PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
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Invesp's Pii conversion optimization software evaluates pages within a retailer's web site using 350 criteria and ranks shortcomings in the page design that may negatively impact conversions by their importance. That enables a retailer to prioritize changes to the page.
Another way to improve conversion is through personalization, which is playing a bigger role in online marketing and merchandising strategies. Retailers realize consumers will only give them so many clicks before deciding to buy or leave a site. Understanding consumer behavior patterns and applying that knowledge across all consumer touch points makes it possible for retailers to serve up products consumers will be interested in and incentives to entice them to buy.
Retailers can also improve conversion rates by better understanding what each consumer is looking for when she arrives at a traditional e-commerce site. Having that understanding enables retailers to tailor the content of the page using personalization strategies.
"True personalization extends to all sales channels and customer touch points," says Bob Cell, CEO of MyBuys Inc., provider of cross-channel personalization services. "Personalization is not just limited to the web site, e-mail or customer service. It has to be applied to online ads, m-commerce, direct mail and the retail store, too. Each customer interaction must get customers to the products they want fast. The freshest recommendations must show them items of interest they have not seen, but which appeal to their tastes."
The power of integration
Tracking customer behavior data across all touch points requires an operating platform that allows each division within a retail organization to share that information in real time.
"One of the biggest problems multichannel retailers face is that customer information resides within departmental silos and can't be readily accessed," says Gary Black, general manager of CDC eCommerce, provider of e-commerce platforms. "When a retailer cannot connect their mobile, e-commerce and retail stores they end up with a limited picture of consumer behavior in each of those channels, and that creates other barriers to doing business with the consumer."
For example, the lack of platform integration can prevent a consumer who bought a product online from returning it in the retail store. "Most retailers can't do this because their back-office systems are not connected, so the retail store lacks the data to process the return," says Black. "Retailers need to look at their business from the perspective of the consumer. Most consumers think that all touch points are seamlessly connected."
Because consumers expect a seamless connection between all sales channels it is not uncommon for them to expect to be able to go online and check in-store inventory. Mobile shoppers do this while on the go to find the nearest retail store stocking the item they want. Conversely, consumers expect the retail store to be able to check online inventory if an item they want is not on a store's shelf.
"The depth of integration consumers expect across sales channels is forcing retailers to think more and more about breaking down the walls between sales channels," says Black.
CDC's platform allows retailers to add promotions or customer ratings and reviews without having to rely on the I.T. department to implement the changes. On the back end, CDC's order management application enables retailers to fulfill an order from any warehouse or from the store closest to the consumer to speed fulfillment and delivery.
CDC also has upgraded its platform to support smartphones, allowing retailers to offer mobile site search, category browsing and to redirect users to a mobile site when a consumer types in the URL for the retailer's e-commerce site into a mobile browser. Retailers can also manage their m-commerce sites using the administrative interface for their e-commerce sites.
Easy does it
With all the technology available to online retailers, there's a higher priority on making that technology easy to maintain and upgrade over time. That's a big reason why retailers, and organizations of all types, are gravitating to a new way of accessing software called software as a service, or SaaS. In this model, the vendor maintains the software on its servers and the retailer accesses it via the web.
Any time a SaaS vendor adds a new feature or tweaks an old one, that change is made once and all its retailer clients get the benefit of it—without lifting a finger. That ease of use is a big reason that the percentage of software spend going to SaaS technology will double to 14% in 2013 from 7% in 2010, according to Forrester Research.
SaaS-based applications also let e-retailers get up and running quickly. And merchants can integrate SaaS-based applications as needed, rather than converting an entire web-retailing platform at once. That's a big plus for retailers looking to get more mileage out of their existing hardware and software.
"On-demand or SaaS applications are cost-effective, easier and faster for retailers to implement," says CDC's Black. "For retailers looking to expand globally, on-demand applications are the most technologically comprehensive way to go because they are assured regular upgrades."
SaaS platforms also can offer easier integration, since it's the vendor maintaining the links between systems, and updating those links as feature changes, rather than putting that burden on a retailer's internal resources.
"Retailers need front-end and back-end integration because it makes it easier to manage customer relationships across touch points without having to get bogged down in I.T. issues," says Michael Turcsanyi, president of OrderDynamics, provider of SaaS-based e-commerce platforms. "When retailers get their platform properly integrated, the platform can keep up with the changing needs of their business, allowing them to grow faster."
Just for you
Integration makes possible better follow-up marketing. If a retailer's customer history database is linked to its inventory system it can show a returning consumer who previously viewed hunting gear a teaser ad on the home page for a related high-margin product or one that the retailer has in large supply.