Part of the team

The leading application and services providers who help the Top 500 Internet retailers achieve their success

There's a maxim among sales organizations that goes something like this: Nothing happens until something is sold. In the e-commerce world, nothing happens until technology is in place to make a sale possible.

For the e-retailers in the Internet Retailer Top 500 Guide, successful selling on the web requires many technological tools and the skills to use them. These tools can come from a handful or an armload of application and service providers, and all e-retailers except the largest rely to some extent on outside companies for technology and the know-how to make it work. E-commerce companies listed in this year's Top 500 Guide use products and services from more than 200 vendors. These vendors fall into one or more of 16 categories and play a significant role in an e-retailer's ability to stay open for business whenever customers are ready to buy.

The following report takes a look at vendors in their respective technology categories most often cited by Top 500 companies. The top two vendors in each category were determined by research for the Top 500 Guide conducted by Internet Retailer from January through April of this year. The rankings are based on the frequency suppliers were cited by merchants in this year's Top 500 Guide.

Affiliate Marketing
Solid sales source
Affiliate web sites long have been a solid source of sales and new customers for online retailers. The tactic of using one site to drive traffic to another historically has been a cost-effective way to increase online sales and customer acquisition, and many e-retailers turn to service and software providers to manage their affiliate programs. Commission Junction, a subsidiary of ValueClick Co., and LinkShare Corp. account for almost half of all affiliate marketing services among the Top 500. Commission Junction has 154 clients and LinkShare 86. Both serve top 5 web merchants. Staples (No. 2) and HP Home & Home Office Store (No. 5) are among the former company's customers, Office Depot (No. 3) and Dell Inc. (No. 4) are among the latter's.

Content Delivery Network
Get it there on time
Content delivery network providers help merchants manage short-term spikes in traffic without long-term investments. The two leading providers in this category are Akamai Technologies Inc., with 70 Top 500 customers, and Mirror Image Internet Inc., with 9. Akamai's Top 500 customers range from the largest, Amazon.com Inc. (No. 1), to some of the smallest, such as Dillard's Inc. (No. 400). For example, Your Electronic Warehouse added content delivery software, among other tools, from Akamai in 2006. The content delivery network was the most important e-commerce addition, says Justin Meats, information technology director, citing improved site performance. "Our conversion rate went up from the 2005 average of 0.7% to 1%," he says. Mirror Image customers also run the size gamut, from IAC/InterActive Corp. (No. 26) to FirstStreet (No. 384).

Content Management
Going with the flow
Content management tools enable web merchants to quickly adjust product content on their web sites, regardless of their technical expertise. E-retailers with multiple web sites can create video and text content, for example, and move it where it's needed on the fly. GSI Commerce Inc. and Interwoven Inc. were cited most often by Top 500 companies with 10 apiece, including Toys "R" Us Inc. (No. 39) for GSI and Quixtar (No. 22) for Interwoven. Close behind were Escalate Retail and Scene7, a subsidiary of Adobe Systems Inc., tied with seven each. Escalate customers include Hot Topic Inc. (No. 237) and CPA2Biz Inc. (No. 326); Scene7's client list includes Restoration Hardware (No. 96) and Hanna Andersson Corp. (No. 167).

CRM Systems
Taking it personally
Customer relationship management systems help ensure web shoppers' online experiences are more than checking boxes on electronic forms. 11 Top 500 retailers use Escalate Retail CRM technology, including J&R Electronics Inc. (No. 97) and Sephora USA (No. 106). EGain Communications was cited by seven Top 500 clients, including Cooking.com (No. 178), which recently upgraded to eGain Service 7.6. Cooking.com operates branded storefronts such as StarbucksStore.com and KitchenEtc.com and the eGain upgrade "will allow us to more efficiently handle customer service for these multiple brands," says Kirk Oshiro, director of customer service.

E-Commerce Platform
Critical infrastructure
E-commerce platforms are a web retailer's backbone. As such they require substantial investments of time and money and are not easily replaced. Microsoft Corp. was named most often, with 30 Top 500 companies using .NET web services architecture to some degree and 12 using the Commerce Server platform. GSI Commerce counts 28 customers in the Top 500. Microsoft customers include Best Buy (No. 11), Indigo Books & Music Inc. (No. 140) and Auntie's Beads Inc. (No. 496). GSI's Top 500 clients include Palm Inc. (No. 99), Liz Claiborne Inc. (No. 305) and Aeropostale Inc. (No. 423). Almost 150 of the Top 500 developed their own e-commerce platforms.

