Retailers face more choices than ever when it comes to powering their web sites. This special section outlines some of the issues and lays out how to make the right decision.
The move toward e-commerce
platform outsourcing
Scalability and flexibility are key reasons retailers are shifting
management of their web sites away from I.T. to service providers
As consumers flock to the web to shop, their expectations of the web store continue to rise. Today’s consumers want to shop at web sites with stunning graphics, intuitive navigation and seamless checkout.
Not surprisingly, many retailers are feeling the pressure to keep up with consumer expectations, especially since most retailers’ expertise lies in marketing and merchandising, not technology. Further compounding matters is that web site technology itself is advancing at such a dizzying pace that some retailers have yet to get their arms around the preceding generation of web site technology, let alone the latest applications.
Recognizing that their I.T. departments are already overloaded with managing internal technology issues, such as databases, systems networking, systems audits and maintenance, e-retailers are increasingly turning to outsourcing partners to manage web sites and keep them on the cutting edge of technological innovation.
“E-retailing is moving out of the era where retailers have to be engrossed in technology to successfully run the site,” says Jeffrey Max, CEO of outsourcing e-commerce platform provider Venda Inc.
The chief advantages of outsourcing are that the retailer doesn’t have to make technology investments upfront and at the same time achieves a system that can grow as the business grows. In the case of the former, retail managers can implement merchandising and marketing changes to the site without having to enlist their I.T. department for every alteration. In the case of the latter, e-retailers are spared the cost of adding servers that remain underutilized except during peak periods when site traffic and orders jump.
Always updating
“About 20% of the technology used to build an e-retail web site is going to change every two years, which means retailers are in a never-ending cycle of updating the functionality of their sites,” says Curtis Hampshire, general manager of e-commerce platform provider USi eBusiness. “Having an outsourcing partner that can implement and guide them through these changes is more important than ever, because I.T. departments don’t move with the same speed as the web. That’s why they are a cost center, not a profit center.”
Indeed, outsourcing firms which provide software as a service, widely known by the acronym SaaS, are better positioned to help e-retailers navigate changes in web site technology because they work with multiple clients that have similar needs. In contrast, many I.T. departments operate in a vacuum, which limits their view of the e-retailing infrastructure, making them reactive instead of proactive when it comes to implementing web site technology.
“Outsourcing firms have broader knowledge about the marketplace, best practices and how new technology is being applied than an internal I.T. department, which operates in an insular environment,” says Stephan Spencer, founder and president of e-commerce platform provider NetConcepts. “It’s rare for an I.T. department to be experts in all areas of the web site, whereas service providers hire the specialists needed to meet a retailer’s needs.”
Outsourcing to meet PCI
One prime example of an instance where outsourcing can save retailers multiple headaches as well as investment costs is PCI compliance. Created to protect credit card account data, the PCI standard is the card companies’ requirements for protecting card data, including who can store it and how. The standard is constantly evolving and therefore requires personnel dedicated to managing compliance. The outsourcing partner that hosts the payment processing for the retailer must undergo continual PCI certification, which spares the retailer that cost and effort.
“Not only are the rules for PCI compliance constantly changing, but compliance includes changing internal procedures and processes for handling payment data,” says Ken Burke, chairman of e-commerce platform provider MarketLive Inc. “It is hard and expensive for merchants to stay on top of all the changes, but an outsourcing partner can do it for them more efficiently and at a lower cost.”
Database security is another issue for retailers to consider. “Having a processor that is PCI compliant and stores transaction data in a hosted environment can decrease the retailer’s exposure to a data breach,” says Jeff Thorness, president of payments processor ACH Direct Inc. Outsourcing card processing and data storage makes sense for many retailers, industry participants say. “It reduces the retailer’s liability,” Thorness says.
