When searching is no longer enough

But the landscape is different today—and a lot less lonely for Mercado and EasyAsk. Two start-ups—Endeca Technologies Inc. and Netrics Inc.—both landed significant customers in the last few months. And Endeca is part of a trend that now includes Mercado and EasyAsk toward broadening the definition of search results.

Given that the importance of search has risen dramatically on e-retailer’s to-do lists, it’s not surprising that more competitors are coming into the market. At the end of last year, 76% of 50 web site managers that Forrester Research Inc. interviewed said search is extremely important to their sites. Eighteen months earlier, 68% had rated search extremely important. At the end of last year, no site manager said search was not very important, while 6% of managers had given that answer 18 months earlier.

But at the same time, while 90% of respondents said they were taking steps to improve search, 40% said their efforts had yielded few results. “So much is going on in search,” says Harley Manning, research director, site design and development for Cambridge, Mass.-based Forrester Research, who was one of the authors of Forrester’s report, “Specialize Your Site’s Search,” that came out in December. “While we’ve got web categories that are contracting, such as web content management, there’s been an explosion of search vendors.”

Moving up the hit list

In fact, vendors’ own experience shows the importance that retailers are placing on search today. “Prospective clients are coming to us with search RFPs,” says Stefanos Damianakis, president of Netrics. “That shows they clearly understand the importance of search.”

And the growing importance of web shopping—whether to buy online or to research online and buy offline—is prompting many retailers to focus on search. “Many, many more retailers than we’ve seen in the recent past are anticipating a rebound in retail spending and so they are allocating capital dollars to fix search,” says Bob Alperin, CEO of EasyAsk, which counts LandsEnd.com and ColdwaterCreek.com among its customers. “It’s always one, two or three on their lists.”

Forrester identified nearly 80 vendors of various web search products, Manning says. Forrester includes 21 leading search vendors in its report and identifies five that excel in product search, which is most applicable to retailing. Those five were EasyAsk, Endeca, which powers the search at TowerRecords.com, Mercado, which powers the search on 70 sites, including Macys.com and Petco.com, Oracle Corp. and Requisite Technology Inc. Netrics, which powers the search at high-profile customer BMGDirect.com, was not included in the report but Manning says the company has good product-search software. Forrester gave high marks to some well-known names in web search, such as AltaVista, Google and Inktomi, which focus on content, but lesser grades in product search.

Not only has the market grown in the past year, but the definition of search itself has changed. Today, to most vendors of site-search technology, simple search results are not enough. Endeca, EasyAsk, Mercado and Netrics all offer some sort of search-and-browse results. With the search-and-browse technology, a customer searching for a product will get a list of search results as well as get the results sorted by various attributes. “It’s search coupled with appropriate navigation,” says Matthew Berk, analyst with Jupiter Media Metrix Inc. “It’s a great hedge against losing people.”

A consumer searching a site for a sweater, say, would get not only a list of sweaters, but also a list of sweaters sorted by attributes that she might like to browse through—cotton sweaters, for instance, or cardigans or pullovers, or perhaps by size. Each time she clicks on one of the attributes, the information is re-sorted so she can browse through her new selections by other attributes. For instance, she may choose to browse by size, then choose small. All the sweaters then displayed will be small, and they will still be sorted by other attributes. “It’s like being in a store that sells only the size you want,” says Yaron Dycian, Mercado’s director of product marketing.

Or someone searching for music can start the search with a genre then narrow down to such attributes as artist, compilations, price, oldies, etc. “We are giving customers the option to shop our web site however they want and use whatever path they want to take,” says Mark Bressler, direct-to-consumer division manager of TowerRecords.com. “It creates a portal-like experience.”

Up, up, up

TowerRecords.com represented a major win for Endeca when Tower agreed to install what Endeca calls its “Guided Navigation” product last summer for DVD searches. In January, Tower announced that it would use Endeca technology for all music and video search, replacing Mercado on the site. Since then, Tower has gone public with the results of the technology, giving the heretofore unknown Endeca much credibility.

TowerRecords cites an impressive number of statistics that back up search-and-browse advocates’ claims that the technology increases sales because it puts more potential products at customers’ fingertips, sorted in ways that make it easier for customers to find more products. Among the stats: Conversion rates are up 8.5%, average sales have increased 6%, video sales are up 29% while video orders are up 19%. Customers are spending 14% more time at the site. And gross margins have improved because higher-margin, back-catalog items are more visible to customers. All of this came at a time when TowerRecords.com was doing nothing new in marketing, Bressler says. “It’s a great cross-merchandising tool,” he says.

So far, TowerRecords.com is the only site using the search-and-browse technology, although the other vendors say deals are imminent. EasyAsk, for instance, rolled out Search Adviser toward the end of January and expects to announce an implementation soon. Mercado unveiled its new IntuiFind 5 in November and it, too, expects to announce implementations in the near future. Netrics has a cross-referencing feature on its product, but continues to stress search results over the browse capabilities.

