The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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“It used to be you had to invent practically everything in house, because most of the third-party technology was not that good,” Byrne says. “But now there’s so much good third-party technology.” As an example he points to Omniture Inc., which not only provides analytics software, but also has integrated that software with content management, site search, search marketing and other technologies from many suppliers.
Leave it to the experts
Not only are software vendors improving their technology, increasingly they’re hosting it, letting e-retailers plug into applications via the Internet, a model called software as a service, or on-demand technology. It’s an approach that’s become increasingly accepted in the past 18 months and that cost-conscious online retailers will want to consider, says Rebecca Wettemann, a vice president at Nucleus Research who will speak as part of a conference track devoted to managing technology.
She says letting vendors take full responsibility for hosting and upgrading software reduces the upfront capital investment and ongoing information technology costs for retailers.
Driving cost out of e-commerce operations is becoming essential because the Internet makes it so easy for consumers to compare prices, she adds. “Unless you have a unique product, it’s all about price and margin,” Wettemann says. “Retailers have to drive cost out of the process. Many are spending an awful lot keeping e-commerce platforms up.”
For many consumers, saving money is top of mind during the recession. And that has prompted RugSale.com to put its sale and clearance items front and center, says Paul Nangle, director of marketing, whose session-part of the workshop for smaller e-retailers-will focus on making it easy for customers to find what they want on a retail site.
RugSale.com’s left-side navigation bar features at the top links to the retailer’s deal of the day and deal of the hour, as well as to clearance items. That navigation bar also includes customer reviews, product categories and information about the rugs the e-retailer sells. Nangle recognizes that many consumers arrive at his site through search or e-mail and go directly to product or category pages-less than half come through the home page-which is why providing that navigation bar content on every page is so important.
That’s a strategy Ken Burke, chairman of e-commerce technology provider MarketLive Inc., will reinforce in his session on combining technology know-how with retail expertise. Every product page should have all the information that would persuade a consumer to buy, because that might be the only page the consumer sees, Burke says.
Even seemingly small changes can make a big difference, he says. For instance, a MarketLive study found the conversion rate is 4.6% for product pages that include a toll-free customer service number versus 1.8% for pages without that number.
For very little money, Burke says, an online retailer can implement a “light” site redesign that incorporates sure-fire winners such as more content on product pages, reassuring messages about guaranteed delivery, putting the most popular categories at the top of navigation bars and a top-10 product list in every category.
Building trust is a core strategy at Zazzle.com Inc., a web-only retailer that lets consumers customize such products as T-shirts, mugs, calendars and greeting cards. The site’s home page gives prominence to “the Zazzle promise,” which includes a guarantee that the retailer will provide a full refund if a customer is not satisfied, even on personalized items. Fewer than 1% of items are returned, although that rate briefly exceeded 1% during the recent holiday season, says Zazzle.com vice president and co-founder Jeff Beaver, who will speak with brother and partner Bobby Beaver on how small retailers can harness the power of the Internet.
Beaver says it’s more important than ever for e-retailers to build trust-and to deliver on promises. “Especially in bad times, people will be increasingly loyal because they’re not going take a chance on the new guy,” Beaver says. “So building loyalty is important.”
While the focus of IRCE this year will be on nuts and bolts and the bottom line, in keeping with retailers’ focus on surviving the deep recession, several sessions will look ahead at what’s coming. That includes sessions on how to turn social networks to a retailer’s advantage, ways to best deploy rich media and the final-day workshop on mobile commerce.
After all, the recession is not going to last forever. The Internet Retailer Conference & Exhibition will provide plenty of tips on how to survive until the economy turns up, and how to take advantage of better times when they arrive.
Click Here for the Internet Retailer 2009 Conference & Exhibition Exhibitor Showcase