inc.
The Speedera/-TrueSpectra arrangement is one of the first ASP offerings in the image serving market. “The entire image serving market is very small, although it is growing,” says Jill Aldort, research analyst with InfoTrends Research Group Inc., a market research and consulting company that specializes in digital imaging. She expects the market to grow as the demand for more web-based images grows. And she expects the popularity of ASP-based offerings to grow as retailers search for ways to meet the demand without a huge capital outlay. “Affordability is a big obstacle,” Aldort says. “An arrangement like this offers companies a flexible choice.”
Affordability was one of the main attractions for Berries.com, which experiences traffic spikes sometimes as high as fifty-fold around Valentine’s Day, Christmas, Mothers Day and other gift-giving holidays. Furthermore, site content changes only infrequently, but when it does change, it usually gets a makeover for a holiday. “To do it ourselves, we’re talking a major capital expenditure for technology that’s needed only 90 days a year at most,” Beresford says. “The expenditures to handle those volumes were a great burden that we didn’t want to bear.”
Further, Beresford says, with a growing company and consumers’ increasing comfort in buying on the web, such investments are a vicious cycle. “More computers and more bandwidth are only good for one year,” he says. “The next year you have to upgrade again.”
The base price for the Speedera-hosted service from TrueSpectra is $2,700 a month for a gigabyte of capacity. That translates into about 2,000 images, says David Watkins, president of TrueSpectra, enough to serve a medium-sized retail site. The minimum size operation that could benefit from an outsourced service would deliver about 2 million page views a month, Smith says.
Berries.com is an independent offshoot of Shari’s Berries, a Sacramento, Calif., institution that was started 13 years ago by real estate broker Shari Fitzpatrick, who dipped strawberries in chocolate as a thank you for her clients. It maintains about 150 products on its site at any one time. Installation of the Speedera/TrueSpectra service took about 15 minutes, says Chris Schipper, business application specialist for Berries.com. A bigger problem, he says, was getting high-resolution photos to TrueSpectra so the site could take complete advantage of the service. “We
didn’t have a lot of high-res graphics,” Schipper says. “It’s been a long time since we did a photo shoot for the web.”
Thus Berries.com found itself having to re-shoot some products to present a high-quality image on the web. “The zooming capability changed the whole direction of our photo sessions,” Beresford says. “Now we have to shoot the photographs so people can zoom in on the picture. Before, our focus would be very utilitarian, now we have more of an art focus.”
But the trade-off was that Berries’ photographers no longer have to create four or five versions of the same photo for different uses. “Now when we do a photo shoot, we do 2,000 by 2,000 pixels and that’s all,” Schipper says.
Outsourcing of the image management also has made Berries.com more flexible in presenting products, Beresford says. “Outsourcing it took technology that is so vital to our business out of programmers’ and administrators’ hands,” he says. “It’s made our web site much more spontaneous.”
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