In its second-largest acquisition, Amazon buys the company for $970 million.
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Get it there
Now that e-retailing has entered the mainstream, customers more than ever expect e-retailers to provide seamless fulfillment. At the same time, competition dictates e-retailers bring scalability and operating efficiencies to fulfillment and find ways to more effectively manage their warehouse space. Escalate Retail and GSI Commerce each has 19 clients in the Top 500. Escalate clients include Lamps Plus Inc. (No. 136) and Levenger Co. (No. 238). GSI clients include NFL.com (No. 142) and The Hershey Co. (No. 278). GSI signed on with NFL.com earlier this year to provide fulfillment services on product orders received through television retailer QVC Inc. (No. 14). CommerceHub counts eight clients among the Top 500.
Order management systems enable web retailers to integrate inventory management across retail channels, helping customers order products online and pick them up in stores, for example. Escalate Retail was named by 34 Top 500 merchants, including dELiA`s Inc. (No. 90). Escalate integrated its enterprise resource planning system with other information systems at Onlineshoes.com (No. 129) last year. The system helps keep inventory current by subtracting products as they are sold so consumers can see what`s available, and integrates with warehousing and fulfillment systems to provide "a database we can manipulate," says Dan Gerler, Onlineshoes.com`s president and CEO. GSI Commerce works with 17 Top 500 merchants, including Ralph Lauren Media LLC (No. 105) and ShopPBS (No. 368).
Retailers are looking across borders for new customers and finding the prospect of fraud looms large for international operations. But retailers might be overreacting to the threat. Online orders are more than twice as likely to be fraudulent when placed outside the U.S. and Canada, but retailers reject seven times as many good foreign orders as bad ones, CyberSource Corp. reported in its 8th Annual Online Fraud Survey. Geolocation technology that confirms addresses and other information can help. The payment systems providers named most often by Top 500 retailers were Chase Paymentech Solutions LLC, by 99 companies, and CyberSource, by 45. Chase Paymentech customers include Walmart.com (No. 13) and World Wrestling Entertainment (No. 304). CyberSource clients include FreshDirect LLC (No. 57) and Guess? Inc. (No. 340).
Rich gets richer
The Internet is about "showing" and rich media technology is boosting shoppers` confidence that what they see is what they`ll get. 24% of Top 500 retailers depend on two companies for rich media tools: Scene7 was listed by 84 and RichFX Inc. by 37. AnnTaylor.com (No. 115) has been using Scene7 rich media applications for years, but last fall it tried online video for the first time. Fall and spring fashion shows captured on video for AnnTaylor.com were the most clicked-on features in the past year, says Michelle Pearlman, senior vice president, Ann Taylor Direct. Product personalization from RichFX helped apparel and accessories retailer The Orvis Co. Inc. (No. 143) show customers how products will look before purchase. Buyer confidence in the product and the personalization service helps drive "higher conversions and sales on both. Plus we`re anticipating lower return rates," says Brad Wolansky, director of e-commerce.
Search Engine Marketing Management
Searching for sales
E-commerce merchants are increasing nearly every phase of their search engine marketing programs, both pay-per-click and site optimization, to rank high in search engine results, according to an Internet Retailer survey last spring. The survey finds that search engine marketing drives more than 50% of sales for 30% of 245 responding e-retailers. Almost 83% of all survey respondents also have no plans to reduce their overall spending on pay-per-click search engine marketing this year. Twenty Top 500 retailers have turned to DoubleClick Performics Inc. for search engine marketing technology and services, including L.L Bean Inc. (No. 23). Twelve of the Top 500 are working with Rimm-Kaufman Group LLC, including CDW Inc. (No. 8).
Designs age quickly
There are no clear-cut rules for when to update e-commerce sites, but many e-retailers say they plan major overhauls every two or three years. The Swiss Colony Inc. (No. 434) turned to Fry Inc. last year for a redesign and Fry counts 12 other Top 500 clients. The new site for the food gifts and cheese retailer features user reviews, stored addresses, recipes and catalog quick orders. Dick`s Sporting Goods Inc. (No. 133) relaunched its site last year with the help of GSI Commerce. Nine other Top 500 companies also chose GSI as their site design provider. Dick`s wanted the site to be more like its physical stores for a more consistent multi-channel shopping experience, says Jeffrey R. Hennion, senior vice president and chief marketing officer.
Hitting the bull`s-eye
Site search has evolved into a merchandising tool that can make product recommendations based on business rules set by a merchant. Endeca Technologies Inc. works with 67 of the Top 500 merchants, including The Guild Inc. (No. 424) and its Artfulhome.com site. A new advanced search tool from Endeca helps customers shop 12,000 online items by criteria important to them, such as price, color, size, theme or artist. Shoppers can view up to 96 items on a page, rather than clicking through multiple pages of results. Celebros counts 22 Top 500 retailers among its clients, including Ice.com (No. 182). By automatically displaying top sellers in site search results the jewelry retailer has produced 25% to 50% higher conversion rates, says CEO Shmuel Gniwisch.
What`s the score?
Web analytics tools help web merchants dissect just about anything that can be measured. Analytics provider Omniture Inc., with 139 clients in the Top 500, helped apparel retailer Junonia Ltd. (No. 412) yield meaning from new merchandising features on its redesigned web site. With new functionality, Junonia expects to more actively test and optimize offers and other merchandising efforts, says director of e-commerce Tom Lindmeier. 91 Top 500 companies list Coremetrics Inc. as their web analytics vendor, including Bass Pro Outdoor Online LLC (No. 78). After poor results from listings on comparison shopping sites, the sporting goods retailer has seen a sharp increase in sales through the third-party sites by using web analytics data as part of its ad-buying strategy, says David Seifert, director of operations and direct marketing. Bass Pro buys its product listings on shopping comparison sites through Mercent Corp. with integrated web analytics data from Coremetrics. Bass Pro is able to target its ad spending on product listings known to produce the best sales on particular comparison sites.