Giving the customer what she wants— and making it easy to find

Coldwater Creek’s customers like the Coldwater Creek web site. In fact, last year, Jupiter/Media Metrix rated it the stickiest e-retailing site. But customers coming to the site couldn’t search for what they wanted. Rather, they had to drill down through the various product categories before they zeroed in on their purchase.

Coldwater Creek was well aware of the drawbacks of a site with no search ability. “With that system, the customer can’t define what she wants to see,” a spokesman says. But Coldwater Creek was hearing clearly from its customers that they wanted to zero in quickly on what they were seeking. “This is a customer service issue,” he says.

Many retailers are familiar with the search phenomenon of goofy results. A customer who types in “no-iron slacks” is as likely to get a listing of irons as he is of slacks. And in many cases, if the product is not described as slacks in the database, but rather as trousers, the customer is likely to not find at all what he is looking for.

Reluctant to create such an experience, Coldwater Creek did without a search function. But in March, Coldwater Creek customers were able to start searching for what they wanted. No longer did they need to map their way through the site to find the goods. The difference: Coldwater Creek had been sold on natural language search and implemented a system from Easy Ask Inc.

Most retail web sites today experience a 2% browse-to-buy ratio, meaning that 98% of the customers who visit a site leave without buying. “Search is one of the primary areas that people complain about,” says Larry R. Harris, chairman and founder of EasyAsk.

EasyAsk and rival Mercado Software Inc. are out to change that. Easy Ask today is rolling out its search capability. Mercado has been installing natural language searches on e-retailing sites since 1999.

The importance of quick, accurate search results cannot be underestimated, say market observers. “Search is one of the most important things consumers do online,” says David Schatsky, research director for Jupiter Research. “It’s vital to shopping and one thing that retailers should be paying close attention to.”

And an efficient search is particularly important. “The online shopper’s patience is very, very finite,” says the spokesman for Coldwater Creek. Coldwater Creek spent several months testing the EasyAsk system before rolling it out. “This will expedite the whole process and we’re expecting it will close a lot more sales,” he says.

Harris launched EasyAsk in 1999 to develop a natural language search engine. The company grew out of Harris’s work with computational language as far back as the early 1980s. Harris, who holds a Ph.D. in computational linguistics from Cornell University, was focusing on the use of natural language technology to retrieve information from computer systems. In 1981, he developed a system to access data on IBM mainframe computers. Eventually more than 600 corporations used the system, called Intellect, for a variety of applications.

That success led to the development of an Internet-oriented search application. “This product was really the result of frustration from doing searches on the web and seeing how bad they really are,” Harris says.

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By contrast, EasyAsk, as well as Mercado, applies thesauruses to the search function and instructs the software that someone who types “slacks” is looking for trousers and pants. Similarly, someone who types in “cardigan” is looking for a sweater and if she types in “rose” she might be looking for pink.

Furthermore, EasyAsk also can ask for a clarification. For instance, if a consumer types “Simmons” into the search box, EasyAsk can inquire if the consumer wants Simmons mattresses or Richard Simmons exercise tapes. Harris says the company feared the follow-up question would make the system look less than adequate. “But we found many retailers viewed asking for clarification as an enhancement in terms of customer service,” Harris says. “Instead of looking stupid, you look quite smart.”

Retailers pay a one-time licensing fee of $30,000 for a site performing 50,000 searches a month and more for busier sites. They also pay an annual maintenance fee based on the number of searches. “That gives us a price low enough for small sites but it doesn’t leave a lot of money on the table when we get large sites buying,” Larry Harris says. If a retail site exceeds the contracted number of searches, EasyAsk will re-negotiate the price; the software will not disable searches when the number exceeds the contracted amount.

Payback could occur within six months, David Harris says. For instance, a retailer with a 1.5% conversion rate and whose site performs 100,000 searches a month would have 1,500 sales a month. At $100 a transaction, sales equal $150,000 a month. Such a site would have paid $50,000 in licensing fees. “If we improve that by only 10%, we are increasing monthly sales by $15,000 a month,” David Harris says. “If you assume all those are incremental sales and the margin is 50%, the payback comes in six months, using the most conservative assumptions.”

Mercado charges a one-time implementation fee of $40,000 to $100,000.

While EasyAsk can make compelling arguments about the payback rate, the company still faces significant barriers in the marketplace. “The biggest barrier,” David Harris says, “is that most e-commerce applications already come with some kind of search built in. We hear from many retailers, ‘I know it doesn’t perform the way I’d like it to, but it’s free.’”

To address that obstacle, EasyAsk urges retailers to perform click-stream analysis to learn which are the most visited areas of a site. After the home page, the second most visited site at most retailers is the search page, says Larry Harris. Third: “no results found.”

Nonetheless, online retailers often have so many pressing needs that improving the search function falls low on the priority list. “Companies with web sites have more things to do than they have time and resources to do them,” says Schatsky of Jupiter Research. “And many are really understaffed in the area of analyzing data. They don’t have the manpower to look at the search results the way they should.”

In addition, Easy Ask faces Mercado, which has a track record that dates back to mid 1999 with such retailers as Towerrecords.com, Sears.com, Webvan.com and Blockbuster.com. “We have been selling our search solution since 1998,” says Yaron Dycian, Mercado’s director of product marketing. “We were evangelizing the concept.” He says it took Mercado 18 months to break through retailers’ disbelief that there was a problem. Eventually retailers began recognizing the problem: “There was a large complex catalog being accessed by search users who had no technology knowledge. They just wanted to find what they were looking for.”