Retailers shift their ad spending from TV, radio and print ads to digital ads.
How retailers control web site rich media to increase conversion rates
Online retail’s weakness-that technology cannot re-create the brick-and-mortar world’s ability to see and experience products-has been offline retail’s greatest comparative strength. But continuing developments in rich media are changing that equation, as tools like Macromedia Inc.’s Flash move beyond their early shortcomings to bring more real-life experience into online shopping.
“Rich media are beginning to blur the lines between online and offline retailing,” says Fred Almond, director of marketing for Toys R Us Inc.’s ToysRUs.com and Imaginarium.com, which employ a variety of rich media. “The decision to buy is often made by viewing the Flash or streaming video instead of viewing the product in the store.”
Just as in the brick-and-mortar world, effective merchandising boosts sales in the online world. Some retailers are reporting that rich media are the effective merchandising they need. While Toys R Us will not reveal the hike in sales that rich media have brought to its sites, other retailers are not as shy. EBags Inc. recently tested the effect of rich media by running two versions of eBags.com, one displaying products highlighted by rich media from Vendaria Inc., the other displaying the same products without rich media. The version with rich media produced a 19% higher sales conversion rate, says Peter Cobb, co-founder and vice president of business development.
That is within the realm of experience at other sites, says Mike McHenry, vice president of sales and marketing for Vendaria, which develops rich media projects based on Flash for dozens of retailers including eBags, Toys R Us, J. C. Penney Co. Inc. and Wal-Mart Stores Inc. “We’ve seen increases in online sales conversions of 10% up to 50%,” he says.
Rich media-particularly Flash-are expected to grow as a ubiquitous tool making web site merchandising and advertising more lively and interactive, according to web site designers and retailers. When it comes to exotic toys, flip-top cell phones or products like child car seats that raise questions about installation, online consumers are beginning to expect a near-real-life demonstration of how they function. “If you’re trying to show consumers how a complex product works-for example, you want to show them all the features of a cell phone-using Flash gives them the chance to play with the buttons and features and get a true sense of how the phone works,” says Nate Elliott, an analyst who specializes in rich media for Forrester Research Inc.
Furthermore, rich media can help customers better visualize a product’s dimensions and how it operates. “A static image doesn’t show scale,” says Rich Sadowsky, CTO of Vendaria. “A shopper can read text on dimensions, but with Flash or a video, she can see a vacuum cleaner in operation, how to change its filter, how well it moves over carpet, how to wrap the electric cord. That’s filling the gap between online shopping and real in-store shopping.”
In the advertising world alone, rich media will account for a rising percentage of online ad displays over the next several years, Forrester says. While expenditures on online advertising are expected to more than double by 2008 to $14.8 billion from $6.3 billion today, the use of rich media in online ads will more than triple, Elliott says. Although rich media include several forms, Flash dominates other rich media technology by a wide margin, he says.
Elliott adds that streaming video will also increase in online advertising, as rich media and streaming media combined grow to account for 39% of online ads by 2008, up from 11% this year.
Moreover, newer versions of rich media are beginning to create ways of improving the online shopping experience. Macromedia, for example, is testing a Flash-based shopping cart on its own European e-commerce site. The Flash-based cart is designed to immediately update a shopper’s total purchase amount each time he adds a product to the cart, helping to prevent common online shopping errors like adding the same product to the cart more than once, says Forrester analyst John Dalton. The cart is also designed so a shopper can expand or contract it separately from shopping pages, allowing a customer to continue shopping while viewing what’s in the cart. Such features address common complaints about shopping carts and should help reduce abandonment rates, Dalton says in a recent Forrester analysis brief, “Shopping With Flash: Finally, a Smart Cart.”
Still, for all the wonders of Flash and streaming video, retailers, developers and other industry experts caution that rich media should be used wisely. Despite rich media’s rising popularity, the technology is still known for negative characteristics that can disrupt the online shopping experience rather than enhance it. In spite of improvements in the last 18 months, rich media still require more bandwidth than is available to many consumers still on dial-up; rich media can require users to download a player that may not be supported on their home computer, and they can overwhelm online shoppers with moving distractions, making a web page appear more like a pinball machine than an organized place to shop.
“We want to use rich media on products that really need them for demonstration purposes,” says Almond of ToysRUs.com. “Otherwise, it becomes a distraction for site guests.” For example, ToysRUs.com uses streaming video to produce a real-life demonstration of the Screamin Serpent Roller Coaster from K’Nex. The demo, which is offered after a shopper has clicked on the product’s initial icon, details the roller coaster’s scale and operation by showing a child loading people figures into cars then the cars moving along the track. As the cars speed up and down the track, the demo provides the sound of screaming passengers.