This level of expertise and depth of human resources that technology requires means that outsourcing firms can act faster and less intrusively when it comes to implementation and site maintenance. Many I.T. departments are caught up in other duties and myriad technologies and they may not be able to keep abreast of changes in web technology and thus have difficulty when trying to fix problems. Such mistakes can result in poor site performance that degrades the shopping experience. Even if it is only a temporary problem, it can end up costing the retailer sales and harm customer loyalty.
Speed limits
“The rapid evolution of web technology limits how fast an I.T. department can update the retailer’s site because they are not seeing the entire world, only their little corner of it, and that can create site maintenance burdens that can negatively impact the retailer’s business,” explains Eric Best, CEO of online performance marketing and e-commerce platform company Mercent Corp. “The SaaS model allows retailers to keep pace with changes in technology without creating maintenance or implementation burdens on their business.”
Relieving the burden of maintenance and implementation on the I.T. department can be another huge plus in removing the potential for finger pointing when implementation of an application goes wrong. In many instances, marketing and merchandising will blame I.T. for the error and I.T. will argue the application chosen by marketing and merchandising is itself the root cause, not the implementation.
The battle to assign blame can be detrimental to an e-retailer’s business because it results in temporary inaction when it comes to fixing the problem. “The last thing any retailer wants is finger pointing between departments about what went wrong with the site,” says Mike Svanascini, COO of Americaneagle.com Inc., a provider of e-commerce platforms. “With an outsourcing partner, there is a clear line as to who is maintaining the site and performing implementation. A good outsourcing firm has the expertise to correctly handle these issues.”
Improved tech support is just one consideration when selecting an outsourcing partner. Cost savings and return on investment in new technology is another. Paying for the hardware to build an e-commerce platform and the software licenses for the applications to run it are a major expense for e-retailers, and the ROI for these purchases can be spread over a year or longer. Outsourcing an e-commerce platform can spare retailers these upfront costs and deliver ROI in as little as one month, depending on the extent of the services purchased, according to Jason Jacobs, CEO of e-commerce platform provider CoreSense Inc.
“The SaaS model is where the market is going because retailers only have a finite amount of capital to invest in their platform; the rest is spent on marketing and merchandising,” says Jacobs. “The SaaS model makes it possible for retailers to gain access to best-of-breed technology and lower their operating costs, which delivers a faster ROI on their platform.”
Some basic questions
Before considering whether to outsource management of web sites, retailers ought to ask themselves some basic questions to determine if outsourcing will fit their needs. The starting point is to determine the level of control they want over their site.
If retailers want a high level of control and if they want it to extend beyond marketing and merchandising, then licensing software may be the preferred route. “Retailers that exercise the most control over their site tend to operate it in-house,” says Larry Harris, vice president and general manager for site search provider Progress Software Corp., seller of the EasyAsk technology. “SaaS applications tend to take a one-size-fits-all approach and are predicated on everyone operating on a uniform platform. Internal applications can be closely customized to meet the individual needs of the retailer.”
Once the decision has been made to outsource the e-commerce platform, retailers need to consider to what extent the outsourcing partner will work with them to improve the site. For example, the growing emphasis on natural search rankings is prompting retailers to pay closer attention to how they categorize their products across all online sales channels. Proper categorization results in a greater likelihood of search engines finding the products when consumers are looking for them. Improved categorization also helps shoppers find items faster when they are searching on a retailer’s site.
”One of the reasons retailers are moving to outsourcing for help in categorizing is that it is tough for them to be experts at doing this even on their own sites,” says Rob Wight, CEO of Channel Intelligence Inc., which provides online content management and product information syndication services. “Retailers want an outsourcing partner to work with them on organizing and mapping product attributes so they are properly categorized.”
Customization
One of the ways service providers can work closely with retailers is by providing customized features and functionality. For some e-retailers, customization means the ability to turn certain features on and off as their needs change. This is particularly beneficial, for instance, when it comes to partnering with a payments processor that provides fraud detection services.
