The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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E-retailers need to keep a sharp eye on RSS and ensure they understand exactly what people want from the technology, he adds. “People subscribe to RSS for content, not coupons or specials,” DeLuca says. “E-retailers need to create content that is so useful and desirable to shoppers that the shoppers are compelled to subscribe. Once they develop that relationship, they can weave in occasional coupons and specials. Retail executives, though, have to be careful so that RSS does not go the route of e-mail and become one big spam-fest.”
Faintreny at Redcats USA believes web users are saturated with information and marketing, and RSS feeds are an excellent way for web users to gain more control and e-retailers to better get their message across. “A shift from push marketing to pull marketing is on the way. The more an Internet retailer can establish itself through technologies like RSS feeds, the less they will have to push.”
Mike Faith, CEO and president of Headsets.com Inc., has faith in RSS feeds, a technology he says ultimately could be revolutionary not just for e-retailing but many other industries. The niche web retailer and cataloger, No. 389 in the Internet Retailer Top 500 Guide, plans to deploy an RSS feed in 2007.
“The downside to RSS, though, is that advertising opportunities may get marginalized,” Faith notes. “More and more content is being provided offsite, as is the case with RSS, and advertising is not going with it. But as RSS develops, we’ll see advertising embedded into content in some way. When GoTo.com came along around 1998, everyone said no one will use a search engine where companies are paying to get results. GoTo became Overture, which then was bought by Yahoo. Then Google came along and quickly followed Yahoo’s lead. Everyone said search engines with paid search programs would not last-web users would not let advertisers take over the Internet. But in this case the advertisers won, and the method has delivered better results for everyone concerned. RSS feeds will follow this same path.”
While RSS seems to have a lot of wind in its sales, podcasting, another technology that can help strengthen e-retailers’ bonds with customers and bolster marketing efforts, is receiving less than enthusiastic response from the C-suite. Many of the CEOs believe podcasting will not increase in importance in 2007 or beyond.
Podcasting as a marketing or informational tool simply will not have much of an impact in e-retailing in the next 12 to 18 months, AtomicPark.com’s Boldin predicts. “Podcasts perhaps could be used as another method for customer reviews to increase site personalization, but even something as basic as that would add labor costs because, like text customer reviews, they must be screened. It’s just too early to tell with podcasting.”
Bodybuilding.com is far ahead of the curve when it comes to using the latest technologies as both free services and content for customers as well as marketing tools for itself. The e-retailer employs podcasting as well as RSS feeds and online and mobile video content.
Unlike most e-retailers, Bodybuilding.com has deployed many podcasts. Its customers have embraced the merchant’s podcasts, portable instructional tools they can use in a gym that help them learn how to pump up muscles and stay fit. Still, DeLuca believes the use of podcasting in Internet retailing will not get much bigger than it is today, saying there is only a finite number of people interested in the technology and that it offers a limited number of applications. “Podcasting will not be on magazine covers anymore,” he says. “It’s not going to take over the world.”
The force should be with you
One technology that may just take over the e-retailing world is online video. In 2007 online video content will be well on its way to becoming an enormous force in Internet retailing, predicts AtomicPark.com’s Boldin. The company has begun exploring how it can deploy online video technology. “Today the industry in most cases has what amounts to lame product descriptions with little tiny pictures when compared with what online video can present customers,” he contends. “Online video represents a huge step in improved customer interaction. It adds to a greater look-and-feel for products being sold online, which gets customers closer to feeling like they are actually in a bricks-and-mortar store and creates more excitement about products.”
Driving increasing use of online video technology is the adoption by consumers of broadband Internet access-it’s finally reaching critical mass, DeLuca says. “In the next couple of years, virtually all Internet users will have a broadband connection. The unbelievable growth of YouTube is a perfect example. People are clamoring for online video, which requires broadband web access,” he says.
It comes down to keeping up with the Joneses. As the number of users of YouTube and similar sites with content that requires broadband access increases, there will be more buzz that in turn will lead more dial-up users to make the switch to broadband, DeLuca says. “It won’t be long before we laugh about the old days of web site design and access,” he says.
Applications of online video in e-retailing can be very effective in certain retail product categories, especially those where customers can benefit from an explanation, says Build-A-Bear Workshop’s Clark. The multi-channel merchant’s e-commerce site offers online video content that shows what the company’s party services are like. “In the old days you used to go into a department store to the housewares department and watch a live or videotaped demonstration on how to use a Cuisinart. Now retailers can do these demos on the web with online videos, which of course have links next to them: ‘Click here and buy.’”
Napster earlier this year decided to try its hand at online video, using the technology as a form of viral marketing. “We launched an entertainment program called Napster Girl and had a lot of success; as a result, Episode Two was just released. The program has been picked up on all the big video sites like YouTube, and that created an enormous amount of traffic for us,” CEO Gorog explains.