In its second-largest acquisition, Amazon buys the company for $970 million.
Many online retailers have been so busy building sites, loading them with the right merchandise and marketing to get customers to shop at their sites that they’ve overlooked one of the basics of an effective web site: Product search.
Some say new site search technology is too expensive, while others say they use search functionality that came with their e-commerce package. But whatever their reason, they are losing sales with ineffective site search, says industry research. For instance, a widely reported study from Jupiter Research shows that 34% of shoppers rely on search as the primary way to find products at a retail site, while 48% use search if their attempts at navigation fail. That same report says as many as 85% of searches do not return what customers are seeking.
With those sales at stake, more e-commerce sites are waking up to the fact that good search is like a good sales associate who helps a customer when she needs help and directs her to the right place for the right products. That growing interest is being reflected in the market for site search technology. “We’re coming off a record quarter due to the value we provide to our customers,” reports Steve Kusmer, president of site search technology company Atomz Corp., which counts among its enterprise and e-commerce customers such retailers as palmOne Inc., Backcountry.com and Pacific Sunwear Inc.
Atomz isn’t relying on just growing interest in the marketplace to maintain that momentum; it has a number of initiatives in place that it hopes will keep retailers interested in its technology.
For starters, it will continue to emphasize that it hosts its services, which reduces the cost of implementation and dramatically increases ROI. Kusmer notes that over three years, the cost of using Atomz site search technology is a third to a half the cost of licensing software and supporting it. In addition, hosting allows Atomz to introduce innovations faster and react more quickly to retailer feedback. “We are leveraging our whole infrastructure and services across 250 customers,” Kusmer says.
Entry level costs for Atomz technology is $40,000 a year plus limited set-up fees, with a typical customer paying $50,000 to $80,000, Kusmer says. That will support an online retailer with sales of $10 million and up.
In addition to continuing to stress its hosted services, Atomz is planning a major release this month that will expand the technology’s merchandising functionality, move greater control to retailers’ merchandising managers and increase the size of retail sites that the technology can handle. “We’ve done a major amount of work over the past year to bring us to this point,” Kusmer says.
Among the major features of the new release is the ability for merchandisers to control how search results display. Retailers can rank products in search results by price, margin, inventory, brand and other attributes. In fact, the Atomz technology can blend attributes to allow retailers to display results based, for instance, on margin and inventory or inventory and seasonality.
Merchandisers log onto an Atomz server via the Internet and can manipulate the results parameters to achieve their merchandising and sales goals. “We are giving fine-grained control to the merchandiser,” Kusmer says. At the same time, he notes, the technology is doing the work, not the merchandiser, which frees up the merchandiser to look at the bigger picture of what’s happening on the site. “Merchandisers set up the general trends they want to see and they don’t have to spend half their day tweaking the results,” Kusmer says.
Further increasing the value of the search functionality, Atomz earlier this year reached an agreement to integrate with WebSideStory’s HBX web analytics product. The two technologies combine to give retailers a view of how shoppers are using the search functionality. “Analytics allow us to tell the retailer what people searched on, which searches failed, which results people clicked on the most, what terms shoppers searched on after they did an initial search, what customers did after they searched, and conversion rates for search terms,” Kusmer says.
The combination of search and analytics gives a retailer the big picture. “Tying into web analytics allows the retailer to see not only what is going on in the search engine, but what is going on in the whole site,” Kusmer says. “It can provide very valuable insight.”
Anything that makes search more effective for consumers is beneficial for retailers, analysts say. Because they are so used to stellar Internet search, consumers come to retail sites with high expectations. And they don’t understand-or care why-if the retailer doesn’t deliver. “Consumers don’t care about your problems as a retailer,” says Paul Sonderegger, analyst at Forrester Research Inc. “They just care about their own problem-finding what they want to buy.”