June 1, 2006, 12:00 AM

SPONSORED SUPPLEMENT: Creating the e-commerce platform of the future

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"The e-commerce engine is now central to creating a satisfying brand for the customer," says NewRoads` Reeves. "Integration across all dimensions of order management and fulfillment can be a big deal, and this cost is often missed in the buying process."

Indeed, it can easily cost at least six figures for the IT work alone to achieve such a high level of integration. "Going with a fully integrated hosted platform reduces that cost and gives the added benefit of not having to manage the platform," Reeves says.

Finally, retailers ought to check out the e-commerce platforms used by their direct competitors before selecting a platform vendor. This exercise not only gets them up to speed on the quality of the competitor`s platform, but provides ideas for what works and what doesn`t.

Supporting growth

"A lot of large retailers use custom applications so it`s a good idea to demo a couple of vendor platforms and see how their solutions stack up against those of competing retailers before making a selection," says Solid Cactus`s Rattigan. "Once an investment is made in an e-commerce platform it is tough to move off it."

With that in mind, retailers are best served when they give extensive thought to how their e-commerce platform will support growth, as well as help them optimize basic functions such as search and shopping cart.

"Retailers need to pick a platform that is flexible and channel friendly because these will become the main pieces of e-commerce platforms in the future," Wingo says.

If they don`t choose a scalable platform that provides the flexibility for growth, not only is their return on investment apt to be poor, but retailers also will find themselves at a competitive disadvantage.

Making the connection between platform integration and personalization

As competition among retailers to attract new customers and deepen relationships with existing customers intensifies, many retailers are seeking to differentiate their online stores by creating a more personalized shopping experience. Doing so requires extensive integration between their storefront, which is centered around merchandising and marketing, and the back office, which houses such critical functions as fulfillment and customer service. Further complicating matters is that the storefront and back office must also be integrated with other sales channels, such as eBay and comparison shopping engines.

To achieve this goal, retailers are installing e-commerce platforms that provide end-to-end connectivity to allow data to flow freely among sales channels and departments within their business so they can gain a clearer picture not only of the customer, but also of how efficiently they serve shoppers.

Major upgrades

These enterprisewide solutions are major upgrades from early e-commerce platforms, which were considered hodgepodge systems that siloed information within departments. Consequently, retailers ended up having a limited view of their customers as they moved through their web site and adjoining sales channels.

"End-to-end integration is key because it provides retailers with real-time visibility into their data base, into what the shopper is doing, and how they are being serviced," says Holly Haines, product manager, multi-channel retail, for Junction Solutions. "A lot of retailers have disjointed platforms that dump data once a day. Integration allows real-time access to data across sales and business channels so retailers can be nimbler in how they operate."

Achieving such nimbleness requires retailers to change the way they look at their online business. With retailers branching out beyond their storefronts to sell on eBay and comparison shopping sites, in addition to marketing through affiliate sites, it no longer makes sense for retailers to view these sales and marketing channels as separate entities that do not interact with each other or the back office.

"E-commerce is just one piece of the puzzle," says Scot Wingo, CEO of ChannelAdvisor Corp. "Retailers need to think how their platform interacts with paid search, natural search, alternative shopping channels like e-Bay, fulfillment, etc., and how to keep the data in those channels from being locked in place."

The ability to leverage customer data across all sales channels enables retailers to create a more personalized shopping experience. Nieman Marcus, for instance, sends five e-mails a week to its online customers and seven times a week during the Christmas selling season, according to Art Technology Group Inc. The e-mails deliver highly targeted offers based on what the retailer knows about the customer, such as an offer for an accessory to complement a recent purchase.

A navigation plan

What differentiates the e-mails are links embedded in the message that take recipients to a customized landing page built around the content in the e-mail, as opposed to a generic landing page. Such links and landing pages can be created for each individual in the e-mail campaign.

"It`s about creating a navigation scheme around the site based on what you know about the customer," says Cliff Conneighton, senior vice president of marketing for ATG. "The goal is to put more power in the hands of the marketing department to make e-mail promotions an extension of the web site and give customers information they want."

Using web pages to create the in-store shopping experience for an online customer allows retailers to market more efficiently. "Replicating the in-store shopping experience is critical because it allows the retailer to put the right product in front of the customer at the right time, just as if they were in a store being helped by a sales associate, and that is what drives conversion," explains Matt Carroll, senior vice president, commerce service, for NewRoads Inc. "The more a retailer can personalize the shopping experience, the more reasons they can give consumers to shop online."

A related personalization strategy is to use the data from the e-commerce platform to identify which affiliate and comparison shopping sites are used by consumers to research an item prior to purchasing it offline and directing them to the nearest store where the item is in stock. "Understanding the underlying data behind the sale empowers retailers to be successful at putting the right product in front of the customer at the right time in the right sales channels, says Robert Wight, president and CEO of Channel Intelligence, which has developed just such a solution.

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