April 30, 2009, 12:00 AM

SPONSORED SUPPLEMENT: Spending technology dollars wisely

Before retailers slash their investments in e-commerce systems looking to weather the drop off in retail sales, they should carefully look at making low-cost upgrades to their e-commerce platforms that increase conversions and revenues. In the current economic environment, retailers can stretch their I.T. budgets by identifying economical technologies that enhance the shopping experience and deliver the fastest return on investment.

“A retailer can create a true competitive advantage, within a limited budget, by identifying areas of their site that can be upgraded to better meet consumers’ expectations and demands,” says Jeff Zisk, CEO of SpeedFC Inc., provider of e-commerce and transaction management services. “These upgrades often quickly produce measurable returns and may be quickly implemented with the right technology. E-retailing is still showing great growth potential in this economy and there are opportunities for retailers to make inexpensive investments that yield big benefits.”

Becoming more nimble

A more flexible platform allows retailers to make changes to a site that meet online shoppers’ evolving needs and expectations and that provide to marketing and merchandising managers more direct control over management of the web site.

Applications that deliver this type of flexibility allow retailers to be more nimble when it comes to implementing changes in real time to keep marketing and merchandising strategies fresh.

“To be truly competitive in this economic climate retailers need e-commerce platforms and applications that are retailer driven, not I.T. or vendor driven,” says John Marrah, CEO of e-commerce platform provider ProfitCenter Software Inc. “Retailers have to run their businesses more cost efficiently in this economic environment and implementing applications that provide greater control over marketing and merchandising helps ensure that every dollar they spend on the e-commerce platform either generates a sale or delivers greater operating efficiencies.”

Some areas of their platforms that retailers want to consider adding or enhancing include the product recommendation engine, customer-generated content, site navigation, the checkout page, click-to-call and live chat. Upgrading each of these technologies can be a relatively low-cost fix that can enhance the shopping experience, increase conversions and reduce site abandonment.

“Retailers looking to make upgrades with low, upfront costs and who want a quick return on investment will want to look at these areas of their online business,” says Bill Zujewski, vice president, product marketing for e-commerce solution provider ATG. “Short-term I.T. strategies involve increasing conversions and revenue and improving customer interaction, more than reducing total platform operating costs or expanding their business to new markets.”

A starting point

Improving product recommendations is often a good starting point for economically upgrading the web store because it provides retailers options for steering shoppers to products with the highest profit margin or sale items likely to appeal to shoppers and meet their budget.

“If sales are down, steering shoppers to higher margin items, such as accessories, is a cost-effective way to boost profits,” says Tony Svanascini, CEO of web site design firm Americaneagle.com.

When guiding shoppers to accessories, retailers must make sure the accessories appear both with the item they complement and as stand-alone products with links to related products, in case the shopper is looking specifically for the accessory.

“If a shopper is looking for a cell phone battery, the retailer wants to categorize it as a stand-alone product with links to the car charger for the battery, and as an accessory to the cell phone it fits as well as the car charger,” Svanascini says. “Once the logic behind these rules is built into the platform, retailers don’t have to do much to maintain it.”

Adding product recommendation categories that can be highlighted more creatively on the site is another cost effective way to recommend products. Highlighted recommendations can include best sellers, items other shoppers in the same geographic region purchased, new arrivals that reflect seasonal changes to the retailer’s product catalog or gift centers that feature items based on the selling season.

Creative rankings

Adding this capability requires changes to the merchandising configurations within the product recommendation engine. Retailers don’t necessarily need to base most popular, for example, on actual sales; they can select most popular based on such criteria as page views or search queries.

Online retail systems can also make product recommendations based on a combination of criteria. ATG uses dynamic behavioral models to analyze each shopper’s past and current behaviors to predict what she’ll want to see and buy. ATG uses data from the retailer’s catalog, historical shopping information, clickstream data, web site information and visitor information, including the geographical location of the shopper’s Internet connection, to anticipate behavior and predict highly relevant recommendations.

“The ATG recommendation engine increases the personal relevance of the product recommendations, can be up and running within a couple of weeks, doesn’t cost much, and can quickly yield a substantial return,” Zujewski says. “Automated gift recommendations are a great way to selectively highlight those updates to the product catalog that occur every few weeks on a select basis.”

Site navigation is also an area where upgrades can pay quick dividends. Consumers can easily get lost in sites that are difficult to navigate and they then abandon the site out of frustration. Rectifying this problem requires evaluating the clarity and directness of the navigation paths.

“If the site design is a mess, shoppers will give up quickly and go to another store,” Svanascini says. “Shoppers’ expectations of navigating a web site are no different than getting around in a store. If a store is poorly laid out, shoppers will have trouble locating the right department and products within each department and won’t spend much time there. If the store is well laid out, they are more likely to browse other areas after finding what they want.”

Know the customer

Effective site design starts with knowing the customers and their needs. “Once a retailer understands their audience, they can properly design a site that delivers the desired value proposition,” Svanascini says.

In addition to site design and development, Americaneagle.com provides site hosting, content management, search engine marketing, multimedia, streaming audio and video services.

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