June 1, 2006, 12:00 AM

SPONSORED SUPPLEMENT: Creating the e-commerce platform of the future

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A consultative approach helps retailers create more effective customer loyalty programs through personalization. That is important, because most first time shoppers typically enter a retailer`s site through a search engine or a comparison shopping site. Hence, most of these shoppers don`t get a sense of the retailer`s brand

"In these instances, retailers don`t get much brand leverage from the search engine, which is not conducive to converting a shopper into a repeat customer, because they are less likely to remember the retailer`s brand," adds Leffler. "Integration to the front end and back end lets retailers effectively market to consumers in ways they will remember regardless of their entry point."

Looking ahead the next 18 to 24 months, e-commerce platform providers expect retailers to place an even higher premium on more integrated systems. One business channel expected to receive much attention is integration of the call center. Connecting service representatives into the e-commerce platform allows them to view the shopping experience of the customer that has called in with a question, according to Stephan Schambach, President and CEO of Demandware Inc.

A continuous experience

Having this information makes it possible for service representatives to avoid making recommendations on products and services that have already been offered to the customer through another communications channel, such as e-mail, only to be rejected. "There ought to be no break between the call center and the e-commerce piece of the platform," says Schambach. "Making a recommendation that has already been rejected is not helpful, but it can`t be avoided if the service representative does not have access to that information."

Personalization is as much about being helpful as it is about customizing marketing and merchandising offers. "Sometimes being helpful is all it takes to create a personalized experience," continues Schambach. "Integrating what retailers know about their customers across channels can lead to a complementary, helpful shopping experience as the customer moves through each channel."

In other words, customer care must be integrated across the entire platform to allow customers seamless movement between sales channels. "The shopping experience doesn`t end at checkout," says ATG`s Conneighton.

The increased focus on integrated platforms is expected to lead to more universal architecture. This flexibility actually extends the power of the platform into all areas of a retailer`s business ensuring that the retailer can upgrade and reconfigure its business to meet changing market conditions.

Standardization = lower costs

Two of the most expensive back-end channels to integrate into the e-commerce platform are the warehouse and the order management system, according to NewRoads` Carroll

"Standardization can lower the cost of integration substantially by making hosted systems more viable," he explains. "When there is a common set of functionality, it is easier to leverage the cost of investment across the platform, and in the case of a hosted solution, the customer base as well."

Leveraging their investments in their e-commerce platforms means retailers can more effectively use the platform`s core functionality to enhance the shopping experience. "It lets retailers create a more personalized, satisfying shopping experience," adds Carroll.

By seeing where best to apply resources across the platform, retailers can automate many of their business processes, such as e-mail confirmation for sales and real-time reporting on fulfillment. Freeing retailers from performing such tasks manually allows them to focus on their core business of marketing and merchandising and accelerating sales through all online sales channels.

"The idea of integration to create a channel-friendly platform is just becoming top of mind with retailers, but it is a trend that will continue," says ChannelAdvisor`s Wingo.

With about 80% of all direct consumer sales predicted to be generated online and about 75% of all offline sales expected to be researched online in the near future, platform integration is certain to grow in importance to all retailers, according to MarketLive`s Burke.

That means connectivity among all aspects of the retailer`s business, not just the storefront. "E-commerce platforms must connect not only into marketing and search, but the back office as well," Burke says. "From a vendor standpoint, the winners in the business will be the ones that extend their universe by allowing any application to integrate into their system." o

How e-commerce platforms influence marketing and merchandising strategies

When it comes to deciding on an e-commerce platform, there are many functionalities that retailers must take into consideration. A major area for investigation is marketing and merchandising. Not only are they as important to online success as they are to offline success, but they also change much more frequently on the Internet than in the offline world.

That`s a two-edged sword: That ability to change often is an opportunity in that retailers can quickly expand what works and cut back on what doesn`t. But it`s also a challenge because retailers need to have confidence that they are making the right decision.

"Retailers need to be able to gather data from their e-commerce platform that allows them to closely examine their online marketing, merchandising and advertising strategies to provide the greatest return on investment," says Robert Wight, CEO of Channel Intelligence Inc. "Retailers need the tools to be able to determine what products to advertise and what ad medium will maximize revenues, margins and profit."

Tracking sales

For example, e-commerce engines can be leveraged to track which products sold as the result of a customer viewing an advertisement, marketing promotion or link to an affiliate or comparison shopping site. Once in possession of that data, retailers can analyze the return on their advertising and marketing investment.

It makes little sense, for instance, to advertise a low-margin item on a search engine, comparison shopping or affiliate marketing site that may generate less revenue than the cost to promote the product in that channel, according to Wight.

But it`s not always a mistake to promote such products. "Profits from an ad expenditure aren`t just limited to the product that sold directly from the ad, but include whether the ad led to other purchases by the same customer," says Wight. "Having an e-commerce platform provider that can deliver this information helps retailers use their e-commerce platform to drive more sales and growth."

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