A discussion draft of the Online Sales Tax Simplification Act of 2016 is expected to be introduced in Congress soon.
Retailers find rich insights in their site search data.
Site search is crucial for web shoppers, who have been trained by Google and other search engines to use the search box on all sites. But site search also provides retailers with a wealth of information about the visitors to their sites, information merchants can use to present more appealing items to subsequent visitors.
"The challenge for retailers is to take search beyond its traditional use as a tool for product location, and leverage it as a key customer touch point from which the consumer and retailer can benefit," writes Aberdeen Group research analyst Greg Belkin in an October 2010 report on site search. "These benefits can include a fast and easy research process for the consumer, and a profitable, market-responsive process for the retailer."
The report, "Retail E-Commerce Search: Accuracy, Relevancy and Profitability in the Age of Consumer Choice," was based on a survey of 94 retailers that Aberdeen segmented into three groups: top performers, the average group and the lowest-performing segment. The retailers were segmented based on year-over-year increases or decreases in average order values, average conversion rates and net profit margins.
Aberdeen found 53% of the top-performing retailers deliver personalized search results based on a customer's past purchase history or customer segment behavior. But only 44% of the retailers in the average group and 15% of the lowest-performing group personalize site search results.
The top-performing retailers also do more with the information they collect. 80% of top performers track up-sell and cross-sell products related to search results and 73% disseminate results from searches to other departments, such as marketing or customer service, the report says.
What they mean
Belkin says top performers make use of the insights they gain from customer searches. The study found that 56% of the top-rated merchants use search data to readjust search results automatically. Belkin says astute retailers can also use those insights to tweak their marketing programs on Internet search engines.
He says top-performing retailers not only provide accurate and relevant search results, they also can "recognize increased revenue based on search."
Children's toy and play set manufacturer and retailer Step2 is an example of a web retailer that has improved its conversion rate since it upgraded its site search in 2010. One flaw in the old system was that it didn't allow for misspellings or alternate search terms. Thus, a consumer who typed in "playset" as one word instead of two received no results.
Step2's new site search guides visitors despite misspellings and recognizes many of the search terms a consumer might use for a particular product. In adding the spelling feature the retailer is catching up with many of the top online retailers, according to a fourth quarter study of 100 top web merchants by research and consulting firm The E-tailing Group Inc. That study showed 80% of the e-commerce sites studied corrected misspelled terms, up from 67% the previous year. The report also noted a slight improvement in accuracy when retailers' site search systems corrected a misspelled term, improving to 3.7 on a five-point scale from 3.6 in 2009.
Step2's site search technology also plays a role in merchandising by automatically tagging products that are clicked on after consumers search for particular terms. The retailer uses that data to prominently feature those products on subsequent searches for the same terms.
The upgrades have been so effective that Step2's visitors are two and a half times more likely to make a purchase after using the site search system than visitors that don't use it, according to the retailer. And 14% fewer visitors leave the site from search results pages than from other pages on the site, the company says.
Such results are leading some retailers to include site search as they begin selling on the Facebook social network. In a recent survey, 15% of web retailers said they already were selling through social networks and another 32% said they planned to do so, according to "The State of Retailing Online 2011" report from Forrester Research Inc. and Shop.org, the e-retailing arm of the National Retail Federation, a major trade association.
Online retailer Aquinas and More Catholic Goods is one of those retailers driving traffic from Facebook with search. The retailer began in May enabling visitors to its Facebook page to search its catalog of religious products.
When visitors click Shop Now they can use the search box that appears at the top of the page to find items. For example, visitors searching for religious crosses can view the various types of crosses along with their prices. They can filter by most relevant match, highest or lowest price, or alphabetical order. They can also sort by the intended recipient, such as girl, boy, man or woman, and by brand.
"Over the past year we have seen our Facebook traffic grow tremendously and we are seeing a large percentage of the visitors to our main e-commerce site coming from Facebook," says Ian Rutherford, president and founder of Aquinas. "We believe that by bringing our store to Facebook we have a greater chance of bringing in sales by saving our customers that extra click to our site."
Rutherford adds that he expects Aquinas' Facebook fans to use the products page like a catalog, "as a place to casually browse products and share with their friends before making a purchase decision."
Aquinas' extension of selling to Facebook, and its inclusion of a search and filtering system, reflect the increasing sophistication of retailers' site search implementations. In The E-tailing Group's fourth quarter study, 42% of e-retailers allowed visitors to sort search results by color, up from 31% the previous year, and 29% to sort by size, up from 15% in 2009.
Making site search more helpful with filters like those is increasingly important as e-retailers face sharper competition, experts say. "It is way too easy online to move from one site to another," says Aberdeen's Belkin. "More often than not, consumers use site search to find what they're looking for and if they don't, they're out."