May 2, 2008, 12:00 AM

Where does e-commerce go from here?

A preview of the Internet Retailer 2008 Conference & Exhibition: Web Merchants Dive Into the Mainstream. Plus details about every session in the Show Guide.

It was not so long ago that a big retail chain like J.C. Penney Co. Inc. was viewed as forward-thinking if its executives paid enough attention to the Internet to describe their company as “multi-channel.” Now the term multi-channel is becoming outdated, says Mike Boylson, Penney’s chief marketing officer and executive vice president.

“The term connotes silos, and we’re breaking down those silos and merging our channels, rather than thinking differently about the direct business and the store business,” he says. “Long term, we’re positioned to have be the hub of the brand. It’s the platform that customers more and more are going to access us through.”

That kind of thinking from Boylson, keynote speaker at the Internet Retailer Conference & Exhibition June 9-12 in Chicago, illustrates how far e-commerce has come, and the scope of the challenges ahead.

The theme of the conference, “Web Merchants Dive Into the Mainstream,” sums up the reality that online shopping is now a big part of U.S. retail, and growing far faster than store or catalog sales. For the 140 speakers on the IRCE agenda the main question is: Where do e-retailers go from here?

Though Forrester Research predicts online retail sales will grow by another 17% this year to $204 billion, despite a weakening economy, none of the speakers is likely to propose simply riding the wave. Instead, they will address such pressing issues as how to take advantage of the many new technologies that can make web sites more appealing and profitable; how to manage customer-created content, from ratings and reviews to video and blogs; the ever-changing world of search engine optimization and marketing; mobile commerce and other emerging trends; and such nuts and bolts issues as fulfilling orders efficiently and choosing among e-commerce platforms.

The two days of the main conference-Tuesday and Wednesday, June 10 and 11-will begin with morning sessions for all attendees, followed by three specialized tracks each afternoon. The first day tracks cover decision-making tips and tricks for smaller e-retailers, web-related issues facing retail chains, and the latest in e-commerce technology. Day 2 tracks will take up marketing, payment and security, and a hands-on look at technology, including on-the-spot critiques of retailers’ web sites.

For a deeper dive into key topics, the conference will feature four full-day workshops-two on Monday, June 9, and two more on Thursday, June 12. Monday’s workshops focus on advanced marketing techniques and strategies for smaller merchants. Thursday’s will cover mobile commerce and how to choose a third-party e-commerce platform.

Change is in the air

The Internet Retailer Conference & Exhibition, which drew 4,100 last year in San Jose, making it the world’s largest e-commerce event, is designed to provide information relevant to the smallest online retailer as well as to the largest retail chain.

J.C. Penney falls into the latter category and is a prime example of a major store-based retailer that’s reaping the benefits of major web investments. 240 million unique individuals visited, Penney’s e-commerce site, last year. And a Penney survey found 80% of shoppers on also go into Penney stores, and that two-thirds of customers research online before going into the stores. “Customers aren’t thinking about our brand by silos,” Boylson says. “They’re thinking of J.C. Penney, no matter how they access the brand.”

Seeking to deepen its cross-channel strategy, the retailer recently combined its channel-specific marketing organizations into one group and last fall introduced a feature to its web site called “know before you go” that lets consumers see the company’s store ads online and check the availability of a product in a local store.

That feature takes into account declining newspaper readership among Penney’s customers, Boylson says. “Customers’ shopping and media habits are changing pretty rapidly,” he says, “so we have to get ahead of the curve.”

Change is also on the minds of executives of traditional catalog firms, such as Eric Faintreny, chairman and CEO of Redcats USA, a featured speaker on the first day of the main conference. The Internet now represents close to half of the company’s business, up from 30% two years ago, and, like many catalogers, Redcats is mailing out fewer catalogs and bolstering its web presence with new sites such as, catering to larger women.

Faintreny notes that online profit margins are being squeezed by free shipping offers and other promotions, and Redcats is trying to differentiate itself in ways besides cutting prices. For instance, it has created a buyer’s club for loyal customers of the company’s Sportsman’s Guide site, offering a permanent 10% discount and advance notice of new products. Several hundred thousand have signed up.

“Those customers are much more loyal,” Faintreny says. “They come back more often.”

Another way to keep customers coming back is to spruce up web sites with new technology. In his Day 2 keynote address, president and CEO Neel Grover will talk about his site’s BuyTV video product presentations, and the role of customer product reviews and social networking features.

E-commerce is still young enough that retailers often have to build new site features on their own, says Christian Friedland, president of online retailer Improvement Direct Inc., a featured speaker on Day 1.

Improvement Direct, for instance, had to create in house a system for photographing products from different vantage points so it could present online shoppers with three-dimensional views of popular faucets, fixtures and other items. “We’re having to develop a lot of this new technology to really bring the second wave of Internet retailing on,” Friedland says.

Another challenge facing online retailers, he says, is how to deliver to consumers’ homes large and bulky items that FedEx and UPS won’t handle. “If someone can find a better way to facilitate commerce from your dock to the customer’s front door, that’s a huge opportunity,” he says.

Web 2.0

The explosive growth of e-commerce and of the Internet itself has created a wealth of options for online retailers, both in terms of site improvements and marketing strategies. Much of the conference will focus on retailer case studies and presentations that help attendees understand which options fit their needs.

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