Cover story

E-commerce technology: Big bets on the web pump up the e-commerce tech market

Nordstrom plans to spend nearly $200 million a year for the next five years on e-commerce technology. And such other major retail chains as Lowe’s, Kohl’s, Best Buy, Office Depot and Williams-Sonoma are beefing up their web properties. Web-only retailers, catalogers and consumer goods manufacturers are investing along with the retail chains. One sign of this growing investment: e-commerce software provider Demandware’s revenue jumped 54% in 2011 over the previous year. In this story we’ll size the market for e-commerce technology, show how fast it’s growing and what’s driving it. Is it mainly the retail chains or are other retailers investing at the same pace? What kind of technology is most in demand? How is this changing the market? We’ve seen a significant consolidation, with such major technology companies as IBM and Oracle snapping up major e-commerce technology providers in the past two years. How is that changing what’s available to e-retailers and the service they can expect? And what about the newcomers to the market? The venture capital spigots opened up again in 2011, and in this story we’ll document how much of that cash is flowing into e-commerce startups. The story will also feature the leading vendors to the Top 500 retailers and why the most successful web retailers choose these providers of technology and services.

IRCE 2012 report

What the world’s largest e-commerce show reveals about industry trends

More than 9,000 are expected to attend the Internet Retailer Conference & Exhibition in early June in Chicago. And this show, the industry’s largest, will feature 175 speakers and an exhibit hall with more than 550 vendors. It’s the industry’s gathering place and each year provides a snapshot of what online retailers are doing to grow and the challenges they’re grappling with. This story will highlight the hottest trends that emerge out of IRCE, some of the key lessons presented by conference speakers and the major questions facing e-retailers that float to the surface at this big event.

Mobile in stores

What really works

With half of U.S. consumers carrying smartphones, there’s a rush to develop ways to market to those consumers when they’re in and around bricks-and-mortar stores. The Shopkick service, for example, lets retailers recognize registered consumers when they enter a store and make them offers based on their buying and browsing history. Various price-comparison apps let consumers use their mobile phones to scan bar codes on products to access information about those products from the web, including the prices offered by e-commerce sites like Amazon and eBay. The prospect of many consumers accessing the web to obtain product information, reviews and especially prices has retail chains spooked, and has created a new industry term: showrooming. But is this mobile technology actually changing the way consumers shop? How well do these services work in real-world stores? A recent study shows half of smartphone owners used their phones in stores to assist with shipping, but 37% had connectivity problems. To find out how well these services are working, Internet Retailer has dispatched senior editor Katie Deatsch to several stores to try them out, talk to customers and store associates, and then report back on her findings from the front lines of the showrooming battlefront. This story will report on what she found, and provide commentary from retailers and analysts about how well these systems work in general, and the role they’ll play in retailing in the future.

Social media

The social landscape beyond Facebook and Twitter

The popularity of Facebook and Twitter has spawned many new social networks, and some of them present clear opportunities for online retailers. Take Tumblr, a site that makes it easy to share blogs and multimedia content that has become a meeting place for the fashion-conscious. Its traffic exploded last year, with 18 million unique visitors each month, and the site raised $85 million to fund expansion. Then there’s Pinterest, which went from zero to 10 million unique visitors faster than any site in history, according to comScore, and is all about sharing images, including of products. Add in Instagram (just purchased by Facebook), DeviantArt, CafeMom, Ning and many others, and retailers have to be wondering how to address this rapidly multiplying phenomenon. This story will provide some guidance. It will identify the most important of the new online social networks, explain how they work and how pioneering retailers are turning them to their advantage.

Order management

The cross-channel puzzle

If multichannel retailers stand a chance of competing with Amazon, they have to offer shoppers something that an online-only retailer cannot—the ability to buy all the merchandise a chain offers in any and all its channels. That closing of the gap between stores and the web means that if a customer in a store doesn’t see an item in the right size or color the clerk can offer to order it from the retailer’s web site and have it shipped to his home—or one of its stores. Or if an online shopper wants a product immediately, the web site—or call center agent—can direct him to a store that has that product. That requires an order management system that gives stores access to web inventory and the web and call centers access to store inventories. This story will survey the order management landscape, reporting on how the technology is changing to meet cross-channel needs, how order management systems are helping retailers link their various channels and how taking advantage of enhanced order management systems impacts sales. It will also examine the obstacles to implementing this approach. That includes training store personnel to pack and ship orders, setting aside room in the store for packing or as a pickup point for web orders, and incenting store employees to order from the online store. Who gets credit for that sale? And then there’s the ultimate question: Do consumers really want to go into a store and wait while a clerk types in their online order, when they can go home and do it themselves? This story will look at the actual experiences of several retail chains to provide answers to these questions.

Online video

How to get more ROI out of video while controlling costs

E-retailers’ online videos run the gamut from computer-generated clips designed to drive immediate conversions to highly choreographed and slickly produced how-to’s and branding videos designed to generate interest (and eventually sales) for the merchant. This story will look at the level of ROI various video types produce, such as manufacturer-provided video, template/computer-generated video vs. human-touch, etc. It will also report on how e-retailers set and allot their video budgets. E-retailers will provide their perspective on when or whether it’s more cost-effective to produce videos in-house or to outsource production. And, regardless of which method they choose, how much training of personnel is required to get the most out of video? A sidebar to the story will explain how retailers can extend the reach of their video assets via social media. Which video types get the most views or shares on Facebook, YouTube and Twitter?

