February 26, 2009, 12:00 AM

Cover Story: What’s Next

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New technology also makes it possible to move beyond what Fry calls the pogo stick approach to web site navigation-“hopping from the home page to the category page to the product page and then the shopping cart”-to a more uninterrupted experience in which one page can encompass a vast number of products relevant to a particular consumer.

The Memorabilia section of Hard Rock Café International Inc.’s HardRock.com provides a glimpse of what’s possible. On a single page, music fans can scroll through and zoom in on 610 high-resolution images, including of John Lennon’s sunglasses and a piece of paper on which he wrote the lyrics to “Don’t Let Me Down.”

The user could reduce the entire block of 610 images within a second to the size of a dot, then just as quickly zoom back in. With a few flicks of a mouse, a single word from Lennon’s lyrics page can be made to fill a screen. Visitors can also click each image to pull up a window with details, and e-mail the image to a friend. The site is built with Microsoft Corp.’s new Silverlight imaging platform, including its Deep Zoom application, also known by its laboratory name Seadragon.

A particularly compelling feature of the Memorabilia page for online merchandisers is its ability to quickly pull any sub-group of images from the entire block of 610 images. A click on a Beatles tab, for example, instantly pulls all Beatles images into a new group of images. On a retail apparel site, that application could allow shoppers to view an entire collection of women’s wear, including images submitted by customers, then quickly pare that down to spring season outfits, zooming in on the tiniest details of each item. Each product could pop up its own shopping cart window.

Sharper images

Vertigo, the design firm that developed the Memorabilia page, has not yet developed a Silverlight application for online shopping carts, but says it’s not far off. “I definitely see this moving in that direction,” says Blake Sorrell, manager of business development. Vertigo used its own Big Picture imaging application to develop the Memorabilia section on the Silverlight platform, which is based on Microsoft’s .Net web-based integration technology.

The fact that many online retailers already use .Net technology makes the Silverlight platform a natural for e-commerce sites, experts say. And it comes at a time when online merchants are poised to expand the use of high-end imaging, says Mike Julson, chief technology officer of Escalate Retail Inc., a multi-channel e-commerce platform provider.

“Over the next five years, retailers will continue to invest in video content and high-resolution images that customers can use in purchasing decisions,” Julson says. “The more prevalent high-definition imaging is, the better products look, making it more likely shoppers will buy.”

Until now, some of the most innovative online interfaces have been on products like Apple Inc.’s iPhone, which lets users touch the screen to scroll and enlarge images. New technologies under development will also make the iPhone-like interface more common on other mobile phones, Julson and others say, making it easier for retailers to interact with consumers as they move through their mobile, web-enabled, socially networked world.

These new interfaces will also extend within a few years to in-store kiosks and digital signs, where consumers who belong to a retailer’s loyalty program will be able to use touchscreens to quickly sort through personalized merchandise offers, Julson adds.

In another in-store development, Escalate Retail and Microsoft recently demonstrated Microsoft Tag, a color-coded product identification tag. When a shopper scans the tag with a web-enabled camera phone, it can call up a web page of product details and a Buy button. Retailers can design the application so that the shopper can send information on a scanned product to friends via social networks.

New partners

Opening up e-commerce may include sharing the source code of an e-commerce platform with suppliers or other retailers to create new kinds of shopping features. A supplier or a retailer of fishing rods, for instance, might develop an online game to promote sales through a revenue-sharing agreement on the site of a retailer that sells fishing boots. “With open source codes, the cat is out of the bag for bringing big changes to a lot of retailers,” says Sucharita Mulpuru, principal analyst for e-commerce at research and advisory firm Forrester Research Inc.

Retailers are also likely to share their online real estate more with other merchants in coming years, experts say. Though only a handful of online retailers, including Amazon and Buy.com, currently channel sales for other online merchants, the number will soon grow to as many as 100, says Scot Wingo, CEO of ChannelAdvisor Corp., which specializes in connecting retailers to e-marketplaces. Indeed, one reason why Amazon recorded a 29% year-over-year rise in 2008 sales amid far lower industrywide sales was because it provides a sales platform for other merchants, notes Colin Sebastian, an Internet analyst at securities broker Lazard Capital Markets.

Say cheese

Retailers will also continue to develop new ways of operating. Amazon, for example, has developed an application for the iPhone that lets consumers take photos of virtually any product-a friend’s unusual wristwatch, for instance-and have the image automatically sent to Amazon to see if it’s available on Amazon.com.

Smaller and start-up retailers are also breaking new ground. Since launching last year and building its brand on social networks, fashion apparel and accessories retailer ideeli.com has reported surging growth from members-only special sales events. Because it routinely sells out of its limited inventory and attracts repeat customers, ideeli operates with minimal inventory and marketing costs, says founder and CEO Paul Hurley.

The convergence of television and the web is another trend already emerging. Backchannelmedia Inc. recently began providing dozens of local TV stations a system that lets viewers click their TV remotes to connect with online retailers advertising on TV shows.

And it won’t be long before retailers tie mobile phones more closely together with both web sites and stores, says Chris Fargiano, founder and president of Envisa, an e-commerce technology consulting firm.

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