Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Everything is secondary to that, DeLuca says. “Web analytics, testing Page A vs. Page B, search marketing-these kinds of things are important, but it’s just looking at numbers on a screen as opposed to better understanding the kinds of people visiting your site,” he says. “The numbers can make executives lose sight of the fact that there are people out there who want things.”
Customers influence design
One pure-play Internet retailer who strongly agrees with the trend toward heightened customer service in 2007 has merged foundational web site technological issues with enhanced customer service. Shoe merchant Zappos.com Inc., No. 34 in the Top 500 Guide, lets shoppers direct the continuous tweaking of site design, allowing customers to decide the best ways to improve the e-commerce site experience as well as customer service.
“When it comes to site design, we don’t really follow the rest of the industry,” says Tony Hsieh, CEO of Zappos.com. “Our site design is based almost entirely on customer feedback. We gather this feedback via e-mail. Customers say things like, ‘It would be great if I could do this’ or ‘Give me this kind of information on the product pages.’ With site design and customer service, when enough customers ask for something we place it on our development priority list.”
Zappos.com’s method for site design enables customers to help fine-tune the design and operational style of the merchant’s e-commerce site. Another trend most of the CEOs see in 2007 is the inverse of this methodology: a rapid adoption by merchants of web site personalization techniques for customers.
To be competitive, e-retailers must aggressively pursue as much site personalization as they can, says Boldin of AtomicPark.com. “Shoppers must have a consistent and focused experience online; personalization is key to this. Similarly, e-retailers have to reduce visual clutter. There are many e-commerce sites that throw a lot of information at you, and most people can get lost. People don’t want to be advertised to, they want to shop-and in a personalized way that helps them in their hunt.”
Gaining a deeper respect for their community of customers, understanding precisely how the customers want to interact on web sites, then giving customers personalized information and tools to meet their wishes is what e-retailers now must do-and indeed will be doing more of in the coming year, states Chris Gorog, CEO of Napster Inc. The pure-play e-retailer, which sells digital music, wallpapers and ringtones, is No. 100 in the Internet Retailer Top 500 Guide.
He agrees with Boldin that a strategy that can aid personalization is a site design that avoids visual clutter and is based on the concept that less is more, which helps shoppers focus on the personalized information they’re being presented. “People are very busy,” Gorog adds, “and if they cannot quickly get to exactly what they want, an e-retailer really puts itself at risk of losing customers and potential customers to competitors.”
One of the factors driving the increased personalization trend is that the Internet, the most incredible customer service tool a retailer has ever had, is becoming increasingly impersonal because of challenges presented by identity theft, e-mail phishing, spam and other problems, says Maxine Clark, founder and CEB (“chief executive bear”) of multi-channel Build-A-Bear Workshop Inc., No. 400 in the Top 500 Guide. As a result, retailers must battle these menaces by making customers feel more comfortable online, she says.
And Clark asserts that personalization is a great weapon against the online menaces, as well as a tremendous tool for boosting sales. “When it comes to personalized things like product recommendations based on your shopping history, I’m like 1-800-SUCKER,” she admits. “On Amazon.com, for example, they know what I like. There remains so much potential for retailers to make online shopping much more personal, but most companies haven’t figured it out yet.”
Not just bells and whistles
Backstage technologies are the engines that drive personalization of e-commerce sites. Another trend many of the CEOs see for 2007, though, involves e-retailers more robustly using quickly evolving technologies that stand in the spotlight when the curtain rises on an e-commerce site. While some of these newer technologies to date have been considered unnecessary bells and whistles, they in fact are proving to be useful tools for many e-retailers, tools poised for widespread adoption, according to many of the CEOs.
Any retailer not implementing RSS (really simple syndication) information feeds already is behind the game, AtomicPark.com’s Boldin contends. The e-retailer offers its gamers RSS feeds and will expand its use of the technology next year. “The technology helps build connections and establish trust between shoppers and e-retailers. And an increasing number of web shoppers are asking for RSS,” he says. “What e-mail became a few years ago for e-retailing, RSS will become in the next couple years. When you can get web shoppers to sign up for your RSS feed, that clearly shows a preference, or at least serious interest, in your goods and services. And that’s a huge win.”
Next year, growth of the use of RSS feeds is going to be explosive, concurs DeLuca of Bodybuilding.com, which offers customers fitness feeds. “The next version of Microsoft Office will have RSS functionality, and the new Internet Explorer 7 has a built-in RSS reader,” he says. “These kinds of developments will make RSS much easier for the average web user and take the technology to the next level. The whole idea of the Internet is finding things you want, not someone giving you things they think you need. It’s like TiVo: Give me what I want and let me skip over the other stuff.”