In its second-largest acquisition, Amazon buys the company for $970 million.
Leading application and services providers help the Top 500 Internet retailers achieve success. E-retailers in this year’s Top 500 Guide use products and services from more than 200 vendors.
There`s a maxim among sales organizations that goes something like this: Nothing happens until something is sold. In the e-commerce world, nothing happens until technology is in place to make a sale possible.
For the e-retailers in the Internet Retailer Top 500 Guide, successful selling on the web requires many technological tools and the skills to use them. These tools can come from a handful or an armload of application and service providers, and all e-retailers except the largest rely to some extent on outside companies for technology and the know-how to make it work. E-commerce companies listed in this year`s Top 500 Guide use products and services from more than 200 vendors. These vendors fall into one or more of 16 categories and play a significant role in an e-retailer`s ability to stay open for business whenever customers are ready to buy.
The following report takes a look at vendors in their respective technology categories most often cited by Top 500 companies. The top two vendors in each category were determined by research for the Top 500 Guide conducted by Internet Retailer from January through April of this year. The rankings are based on the frequency suppliers were cited by merchants in this year`s Top 500 Guide.
Solid sales source
Affiliate web sites long have been a solid source of sales and new customers for online retailers. The tactic of using one site to drive traffic to another historically has been a cost-effective way to increase online sales and customer acquisition, and many e-retailers turn to service and software providers to manage their affiliate programs. Commission Junction, a subsidiary of ValueClick Co., and LinkShare Corp. account for almost half of all affiliate marketing services among the Top 500. Commission Junction has 154 clients and LinkShare 86. Both serve top 5 web merchants. Staples (No. 2) and HP Home & Home Office Store (No. 5) are among the former company`s customers, Office Depot (No. 3) and Dell Inc. (No. 4) are among the latter`s.
Content Delivery Network
Get it there on time
Content delivery network providers help merchants manage short-term spikes in traffic without long-term investments. The two leading providers in this category are Akamai Technologies Inc., with 70 Top 500 customers, and Mirror Image Internet Inc., with 9. Akamai`s Top 500 customers range from the largest, Amazon.com Inc. (No. 1), to some of the smallest, such as Dillard`s Inc. (No. 400). For example, Your Electronic Warehouse added content delivery software, among other tools, from Akamai in 2006. The content delivery network was the most important e-commerce addition, says Justin Meats, information technology director, citing improved site performance. "Our conversion rate went up from the 2005 average of 0.7% to 1%," he says. Mirror Image customers also run the size gamut, from IAC/InterActive Corp. (No. 26) to FirstStreet (No. 384).
Going with the flow
Content management tools enable web merchants to quickly adjust product content on their web sites, regardless of their technical expertise. E-retailers with multiple web sites can create video and text content, for example, and move it where it`s needed on the fly. GSI Commerce Inc. and Interwoven Inc. were cited most often by Top 500 companies with 10 apiece, including Toys "R" Us Inc. (No. 39) for GSI and Quixtar (No. 22) for Interwoven. Close behind were Escalate Retail and Scene7, a subsidiary of Adobe Systems Inc., tied with seven each. Escalate customers include Hot Topic Inc. (No. 237) and CPA2Biz Inc. (No. 326); Scene7`s client list includes Restoration Hardware (No. 96) and Hanna Andersson Corp. (No. 167).
Taking it personally
Customer relationship management systems help ensure web shoppers` online experiences are more than checking boxes on electronic forms. 11 Top 500 retailers use Escalate Retail CRM technology, including J&R; Electronics Inc. (No. 97) and Sephora USA (No. 106). EGain Communications was cited by seven Top 500 clients, including Cooking.com (No. 178), which recently upgraded to eGain Service 7.6. Cooking.com operates branded storefronts such as StarbucksStore.com and KitchenEtc.com and the eGain upgrade "will allow us to more efficiently handle customer service for these multiple brands," says Kirk Oshiro, director of customer service.
E-commerce platforms are a web retailer`s backbone. As such they require substantial investments of time and money and are not easily replaced. Microsoft Corp. was named most often, with 30 Top 500 companies using .NET web services architecture to some degree and 12 using the Commerce Server platform. GSI Commerce counts 28 customers in the Top 500. Microsoft customers include Best Buy (No. 11), Indigo Books & Music Inc. (No. 140) and Auntie`s Beads Inc. (No. 496). GSI`s Top 500 clients include Palm Inc. (No. 99), Liz Claiborne Inc. (No. 305) and Aeropostale Inc. (No. 423). Almost 150 of the Top 500 developed their own e-commerce platforms.
Getting the message
A recent Internet Retailer survey found merchants are expanding both the size and scope of e-mail programs. CheetahMail, a subsidiary company of Experian, was listed by 59 of the Top 500 retailers. One of its customers, Bass Pro Shops Outdoor Online LLC (No. 78), ran a pre-Thanksgiving e-mail marketing campaign last year featuring "top-rated gifts" based on user-generated reviews. The campaign, providing links back to landing pages containing reviews along with product details, doubled the performance of other, simultaneous e-mail campaigns in bringing customers to BassPro.com, says David Seifert, director of operations and direct marketing. 17 Top 500 companies listed Yesmail as their e-mail marketing management provider, including Avon Products Inc. (No. 29) and Miles Kimball (No. 204).