JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
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In addition, many providers of on-demand services stress flexibility in creating business relationships. For instance, Cupertino, Calif.-based SLI Systems Inc., a provider of site search solutions, does not charge retailers for additional functionality once the application is up and running. “If we charged for this, clients might be more inclined to take site search to the level they want initially, but not modify it after deployment, which can detract from the effectiveness of the application and their business,” says Geoff Brash, vice president of marketing. “This approach allows retailers to make changes without having to get internal approval for the expenditure, because there is no cost to add functionality. It also means we will add features as retailers identify new opportunities to use our platform to enhance their business.”
Additionally, the rapid pace at which e-retailing evolves prompts many retailers to look at on-demand solutions to interact more effectively with shoppers, because even if they can build such features, it is a monumental task to do so.
Lack of internal resources to add rich features is a big drawback to the in-house model, many on-demand advocates say. That’s especially true when it comes to such complex deployments as personalization. “Personalization does not end at the web site, it has to be extended to the call center,” says Cid Jenkins, vice president of sales, North America, for Reston, Va.-based eStara, an Art Technology Group Inc. company and provider of e-commerce optimization services, which offers click-to-call functionality for web sites.
“We manage the retailer’s program through our web portal which contains established rules for engagement prompts that can be changed daily along with the type of invitation offered to the shopper,” Jenkins says. “This provides the retailer with control over the process because they don’t have to use in-house IT staff to make the change.”
On-demand solutions often revolve around services or technology that retailers would find virtually impossible to create. For instance, a common pain point retailers express to Melissa Data is that it costs them $10 to $15 for every undeliverable address. “That hurts, especially if the address comes from a manufacturer’s sales lead,” says Van Roekel. “In our business, it is important to get the address correct before the order is fulfilled and ships. As soon as the retailer inputs shipping data, labels are printed and a cost is incurred. That is why we focus on address verification as a point of entry with the retailer.”
Fixing that problem would be cost-prohibitive for most retailers. Rancho Santa Margarita, Calif.-based Melissa Data has developed its Data Quality Suite to verify and correct addresses at the point of entry and catch data entry errors made by shoppers before they enter the retailer’s database and the shipping process is initiated. “Our aim is to help retailers understand the importance of data quality, how it cuts across the company, and the expense associated with bad data,” says Van Roekel.
Avoiding complex problems
Meeting data handling requirements and security certifications for information sources, such as the United States Postal Service, is another built-in benefit of Melissa Data’s platform These requirements include building firewalls and USPS CASS certification. CASS enables the USPS to evaluate the accuracy of address-matching applications for a variety of mailing types, including five-digit ZIP codes; ZIP + 4/ delivery point, and carrier route coding. Vendors can use CASS to test their address-matching software. After achieving a designated percentage of compliance, they receive certification by the USPS.
“The Postal Service has a lot of security, data quality and formatting requirements and that means a lot of certifications for users of their data,” says Van Roekel. “Our handling of these requirements makes it a lot easier for the retailer to manage their use of Postal Service data. Plus, certifications bring a higher level of customer confidence to our data.”
In 2008, Melissa Data responded to a growing demand for access to more international databases for addresses and phone numbers by complying with the data standards required by the sources for that information. “We can now verify all international data,” says Van Roekel, who adds further enhancements include the ability to generate sales leads for clients from its databases. “We are also willing to guarantee our uptime beyond the standard 99.9% if that is mission critical to the retailer.”
Before committing their data quality to an outside agency, retailers have the option to test Melissa Data’s applications for 30 days at no cost. During the trial period, retailers have the opportunity to talk to tech support staff in a real-use environment and make use of all available features. “Demos are all right,” says Van Roekel, who adds the company offers an on-site demonstration. “But a trial goes further by giving retailers hands-on experience with the application that helps them determine if the platform is the right fit.”
Retailers also have the option to purchase data access for a few months. All contracts come with a 30-day money back guarantee. Retailers accessing 100,000 records in 12 months pay 3 cents per request. The price drops to as low as a fraction of a cent when volume reaches the millions. “Flexibility is the name of the game,” says Van Roekel. “This lets us work with small retailers up through the large ones.”
Trial periods are important when retailers are considering an on-demand service. It gives the retailer’s IT staff the opportunity to ensure that the technology lives up to expectations. But in some cases it also gives the retailers the chance to gauge customers’ views of the service or the technology free of charge. SLI, for instance, includes a question to measure customer satisfaction when the search result is returned. Questions are kept simple so as to be less intrusive, such as “Did you find these results useful?”
Gauging the value
Asking these types of questions helps retailers measure the value of the platform during the trial period. SLI will also report on the quality of the search results, whether the quality of results is improving, and if shoppers are finding what they want.