Spurred by consumers’ adoption of broadband, rich media stages a comeback
By Kurt Peters
Rich media on web sites has been on a roller coaster ride. At first, wowed by the prospects of virtually re-creating the store experience online, retailers deployed rich media because they believed it would boost conversion rates. Then, when reality set in and they realized that consumers were leaving sites where graphics took too long to load, they cut back. Now rich media appears ready to make a comeback, spurred by consumers’ increasing adoption of broadband Internet connections and their willingness to buy after they see a rich media presentation.
“We felt good enough about what rich media has done for our web site when we tried it on some products that we decided it was a good feature for a lot more,” says Gary Dembart, executive vice president of handbag and apparel manufacturer and retailer Dooney & Bourke. Now as Dooney & Bourke adds products to its site, it adds color-swapping and zoom features from RichFX Inc. “We really believe it enhances the way people look at our products,” Dembart says.
Dooney & Bourke is not alone in re-assessing rich media presentations on retail web sites. And while there’s no land-rush return to advanced product rendering, as rich media is also known, a growing number of retail web sites are flirting with some form or other of rich media. In fact, 31% of retailers had planned to have some kind of rich media on their web sites by this past holiday shopping season, according to a survey from Jupiter Research Inc. Zoom and color swapping are the most widely used. But 3-D presentations appear on sites as diverse as Dell Computer Corp. and Eddie Bauer. Macromedia Inc.’s Flash technology is used to help customers build products at such sites as bag retailer Timbuk2.com and confectioner Eli’s Cheesecake.
More perceived value
Now with consumers’ growing acceptance of broadband Internet access, analysts are encouraging retailers without rich-media presentations to get ready for them. “Broadband users see more value in rich media product presentation,” says Carrie Johnson, analyst with Forrester Research Inc. who has just issued two reports on the impact of broadband on retail presentations. “They value zoom and 3-D more than they did when they were dial-up users.”
The market may be
shifting to the point where broadband users become the prime movers of web content,
she says. Forrester’s surveys underscore the importance of broadband users:
In the past three months, they spent 70% more online on average than dial-up
users: $552 vs. $324. Further, according to Nielsen/NetRatings data, broadband
users spend 43% more time online than dial-up users. More than a fifth of American
Internet households will be broadband users by the end of this year and that
will reach nearly a third by the end of 2005, says a new report from eMarketer
Inc. “Before, everyone was worried about annoying the dial-up user by offering
too much,” Johnson says. “But it may now be more important to avoid annoying
the broadband user by offering too little.”
But just like the rest of Internet retailing, retailers are smarter about rich media today and realize that there is a cost to providing such enhancements as zoom, video presentation and 3-D views. “There’s always a higher cost associated with providing that kind of functionality,” says Matthew Berk, analyst with Jupiter Research, who follows the web site content market and the effect that various media offerings have on web site performance.
A retail site will need greater bandwidth to deliver the experience and will probably have to adjust the product display on pages to allow areas for higher-quality graphics to appear, Berk says. Rich media display also can require more photographs of products—30 shots for the product to rotate on a single axis, 60 if it will rotate on two, Jupiter says. And there will be additional costs in staff training, in more quality assurance to make sure customers are seeing the presentations in the way the retailer intended them to be seen, and in more storage, hosting and operations functions, Jupiter says. “Retailers will always have to do some amount of labor to take advantage of rich media,” Berk says.
Labor-saving technology
But if retailers are performing the labor now, at least consumers don’t have to. In the first versions of rich-media, consumers often had to download programs to run the presentations. And while that seemed natural to the techies who developed the programs, it only seemed scary to consumers who had little idea what downloading a program meant, other than the possibility of viruses. “We’ve made a lot of progress in the past year in knowing what’s too much for consumers and what’s the right amount,” says Paul Cimino, COO of RichFX. “We were trying to push the bleeding edge of technology, but we took a step back about a year ago. Now we are introducing technology at a level that consumers are looking for.”
RichFX’s zoom and color changing are now based on Flash technology. “We wanted to make sure we didn’t alienate the user,” Cimino says.
Retailers’ interest in rich media is also growing, analysts say, as they try to get the most out of their web site investments. “If you’ve spent thousands of dollars to shoot your product images, you need to be able to use them in more than one spot,” says Tim Bigoness, vice president of marketing of Equilibrium Technologies Inc., San Rafael, Calif. At the same time, rich media does not exist as an end in itself. “It’s hard to convince a company to invest in just rich media, unless there’s an ROI,” Bigoness says.
