Internet Retailer - Strategies For Multi-Channel Retailing


Feature Article
Feature Article May 2000   
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Picture this: E-retailers aim to zoom, spin and model their way to higher sales

By Mary Wagner

Think 3D is a slick toy best suited to video games? Think again. Timebeat.com, an Internet seller of jewelry and watches, last year rendered several products on its site in 3D and offered shoppers a free downloadable plug-in, Cult3D from technology provider Cycore, so they could enable online viewing. Over the next several months, the retailer saw sales of the items rise 15% over when they were viewable only in 2D.

To date, it’s rare for online sellers to tie advanced visualization technology so directly to the bottom line. Most retailers who’ve experimented with enhanced product imaging technology say it’s still difficult to track their success rate with traditional measures like increased sales—or they’re simply not telling.

What’s clear is that an increasing number are testing the waters and investing in rich media tools, which are migrating to retail from games, entertainment and other industry sectors, to pump excitement into even the dullest product categories that may be difficult to sell online. Some 23% of online apparel sellers in a Forrester Research survey last year, for example, say they already used zoom technology; another 55% planned to add it.

And zoom functionality, which provides Web shoppers with closeups that show selected areas of a product in greater detail, is the bottom rung of the ladder when it comes to enhanced online imaging.

3D technology lets users rotate a product image for a 360 degree view. Other new technologies provide similar interactivity, letting users virtually open a laptop case to see how it works, build a virtual model and “try on” clothes, and even move through a 3D environment in a virtual room or landscape.

Getting real

In today’s competitive retail market, these enhanced visualization tech-nologies appear to be proliferating. “Online retailers that sell highly differentiated products are desperately trying to find ways to display the properties of those products on the Internet,” says Ken Cassar, senior retail analyst with Jupiter Communications. While the purchase of replacement or commodity product has become a no-brainer on the Web, consumers remain less willing to buy online what they can’t see or feel first. In fact, 84% of consumers in a Jupiter survey last year said that the need to see, touch or try on certain products would ultimately be a barrier to purchasing a wider range of products online.

A host of technology developers are striving to change that by working with Internet merchants to enhance the way products look on their sites. Among them: The Sharper Image uses Shells Interactive’s 3D Dreams technology to give customers a better look at exclusive products. Internet Pictures Corp.’s IPIX 360 degree visual content technology lets users tour car interiors on Autoweb.com, AutoNation.com and other automotive sales sites. Toysrus.com and babiesrus.com also have acquired the technology to build 3D functionality into their sites. In February, MetaCreations launched a trial run of its streaming 3D technology on J. Crew’s Web site, while the Warner Brothers Online

Store and Styleclick.com already use it on their sites. And 3Dshopping.com not only offers product rotation, zoom closeups and color changes for merchandise featured in its own online mall, but it powers 3D product rotation on Nordstrom’s recently-launched shoe Web site, which uses the same technology.

Benefits beyond sales

Even without a mass of evidence to prove that these enahncements boost sales, retailers say they see other benefits. 3Dshopping’s product image enhancements keep return rates at the online mall at less than 15%, well under average catalog return rates of 25% or more, says Joel Gayner, senior vice president of sales and marketing. The key, he adds, is that enhanced visuals shrinks the gap between customers’ expectations and the delivered reality—a frequent issue with unseen purchases. “When the customer opens the box with a high level of expectation that this is what they thought they purchased, returns go down,” he says.

Several retailers say enhanced visualization increases site “stickiness” and that consumers spend more time on pages where they can play with an image. “When a shopper is on a site that’s only 2D, he or she flips through page after page,” says Jim Madden, president and CEO of the U.S. operating unit of Sweden-based Cycore. “With [3D], people become participants. It engages them. They spend time learning about the product—interacting with it. It builds confidence and trust, and affects consumer psychology very directly.”

Building the brand

Other cited benefits reach deep into the issue of brand image. With personal stories and photos scattered among product shots and information, for example, the Lands’ End catalog has become known as an entertaining read. The company uses virtual modeling technology to extend that same sensibility to its Web site. In November of 1998, Landsend.com launched My Virtual Model online. The 3D technology, developed by Public Technologies Multimedia, lets shoppers key in their own measurements to build a virtual double that can “try on” selected clothes.

“About 450,000 models have been created since we launched, so we know people are using it,” says Jeremy Hauser, research and analysis specialist at Lands’ End. “Right now we’re looking at the application as more of a tool to help customers enjoy the site, to help them mix and match clothes, but less of a sales tool.” However, given the customer response, the virtual model may be well on its way to becoming just that. Working with Public Technologies, Lands’ End plans to roll out improvements later this year to increase the model’s realism, refine fit recommendations and expand clothing items available for trying on. JCPenney last year also added Public Technolgies’ virtual modeling technology to the plus-size section of its Web site.

Growing pains

Industry watchers also don’t discount the value of new products enhancing visualization as a media garnering tool. “At least for the time being, there’s a PR bonus for retailers in some of this gee-whiz technology,” says Scott Silverman, vice president of Internet retailing at the National Retail Federation, Washington. “If you’re doing something unique and it’s a first, there will be media that find it interesting. And if you’re trying to build an Internet brand, that can be useful. Some of these imaging technologies are ahead of their time, but consumers will grow into some of them as they get more accustomed to shopping online and using these applications.”

Early retail adopters may even be gaining extra benefits by being ahead of the curve, adds Jupiter Communications Web technologies analyst Billy Pidgeon. “What retailers get now is a way to differentiate themselves from others by giving customers a new experience that is different from other sites,” he says.

