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Know the customer: Internet Retailer's new Top Tech 2014
Personalization technology makes gains, says Internet Retailer’s newest research guide.
The online retailing industry’s biggest web merchants and its up-and-comers—which make up Internet Retailer’s Top 1000 list—continue to spend significant resources on e-commerce technology and services, according to an analysis of data from Internet Retailer’s newly published Top Tech 2014.
For many Internet Retailer Top 1000 merchants, their biggest priorities include technology that helps them add more sophisticated web site features, functions and security; expand their sales channels; and generate repeat business from their best customers.
That’s demonstrated by the Top Tech 2014’s rankings of providers in 28 categories of technology and services used by online retailers, from affiliate marketing to web site performance monitoring.
Overall, the 175 e-commerce technology and services companies ranked in those 28 categories (some appear in several categories) collectively grew their Top 1000 retailer base about 13.3% to 9,198 in 2013. But vendors in several technology categories grew much faster. Those categories include personalization, security certification, marketplace management and web analytics.
Based on number of Top 1000 clients, personalization was the fastest-growing Top Tech technology category with a customer base that grew about 68% to 337 Top 1000 merchants. That compares with growth of 45% to 851 merchants for security certification, and 39% to 289 merchants for marketplace management. Also notable was the growing adoption of Google Analytics, the primary reason the number of Top 1000 merchants using analytics packages grew 9% to 903.
“Many of the biggest online retailers have already developed a complex and fully integrated e-commerce platform to handle fundamental applications such as content management, order management and transaction processing,” says Gartner Inc. vice president and information technology analyst Gene Alvarez. “Where they are investing now is in more specialized technology that helps them to better target their best customers, extend their reach to more mobile, social and marketplace shoppers, and analyze buyer behavior.”
A good example of where Top 1000 merchants are investing is personalization, including tools such as a product recommendation engine that shows individual shoppers finely targeted offers and products based on attributes such as their past purchasing history. In 2013, the personalization category was the fastest-growing Top Tech, category with 337 Top 1000 merchants adding one or more commercial personalization application, an increase of 68% from 201 merchants in the prior year. “The online retailing market has never been more competitive,” says John Kinsella, senior vice president at FitForCommerce, a Boston e-commerce consulting firm. “For an edge, more Top 1000 merchants are investing in technology that’s going to get them to know their best customers faster, get to them quicker with enticing deals and a sophisticated, but easy, shopping experience.”
At Accessory Geeks, No. 776 in the Internet Retailer 2013 Second 500 and an online retailer of accessories for smartphones, computer tablets and other handheld devices, the merchant is counting on new personalization technology to help it grow web sales around 7% to about $7.3 million in 2013. In connection with the installation of a new e-commerce platform from Magento, which is based on open-source software, Accessory Geeks is installing a new commercial product recommendation tool from Strands Labs Inc. The technology will enable Accessory Geeks to do a better job of sending targeted product recommendation campaigns to specific segments of its e-mail list, adding tailored product recommendations to more product pages and the shopping cart, and using a broader array of metrics in its customer database to serve up more detailed “We think you may also like this” messages.
Buying a case or screen protector for a smartphone and even ordering the right mix of headphones and a charger can be very personal buying decision, says Accessory Geeks vice president Karen Kang. With an inventory of more 200,000 products overall and about 400 choices shoppers can make for the latest iPhone alone, shoppers need help with finding the right accessory that reflects a buyer’s personality and lifestyle. The average ticket on a shopping cart containing multiple items based on recommended products also can be about $50, or double the size of the retailer’s typical order. “Better personalization technology makes sure we give the best options to shoppers to make their best buying decision,” Kang says.
Top Tech 2014 ranks the biggest suppliers of e-commerce technology and services to the Internet Retailer Top 1000 based on the number of merchants in the Internet Retailer Top 500 Guide and Second 500 Guide that verify they use a vendor in one or more categories. Vendors are ranked on their confirmed number of Top 1000 retailers and the collective web sales those merchants represent. More on how to order Top Tech 2014 is available by clicking here.