Retailers shift their ad spending from TV, radio and print ads to digital ads.
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In addition to making it easier for customers to order furniture online, Ballard`s use of color swatching has helped call center reps assist customers better. This has effectively channeled more orders online while reducing the amount of time reps spend on the phone with customers. What`s more, rich media advancements have made it possible for customers to place their own custom furniture orders online; previously, they had to call in custom orders. Now, more than 30% of custom orders are being placed online and call center talk time has been greatly reduced.
Unlike some recent converts, Coach was an early adaptor of rich media. Three years ago, Coach started using spot zoom on such portions of its bags as snaps, stitching, and buckles. The primary benefit, the company believes, is that customers have been able to experience online the in-store shopping experience. Offir notes, however, that he can`t quantify how much the advancements have helped online sales.
"We don`t know rich media`s total impact on sales," Offir says, "but we do feel our catalog is such a great marketing vehicle that this technology has allowed us a way to provide a comparable online experience at a relatively low cost." Offir won`t reveal Coach`s actual investment in rich media, but considers it "reasonable."
No picking and choosing
Coach has successfully given customers greater detail of its bags through the use of spot zoom in conjunction with color and pattern swatching, Offir says. Unlike larger retailers, such as Neiman Marcus, which offer tens of thousands of SKUs online, Coach offers 300 to 400 styles and three colors per style, resulting in 900 to 1,200 SKUs, Offir says. "So we can afford to treat each product online with care and display each to the best of our ability," he says. "We don`t have to pick and choose--we can afford color swatching and spot zoom across all our products." Coach likes the interactive experience so well that it recently launched a Try This Bag On feature for handbags (see box).
Coach hasn`t had to do anything on its end, insofar as increasing bandwidth is concerned, to accommodate rich media. "We were delighted when in the middle of 2003 RichFX launched its zoom technology off a nonproprietary piece of software," Offir says. "Users at first had to download a flash player, but RichFX made a flash software program that virtually everybody has on their browsers. So consumers no longer need to download any software they might not be familiar with."
Unlike other evolving technologies whose costs go down as their popularity increases, rich media`s cost has stayed stable, vendors say. "In the early days of the rich media market, vendors would sell their services at a loss," says Scene7`s Mack. "But now the industry is being run by solid long-term businesses, so pricing has been pretty consistent the past couple of years."
That`s not to say, however, that rich media implementation costs the same today as it did four years ago. "The actual cost of something like spot zoom hasn`t gone down--the labor involved with setting it up for each photo has," Cremault says. Vendors say a retailer can spend from a few thousand dollars to a few hundred thousand dollars, depending on how many products they choose to apply the various technologies to.
Many retailers work closely with either RichFX or Scene7. Retailers say that by partnering with their vendors, they`ve cut costs because the vendors leverage the infrastructure they`ve built for other retailers. "Scene7 shares its image production system, so we get the benefit of using images in its combined network," says Sharma of Anthropologie. "We didn`t have to pay for extra bandwidth since we`re part of Scene7`s hosted environment." Scene7, in turn, partners with Akamai Technologies Inc., a network that delivers content. This way, instead of having the vendor`s servers serve every single image to every single end-user, the end-user`s computer actually requests images from Akamai, which has servers all over the world.
Anthropologie is using Scene7`s Infinite Imaging Network hosted ASP solution to create and deploy all imagery and online catalogs for its web site. As a result, the retailer has improved production cost and time up to threefold without straining Anthropologie`s in-house technical resources or requiring additional capital investments.
In addition to working closely with their vendors, retailers have learned that they must nevertheless proceed with caution. When Ballard last year introduced color swatching for its leather products, for example, sales decreased at first, Hansen says. "The problem was that we changed graphics to accommodate the color change technology," she says. "We initially replaced color swatches for the item with a button to click through to the color change option. Removing the swatches from the first place the item was viewed diminished sales. So we redesigned the button so it represented all the colors available and sales have since come back."
Ballard and other retailers are also cautious about exploring more advanced forms of rich media, such as video and animation. For most retailers, video "has yet to be proven for its ability to drive sales," says Freeman Evans of Jupiter Research. "And although most retailers have product photos they can repurpose for zoom or panning, they don`t have video to repurpose."
There`s a limit
Hansen says that most newer rich media technologies, such as animation and video aren`t as important as color swatching and zoom. Likewise, Sharma of Anthropologie says she has no interest in the more advanced rich media, such as animation and video, for its web site. But like Coach, which has used some animation in its customer- requested e-mails for nearly two years, she believes animation will make sense for personalized e-mails to Anthropologie`s core customers, which it plans to do this year. "Now that we have the system in place with Scene7, it can offer us the capability to do better personalized customer e-mail," Sharma says.
Although few mainstream retailers want to make the plunge into video or animation on their web sites now, some other marketers are leading the way. In addition to a number of automobile manufacturers, TV home shopping marketer QVC uses video on its site that`s not repurposed from its mainline TV sales pitches.