Food and gift basket sales increased 4.7%, but total e-commerce, which includes online and telephone orders, increased less than 1%.
Keeping up with rising expectations
How retailers meet the demand that shopper expectations place on their web sites
The Internet of 2005 is not the same Internet of 2000. And that’s creating opportunities for retailers to sell more merchandise online-and opportunities for companies that help online retailers deliver unique shopping experiences. “The richness of the web environment today gives retailers lots of options to enhance their web sites,” says John Rozen, chief operating officer of Mirror Image Internet Inc., a provider of content delivery solutions for online retailers.
Not surprisingly, experience has shown that consumers respond to web site enhancements by buying more. And retailers recognize that. In Shop.org/Forrester Research Inc.’s State of Online Retailing 8.0 report, while only 47% of retailers offered product zoom, 100% rated it as effective or very effective as a merchandising tool. Ditto for color/fabric swatches (used by 42%), 3-D rotation (used by 9%) and color matching (used by 9%). Other high ranking techniques included virtual model (implemented by 6%, rated effective by 83%) and streaming video (22% and 64%).
A growing market
As the relatively low proportion of implementations suggests, retailers have been constricted in rich media use until now. That’s primarily the result of consumers’ lack of bandwidth. Now more than 50% of homes access the Internet through a broadband connection and that’s opening up the possibilities for-and greater retailer interest in-such enhancements as zoom, pan and demo videos.
“The timing was wrong in the past,” Rozen says. “We have seen a movement toward greater interest in web site enhancements starting around the beginning of this year and already most retailers are building their sites with the broadband Internet user in mind. The previous efforts were premature, but now the market has caught up with the retailers.”
The movement toward a more robust online experience has two components: rich media that helps retailers display products more effectively and digital content, particularly music but also movies, that consumers download from web sites.
Certainly consumer adoption of broadband has made retailers bolder in trying advanced applications on their web sites, but so has the rise of companies like Mirror Image. A few years ago when retailers wanted to enhance their web sites, they had to turn to their own IT departments for development. And with few options for distributed computing, they had to increase their own server capacity to handle the greater demands that rich media and digital content place on a network.
Today there are companies like Mirror Image to not only develop and run the applications but also to assist in distribution. “The trick is to find the right technologies to use and to distribute the applications closer to the end user,” Rozen says. “Most retailers don’t want to build that infrastructure.”
Mirror Image has developed a number of products to help retailers meet the new demands of online shoppers. Among its major offerings are support for such rich media applications as Windows Media Player 9, Macromedia Flash, On2 Technologies’ video compression applications and Scene7’s e-catalog applications.
The rules engine
At the heart of Mirror Image’s offerings is an extensible rules engine that allows a retailer to set rules about which users will get which content. For instance, a retailer can deliver to the user certain information based on time of day, location of the end user and even the user’s browser speed (dial-up vs. broadband). As more retailers use the rules engine the technology becomes more sophisticated, Rozen says. “We learn with each customer, we see what each one is looking to customize, we see the problems they are solving, and every time we learn something, we provide that information to all our customers,” he says.
While providers such as Mirror Image have helped retailers solve the problems they face in improving the online shopping experience, challenges will continue to develop. One of the fastest to develop, Rozen believes, will be shopping on portable devices. And that will change the kinds and amount of content that retailers will deliver to consumers. For instance, retailers will want to provide briefer product descriptions and possibly lighter images to handheld users. “Shopping on portable devices is coming-it’s a year and a half away at the most,” Rozen says. “And so we’ll continue to see a movement toward making different rules for different client environments.”
Mirror Image, whose customer include Lillian Vernon, Orvis, Pacific Sunwear, Barewalls and others, will continue to develop services and look for other technology vendors it can support, such as it does with Microsoft, On2 and Scene7, Rozen says. “We’ve always thought of ourselves as a partner rather than as a vendor,” he says. n