That most retailers today rank the importance of search very highly and are looking for more effective search tools is not surprising. Failed search has been the cause of much lost revenue over the years. Jupiter Media Metrix reports that search is the first thing 16% of visitors do when they arrive at a site. In addition, 50% of visitors whose navigation attempts fail turn to search. But Jupiter says that as many as 85% of searches do not return what the customer is seeking. By that measure, only a slight improvement in search would yield great returns.

Thus if a site hosts 500,000 visitors a month, and 48% of visitors (the initial 16% who search plus half of the remaining 84%) search for a product and 85% of those searches fail, just over 200,000 potential buyers have left the site without being given a chance to even look at what they want to buy. “Most sites don’t know how to do search; they’re just bad at it,” Berk says.

Brittle technology

But achieving accuracy has been difficult. And that has given rise to the search-and-browse phenomenon. “The whole text search metaphor is wanting,” says Alperin. “Search technologies are very brittle because you’re searching on words that people enter into the box. But you can’t search literally, because consumers don’t know the merchant’s terminology.”

Furthermore, because of that very inaccuracy, searches may generate more results than any consumer would be inclined to browse through. Jupiter’s research found that 35% of consumers abandon a search after the first page or two because it’s too time-consuming. Those results are much like not assisting customers in stores. “If a shopper goes into a Macy’s and asks for a shirt, the sales associate isn’t going to say, ‘Go to the fifth floor, it’s full of them,’” says Dycian. “The clerk will ask if the customer is looking for a dress shirt, or a T-shirt, men’s or women’s, and so on.”

Still other searches may fail to produce results because the customer is basing the inquiry on brands the merchant doesn’t carry. But the search still may represent products for which the merchant carries a competing brand that a customer might be interested in if the customer knew the merchant had the product. And so, say search-and-browse advocates, the search needs to be guided, just as a sales associate would guide a customer in a store. “If you go to a store and ask for a brand they don’t carry, the clerk will interpret what you want and lead you to that product,” Alperin says.

To be able to sort on attributes, those attributes must be in the database to begin with. “There’s got to be some hook that we can grab onto,” Alperin says. By necessity, most retailers’ databases contain several attributes for each product, so the search-and-browse technologies can grab those attributes. But retailers need to beef up the data in databases for some products. The amount of additional information needed will vary depending on the age of the database and the retailer’s desire to have a variety of information in it. “We have one customer who put 200 attributes into the database for no other reason than he thought it might be useful some day,” Alperin says. He notes, however, that the addition of attributes can be an incremental process. “You don’t have to do it all upfront,” he says.

Taking a test drive

Until now, the search battles have been waged on the accuracy of search, with each vendor claiming its accuracy is better than the others’. Compared to the early stages of search, the products of the past few years have been a major improvement. Most rely on spelling-correction technology—type in Led Zepelin, for instance, and the search engine will automatically give you results for Led Zeppelin—and matching of concepts—type in slacks at a site where the database contains pants and the customer will still get an answer. But all still have their quirks. Any retailer wishing to check out a vendor’s claims need go no further than to sites that feature that vendor’s technology and type in a few misspelled words, analysts say. “The caveat to that is that there’s not a search engine that’s so awful that a lot of mechanical work by the site owner won’t offset a lot of shortcomings,” says Forrester’s Manning. “So not finding problems is not indicative that the search engine is wonderful. You really need to talk to the site owner to find out how much mechanical work they had to do.”

There’s also a contingent that argues that search-and-browse will only be as good as the search. Thus accurate search is still key because only with accurate search can a shopper be guided toward navigation. “The quickest way to connect to customers is to let them tell you what they want and then provide accurate search,” says Damianakis of Netrics. “You can generate a list of other products that have affinity with the product they’re looking for, but you need to make sure you’ve provided accurate search results to begin with for the affinity list to be accurate.”

Improving search on a site typically costs about upwards of $200,000. The average installation in Forrester’s research ranged from about $100,000 to $400,000. Sites with as little in sales as $2 million a year would experience a quick payback by installing systems at the $100,000 range, says EasyAsk’s Alperin. Vendors all say their search tools can be implemented in a matter of weeks or months and offer immediate paybacks in terms of increased sales. Tower Records, for instance, licenses the Endeca technology with a monthly fee. “We pretty much get it back at the beginning of every month,” Bressler says.

More retailers are sure to be looking at the investment in and payback from search, especially as the ability to compete in multiple channels becomes more important to success, analysts say. “A critical factor is having your customer be able to find information about your products,” Manning says, “whether they are buying online or researching online and buying offline.”

kurt@verticalwebmedia.com