May 31, 2006, 12:00 AM

The New Merchandising

In the young world of online retailing, merchants still look for the right way to present products.

Retailers in the bricks-and-mortar world have had at least 100 years to perfect modern merchandising techniques. But for Internet retailers, getting the right product to the right customer is still very much what one merchant describes as a “test-and-learn” process. Retailers still haven’t found how to bring to online shopping the salesperson’s expertise that results in consumers finding what they want-and sometimes more than they wanted.

That’s not because online merchants aren’t trying. Retailers are using everything from tools that allow shoppers to focus on even the most minute features of a product-a waterproof zipper, for example-to so-called virtual search reps that deliver detailed information on an item straight from the manufacturer’s web site.

And many of the new merchandising tools are designed to be user friendly for the retailer. For example, merchandising staff at B&H; Photos can update content on the latest digital camera simply by setting up a feed or installing a piece of JavaScript code on a product page.

Thus far, no technology has emerged as the go-to tool for merchandising. “A lot of online merchandising is based on having information from the different databases-customer information, product information and inventory margin information,” says Jupiter Research analyst Patti Freeman Evans. “Having that all meld together isn’t so easy.”

But if there’s one thing retailers understand, it’s the importance of merchandising. And so they are testing a variety of approaches to making online shopping as appealing to consumers as an in-store visit.

The North Face:

Where details count

Sometimes a picture is not enough, even if it’s a close-up and in color. That’s the case at The North Face Inc., manufacturer of high-tech outdoor and athletic wear. Much of North Face’s outerwear uses state-of-the-art fabric and zipper technologies designed to meet the unique needs of hardcore and outdoors athletes. “We feel it’s really important to call those features out for the consumer,” says Sarah Gallagher, online manager.

But at the same time, The North Face sells everyday clothing such as socks and t-shirts, “where just a basic zoom and color change work best,” Gallagher says. As such, the manufacturer needs tools that are flexible enough to handle both merchandising requirements.

The North Face found the answer to its merchandising needs with Fluid Inc.’s new Concept Retail online merchandising suite. With Concept Retail, North Face can set up a guided zoom feature, which enables shoppers to zero in on specific features of a jacket with accompanying text explaining the technology. Or it can set up the most basic zoom and color feature.

The results have been impressive-up to a 72% increase in conversion on some products, and for people who make repeat visits, up to a 300% increase in conversions. “Overall, we’ve seen about a 100% increase in conversions across the site,” Gallagher says.

For The North Face, improving shoppers’ online experience means giving them detailed descriptions of higher-priced items. “Because our products are so technical, we have higher price points,” Gallagher says. “Someone who’s going to spend $500 on a jacket wants to know what they’re spending their money on.”

The North Face uses Fluid’s guided zoom technology to create so-called hotspots-small boxes overlaid on the product image that a shopper can click on to get a magnified view and a brief description of a product feature. For example, the retailer might want to highlight a zipper on a jacket, explaining the technology used to make it waterproof.

To set up the hotspot, a member of the merchandising staff clicks on the image of the jacket, clicks on the zipper and then writes a sentence about the technology around that, Gallagher says.

Employees can learn how to use Fluid’s merchandising tools in about a two-hour training session because the technology is web-based and “really intuitive,” she says. “There’s no coding at all. It’s just a lot of drag and drop.”

In addition to the display features, the Fluid Concept Retail suite also includes a custom product configurator and a product selector tool.

Merchants also can integrate analytics and supply chain data into their online merchandising decisions, says Andy Lloyd, Fluid’s director of product management.

Guiding the customer to the right product

Consumer electronics retailer Abt Electronics Inc. is using another approach to helping consumers narrow their field of choices at The Glenview, Ill.-based retailer uses a customized product recommendation tool from Guidester Inc. Abt tested the tool with 13 products and received positive customer response, says Jon Abt, vice president of marketing. “We plan on adding more,” he says.

Guidester is designed to present consumers with a more manageable array of products based on their personal preferences, says Joe Chin, CEO. He cites the example of a shopper looking for a digital camera. “The problem consumers always encounter is that there are just so many choices,” he says. “We call it the wall of products.”

The Guidester tool enables shoppers to narrow those choices by asking them what features they are looking for in a product. To install the tool, retailers simply set up on each category page a “need help deciding” button which links to Guidester’s site. They also provide a data feed that enables Guidester to customize the tool to the retailer’s selection and pricing.

A shopper who clicks on the button is asked to select from multiple choice answers on criteria such as price, brand, and product weight and size. Guidester then returns a list of products meeting those specifications. When the shopper selects a product, he goes back to the retailer’s site where he can read more about the product and complete the purchase.

“The tool is customized to our retailers so it’s very seamless,” Chin says. “From the end-user’s standpoint, they never think they’re leaving the site.”

Guidester acts as a paid search network for manufacturers but is free to retailers.

B&H; Photo:

Relying on the manufacturer for up-to-date specs

In a market where obsolescence is a way of life-like consumer electronics-keeping information current is paramount, says Malachy Sherlock, vice president, web business, B&H; Photo-Video-Pro Audio.

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