That’s a big caution these days, analysts say, but one that can be approached in a number of ways. Increased product sales is the measure that most retailers look to when they implement rich media. Berk reports that The Spiegel Group Inc., for instance, experienced a 101% increase in conversion rates when it applied RichFX’s zoom technology to a test of 250 products last year and expanded it to 1,640 products at the end of the year.
Higher conversions
Similarly, another manufacturer and retailer of women’s accessories who did not wish to be named performed an A/B test of rich media and reports higher conversion rates for the rich media users vs. the static media users. “The test definitely produced higher conversion rates for customers who delved deeper into the technology,” says the Internet manager for this company. “We sell expensive accessories and so the more information you can provide to the customer, the more comfortable she is buying online.” That retailer thus has made a commitment to rich media. “Virtually every product is zoomable and you can change the color with a click,” the Internet manager says.
As that experience and the experience of Dooney & Bourke show, retailers of luxury goods may be in the best position to invest in rich media today. For one thing, a recent survey shows that buyers of luxury goods turn to the web first for product information, before they read magazine articles or look at newspaper or magazine ads. And higher income consumers have wider acceptance of broadband Internet connections than the general population.
Forrester reports that average annual income for broadband users is $70,000, while for dial-up users it’s $53,200. “Broadband shoppers’ appetite for product information is nearly insatiable,” says Forrester’s “Broadband Produces Smarter Shoppers” report. They are 11% more likely than other shoppers to find zoom important and 46% more likely to create custom apparel.
Thus some retailers conclude the rich media investments are worth it. While his assessment of the efficacy of rich media is intuitive, Dembart of Dooney & Bourke believes that customers have responded to zoom and color swapping. “Our web business is 50% higher than it was last year and that’s without being listed at portals or doing banner ads,” he says. “We think it’s because people are getting a better look at individual products.”
The next step for Dooney & Bourke’s rich media presentation: The color choice box in the order form will automatically populate as the customer swaps the colors on the image. It expects that feature to be available soon.
Manufacturers, too
But it’s not just retailers who are using rich media technology to display products on the web; manufacturers are doing so also. “We’ve seen a big increase in interest from manufacturers who want to produce 3-D presentations for retailers,” says Tim Palmer, vice president of marketing for Kaon Interactive Inc., makers of 3-D technology. Some of the rich media technology is flexible enough that manufacturers can provide different presentations of the same product to different retailers. “Circuit City doesn’t want customers to come to their site and see the exact same presentation that a customer would see at the Best Buy site, for instance,” Palmer says.
Having manufacturers take the lead makes sense because of the cost to a retailer of producing 3-D presentations of all the products at a site, he says. “It would just be way too much money for retailers to buy it for all their products,” Palmer says.
Box vs. computer
Nonetheless, some retailers are spending the money for their own product presentations. 3-D technology provider Viewpoint Corp., which counts The Speigel Group’s Eddie Bauer among its customers, reports that creating a 3-D presentation can cost as little as $200 for simple QuickTime presentation to into the five figures for an elaborate 3-D presentation that allows customers to configure products or rooms of furnishings and that pulls availability information from a product database. “A 3-D presentation of a box is a lot different from a 3-D presentation of a computer that you can open up and look inside of,” says Michael Hoydich, vice president of eastern sales of Viewpoint.
Rich FX charges a set-up fee of $5,000 to $10,000 and $50 to $100 per image for rendering and hosting.
Analysts also note that the most efficient way to present rich media on a web site is to construct a database that works across channels. Such a database will then feed the correct images to the web sites for thumbnails, larger views and rich-media presentation. But the key is to make the material in the database accurate from the start. “You should take product shots that can be used across any medium,” says Burton M. Smith, vice president of strategic alliances for digital asset management company MediaBin Inc.
In fact, Smith adds, since many of the digital assets that populate web pages are only now being created, retailers should take advantage of the opportunity to get ready for rich-media presentations. “The basic blocking and tackling is still being done,” Smith says. “When retailers create their product images now, they should be thinking in terms of being able to use the images on the web site in multiple ways.” MediaBin has a relationship with Kaon to provide the rich-media portion of its services.
In spite of retailers’ growing enthusiasm for rich media, there are still
voices of caution that urge careful analysis of ROI. “There’s a business case
you have to prove,” says Berk of Jupiter. “And that is: Will it sell more product?
How much more? And on what kind of products will this work best?” A better first
step than embracing rich media, Berk says, could be a lot of still pictures
of a product from different angles. “Take incremental steps,” he says. “Experiment
at the high end and measure the uptick. It all comes down to whether these selling
tools help push products.”
kurt@verticalwebmedia.com
