Online sales climbed 24% year over year, while Best Buy’s overall sales were flat.
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In some cases, the value of a vendor’s retail heritage can win over retail clients even without openly promoting that heritage. Although eBags rarely goes outside its own 40-person I.T. staff to buy commercially available technology applications, one application it has decided to acquire from a vendor is its Scene7 image management system from Adobe Inc., which acquired the former Scene7 Inc. last year. “Every once in a while we look at the technologies on the market,” Cobb says. “We had our own image management system, but Scene7 was doing so many things with integrated zoom and other things-these guys think about this stuff every day.”
Image-management was becoming so complicated-including the need to create several versions of product photos at multiple pixel levels, and then to make them twist and turn at shoppers’ wills-that eBags decided it could realize a better return on investment by going with the Adobe Scene7 system, Cobb says. “It became an internal resources v. purchase decision,” he says. “We realized we could save a lot of time by not having our own people manage images.”
Beyond the technology, however, Cobb says he values the sharing of ideas he gets when talking with Doug Mack, the head of Adobe Scene7. “He has good vision,” Cobb says.
Cobb says he was surprised to learn that Mack and two other Scene7 founders still with Adobe Scene7-Sheila Dahlgren and Peter Noel-are former retailers who initially developed the technology behind Scene7 at GoodHome.com, a home furnishings retailer they launched in early 2001.
Prior to GoodHome.com, Mack and Dahlgren worked in the late 1980s at the former Broderbund Software, which was known for its production of graphic-heavy computer games like “Where in the World Is Carmen Sandiego?” and room-design software that let consumers visualize what their home interiors could look like with particular products including furniture and multiple choices of paint. “We had close to 70% of the market for room configurators,” Mack recalls.
The room configurator software was distributed on CD-ROMs, but by the late 1990s with the growth of the Internet, Mack and his partners decided to develop a new business model. Instead of selling the configurators on CD-ROMs, they launched GoodHome.com as a retail site that provided free online use of the configurator software along with the opportunity to purchase online the same home furnishings products used to design the virtual room settings.
GoodHome.com’s mid-1999 debut came shortly before the Internet investment bust, however, and “the level of investment to build a brand like GoodHome was too high,” Mack says. But before closing its doors in 2001, the retailer began attracting interest in its visualization technology from established retailers, some of whom were just beginning to develop a retail e-commerce presence. In January 2001, Mack and his partners launched Scene7 with customers including Home Depot, Victoria’s Secret and electronics and home appliance manufacturer Sanyo.
The experience in developing the configurator software, online as well as in CD-ROM form, taught Scene7 a lesson that has stayed with the partners throughout their work at Scene7 and Adobe, Mack says. The early configurator programs included some that relied on non-photographic line drawings, but they paled in comparison to the configurators with photographic images. “We learned that absolute photographic realism is a must, that whatever you dynamically render must look photo perfect in order to enable higher conversion rates and sales,” he says.
Mack adds that Scene7’s absorption by the corporate world of Adobe hasn’t dulled its focus on retailers. Rather, he contends that his team’s roots in retailing help to keep Adobe focused on the needs of online merchants. The company now provides better integration between its programs for designing images, outputting them to PDFs, then publishing them to a web site in Scene7’s image management system, he says. “We never lost our retail DNA, which makes us constantly think about what will delight the end consumer,” he says.
At CableOrganizer, the focus of innovation always centers initially on what works for CableOrganizer itself, Holstein says. “It has to make sense for us, because we’re not in the software business,” he says. “We have to first ask ourselves, Are we going to make money using this new technology in our own retail operations?”
So far, the return on investment has been good, he adds. CableOrganizer has spent about $20,000 in time and resources on each of its technology projects-including two other products that improve web analytics and site navigation by ensuring that web pages are properly tagged and organized-and has earned back the cost through its own improved retailing performance. “The Preconfigured Search tool has already paid us dividends through money saved on search ads, a reduced bounce rate and increased sales,” he says.
Relieving the boredom
One of Holstein’s latest projects is designed to provide a connection between Internet search-driven online shopping activity and call center orders. If a shopper clicks the image of a call center rep, software automatically generates a code that CableOrganzier will use to associate an order placed through the contact center with the natural-search keyword the shopper used to arrive at the site. “So we can tie that phone order back to what keywords the shopper searched on,” Holstein says.
Technology innovation also pays other types of dividends, adds Cobb of eBags. Developing the Japanese site for Tumi has been an enormous challenge, including the development of its own language translation software that must account for the way Japanese vertical script forces changes in how images are displayed on web pages. “It’s taken thousands of man-hours to develop and maintain that site, but it keeps our employees fresh,” Cobb says. “Working on the same things every day gets boring.”