In its second-largest acquisition, Amazon buys the company for $970 million.
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“Three to four years ago, retailers were content to focus on making their site work or adding hot new technology because it was in vogue, but now they are realizing the need to take it to a higher level and deliver a richer, more interactive user experience,” says Scot Wingo, CEO of ChannelAdvisor Corp., which provides technology that helps retailers sell and market online. “Once a customer comes to the site, a retailer must have the tools and information to deliver that richer shopping experience that will get a visitor to convert.”
Frequently referred to as Web 2.0, the new generation of e-retailing applications is designed to add value to retailers’ marketing and merchandising strategies.
“There is a growing demand from consumers for a richer online shopping experience, not just from a visual standpoint, but from an information standpoint,” says Jason Jacobs, CEO of CoreSense Inc. “Applications like Ajax are allowing retailers to do some innovative things with page presentation and features like PowerReviews are giving retailers a chance to incorporate consumer opinions about the products they carry into their marketing and merchandising strategies.”
One of the benefits of Ajax technology, which is growing in popularity with retailers, is that it makes it easier for shoppers to access information. For example, when using Ajax retailers can instruct their e-commerce platform to deliver product information through a pop-up window when shoppers run their mouse over the image of the product, rather than requiring the customer to click to a new page.
“Web 2.0 technology like Ajax enables the creation of easier ways to interact with customers,” explains Jeff Zimmerman, vice president of product management and online marketing for Network Solutions LLC.
Enriching the shopping experience through better interaction is especially important for small and mid-sized retailers seeking to level the playing the playing field with larger brand name retailers.
“Large retailers try a lot of things when it comes to enriching the shopping experience and as shoppers get exposed to those efforts, they begin to expect the same thing from smaller retailers,” says Zimmerman. “If a smaller retailer doesn’t have it, it hurts their credibility.”
More product information
For some retailers, adding value to the shopping experience means enhancing the information that is wrapped around a product to go beyond basic descriptions, attributes and specifications to include consumer opinions. Hence, customer reviews are playing a bigger role than ever in retailers’ marketing and merchandising strategies. Customer reviews, part of the social networking trend on the Internet whereby consumers create communities through the sharing of opinions and ideas, resonate well with shoppers in their mid-twenties and younger, a.k.a. the Millennial Generation.
“Customer reviews are more meaningful to the Millennial Generation because they value opinions about a product as opposed to specifications and as such are immune to many of the marketing techniques preceding generations were raised on,” explains Curtis Hampshire, general manager of USi eBusiness. “These are savvy buyers that expect more depth of information when researching a product, which is why Web 2.0 technology is more meaningful to them and future generations.”
Often overlooked in the value of customer reviews is that they help create a level of trust between shopper and the product which can provide small retailers without brand recognition more credibility than they might otherwise enjoy.
“Shoppers will put more weight behind another shopper’s opinion of a product they are thinking about buying, rather than that of the so-called expert who in reality may have a conflict of interest or is a paid spokesman for the product,” says Network Solutions’ Zimmerman. “Customer reviews feed into the sense of community shoppers will turn to outside the Internet for information, and at the same time help small retailers that may lack brand recognition gain credibility with the shopper because they can provide the same level of information a larger brand name retailer may be delivering through customer reviews as well.”
The video review
The explosion of video on the Internet as part of Web 2.0 has opened the door to merge the medium with customer reviews. What differentiates videotaped customer reviews is that the shopper can put a face to the person providing the opinion, which makes the review more engaging.
“Video provides a more entertaining and engaging way to deliver content and that helps to pull the shopper into the product,” says Ken Burke, chairman of e-commerce platform provider MarketLive Inc. “It is a great medium to describe a complex product because a demonstration of how something works can be included or shown in a separate video. The success of YouTube.com has shown that consumers will dig to find online video content.”
While customer reviews have proven to be a powerful merchandising medium, they are not without management challenges. The challenge facing retailers with customer reviews is how to present them in a way that is consistent with their brand image as they move into different sales venues on the web, such as affiliate sites and comparison shopping sites. The goal is to use Web 2.0 technology to create strategies that target different buying communities.
“Retailers need to be asking themselves whether their e-commerce platform can support multiple marketing strategies across different online sales channels as they evolve,” says USi eBusiness’s Hampshire. “Shoppers today aren’t going to necessarily follow one path to a purchase.”
Before retailers can determine how they can enrich the shopping experience, they need to ask themselves some basic questions, such as: How can they build a better customer relationship? How can they personalize presentation of their catalog to the shopper? And how can they drive traffic through sales channels outside the web store?
“It comes down to having a good channel integration strategy and amazingly some retailers don’t have one yet,” says Hampshire. “Retailers not only need a platform that allows them to create multiple presentations of their catalog to fit targeted sales channels, but they must do so in a way that provides the deeper information target audiences want in a way that is consistent with their brand image.”
Uniqueness = success