August 1, 2005, 12:00 AM

SPONSORED SUPPLEMENT: Site Search: Creating the Online Precision Shopper

One thing is sure about site search: It never sits still. What started as a search function to help shoppers find what they were looking for evolved into a search and navigation function that allowed shoppers to narrow their choices or even go off in different directions. That in its turn evolved into a merchandising function that allowed retailers to present search results in ways that highlighted products they wanted to promote. And today, even that is almost passé as technology developers explore new ways that site search can assist retailers in making sales.

In fact the name “site search” itself, may no longer be apt. “The shift to search, browse and merchandise has already moved through much of the industry,” says Israel Aloni, senior product manager for search technology developer Mercado Software Inc. “Today, people want to enhance that approach so it’s not just merchandising and marketing but also analytics to know how people use the site and what people want from a site.”

Variety of features

In addition, retailers want to use site search results for a wide range of applications. “There’s a whole variety of features available today,” says Stephen Baker, head of emerging opportunities and vice president of e-business for search technology developer FAST Search & Transfer. “The trend in search today is to use the data for personalization, to understand user behavior, for one-to-one marketing. It’s all about how you use search to tailor the shopping experience.”

On top of all the functionality that developers are building into site search and that retailers expect is the fact that not all vendors see the market the same way. “There are a lot of differences among vendors, we’re not all just following each other,” says Geoff Brash, vice president of marketing for search technology developer SLI Systems Inc. “In addition, we’re seeing a great variety of differences in what our customers are looking for in search.”

The evolution of site search has occurred in a relatively short period. Only four years ago, retailers were happy to install a search product that would correct misspellings, include synonyms, such as shirts when a customer searched for a blouse, and eliminate the vagaries of automated responses, such as returning a list of no-iron slacks when a shopper searched for an iron or toys that required a certain type of battery when shoppers were searching for a battery.

A must-do

While a fair number of retailers have been slow to adopt improved site search technology-a survey in the fourth quarter 2004 by Chicago-based consultants The E-tailing Group Inc. reported that only 54% of 100 sites tested returned correct results on misspelled words-vendors forged ahead to develop a search-and-navigation function that not only returned correct results but also sorted the results in a way that allowed shoppers to browse the merchandise.

After that, search vendors developed merchandising capabilities that allowed retailers to display search results in ways that helped them meet their business objectives; for instance, by margin, by current promotions, by inventory status and so on. Then the technology got into providing data for upsells and cross-sells on the product page and in the shopping cart. That higher level of sophistication has become required today. “It’s a must-do thing for retailers today,” says Eric T. Peterson, site technology and operations analyst for Jupiter Research and author of Jupiter’s just released “Site and Commerce Search” report.

That constant evolutionary spiral has raised expectations and today retailers are looking for a lot more. “Once retailers and b2b organizations realized that search was mission-critical and navigation-critical, they realized they could do a whole lot more,” says Kevin Lindsay, Mercado’s director of marketing. “They realized it can allow them to engage in more active selling, including cross-sells and upsells.”

Mercado today includes such functionality as A/B testing, personalization and customer segmentation, all built on its site search platform. One of its goals is to allow online retailers to offer an even better experience than customers would get in a local store. “If you go to a nice local apparel store, the sales personnel might know you and what you like to buy, so they can make suggestions,” Aloni says. “Online sellers want to do things that are similar. But these are enhancements that are not available in the real world. We can help them create business rules that affect the entire shopping experience.”

The feedback loop

Part of that offering includes a feedback loop that tracks everything that happens after a customers enters a term into a search box, such as which items shoppers click on, which they place in a shopping cart, which they abandon and which they buy. Mercado’s system then uses that information to inform the results of future searches. It also reports which were the most popular search terms.

Mercado introduced its business rules solution a year ago and just earlier this year began offering tools so that the end user could create business rules and run the analysis without having to get technological assistance. “Retailers expect tools so they can make their own decisions,” Aloni says.

SLI Systems also offers analysis of how shoppers use search, looking at the terms they search on, which they click on, which they ignore and how long customers take to peruse lists before clicking, among other factors. Then, like Mercado, it uses that data to improve future searches.

Such refinements are important because they lead directly into better search results, which in turn create more sales. “The data exist to improve results,” says FAST’s Baker, “but most people aren’t doing anything about it.”

FAST’s search product includes merchandising tools that allow managers to sort results based on rules. “Usually when someone comes to a site and types in a term, it’s very ambiguous,” Baker says. “The classic problem with site search is the generic query. If someone searches on ‘digital cameras,’ the merchandising tool allows the product managers to decide what they want to promote for those queries.” Such criteria might favor products with the best margin, or that are the most popular, or for which the retailer has excessive inventory. “Search engines have created different kinds of tools in which it is easy to change business logic,” Baker says.

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