IRCE 2007: Report from the Conference

Media Center Interviews
Finding the right solutions in an evolving market

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During the Internet Retailer 2007 Conference and Exhibition, Internet Retailer conducted interviews with several executives from leading e-retailing solution providers. The interviews covered a wide range of topics from outsourcing the e-commerce platform, to choosing ­payment systems to how to create effective e-mail marketing campaigns. Below is a summary of those interviews. Click here to see them in their entirety.

More engaging content
Kieran Taylor, Senior Director, Marketing, Akamai Technologies Inc.

Web 2.0 applications hold the promise of creating a more interactive and engaging shopping experience. As a result, e-retailers will need an e-commerce platform that can support such Web 2.0 applications as a product configurator and that scale according to the retailer's performance needs. "Web 2.0 applications only enhance the shopping experience and reduce abandonment if site performance is adequate," says Kieran Taylor, senior director of marketing for web content acceleration company Akamai Technologies Inc.

A key measure of site performance is the ability to scale to traffic. Retailers that fail to anticipate load increases end up turning away customers, which is like padlocking the doors on the store, says Taylor. Akamai's 25,000 servers help e-retailers effectively manage traffic spikes and improve their business. "We've helped eBags increase buyers 15% and Ross-Simons increase revenues by $20 million," says Taylor. "Choosing an on-demand solution that scales to traffic and revenues can keep retailers from becoming a victim of their own success."

Keeping comparison sites fresh
Scot Wingo, CEO, ChannelAdvisor Corp.

The popularity of comparison shopping sites has made it imperative for e-retailers to more actively manage their presence in that sales channel. About 40% of consumers begin their buying decision through a comparison site; retailers that fail to provide comparison sites with an accurate and timely data feed of their product catalog can end up presenting stale data that does not reflect current promotions, which results in lost sales, according to Scot Wingo, CEO of ChannelAdvisor Corp., which provides services that help retailers sell in various online channels and populate comparison sites and search engines.

Retailers also need to consider the return on investment of comparison sites. If a product is not hitting its margin target, retailers might want to pull it off the comparison site or bid a lower amount for placement. "Retailers need to measure and figure the economics of the comparison channel and which comparison engines contribute most to their bottom line," says Wingo. "The aim is to measure the whole view of the channel."

Getting search engines the right data
Steven Roth, Vice President, Channel Management, Channel Intelligence Inc.

Although many consumers start their online shopping trips at a search engine, they are growing dissatisfied with receiving an abundance of generic results that lack the relevance and increase the time they spend searching for a product. In response, search engines are mandating the inclusion of product attributes in e-retailers' data feeds. The aim is to provide consumers the ability to conduct guided product searches based on product attributes, such as the size of a television screen. "Without product attributes there is a lack of search relevance," says Steven Roth, vice president of channel management for Channel Intelligence Inc. "The more attributes available, the easier it is to locate items in a search."

Channel Intelligence can help retailers harvest product attributes, including those provided by manufacturers, and map them to search engines. "The more consumers get exposed to this type of guided search, the more product attributes will be mandated," adds Roth.

Knowing global payments
Shane Happach, Vice President, Business Development, GlobalCollect

As more e-retailers expand internationally they find they must have an effective payments and fraud detection strategy. On the payments side, e-retailers need to tailor payment options to those of local international markets. "Payments cultures are very diverse in large e-commerce markets even more so in many of the emerging markets e-retailers are taking an interest in," says Shane Happach, vice president, business development, GlobalCollect

When it comes to fraud detection, retailers need to closely track the behavior of customers to understand their shopping and purchasing patterns. While this information is typically collected for marketing purposes, it can be used for fraud prevention. Another way to prevent fraud is to offer payment options that have an inherently lower risk of fraud and chargebacks, such as real-time bank transfers. "Retailers' core business is not payment and fraud management, it is retail," says Happach. "We can help provide a lot of the consulting services to create an effective payment strategy."