As e-retailers know, fraud is a moving target because criminals are constantly evolving their methods to stay a step ahead of fraud prevention techniques. Since many retailers do not want to create hard and fast rules that say a suspect transaction is automatically declined, they want tools that can be tailored to their needs. Thus many retailers look outside for partners not only with fraud detection and prevention expertise but who also can provide the big-picture view of fraud trends and who have made the technology investment to fight fraud.
At the same time, though, most retailers look for flexibility and the ability to customize to their own needs. “E-retailers want processors that can help them develop business logic around fraud detection that is unique to their business needs,” says ACH Direct’s Thorness. “In some cases, retailers will want a warning about a suspect transaction so it can be manually reviewed, rather than give a hard decline, and other times rules may be more stringent around hot fraud trends. These rules will change and e-retailers want to be able to turn them on and off as the situation dictates.”
Once a retailer has made the decision to outsource, the next step is to find the right partner. A good way to tell how closely a service provider is willing to work with a retailer to achieve the retailer’s goals is to look at the provider’s customer base. “Are their customers your competitors? Are they mom-and-pop retailers or major retailers?” Wight says. “A service provider’s clients will say a lot about the kind of work they do.”
Another question retailers ought to be asking a potential outsourcing partner is whether the e-commerce platform can deliver the flexibility to quickly implement changes as needed to drive traffic to the site, boost sales and deliver a unique customer shopping experience that is consistent with its offline shopping channels.
“Retailers need to be asking, ‘How good are the operating fundamentals of the potential partner?’ because that is what it boils down to,” says Accretive Commerce CEO Henry A. (Hank) Reeves Jr. “There has to be some demonstration of the technology behind the e-commerce platform that justifies the expense to the retailer.”
The proprietary question
Retailers must also consider whether partnering with an SaaS provider is locking them into a proprietary technology they cannot take in-house at a later date if they should decide to do so.
“Outsourcing relationships change and there are retailers that will want to pull their platform in-house once they reach a certain size in revenue,” adds Reeves. “If the retailer can’t purchase a license to take the platform in-house, then they end up rebuilding it, which is pretty costly.”
To verify the flexibility of an outsourcing partner’s platform and justify the expense of their fees, consultants recommend that e-retailers request a demo and look into any guarantees the provider may offer.
“There is no substitute for trying out an e-commerce platform in a live environment,” says Jeff Zimmerman, vice president of product management, e-commerce and online marketing for e-commerce platform provider Network Solutions. “Customer expectations of the web store are changing so fast that retailers without much technical expertise need assurances their outsourcing partner can deliver a flexible platform that will drive sales as markets change.”
Network Solutions, which provides its software on a hosted basis, offers a full money-back guarantee if a retail client is not satisfied with the e-commerce platform for any reason within 30 days of installation. “This helps put the retailer at ease, especially if it’s a small retailer with a limited budget that wants to compete with the big boys,” adds Zimmerman.
Finally, retailers ought to avoid being a guinea pig for a service provider. “No retailer wants to be the first to deploy a platform if they can avoid it because there is no track record with it,” says Scot Wingo, CEO of ChannelAdvisor Corp., which helps retailers sell online in various venues and offers marketing services.
Caution advised
This is not to say that any new service provider does not have worthwhile technology. In fact, new entrants in the market can be hungrier and have cutting edge applications that can more easily be integrated with applications from other vendors than established players.
But anyone testing a new platform for a vendor needs to be cautious. “If a retailer is going to be among the first to deploy, they need a contingency plan in place that gets them back on their old platform if need be,” says Wingo. “You don’t want to get caught short if the outsourcing relationship does not work out.”
Once these questions have been asked and answered, retailers can take a hard look at pricing. Advancements in web technology have brought standardization to much of the functionality being offered. As a result, application costs are being reduced.
“As the core e-retailing technology gets standardized, there is less room for opaque pricing today, because vendors are offering the same core functionality,” says Venda’s Max. “Retailers want a true fix on their core technology costs because money they save there can be applied to marketing and merchandising.”
