The top application and service providers who teamed up with the 2009 Top 500 e-retailers to streamline online operations
By Bill Briggs
Some very small e-retailers are run by technology wizards who develop and maintain their own software, and some very large web retailers have an army of programmers and technical staff to handle e-commerce operations needs internally. For everyone else, there are hundreds of application and service providers who keep web retailers’ web sites running so consumers can buy whenever they choose to shop.
Retailers listed in the 2009 Internet Retailer Top 500 Guide rely on hundreds of providers to ensure shoppers are able to find, compare, order, pay for and, if necessary, return products using technology tools on the retailers’ web sites—all as seamlessly and hassle-free as possible.
The top three providers in each of 21 technology and services categories served anywhere from 17 to 458 of the Top 500 retailers, according to data from the current guide. Internet Retailer added three new categories to the 2009 research: customer reviews and forums, live chat/click-to-call, and personalization.
In the 2009 Internet Retailer Top 500 Guide, retailers identified whether they develop technology in-house, work with providers, or do both. The following report examines the vendors in each technology category cited most often by Top 500 retailers. The top three vendors in each category were determined by research that has been published in the Top 500 Guide. Data was gathered by Internet Retailer from January through April of this year, and the provider rankings are based on the frequency with which providers were cited by merchants in the 2009 Top 500 Guide. The following summaries include the top providers in each category, the number of times retailers cited them and three of their leading retailer clients.
Affiliate marketing: Steady ROI
Most retailers focus their online marketing efforts on affiliate marketing, paid search and e-mail marketing. Affiliate marketing maintains its luster because of high return on investment and relatively low cost. The top three providers helped 80%, or 402, of the Top 500 retailers manage their affiliate marketing programs.
1. Commission Junction,
a division of ValueClick,
207 Top 500 clients, including:
QVC Inc. (No. 11)
Gap Inc. Direct (No. 25)
Overstock.com Inc. (No. 29)
2. LinkShare Corp.,
104 Top 500 clients, including:
Nordstrom Inc. (No. 32)
Shutterfly Inc. (No. 69)
Alibris Inc. (No. 116)
3. Google Affiliate Network, 91 Top 500 clients, including:
Sears Holdings Corp. (No. 7)
Target Corp. (No. 20)
BarnesandNoble.com Inc. (No. 41)
Content delivery network: Carrying the load
Many retailers use a content delivery network to store images and other site content on servers around the world, which helps accelerate delivery of that content to consumers visiting their e-commerce sites. The top three providers delivered content network services to 27%, or 135, of the Top 500 retailers.
1. Akamai Technologies,
104 Top 500 clients, including:
Staples Inc. (No. 2)
Sears Holdings Corp. (No. 7)
Best Buy Co. (No. 10)
2. GSI Commerce Inc.,
22 Top 500 clients, including:
Toys ‘R’ Us Inc. (No. 39)
Ralph Lauren Media LLC (No. 88)
National Football League (No. 123)
3. Mirror Image Internet Inc., 9 Top 500 clients, including:
HSN Inc. (No. 26)
LEGO Brand Retail Inc. (No. 141)
Petco Animal Supplies Inc. (No. 186)
Content management: Keeping it together
Content is king, even more so now as retailers zero in on better ways to optimize their web sites on the major search engines. GSI Commerce Inc. is the biggest provider of content management applications to Top 500 retailers, followed by Escalate Retail and ATG. Combined, all three vendors supply content management systems to 38—7.6%—of the Internet Retailer Top 500 e-retailers.
1. GSI Commerce Inc.,
19 Top 500 clients, including:
Victoria’s Secret (No. 19)
Dick’s Sporting Goods Inc. (No. 121)
Zale Corp. (No. 185)
2. Escalate Retail,
11 Top 500 clients, including:
Clients: Saks Direct (No. 45)
Kohl’s Corp. (No. 50)
The Gymboree Corp. (No. 290)
3. ATG, 8 Top 500 clients, including:
Clients: Bluefly Inc. (No. 132)
NBTY Inc. (No. 136)
VitaminShoppe.com (No. 171)
CRM systems: Consumer intelligence
Web retailing is a numbers game and Top 500 retailers rely on their customer information systems to produce the data that helps them figure out what makes shoppers tick. A total of 48 Top 500 retailers, or 9.6%, contract with the biggest suppliers of CRM systems: GSI Commerce Inc., Escalate Retail, NetSuite Inc. and RightNow Technologies Inc.
