A Profitero study showed Target’s online prices were 25% more expensive than Wal-Mart’s, which were just slightly more expensive than prices on Amazon.
At a time when e-retailers are faced with a bewildering array of technology choices, e-commerce specialist firms can be a godsend.
It's never been tougher for online retailers to keep up with the pace of technology change. They have to learn what quick response codes are, figure out how to integrate social networks like Facebook, Twitter and Pinterest into their marketing campaigns, keep up with Google's changes to its ranking formulas, make sure their sites are loading quickly even as they load those sites with imagery and videos, and then do whatever it takes to make it all work equally well on mobile phones. Mastering those technology skills requires time and resources that most web retailers simply don't have.
But there are firms that specialize in each of these disciplines and many others that an e-retailer needs to stay ahead of today's fierce online competition. And many of the retailers that make up Internet Retailer's Top 500 and Second 500 Guides—together, the 1,000 leading retailers in North America by online sales—are bridging the technology gap by relying heavily on technology specialists to provide the expertise needed to grow sales and maximize profits.
The best of these technology providers don't just foist the latest shiny e-commerce toy upon their retailer clients. Rather, they work to help each e-retailer client understand how to marry the latest trends in e-commerce technology to that retailer's product selection, pricing and promotional strategies.
"E-commerce is about selling to the consumer, which is why retailers need a technology partner that brings marketing and merchandising perspectives to e-commerce technologies," says Diane Buzzeo, CEO and founder of Ability Commerce, a provider of integrated e-commerce and personalization solutions. "The goal is to provide technology that makes it easier for consumers to purchase online, regardless of how they interact with the retailer online."
Consumers are using the Internet in many new ways that influence their shopping behaviors, and among the most important are social networks. Many retailers looking to capitalize on the popularity of social media are launching Facebook Connect applications to allow consumers to easily log in to their online stores, share product information and reviews with others in their social network and deliver personalized content and product suggestions. Some retail web sites show visitors who are signed in to Facebook items their Facebook friends have Liked, bought or commented on.
Nevertheless, many retailers have only scratched the surface when it comes to maximizing the full potential of social media as a marketing tool. And that's more the rule than the exception when it comes to emerging technologies.
"As retailers learn about a new technology they want to take full advantage of it, but they don't always have the expertise to do it," says Jimmy Rodriquez, chief technology officer for e-commerce platform provider 3dcart. "When we launch a new feature, like Facebook Connect, we look at how clients are using it and which ones are not, and offer help on how to utilize the full potential of the application."
Just as retailers can learn a lot from technology providers about social media as a marketing tool, the same is true for video. Many web retailers now offer product videos on their sites, but that's just the start of what they can do.
"For example, retailers can do a lot more with video, such as integrating it into paid and organic search campaigns and linking videos with QR codes on posters and print ads," Buzzeo says. "The reach and impact of video is so huge that retailers need a technology partner to help them understand how it connects different customer touch points and marketing channels."
That's true and then some for mobile devices. The array of smartphones and tablet computers and their varying screen sizes are creating a whole new set of challenges when it comes to sizing content and typefaces and designing web pages that will look good on a mobile phone's small screen.
Because each mobile device renders a page differently, some retailers create separate style sheets for each type of mobile device. When a consumer logs onto the retailer's web site using a mobile device, the web server detects the type of device contacting it and redirects the consumer to the appropriate style sheet.
While effective, the process can be technically cumbersome. A simpler solution is to have an e-commerce platform that determines the screen size of the device contacting the web server and automatically adjusts the resolution of the web page being displayed.
"Having a smarter platform that can identify the pixel capacity of the device being used to access the web site eliminates the need to create multiple style sheets for mobile devices and redirects," Buzzeo says. "Retailers can have just one site that can be viewed by any device, as opposed to several mobile sites."
Ability Commerce's latest version of its SmartSite platform, due out later this year, will be built around Internet Information Services, Microsoft Corp. software for web servers that, among many other things, automatically detects the number of number of pixels a mobile device's screen supports and adjusts the pixel content of the web site. In that way, the retailer can maintain a single version of the site and be sure it will render properly on any device.
Helping retailers maximize the use of technology is just one piece of the puzzle. Many retailers also look to e-commerce specialist firms to help them select the right technology for their business. A heavily hyped new technology may wind up on a retailer's wish list, but that doesn't mean it is a good fit for the merchant's business.
"Selecting and prioritizing the right technologies to adopt comes down to the return on investment," Rodriquez says. "In many cases there are other technologies that can be implemented that provide a greater ROI than the latest and greatest gadget."
Choosing e-commerce technology based on its ROI can help retailers make better choices about where to spend their money. For example, a retailer that wants to redesign its web site and automate its back-office reporting can analyze which option will have a greater benefit by determining the ROI of each upgrade.