PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
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Pearlman would not disclose incremental sales attributable to online video, but she says it’s been a strong sales tool. The videos also have given the brand added exposure through postings on venues such as YouTube.com and Google Videos. Additionally, because fashion collections preview ahead of when shoppers can actually buy the apparel, using the web site to direct shoppers to Ann Taylor’s call center to pre-order outfits gives the merchant another merchandising tool. The site of sister brand Ann Taylor Loft has been hosting its own fashion video and supporting it with similar product display functionality, with results much like those of AnnTaylor.com, Pearlman adds.
So far, shoppers can’t shop and buy directly from the video as they can from catalog pages displayed online. But Pearlman says she’d like to explore this as a next step when the technology to support it becomes available.
“The first step was to prove that people want to watch the video and want to shop from the fashion show,” she says. “We’ve proven that case. The next step is making it an even more interactive experience.”
Not every online merchant is adopting more advanced merchandising functionality available via rich media, loosely defined as interactive multimedia applications. In the 6th Annual Merchant Survey by The e-Tailing Group, about 50% of the 167 merchants surveyed reported using video for product displays on their site, for example. “Merchants looking to differentiate themselves are looking at better ways to show the product and give people a better feel for it by incorporating things like video and alternative views. But I would still say it’s far from the norm,” Freedman says.
Adding features and functions of any kind to web sites carries a cost, another reason newer dynamic merchandising tools at this point make more sense for some retailers than others. “There is cost not only in technology but in managing these kinds of programs,” Chu notes. “It takes people time, and you have to focus your merchandising team on the right activity.”
But those at the head of the curve in using rich media for online merchandising say they’re seeing results. In The e-Tailing Group survey, of the 54% to 61% of respondents who said rich media applications are having an impact on their site, 85% said they enhance the customer experience, 65% said they increase conversions, 47% said they increase average order size and 38% said they reduce returns.
Following a pattern typical of technology adoption, rich media likely will become standard first with retailers in certain categories looking to differentiate. One driver will be how competitive a product category is, Freedman says. For example, retailers might be more aggressive in the hotly-contested consumer electronics category. The nature of the merchandise in certain categories also lends itself naturally to the experience served up by rich media, Freedman adds, pointing out categories such as apparel and home, where the tactile component is more key to buying.
The ability to see how a product works-which video or animated product displays provide-is especially important to a sales proposition where a product is complex. “You don’t need a product tour for an eight-pack of AA batteries,” says Dennis Marshall, vice president of marketing and product management at SellPoint. “The products really begging for tours have a complexity and are multifaceted, like digital cameras, laptops and appliances.”
SellPoint’s clients are manufacturers who pay to have interactive tours of their products produced and syndicated to the 85 retailers in the vendor’s network who subscribe to receive feeds of this content. Retailers pay nothing to add tours to their site. The tours are launched from the relevant product page on a participating retailer’s site through integration with the vendor’s platform.
With no investment required, Marshall explains, retailers measure these tours’ value in two ways: influence on online conversion and offline sales among shoppers who look for detailed product information online before closing a deal in a store. Though he would not disclose specific numbers across the company’s retailer syndication network, Marshall says incremental sales directly attributable to the product tours range from “single digits into double digits” based on tracking sell-through from shoppers who took a product tour vs. those who didn’t.
It’s difficult to track lift in store sales attributable to a retailer’s site hosting product tours. But the easy availability of detailed product information from multiple sources online, particularly in categories such as consumer electronics, suggests retailers can’t worry about whether rich media content offered online in the name of merchandising will result in a sale that closes elsewhere: To be considered by consumers, retailers need to be on the bandwagon, experts say.
Marshall’s view of how online product tours are evolving might just as easily be applied to how any of the new online merchandising technologies will evolve, whether they’re on the way to becoming standard, just emerging or only a gleam in a web developer’s eye. Collectively they’re raising the bar on what it takes to engage and sell to consumers on retail sites. To stay with the pack, online merchants face having to respond to the trend at some point in the not-too-distant future if they haven’t done so already, he contends.
“Retailers we work with understand people shop online at their store and at other stores,” Marshall says. “If they don’t find the information they want at your site, they go somewhere else. So the retailer’s best opportunity is to provide the most information possible on the site. The biggest risk they face today is in not providing all the information people are looking for.”