The Top 500 retailer buys Campus Deals, which offers mobile coupons to college students.
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Frazier notes that retailers such as Neiman Marcus have seen as much as a 300% improvement in conversions directly off site search after implementing iPhrase’s search and navigation technology. Sites such as iPhrase client Sephora.com take it a step further, harnessing the technology for active merchandising duty. At Sephora, a query on “dry hair,” for example, may not only deliver relevant hair products Sephora wishes to promote, but also related content, such as a magazine article that offers guidance on the subject.
“They are using the same business rule facility to directly promote product and to promote non-product content that educates a user on how to solve the problem-and along the way, sell more product to facilitate that,” Frazier says “It’s one of the ways our product has evolved. We have moved from using the natural language processing capability to not just deliver more accurate answers, but also to understand how to influence a customer.”
Guided navigation lets shoppers narrow search results into a progressively smaller set, based on a series of choices presented to them as results are returned. The choices are tied to product attributes such as color, size and price. The challenge on outdoor gear retailer Orvis.com was 4,000 products and 35,000 SKUs: in other words, many, many subcategories of a relatively small number of products. “We were looking to bring some intelligent navigation to our search results,” says director of e-commerce John Rogers. That led Orvis to vendor Endeca, where the guided navigation approach is a product centerpiece.
“Someone looks for a sweater on the site. They know what they have in mind, but we don’t know what we should show them-men’s? women’s? wool? cashmere?,” says Rogers. “And you don’t have much time, because if something doesn’t jump out at them right away when they key in sweater, they’re off to the next site.”
The merchandiser override
Endeca streamlined the existing search function, guiding shoppers more quickly to what they were looking for. And it did something more: it boosted site merchandising by automatically feeding related product listings into page real estate set aside by Orvis for that purpose. Orvis positioned a box that runs at the top of every search results listing under a major product category, “boots,” for example, that displays current best sellers or whatever Orvis wants to display, depending on what the customer is searching for. Endeca’s technology selects category best-sellers to populate the box automatically; Orvis’s merchandisers can override that to feature other products of their choice.
Within a month of implementing Endeca’s search and navigation technology, Orvis saw sales off site search gain by 50%. Sales from the merchandising feature, which Orvis calls the merchandising zone, now account for 24% of all sales from site search. Rogers says the new site search capability also pays for itself in better reporting. “The search shows you where you are missing and where your action is,” he says. “It is allowing us to be smarter about how we build our rules set.”
As with any kind of technology implementation, prices vary. Celebros, for example, which aims for small to mid-sized sites, offers a hosted service or will install its software on the retailer’s server. Licenses for its product start at $2,000 monthly, with no other fees. Atomz’s search product is offered exclusively on a hosted basis, with the typical annual pricing at about $60,000, higher for service that must support a very large number of SKUs; smaller for a lower number of SKUs, Kusmer says. At iPhrase, which targets large, complex sites, the standard pricing model is $150,000 for a perpetual license with an annual maintenance fee on top of that. Pricing may scale upward or downward depending on the amount of content and volume of interaction the software must support. IPhrase’s Frazier notes that some retailers buy the license on an annual subscription basis which significantly reduces their initial acquisition cost.
Tower Records uses search and navigation technology from Mercado Software Inc. to build a “Spotlight” feature similar to Orvis’s merchandising zone. The spotlight is a section that runs at the top of search results, into which Mercado technology feeds data on different artists and products. “We can set the merchandising rules on what appears in the spotlight based on when the shopper searches or browses on certain terms or refinements. We can also set third-column ad squares based on merchandising rules,” says Kevin Ertell, senior vice president of direct to consumer operations.
Tower maintains a ranking of its 5,000 best-sellers. Under one of its merchandising rules, if any results of a searched query fall within the 5,000, they’re highlighted as best-sellers in the search results. “That one’s completely automated, and it’s probably our most successful,” says Ertell. “The promotions we are merchandising contextually within search are getting strong click-through rates; in some cases, as high as 20%. Our promotional pages are our highest-converting pages, with anywhere from 8% to 30% conversion rates, so the contextual promotions are clearly benefiting sales.”
Nevertheless, Ertell already has his eye on future rounds of site search improvements. “In our type of product, there are a lot of weird band names and crazy spellings, so with 800,000 SKUs, there are things in there that we don’t catch and so people don’t find them. We do our best to look for them but it would be nice if it were all automated somehow,” he says. “We have really fine-tuned our search engine, but whatever it is in a human being that instantly processes and interprets correctly, computers aren’t there yet.”
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