Fulfillment

How to turn “free shipping” into a profit center this holiday season

On 52% of the orders U.S. shoppers placed online during the fourth quarter of 2011 they paid nothing for shipping, says comScore Inc. That ticked up slightly from 49% during the 2010 holiday season, the previous high-water mark for free shipping. Consumers are being trained to expect free shipping, and Amazon contributes to that expectation with its low free shipping threshold (typically $25) and by signing up millions of consumers for its Amazon Prime program that provides shoppers no-cost shipping on all orders, no matter how small, in return for paying a $79 annual fee. Analysts estimate several million U.S. consumers have joined Prime. How can other e-retailers compete, without cutting into profit margins? Calculating the proper free shipping threshold has become a science for many web retailers, and in this article they will report on how they make their calculations and the results they’ve achieved. The story will also look at the various ways e-retailers can turn the shipping fee dilemma to their advantage. For example, a smaller retailer, SortingWithStyle.com, got good results last holiday season by moving to a flat $2.95 charge for most orders. Others offer free shipping to their highest-spending customers, on overstock goods or during peak periods. This article will summarize the most effective lessons web retailers have learned about how to gain sales, and profits, while meeting consumer expectations for free, or very low, shipping fees.

m-commerce

Tricks and tweaks for a speedier mobile site

A sprite is not just a fairy. It’s also a web programming tool. It enables a mobile commerce site developer to package numerous images into one file. Why bother? Because then a smartphone requesting a mobile web page will only have to load one file, the sprite, instead of numerous image files. This makes the process of sending data from a web server to a smartphone to build a page much quicker. And in mobile commerce, quicker is better for impatient smartphone shoppers. Retailers that have used programming tricks, like sprites, and design tweaks to speed performance of their m-commerce sites discuss how these techniques work, how they implemented them, how best to work with a technology provider or a performance firm to boost speed, and the results of their performance-enhancing efforts.

IRCE exhibitors

In case you missed us at IRCE

Bigger than ever. That’s the short description of the Exhibit Hall at this year’s Internet Retailer Conference & Exhibition. The 250,000-square-foot show floor will be nearly 15% bigger than last year’s record of 218,000 square feet, and organizers expect there will be 562 exhibiting companies to visit, up 11.5% from 504 last year. Even the most tireless retailer will find it hard to visit every booth on this massive show floor, so we’re going to give them a second chance in this special report and advertising supplement, IRCE exhibitor spotlight: In case you missed us at IRCE.

In this special section, IRCE exhibitors will recap the highlights of their announcements and the new products they unveiled at IRCE. They will explain how their products and services can help online retailers improve their results and discuss the trends they’ve observed in the fast-growing e-retail arena. The IRCE Exhibit Hall covers every kind of service provider active in e-commerce. And this special section will do the same. Specialists in online marketing, fulfillment, payment, analytics, web design, personalization and product recommendations, performance management, security and more will get a second chance to tell their stories to online retailers in this special report, IRCE exhibitor spotlight: In case you missed us at IRCE.

Supplement

Holiday strategies that will boost e-retailers’ profits in 2012

Summer is approaching, and that means one thing for online retailers: time to prepare for the crucial holiday season. With the economy on the mend, this season figures to be lucrative but also highly competitive. E-commerce grew at 16% last year, far faster than store sales, leading retail chains to invest more in their e-commerce efforts. That will put the heat on web-only retailers, catalogers and consumer brand manufacturers that sell via the web. The competition will ratchet up dramatically once the departure of the last trick-or-treater signals the start of holiday sales and promotions. Now is the time for online retailers to make their buying decisions, set their promotional calendars, add the web site features that will drive more sales, determine their mobile strategies, forge alliances with partners who will drive more traffic to their web sites and deliver the goods more efficiently, and make sure they have site performance, payment options and security ready for the busy fourth quarter.

In this special report and advertising section, Holiday strategies that will boost e-retailers’ profits in 2012, experts will offer insights on the steps e-retailers can take now to guarantee success during the holidays. They will discuss marketing strategies—e-mail, affiliate, natural and paid search, display advertising, retargeting and mobile—that can drive traffic. They will describe the sources of unique, low-cost goods e-retailers can order now that will help them drive traffic and profits in Q4. Key features of web site design that can boost sales, such as targeted product recommendations and security seals—will be explained, along with insights about how e-retailers can use web analytics to quickly understand how the 2012 holiday season is unfolding. E-retailers will learn how to tune up their web and mobile sites so that they display quickly, keeping impatient consumers from moving on to competitors. The report will cover online payment options that can boost sales, particularly from consumers that don’t have or prefer not to use credit cards, as well as the latest techniques for minimizing fraud. The role of mobile commerce—on the phone, via tablet computers and in bricks-and-mortar stores—will be covered, providing retailers tips on how to take advantage of this new channel that is rapidly transforming retailing. All this and more will be covered in this valuable report, Holiday strategies that will boost e-retailers’ profits in 2012, a must-read addition to the July 2012 issue of Internet Retailer magazine.