E-Mail Marketing
Getting the message
A recent Internet Retailer survey found merchants are expanding both the size and scope of e-mail programs. CheetahMail, a subsidiary company of Experian, was listed by 59 of the Top 500 retailers. One of its customers, Bass Pro Shops Outdoor Online LLC (No. 78), ran a pre-Thanksgiving e-mail marketing campaign last year featuring "top-rated gifts" based on user-generated reviews. The campaign, providing links back to landing pages containing reviews along with product details, doubled the performance of other, simultaneous e-mail campaigns in bringing customers to BassPro.com, says David Seifert, director of operations and direct ­marketing. 17 Top 500 companies listed Yesmail as their e-mail marketing management provider, including Avon Products Inc. (No. 29) and Miles Kimball (No. 204).

Fulfillment
Get it there
Now that e-retailing has entered the mainstream, customers more than ever expect e-retailers to provide seamless fulfillment. At the same time, competition dictates e-retailers bring scalability and operating efficiencies to fulfillment and find ways to more effectively manage their warehouse space. Escalate Retail and GSI Commerce each has 19 clients in the Top 500. Escalate clients include Lamps Plus Inc. (No. 136) and Levenger Co. (No. 238). GSI clients include NFL.com (No. 142) and The Hershey Co. (No. 278). GSI signed on with NFL.com earlier this year to provide fulfillment services on product orders received through television retailer QVC Inc. (No. 14). CommerceHub counts eight clients among the Top 500.

Order Management
Following orders
Order management systems enable web retailers to integrate inventory management across retail channels, helping customers order products online and pick them up in stores, for example. Escalate Retail was named by 34 Top 500 merchants, including dELiA's Inc. (No. 90). Escalate integrated its enterprise resource planning system with other information systems at Onlineshoes.com (No. 129) last year. The system helps keep inventory current by subtracting products as they are sold so consumers can see what's available, and integrates with ­warehousing and fulfillment systems to provide "a database we can manipulate," says Dan Gerler, Onlineshoes.com's president and CEO. GSI Commerce works with 17 Top 500 merchants, including Ralph Lauren Media LLC (No. 105) and ShopPBS (No. 368).

Payment Systems
Fraud alert
Retailers are looking across borders for new customers and finding the prospect of fraud looms large for international operations. But retailers might be overreacting to the threat. Online orders are more than twice as likely to be fraudulent when placed outside the U.S. and Canada, but retailers reject seven times as many good foreign orders as bad ones, CyberSource Corp. reported in its 8th Annual Online Fraud Survey. Geolocation technology that confirms addresses and other information can help. The payment systems providers named most often by Top 500 retailers were Chase Paymentech Solutions LLC, by 99 companies, and CyberSource, by 45. Chase Paymentech customers include Walmart.com (No. 13) and World Wrestling Entertainment (No. 304). CyberSource clients include FreshDirect LLC (No. 57) and Guess? Inc. (No. 340).

Rich Media
Rich gets richer
The Internet is about "showing" and rich media technology is boosting shoppers' confidence that what they see is what they'll get. 24% of Top 500 retailers depend on two companies for rich media tools: Scene7 was listed by 84 and RichFX Inc. by 37. AnnTaylor.com (No. 115) has been using Scene7 rich media applications for years, but last fall it tried online video for the first time. Fall and spring fashion shows captured on video for AnnTaylor.com were the most clicked-on features in the past year, says Michelle Pearlman, senior vice president, Ann Taylor Direct. Product personalization from RichFX helped apparel and accessories retailer The Orvis Co. Inc. (No. 143) show customers how products will look before purchase. Buyer confidence in the product and the personalization service helps drive "higher conversions and sales on both. Plus we're anticipating lower return rates," says Brad Wolansky, director of e-commerce.