But like any emerging technology, enhanced visualization must find common ground between what’s technically possible and what’s practical for mainstream audiences. Two big challenges to widespread use of product rotation are that accessing the technology often requires a download, and many home shoppers don’t have high-speed Internet access, which greatly improves the quality and operability of the technology.

Industry sources say dial-up access is likely to remain the standard for home shopping for a few years to come (see “The Need for Speed,” April 2000). Jupiter estimates that only a quarter of consumers will have high-speed broadband access by 2003. And without high-speed connections, “A lot of consumers don’t have the patience to download plug-ins,” said one analyst.

Technology providers are only too aware of potential glitches with the user interface and aim for a download that’s as seamless as possible. That is, users should be able to click, download and install the plug-in in a few minutes without having to shut down their browser or close out all open windows.

That’s the intention, but the execution can be another matter, particularly given different equipment and connections among users and the expected wave of less tech-savvy shoppers to coming online. Error messages, lengthy downloads and plug-ins that should work but don’t may result from issues at the individual user’s end, beyond the technology provider’s control—but all shoppers know is that they’re frustrated and have a reason to bail out.

Solutions

That’s why online home furnishings retailer GoodHome.com chose to offer advanced imaging technology for decorating on a CD-ROM rather than as a plug-in. Site visitors can swap out computer-rendered upholstery fabrics on selected products through GoodHome’s proprietary iDecorate technology, which doesn’t require a plug-in, and the site will shortly add zoom functionality. 3D and more sophisticated options for manip-ulating virtual rooms, however, are left to the disk.

“A lot of our team comes from the tech side,” says corporate communications manager Adrienne Hankin of the site, which launched last September. “One of the first things we realized when converting applications to the Internet was that the minute we added a plug-in to the site, a good percentage of potential customers went away because they didn’t understand it. Anything that doesn’t go perfectly is a reason for customers to leave the site. And they might not come back.”

Public Technologies Multimedia’s My Virtual Model and 3D Shopping’s visualization technology also don’t use plug-ins “It doesn’t require a plug-in or a particular modem speed, but users do need to have a browser that’s level 3.0 and above,” says Hauser of Lands’ End’s My Virtual Model. “Our statistics say that’s more than 90% of our customer base now.”

Another approach to minimizing plug-in difficulties among users involves taking advantage of plug-ins users already have. Macromedia’s Shockwave and Flash are two of most common plug-ins for enabling enhanced online visualization. The Shockwave Player, required to view 3D on sites including Sharper Image, Palm Computer and Timex.com, provides interactive product simulations. The Flash player, used on the Web sites of Tiffany, Volkswagen and others, provides animation and other features.

Together, they’ve had hundreds of millions of downloads. They also arrive already bundled into ISPs and new or upgraded browsers under agreements Macromedia has with original equipment manufacturers—a strategy other advanced imaging technology providers also are beginning to pursue. “Macromedia has really been one of the leaders in OEM packaging and distribution of plug-ins. “If your browser doesn’t support it, it’s definitely time for an upgrade,” says Pidgeon.

Online retailers have found yet another way around the problem of widely varied system capabilities and connection speeds at the user end by offering two different viewing options. Online fashion retailer Boo.com greets visitors with a window that automatically tests the user’s connection speed and then advises the choice of either “full mode” viewing, which enables 3D imaging, or “simple mode,” which doesn’t. Users with less than a 56K modem connection can choose the 3D option, but are warned that viewing will be slower.

Making choices

To 3D or not to 3D? That is the question among Internet merchants still standing on the sidelines. Rendering product images for these features can add considerably to the cost of displaying them online.

As enhanced imaging spreads into e-retailing and implementation becomes increasingly easy for shoppers, consultants, technology providers and retailers who’ve pioneered the applications have advice to share with those still making up their minds. Among the key questions online sellers need to answer in deciding whether or how much to boost viewing functionality:

—Are some or all products candidates? It’s one thing to render a few key products for 3D or zoom—or even many more for specialty sites like apparel sellers—but costs will soar if you’ve got massive numbers of SKUs. “The online medium parallels the challenges of displaying merchandise in the real world,” says 3Dshopping’s Gayner. “You can showcase your high-profile items in 3D and present the meat and potatoes of the line in 2D.”

—What will it cost? Pricing models vary greatly. Some providers of advanced imaging functionality sell core technologies that can be developed and integrated onto a site by the retailer if the necessary expertise exists in-house. Some deliver a complete solution, including technology and integration, even working with a retailer’s existing multimedia supplier. Still others deliver a complete technology and integration solution, wrapped in a compre-hensive marketing package. In general, pricing models are based on a fixed licensing fee that can range anywhere from $5,000 to hundreds of thousands of dollars, plus a variable per-product charge.

—User connections? If most customers visit the site through slower dial-up connections, retailers might want to think carefully before adding anything that would slow down the shopping experience. The challenge for those providing advanced product images now is to deliver a shopping experience that offers something to both sets of customers with slower connections and those shoppers who already have high-speed access.

—What is the product mix? It’s doubtful that rotating, say, a box of diapers will pump up sales, and online purveyors of “flat” objects such as books and CDs don’t need
to spin them to sell them.

As retailers wrestle with the opportunities and pitfalls of the new viewing technologies, they might consider one last point: the landscape today will change significantly tomorrow. And at Internet speeds, that’s not far off.

“I’m not convinced that 3D rendering and zoom drive sales today. But I do believe they’ll become a critical driver of sales in the future,” says Cassar. “Those that are aggressively pursuing these technologies today are going to be in much better shape than everyone else when the market catches up with them.”

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