May 11, 2006, 12:00 AM

Online retail merchandising ripe for improvement, Forrester report finds

With e-commerce basics nailed, retail sites must look to improve merchandising technology that boosts conversions. One third of retail sites surveyed by Forrester Research don’t even have site search functionality yet.

Internet retailers generally have nailed the basics of e-commerce, opening the way for them to start investing in improving their online merchandising with more innovative tools and technologies. And online merchandising is an area in need of retailers’ attention, notes Forrester Research, with conversion rates averaging only about 2.6% and some retail verticals averaging even lower.

A Forrester survey conducted for a recent report, “How to Master Online Merchandising,” found that the penetration of tools and technologies that improve online merchandising still has far to go among retailers. The most commonly used online functionality falling under Forrester’s definition of online merchandising tools was site search. With 54% of retailers surveyed saying they use site search, that means more than a third of the retailers still don’t have a site search function.

Among other online merchandising tools now in use among surveyed retailers, 55% said they had implemented technology to bring richer imagery to their sites, 47% use zoom, and 42% use swatching technology. A total of 41% use buying guides on their site, while 33% use A/B design testing. Customer ratings and reviews were cited by 26%, live chat by 26%, streaming video by 22% and personalized recommendations were used by 16% of the retailers. Gift registries and wish lists were cited by only 15% of retailers surveyed; 9% use 3-D rotation technology, and only 6% used virtual model technology.

“Even though online retail sites have evolved and matured, most consumers who come to those sites just don’t purchase,” says Forrester analyst Sucharita Mulpuru. “By engaging in efforts that place products more effectively throughout a web site and present features in a more engaging way, retailers can drive the incremental conversion improvements that dramatically affect overall sales.”

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