As best practices spread throughout the industry, platform providers are offering more standard features. With little differentiation in their technology, platform providers must compete on price.
“The top-end platform providers pretty much offer the same core functionality,” says Max. “This is making platforms more interchangeable so that retailers can add what features they want from the platform provider of their choice. This level of standardization is placing more importance on pricing.”
Pricing clarity
The growing emphasis on price is expected to create a clearer picture of the cost to build and modify an e-commerce platform. “There used to be a lot of smoke and mirrors around pricing,” Max says. “But that is going away just as it has in other areas of e-retail technology, such as CRM, because once the core technology is standardized, the cost of the technology gets driven down and price becomes more of a differentiator. The platform providers that can’t deliver their service at a reasonable price will fall away.”
Price is only part of the equation. Some retailers are also placing a higher premium on support and service by retailers. “A good outsourcing partner will have global reach and the resources to provide top-flight service 24/7,” says Max. “Outsourcing lowers the I.T. expertise a retailer needs on staff so they must validate that the outsourcing partner can support the functionality of their platform.”
One question retailers ought to ask an outsourcing partner is whether the platform is proprietary or if the partner uses preferred software developers for add-on applications. If it is the former, it creates a barrier to doing business with other best-of-breed application providers, Max notes. “Retailers don’t want to be locked into a relationship with their platform provider,” he says. “What retailers want is more flexibility and control over their e-commerce platform without the technical headaches.”
After all, marketing and merchandising are the core strengths of any e-retailer, which is why they are more inclined than ever to turn over the management of their e-commerce platforms to a third-party so they can focus on doing what they do best.
Enriching the shopping experience through better customer interaction
With Web 2.0 technology, the sky is the limit
for creating a more satisfying shopping experience
With each generation of web technology online shoppers are becoming more discerning about the shopping experience. Today, online shoppers expect not only richer graphics and easier navigation, but also more payment options, customer reviews, more detailed product information and the opportunity to have friends and family participate in the shopping experience by showing them outfits created in virtual dressing rooms.
The move toward creating a richer shopping experience is being driven in large part by consumers’ desire for a more interactive shopping experience, similar to what they experience in a store. At the root of this trend is the wholesale adoption of broadband Internet connections which make it practical for retailers to support the new generation of web applications—and for consumers to experience them.
As consumers become more exposed to the new generation of web technology through such sites as the video web site YouTube.com, they expect other sites to provide the same level of engaging visuals and deeper content delivered in unique ways, such as videos of customer reviews as opposed to words on a page.
Whether a retailer meets these expectations directly affects conversion rates. As a result, retailers are adding features and functionality that enrich the shopping experience, and not just glitz that dazzles.
“Three to four years ago, retailers were content to focus on making their site work or adding hot new technology because it was in vogue, but now they are realizing the need to take it to a higher level and deliver a richer, more interactive user experience,” says Scot Wingo, CEO of ChannelAdvisor Corp., which provides technology that helps retailers sell and market online. “Once a customer comes to the site, a retailer must have the tools and information to deliver that richer shopping experience that will get a visitor to convert.”
Frequently referred to as Web 2.0, the new generation of e-retailing applications is designed to add value to retailers’ marketing and merchandising strategies.
“There is a growing demand from consumers for a richer online shopping experience, not just from a visual standpoint, but from an information standpoint,” says Jason Jacobs, CEO of CoreSense Inc. “Applications like Ajax are allowing retailers to do some innovative things with page presentation and features like PowerReviews are giving retailers a chance to incorporate consumer opinions about the products they carry into their marketing and merchandising strategies.”
Easier access
One of the benefits of Ajax technology, which is growing in popularity with retailers, is that it makes it easier for shoppers to access information. For example, when using Ajax retailers can instruct their e-commerce platform to deliver product information through a pop-up window when shoppers run their mouse over the image of the product, rather than requiring the customer to click to a new page.