1. GSI Commerce Inc.,
23 Top 500 clients, including:
American Eagle Outfitters Inc. (No. 54)
Aéropostale Inc. (No. 156)
The Sports Authority Inc. (No. 184)
2. Escalate Retail,
13 Top 500 clients, including:
Sephora USA Inc. (No. 112)
Brooks Brothers (No. 165)
Hot Topic Inc. (No. 211)
3. NetSuite Inc.,
6 (tie) Top 500 clients, including:
Ira Wood & Sons Inc. (No. 344)
Discount Ramps.com LLC (No. 402)
Your Electronic Warehouse (No. 442)
3. RightNow Technologies Inc.,
6 (tie) Top 500 clients, including:
SonyStyle.com (No. 12)
Bass Pro Outdoor Online LLC (No. 81)
Big Fish Games Inc. (No. 147)
Customer reviews and forums: A key resource
Customer reviews and forums are quickly passing from “wish list” to “must have” status among the Top 500. Combined the three largest providers—PowerReviews Inc., Bazaarvoice and BizRate—supply 91 Top 500 retailers with technology that lets a customer speak her mind on products and services.
1. PowerReviews Inc.,
48 Top 500 clients, including:
Staples Inc. (No. 2)
Toys ‘R’ Us Inc. (No. 39)
Recreational Equipment Inc. (No. 67)
2. Bazaarvoice,
40 Top 500 clients, including:
Office Depot Inc. (No. 4)
Sears Holdings Corp. (No. 7)
Best Buy Co. (No. 10)
3. BizRate, Scripps Networks Interactive, 3 Top 500 clients, including:
Zazzle.com Inc. (No. 195)
Liz Claiborne Inc. (No. 300)
Carrot Ink LLC (No. 489)
Customer service: Handle with care
In these days of conservative consumer spending, excellent customer service can mean the difference between a happy customer and a sale lost forever. To aid them in keeping in touch with visitors and shoppers, 60 merchants, 12% of the Internet Retailer Top 500 e-retailers, use GSI Commerce Inc., RightNow Technologies Inc. and LivePerson as their customer service vendor of choice.
1. GSI Commerce Inc.,
29 Top 500 clients, including:
The Estee Lauder Cos. Inc. (No. 129)
MLB Advanced Media (No. 160)
Burberry Ltd. (No. 423)
2. RightNow Technologies Inc., 21 Top 500 clients, including:
Overstock.com Inc. (No. 29)
Musician’s Friend Inc. (No. 36)
Scholastic Inc. (No. 42)
3. LivePerson, 10 Top 500 clients, including:
Newegg Inc. (No. 9)
CafePress.com (No. 117)
Vera Bradley Retail Stores LLC (No. 240)
E-commerce platform: Support system
E-commerce platforms are the backbone of web retailing. While some retailers build and maintain their own, many license software or let vendors host their e-commerce platforms. In a recent survey of large e-retailers, 44% say they plan a platform upgrade within three years, says the E-tailing Group. Top goals are to offer more features and functions, and reduce costs.
1. ATG, 31 (tie) Top 500 clients, including:
NutriSystem Inc. (No. 46)
Nike Inc. (No. 49)
American Eagle Outfitters Inc. (No. 54)
1. GSI Commerce Inc.,
31 (tie) Top 500 clients, including:
Ralph Lauren Media LLC (No. 88)
Dick’s Sporting Goods Inc. (No. 121)
General Nutrition Centers Inc. (No. 253)
3. IBM WebSphere,
29 Top 500 clients, including:
Staples Inc. (No. 2)
Sears Holdings Corp. (No. 7)
L.L. Bean Inc. (No. 22)
E-mail marketing: Growing volume
Over the next five years, spending on e-mail marketing in the U.S. will grow at a compound annual rate of 11%, reaching $2 billion by 2014, according to a Forrester Research Inc. study. The study, “U.S. E-mail Marketing Forecast 2009 to 2014,” notes that permission-based e-mail campaigns designed to retain existing customers will account for the largest share of e-mail marketing messages, at one-third, by 2014. Many retailers count on providers for some or all of their e-mail marketing programs.