Strategies for e-mail success
Mike Atkinson, Director of Internet Marketing, House of Magnets (for Got Corp).

Boosting open rates for e-mail marketing campaigns is a major challenge facing e-retailers. House of Magnets, a multi-channel promotions company that offers team schedules on magnets and like merchandise, is using Got Corp.'s Campaigner Pro to successfully boost open rates through improved list segmentation. By setting its mailing strategies according to open rates, House of Magnets is targeting consumers with a lower response rate less frequently, which results in a more successful campaign. "It has also reduced customer complaints to their ISP about our mailings and that helps our reputation," says Atkinson.

Mailings sent with promotions for a team specific to the customer's geographic area have increased responses for those campaigns 40% to 50% over generic messages, he adds.

In addition, House of Magnets has used A/B testing to identify subject lines that result in better open rates, and which days and times are best to send a message.

Search engine optimization lives
Rob Murray, President, iProspect

With as many as 85% of search engine users' clicking on results from organic searches, retailers are putting a greater emphasis on ­improving their organic search rankings. "Once a site is fully optimized, every incremental click driven from a natural search listing leads to incremental revenue and profit that falls to the bottom line, as opposed to a paid search campaign where every click costs incrementally," says Rob Murray, president of search engine marketing agency iProspect.

Yet as important as optimizing organic search results is, many retailers do not keep pace with changes in the way consumers search for products, because once their search strategy is optimized they think no further optimization is needed. What many retailers overlook is that search engines' algorithms, competitors' search strategies, and interfaces between the search engine and retailer web sites are constantly changing. "Our role is to help retailers build a strategy that helps them stay ahead of the curve," says Murray.

The foundation of online success
Mike Wachner, General Manager, e-Commerce, Junction Solutions

Too often the online shopping experience falls short of consumer expectations, which reduces conversion rates and customer satisfaction. Implementing a next generation e-commerce platform can help retailers address these issues by increasing site performance and scaling to handle enormous traffic loads that can occur at any time and deliver global load balancing. Other considerations in selecting an e-commerce platform include guided navigation that helps customers shop by category and brand. "It's the little details of best practices that can strongly drive conversion and help the customer experience," says Mike Wachner, general manager, e-commerce, of platform provider Junction Solutions.

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Further, selecting a platform delivered through the software-as-a-service model not only reduces equipment, and support and maintenance costs, but also provides access to the latest applications as they become available. "This allows smaller retailers to take advantage of features that typically only tier one retailers would be able to," says Wachner.

Beyond business intelligence
Brett Kilpatrick, President and CEO, Panoratio Inc.

Having reached the limits of business intelligence applications for making sense of customer data, e-retailers are embracing analytics. What separates analytics from business intelligence is that it provides deeper insights into why a consumer made a purchase, greater detail about the shopper from a behavioral standpoint, and how shoppers make purchasing decisions.

"Business intelligence told retailers what was purchased, analytics tells them the who, why and how behind the purchase, as well as the what," says Brett Kilpatrick, president and CEO of data analytics provider Panoratio Inc. "It's about getting a composite 360-degree view of the customer."

By applying analytics to customer data e-retailers can quickly discover new sales and marketing opportunities they may have overlooked previously. "E-retailing is happening way too fast for daily reports, weekly summaries or monthly dashboards that are part of business intelligence," says Kilpatrick. "Analytics is about speed of information and that helps retailers understand the customer relationship and act to personalize the customer relationship faster."

Alternative payments boost sales
Diane Sasseville, Director of Sales, PayPal

As concerns about the security of credit card transactions on the Internet grow, consumers are demanding e-retailers offer secure, alternative forms of payment that allow for prompt checkout without the risk their account data can be compromised. Concurrently, alternative payments can help retailers drive revenue by increasing conversion rates. "Merchants who offer three or more payment methods can increase conversions at the shopping cart level by 14%," says Diane Sasseville, director of sales for PayPal, the payment provider owned by eBay Inc. "That translates to a payment strategy being a significant contributor to sales."