“Web 2.0 technology like Ajax enables the creation of easier ways to interact with customers,” explains Jeff Zimmerman, vice president of product management and online marketing for Network Solutions LLC.
Enriching the shopping experience through better interaction is especially important for small and mid-sized retailers seeking to level the playing the playing field with larger brand name retailers.
“Large retailers try a lot of things when it comes to enriching the shopping experience and as shoppers get exposed to those efforts, they begin to expect the same thing from smaller retailers,” says Zimmerman. “If a smaller retailer doesn’t have it, it hurts their credibility.”
More product information
For some retailers, adding value to the shopping experience means enhancing the information that is wrapped around a product to go beyond basic descriptions, attributes and specifications to include consumer opinions. Hence, customer reviews are playing a bigger role than ever in retailers’ marketing and merchandising strategies. Customer reviews, part of the social networking trend on the Internet whereby consumers create communities through the sharing of opinions and ideas, resonate well with shoppers in their mid-twenties and younger, a.k.a. the Millennial Generation.
“Customer reviews are more meaningful to the Millennial Generation because they value opinions about a product as opposed to specifications and as such are immune to many of the marketing techniques preceding generations were raised on,” explains Curtis Hampshire, general manager of USi eBusiness. “These are savvy buyers that expect more depth of information when researching a product, which is why Web 2.0 technology is more meaningful to them and future generations.”
Often overlooked in the value of customer reviews is that they help create a level of trust between shopper and the product which can provide small retailers without brand recognition more credibility than they might otherwise enjoy.
“Shoppers will put more weight behind another shopper’s opinion of a product they are thinking about buying, rather than that of the so-called expert who in reality may have a conflict of interest or is a paid spokesman for the product,” says Network Solutions’ Zimmerman. “Customer reviews feed into the sense of community shoppers will turn to outside the Internet for information, and at the same time help small retailers that may lack brand recognition gain credibility with the shopper because they can provide the same level of information a larger brand name retailer may be delivering through customer reviews as well.”
The video review
The explosion of video on the Internet as part of Web 2.0 has opened the door to merge the medium with customer reviews. What differentiates videotaped customer reviews is that the shopper can put a face to the person providing the opinion, which makes the review more engaging.
“Video provides a more entertaining and engaging way to deliver content and that helps to pull the shopper into the product,” says Ken Burke, chairman of e-commerce platform provider MarketLive Inc. “It is a great medium to describe a complex product because a demonstration of how something works can be included or shown in a separate video. The success of YouTube.com has shown that consumers will dig to find online video content.”
While customer reviews have proven to be a powerful merchandising medium, they are not without management challenges. The challenge facing retailers with customer reviews is how to present them in a way that is consistent with their brand image as they move into different sales venues on the web, such as affiliate sites and comparison shopping sites. The goal is to use Web 2.0 technology to create strategies that target different buying communities.
“Retailers need to be asking themselves whether their e-commerce platform can support multiple marketing strategies across different online sales channels as they evolve,” says USi eBusiness’s Hampshire. “Shoppers today aren’t going to necessarily follow one path to a purchase.”
Before retailers can determine how they can enrich the shopping experience, they need to ask themselves some basic questions, such as: How can they build a better customer relationship? How can they personalize presentation of their catalog to the shopper? And how can they drive traffic through sales channels outside the web store?
“It comes down to having a good channel integration strategy and amazingly some retailers don’t have one yet,” says Hampshire. “Retailers not only need a platform that allows them to create multiple presentations of their catalog to fit targeted sales channels, but they must do so in a way that provides the deeper information target audiences want in a way that is consistent with their brand image.”
Uniqueness = success
Brand consistency is fundamentally measured by whether the retailer offers the right products through the right sales channel, such as placing low-cost items on affiliate sites known for discounting; providing real-time 24/7 customer support; and running on an e-commerce platform that can reliably support interactive applications and not fall down during peak operating periods.
