JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
Consumers’ wider adoption of broadband makes rich media more appealing to retailers.
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.
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.