PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
More tech options, more challenges are driving retail e-commerce
It’s a great time to be in retail e-commerce, because the choice among available technology has never been greater. It’s also a really challenging time, because choosing among available e-commerce systems-and how far to go with them to engage customers-has never been tougher.
“It’s hard to view e-commerce in a vacuum anymore,” says Paula Rosenblum, managing director at research and advisory firm RSR Research. “As a retailer, you can’t look at e-commerce technologies without thinking about mobile commerce and cross-channel transparency. You have to be able to look the same to the customer however and wherever she’s finding you. You have to offer the same brand image, consistent prices, product descriptions and pictures-even on my 1-inch BlackBerry screen-to be able to capture customers’ attention and share of wallet.”
Consumers also are increasing their expectations of an interactive, engaging online shopping experience, Rosenblum and other experts say. “There’s a big switch in online buying behavior with a desire for interaction, and that’s creating new demands on retailers to shift their thought processes in technology deployments,” says Kate Clark, director of e-commerce product development for USinternetworking Inc., a unit of AT&T; Inc. that provides an e-commerce technology platform along with web hosting and managed services. “It’s not just about delivering new technologies to customers, it’s about delivering an experience.”
Don’t march too fast
Retailers still need to be careful not to get ahead of themselves in deploying e-commerce technology, not to overspend on whiz-bang stuff that might not bring a quick-enough return from their customers, experts say. Merchants should do their homework about who their customers are and what they want in a shopping experience. For some, that may mean simply providing a solid web site that lets shoppers quickly find products and check out without running into dead pages.
The key is to make the technology fit the defined e-commerce strategy for winning over customers, says Michael Svanascini, chief operating officer of e-commerce platform provider AmericanEagle.com Inc.
More retailers, meanwhile, are finding that it pays to deploy technology and strategies that leverage trends such as social networking, online video and web pages personalized to the interests shown by customer shopping behavior, Svanascini adds.
E-commerce sites designed to better present products and engage shoppers serve a core strategy that drives traffic, repeat customers and spending, says Errol Denger, senior strategist for IBM Corp.’s WebSphere Commerce e-commerce platform. When IBM surveyed nearly 20,000 online shoppers recently, it found that shoppers considered the level of interactivity with a retail web site a key driver of a good brand experience, including shopping convenience and service, leading to customer loyalty.
New levels of functionality
He adds that IBM is investing heavily in Web 2.0 applications designed to provide a more useful shopping experience. For example: product mouse-overs that, instead of just calling up a larger product picture, reveal information like customer ratings and reviews for the featured product.
Indeed, integration of Web 2.0 technology is bringing new levels of functionality to common web site features like search and navigation, says Graeme Grant, chief operating officer of Allurent Inc., which works with Flex technology to provide high levels of interactivity to help shoppers find and learn about products. “This makes guided navigation more dynamic and with the customer more in control of the shopping experience,” he says.
Cutting-edge e-commerce technology is not just for web-only retailers, of course, and web-enabled applications and technology platforms are making it easier for retailers to deploy merchandising and marketing strategies across their retailing channels including stores, catalogs and web sites. “Retailers can now drive customer value not only in the e-commerce channel, but also in the contact center and in store point-of-sale systems,” says John Marrah, CEO of Profit Center Software, which provides order management and related technology across multiple channels.
Instead of driving all merchandising and marketing efforts from a back-end warehouse of customer data from one retailing channel, the multi-channel environment, with integrated customer data across channels, can trigger marketing and merchandising content based on how customers have shopped in each of a retailer’s channels. “If a customer buys in two or three product categories, a retailer might offer them 10% off their next purchase, then use the same engine to make that offer on the web, in the call center and on a store POS receipt,” Marrah says.
Although demand is rising among retailers for cross-channel marketing and merchandising capabilities, many existing systems were not designed to support cross-channel data flow-at least not without extensive input from a retailer’s or outside vendor’s technology experts. “The demand we’re seeing is from one of two things: the marketing team can’t do what it wants to do easily, so it’s too reliant on its I.T. department or a vendor; or the existing system just can’t handle cross-channel information,” says Darren Hill, managing partner of WebLinc.
Technology platforms from WebLinc and other vendors, however, are designed to be more user-friendly for merchandising and marketing managers. The same web-enabled technology that makes it easier for consumers to shop on web sites and across channels, also makes it easier for retailers to manage using online administration tools designed with graphical user interfaces.
Technology integration is also improving how retailers can connect their order management systems to back-end fulfillment-a strategy that helps them operate more efficiently. “We see retailers looking to invest in technology that pays off, such as by integrating order management with back-end pick, pack and ship, to operate as efficiently as they can,” says Soumen Das, CEO of UniteU Connected Commerce.
UniteU also supports integration between order management and multiple marketing channels, helping retailers to determine how each marketing campaign, whether e-mail, Internet search or banner ads, led to purchases.
To get maximum exposure among consumers, many retailers extend their product data from their own web sites to comparison shopping engines, multiple merchant e-marketplaces like Amazon.com and paid-inclusion programs in Internet search engines. “We can see how well a paid search keyword in Google AdWords performed against paid inclusion in Yahoo Search or a product listing on Amazon,” says Eric Best, chairman and CEO of Mercent Corp., which connects online retailers with multiple outside selling channels.