Mobile accounted for 25% of Ulta's e-commerce revenue during Q2.
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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.
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.”