E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
The evolution of site search from a navigation tool to a merchandising tool is driving retailers to implement the technology in ways never imagined.
As site search continues to evolve into a more sophisticated merchandising tool, retailers are recognizing greater uses for the data that powers their site search engine. The end game is to create a more enriching shopping experience that delivers a higher level of customer service, and subsequently boosts conversion rates and customer loyalty.
Not only are the latest generation of site search applications more intuitive when it comes to answering a customer’s inquiry, they also are user-friendly applications that deliver real-time information. Plus, they can be easily integrated across the entire enterprise to enhance such areas as customer service and the call center.
The payoff for retailers is the opportunity to reduce the reliance of marketing and merchandising departments on IT to implement new and creative uses for site search in an expedient manner. “Site search is a work flow tool that empowers the end user to create a more intuitive marketing and merchandising strategy,” says Stephen Baker, vice president, eBusiness for Fast Search and Transfer. “By expanding the ecosystem of information that makes up the site search database to enhance the shopping experience, retailers can differentiate their business.”
By pulling data from CRM applications, customer e-mail, Google, and web analytics, then linking it to their site search databases and placing it into the context of the customer inquiry, retailers are creating a more powerful marketing tool capable of boosting conversion rates by about 20% on average, and by more than 50% in some cases. “There is a lot of data that is part of the customer relationship building experience, such as product reviews and owners manuals, that can be integrated into the site search results to create a richer shopping experience the retailer can leverage as a point of differentiation,” explains Andy Wolf, industry manager, retail, for Endeca Technologies Inc.
Delivering a richer level of data creates a more intuitive search result that can create cross-sell and upsell opportunities for the retailer. “To grow, retailers need the means to sell customers more than for what and why they came to the site,” says Mercado Software Inc. CEO Corey Leibow. “Site search is a way to deliver information about related, higher margin products and get customers the information they need to make the purchasing decision in as few clicks as possible.”
Anecdotal evidence indicates that if consumers do not receive the site search results they desire within three clicks, 30% will abandon the site with each successive click. In comparison, retailers that can convert a sale in one or two clicks after a site search query can enjoy an increase in sales revenues of about 20%.
“It’s about delivering more sophisticated results that are put in context, not just a list of results,” says Doran Howitt, vice president of marketing for Thunderstone Software.
Thunderstone builds the spelling checker or “did you mean” function for a site search out of the actual words indexed on that site. These may include trademarks and the retailer’s own terms that don’t appear in a normal dictionary.
Part of the sophisticated thinking process behind the new breed of site search applications is real-time tracking. Increasingly, multi-channel retailers need to stay abreast of inventory in all channels, price changes, and pricing for corporate or preferred customers. “Search results tied to availability of the product and current price optimizes the site search engine by helping customers zero in on what they are looking for faster, and creates a positive shopping experience,” says Shaun Ryan, CEO of SLI Systems. “A positive experience gives customers a compelling reason to return to the site.”
There is no such thing as too much data, or data too ambiguous, when it comes to site search optimization. “It’s less about an elegant algorithm and more about delivering the right results,” says Tony Frazier, program director, content discovery marketing for IBM Corp. “Putting the search query into context before returning the answer allows merchandisers to configure the weight of the query to drive a more personalized experience and create sophisticated merchandising scenarios.”
In giving the merchandising department more control over site search, retailers gain flexibility over how best to interact with the customer to complete the sale, while maximizing use of the web site and their stores. “Retailers that can track whether a customer makes a site search query from home, office or a mobile device and the time and day the query is made can use that information to create customized results that mean something,” says Fast Search and Transfer’s Baker.
For example, when a customer logs on to a retail site from a location other than his usual location (say, from office rather than home) and searches for an item that is out of stock on the web, the retailer should be able to direct the shopper to a store with the item closest to the current location rather than closest to the location from which the shopper usually visits the site. Web operations need the ability to know from where a customer is shopping as well as the ability to know which stores have what in stock. Retailers can then further sweeten the deal by offering an incentive, such as a discount or free gift, to purchase the item at the designated store. “The more retailers weave information about the customer query and how customers interface with their site search, the better the chance of returning a result that aligns with the customer’s shopping objectives at that particular time,” adds Baker. “Putting more intelligence into search to anticipate the needs of the customer boosts the ROI on the application.”
Part of the intelligence is to recognize the device customers are using to access the web site. This is increasingly critical as the Blackberry and web-enabled cell phones gain market share. While these devices make it possible for consumers to shop anywhere, they are limited in screen size, not to mention the time they may require to scroll through a large block of search results. “Sometimes it is better to take the customer directly to a landing page or show the top three results for a couple of categories so they can choose how to deepen the search,” says Endeca’s Wolf. “This gives merchandising more control over the user experience by servicing customers in specific ways.”