1. Experian CheetahMail,
69 Top 500 clients, including:
Staples Inc. (No. 2)
Victoria’s Secret (No. 19)
U.S. Auto Parts Network (No. 102)
2. Yesmail, 28 Top 500 clients, including:
HP Home & Home Office Store (No. 16)
Macy’s Inc. (No. 23)
Scholastic Inc. (No. 42)
3. e-Dialog, 25 Top 500 clients, including:
OfficeMax Inc. (No. 6)
Toys ‘R’ Us Inc. (No. 39)
American Eagle Outfitters Inc. (No. 54)
Fulfillment: Crossing channels
As consumers become accustomed to shopping both online and in stores, multichannel retailers must take a harder look at technology that supports cross-channel order management and fulfillment, says advisory firm AMR Research Inc. When retailers combine cross-channel order management with the ability to fulfill orders from any channel, including stores and warehouses dedicated for either stores or the online channel, they can better match customer demand with inventory, AMR Research says. But AMR says just 7% of retailers have deployed infrastructure to support cross-channel shopping.
1. GSI Commerce Inc.,
28 Top 500 clients, including:
L.L. Bean Inc. (No. 22)
PetSmart Inc. (No. 230)
iRobot Corp. (No. 249)
2. Escalate Retail, 20 Top 500 clients, including:
Urban Outfitters Inc. (No. 57)
Lamps Plus Inc. (No. 138)
Hot Topic Inc. (No. 211)
3. CommerceHub (Commerce Technologies),
13 Top 500 clients, including:
Staples Inc. (No. 2)
Costco Wholesale Corp. (No. 14)
The Home Depot Inc. (No. 43)
Live chat/click-to-call: On the same page
As live chat becomes a more common tool used by 54% of large e-retailers, according to the E-tailing Group, online retailers are learning how to make it more effective. Live chat can be deployed so a customer service agent can view the same web page that a customer is viewing. Retailers are promoting expanded use of live chat by making it more noticeable on product pages, promoting its use within on-hold telephone recordings and displaying the average wait time for each customer service channel.
1. LivePerson, 34 Top 500 clients, including:
QVC Inc. (No. 11)
NutriSystem Inc. (No. 46)
Etronics Inc. (No. 77)
2. InstantService Inc.,
11 Top 500 clients, including:
Nordstrom Inc. (No. 32)
The Orvis Co. Inc. (No. 119)
Ritz Interactive Inc. (No. 124)
3. ATG, 7 Top 500 clients, including:
Amazon.com Inc. (No. 1)
Dell Inc. (No. 3)
Best Buy Co. (No. 10)
Order management: Preserving order
Data consistency and effective use of cross-channel data, which is typically organized with order management systems, remain big hurdles to serving consumers efficiently across the channels of store, web and catalog. According to Retail Systems Research, an inability to effectively use customer information for cross-channel marketing was identified as the most significant inhibitor by the 88 retailers surveyed. The lack of cross-channel integration of inventory and order management systems was cited by 36% of “winners” and 35% of the other retailers. RSR classifies retailers whose same-store sales are growing by more than the historical industry average of 3% as winners.
1. Escalate Retail, 38 Top 500 clients, including:
The Home Depot Inc. (No. 43)
Hot Topic Inc. (No. 211)
The Buckle Inc. (No. 425)
2. GSI Commerce Inc.,
29 Top 500 clients, including:
Toys ‘R’ Us Inc. (No. 39)
RadioShack Corp. (No. 224)
Ace Hardware Corp. (No. 451)
3. MICROS-Retail, 13 Top 500 clients, including:
Orchard Brands Corp. (No. 59)
GameStop Corp. (No. 113)
Jos. A. Bank Clothiers Inc. (No. 189)
Payments systems: More options?
Despite lingering security concerns about doing business online in foreign markets, there are indications that these new markets can be a significant boost to sales. For example, letting European shoppers pay online through their preferred methods can boost overseas sales an average of 20% to 30%, payments systems provider CyberSource Corp. advises. Although 59% of North American merchants accept international orders, the percentage of these merchants that accept payment methods preferred by overseas consumers is relatively low, CyberSource says.
1. Chase Paymentech Solutions LLC, 113 Top 500 clients, including:
Amazon.com Inc. (No. 1)
Costco Wholesale Corp. (No. 14)
Zappos.com Inc. (No. 27)
2. PayPal Inc., 75 Top 500 clients, including:
SonyStyle.com (No. 12)
Blue Nile Inc. (No. 56)
YOOX Group (No. 79)
3. CyberSource Corp.,
45 Top 500 clients, including:
Overstock.com Inc. (No. 29)
The Home Depot Inc. (No. 43)
Nike Inc. (No. 49)
Personalization: Making relevant offers
Online retailers that pay close attention to how customers react to personalized product recommendations have an excellent opportunity to drive more sales, says a June 2009 report and survey from personalization technology vendor MyBuys Inc. and research firm the E-tailing Group Inc. In a survey of 1,000 consumers with annual household incomes of $50,000 and higher who shop online at least twice each month, 43% of respondents find it very or somewhat valuable if the retailer offers specific product recommendations tailored to their personal tastes and shopping histories.
