July 27, 2006, 12:00 AM

Internet Retailer 2006: Report from the conference

The Internet Retailer Conference & Exhibition featured 78 speakers in 44 sessions. Here`s the full report.

One of the major themes of Internet Retailer 2006 Conference & Exhibition, June 5-7, revolved around using technology to meet customer needs. From the Keynote Address through the final breakoutsessions, 78 speakers in 45 sessions focused on the importance of the Internet in meeting customers` needs--and how e-retailing will not ascend to the next level until retailers understand how customers are using their web sites and how to harness technology to meet customers` spoken and tacit desires.

The conference drew 3,300 attendees and 185 exhibitors to the Hyatt Regency in Chicago. Theconference occupied five times as much space on two levels as IR2005. In addition to meeting vendors, attendees had the opportunity to view live interviews throughout the show at the Internet Retailer Media Center in the exhibit hall. Festivities were capped off by dinner and a concert by Motown hit-makers The Temptations on June 6.

Following is complete coverage of the conference ...

General Sessions
June 6

Day 1 Keynote: The new-age web

Taking E-Retailing to the Next Level, Keynote Address
Thomas McInerney, executive vice president, IAC/InterActiveCorp

More than at any other time since the late 1990`s, the web is quickly changing with innovations for online retailing, Thomas McInerney, executive vice president of IAC/InterActiveCorp said in the keynote address at IR2006.

Recent and ongoing developments in e-commerce--including broadband Internet access, new technologies such as AJAX that provide faster online shopping experiences, and the merging of the web and TV--are presenting exciting new opportunities that retailers need to be aware of, McInerney said.

Broadband capabilities, for example, are enabling HSN to show more of its TV programming on HSN.com. The web strategy will range from live showings of full TV programs to segments that focus on particular products. Combined with web site search, this will let HSN shoppers view material on TV, then go online to search for a particular show segment and product, McInerney said.

Other important trends to watch, McInerney said, are how brands can leverage the power of social networking sites like MySpace.com, and how retailers of all sizes are using the web and global-positioning systems to connect with local customers.

IAC, meantime, will continue to look for ways to leverage its presence in online retail and TV programming. "With 500-plus channels, the cable operators are desperate for content to fill those channels, and some of them will be retail," McInerney said. "Ultimately, we think IPTV (web-based TV) can enable the HSN show to be a front door to other services."

Analyzing search

Who`s Online and How Do You Reach Them?
John Miniati, vice president, comScore Networks Inc.
Heather Dougherty, senior e-retail analyst, Nielsen/NetRatings Inc.

While it`s clear that Internet search has far surpassed other media as a means for finding products, it can be challenging to figure its impact on sales, experts said at IR2006. "People don`t always convert in the same web session when searching," said John Miniati, vicepresident of comScore Networks.

In a study of consumer search behavior last year, comScore found that only 17% of search-initiated sales--mostly movie tickets and flowers--occurredduring the same web session. 20% occurred in later online sessions and 63% in latent offline purchases.

It`s also important to look at both the amount of traffic as well as sales derived from search as compared to non-search activity, said Heather Dougherty, senior e-retail analyst with Nielsen/NetRatings Inc. In a study of the retail apparel market, Nielsen found that 86% of consumers arrived at a retail apparel site directly, 8% through a non-search-related referral, and only 6% through web search.

While consumers arriving directly at a site also accounted for the lion`s share of sales, at 91%, search accounted for a higher share of sales than did other non-search referrals, at 9% to 3%.

The average spend for purchases, however, was less diverse across the three means of arriving at an apparel site. The average spend for direct-visitpurchases was $88, compared to $74 for non-search referrals and $72 for search-initiated visits. Search visitors tend to be more price-conscious, Dougherty said.

Getting Back to Basics

From Zero to a Billion in Four Years
Howard Tong, vice president, Newegg.com

Although Newegg Inc. spent less than 1% of its budget on marketing, it grew sales from zero to $1 billion in four years by giving visitors to its site "as close to the retail experience as possible," Howard Tong, vice president, told IR2006. "It`s really just getting back to basics," Tong said. "We wanted to develop strategies to provide the best online shopping experience for our customer base."

Newegg.com, launched in January 2001, is a pure-play retailer of computers and consumer electronics. One pillar of Newegg`s strategy is to know the customer, Tong told attendees. "Our core audience is the gamer," he said. "We need to know what gamers love. What would make them loyal? What would make them feel like we were their home away from home?"

Newegg used customers` input to determine which products to stock. The retailer also posted reviews,testimonials, in-depth technical descriptions, and multiple photos of the products, including accessories, software, DVDs and instruction manuals.

"For our tech audience, they want gigahertz, they want nanoseconds, milliseconds, all sorts of geeky terms," he said. "We tried to create an experience that was second to none, that really catered to them."

Tong also credits Newegg`s success to its customer-service philosophy--make the customer happy no matter what, even if it entails replacing a hard drive ruined by the customer`s misuse. "It`s not items we`re selling, but the experience we`re trying to provide to our customers," he said.

Impulse e-commerce

Wireless Web: Cashing In When the Buying Impulse Strikes
Bryan Biniak, senior vice president of the AG Interactive Division, American Greetings Corp.

Because of the ubiquity of mobile phones and a massive cultural shift from formal to impulse communication, there is a growing market for electronic commerce via wireless phones and other handheld devices, says Bryan Biniak, senior vice president of the AG Interactive Division of American Greetings Corp.

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