Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Yet some experts argue that the nature of the online environment makes placement less of an issue on the web than in print media or in stores, at least for some merchandising activities. Fry’s research shows that bargain lovers behave similarly online and offline, hunting down promotional messages regardless of where they’re located on a page in the same way they’ll search out promotions in catalogs or stores. “Some retailers have experimented with outlet and clearance areas on their site, and even in cases where the area is not labeled prominently shoppers find it,” Carter says. “That indicates that shoppers do read, they do scan, and they do respond from a click perspective favorably to words over images in some cases, depending on the impact of the message.”
And the impact is highly subjective. “If a woman is going to a site to shop for herself, men’s khakis aren’t going to interest her even if they are in a large image in the center of the page,” points out Fahrland, Fry’s executive creative director. “So to some degree, you can say that users will click on what they came for, whatever it is. Placement is almost less important on the web than in print because so much of what users see on the web is driven by what they are looking for.”
That makes on-site search one of the most important merchandising tools for online merchants. Product presentation as driven by site search remains, to a large extent, an activity unilaterally controlled by the shopper. So now, merchants are exploring ways to weave more merchandising right into the search function.
Crutchfield has for three years offered a “What fits my car” feature that filters search results to show shoppers only the audio components that will fit their particular car, based on information the shopper has provided on the make, year and model. The feature is powered by a proprietary database of more than 3,000 cars that Crutchfield has built up over the years, by measuring the relevant dimensions of new cars at dealerships and combing junkyards for older models. Now, with a well-developed knowledge base about not only what fits but what works best in each car for the home audio installer and what other elements are needed for installation, Crutchfield will use the information in a recommendation engine it hopes to launch on the site later this year.
“Today, when the site recognizes your car, we just make it harder for you to select a component that we know won’t fit your car. That’s a narrowing process. The new feature will go beyond telling the user what will fit to say that because he is driving Model X, here’s the system that’s the most popular, and here are the things that go with it,” Rimm-Kaufman says. “Rather than just helping shoppers avoid the pitfalls of the wrong selection, it will present stronger recommendations.”
Personalization is directing more online merchandising as increasingly sophisticated technology evolves to support segment-specific and even customer-specific offers, based on both purchase history and data supplied by the shopper. Vendor Art Technology Group Inc. offers software solutions and services that build customer profiles based on implicit personalization, that is, a customer’s shopping behavior, and explicit personalization, information supplied by registered customers. Several ATG clients have gone live with the company’s personalization technology within the last year, and the roster includes retailers such as J. Crew, Nieman Marcus and Best Buy.
Hunting and fishing gear retailer Cabela’s Inc. attributes much of a 60% lift in web site sales last Christmas to ATG’s Commerce personalization product, which allowed it to change merchandising on the site to coincide with the preferences and purchase history of individual registered shoppers. Now Cabela’s is working with ATG to take it to the next level: the creation of a personalized navigation bar for registered users. If a shopper wants information on camping equipment, for instance, but has registered no interest in guns or hunting gear, only the relevant product catalogs will be listed on his personal navigation bar.
“The technology is supporting online merchandising, which is all about allowing the customer to quickly and easily navigate and get access to the items they want,” says Scott Todaro, product marketing manger for ATG Commerce.
Online retailers have depended on the accumulated experience of their merchandisers to present products effectively. Now they are getting a hand from a new generation of analytic technology that pinpoints online shoppers’ behavior with a new level of precision to inform better merchandising decisions.
DoubleClick recently launched a tool for web merchants that will feature analytic solutions in four modules, one specifically targeting the measurement of merchandising effectiveness online. “To run an e-commerce business, you need to go beyond the basics such as conversion rate and top-selling products to find out not just what is happening on your site, but why,” says Heller. “If you’ve got a top-selling product, you want to know is it the product itself that is appealing, its position on the page, its price? We try to isolate what’s behind the conversion rate for a product so retailers know what to work on to improve it.”
DoubleClick’s merchandising effectiveness tool, now in use at the web sites of beta testers Crate & Barrel, J. Jill and Flax Art & Design, tells merchants which products are selling best to which customer segments, which sections of a site are generating the best returns, why and when shoppers abandon carts and average order size or number of items by customer segment. In combination with other elements of the company’s SiteAdvance suite, the tool pulls the data needed to make decisions on changing campaigns or product presentation out of its usual repository in the IT department and puts it directly into the hands of merchants.
The tool reports data that identify key business questions about site performance; the answers guide merchandising decisions on the sites. “One of our beta testers (not disclosed) always had a large product image in a particular place on the site, and the company wondered if it was working for them in that space,” Heller says. “Our answer was, not really. It was generating incremental sales of the product, but analysis showed that the vast majority of sales of this product were coming from people who found it by site search or in the product category section. The special promotion placement wasn’t doing much. So the business decision became, is this the right product for that placement?”