1. Certona, 6 (tie) Top 500 clients, including:
Victoria’s Secret (No. 19)
eBags.com (No. 93)
Petco Animal Supplies Inc. (No. 186)
1. MyBuys Inc., 6 (tie) Top 500 clients, including:
AutoAnything (No. 204)
Gaiam Inc. (No. 254)
Cost Plus Inc. (No. 374)
3. ATG, 5 Top 500 clients, including:
Best Buy Co. (No. 10)
NutriSystem Inc. (No. 46)
Joann.com (No. 256)
Rich media: New looks
Web retailers are adding rich media to offer consumers visual shopping aids. In a recent survey, 50% of retailers plan to add alternative product images this year, and 31% color swatches, according to Shop.org and Forrester Research. Vendors offer technologies via licensed software or host them, providing service on demand.
1. Scene7, an Adobe Co.,
109 Top 500 clients, including:
Sears Holdings Corp. (No. 7)
Walmart.com (No. 13)
HP Home & Home Office Store (No. 16)
2. ChannelAdvisor, 33 Top 500 clients, including:
Staples Inc. (No. 2)
Walmart.com (No. 13)
1-800-Flowers.com Inc. (No. 31)
3. Easy2 Technologies Inc.,
22 Top 500 clients, including:
Amazon.com Inc. (No. 1)
CDW Corp. (No. 8)
Lowe’s Cos. Inc. (No. 76)
Search engine marketing: Productive tools
Fiscal inertia characterized much of U.S. retailing in the past year. But through it all online retailers have fared better than other channels and many have done so by sticking to search as a key tool for online advertising. And there are signs that strategy is working. Internet Retailer’s spring search engine marketing survey found that since last fall 41.9% of retailers say paid search advertising outperformed other forms of marketing.
1. iProspect, 18 Top 500 clients, including:
ShoeMall.com (No. 135)
Jones Retail Corp. (No. 271)
Hat World Corp. (No. 360)
2. Performics, 15 Top 500 clients, including:
HP Home & Home Office Store (No. 16)
Cabela’s Inc. (No. 40)
American Girl LLC (No. 97)
3. ChannelAdvisor,
13 (tie) Top 500 clients, including:
J&R Electronics Inc. (No. 103)
Petco Animal Supplies Inc. (No. 186)
LumberLiquidators.com (No. 234)
3. Google, 13 (tie) Top 500 clients, including:
Costco Wholesale Corp. (No. 14)
Toys ‘R’ Us Inc. (No. 39)
YOOX Group (No. 79)
Security certification: Calming fears
Many consumers worry about the safety of buying online, and 71% say they exercise caution when choosing where to shop online, according to a survey by research and consulting firm Gartner Inc. Many online retailers try to soothe those fears by using security services that certify the safety of an e-commerce site. Of the Top 500 retailers, 58% use security certification vendors.
1. VeriSign Inc., 132 Top 500 clients, including:
Newegg Inc. (No. 9)
Overstock.com Inc. (No. 29)
Peapod LLC (No. 47)
2. McAfee Inc., 129 Top 500 clients, including:
Avon Products Inc. (No. 30)
Redcats USA (No. 34)
Cabela’s Inc. (No. 40)
3. Thawte Inc., 20 Top 500 clients, including:
Cymax Stores Inc. (No. 200)
Under Armour Inc. (No. 259)
KitchenSource.com (No. 427)
Site design: Follow a leader
Many online merchants that have been through an e-commerce redesign experience similar woes. Everyone—from technology staff to the marketing department to upper management—wants a say in how the site should look and function. And many times, those opinions clash. Pulling off a successful site redesign is not easy, but it can be done. Retailers who have done it offer a few tips: Put the customer first, establish clear objectives in the beginning and designate a redesign leader that no one, not even the CEO, can trump.