Search Engine Marketing Management
Searching for sales
E-commerce merchants are increasing nearly every phase of their search engine marketing programs, both pay-per-click and site optimization, to rank high in search engine results, according to an Internet Retailer survey last spring. The survey finds that search engine marketing drives more than 50% of sales for 30% of 245 responding e-retailers. Almost 83% of all survey respondents also have no plans to reduce their overall spending on pay-per-click search engine marketing this year. Twenty Top 500 retailers have turned to DoubleClick Performics Inc. for search engine marketing technology and services, including L.L Bean Inc. (No. 23). Twelve of the Top 500 are working with Rimm-Kaufman Group LLC, including CDW Inc. (No. 8).

Site Design
Designs age quickly
There are no clear-cut rules for when to update e-commerce sites, but many e-retailers say they plan major overhauls every two or three years. The Swiss Colony Inc. (No. 434) turned to Fry Inc. last year for a redesign and Fry counts 12 other Top 500 clients. The new site for the food gifts and cheese retailer features user reviews, stored addresses, recipes and catalog quick orders. Dick's Sporting Goods Inc. (No. 133) relaunched its site last year with the help of GSI Commerce. Nine other Top 500 companies also chose GSI as their site design provider. Dick's wanted the site to be more like its physical stores for a more consistent multi-channel shopping experience, says Jeffrey R. Hennion, senior vice president and chief marketing officer.

Site Search
Hitting the bull's-eye
Site search has evolved into a merchandising tool that can make product recommendations based on business rules set by a merchant. Endeca Technologies Inc. works with 67 of the Top 500 merchants, including The Guild Inc. (No. 424) and its Artfulhome.com site. A new advanced search tool from Endeca helps customers shop 12,000 online items by criteria important to them, such as price, color, size, theme or artist. Shoppers can view up to 96 items on a page, rather than clicking through multiple pages of results. Celebros counts 22 Top 500 retailers among its clients, including Ice.com (No. 182). By automatically displaying top sellers in site search results the jewelry retailer has produced 25% to 50% higher conversion rates, says CEO Shmuel Gniwisch.

Web Analytics
What's the score?
Web analytics tools help web merchants dissect just about anything that can be measured. Analytics provider Omniture Inc., with 139 clients in the Top 500, helped apparel retailer Junonia Ltd. (No. 412) yield meaning from new merchandising features on its redesigned web site. With new functionality, Junonia expects to more actively test and optimize offers and other merchandising efforts, says director of e-commerce Tom Lindmeier. 91 Top 500 companies list Coremetrics Inc. as their web analytics vendor, including Bass Pro Outdoor Online LLC (No. 78). After poor results from listings on comparison shopping sites, the sporting goods retailer has seen a sharp increase in sales through the third-party sites by using web analytics data as part of its ad-buying strategy, says David Seifert, director of operations and direct marketing. Bass Pro buys its product listings on shopping comparison sites through Mercent Corp. with integrated web analytics data from Coremetrics. Bass Pro is able to target its ad spending on product listings known to produce the best sales on particular comparison sites.

Web Site Hosting
Hosts with the most
Working with a web hosting company can be intimidating for e-retailers because they must trust someone else to provide and manage web site functions. If things go wrong, web retailers can feel helpless. The ideal web hosting company understands the business side of their world, retailers say. The providers cited most often in this category are Yahoo Inc., with 24 Top 500 clients, and GSI Commerce and RackSpace Managed Hosting, each with 17. Yahoo customers include SuperMediaStore.com (No. 217) and Danskin Inc. (No. 361). GSI and Rackspace clients include Zale Corp. (No. 189) and ivg Stores (No. 388), respectively.

Web Performance Monitoring
Who's minding the store?
Retailers who operate physical stores can monitor most sales and operations by walking around or examining the books. That's not so simple with web-based businesses, so merchants turn to providers like Gomez Inc., with 50 clients in the Top 500, and Keynote Systems Inc., with 36. Gomez customers include SonyStyle.com (No. 9), Walgreen Co. (No. 71) and Benchmark Brands Inc. (No. 205). Keynote clients include J.C. Penney Co. Inc. (No. 12), Sierra Trading Post Inc. (No. 95) and Panasonic Corp. of North America's Panasonic.com (No. 158). Panasonic used Keynote technology this spring to test a sluggish checkout page and found a slowdown at certain times of the day. I.T. staff fixed the problem by re-architecting how back-end systems communicated with each other, says vice president of e-commerce Jeremy Dalnes.

billb@verticalwebmedia.com

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