A key contributor to PayPal's allure to e-retailers is its account holder base of 145 million, which increases 5 million accounts per quarter. "This creates a beautiful network effect," says Sasseville, who adds PayPal is in 190 markets globally and supports 17 currencies. "As our user base grows, our merchant bases grows because they see the value of our users as a way to drive revenue," she says.

Getting the most out of rich content
Rick Martin, CEO, SellPoint

Consumer demand for a richer, interactive shopping experience is prompting e-retailers to use video as a marketing and merchandising tool. SellPoint's online product tours combine rich media presentation of the product with in-depth detail, such as owner's manuals, sell sheets and product reviews that can be downloaded. Shoppers spend more than two and a half minutes reading the information and viewing a product tour.

Product tours can also boost sales. A national retailer saw a 12% increase in sales between the web store and the storefront after adding product tours, according to SellPoint CEO Rick Martin. SellPoint makes product tours available to retailers at no charge, because production costs are underwritten by the manufacturer. Product tours can also improve customer retention and reduce returns because the depth of information in them usually answers all customers' questions so shoppers are likely to get exactly what they want. "You can't always get that level of information with a picture and a paragraph," says Martin.

Watching each shopper
Geoff Galat, Vice President Product Marketing and Strategy, Tealeaf Technologies Inc.

Viewing customers as a data stream is causing many retailers to suffer a disconnection when interacting with them. "Customers aren't data streams, customers are people and retailers need a full understanding of the human layer of experience that underlies customer interaction," says Geoff Galat, vice president of product marketing and strategy for Tealeaf Technologies Inc.

Tealeaf's customer experience management application captures each customer's interaction during the shopping trip and applies analytics to that information to help retailers understand what the customer saw and did while at the web store. It is similar to the observations in-store managers make about how customers shop and how staff interacts with customers. These insights have helped Tealeaf customers reduce the time and cost to fix errors by up to 60%, and improve conversion and customer retention. "Being able to drill down into why customers take the actions they do is key information every retailer needs," says Galat.

Keeping up with the changes
Curtis Hampshire, General Manager, USi-eBusiness

Retailers can expect about 20% of the technology used to build an e-retail web site to change every two years, which puts them in a never-ending cycle of updating site functionality. Subsequently, retailers need to consider the extensibility of their e-commerce platforms. "E-retailers need to ask whether their platform can realize new benefits from new technology or if it will require wholesale replacement with the next technological advancement," says Curtis Hampshire, general manager for USi-eBusiness, which helps companies plan and implement e-business initiatives.

Purchasing e-commerce applications delivered through the software-as-a-service model is a way to address this issue. The advantage of SaaS is that it provides easier integration between new and existing applications and future applications in development. Because retailers don't have to think about ongoing maintenance and patching with SaaS, they can focus on how to use the next new technology to benefit their business. "The SaaS model enables retailers to look forward instead of backward," says Hampshire.

An all-in-one platform
Jeff Max, CEO, Venda

The maturity of e-retailing is shifting retailers' focus away from building and maintaining an in-house e-commerce platform to outsourcing those responsibilities. The trend is being driven largely by retailers' desire to reduce infrastructure costs and reallocate those funds into marketing, merchandising and customer acquisition, as much as by the standardization of features and functionality offered by third-party platform providers.

"The aim is to use those savings to attract more customers and generate more interest and presence on their site rather than throw money down the hole for overpriced technology," says Jeff Max, CEO of Venda, which charges a flat monthly fee for its all-in-one e-commerce platform. "The old platform model is costly and ineffective."

When choosing an outsourcing provider, retailers need to consider the level of support provided. Questions to be asked include: Are call centers local? Are they locally staffed? Are they available 24/7? What kind of visibility can they provide into the service ticket through their web site?