In its second-largest acquisition, Amazon buys the company for $970 million.
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Yet while the mobile phone and other handheld devices present new ways of shopping online, they may be only the beginning of a whole new generation of Internet access tools. “Retailers should determine a long-term strategy to allow customers to access the web from numerous devices, the ones we know of today and the ones we don’t know of yet,” Garf says.
In addition to more interactive web sites, much of the change in retailing will cater to consumer expectations of shopping across channels with consistency in product selection and customer service.
Many of the changes ahead are already in the works-or at least far enough into a concept stage-that retailers can place some fair bets on what they can do now to assure a place at the e-commerce table five years from now.
To start off, retailers will act more as single organizations, regardless of how many separate channels they sell through. Instead of separate merchandising and marketing teams for store and online channels, for example, one organization will run all of a retailer’s channels. “Five years from now the organizational barriers between e-commerce and traditional operational models will totally break down-and in a good way,” Garf says.
A second general shift will come in technology systems that smooth the kinks in many current platforms that don’t fully share customer and inventory data across channels. “There is a lack of integration today among best-of-breed applications, but there will be a major blurring among store point-of-sale systems, e-commerce front end and back-end order management systems,” Garf says. “And the systems integration between retailers and their suppliers will also come together in a cohesive fashion.”
Combined with business intelligence systems that cut across customer touch points as well as back-end inventory and order fulfillment applications, these integrated systems will provide retailers the information they need to know their customers’ interests and serve them with the right products at the right time and place. “The real winner is the retailer who can combine the wisdom of crowds with personalization technology to make more relevant and timely offers online as well as in stores,” says Cliff Conneighton, vice president of marketing for Art Technology Group.
Effective technology systems will have at their core a flexibility to adapt to new applications, such as through web technology-enabled, service-oriented architecture; the ability to gather and store large amounts of information; and speed in transmitting that information throughout a retail enterprise and its supply chain, a process supported by new web development technologies like Ajax (see Cleaning up the store with Ajax, Internet Retailer, February 2007) and other varieties of XML, says Patti Freeman Evans, retail industry analyst with JupiterResearch.
While Ajax is already speeding up content on web sites, another development tool, Apollo, promises to make web site applications run even faster. Under development by Adobe Systems Inc., the same company that owns Flash and Flex video and rich media technology, Apollo will enable retailers to offer web site features, including videos and shopping carts, that run faster and more smoothly than today’s web applications because they’ll actually run on a shopper’s own desktop. Experts say the technologies will run as smoothly as any native desktop application.
“With Apollo, web applications and desktop applications are coming together,” says David Fry, president of web site development and hosting firm Fry Inc.
Apollo, expected to become available within a year or so, could also lead to business models that favor the convenience of shoppers over any particular brand, Fry adds. For example, non-competing apparel retailers might cooperate in offering a virtual model web application that a shopper runs on her own desktop. After personalizing the virtual model application with her specifications, she could use it to shop at any participating retailer.
Another coming trend in web applications is the growing use of XML to develop mash-ups, or combinations of applications, within a retailer’s own system or even among two or more retailers. A mash-up within a single retailer’s site, for example, might automatically present multiple offerings of women’s and men’s outfits to a wife who shops for her husband as well as for herself. Multiple retailers, such as ones specializing separately in women’s, men’s and children’s apparel, might agree to develop a mash-up that would present on each of their sites selections from all three categories to customers who shop for entire families.
At Home Décor Products, Golden foresees within two years an online room planner application, using already available technology, such as from 20-20 Technologies Inc. and Easy2.com Inc., that would let shoppers design a complete kitchen by choosing among products from a dozen or more suppliers. The key to a successful application would be the availability of true product images and specifications from all of the manufacturers. “I don’t think this is far away. Manufacturers are already going down the path of digital renderings of product,” Golden says.
Riding the buzz
While retailers improve their own web sites and multi-channel offerings, they will also play a bigger role in a growing number of other sites-through social networking, comparison shopping and blog sites, for instance, and perhaps additional organically developed sites to serve foreign or niche markets.
“It will no longer be just a multi-channel world in the classic sense of multi-channel,” says Mark Fox, president and CEO of Novator Systems Ltd., which recently rebuilt its technology to accommodate better integration among multiple sites. “With the way teens are shopping, comparison shopping sites are becoming as important as a retailer’s main site, and more retailers will want to rapidly deploy microsites for niche categories or multiple sites for international markets.”
At Roots Canada, Connell and members of his staff post content on social networking sites like ThisNext.com, where consumers share information about what they like about products from retailers.