“Creating a unique brand experience that is consistent across all sales channels is critical to success,” says Henry A. (Hank) Reeves Jr., CEO of Accretive Commerce, an e-commerce services provider. “It’s not just cool technology that delivers stunning visuals and interactive features, but customer support that resolves problems quickly, having the right product mix in each channel and efficiently processing and delivering orders to customers. The brand experience is about demonstrating the effectiveness of your technology to the customer.”
To achieve that goal, retailers need to thoroughly investigate whether their e-commerce platform delivers the features needed to drive traffic, handle orders and create value in the shopping experience. “Retailers ought to be asking whether their e-commerce providers can create interactions that duplicate as many of the experiences shoppers get in the store as possible,” says Reeves. “There are a lot of opportunities to create value across the platform and deliver it to the customer.”
How a retailer’s e-commerce platform influences the shopping experience extends beyond the shopping experience provided through the web store and order fulfillment to how they manage their marketing and merchandising strategies.
“Retailers need to look at revenue, profits, inventory turn and brand reputation based on customer satisfaction levels across all sales channels and then measure their impact on sales,” says Eric Best, CEO of Mercent Corp. “If retailers can do that, they can figure out if the next dollar spent on marketing, advertising, customer service or infrastructure adds to their business.”
Other investments
Once retailers are able to measure the impact of capital spent in these areas, they can make decisions about where and how best to invest in their business, especially in marketing and merchandising.
“When it comes to the e-commerce platform there is a lot of emphasis on the storefront and order management, but less so on promotion of the brand across all touch points,” says Best. “Retailers need a platform that can help them coordinate syndication of marketing and merchandising strategies across third-party sales channels and that can track the metrics of how they relate to sales velocity.”
Mercent’s retail platform is based on the concept of distributive e-commerce, which is about adding value to the shopping experience through whatever channel the retailer touches the customers. The platform supports product syndication, merchandising optimization, retail analytics, and transactional order processing across more than 35 online marketing channels, in addition to custom data feeds. Channels include transactional marketplaces such as Amazon.com, shopping portals such as Shopping.com, affiliate networks such as LinkShare, and online search engine marketing platforms such as Google AdWords.
“Retailers are working to maximize sales through these channels, but they don’t want to do anything to sacrifice the quality of their brand,” says Best. “Without an integrated platform that provides the tools to tie together and measure the impact each part of their business has on sales, it is going to be tough for retailers to deliver a value-added shopping experience regardless of the sales channel.”
Working together
Having an integrated platform means having components that work together and at the same speed to ensure that the platform can handle all exceptions that may occur across the retailer’s business, as opposed to just on their site.
“Retailers can’t just speed up one car on the train and expect the rest of the cars to function at the same speed,” says CoreSense’s Jacobs. “Analytics, inventory management, CRM, fulfillment, etc., all play a key role in providing a richer shopping experience and need to work together. Retailers need to start thinking about how they can leverage their platform to push content across all online sales channels in a way that creates a delightful shopping experience. If retailers can succeed in achieving this goal they can engender customer loyalty and attract repeat buyers.”
Having the web store work in conjunction with comparison shopping sites is essential. Frequently consumers will access a comparison site after they have placed an item in their shopping cart to make certain they are getting the best price. If the retailer lacks a presence on these sites, it raises questions as to why they are absent, especially if the shopper has linked to the retailer’s site through a paid search ad, says ChannelAdvisor’s Wingo.
About 75% of shoppers check an item on a comparison shopping site or a transactional marketplace, and many do it after they have placed in item in the retailer’s shopping cart, Wingo continues. “It’s a mind set,” he says. “If a retailer is in front of the shopper through paid search but not in front of them on a comparison site, it raises concerns. Retailers need to keep their inventory in front of the shopper across all the sales channels.”
When performing a price check, shoppers will return and complete the sale if they confirm they are getting the best price, in most cases. “The shopping cart is a holding platform,” says Wingo. “Just because shoppers take a quick look elsewhere to compare prices does mean they will abandon the cart as long as the retailer’s catalog is consistent in the other sales channels.”