1. Fry Inc., 12 Top 500 clients, including:
Ann Taylor Stores Corp. (No. 108)
The Children’s Place Retail Stores Inc. (No. 149)
Meijer Inc. (No. 490)
2. GSI Commerce Inc.,
11 Top 500 clients, including:
National Football League (No. 123)
adidas America Inc. (No. 315)
Shop PBS (No. 400)
3. Razorfish, 5 Top 500 clients, including:
J.C. Penney Co. Inc. (No. 15)
Williams-Sonoma Inc. (No. 24)
Amway Global (No. 28)
Site search: Meshing the tools
The most successful e-commerce sites integrate site search and other key marketing tools, says Susan Aldrich, senior vice president with the marketing consulting firm Patricia Seybold Group. Combining site search with other key elements of an e-commerce platform can produce more sales, bigger orders and a higher sales conversion. Until recently many online retailers have focused on getting the basics working: a site search engine and taxonomy, product catalogs, and a shopping cart, Aldrich says. Site search applications have dramatically improved in the past decade and even more significantly in the past two years.
1. Endeca Technologies Inc.,
85 Top 500 clients, including:
SonyStyle.com (No. 12)
Costco Wholesale Corp. (No. 14)
J.C. Penney Co. Inc. (No. 15)
2. Omniture (Mercado),
45 Top 500 clients, including:
Williams-Sonoma Inc. (No. 24)
Overstock.com Inc. (No. 29)
Blockbuster Inc. (No. 37)
3. SLI Systems Inc., 37 Top 500 clients, including:
FTD Group Inc. (No. 60)
Hot Topic Inc. (No. 211)
ULTA Salon, Cosmetics & Fragrance (No. 339)
Web analytics: Marketing measures
As consumers shop more online rather than offline and marketers rely more on interactive online marketing channels, spending on web analytics technology will rise to $953 million by 2014, up from $431 million this year, Forrester Research Inc. says in a June report. Also driving demand for web analytics is an increasing quest for accountability in marketing campaigns and the emergence of a new crop of web analytics applications that provide more analysis of specific business operations, Forrester says in “U.S. Web Analytics Forecast, 2008 To 2014.”
1. Omniture, 220 Top 500 clients, including:
Dell Inc. (No. 3)
Apple Inc. (No. 5)
Best Buy Co. (No. 10)
2. Google, 123 Top 500 clients, including:
Blue Nile Inc. (No. 56)
CSN Stores LLC (No. 63)
The Swiss Colony Inc. (No. 91)
3. Coremetrics, 115 Top 500 clients, including:
Office Depot Inc. (No. 4)
QVC Inc. (No. 11)
Costco Wholesale Corp. (No. 14)
Web hosting: Know the basics
While web hosting can be the lifeblood of an e-commerce site, details such as server configuration and PCI compliance protocols are beyond the expertise of most business managers—they depend on the web host to deliver what it says it will, without firsthand knowledge of precisely how the process works. Scalability, redundancy and co-location issues, seamless rollover ability, and security are some of the key factors business managers should have on their checklist before handing off more detailed questions about the technical interface to the information technology department.
1. GSI Commerce Inc.,
28 Top 500 clients, including:
Victoria’s Secret (No. 19)
Toys ‘R’ Us Inc. (No. 39)
Ralph Lauren Media LLC (No. 88)
2. Rackspace, 26 Top 500 clients, including:
Coastal Contacts Inc. (No. 118)
Lamps Plus Inc. (No. 138)
Cymax Stores Inc. (No. 200)
3. Yahoo, 21 Top 500 clients, including:
OpticsPlanet Inc. (No. 197)
Online Stores Inc. (No. 352)
Organize.com Inc. (No. 476)
Web performance monitoring: Minding the store
Ensuring consistent and speedy delivery of pages becomes increasingly challenging for online retailers with the addition of new bandwidth-consuming features. And if it’s a potential problem when a single consumer interacts with a web page, it’s magnified by the demands of many consumers attempting to interact with a site during peak times, such as during the holiday shopping season. Web performance monitoring providers aim to help retailers manage the new environment. Yet only 55.8% of the Top 500 say they use a performance-monitoring service.
1. Gomez Inc., 113 Top 500 clients, including:
Amazon.com Inc. (No. 1)
Office Depot Inc. (No. 4)
OfficeMax Inc. (No. 6)
2. Keynote Systems Inc.,
38 Top 500 clients, including:
CDW Corp. (No. 8)
Costco Wholesale Corp. (No. 14)
HP Home & Home Office Store (No. 16)
3. AlertSite, 27 Top 500 clients, including:
Sierra Trading Post Inc. (No. 73)
Shoebuy.com Inc. (No. 90)
Potpourri Group Inc. (No. 150)
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