But losses mount for the home furnishings e-retailer that went public in October.
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Tailoring site search to reflect current marketing initiatives is important because retailers do want some level of control over the search results, much like they have when directing a customer to products in a store. Retailers can even instruct the site search engine to show the Top 5 converting items that fit the search query.
“Site search feeds into merchandising and retailers want to have control over their merchandising efforts,” says Barshack. “There may be items that fit the search query that are on clearance at the end of the season or of which the retailer has excess inventory or maybe they are introducing a house brand. In either case, the retailer wants to get these products in front of the shopper as long as they are relevant to the search query.”
Before implementing any e-retailing technology, retailers ought to test it. The best route to follow is incremental A/B testing. This method helps retailers avoid the potential risk of a broader-based test souring customers and prompting the retailer to scramble to return the site to its previous appearance.
“Many retailers have a lot of equity in their brand and don’t want to upset the look and feel of their site too dramatically, because it can harm that equity, so they will test new features incrementally and roll them out as warranted,” says Solid Cactus’s Younger. “The testing process is a lot more refined now.”
Retailers can choose from several tools that allow for basic and advanced A/B testing. Solid Cactus offers basic multivariate testing functions such as Google Website Optimizer, in addition to more advanced Geotargeting applications. Google Website Optimizer allows retailers to test blocks of copy images, headlines, or complete page layouts through Website Optimizer, which shows the content and design alternatives to a specified percentage of site visitors. Retailers can select which visitors see the changes being tested based on such criteria as their entry point into the site or average ticket size. Reports detail which changes result in the most conversions.
“There are a lot of good testing applications available and our focus is to provide the latest ones that take the guesswork out of testing and help retailers develop marketing strategies to reach their sales goals and improve their brand,” says Younger.
Other options for testing include gathering customer feedback. The logical choice is repeat customers, as they are more familiar with the look and feel of the site and are likely to be receptive to requests for feedback. The request can be made via e-mail to repeat customers that have opted into the mailing list.
“Customer feedback is important to making the decision to roll out changes, because the last thing any retailer wants is to find they haven’t got the new features right,” says Americaneagle.com’s Svanascini. “If that is the case, conversion may not perform as expected.”
In or out?
One final point for retailers to consider when selecting any e-commerce technology is whether to install a licensed application and operate it in-house or outsource it to the vendor. The decision to license or outsource is based largely on the retailer’s corporate culture and internal resources.
“If the retailer is going to be upgrading their platform and applications several times a year, there is likely to be enough of a challenge to keep the internal IT staff inspired and on the cutting of new technology, but if there are one or two upgrades a year it may not be enough,” says WebLinc’s Hill. “Plus, it can cost $400,000 in salary for a support staff of five. That’s a lot to pay if the IT staff works in a vacuum when it comes to being exposed to cutting edge technology.”
Retailers that opt to outsource will want to consider using an SaaS (software as a service) model, where a software vendor develops a web-based software application and hosts and operates the application for use by customers over the Internet. Customers do not pay for owning the software itself, but rather for using it, which makes it a lower cost alternative to traditional outsourcing, which is more labor intensive.
“If outsourcing is a consideration it makes sense to inquire about the SaaS model, because it is becoming very comprehensive and capable of delivering robust product discovery experiences to the shopper,” says Mercado’s Barshack.
With more consumers shopping online-and more competition to convert them into customers-choosing technology that provides flexibility, scalability and delivers the performance shoppers expect is more critical than ever, because the wrong choice can cost retailers dearly.
“As the shopper base becomes more diverse, e-retailing is becoming more complex and retailers need technology that can automate processes where necessary, be integrated across all sales channels, and share data as needed with search engines and affiliate sites,” says ATG’s O’Neill. “The last thing any retailer wants is technology that slaps limits on what they can do with it, because that limits their success.”
Broadening retailers’ marketing horizons
Just as vendors are helping e-retailers to raise their front-end technology to the next level, they are helping retailers to improve the quality of their online marketing applications. The focus of their efforts is to improve traditional marketing tools, such as e-mail and search, and to develop solutions that help retailers reach consumers in more places on the Internet. By implementing these tools, retailers can develop highly targeted marketing campaigns and establish a brand presence on social networking sites such as Facebook.com and comparison shopping engines.
Driving this trend is the realization there is plenty of marketing real estate on the Internet that has yet to be tapped and that putting marketing dollars into these channels can increase the odds of attracting new customers where there is less competition for them.
“There are a lot of emerging incremental marketing opportunities for retailers to connect with new customers by tapping new online destinations,” says Michael Kahn, vice president of account management and marketing for search marketing firm DoubleClick Performics. “Retailers will always work to optimize their search marketing, but more marketing dollars are starting to shift into these areas.”