Retailers that establish a consistent presence across all these sales channels can see a 5% to 10% bump in conversion rates, adds Wingo.
Catalog consistency extends to product descriptions, customer reviews, buyer’s guides and other information that can be wrapped around the product. “The more content provided, the better the conversion rate,” says Wingo.
A new checkout experience
Besides establishing a consistent presence across all sales channels, retailers also need to consider how to take checkout to the next level. One solution is to offer payment options beyond credit cards, which can boost conversions, as there are still millions of consumers reluctant to provide credit card information on the web to make a purchase.
“Not everybody feels comfortable using credit cards because of security concerns,” says Jeff Thorness, president of payments processor ACH Direct. “Payment methods like PayPal and BillMeLater are being adopted by major retailers, not just mom-and-pop retailers, because consumers are more comfortable with the security around them. The more payment options a retailer offers, the more they can boost conversions.”
Adding card-based or credit-oriented, non-card options only scratches the surface of what retailers can offer beyond credit cards. One option ACH Direct is working to develop is a so-called credit push, whereby consumers pay for purchases using the online bill payment applications through their banks. In essence, the processor connects the shopper to the bank’s bill payment application through the retailer’s checkout page.
Once connected to the bank, the shopper is presented an option to push funds through the bill payment application to the retailer. The funds are debited from the shopper’s checking or savings account and transferred to the retailer.
“The advantage is that this eliminates the risk of chargebacks, because the consumer initiates the transaction in a secure environment that requires they authenticate themselves in order to gain access,” says Thorness.
PIN cards
Another emerging payment option that is expected to become more widely available to consumers is PIN-based debit. Millions of consumers have PIN-based debit cards—ATM cards with personal identification numbers. Many actively use them to make purchases in the physical world, but do not have a credit card, preventing them from shopping online. Acceptance costs for PIN-based debit are about half those for credit cards.
The hurdle to widespread acceptance of PIN-based debit by e-retailers is creating a secure environment into which the cardholder can enter a PIN. “The industry is getting closer to creating a standardized secure environment for PIN debit and once that happens, consumers will get on board with it quickly for online shopping,” predicts Thorness.
Beyond enhancing the shopping cart, wish lists are another feature retailers can offer to enrich the shopping experience. The benefit is that a wish list provides a reason for shoppers to return to the retailer’s site. Often a shopper may run across an item she wants when making another purchase, but might not be able to afford at the time.
“A wish list gives the shopper a way to save the item so they can find it immediately when they return at a later date to make the purchase,” says Network Solutions’ Zimmerman. “It is also something they can share with family and friends to give ideas about what they want for their birthday, Christmas or other gift-giving occasion.”
The interaction that Web 2.0 creates can be extended to creating outfits. Apparel retailers can create virtual dressing rooms where shoppers assemble an outfit from a virtual rack of tops, pants and accessories and then e-mail the creation to friends and family for their opinion.
“It’s the same concept as coming out of a dressing room and asking a friend’s opinion of the outfit,” says MarketLive’s Burke. “Having the option to show the outfit to others builds on social networking communities that have become such a big part of the web.”
Home décor retailers can also take advantage of this functionality, enabling shoppers to decorate a virtual room, adds Burke.
Porous boundaries
Clearly, the advances in e-retailing as a result of Web 2.0 technology have no hard boundaries which means that retailers are free to push the limits of creating a richer shopping experience. What ties Web 2.0 together is not so much the capabilities of the technology, but the core principles surrounding its use to improve the ways e-retailers interact with customers.
“Web 2.0 is dramatically changing the quality of shopper interactions and those retailers that take advantage of this technology will have the edge because they are creating value, and those that don’t will lose traction and eventually disappear,” says Accretive’s Reeves. “It is a marketplace dynamic that retailers can’t ignore.”
